AXT, Inc. Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance Highlights

  • Revenue: $47.6 million (record high). +77% vs. Q1 2026 ($26.9M); +164% vs. Q2 2025 ($18.0M).
  • Indium Phosphide (InP): $30.7 million (record high), primarily data center/AI applications. Gallium Arsenide: $6.6M; Germanium: $0.27M; Raw materials JV: $10.0M.
  • Top customers: Top 5 accounted for ~30% of revenue; no customer exceeded 10%.

Profitability and Margins

  • Non-GAAP Gross Margin: 45.0% (vs. 29.9% in Q1 2026; 8.2% in Q2 2025). GAAP gross margin: 44.9% (vs. 29.6% Q1 2026; 8.0% Q2 2025). Improvement driven by higher volume and favorable InP mix.
  • Non-GAAP Operating Profit: $11.2 million (vs. $0.55M loss in Q1 2026; $6.1M loss in Q2 2025). GAAP operating profit: $10.4M (vs. $1.6M loss Q1 2026; $6.7M loss Q2 2025).
  • Non-GAAP Net Income: $11.9 million or $0.19 per diluted share (vs. $0.585M loss / $0.01 loss Q1 2026; $6.4M loss / $0.15 loss Q2 2025). GAAP net income: $11.1M or $0.17/share.
  • Cash & Investments: $74.9 million as of June 30 (up from $12.3M at March 31), boosted by ~$63.2M secondary offering. Inventory up $6.2M to $96.3M.

Strategic Updates

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Operator: Good afternoon, everyone. And welcome to AXT's Second Quarter 26 Financial Conference Call. Leading the call today is Dr. Morris S. Young, chief executive officer and Gary L. Fischer, chief financial officer. In addition, Timothy J. Bettles, VP of business development, will be participating in the Q&A portion of the call. My name is Kenneth, and I will be your coordinator today. I would now like to turn the call over to Leslie Green, investor relations for AXT. Leslie Green: Thank you, Kenneth, and good afternoon, everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide forward-looking projections or make other forward-looking statements. Regarding, among other things, the future financial performance of the company market conditions and trends, emerging applications using chips or devices fabricated on our substrates, our product mix, global economic and political conditions, including trade tariffs and import and export restrictions, ability to obtain China export permits, timing of receipt of export permits, listing our subsidiary, Tongmei, in Hong Kong our ability to increase orders in succeeding quarters to control costs and expenses, to improve manufacturing yields and efficiencies or to utilize our manufacturing capacity. We wish to caution you that such statements deal with future events, are based on management's current expectations, and are
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