AXT Revenue Hits Record $73.4 Million, Up 162% From A Year Ago, As Gross Margin Reaches 56.0%
The wafer maker swung to a $25.7 million profit attributable to AXT, and its cash pile reached $485.5 million.
AXT, which makes specialty semiconductor wafers, said third-quarter revenue hit a record $73.4 million, up 54% from the second quarter and 162% from a year earlier. Net income attributable to AXT reached $25.7 million, against a $1.9 million loss in the third quarter of 2025.
Margins widen as profit swings
Earnings came to $0.39 per diluted share, compared with $11.1 million, or $0.17 per share, in the second quarter. Total net income was $29.75 million before $4.0 million went to noncontrolling interests, the stakes other investors hold in AXT's subsidiaries.
Gross margin, the share of revenue left after production costs, was 56.0%, up from 44.9% in the second quarter and 22.3% a year earlier. Operating income was $28.4 million, versus a $1.1 million loss in the third quarter of 2025. Adjusted net income, which excludes stock-based pay, was $26.8 million, or $0.41 per share.
For the first nine months, revenue was $147.9 million, compared with $65.3 million in the same period of 2025.
Indium phosphide drives the surge
AXT makes substrates, the wafers that chips are built on, from indium phosphide, gallium arsenide and germanium. They go into products such as data center optical links, 5G equipment and lasers. Substrates were 67% of 2025 revenue, according to the company's annual report, and all of its products are made in China.
CEO Morris Young attributed the quarter to "exceptionally strong customer demand for our indium phosphide material." He said AXT had surpassed its goal of doubling indium phosphide capacity and has "more than quadrupled our 2026 indium phosphide revenue opportunity" through productivity gains and expanded large-diameter capabilities.
A $485.5 million cash balance
Cash and cash equivalents stood at $485.5 million on September 30, up from $120.3 million at the end of 2025. Total assets rose to $1.22 billion from $433.8 million. Weighted diluted shares rose to 65.9 million from 43.8 million a year earlier.
The company lists receipt of export permits for its indium phosphide substrates among the risks to its results, along with geopolitical tensions between China and the United States. It held its conference call at 1:30 p.m. PT on Thursday.
Total equity ended September at $940.5 million, up from $296.6 million at the end of 2025.
Sources
- 8-K Filing — AXT INC (AXTI) — SEC EDGAR
- Exhibit ex_1013304.htm — AXT INC 8-K exhibit — SEC EDGAR
- AXT, Inc. Announces Third Quarter 2026 Financial Results — businesswire.com
