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• Revenue: $27.9 million, up 23% from Q1 2024 and 50% from Q2 2023.

• Indium Phosphide Revenue: $7.7 million, driven by demand from data center applications and AI.

• Gallium Arsenide Revenue: $9.1 million, with broad-based improvement across applications.

• Germanium Substrates Revenue: $2.9 million, with increased demand for satellite solar cells.

• Raw Material Joint Venture Revenue: $8.2 million, up substantially from Q1.

• Non-GAAP Gross Margin: 27.6%, compared to 27.3% in Q1 2024 and 9.8% in Q2 2023.

• GAAP Gross Margin: 27.4%, compared to 26.9% in Q1 2024 and 9.2% in Q2 2023.

• Non-GAAP Operating Loss: $1.2 million, improved from $2.5 million in Q1 2024 and $5.9 million in Q2 2023.

• GAAP Operating Loss: $1.9 million, compared to $3.3 million in Q1 2024 and $6.8 million in Q2 2023.

• Non-GAAP Net Loss: $800,000, or $0.02 per share, compared to $1.3 million, or $0.03 per share, in Q1 2024.

• GAAP Net Loss: $1.5 million, or $0.04 per share, compared to $2.1 million, or $0.05 per share, in Q1 2024.

• Cash, Cash Equivalents, and Investments: Increased by $2 million to $43.3 million as of June 30.

• Depreciation and Amortization: $2.2 million in Q2 2024.

• Total Stock Compensation: $700,000 in Q2 2024.

• Net Inventory: $85.8 million, with 34% raw materials and 64% work in progress.

• Warning! GuruFocus has detected 6 Warning Signs with AXTI.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AXT Inc (NASDAQ:AXTI) reported a 23% sequential increase in revenue for Q2 2024, reaching $27.9 million, and a 50% increase year-over-year.

• The company saw strong growth in indium phosphide substrates, with a 67% increase over the same quarter last year, driven by demand from AI and high-speed optical connectivity.

• Gallium arsenide revenue grew 22% in Q2 and is up 50% from Q4 2023, reflecting broad-based demand across various applications.

• AXT Inc (NASDAQ:AXTI) has made significant progress in its recycling efforts, contributing positively to revenue and gross margins.

• The company is optimistic about future growth opportunities, particularly in AI applications, and is well-positioned to support new high-value applications.

Negative Points

• AXT Inc (NASDAQ:AXTI) reported a non-GAAP net loss of $800,000 for Q2 2024, although this was an improvement from previous quarters.

• The company expects a moderation in gallium arsenide sales in Q3 due to fluctuations in the industrial market.

• There is some uncertainty regarding the continuation of AI-related orders for indium phosphide substrates in Q3.

• The company faces challenges in reducing inventory levels, particularly for indium phosphide, which has been slower than anticipated.

• AXT Inc (NASDAQ:AXTI) provided guidance for Q3 2024 with expected revenue between $25.0 million and $27.0 million, indicating a potential sequential decline.