AXT, Inc. Reports Strong Q4 and Full-Year 2024 Financial Results: Revenue Growth and Strategic Advancements Highlight Progress
AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, has announced its financial results for the fourth quarter and fiscal year ended December 31, 2024. The company demonstrated significant progress across key metrics, including revenue growth, improved gross margins, and advancements in product innovation. These achievements underscore AXT’s commitment to addressing the growing demands of next-generation connectivity solutions in markets such as cloud infrastructure, data centers, and mobile devices.
Management Insights: A Year of Transformation and Growth
CEO Morris Young highlighted the company’s accomplishments in 2024, emphasizing the strides made in both financial performance and technical capabilities:
“Our growth in 2024 showed a year of improvement for AXT in several key areas. 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 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 $100 million addressable market and largely untapped by AXT until now. 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.”
Young’s comments reflect AXT’s strategic focus on leveraging its expertise in compound semiconductor materials to capitalize on emerging trends in technology and connectivity.
Fourth Quarter 2024 Financial Highlights
AXT’s Q4 2024 results demonstrate continued momentum and operational improvements:
- Revenue: Revenue for the quarter reached $25.1 million, up from $23.6 million in Q3 2024 and $20.4 million in Q4 2023, representing a year-over-year increase of 23%.
- GAAP Gross Margin: GAAP gross margin was 17.6% of revenue, compared to 24.0% in Q3 2024 and 22.6% in Q4 2023. The decline reflects increased production costs and investments in scaling operations.
- Non-GAAP Gross Margin: Non-GAAP gross margin, excluding stock-based compensation charges, was 17.9%, down from 24.3% in Q3 2024 but an improvement over 23.2% in Q4 2023.
- GAAP Net Loss: AXT reported a GAAP net loss of $5.1 million, or $0.12 per share, compared to a net loss of $2.9 million, or $0.07 per share, in Q3 2024 and $3.6 million, or $0.09 per share, in Q4 2023.
- Non-GAAP Net Loss: Non-GAAP net loss was $4.3 million, or $0.10 per share, compared to $2.1 million, or $0.05 per share, in Q3 2024 and $2.8 million, or $0.07 per share, in Q4 2023.
Despite higher costs impacting margins, AXT’s revenue growth and operational discipline position the company for sustained progress.
Fiscal Year 2024 Performance: A Year of Milestones
AXT’s full-year 2024 results highlight the company’s ability to scale operations and capture new market opportunities:
- Revenue: Fiscal year 2024 revenue totaled $99.4 million, a 31% increase from $75.8 million in fiscal year 2023.
- GAAP Gross Margin: GAAP gross margin improved to 24.0% of revenue, up from 17.6% in fiscal year 2023.
- Non-GAAP Gross Margin: Non-GAAP gross margin rose to 24.3%, compared to 18.1% in fiscal year 2023, reflecting operational efficiencies and cost management.
- GAAP Net Loss: GAAP net loss narrowed to $11.6 million, or $0.27 per share, compared to a net loss of $17.9 million, or $0.42 per share, in fiscal year 2023.
- Non-GAAP Net Loss: Non-GAAP net loss improved to $8.5 million, or $0.20 per share, compared to a net income of $14.3 million, or $0.34 per share, in fiscal year 2023.
These results underscore AXT’s ability to drive top-line growth while improving profitability through strategic initiatives and operational excellence.
STAR Market IPO Update: Progress Toward Listing
In a significant development, AXT’s subsidiary, Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), continues to advance toward a potential listing on China’s STAR Market, a platform dedicated to innovative technology companies. Key milestones include:
- On January 10, 2022, Tongmei submitted its IPO application to the Shanghai Stock Exchange (SSE), which was accepted for review.
- The SSE approved the listing on July 12, 2022, and the China Securities Regulatory Commission (CSRC) accepted the application for review on August 1, 2022.
- The STAR Market IPO remains subject to regulatory approvals, and the process is expected to take several months. If successful, this listing could enhance Tongmei’s visibility and provide additional resources to support AXT’s growth initiatives.
AXT has provided updates on the STAR Market process on its website at http://www.axt.com.
Strategic Positioning for Future Growth
AXT’s strong performance in 2024 positions the company as a leader in the compound semiconductor industry. By focusing on high-growth markets such as cloud infrastructure, data centers, and mobile devices, AXT is well-equipped to capitalize on increasing demand for advanced connectivity solutions. The company’s investments in R&D, manufacturing capabilities, and supply chain optimization are critical to maintaining its competitive edge.
Moreover, AXT’s efforts to penetrate previously untapped markets, such as the cell phone segment, demonstrate its ability to identify and seize new opportunities. With a clear strategy and a commitment to innovation, AXT is poised to deliver long-term value to its customers, employees, and shareholders.
Opportunities and Challenges
While AXT’s financial results and strategic initiatives point to a promising future, the company faces challenges such as rising production costs, global supply chain disruptions, and intense competition. However, AXT’s leadership team remains focused on navigating these headwinds while driving sustainable growth.
The potential STAR Market listing of Tongmei represents another avenue for unlocking value and expanding AXT’s global footprint. If approved, this milestone could provide additional capital to fuel innovation and accelerate market penetration.
