AXT, Inc. Reports 164.8% Revenue Growth to $47.6 Million in Latest Quarter

AXT, Inc. reported significant financial growth in its latest quarterly filing, with revenues reaching $47.6 million for the three months ended June 30, 2026, a 164.8% increase from $18.0 million in the same period last year. For the six months ended June 30, 2026, total revenue was $74.5 million, nearly doubling from $37.3 million in the prior year. The surge in revenue was primarily driven by heightened demand for indium phosphide (InP) wafer substrates, which are increasingly utilized in data center applications and passive optical networks, following additional export approvals from the Chinese government. Gross profit also saw a remarkable increase, rising to $21.4 million for the quarter, compared to just $1.4 million a year earlier, reflecting a gross margin of 44.9%.

The company’s operational metrics indicate a robust performance, with total current assets climbing to $598.8 million as of June 30, 2026, up from $246.6 million at the end of 2025. This increase was bolstered by a substantial rise in cash and cash equivalents, which reached $412.2 million, compared to $120.3 million at the end of the previous fiscal year. AXT's employee headcount also grew, reflecting its expansion efforts, although specific numbers were not disclosed in the filing. The company continues to focus on enhancing its manufacturing capabilities, particularly in the production of InP substrates, to meet the growing market demand.

Strategically, AXT has made significant moves, including the withdrawal of its IPO application for Tongmei on the STAR Market, which occurred on July 8, 2026. The company plans to redirect its efforts towards a listing on the Hong Kong Stock Exchange, emphasizing its InP business to attract a broader investor base. Additionally, AXT entered into long-term supply agreements with customers, including a notable agreement with Nanjing Casela Technologies Corporation for the supply of InP wafer substrates, which is expected to generate approximately $25.4 million in revenue in 2027.

Despite the positive financial results, AXT faces challenges, particularly related to geopolitical tensions and trade regulations. The company has been impacted by U.S. tariffs on imports from China, which have fluctuated significantly, and new export controls imposed by the Chinese government on materials like gallium and germanium. These factors have led to a decrease in revenue from North American customers, which fell to just 0.3% of total revenue in the latest quarter. AXT is actively monitoring these developments and their potential impact on its operations and financial performance.

Looking ahead, AXT remains optimistic about its growth trajectory, supported by its strong cash position and strategic investments in manufacturing capacity. The company believes it has sufficient liquidity to meet its operational needs and capital expenditures over the next 12 months. However, it acknowledges the risks associated with fluctuating market conditions, regulatory changes, and the need to maintain high product quality to retain and expand its customer base.