Revenue Growth
Q1 2026 revenue was $26.9 million (versus $23.0M in the most recent comparative period and $19.4M in the year-ago period), implying roughly +17% sequential and +39% year-over-year increases.
April 30th, 2026
Summary
- Earnings Call Date:
- 2026-04-30
- Change Since:
- -11.46%
- Next Earnings Date:
- 2026-07-30
Earnings Call Sentiment
PositiveThe call conveyed strong operational momentum: solid revenue growth, a major capital raise, a >$100M indium phosphide backlog, material margin improvement, and a clear multi-stage capacity expansion plan that positions the company to benefit from AI and optical market growth. However, meaningful execution risks remain—most notably the unpredictability of China export permits (including pending U.S. permits), high near-term CapEx and working capital needs, regional revenue concentration, and the technical/qualification challenges of migrating to larger wafer sizes. On balance, the positive financial and commercial developments and a path to near-term profitability outweigh the listed risks.
Company Guidance
Management guided to sequential Q2 revenue growth driven by indium phosphide—Q2 is expected to be AXT’s largest indium phosphide quarter ever—backed by a >$100M indium phosphide backlog and roughly $34M of revenue that either already has permits or does not require them; export permits remain the key uncertainty and could drive significant upside. They expect to achieve profitability in Q2, with non‑GAAP OpEx of about $9.3M (GAAP OpEx ≈ $10M), non‑GAAP net income of $0.06–$0.08 per share, GAAP net income of $0.05–$0.07 per share, and an estimated share count of ~63.5M.
Indium Phosphide Strength & Mix
Indium phosphide revenue was $13.6 million, representing just north of 50% of total Q1 revenue and driving much of the margin and revenue expansion; indium phosphide backlog exceeded $100 million.
Margin Expansion
Non-GAAP gross margin improved to 29.9% (GAAP gross margin 29.6%), up from 21.5% (non-GAAP) and a negative gross margin in the prior-year period (non-GAAP -6.1%), a multi-decade-style swing in profitability.
Narrowing Losses and Path to Profitability
Non-GAAP operating loss narrowed to $0.55M (from $2.6M prior period and ~$9.6M year-ago); non-GAAP net loss was $0.585M ($0.01/share) versus $2.3M prior quarter and $8.2M year-ago. Company expects GAAP and non-GAAP profitability in Q2 with non-GAAP EPS $0.06–$0.08 and GAAP EPS $0.05–$0.07.
Substantial Capital Raise
Completed a $632.5 million capital raise to support Tongmei indium phosphide capacity expansion, R&D (including 6-inch IP), and working capital.
Aggressive Capacity Expansion Plan
Company is ahead of plan to double indium phosphide capacity in 2026, targeting ~ $35M per quarter capacity by end of 2026 and ~ $65–$70M per quarter by 2027 (annualized exit rates cited of ~$140M then ~$280M).
Raw Materials & Vertical Integration
Subsidiary Jinmei began refining high-purity indium, strengthening control of critical raw materials and supporting guaranteed supply for indium phosphide substrates—positioned as a competitive differentiator.
Geographic & Customer Momentum
Asia Pacific comprised 78% of revenue in Q1; top five customers ~32% of revenue with no single customer >10%; management reports expanding relationships with tier-one customers and hyperscalers, and increased customer visibility and long-term supply discussions.
Operator
Good afternoon, everyone, and welcome to AXT, Inc.'s First Quarter 2026 Earnings Conference Call. Leading the call today is Doctor Morris S. Young, Chief Executive Officer, and Gary L. Fischer, Chief Financial Officer. In addition, Tim Bettles, VP of Business, will be participating in the Q&A portion of the call. My name is Tracy, and I will be your coordinator today. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand.
I would now like to turn the call over to Leslie Green, Investor Relations for AXT, Inc. Leslie, go ahead.
Leslie Green
Thank you, Tracy, 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 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, our plan to list our subsidiary, Tongmei, in China, 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...
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