SemiLEDs Corporation (NASDAQ:LEDS) reported a sharp sequential decline in revenue for its first fiscal quarter of 2026 on Wednesday, as the Hsinchu-based chipmaker moved past a period of high-volume equipment sales that had temporarily inflated its top line.
For the quarter ended November 30, 2025, revenue plummeted to $2.6 million, an 80% drop from the $13.2 million reported in the previous quarter.
The steep decline reflects the cyclicality of the company’s recent "buy-sell" strategy, where it facilitates equipment transactions to support its transition toward a fabless business model.
In late fiscal 2025, these transactions accounted for nearly the entirety of the company's revenue, but those volumes normalized significantly as the new fiscal year began.
Despite the revenue retreat, SemiLEDs saw its GAAP net loss narrow to $742,000, or $(0.09) per share, compared to a $1.2 million loss in the prior quarter.
The improvement in the bottom line was driven by lower operating expenses, though the company’s gross margin remained razor-thin at 1%, down from 2% in the fourth quarter.
The operating margin took a significant hit, falling to negative 39% from negative 7%, as the lower revenue base struggled to cover fixed costs.
However, the company’s liquidity remained stable, with cash and cash equivalents rising slightly to $2.9 million, up from $2.6 million at the end of August.