AXT (AXTI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $26.9M, up from $23.0M in Q4 2025 and $19.4M in Q1 2025, driven by strong Indium Phosphide demand and export approvals.

• Gross margin improved significantly, with non-GAAP at 29.9% and GAAP at 29.6%, up from negative margins a year ago.

• Net loss narrowed to $1.6M GAAP ($0.03/share) and $0.6M non-GAAP ($0.01/share), a substantial improvement from prior periods.

• Completed a $632.5M capital raise to fund Indium Phosphide capacity expansion and R&D.

• Indium Phosphide backlog hit a record $100M, with Q2 expected to set a new revenue record for this product.

Financial highlights

• Q1 2026 revenue: $26.9M (up 39% YoY, up 17% sequentially).

• Non-GAAP gross margin: 29.9% (vs. 21.5% in Q4 2025, -6.1% in Q1 2025); GAAP gross margin: 29.6%.

• Non-GAAP operating loss: $550K (vs. $2.6M in Q4 2025, $9.6M in Q1 2025).

• GAAP net loss: $1.6M ($0.03/share), improved from $8.8M ($0.20/share) in Q1 2025.

• Cash and investments: $123M as of March 31, 2026; cash and equivalents: $57.9M; short-term investments: $65.4M.

Outlook and guidance

• Q2 2026 revenue guidance: $34M with potential upside if additional export permits are received.

• Non-GAAP net income forecasted at $0.06-$0.08/share; GAAP net income at $0.05-$0.07/share.

• OpEx expected at ~$9.3M non-GAAP and ~$10M GAAP for Q2.

• Profitability anticipated on both GAAP and non-GAAP basis in Q2.

• Management expects continued strong demand for Indium Phosphide substrates, especially for AI and data centers, but notes ongoing uncertainty due to export permit requirements and trade tensions.