AXT, Inc. Announces Fourth Quarter and Fiscal Year 2024 Financial Results

Rhea-AI Summary

AXT Inc. (AXTI) reported its Q4 and fiscal year 2024 financial results, showing significant year-over-year growth. The company achieved a 31% increase in annual revenue to $99.4 million, up from $75.8 million in 2023. For Q4 2024, revenue was $25.1 million, compared to $23.6 million in Q3 2024 and $20.4 million in Q4 2023.

The company's GAAP gross margin for Q4 2024 was 17.6%, down from 24.0% in Q3 2024. The full-year GAAP gross margin improved to 24.0% from 17.6% in 2023. GAAP net loss for fiscal 2024 was $11.6 million ($0.27 per share), an improvement from a net loss of $17.9 million ($0.42 per share) in 2023.

AXT reported successful expansion into the cloud and data center infrastructure market, along with penetration into the cell phone market, which represents a $100M addressable opportunity.

Positive

• 31% year-over-year revenue growth to $99.4 million
• Successful expansion into cloud and data center infrastructure market
• Entry into $100M addressable cell phone market
• Improved annual GAAP gross margin from 17.6% to 24.0%
• Reduced annual net loss from $17.9M to $11.6M

Negative

• Q4 2024 GAAP net loss increased to $5.1M from $2.9M in Q3
• Q4 gross margin declined to 17.6% from 24.0% in Q3
• Continuing net losses despite revenue growth

Insights

Financial Analyst

The financial results reveal a company in transition, with notable progress in revenue growth but persistent profitability challenges. The 31% year-over-year revenue increase to $99.4M demonstrates successful market penetration strategies, particularly in high-growth segments like cloud infrastructure and mobile devices. The company's expansion into the cell phone market, with its $100M addressable opportunity, represents a significant pivot from traditional focus areas.

However, the Q4 margin compression - dropping to 17.6% from 24.0% in Q3 - signals potential challenges in cost management or pricing pressure. This margin deterioration, combined with a widening quarterly loss of $5.1M, suggests that the company's growth strategy currently prioritizes market share over immediate profitability.

The pending STAR Market listing of subsidiary Tongmei represents a strategic move to potentially unlock value and access capital markets in China, where much of the company's manufacturing occurs. This could provide important funding for expansion while potentially reducing dependency on U.S. capital markets.

The divergence between GAAP and non-GAAP results, particularly in net losses ($11.6M vs $8.5M for FY2024), indicates significant non-cash expenses impacting reported figures. The improved year-over-year non-GAAP metrics suggest underlying operational improvements, though the company still needs to demonstrate a clear path to profitability.

Year on Year Revenue Increases 31 Percent

FREMONT, Calif.--(BUSINESS WIRE)-- AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, today reported financial results for the fourth quarter and fiscal year ended December 31, 2024.

Management Qualitative Comments

“Our growth in 2024 showed a year of improvement for AXT in several key areas,” said Morris Young, chief executive officer. “We delivered a 31 percent increase in revenue, a 21 percent improvement in non-GAAP gross profit, and a 40 percent improvement in non-GAAP net loss. Over the last twelve months we have aggressively advanced the technical specifications of our materials to help our global customer base solve complex, next-generation connectivity challenges. As such, 2024 marked a meaningful year of our revenue growth into the cloud and data center infrastructure market, as well as our successful penetration of the cell phone market, which is close to a $100M addressable market, and before now, largely untapped by AXT. Through our product success, world-class manufacturing, and unique supply chain, we have built a valuable company poised to address the rapidly growing market opportunities ahead of us.”

Fourth Quarter 2024 Results

• Revenue for the fourth quarter of 2024 was $25.1 million, compared with $23.6 million for the third quarter of 2024 and $20.4 million for the fourth quarter of 2023.
• GAAP gross margin was 17.6 percent of revenue for the fourth quarter of 2024, compared with 24.0 percent of revenue for the third quarter of 2024 and 22.6 percent for the fourth quarter of 2023.
• Non-GAAP gross margin, after excluding charges for stock-based compensation, was 17.9 percent of revenue for the fourth quarter of 2024, compared with 24.3 percent of revenue for the third quarter of 2024 and 23.2 percent for the fourth quarter of 2023.
• GAAP net loss, after minority interests, for the fourth quarter of 2024 was a net loss of $5.1 million, or $0.12 per share, compared with a net loss of $2.9 million, or $0.07 per share, for the third quarter of 2024 and a net loss of $3.6 million, or $0.09 per share, for the fourth quarter of 2023.
• Non-GAAP net loss for the fourth quarter of 2024 was a net loss of $4.3 million, or $0.10 per share, compared with a net loss of $2.1 million, or $0.05 per share, for the third quarter of 2024 and a net loss of $2.8 million, or $0.07 per share, for the fourth quarter of 2023.

Fiscal Year 2024 Results (January 1 to December 31, 2024)

• Revenue for fiscal year 2024 was $99.4 million, compared with $75.8 million in fiscal year 2023.
• GAAP gross margin for fiscal year 2024 was 24.0 percent of revenue, compared with 17.6 percent of revenue in fiscal year 2023.
• Non-GAAP gross margin for fiscal year 2024 was 24.3 percent of revenue, compared with 18.1 percent of revenue in fiscal year 2023.
• GAAP net loss for fiscal 2024 was a net loss of $11.6 million, or $0.27 per share, compared with a net loss of $17.9 million, or $0.42 per share for fiscal 2023.
• Non-GAAP net loss for fiscal 2024 was a net loss of $8.5 million, or $0.20 per share, compared with net income of $14.3 million, or $0.34 per share for fiscal 2023.

STAR Market Listing Update

On January 10, 2022, AXT announced that Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), its subsidiary in Beijing, China, submitted to the Shanghai Stock Exchange (the “SSE”) its application to list its shares in an initial public offering (the “IPO”) on the SSE’s Sci-Tech innovAtion boaRd (the “STAR Market”) and the application was accepted for review. Subsequently, Tongmei responded to several rounds of questions received from the SSE. On July 12, 2022, the SSE approved the listing of Tongmei’s shares in an IPO on the STAR Market. On August 1, 2022, the China Securities Regulatory Commission (the “CSRC”) accepted for review Tongmei’s IPO application. The STAR Market IPO remains subject to review and approval by the CSRC and other authorities. The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Subject to review and approval by the CSRC and other authorities, Tongmei hopes to accomplish this goal in the coming months. AXT has posted a brief summary of the plan and the process on its website at http://www.axt.com.

Conference Call

The company will host a conference call to discuss these results today at 1:30 p.m. PT. The conference call can be accessed at (800) 715-9871 (passcode 4378083). The call will also be simulcast at www.axt.com. Replays will be available at (800) 770-2030 (Playback ID: 4378083 followed by # key) until March 6, 2025. Financial and statistical information to be discussed in the call will be available on the company’s website immediately prior to commencement of the call. Additional investor information can be accessed at http://www.axt.com or by calling the company’s Investor Relations Department at (510) 438-4700.

About AXT, Inc.

AXT is a material science company that develops and manufactures high-performance compound and single element semiconductor substrate wafers comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge). The company’s substrate wafers are used when a typical silicon substrate wafer cannot meet the performance requirements of a semiconductor or optoelectronic device. End markets include 5G infrastructure, data center connectivity (silicon photonics), passive optical networks, LED lighting, lasers, sensors, power amplifiers for wireless devices and satellite solar cells. AXT’s worldwide headquarters are in Fremont, California where the company maintains sales, administration and customer service functions. AXT has its Asia headquarters in Beijing, China and manufacturing facilities in three separate locations in China. In addition, as part of its supply chain strategy, the company has partial ownership in ten companies in China producing raw materials for its manufacturing process. For more information, see AXT’s website at http://www.axt.com.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding the timing and completion of the proposed listing of shares of Tongmei on the STAR Market. Additional examples of forward-looking statements include statements regarding the market demand for our products, our product mix, our growth prospects and opportunities for continued business expansion, including technology trends, new applications and the ramping of Tier-1 customers, our market opportunity, our ability to lead our industry, our relocation, our expectations with respect to our business prospects and financial results, including our gross margin performance, and our development of larger diameter substrates that we believe will enable the next generation of technology innovation across a number of end-markets. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company’s operations and business environment, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: the requests for redemptions by private equity funds in China of investments in Tongmei, the administrative challenges in satisfying the requirements of various government agencies in China in connection with the listing of shares of Tongmei on the STAR Market, continued open access to companies to list shares on the STAR Market, investor enthusiasm for new listings of shares on the STAR Market and geopolitical tensions between China and the United States. Additional uncertainties and factors include, but are not limited to: the timing and receipt of significant orders; the cancellation of orders and return of product; emerging applications using chips or devices fabricated on our substrates; end-user acceptance of products containing chips or devices fabricated on our substrates; our ability to bring new products to market; product announcements by our competitors; the ability to control costs and improve efficiency; the ability to utilize our manufacturing capacity; product yields and their impact on gross margins; the relocation of manufacturing lines and ramping of production; possible factory shutdowns as a result of air pollution in China or COVID-19; COVID-19 or other outbreaks of a contagious disease; tariffs and other trade war issues; the financial performance of our partially owned supply chain companies; policies and regulations in China; and other factors as set forth in the company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company’s control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.

AXT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2024				2023				2024				2023
Revenue		$	25,105			$	20,429			$	99,361			$	75,795
Cost of revenue			20,697				15,802				75,525				62,477
Gross profit			4,408				4,627				23,836				13,318
Operating expenses:
Selling, general and administrative			6,440				5,367				24,096				22,806
Research and development			4,133				2,820				14,543				12,081
Total operating expenses			10,573				8,187				38,639				34,887
Loss from operations			(6,165	)			(3,560	)			(14,803	)			(21,569	)
Interest expense, net			(318	)			(384	)			(1,340	)			(1,527	)
Equity in income (loss) of unconsolidated joint ventures			944				(460	)			3,439				1,884
Other income (expense), net			(5	)			897				2,047				2,179
Loss before provision for income taxes			(5,544	)			(3,507	)			(10,657	)			(19,033	)
Provision for income taxes			113				252				1,134				160
Net loss			(5,657	)			(3,759	)			(11,791	)			(19,193	)
Less: Net loss attributable to noncontrolling interests and redeemable noncontrolling interests			569				138				167				1,312
Net loss attributable to AXT, Inc.		$	(5,088	)		$	(3,621	)		$	(11,624	)		$	(17,881	)
Net loss attributable to AXT, Inc. per common share:
Basic		$	(0.12	)		$	(0.09	)		$	(0.27	)		$	(0.42	)
Diluted		$	(0.12	)		$	(0.09	)		$	(0.27	)		$	(0.42	)
Weighted-average number of common shares outstanding:
Basic			43,381				42,851				43,154				42,643
Diluted			43,381				42,851				43,154				42,643

AXT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)
		December 31,				December 31,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents		$	22,833			$	37,752
Restricted cash			10,978				12,362
Short-term investments			—				2,140
Accounts receivable, net			25,640				19,256
Inventories			85,077				86,503
Prepaid expenses and other current assets			13,744				12,643
Total current assets			158,272				170,656
Property, plant and equipment, net			159,721				166,348
Operating lease right-of-use assets			2,479				2,799
Other assets			18,842				18,898
Total assets		$	339,314			$	358,701
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	12,356			$	9,617
Accrued liabilities			14,556				19,019
Short-term loans			47,264				52,921
Total current liabilities			74,176				81,557
Noncurrent operating lease liabilities			1,977				2,351
Other long-term liabilities			8,253				5,647
Total liabilities			84,406				89,555
Redeemable noncontrolling interests			38,577				41,663
Stockholders’ equity:
Preferred stock			3,532				3,532
Common stock			45				44
Additional paid-in capital			241,514				238,452
Accumulated deficit			(43,664	)			(32,040	)
Accumulated other comprehensive loss			(8,657	)			(5,999	)
Total AXT, Inc. stockholders’ equity			192,770				203,989
Noncontrolling interests			23,561				23,494
Total stockholders’ equity			216,331				227,483
Total liabilities, redeemable noncontrolling interests and stockholders’ equity		$	339,314			$	358,701

AXT, INC. Reconciliation of Statements of Operations Under GAAP and Non-GAAP (Unaudited, in thousands)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2024				2023				2024				2023
GAAP gross profit		$	4,408			$	4,627			$	23,836			$	13,318
Stock-based compensation expense			76				103				322				414
Non-GAAP gross profit		$	4,484			$	4,730			$	24,158			$	13,732
GAAP operating expenses		$	10,573			$	8,187			$	38,639			$	34,887
Stock-based compensation expense			677				719				2,775				3,126
Non-GAAP operating expenses		$	9,896			$	7,468			$	35,864			$	31,761
GAAP loss from operations		$	(6,165	)		$	(3,560	)		$	(14,803	)		$	(21,569	)
Stock-based compensation expense			753				822				3,097				3,540
Non-GAAP loss from operations		$	(5,412	)		$	(2,738	)		$	(11,706	)		$	(18,029	)
GAAP net loss		$	(5,088	)		$	(3,621	)		$	(11,624	)		$	(17,881	)
Stock-based compensation expense			753				822				3,097				3,540
Non-GAAP net loss		$	(4,335	)		$	(2,799	)		$	(8,527	)		$	(14,341	)
GAAP net loss per diluted share		$	(0.12	)		$	(0.09	)		$	(0.27	)		$	(0.42	)
Stock-based compensation expense per diluted share		$	0.02			$	0.02			$	0.07			$	0.08
Non-GAAP net loss per diluted share		$	(0.10	)		$	(0.07	)		$	(0.20	)		$	(0.34	)
Shares used to compute diluted net income per share			43,381				42,851				43,154				42,643

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250220199958/en/

Gary Fischer

Chief Financial Officer

(510) 438-4700

Leslie Green

Green Communications Consulting, LLC

(650) 312-9060

Source: AXT, Inc.

FAQ

What was AXT's (AXTI) revenue growth in fiscal year 2024?

AXT reported a 31% increase in annual revenue, reaching $99.4 million in fiscal year 2024 compared to $75.8 million in 2023.

How did AXTI's Q4 2024 gross margin compare to previous quarters?

AXTI's Q4 2024 GAAP gross margin was 17.6%, down from 24.0% in Q3 2024 and 22.6% in Q4 2023.

What was AXTI's net loss per share for fiscal year 2024?

AXTI reported a GAAP net loss of $0.27 per share for fiscal year 2024, improved from a loss of $0.42 per share in 2023.

What new markets did AXT (AXTI) expand into during 2024?

AXT expanded into the cloud and data center infrastructure market and penetrated the cell phone market, which represents a $100M addressable opportunity.

What was AXTI's Q4 2024 revenue compared to Q4 2023?

AXTI's Q4 2024 revenue was $25.1 million, compared to $20.4 million in Q4 2023, showing year-over-year growth.