AXT, Inc. Reports Fourth Quarter and Full-Year 2024 Financial Results
AXT, a leading manufacturer of compound semiconductor wafer substrates, has announced its financial results for the fourth quarter and fiscal year ending December 31, 2024. The company continues to build on its strong market presence, reporting substantial year-over-year growth in revenue and improvements in profitability metrics, despite industry-wide challenges.
Management Commentary
Morris Young, Chief Executive Officer of AXT, Inc., expressed optimism about the company’s progress throughout 2024.
“Our growth in 2024 demonstrated notable improvements in multiple key areas,” Young stated. “We achieved a 31% increase in revenue, a 21% improvement in non-GAAP gross profit, and a 40% improvement in our non-GAAP net loss. Over the past year, we have made significant strides in advancing the technical specifications of our materials, allowing us to better support our global customers in addressing complex, next-generation connectivity challenges.”
Young further emphasized the company’s strategic initiatives in 2024, particularly in cloud and data center infrastructure, as well as its entry into the mobile phone market. “Our successful penetration into the cell phone market, which represents an addressable market opportunity of nearly $100 million, marks a critical milestone for AXT. Until now, this segment had remained largely untapped by our company. Through the strength of our innovative product offerings, world-class manufacturing capabilities, and unique supply chain, AXT is well-positioned to capitalize on rapidly expanding market opportunities.”
Fourth Quarter 2024 Financial Results
For the fourth quarter of 2024, AXT reported the following results:
- Revenue: $25.1 million, compared to $23.6 million in the third quarter of 2024 and $20.4 million in the fourth quarter of 2023.
- GAAP Gross Margin: 17.6% of revenue, down from 24.0% in the third quarter of 2024 and 22.6% in the fourth quarter of 2023.
- Non-GAAP Gross Margin: 17.9% of revenue, compared to 24.3% in Q3 2024 and 23.2% in Q4 2023, after excluding stock-based compensation charges.
- GAAP Net Loss: $5.1 million, or $0.12 per share, compared with a net loss of $2.9 million ($0.07 per share) in Q3 2024 and $3.6 million ($0.09 per share) in Q4 2023.
- Non-GAAP Net Loss: $4.3 million, or $0.10 per share, compared with $2.1 million ($0.05 per share) in Q3 2024 and $2.8 million ($0.07 per share) in Q4 2023.
Despite the decline in gross margin, the company’s revenue growth is indicative of increasing demand across its key markets. The decline in margins can be attributed to higher operational expenses and increased investments in research and development aimed at strengthening AXT’s product offerings.
Full-Year 2024 Financial Results
For the full fiscal year 2024, AXT reported:
- Revenue: $99.4 million, a 31% increase from $75.8 million in fiscal year 2023.
- GAAP Gross Margin: 24.0% of revenue, a substantial improvement from 17.6% in fiscal year 2023.
- Non-GAAP Gross Margin: 24.3% of revenue, up from 18.1% in fiscal year 2023.
- GAAP Net Loss: $11.6 million, or $0.27 per share, compared with a net loss of $17.9 million, or $0.42 per share, in fiscal year 2023.
- Non-GAAP Net Loss: $8.5 million, or $0.20 per share, compared with a net loss of $14.3 million, or $0.34 per share, in fiscal year 2023.
The financial results for 2024 reflect strong revenue growth, improved profitability, and operational efficiencies. The company’s ability to enhance its gross margin demonstrates effective cost management strategies and increased demand for its semiconductor wafer substrates in high-growth sectors.
Strategic Initiatives and Market Expansion
AXT has made significant advancements in its strategic initiatives, focusing on:
- Cloud and Data Center Market Growth: The company has experienced growing demand from cloud computing and data center infrastructure providers, leading to increased revenue in this segment.
- Mobile Market Penetration: The successful entry into the cell phone market, a segment with an estimated $100 million total addressable market, underscores AXT’s ability to expand into new high-growth areas.
- Product Innovation: The company continues to invest in advanced semiconductor wafer substrates, enhancing its product portfolio to meet the evolving needs of the electronics industry.
STAR Market Listing Update
On January 10, 2022, AXT announced that its Beijing-based subsidiary, Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), submitted its application to list its shares on the Shanghai Stock Exchange’s Sci-Tech Innovation Board (the “STAR Market”). The application was accepted for review, and after several rounds of inquiries from the exchange, Tongmei received listing approval from the SSE on July 12, 2022.
Subsequently, on August 1, 2022, the China Securities Regulatory Commission (CSRC) accepted Tongmei’s IPO application for further review. The IPO remains subject to final approval by the CSRC and other regulatory bodies. The STAR Market listing process is extensive, requiring multiple review periods. Tongmei continues to work toward successfully completing the IPO in the coming months. AXT has provided an overview of this initiative on its website at www.axt.com.
Investor Communication and Conference Call Details
AXT will host a conference call to discuss these financial results today at 1:30 p.m. PT. Investors and analysts can access the call at (800) 715-9871 using the passcode 4378083. The call will also be available via live webcast on AXT’s website, with a replay accessible until March 6, 2025, by dialing (800) 770-2030 and entering playback ID 4378083 followed by the # key.
AXT, Inc. is a leading manufacturer of high-performance compound semiconductor wafer substrates, serving a broad range of applications including data centers, 5G communications, and consumer electronics. With a unique vertically integrated manufacturing model, AXT is well-positioned to drive innovation in the semiconductor industry.
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding future financial performance, market opportunities, and regulatory approvals. Actual results may differ materially from those projected due to various factors, including market conditions, competition, and regulatory developments. Investors should review AXT’s filings with the Securities and Exchange Commission for a complete discussion of potential risks.
