Alpha and Omega Semiconductor Ltd (AOSL)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -25,271 | -15,152 | -16,365 | -13,389 | -3,756 | 57 | -3,841 | 5,175 | 21,328 | 37,433 | 83,067 | 102,902 | 102,317 | 106,261 | 92,825 | 78,698 | 64,076 | 40,386 | 13,971 | -2,989 |
| Interest expense (ttm) | US$ in thousands | 2,639 | 2,521 | 2,196 | 2,544 | 1,961 | 1,636 | 1,370 | 718 | 1,097 | 1,905 | 2,208 | 2,352 | 3,936 | 4,148 | 5,655 | 5,495 | 3,852 | 2,973 | 3,440 | 3,694 |
| Interest coverage | -9.58 | -6.01 | -7.45 | -5.26 | -1.92 | 0.03 | -2.80 | 7.21 | 19.44 | 19.65 | 37.62 | 43.75 | 26.00 | 25.62 | 16.41 | 14.32 | 16.63 | 13.58 | 4.06 | -0.81 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-25,271K ÷ $2,639K
= -9.58
The analysis of Alpha and Omega Semiconductor Ltd.'s interest coverage ratios over the specified periods reveals significant fluctuations with a general trend towards deteriorating ability to meet interest obligations over time.
Initially, as of September 30, 2020, the company recorded a negative interest coverage ratio of -0.81, signaling that operating earnings were insufficient to cover interest expenses, potentially due to high-interest burdens or low earnings. This negative figure continued into December 31, 2020, but improved markedly to a robust 4.06, indicating a substantial increase in earnings before interest and taxes (EBIT), which provided a healthier cushion for interest obligations in early 2021.
From March 31, 2021 onwards, the ratios experienced consistent upward momentum, reaching as high as 43.75 by September 30, 2022. This demonstrates a period during which the company's earnings significantly surpassed its interest expenses, implying strong operational performance and effective financial management.
However, beginning in late 2022, the interest coverage ratios started to decline, dropping to 19.65 by March 31, 2023, and further to 7.21 by September 30, 2023. The decrease suggests a weakening in earnings ability relative to interest costs, although the ratio remained positive, indicating the company could still cover interest expenses but with growing caution.
Most recently, the ratios have turned negative, with December 31, 2023, showing -2.80, and continuing to decline through subsequent periods to -9.58 by June 30, 2025. Negative interest coverage ratios confirm that the company's operating earnings are insufficient to cover interest expenses, implying potential financial distress if the trend persists. These negative figures reflect a situation where interest obligations are not covered by operating income, possibly due to declining revenues, increased interest costs, or both.
Overall, this trend illustrates a period of strong earnings and financial stability followed by a significant downturn, raising concerns about the company's ongoing ability to service its debt commitments in the near future.
Peer comparison
Jun 30, 2025