FREMONT, Calif., Feb. 22, 2024 (GLOBE NEWSWIRE) -- AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal year, ended December 31, 2023.

Management Qualitative Comments
“We believe we are now beginning to see a recovery in our markets,” said Morris Young, chief executive officer. “In Q4, we achieved 18 percent sequential growth in our revenues and a 43 percent sequential improvement in our non-GAAP net income. While the overall demand environment remains somewhat soft, we are seeing increased orders for indium phosphide for both artificial intelligence (AI) and fiber optic applications. Further, the gallium arsenide market, which was the first of our markets to go into a correction, appears to have largely worked through excess inventory and is now reflecting truer demand. In total, we are looking forward to 2024 with optimism. We believe that the trends that have driven our revenue and customer expansion remain very much intact, with new catalysts such as AI providing strong incremental opportunity. AI will drive up the need for massive data transfer requirements with increased bandwidth, low attenuation and low distortion. We believe this will result in increased demand for indium phosphide as the best platform for rapid data transfer. We will continue to prioritize cost savings and efficiency, and are focused on accelerating our return to profitability.”


Fourth Quarter 2023 Results
In order to provide better clarity on its operational and financial results, AXT reports its financial results on both a GAAP and non-GAAP basis. Non-GAAP results exclude stock-based compensation expense. Investors can find GAAP to non-GAAP reconciliation tables in the financial statements in this earnings release.

• Revenue for the fourth quarter of 2023 was $20.4 million, compared with $17.4 million in the third quarter of 2023 and $26.8 million for the fourth quarter of 2022.
   
• GAAP gross margin was 22.6 percent of revenue for the fourth quarter of 2023, compared with 10.7 percent of revenue in the third quarter of 2023 and 32.1 percent for the fourth quarter of 2022.
   
• Non-GAAP gross margin, after excluding charges for stock-based compensation, was 23.2 percent of revenue for the fourth quarter of 2023, compared with 11.3 percent of revenue in the third quarter of 2023 and 32.5 percent for the fourth quarter of 2022.
   
• GAAP operating expenses were $8.2 million in the fourth quarter of 2023. This compares with $8.6 million in the third quarter of 2023 and $9.6 million for the fourth quarter of 2022.
   
• Non-GAAP operating expenses were $7.5 million in the fourth quarter of 2023. This compares with $7.8 million in the third quarter of 2023 and $9.0 million for the fourth quarter of 2022.
   
• GAAP operating loss for the fourth quarter of 2023 was an operating loss of ($3.6) million, compared with an operating loss of ($6.7) million in the third quarter of 2023 and an operating loss of ($1.0) million for the fourth quarter of 2022.
   
• Non-GAAP operating loss for the fourth quarter of 2023 was an operating loss of ($2.7) million, compared with an operating loss of ($5.8) million in the third quarter of 2023 and an operating loss of ($0.3) million for the fourth quarter of 2022.
   
• Non-operating income and expense, taxes and minority interest for the fourth quarter of 2023 was a net loss of ($0.1) million, compared with a net gain of $0.9 million in the third quarter of 2023 and a net gain of $2.3 million for the fourth quarter of 2022.
   
• GAAP net income/(loss), after minority interests, for the fourth quarter of 2023 was a net loss of ($3.6) million, or ($0.09) per share, compared with a net loss of ($5.8) million or ($0.14) per share in the third quarter of 2023, and net income of $1.3 million or $0.03 per share for the fourth quarter of 2022.

• Non-GAAP net income/(loss) for the fourth quarter of 2023 was a net loss of ($2.8) million, or ($0.07) per share, compared with a net loss of ($4.9) million or ($0.12) per share in the third quarter of 2023, and net income of $2.1 million or $0.05 per share for the fourth quarter of 2022.

Fiscal Year 2023 Results (January 1 to December 31, 2023)

• Revenue for fiscal year 2023 was $75.8 million, compared with $141.1 million in fiscal year 2022.
   
• GAAP gross margin for fiscal year 2023 was 17.6 percent of revenue, compared with 36.9 percent of revenue in fiscal year 2022.
   
• Non-GAAP gross margin for fiscal year 2023 was 18.1 percent of revenue, compared with 37.2 percent of revenue in fiscal year 2022.
   
• GAAP operating expenses for fiscal year 2023 were $34.9 million, compared with $39.6 million in fiscal year 2022.
   
• Non-GAAP operating expenses for fiscal year 2023 were $31.8 million, compared with $35.9 million in fiscal year 2022.
   
• GAAP operating profit/(loss) for fiscal year 2023 was an operating loss of ($21.6) million compared with an operating profit of $12.6 million in fiscal 2022.
   
• Non-GAAP operating profit/(loss) for fiscal year 2023 was ($18.0) million compared with $16.6 million in fiscal 2022.
   
• GAAP net income/(loss) for fiscal 2023 was a net loss of ($17.9) million, or ($0.42) per share, compared with net income of $15.8 million, or $0.37 per share for fiscal 2022.
   
• Non-GAAP net income/(loss) for fiscal 2023 was a net loss of ($14.3) million, or ($0.34) per share, compared with net income of $19.8 million, or $0.46 per share for fiscal 2022.

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. .


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 (passcode 4378083) until March 7, 2024. 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.