AXT, Inc. (NASDAQ:AXTI), a leading manufacturer of compound semiconductor wafer substrates, today reported financial results for the first quarter, ended March 31, 2026.

Management Qualitative Comments

"This is an incredibly exciting time for AXT," said Morris Young, chief executive officer. "Last week we completed a capital raise for $632.5 million in support of Tongmei's indium phosphide capacity expansion as well as R&D investment in new products like 6-inch indium phosphide. Indium phosphide substrates are a key ingredient in high-speed optical data transmission required in AI focused data centers. Thanks goes to our investors who are helping us address the strong demand we are seeing. As the market continues to grow, capacity will become a critical enabler. Longer-term capacity planning is one of the most important discussions we are having today with customers and major supply chain players in our space. The message we have for them is this: AXT is stepping up. We believe we are in the best position to support and enable our industry in meeting the current and future needs."

First Quarter 2026 Results

Revenue for the first quarter of 2026 was $26.9 million, compared with $23.0 million for the fourth quarter of 2025 and $19.4 million for the first quarter of 2025.

GAAP gross margin was 29.6 percent of revenue for the first quarter of 2026, compared with 20.9 percent of revenue for the fourth quarter of 2025 and (6.4) percent for the first quarter of 2025.

Non-GAAP gross margin, after excluding charges for stock-based compensation, was 29.9 percent of revenue for the first quarter of 2026, compared with 21.5 percent of revenue for the fourth quarter of 2025 and (6.1) percent for the first quarter of 2025.

GAAP net loss, after minority interests, for the first quarter of 2026 was a net loss of $1.6 million, or $0.03 per share, compared with a net loss of $3.5 million, or $0.08 per share, for the fourth quarter of 2025 and a net loss of $8.8 million, or $0.20 per share, for the first quarter of 2025.

Non-GAAP net loss for the first quarter of 2026 was a net loss of $0.6 million, or $0.01 per share, compared with a net loss of $2.3 million, or $0.05 per share, for the fourth quarter of 2025 and a net loss of $8.2 million, or $0.19 per share, for the first quarter of 2025.

STAR Market Listing Update

On January 10, 2022, AXT announced that Beijing Tongmei Xtal Technology Co., Ltd. ("Tongmei"), its subsidiary in Beijing, China, submitted to the Shanghai Stock Exchange (the "SSE") its application to list its shares in an initial public offering (the "IPO") on the SSE's Sci-Tech innovAtion boaRd (the "STAR Market") and the application was accepted for review. Subsequently, Tongmei responded to several rounds of questions received from the SSE. On July 12, 2022, the SSE approved the listing of Tongmei's shares in an IPO on the STAR Market. On August 1, 2022, the China Securities Regulatory Commission (the "CSRC") accepted for review Tongmei's IPO application. The STAR Market IPO remains subject to review and approval by the CSRC and other authorities. The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Subject to review and approval by the CSRC and other authorities, Tongmei hopes to accomplish this goal in the coming months. AXT has posted a brief summary of the plan and the process on its website at https://investors.axt.com.

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 619252830). The call will also be simulcast at www.axt.com. The webcast will be available at http://www.axt.com until April 30, 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 step up by adding 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. Additionally, statements regarding completing steps in connection with the proposed listing of shares of Tongmei on the Shanghai Stock Exchange's Sci-Tech innovAtion boaRd (the "STAR Market"), being accepted to list shares of Tongmei on the STAR Market, the timing and completion of such listing of shares of Tongmei on the STAR Market are 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 and the listing of shares of Tongmei on the STAR Market, continued open access to companies to list shares on the STAR Market, investor enthusiasm for new listings of shares on the STAR Market, 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
	March 31,
	2026			2025

Revenue	$	26,924		$	19,356
Cost of revenue		18,946			20,597
Gross profit (loss)		7,978			(1,241	)
Operating expenses:
Selling, general and administrative		6,551			5,916
Research and development		3,012			3,118
Total operating expenses		9,563			9,034
Loss from operations		(1,585	)		(10,275	)
Interest income (expense), net		101			(269	)
Equity in income of unconsolidated joint ventures		353			248
Other income, net		76			354
Loss before provision for income taxes		(1,055	)		(9,942	)
Provision for income taxes		430			74
Net loss		(1,485	)		(10,016	)
Less: Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests		(135	)		1,218
Net loss attributable to AXT, Inc.	$	(1,620	)	$	(8,798	)
Net loss attributable to AXT, Inc. per common share:
Basic	$	(0.03	)	$	(0.20	)
Diluted	$	(0.03	)	$	(0.20	)
Weighted-average number of common shares outstanding:
Basic		53,319			43,554
Diluted		53,319			43,554

AXT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)

	March 31,			December 31,
	2026			2025

ASSETS
Current assets:
Cash and cash equivalents	$	41,769		$	120,266
Restricted cash		16,100			8,100
Short-term investments		65,375			—
Accounts receivable, net		32,016			26,849
Inventories		90,168			81,651
Prepaid expenses and other current assets		8,347			9,690
Total current assets		253,775			246,556
Property, plant and equipment, net		164,622			161,860
Operating lease right-of-use assets		1,854			1,982
Other assets		24,347			23,353
Total assets	$	444,598		$	433,751
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	16,141		$	12,947
Accrued liabilities		12,864			14,798
Short-term loans		68,871			62,796
Total current liabilities		97,876			90,541
Noncurrent operating lease liabilities		1,309			1,441
Other long-term liabilities		8,447			7,138
Total liabilities		107,632			99,120

Redeemable noncontrolling interests		38,516			38,056

Stockholders' equity:
Preferred stock		3,532			3,532
Common stock		56			55
Additional paid-in capital		342,434			339,922
Accumulated deficit		(66,544	)		(64,924	)
Accumulated other comprehensive loss		(4,604	)		(5,295	)
Total AXT, Inc. stockholders' equity		274,874			273,290
Noncontrolling interests		23,576			23,285
Total stockholders' equity		298,450			296,575
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$	444,598		$	433,751

AXT, INC. Reconciliation of Statements of Operations Under GAAP and Non-GAAP (Unaudited, in thousands)

	Three Months Ended
	March 31,
	2026			2025
GAAP gross profit (loss)	$	7,978		$	(1,241	)
Stock-based compensation expense		65			63
Non-GAAP gross profit (loss)	$	8,043		$	(1,178	)

GAAP operating expenses	$	9,563		$	9,034
Stock-based compensation expense		970			583
Non-GAAP operating expenses	$	8,593		$	8,451

GAAP loss from operations	$	(1,585	)	$	(10,275	)
Stock-based compensation expense		1,035			646
Non-GAAP loss from operations	$	(550	)	$	(9,629	)

GAAP net loss	$	(1,620	)	$	(8,798	)
Stock-based compensation expense		1,035			646
Non-GAAP net loss	$	(585	)	$	(8,152	)

GAAP net loss per diluted share	$	(0.03	)	$	(0.20	)
Stock-based compensation expense per diluted share	$	0.02		$	0.01
Non-GAAP net loss per diluted share	$	(0.01	)	$	(0.19	)

Shares used to compute diluted net income per share		53,319			43,554

View source version on businesswire.com: https://www.businesswire.com/news/home/20260430987825/en/

Gary Fischer

Chief Financial Officer

(510) 438-4700

Leslie Green

Green Communications Consulting, LLC

(650) 312-9060

AXT, Inc. Announces First Quarter 2026 Financial Results