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 (833) 461-5787 (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 Gary Fischer Chief Financial Officer (510) 438-4700 Leslie Green Green Communications Consulting, LLC leslie@greencommunicationsllc.com Source: AXT, Inc.