second quarter of 2026
Filed Jul 30, 2026AXT reported second-quarter revenue of $47.6 million, GAAP gross margin of 44.9 percent, and GAAP net income attributable to AXT, Inc. of $11.1 million.
Revenue, gross margin, operating income, and GAAP and non-GAAP net income improved substantially versus both the first quarter of 2026 and the second quarter of 2025.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $47.6 million | – | – |
| Cost of revenueGAAP | $ 26,223 | – | – |
| Gross profitGAAP | $ 21,366 | – | – |
| GAAP gross marginGAAP | 44.9 percent of revenue | – | – |
| Non-GAAP gross marginnon-GAAP | 45.0 percent of revenue | – | – |
| Selling, general and administrativeGAAP | $ 7,292 | – | – |
| Research and developmentGAAP | $ 3,651 | – | – |
| Total operating expensesGAAP | $ 10,943 | – | – |
| Income from operationsGAAP | $ 10,423 | – | – |
| Interest income (expense), netGAAP | $ 4,728 | – | – |
| Equity in income (loss) of unconsolidated joint venturesGAAP | $ 417 | – | – |
| Other income (expense), netGAAP | $ (436 ) | – | – |
| Income (loss) before provision for income taxesGAAP | $ 15,132 | – | – |
| Provision for income taxesGAAP | $ 2,102 | – | – |
| Net income (loss)GAAP | $ 13,030 | – | – |
| Net income (loss) attributable to AXT, Inc.GAAP | $11.1 million | – | – |
| GAAP diluted income (loss) per shareGAAP | $0.17 diluted income per share | – | – |
| GAAP basic net income (loss) attributable to AXT, Inc. per common shareGAAP | $ 0.18 | – | – |
| Non-GAAP net incomenon-GAAP | a net income of $11.9 million | – | – |
| Non-GAAP net income per sharenon-GAAP | $0.19 per share | – | – |
| Revenue, six months ended June 30GAAP | $ 74,513 | – | – |
| Gross profit, six months ended June 30GAAP | $ 29,344 | – | – |
| Income from operations, six months ended June 30GAAP | $ 8,838 | – | – |
| Net income (loss) attributable to AXT, Inc., six months ended June 30GAAP | $ 9,508 | – | – |
| Diluted net income (loss) attributable to AXT, Inc. per common share, six months ended June 30GAAP | $ 0.16 | – | – |
What drove it
- Management cited strong customer demand for data center optical connectivity.
- Management cited continued success in adding manufacturing capacity and improving productivity.
- Management said it recorded its highest quarterly indium phosphide revenue to date.
- Management cited demand building across the optical and AI infrastructure markets.
Concerns
- The filing identifies receipt of export permits for indium phosphide substrates as a risk.
- The filing identifies potential withdrawal, cancellations or redemption requests by private equity funds in China relating to investments in Tongmei.
- The filing identifies administrative challenges related to government-agency requirements in China in connection with investments in Tongmei.
- The filing identifies geopolitical tensions between China and the United States as a risk.
What to watch
- Customer demand and roadmaps for data center optical connectivity.
- Manufacturing-capacity additions, production ramping, utilization and productivity.
- Product yields and gross margins.
- Receipt of export permits for indium phosphide substrates.
- Investment in capital projects and the company’s ability to utilize or increase manufacturing capacity.
Balance sheet and cash flow
- Cash and cash equivalents were $ 412,167 as of June 30, 2026, compared with $ 120,266 as of December 31, 2025.
- Restricted cash was $ 33,050 as of June 30, 2026, compared with $ 8,100 as of December 31, 2025.
- Short-term investments were $ 5,031 as of June 30, 2026, compared with — as of December 31, 2025.
- Long-term investments were $ 298,600 as of June 30, 2026, compared with — as of December 31, 2025.
- Accounts receivable, net were $ 36,675 as of June 30, 2026, compared with $ 26,849 as of December 31, 2025.
- Inventories were $ 96,322 as of June 30, 2026, compared with $ 81,651 as of December 31, 2025.
- Property, plant and equipment, net was $ 174,924 as of June 30, 2026, compared with $ 161,860 as of December 31, 2025.
- Total assets were $ 1,097,192 as of June 30, 2026, compared with $ 433,751 as of December 31, 2025.
- Short-term loans were $ 84,233 as of June 30, 2026, compared with $ 62,796 as of December 31, 2025.
- Total liabilities were $ 145,344 as of June 30, 2026, compared with $ 99,120 as of December 31, 2025.
Analysis
AXT reported a sharp second-quarter acceleration. Revenue was $47.6 million, compared with $26.9 million in the first quarter of 2026 and $18.0 million in the second quarter of 2025. Management attributed the increase to strong customer demand for data center optical connectivity, additional manufacturing capacity and improved productivity. It also said quarterly indium phosphide revenue reached a company record, although it did not disclose the amount.
Profitability improved materially with the revenue increase. GAAP gross margin was 44.9 percent of revenue, compared with 29.6 percent in the first quarter and 8.0 percent a year earlier. Non-GAAP gross margin was 45.0 percent of revenue, compared with 29.9 percent and 8.2 percent, respectively. GAAP income from operations was $ 10,423, compared with an operating loss of $ (6,745 ) in the second quarter of 2025.
The company returned to profitability at the net-income line. GAAP net income attributable to AXT, Inc. was $11.1 million, or $0.17 diluted income per share, compared with a net loss of $1.6 million, or $0.03 per share, in the first quarter and a net loss of $7.0 million, or $0.16 per share, a year earlier. Non-GAAP net income was $11.9 million, or $0.19 per share. Interest income (expense), net was $ 4,728, compared with $ (202 ) in the prior-year quarter.
The balance sheet reflects substantial liquidity and investment balances. Cash and cash equivalents were $ 412,167, short-term investments were $ 5,031, and long-term investments were $ 298,600 as of June 30, 2026. Short-term loans were $ 84,233. Inventories increased to $ 96,322 from $ 81,651 as of December 31, 2025, an item to monitor alongside production ramping and demand realization.
AXT did not provide forward financial guidance in the filing. Management emphasized capacity investment, technology and its integrated supply chain as tools to address expected optical and AI infrastructure demand. The principal disclosed risks include export permits for indium phosphide substrates, Tongmei-related private-equity and administrative matters in China, and geopolitical tensions between China and the United States.
Management, verbatim
We have reached an inflection point in our business where strong customer demand for data center optical connectivity coupled with our continued success in adding manufacturing capacity and improving productivity are driving a step-function increase in our revenue.
Morris Young, chief executive officer
In Q2, we recorded our highest quarterly indium phosphide revenue to date.
Morris Young, chief executive officer
The investments we are making today—in capacity, in technology, and in our uniquely integrated supply chain—position us to meet the extraordinary demand we see building across the optical and AI infrastructure markets.
Morris Young, chief executive officer
Not in the filing
stated, not guessed- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Previous-release outlook for comparison with actual results
- Operating cash flow
- Free cash flow
- Capital expenditures
- Share repurchases
- Dividend declaration or payment
- Revenue by reportable segment
- Amount of quarterly indium phosphide revenue
- Non-GAAP operating income
- Non-GAAP operating expenses
- Non-GAAP reconciliation tables
- Second-quarter GAAP operating-expense comparisons with the first quarter of 2026
- Second-quarter GAAP operating-income comparison with the first quarter of 2026
- Second-quarter operating cash flow and free cash flow
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.