AXT, Inc. Reports Strong Q3 2025 Growth Driven by Surging Indium Phosphide Demand
AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, today announced financial results for the third quarter ended September 30, 2025, highlighting a sharp rebound in demand and revenue growth fueled by strength in the global data center market.
CEO Commentary
“This has been a highly active and encouraging period for AXT,” said Morris Young, Chief Executive Officer. “We are seeing strong momentum in indium phosphide demand, especially from data center applications worldwide. In the third quarter, indium phosphide revenue grew more than 250% sequentially, reaching its highest level in three years as we secured key export permits and delivered several major customer orders.”
Dr. Young emphasized that AXT continues to build a healthy backlog for both indium phosphide (InP) and gallium arsenide (GaAs) materials, as the semiconductor industry adjusts to a “new normal” amid rapid technological and market change.
“We remain focused on improving gross margins, managing expenses, and reducing inventory,” he added. “With strong market trends driving a data center upgrade cycle and the emergence of new high-performance applications, we believe 2026 holds tremendous opportunity for growth and a return to profitability.”
Third Quarter 2025 Financial Results
- Revenue: $28.0 million, up from $18.0 million in Q2 2025 and $23.6 million in Q3 2024.
- GAAP Gross Margin: 22.3%, compared with 8.0% in Q2 2025 and 24.0% in Q3 2024.
- Non-GAAP Gross Margin: 22.4%, excluding stock-based compensation, compared with 8.2% in Q2 2025 and 24.3% in Q3 2024.
- GAAP Net Loss: $1.9 million, or $0.04 per share, improving from a $7.0 million loss ($0.16 per share) in Q2 2025 and a $2.9 million loss ($0.07 per share) in Q3 2024.
- Non-GAAP Net Loss: $1.2 million, or $0.03 per share, compared with $6.4 million ($0.15 per share) in Q2 2025 and $2.1 million ($0.05 per share) in Q3 2024.
AXT’s strong sequential revenue growth and significant improvement in gross margin reflected recovering demand in its core compound semiconductor markets, led by indium phosphide.
STAR Market Listing Update
AXT also provided an update on the planned initial public offering (IPO) of its Beijing-based subsidiary, Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), on China’s Shanghai Stock Exchange Sci-Tech Innovation Board (STAR Market).
- On January 10, 2022, Tongmei submitted its IPO application to the Shanghai Stock Exchange (SSE), which accepted the filing for review.
- After several rounds of questions and responses, the SSE approved Tongmei’s listing application on July 12, 2022.
- On August 1, 2022, the China Securities Regulatory Commission (CSRC) accepted the IPO for further review.
The IPO remains under review by the CSRC and other regulatory authorities. As AXT noted, the STAR Market listing process involves multiple stages of evaluation and can be lengthy. Tongmei continues to work toward completing this process in the coming months, subject to final approval.
Conference Call Information
AXT will host a conference call today at 1:30 p.m. Pacific Time to discuss these results.
- U.S. Dial-in: (800) 715-9871 (Passcode: 4378083)
- Replay: (800) 770-2030 (Playback ID: 4378083#) — available through November 6, 2025.
- The call will also be webcast live at www.axt.com, where financial information and presentation materials will be available prior to the call.
About AXT, Inc.
AXT, Inc. is a materials science company specializing in the development and manufacturing of high-performance compound and single-element semiconductor substrate wafers. These include indium phosphide (InP), gallium arsenide (GaAs), and germanium (Ge) substrates—critical building blocks for next-generation semiconductor and optoelectronic devices where traditional silicon wafers cannot meet performance requirements.
AXT’s substrates are used across diverse applications, including:
- 5G infrastructure and connectivity
- Data center optics and silicon photonics
- Passive optical networks (PON)
- LED lighting and laser diodes
- Sensors and power amplifiers for mobile and wireless devices
- Satellite solar cells
Headquartered in Fremont, California, AXT maintains global sales, customer service, and administrative operations in the U.S., as well as manufacturing facilities in three locations across China. Its Asia headquarters is in Beijing.
To secure supply chain stability, AXT also holds partial ownership in ten raw material producers in China, ensuring access to critical input materials for its manufacturing operations.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of U.S. federal securities laws, including statements regarding AXT’s business outlook, growth opportunities, and the anticipated listing of Tongmei’s shares on the STAR Market. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, many of which are beyond the company’s control.
Key risk factors include, but are not limited to:
- The timing, review, and approval process for Tongmei’s STAR Market IPO;
- Market demand and pricing for AXT’s products;
- Geopolitical and trade tensions between the U.S. and China;
- Supply chain and production capacity constraints;
- Potential impacts from public health or environmental restrictions in China;
- The ability to manage costs, maintain quality, and achieve target gross margins; and
- Economic conditions and end-market demand across AXT’s served industries.
Additional information about these and other risks can be found in AXT’s filings with the U.S. Securities and Exchange Commission (SEC), including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
AXT undertakes no obligation to update these forward-looking statements except as required by law.
