<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q
 
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

 For the quarterly period ended:  September 30, 1996 or
 
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
For the transition period from _____________ to ____________
 
Commission File Number:  0-27250

                           AML COMMUNICATIONS, INC.
             (Exact name of registrant's specified in its charter)


              Delaware                                  77-0130894
   -------------------------------         ---------------------------------
   (State or other jurisdiction of         (IRS Employer Identification No.)
   incorporation or organization)

          1000 Avenida Acaso
        Camarillo, California                             93012
----------------------------------------                ----------
(Address of principal executive offices)                (Zip Code)


                                (805) 388-1345
              --------------------------------------------------
              (Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                               Yes   X    No
                                   -----     -----
                                        
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.

Common Stock Outstanding as of November 1, 1996:  5,886,113

Number of pages in this Form 10-Q    27
                                     --

                                       1
<PAGE>
 
                            AML COMMUNICATIONS, INC.

                                     INDEX
<TABLE>
<CAPTION>
 
                                                                                   PAGE
<S>          <C>                                                                   <C>
PART I       FINANCIAL INFORMATION
 
Item 1.      Financial Statements (Unaudited)
 
             Statements of Operations for the three and six month periods ended      
             September 30, 1996 and September 30, 1995                               3 
 
             Balance Sheets at September 30, 1996 and March 31, 1996                 4
 
             Statements of Cash Flows for the six month periods ended                
             September 30, 1996 and September 30, 1995                               5
 
             Notes to the Financial Statements                                       6
 
Item 2.      Management's Discussion and Analysis of                                 
             Financial Condition and Results of Operations                           8
 
PART II      OTHER INFORMATION                                                      10
 
             SIGNATURES                                                             11
</TABLE>

                                       2
<PAGE>
 
                        PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                           AML COMMUNICATIONS, INC.
                           STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED          SIX MONTHS ENDED
                                                September 31,              September 31,
                                              1996          1995         1996          1995
                                           -----------   ----------   -----------   ----------
<S>                                        <C>           <C>          <C>           <C>
Net sales                                  $3,882,000    $1,444,000   $7,558,000    $2,577,000
Cost of goods sold                          1,799,000       620,000    3,507,000     1,121,000
                                           ----------    ----------   ----------    ----------
     Gross profit                           2,083,000       824,000    4,051,000     1,456,000
                                           ----------    ----------   ----------    ----------
Operating expenses:
     Selling, general and administrative      613,000       214,000    1,319,000       366,000
     Research and development                 391,000       165,000      699,000       327,000
                                           ----------    ----------   ----------    ----------
                                            1,004,000       379,000    2,018,000       693,000
                                           ----------    ----------   ----------    ----------
Operating income                            1,079,000       445,000    2,033,000       763,000
     Interest expense (income), net           (60,000)       25,000     (102,000)       32,000
                                           ----------    ----------   ----------    ----------
Income before provision for
      income taxes                          1,139,000       420,000    2,135,000       731,000
Provisions for income taxes                   421,000       168,000      789,000       292,000
                                           ----------    ----------   ----------    ----------
Net income                                 $  718,000    $  252,000   $1,346,000    $  439,000
                                           ==========    ==========   ==========    ==========
Earnings per common share                        $.11          $.05         $.21          $.09
                                           ==========    ==========   ==========    ==========
Weighted average number of shares of
    common stock outstanding                6,499,000     4,631,000    6,499,000     4,631,000
                                           ==========    ==========   ==========    ==========
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
 
                            AML COMMUNICATIONS, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                           SEPTEMBER 30,     MARCH 31,
                                                1996            1996
                                           -------------    -----------
<S>                                        <C>              <C>
                                            (UNAUDITED)
ASSETS
------
Current Assets:
  Cash                                       $ 6,197,000    $ 6,312,000
  Marketable Securities                        1,009,000             --
  Accounts receivable, net of allowance
   for doubtful accounts of $102,000,
   as of June 30, and March 31, 1996           1,703,000      1,549,000
  Inventories                                  2,056,000      1,304,000
  Facilities held for resale                         ---      1,300,000
  Other current assets                            27,000         41,000
                                             -----------    -----------
     Total current assets                     10,992,000     10,506,000
                                             -----------    -----------
 
Property and Equipment, at cost:
  Machinery and equipment                      1,988,000      1,141,000
  Furniture and fixtures                         133,000          1,000
  Leasehold improvements                         513,000        220,000
                                             -----------    -----------
                                               2,634,000      1,362,000
  Less-Accumulated depreciation and             
   amortization                                 (639,000)      (413,000)
                                             -----------    -----------
                                               1,995,000        949,000
                                             -----------    -----------
Deferred Taxes                                    62,000        107,000
                                             -----------    -----------
Other Assets                                     133,000         83,000
                                             -----------    -----------
                                             $13,182,000    $11,645,000
                                             ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
  Current portion of capital lease           $    38,000    $   118,000
   obligations
  Accounts payable                               654,000        600,000
  Accrued expenses:
     Payroll and payroll related                 195,000        103,000
     Bonus                                       120,000        142,000
     401(k) contribution                          18,000         30,000
     Warranty and customer support                25,000         35,000
     Other                                        66,000        138,000
  Income taxes payable                         1,068,000        710,000
                                             -----------    -----------
       Total current liabilities               2,184,000      1,876,000
                                             -----------    -----------
Capital Lease Obligations, net of                 
 current portion                                  82,000        360,000
                                             -----------    -----------
 
Stockholders' Equity:
  Preferred stock, $.01 par value:
     Authorized--1,000,000 shares, no
      shares issued or outstanding                    __             __
  Common stock, $.01 par value:
     Authorized--15,000,000 shares
      authorized--5,886,113 and 5,641,450
      shares issued and outstanding as
      of September 30, and March 31,
      1996, respectively                          59,000         57,000
  Capital in excess of par value               8,009,000      7,850,000
  Retained earnings                            2,848,000      1,502,000
                                             -----------    -----------
                                              10,916,000      9,409,000
                                             -----------    -----------
                                             $13,182,000    $11,645,000
                                             ===========    ===========
</TABLE>
        THE ACCOMPANYING NOTES ARE INTEGRAL PART OF THESE BALANCE SHEETS

                                       4
<PAGE>
 
                            AML COMMUNICATIONS, INC.

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                  SIX MONTHS ENDED
                                           ------------------------------
                                           SEPTEMBER 30,    SEPTEMBER 30,
                                                1996             1995
                                           -------------    -------------
                                                    (UNAUDITED)
<S>                                        <C>              <C>
Cash Flows from Operating Activities:
  Net income                                 $ 1,346,000        $ 439,000
  Adjustments to reconcile net income
     to net cash provided by (used in)
     operating activities:
       Depreciation and amortization             226,000           49,000
       Provision for losses on accounts           
        receivable                                20,000           10,000
       Changes in assets and
        liabilities:
          Decrease (increase) in:
            Accounts receivable                 (174,000)        (484,000)
            Inventories                         (752,000)        (206,000)
            Deferred tax asset                    45,000           16,000
            Other assets                         (36,000)              __
          Increase (decrease) in:
            Accounts payable                      54,000           59,000
            Accrued expenses                     (24,000)         (22,000)
            Income taxes payable                 358,000          222,000
                                             -----------        ---------
            Net cash provided by (used
             in) operating activities          1,063,000           83,000
                                             -----------        ---------
Cash Flows from Investing Activities:
  Purchase of marketable securities           (1,009,000)              __
  Facilities held for resale                   1,300,000               __
  Purchases of property and equipment         (1,272,000)         (24,000)
                                             -----------        ---------
            Net cash provided by in             
             investing activities               (981,000)         (24,000)
                                             -----------        ---------
Cash Flows from Financing Activities:
  Exercise of stock options                      161,000               __
  Principal payments on capital lease           
   obligations                                  (358,000)         (36,000)
                                             -----------        ---------
            Net cash used in financing          
             activities                         (197,000)         (36,000)
                                             -----------        ---------
Net increase (Decrease) in Cash                 (115,000)          23,000
Cash, beginning of period                      6,312,000          257,000
                                             -----------        ---------
Cash, end of period                          $ 6,197,000        $ 280,000
                                             ===========        =========
 
 
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
 
                           AML COMMUNICATIONS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1996
                                  (UNAUDITED)

1.  BASIS OF PRESENTATION -

         The accompanying unaudited financial statements have been prepared in
conformity with generally accepted accounting principles.  However, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted or condensed pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC).  In the opinion of management all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
have been included.  The results of operations and cash flows for the three and
six month periods presented are not necessarily indicative of the results of
operations for a full year.  These financial statements should be read in
conjunction with the Company's March 31, 1996 audited financial statements and
notes thereto included in the Company's Form 10-KSB.

         The Company declared a three-for-two stock split, effected by means of
a 50% share dividend, paid to owners of record as of the close of trading June
5, 1996, payable on June 28, 1996.  All share and per share information in the
accompanying financial statements have been adjusted to give retroactive effect
to the stock split.

2.  EARNINGS PER SHARE -

         Earnings per share is based upon the weighted average number of common
shares outstanding plus the dilutive effect of common stock equivalents.  For
the periods ended September 30, 1996 and 1995, per share information was
computed pursuant to the rules of the SEC, which require that common stock
issued by the Company during the twelve months immediately preceding the
Company's initial public offering plus the number of common shares issuable
pursuant to the grant of options issued during the same period, be included in
the calculation of shares outstanding using the treasury stock method from the
beginning of the period presented.

Primary and fully diluted earning per share were the same for all periods
presented.

                                       6
<PAGE>
 
3.  INVENTORIES -


         Inventories include costs of material, labor and manufacturing overhead
and are stated at the lower of cost (first-in, first-out) or market and consist
of the following:
<TABLE>
<CAPTION>
                                   September 30,   March 31,
                                       1996           1996
                                   -------------   ----------
          <S>                      <C>             <C>
          Raw materials               $1,667,000   $  792,000
          Work - in - process            251,000      512,000
          Finished Goods                 138,000           --
                                      ----------   ----------
                                      $2,056,000   $1,304,000
                                      ==========   ==========
</TABLE>
4.        FACILITY HELD FOR RESALE -

          The $1.3 million facility held for resale relates to the purchase of
the Company's new manufacturing and administrative facility on February 25,
1996.  The second phase of the transaction, which was consummated on May 1,
1996, after the Company completed the renovations required to accommodate the
intended use of the facility, involved the sale and leaseback of the building.
The terms of sale included payment by the purchaser of the full $1.3 million
original purchase price and the Company agreeing to a seven year lease with a
five year option to extend.

5.        MARKETABLE SECURITIES -

          Marketable securities are interest bearing investments with maturities
of less than one year but greater than three months when purchased.  These
securities are readily convertible to cash and are stated at cost, which
approximates market value.

6.        LINE OF CREDIT -

          In August 1996, the Company renegotiated its revolving bank line of
credit.  The new agreement is comprised of two separate credit facilities.  The
initial facility is a $1,250,000 revolving line of credit, which bears interest
at the bank's reference rate plus .75%.  The second facility is a $500,000 non-
revolving line of credit with term repayment options which may be used to
finance up to 80% of the purchase price of equipment used in the Company's
business.  Repayment of borrowings under this facility are in 47 equal monthly
installments starting on October 1, 1997, with interest at the bank's reference
rate plus 1 percent.  Both facilities are secured by the Company's assets and
expire on September 1, 1997.  As of September 30, 1996, there were no borrowings
outstanding under either facility.

                                       7
<PAGE>
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS
---------------------

THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

NET SALES.  Net sales for the three months ended September 30, 1996, increased
$2.438 million, or 168.8% from the three months ended September 30, 1995. This
increase was due largely to Microcell product line sales of approximately $3.004
million, or 77.4% of net sales for the quarter ended September 30, 1996,
compared to approximately $515,000, or 35.7% of net sales for the quarter ended
September 30, 1995. Sales of the Company's cellular products and products being
developed for the paging and PCS markets will represent an increasing percentage
of net sales in the future if the Company's ongoing strategy is successful.

GROSS PROFIT.  Gross profit for the three months ended September 30, 1996,
increased approximately $1.259 million or 152.8% from the three months ended
September 30, 1995. Gross profit as a percentage of net sales decreased to 53.7%
from 57.1% for the comparable period. The higher gross margin for the quarter
ended September 30, 1995 is primarily due to the much lower than anticipated
costs incurred in connection with a contract which generated approximately 27%
of the quarter's net sales.

SELLING, GENERAL AND ADMINISTRATIVE COSTS.  Selling, general and administrative
costs for the three months ended September 30, 1996, increased $399,000 or
186.5% from the three months ended September 30, 1995.  This increase was caused
primarily by increased personnel and advertising costs incurred to promote sales
in the cellular, PCS and paging communications markets, increased commissions
caused by substantially more sales, and incremental costs associated with the
Company's public ownership status such as accounting, legal, and investor
relations expenses not required in the quarter ended September 30, 1995.
furthermore, due to increasing sales volume, additional administrative personnel
and costs were necessary to support a rapidly growing company.

RESEARCH AND DEVELOPMENT COSTS.  Research and development costs for the three
months ended September 30, 1996, increased $226,000 or 137.0% from the three
months ended September 30, 1995.  This increase was due primarily to the
employment of additional technical staff required to develop new products for
the cellular, PCS and paging communications markets.  Research and development
costs expressed as a percentage of net sales decreased to 10.1% from 11.4% for
the comparable period due to the substantial increase in net sales.

PROVISION FOR INCOME TAXES.  For the three months ended September 30, 1996, the
Company's effective tax rate was approximately 37%.  The difference between the
rate used and the statutory rate of approximately 40% was due to research and
development tax credits available to the Company which reduce taxes payable, and
tax free income generated from certain investments.  For the quarter ended
September 30, 1995, the statutory 40% rate was used.

                                       8
<PAGE>
 
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

NET SALES.  Net sales for the six months ended September 30, 1996, increased
$4.981 million, or 193.3% from the six months ended September 30, 1995. This was
due primarily to Microcell product line sales of approximately $6.042 million,
or 79.9% of net sales for the six months ended September 30, 1996, compared to
approximately $629,000, or 24.4% of net sales for the six months ended
September 30, 1995

GROSS PROFIT.  Gross profit for the six months ended September 30, 1996
increased approximately $2.595 million or 178.2% from the six months ended
September 30, 1995.  Gross profit as a percentage of sales decreased to 53.6%
from 56.5% from the comparable period. The higher gross margin for the six
months ended September 30, 1995 is primarily due to the much lower than
anticipated costs incurred in connection with a contract which generated
approximately 28% of the six months' net sales.

SELLING, GENERAL AND ADMINISTRATIVE COSTS.  Selling, general and administrative
costs for the six months ended September 30, 1996, increased $953,000, or 260.4%
from the six months ended September 30, 1995. this increase was caused primarily
by increased personnel and advertising costs incurred to promote sales in the
cellular, PCS and paging communications markets, increased commissions caused
by substantially more sales, and incremental costs associated with the Company's
public ownership status such as accounting, legal, and investor relations
expenses not required in the six months ended September 30, 1995.

RESEARCH AND DEVELOPMENT COSTS.  Research and development costs for the six
months ended September 30, 1996, increased $372,000 or 113.8%, from the six
months September 30, 1995.  This increase was due primarily to the employment of
additional technical personnel required to support the development of new
products for the cellular, PCS and paging communications markets.  However,
research and development costs expressed as a percentage of net sales decreased
to 9.3% from 12.7% in the comparable period due to the substantial increase in
net sales.

PROVISION FOR INCOME TAXES. For the six months ended September 30, 1996, the
Company's effective tax rate was approximately 37%.  The difference between the
rate used and the statutory rate of approximately 40% was due to research and
development tax credits available to the Company which reduce taxes payable and
tax free income generated from certain investments.  For the six months ended
September 30, 1995, the statutory 40% rate was used.

                                       9
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Historically, the Company financed its operations primarily from internally
generated funds and, to a lesser extent loans from stockholders and capital
lease obligations.  In December 1995, the Company completed its initial public
offering of 1,725,000 shares of common stock (including the exercise of the
underwriters' over allotment option).  Of the net proceeds of approximately $7.7
million at December 31, 1995, $425,000 was used to repay loans from certain
stockholders and the remainder is being used to expand manufacturing capability
through the leasing and outfitting of substantially larger facilities, the
acquisition of sufficient equipment to produce higher product quantities, and
the employment and training of additional employees capable of expanding
production and sales.  The net proceeds of the offering are also being used to
increase inventory levels and expand working capital sufficiently to support
higher operating levels.

In August, 1996, the Company renegotiated its revolving bank line of credit.
The new agreement is comprised of two separate credit facilities.  The initial
facility is a $1,250,000 revolving line of credit, which bears interest at the
bank's reference rate plus 0.75%.  The second facility is a $500,000 non-
revolving line of credit with term repayment options which may be used to
finance up to 80% of the purchase price of equipment used in the Company's
business.  Repayment of borrowings under this facility are in 47 equal monthly
installments starting on October 1, 1997, with interest at the bank's reference
rate plus 1.00%.  Both facilities are secured by the Company's assets and expire
on September 1, 1997.  As if September 30, 1996, there were no borrowings
outstanding under either facility.

The Company believes that the net proceeds from the public offering, together
with cash provided by operations and available under the bank line of credit,
will be sufficient to finance the Company for at least the next 12 months.
Inflation has not had a significant effect to date on the Company's results of
operations.

                                       10
<PAGE>
 
                          PART II - OTHER INFORMATION



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Company's Annual Stockholders' Meeting (the "Annual Meeting") was held on
August 27, 1996.

At the Annual Meeting the following persons were re-elected to the Company's
Board of Directors to serve for a three-year term until the fiscal 1999 Annual
Meeting of Stockholders or until their respective successors have been duly
elected and qualified.  There were 5,885,656 shares eligible to vote at the
meeting, of which, approximately 87% of the shares were voted by proxy.  The
voting for the director nominees was as follows
<TABLE>
<CAPTION>
                              VOTES      VOTES
                               FOR      WITHHELD     TOTAL
                            ---------   --------   ---------
     <S>                    <C>         <C>        <C>
     Edwin J. McAvoy        5,112,597      8,952   5,121,549
     Richard W. Flatow      5,113,197      8,352   5,121,549
</TABLE>

     The proposed election of directors is more fully described in the Company's
notice and proxy statement dated July 25, 1996, concerning the Annual Meeting.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits

     10.26  Business Loan Agreement dated August 2, 1996, between the Company
            and Bank of America National Trust and Savings.
     10.27  Security Agreement dated August 2, 1996, between the Company and
            Bank of America National Trust and Savings.
     27     Financial Data Schedule

(b)  There were no Reports on Form 8-k filed by the Company during the quarter
ended September 30, 1996

                                       11
<PAGE>
 
                                   SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
 
                                       AML COMMUNICATIONS, INC.



Date: November 12, 1996                /s/ William E. Sheridan, III
                                       ----------------------------
                                       William E. Sheridan, III
                                       Vice President, Finance and Chief
                                       Financial Officer (Principal Financial
                                       and Accounting Officer)

                                       12