Companies /Technology

AXT Inc

NASDAQ: AXTI Semiconductor Equipment & Materials
$66.92
â–² $1.74 (+2.67%) today
Markets closed · 6:18pm ET

Q1 2025 Earnings

Reported May 1, 2025, 4:15pm ET · SEC source
$-0.19
Miss −37.68%
EPS · est. $-0.14
$19.4M
Beat +1.97%
Revenue · est. $19.0M
+17.9%
Beating market
AXTI vs S&P since report
4 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−4%0+4%May 1May 2report 4:15pm ETearnings+1.5%+1.5%
−4%0+4%May 1May 2earnings+1.5%+1.5%
AXTI +1.5%S&P 500 +1.5%
−4%0+4%May 1May 2report 4:15pm ETearnings+1.7%+1.5%
−4%0+4%May 1May 2earnings+1.7%+1.5%
AXTI +1.5%NASDAQ +1.7%
−4%0+4%+8%Apr 30May 9report 4:15pm ETearnings+1.3%−3.8%
−4%0+4%+8%Apr 30May 9earnings+1.3%−3.8%
AXTI −3.8%S&P 500 +1.3%
−4%0+4%+8%Apr 30May 9report 4:15pm ETearnings+1.9%−3.8%
−4%0+4%+8%Apr 30May 9earnings+1.9%−3.8%
AXTI −3.8%NASDAQ +1.9%
+2.96%
Day of report
−5.04%
Next session
−10.07%
One week
+23.02%
30 days

S&P 500 over the same 30 days: +5.15%.

Did AXTI Beat Earnings? Q1 2025 Results

AXT, Inc. reported Q1 2025 GAAP EPS of -$0.20 and non-GAAP EPS of -$0.19, significantly wider losses compared to -$0.05 GAAP and -$0.03 non-GAAP in Q1 2024. Revenue came in at $19.36 million, representing a 14.7% YoY decline from $22.69 million in Q1 2024. The quarter was severely impacted by a 58% sequential decline in indium phosphide sales due to China trade restrictions, significant yield issues on gallium arsenide wafers, and under-absorbed factory overhead, driving GAAP gross margin to negative 6.4% versus positive 26.9% a year ago. The company's China subsidiary Tongmei is pursuing growth in high-speed data center connectivity and LIDAR for autonomous driving. Management acknowledged disappointment with gross margin performance but expects improvement beginning in Q2 2025 and continuing through the balance of the year as it takes a more measured approach to scaling gallium arsenide production for the wireless HBT device market.

Key Takeaways
  • 58% sequential decline in indium phosphide sales due to China trade restrictions
  • Significant yield reduction on semi-insulating gallium arsenide wafers
  • Under-absorbed factory overhead due to lower substrate sales
  • Failed attempt to scale gallium arsenide production too quickly

“While the geopolitical environment is creating undeniable challenges, we are focusing our energies where we can drive positive returns today. Tongmei, our China subsidiary, is uniquely positioned to optimize growth opportunities in China, such as high-speed data center connectivity and LIDAR for autonomous driving, and are pursuing these and other opportunities with success across key markets for indium phosphide, gallium arsenide, and germanium substrates. We are also working tirelessly on behalf of our global customer base to ensure that we can continue to support their needs across all our products.”

AXT CEO, on the earnings call

Forward Guidance & Outlook

AXT expects gross margin improvement beginning in Q2 2025 and continuing through the balance of the year. The company is taking a more measured approach to market share expansion in the gallium arsenide HBT device wireless market after stumbling in Q1 by trying to scale too quickly. CEO Morris Young has made this his highest priority in China. The Tongmei STAR Market IPO remains subject to CSRC review and approval, with hopes to accomplish the listing in the coming months.

AXTI YoY Financials

Revenue$19.4M
Gross Profit$-1,241,000
Operating Income$-10,275,000
Net Income$-8,798,000

Figures from SEC filings and company reports. Not investment advice.