AXT (AXTI) investor relations material

Executive summary

• Achieved record quarterly revenue of $47.6 million in Q2 2026, up 164.8% year-over-year, driven by strong demand for indium phosphide substrates in AI and data center markets and increased export approvals from China.

• Returned to profitability with GAAP net income of $11.1 million ($0.17/share) and non-GAAP net income of $11.9 million ($0.19/share), reversing prior year losses.

• Major long-term supply agreements signed with Casela, Coherent, and Lumentum, securing significant prepayments and capacity commitments.

• Backlog exceeds $100 million, with long-term supply agreements extending visibility into 2027 and beyond.

• Management highlights investments in capacity, technology, and integrated supply chain to meet growing demand in optical and AI infrastructure markets.

Financial highlights

• Q2 2026 revenue: $47.6M (Q1: $26.9M; Q2 2025: $18.0M); H1 2026 revenue: $74.5M (H1 2025: $37.3M).

• GAAP gross margin: 44.9% (Q1: 29.6%; Q2 2025: 8.0%); non-GAAP gross margin: 45.0%.

• GAAP net income: $11.1M ($0.17/share); non-GAAP net income: $11.9M ($0.19/share).

• Operating income reached $10.4M in Q2 2026, up from a loss of $6.7M in Q2 2025.

• Cash, restricted cash, and investments totaled $748.8M as of June 30, 2026, mainly from a $632M secondary offering.

Outlook and guidance

• Q3 2026 revenue guidance: at least $66M, with potential upside pending export permits.

• Non-GAAP net income expected between $0.30–$0.32/share; GAAP net income $0.29–$0.31/share.

• Indium phosphide capacity targeted to reach $60M/quarter by year-end, doubling again to $130M/quarter by end of 2027.

• Company believes it has adequate cash and investments to meet operating needs and capital expenditures over the next 12 months.

• Ongoing trade tensions and export permit uncertainties may impact revenue recognition and operational planning.