Company: AAOI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025450
Chunk: 121

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 121
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-Based Compensation
   ​
   Employee share-based compensation expenses recognized for the periods indicated (in thousands):
   ​
   
       Three months ended    Six months ended  
 ​   June 30,    June 30,  
 ​   2025    2024    2025    2024  
 Share-based compensation - by expense types   ​    ​    ​    ​  
 Cost of goods sold  $94  $137  $177  $239 
 Research and development   331   478   607   757 
 Sales and marketing   499   541   822   826 
 General and administrative   2,240   4,902   4,120   7,075 
 Total share-based compensation expense  $3,164  $6,058  $5,726  $8,897 

   Note 16.  Income Taxes 
   ​​ For the three months ended  June 30, 2025 and 2024, the effective tax rate varied from the federal statutory rate of 21% primarily due to the change of the valuation allowance on federal, state, Taiwan, and China deferred tax assets ("DTA"). 
    
   The Company continually monitors and performs an assessment of the realizability of its DTAs, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets using a “more likely than not” standard. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s net deferred tax assets at  June 30, 2025 was appropriate. 
    
   On  July 4, 2025, new U.S tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act.  In addition, the OBBBA makes changes to certain U.S. corporate