AXT, Inc. Announces Third Quarter 2026 Financial Results

FREMONT, Calif.--(BUSINESS WIRE)--AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, today reported financial results for the third quarter, ended September 30, 2026.

Management Qualitative Comments

“This is a pivotal and exciting period for AXT,” said Morris Young, chief executive officer. “Our revenue in Q3 reached a record $73.4 million, up 54 percent from the prior quarter and up 162 percent year over year, driven by exceptionally strong customer demand for our indium phosphide material. We entered 2026 with a commitment to double our indium phosphide capacity and I am pleased to report that not only have we surpassed that goal but we have more than quadrupled our 2026 indium phosphide revenue opportunity through additional productivity gains and the expansion of our capabilities for high-value, large diameter products. We remain laser-focused on execution and supporting our customers as they scale, and we believe we are well positioned for transformational growth as our market continues on an extraordinary trajectory.”

Third Quarter 2026 Results

• Revenue for the third quarter of 2026 was $73.4 million, compared with $47.6 million for the second quarter of 2026 and $28.0 million for the third quarter of 2025.
• GAAP gross margin was 56.0 percent of revenue for the third quarter of 2026, compared with 44.9 percent of revenue for the second quarter of 2026 and 22.3 percent for the third quarter of 2025.
• Non-GAAP gross margin, after excluding charges for stock-based compensation, was 56.1 percent of revenue for the third quarter of 2026, compared with 45.0 percent of revenue for the second quarter of 2026 and 22.4 percent for the third quarter of 2025.
• GAAP net income, after minority interests, for the third quarter of 2026 was a net income of $25.7 million, or $0.39 diluted income per share, compared with a net income of $11.1 million, or $0.17 per share, for the second quarter of 2026 and a net loss of $1.9 million, or $0.04 per share, for the third quarter of 2025.
• Non-GAAP net income for the third quarter of 2026 was a net income of $26.8 million, or $0.41 per share, compared with a net income of $11.9 million, or $0.19 per share, for the second quarter of 2026 and a net loss of $1.2 million, or $0.03 per share, for the third quarter of 2025.

Conference Call

The company will host a conference call to discuss these results today at 1:30 p.m. PT. The conference call can be accessed at [phone] (passcode 457 551 713). The call will also be simulcast at www.axt.com. The webcast will be available at http://www.axt.com until Oct. 29, 2027. Additional investor information can be accessed at http://www.axt.com.

About AXT, Inc.

AXT is a material science company that develops and manufactures high-performance compound and single element semiconductor substrate wafers comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge). The company’s substrate wafers are used when a typical silicon substrate wafer cannot meet the performance requirements of a semiconductor or optoelectronic device. End markets include 5G infrastructure, data center connectivity (silicon photonics), passive optical networks, LED lighting, lasers, sensors, power amplifiers for wireless devices and satellite solar cells. AXT’s worldwide headquarters are in Fremont, California where the company maintains sales, administration and customer service functions. AXT has its Asia headquarters in Beijing, China and manufacturing facilities in three separate locations in China. In addition, as part of its supply chain strategy, the company has partial ownership in ten companies in China producing raw materials for its manufacturing process. For more information, see AXT’s website at https://investors.axt.com.

Safe Harbor Statement

This press release contains certain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. For example, our plans and ability to increase manufacturing capacity and to enable our industry to meet future demands and needs for our indium phosphide wafer substrates. Statements relating to our expectations regarding the receipt of export permits for our indium phosphide substrates, results of operations, market and customer demand for our products, our ability to expand our markets or increase sales, emerging applications using chips or devices fabricated on our substrates, including the use of indium phosphide wafer substrates in artificial intelligence (“AI”) applications, product yields and gross margins, expense levels, our investments in capital projects, ramping production at our sites, our ability to utilize or increase our manufacturing capacity, and our belief that we have adequate cash and investments to meet our needs are also forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “likely,” and similar expressions and variations thereof are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These statements appear in this press release and elsewhere, include statements regarding the intent, belief or current expectations of our management that are subject to known and unknown risks, uncertainties and assumptions which could cause actual results to differ materially from those expressed or implied in the forward-looking statement. These risks, uncertainties and assumptions include, but are not limited to, the receipt of export permits for our indium phosphide substrates, the withdrawal, cancellations or requests for redemptions by private equity funds in China of their investments in Tongmei, the administrative challenges in satisfying the requirements of various government agencies in China in connection with the investments in Tongmei, geopolitical tensions between China and the United States, and other factors described and captioned “Risk Factors” in the company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company’s control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

AXT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Revenue	$	73,410		$	27,955		$	147,923		$	65,285
Cost of revenue		32,315			21,731			77,484			58,869
Gross profit		41,095			6,224			70,439			6,416
Operating expenses:
Selling, general and administrative		8,724			6,334			22,567			17,903
Research and development		3,944			1,013			10,607			6,656
Total operating expenses		12,668			7,347			33,174			24,559
Income (loss) from operations		28,427			(1,123	)		37,265			(18,143	)
Interest income (expense), net		5,895			(395	)		10,724			(866	)
Equity in income of unconsolidated joint ventures		237			515			1,007			592
Other income (expense), net		(238	)		(166	)		(598	)		211
Income (loss) before provision for income taxes		34,321			(1,169	)		48,398			(18,206	)
Provision for income taxes		4,571			504			7,103			1,157
Net income (loss)		29,750			(1,673	)		41,295			(19,363	)
Less: Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests		(4,027	)		(233	)		(6,064	)		1,651
Net income (loss) attributable to AXT, Inc.	$	25,723		$	(1,906	)	$	35,231		$	(17,712	)
Net income (loss) attributable to AXT, Inc. per common share:
Basic	$	0.40		$	(0.04	)	$	0.59		$	(0.41	)
Diluted	$	0.39		$	(0.04	)	$	0.57		$	(0.41	)
Weighted-average number of common shares outstanding:
Basic		63,827			43,842			59,474			43,701
Diluted		65,862			43,842			61,731			43,701

AXT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)
	September 30,			December 31,
	2026			2025
ASSETS
Current assets:
Cash and cash equivalents	$	485,472		$	120,266
Restricted cash		41,200			8,100
Short-term investments		27,266			—
Accounts receivable, net		39,685			26,849
Inventories		103,658			81,651
Prepaid expenses and other current assets		27,334			9,690
Total current assets		724,615			246,556
Long-term investments		271,956			—
Property, plant and equipment, net		194,370			161,860
Operating lease right-of-use assets		2,138			1,982
Other assets		24,801			23,353
Total assets	$	1,217,880		$	433,751
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,043		$	12,947
Accrued liabilities		100,407			14,798
Short-term loans		72,461			62,796
Total current liabilities		190,911			90,541
Noncurrent operating lease liabilities		1,215			1,441
Other long-term liabilities		42,930			7,138
Total liabilities		235,056			99,120
Redeemable noncontrolling interests		42,287			38,056
Stockholders’ equity:
Preferred stock		3,532			3,532
Common stock		66			55
Additional paid-in capital		944,829			339,922
Accumulated deficit		(29,693	)		(64,924	)
Accumulated other comprehensive loss		(5,385	)		(5,295	)
Total AXT, Inc. stockholders’ equity		913,349			273,290
Noncontrolling interests		27,188			23,285
Total stockholders’ equity		940,537			296,575
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	1,217,880		$	433,751

AXT, INC. Reconciliation of Statements of Operations Under GAAP and Non-GAAP (Unaudited, in thousands)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2026		2025			2026		2025
GAAP gross profit	$	41,095	$	6,224		$	70,439	$	6,416
Stock-based compensation expense		65		50			195		159
Non-GAAP gross profit	$	41,160	$	6,274		$	70,634	$	6,575
GAAP operating expenses	$	12,668	$	7,347		$	33,174	$	24,559
Stock-based compensation expense		1,004		688			2,671		1,858
Non-GAAP operating expenses	$	11,664	$	6,659		$	30,503	$	22,701
GAAP income (loss) from operations	$	28,427	$	(1,123	)	$	37,265	$	(18,143	)
Stock-based compensation expense		1,069		738			2,866		2,017
Non-GAAP income (loss) from operations	$	29,496	$	(385	)	$	40,131	$	(16,126	)
GAAP net income (loss)	$	25,723	$	(1,906	)	$	35,231	$	(17,712	)
Stock-based compensation expense		1,069		738			2,866		2,017
Non-GAAP net income (loss)	$	26,792	$	(1,168	)	$	38,097	$	(15,695	)
GAAP net income (loss) per diluted share	$	0.39	$	(0.04	)	$	0.57	$	(0.41	)
Stock-based compensation expense per diluted share	$	0.02	$	0.01		$	0.05	$	0.05
Non-GAAP net income (loss) per diluted share	$	0.41	$	(0.03	)	$	0.62	$	(0.36	)
Shares used to compute diluted net income per share		65,862		43,842			61,731		43,701