What drove AAOI's earnings beat in Q3?

Applied Optoelectronics (AAOI) reported a diluted EPS of $0.00 in the most recent quarter, which was a surprise of $0.00. The company's revenue for the quarter was $99.98 million, which was a decrease of 19.61% from the previous quarter's estimate revenue of $100.27 million.

Despite the revenue shortfall, AAOI's earnings beat expectations due to cost management. The company's gross margin improved to 24.3% in Q3 2024, up from 19.2% in Q2 2024, primarily due to improved operating efficiency and reduced costs. This cost management helped offset the impact of lower revenue and resulted in a net income of $0.28 per share, which was better than the consensus estimate of a loss of $0.29 per share.

In summary, AAOI's earnings beat expectations due to effective cost management that led to improved gross margins and a positive net income, despite lower revenue.