AXT, Inc. Q2 2026 Earnings Recap

AXT's stock surged 63.5% on record quarterly revenue led by indium phosphide sales and substantial gross margin improvement, signaling strong market approval of the company’s multi-year growth narrative and long-term supply agreements.

Key Takeaways

• Q2 revenue reached $47.6 million, up 77% sequentially and 164% year-over-year, driven primarily by a record $30.7 million in indium phosphide sales linked to data center demand.
• Gross margin expanded significantly to 45.0% non-GAAP, up from 29.9% in Q1 and just 8.2% a year ago, reflecting higher volumes and a favorable product mix.
• The company returned to profitability with non-GAAP operating income of $11.2 million and net income of $11.9 million ($0.19 per diluted share), reversing prior losses.
• Cash balance jumped to $749 million following a $632 million secondary stock offering, bolstering liquidity for growth initiatives.
• Signed long-term supply agreements with major customers Casella and Coherent, which included substantial upfront prepayments totaling $47.7 million, underpinning confidence in indium phosphide’s role in AI-driven data infrastructure.