Alpha and Omega Semiconductor Ltd (AOSL)

Return on equity (ROE)

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Net income	US$ in thousands	-96,976	-11,081	12,364	453,163	58,116
Total stockholders’ equity	US$ in thousands	822,332	891,607	883,919	854,093	373,205
ROE		-11.79%	-1.24%	1.40%	53.06%	15.57%

June 30, 2025 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-96,976K ÷ $822,332K
= -11.79%

The return on equity (ROE) for Alpha and Omega Semiconductor Ltd over the specified period illustrates significant fluctuations and a notable trend of deterioration in profitability relative to shareholders' equity. As of June 30, 2021, the company's ROE stood at 15.57%, indicating a modestly positive return generated on shareholders’ investments. However, by June 30, 2022, there was a substantial increase, with the ROE rising sharply to 53.06%, suggesting a period of enhanced profitability and potentially effective utilization of equity capital during that fiscal year.

Following this peak, a dramatic decline is evident, with the ROE plunging to 1.40% as of June 30, 2023. This reduction indicates a significant deterioration in the company’s ability to generate earnings relative to shareholders’ equity, possibly due to factors such as increased expenses, declining revenues, or adverse operational conditions. The downward trend continues into the subsequent fiscal periods, with the ROE turning negative, registering at -1.24% for June 30, 2024, and further declining to -11.79% by June 30, 2025. These negative figures reflect that the company has been experiencing losses attributable to shareholders’ equity, indicating financial distress or operational challenges.

Overall, the ROE trajectory demonstrates a volatile financial performance for Alpha and Omega Semiconductor Ltd over the analyzed period. The initial high ROE signals strong profitability or effective capital utilization in 2022, but the subsequent sharp decline into negative territory highlights potential issues that have significantly impaired the company's ability to generate sustainable returns for shareholders in recent years.