What changed in this filing

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Item 1. Business

2026-02-26 compared with 2025-02-28 · 25 added, 24 removed, 339 unchanged (13% of the section changed)

11 unchanged sentences

In the telecom market, we benefit from deployment of new high-speed fiber-optic networks by telecom network operators, including 5G networks.

The internet data center market is currently our largest and fastest-growing market.

The CATV market is our most established business, for which we supply a broad array of products, including lasers, transmitters and transceivers, and turn-key equipment.

Sales of headend, node and distribution equipment, including amplifiers, have contributed significantly to our revenue in recent years as a result of our ability to meet the needs of CATV equipment vendors who have continued to outsource both the design and manufacturing of this equipment.

In 2023, we began offering many of our CATV products directly to MSO customers, under Quantum Bandwidth™ brand name.

We made this strategic decision in order to better address the needs of our MSO customers as we believe they are embarking on a complex and lengthy series of network upgrades that will likely require significant innovation from their equipment suppliers.

By selling products directly to these customers, we believe that we will be able to address these needs more efficiently and will improve our time to market for these new innovations, which MSOs have indicated will be critical to timely rollout of their planned network upgrades.

The internet data center market is currently our fastest-growing business.

Our customers in this market are generally large internet-based ("hyperscale") data center operators, along with equipment suppliers who supply our products along with others to our hyperscale data center operator customers.

2 unchanged sentences

In addition, we believe that the significant automation employed in our production process for data center optical modules gives us advantages over our competitors in the ability to scale production rapidly, which is beneficial because the rapid adoption of artificial intelligence ("AI") is fueling a new wave of investment by hyperscale data center operators, as AI computing is very compute and bandwidth intensive.

The CATV market is our second largest and the most established market, for which we supply a broad array of products, including lasers, transmitters and transceivers, and turn-key equipment.

In 2023, we began offering many of our CATV products directly to MSO customers, under the newly-created Quantum Bandwidth™ brand name.

As the complexity of CATV networks has increased over the years, equipment vendors, many of whom are our customers, have been under pressure to supply a wider variety of increasingly complex equipment to MSOs.

17 unchanged sentences

At December 31, 2025 and 2024 , our accumulated deficits were $493.1 million and $451.9 million, respectively.

In 2024 , we earned 59.5% of our total revenue from the internet data center market and 35.2% of our total revenue from the CATV market.

In 2024 , our key customers in the internet data center market included Microsoft and Oracle .

In 2024, 2023 and 2022 , Microsoft accounted for 43.7%, 46.6% and 18.4% of our revenue, and Oracle accounted for 12.4%, 8.8% and 5.9% of our revenue, respectively.

In 2025 , we earned 53.8% of our total revenue from the CATV market and 42.9% of our total revenue from the internet data center market.

In 2025 , our key customer in the CATV market was Digicomm.

In 2024 , 2023 , and 2022 , Digicomm accounted for 34.1%, 11.3% and 0% of our revenue and ATX Networks accounted for 0%, 15.6% and 47.3% of our revenue, respectively.

In 2025 , 2024 , and 2023 , Digicomm accounted for 53.1%, 34.1% and 11.3% of our revenue, respectively, and in 2023, ATX Networks accounted for 15.6% of our revenue.

In 2025 , our key customer in the internet data center market was Microsoft .

In 2025, 2024 and 2023 , Microsoft accounted for 28.8%, 43.7% and 46.6% of our revenue, respectively, and in 2024, Oracle accounted for 12.4% of our revenue.

Industry Background

3 unchanged sentences

To support the substantial increase in bandwidth consumption, internet data center operators are increasing the scale of their internet data centers and deploying infrastructure capable of higher data transmission rates.

As a result, there is an ongoing transition from the use of copper cable, typically at speeds of up to 1 gigabit per second ("Gbps"), to optical fiber as a transport medium, typically providing speeds from 10 Gbps to 800 Gbps.

In recent years, a number of leading internet companies have adopted more open internet data center architectures, using a mix of systems and components from a variety of vendors, and in some cases designing their own equipment.

1 unchanged sentence

Moreover, transmission speeds have continued to increase among the companies who have previously transitioned from copper-based to fiber-based infrastructure, resulting in opportunities for optical device vendors to supply new optical transceivers capable of operating at these higher data rates.

In recent years, supply chain disruptions caused by the pandemic and other factors have become increasingly concerning to our customers.

In recent years, supply chain disruptions have become increasingly concerning to our customers.

As a result, we believe that our ability to manufacture lasers and other data center products in the US represents a competitive advantage compared with many of our competitors who have most or all of their production outside the US.

14 unchanged sentences

As one of the early developers of DOCSIS 4.0 equipment, we believe that this represents a significant opportunity for sales of CATV equipment in the next few years.

Beginning in 2025, nearly all of our CATV equipment sold meets DOCSIS 4.0 standards.

Trends in the Telecom Market.

46 unchanged sentences

In the internet data center market, we primarily target internet data center operators who have adopted an open system architecture—one in which the optical connectivity solutions can be provided by a different vendor than the vendor which provides their servers and switches.

Invest in US production capacity for data center products.

We believe that our flexible and highly-automated production process gives us a competitive advantage by allowing us to locate production in the U.S., which is desirable to our customers, without dramatically increasing the cost of production by doing so.

We intend to enhance this advantage by continuing to aggressively invest in U.S.

Extend our leadership in CATV networking.

We intend to add to our product portfolio in the CATV market following our recent launch of our own branded products to sell directly to MSOs, which we believe offers us further opportunity to enhance our presence as a supplier in the CATV market.

We intend to add to our product portfolio in the CATV market following our launch in 2023 of our own branded products to sell directly to MSOs, which we believe offers us further opportunity to enhance our presence as a supplier in the CATV market.

Continue to invest in our capabilities, especially our automated module production, and infrastructure.

98 unchanged sentences

We manufacture our laser chips only within our Sugar Land facility, where our laser design team is located.

In our Taiwan location, we manufacture optical components, such as our butterfly lasers, which incorporate laser chips, subassemblies and components manufactured within our Sugar Land facility.

In addition, in our Taiwan location, we manufacture transceivers for the internet data center, telecom, FTTH and other markets.

We also manufacture CATV outdoor equipment including amplifiers.

In our Taiwan location, which comprises several buildings in close proximity to each other, we manufacture optical components, such as our butterfly lasers, which incorporate laser chips, subassemblies and components manufactured within our Sugar Land facility.

In addition, in our Taiwan location, we manufacture transceivers for the internet data center, telecom, FTTH and other markets and we also manufacture CATV outdoor equipment including amplifiers.

In our China facility, we take advantage of lower labor costs and manufacture certain more labor intensive components and optical equipment systems, such as optical subassemblies and transceivers for the CATV transmitters (at the headend), internet data center market, and CATV outdoor equipment.

17 unchanged sentences

These rules have imposed and will continue to impose additional costs and may introduce new risks related to our ability to verify the origin of any "conflict minerals" used in our products.

Our customers are primarily internet data center operators, CATV, telecom equipment manufacturers, and internet service providers.

Our customers are primarily internet data center operators, CATV and telecom equipment manufacturers, and internet service providers.

We generally employ a direct sales model in North America and in the rest of the world we use both direct and indirect sales channels.

2 unchanged sentences

Where we sell through an indirect sales channel, we work with the end customer to establish technological specifications for our products.

Our equipment customers typically offer our equipment under their brand-name and our equipment is often customized with unique design or performance criteria by each of these customers.

We also from time to time offer design or manufacturing services to customers to assist them in more effectively using our products and realizing time-to-market advantages.

In the last six years, we have taken several actions to increase the diversity of our customer base.

We have taken several actions to increase the diversity of our customer base.

These actions include hiring sales staff to improve our ability to serve new customers and the introduction of new products that we believe will appeal to new customers.

Furthermore, we have developed additional original design manufacturer, or ODM, relationships with customers in each of our target markets which should enable us to diversify our revenue base.

In 2024 , the three customers who contributed most to our internet data center revenue were Microsoft, Oracle and a U.S.

based manufacturer.

In 2025 , the largest customer who contributed most to our internet data center revenue was Microsoft.

In 2025, our largest CATV customer was Digicomm.

In 2024 , revenue from the internet data center market, CATV market, telecom market, FTTH market and other markets provided 59.5%, 35.2%, 4.4%, 0.0% and 0.9% of our revenue, respectively, compared to 64.9%, 27.5%, 6.4%, 0.0% and 1.2%, respectively, in 2023 .

In 2025 , revenue from CATV market, the internet data center market, telecom market, FTTH and other markets provided 53.8%, 42.9%, 3.0% and 0.3% of our revenue, respectively, compared to 35.2%, 59.5%, 4.4% and 0.9%, respectively, in 2024 .

In our telecom market, we manufacture and sell optical products which include transceivers designed to transmit signals used in 5th Generation ("5G") mobile networks, and various products targeted at the metro-scale telecom networking market.

We have various other products designed for diverse applications, both inside and outside of communications technology, which generally are derivatives of products developed for our four target markets.

We support our sales efforts by attendance at industry trade shows (virtually and in person), technical conferences and other promotional efforts.

We support our sales efforts by attendance at industry trade shows, technical conferences and other promotional efforts.

These efforts are aimed at attracting new customers and enhancing our existing customer relationships.

4 unchanged sentences

We do, however, experience intense competition in each product area from a number of manufacturers and we anticipate that competition will increase.

Our major competitors in one or more of our markets include Coherent Corporation, Foxconn Interconnect Technology Ltd., InnoLight Technology (Suzhou) Ltd., Intel Corporation, Lumentum Holdings, Inc., Mitsubishi, Molex, LLC, Source Photonics, Inc.

Our major competitors in one or more of our markets include Coherent Corporation, Eoptolink Technology Inc., Ltd., Foxconn Interconnect Technology Ltd., InnoLight Technology (Suzhou) Ltd., Intel Corporation, Lumentum Holdings, Inc., Mitsubishi, Molex, LLC, Source Photonics, Inc.

and Sumitomo Electric Industries, Ltd.

94 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business