Form 8-K - Current report

0001051627false00010516272024-10-312024-10-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported): October 31, 2024

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AXT, INC.

(Exact name of registrant as specified in its charter)

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​	​	​	​	​
Delaware		000-24085		94-3031310
(State or other jurisdiction of incorporation)	​	(Commission File Number)	​	(IRS Employer Identification No.)

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4281 Technology Drive

Fremont, California 94538

(Address of principal executive offices) (Zip Code)

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Registrant’s telephone number, including area code: [phone]

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Not Applicable

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class:		Trading Symbol		Name of each exchange on which registered:
Common Stock, $0.001 par value	​	AXTI	​	The NASDAQ Stock Market LLC

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Item 2.02 Results of Operations and Financial Condition

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On October 31, 2024, AXT, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2024. A copy of the Company’s press release, announcing the results, is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

The information in Exhibit 99.1 hereto discussing the Company’s results of operations and financial condition for the quarter ended September 30, 2024, is being “furnished” in accordance with General Instruction B.2 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.

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Item 9.01 Financial Statements and Exhibits

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(d)       Exhibits

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99.1     Press release dated October 31, 2024, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2024.

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EXHIBIT INDEX

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Eptem	​	​
Exhibit Number		Description
99.1	​	Press release dated October 31, 2024, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2024.
104	​	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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​	​	​
​	AXT, INC.
​	​	​
​	​	​
Date: October 31, 2024	By:	/s/ Gary L. Fischer
​	​	Gary L. Fischer
​	​	Chief Financial Officer and Corporate Secretary

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Y	​
	Exhibit 99.1
​	AXT, Inc. Third Quarter 2024 Results
​	October 31, 2024
​	Page 1 of 7

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AXT, Inc. Announces Third Quarter 2024 Financial Results

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FREMONT, Calif., October 31, 2024 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, today reported financial results for the third quarter, ended September 30, 2024.

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Management Qualitative Comments

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“Q3 came in largely in line with our expectations, coming off a strong quarter in Q2," said Morris Young, chief executive officer. “By comparison to the year ago quarter Q3 2023, our revenue in Q3 of 2024 increased over 36 percent and we are pleased to see that every product, including raw materials, had double digit year-over-year growth. Data center-related demand remained solid, and we are anticipating new order momentum in indium phosphide substrates for photodetectors in AI applications.”

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“This year-over-year revenue improvement benefited our GAAP gross margin significantly, moving from 10.7 percent in Q3 2023 to 24.0 percent in the recent quarter. The impact on the bottom line reduced the GAAP net loss from ($0.14) per share in Q3 2023 to ($0.07) per share in the recent quarter. As we move into 2025, we are optimistic about the growth and expansion of our business. Across our portfolio of products, the signs of recovery are tangible, and we are strongly positioned for success in this highly dynamic technology landscape."

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Third Quarter 2024 Results

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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.  

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●

Revenue for the third quarter of 2024 was $23.6 million, compared with $27.9 million for the second quarter of 2024 and $17.4 million for the third quarter of 2023.

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●

GAAP gross margin was 24.0 percent of revenue for the third quarter of 2024, compared with 27.4 percent of revenue for the second quarter of 2024 and 10.7 percent for the third quarter of 2023.

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●

Non-GAAP gross margin, after excluding charges for stock-based compensation, was 24.3 percent of revenue for the third quarter of 2024, compared with 27.6 percent of revenue for the second quarter of 2024 and 11.3 percent for the third quarter of 2023.

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​	AXT, Inc. Third Quarter 2024 Results
​		October 31, 2024
​		Page 2 of 7

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●

GAAP net loss, after minority interests, for the third quarter of 2024 was a net loss of ($2.9) million, or ($0.07) per share, compared with a net loss of ($1.5) million, or ($0.04) per share, for the second quarter of 2024 and a net loss of ($5.8) million, or ($0.14) per share, for the third quarter of 2023.

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●

Non-GAAP net loss for the third quarter of 2024 was a net loss of ($2.1) million, or ($0.05) per share, compared with a net loss of ($0.8) million, or ($0.02) per share, for the second quarter of 2024 and a net loss of ($4.9) million, or ($0.12) per share, for the third quarter of 2023.

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STAR Market Listing Update

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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. AXT has posted a brief summary of the plan and the process on its website at http://www.axt.com.

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Conference Call

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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 [phone] (passcode 4378083). The call will also be simulcast at www.axt.com. Replays will be available at [phone] (Playback ID: 4378083 followed by # key) until November 14, 2024. Financial and statistical information to be discussed in the call will be available on the company’s website immediately prior to commencement of the call. Additional investor information can be accessed at http://www.axt.com or by calling the company’s Investor Relations Department at [phone].

About AXT, Inc.

AXT is a material science company that develops and manufactures high-performance compound and single element semiconductor wafer substrates comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge). The company’s wafer substrates are used when a typical silicon wafer substrate 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

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​	AXT, Inc. Third Quarter 2024 Results
​		October 31, 2024
​		Page 3 of 7

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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 more than ten companies in China producing raw materials and consumables for its manufacturing process. For more information, see AXT’s website at http://www.axt.com.

Note Regarding Use of Non-GAAP Financial Measures

As discussed above, the company provides certain non-GAAP financial measures that exclude stock-based compensation in addition to, and not as a substitute for, or because it believes that such information is superior to, financial measures calculated in accordance with GAAP. The company believes that non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and provide better comparability with our peer companies, many of which also use similar non-GAAP financial measures. Further, the company believes that these non-GAAP financial measures offer an important analytical tool to help investors understand the company’s core operating results and trends. In addition, management uses non-GAAP financial measures to compare the company’s performance relative to forecasts and strategic plans and to benchmark its performance externally against peer companies. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the company’s non-GAAP financial measures as tools for comparison. The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non‐GAAP information and the reconciliation between these presentations, to more fully understand its business. A reconciliation of our GAAP consolidated financial statements to our non-GAAP consolidated financial statements is provided below.

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Forward-Looking Statements

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The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding the timing and completion of the proposed listing of shares of Tongmei on the STAR Market. Additional examples of forward-looking statements include statements regarding the market demand for our products, our product mix, our growth prospects and opportunities for continued business expansion, including trends, new applications and the ramping of Tier-1 customers, our market opportunity, our ability to lead our industry, our expectations with respect to our business prospects and financial results, including our gross margin performance, and our development of larger diameter substrates that we believe will enable the next generation of technology innovation across a number of end-markets. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company’s operations and business environment, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: the requests for redemptions by private equity funds in China of investments in Tongmei, the administrative challenges in satisfying the requirements of various government

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​	AXT, Inc. Third Quarter 2024 Results
​		October 31, 2024
​		Page 4 of 7

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agencies in China in connection with the listing of shares of Tongmei on the STAR Market, continued open access to companies to list shares on the STAR Market, investor enthusiasm for new listings of shares on the STAR Market and geopolitical tensions between China and the United States. Additional uncertainties and factors include, but are not limited to: the timing and receipt of significant orders; the cancellation of orders and return of product; emerging applications using chips or devices fabricated on our substrates; end-user acceptance of products containing chips or devices fabricated on our substrates; our ability to bring new products to market; product announcements by our competitors; the ability to control costs and improve efficiency; the ability to utilize our manufacturing capacity; product yields and their impact on gross margins; the relocation of manufacturing lines and ramping of production; possible factory shutdowns as a result of air pollution in China or COVID-19; COVID-19 or other outbreaks of a contagious disease; tariffs and other trade war issues; the financial performance of our partially owned supply chain companies; policies and regulations in China; and other factors as set forth in the company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company’s control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.

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FINANCIAL TABLES TO FOLLOW

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​	AXT, Inc. Third Quarter 2024 Results
​		October 31, 2024
​		Page 5 of 7

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AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

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Three Months Ended

Nine Months Ended

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September 30,

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September 30,

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2024

2023

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2024

2023

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Revenue

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$

23,645

​

$

17,366

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$

74,256

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$

55,366

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Cost of revenue

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17,963

​

15,500

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54,828

​

46,675

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Gross profit

​

5,682

​

1,866

​

19,428

​

8,691

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Operating expenses:

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​

​

​

​

​

​

​

​

​

​

​

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Selling, general and administrative

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5,650

​

5,667

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17,656

​

17,439

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Research and development

​

3,438

​

2,926

​

10,410

​

9,261

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Total operating expenses

​

9,088

​

8,593

​

28,066

​

26,700

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Loss from operations

​

(3,406)

​

(6,727)

​

(8,638)

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(18,009)

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Interest expense, net

​

(391)

​

(381)

​

(1,022)

​

(1,143)

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Equity in income of unconsolidated joint ventures

​

1,007

​

369

​

2,495

​

2,344

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Other income, net

​

529

​

223

​

2,052

​

1,282

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Loss before provision (benefit) for income taxes

​

(2,261)

​

(6,516)

​

(5,113)

​

(15,526)

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Provision (benefit ) for income taxes

​

626

​

(101)

​

1,021

​

(92)

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Net loss

​

(2,887)

​

(6,415)

​

(6,134)

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(15,434)

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Less: Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests

​

(50)

​

592

​

(402)

​

1,174

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Net loss attributable to AXT, Inc.

​

$

(2,937)

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$

(5,823)

​

$

(6,536)

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$

(14,260)

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Net loss attributable to AXT, Inc. per common share:

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​

​

​

​

​

​

​

​

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Basic

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$

(0.07)

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$

(0.14)

​

$

(0.15)

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$

(0.34)

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Diluted

​

$

(0.07)

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$

(0.14)

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$

(0.15)

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$

(0.34)

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Weighted-average number of common shares outstanding:

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​

​

​

​

​

​

​

​

​

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Basic

​

43,157

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42,638

​

43,079

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42,574

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Diluted

​

43,157

​

42,638

​

43,079

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42,574

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​

​

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​	AXT, Inc. Third Quarter 2024 Results
​		October 31, 2024
​		Page 6 of 7

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AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

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​	​	​	​	​	​	​	​
​		September 30,			December 31,		​
​	​	2024		​	2023
​	​	​	​	​	​	​	​
ASSETS	​	​	​	​	​	​	​
Current assets:	​	​	​	​	​	​	​
Cash and cash equivalents	​	$	24,898	​	$	37,752	​
Restricted cash	​	​	13,893	​	​	12,362	​
Short-term investments	​		—	​		2,140	​
Accounts receivable, net	​		27,970	​		19,256	​
Inventories	​		86,109	​		86,503	​
Prepaid expenses and other current assets	​		14,991	​		12,643	​
Total current assets	​		167,861	​		170,656	​
Property, plant and equipment, net	​		166,459	​		166,348	​
Operating lease right-of-use assets	​	​	2,451	​	​	2,799	​
Other assets	​		18,809	​		18,898	​
Total assets	​	$	355,580	​	$	358,701	​
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY	​	​	​	​	​	​	​
Current liabilities:	​	​	​	​	​	​	​
Accounts payable	​	$	12,780	​	$	9,617	​
Accrued liabilities	​		11,941	​		19,019	​
Short-term loans	​	​	54,052	​	​	52,921	​
Total current liabilities	​		78,773	​		81,557	​
Noncurrent operating lease liabilities	​	​	1,993	​	​	2,351	​
Other long-term liabilities	​		8,595	​		5,647	​
Total liabilities	​		89,361	​		89,555	​
​	​	​	​	​	​	​	​
Redeemable noncontrolling interests	​	​	41,237	​	​	41,663	​
​	​	​	​	​	​	​	​
Stockholders’ equity:	​	​	​	​	​	​	​
Preferred stock	​		3,532	​		3,532	​
Common stock	​		45	​		44	​
Additional paid-in capital	​		240,770	​		238,452	​
Accumulated deficit	​		(38,576)	​		(32,040)	​
Accumulated other comprehensive loss	​		(5,038)	​		(5,999)	​
Total AXT, Inc. stockholders’ equity	​		200,733	​		203,989	​
Noncontrolling interests	​		24,249	​		23,494	​
Total stockholders’ equity	​		224,982	​		227,483	​
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	​	$	355,580	​	$	358,701	​

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​	AXT, Inc. Third Quarter 2024 Results
​		October 31, 2024
​		Page 7 of 7

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AXT, INC.

Reconciliation of Statements of Operations Under GAAP and Non-GAAP

(Unaudited, in thousands)

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​

​

​

​

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​

​

​

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Three Months Ended

Nine Months Ended

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September 30,

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September 30,

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​

2024

2023

​

2024

2023

GAAP gross profit

​

$

5,682

​

$

1,866

​

$

19,428

​

$

8,691

Stock-based compensation expense

​

​

73

​

​

102

​

​

246

​

​

310

Non-GAAP gross profit

​

$

5,755

​

$

1,968

​

$

19,674

​

$

9,001

​

​

​

​

​

​

​

​

​

​

​

​

​

GAAP operating expenses

​

$

9,088

​

$

8,593

​

$

28,066

​

$

26,700

Stock-based compensation expense

​

​

747

​

​

789

​

​

2,098

​

​

2,408

Non-GAAP operating expenses

​

$

8,341

​

$

7,804

​

$

25,968

​

$

24,292

​

​

​

​

​

​

​

​

​

​

​

​

​

GAAP loss from operations

​

$

(3,406)

​

$

(6,727)

​

$

(8,638)

​

$

(18,009)

Stock-based compensation expense

​

​

820

​

​

891

​

​

2,344

​

​

2,718

Non-GAAP loss from operations

​

$

(2,586)

​

$

(5,836)

​

$

(6,294)

​

$

(15,291)

​

​

​

​

​

​

​

​

​

​

​

​

​

GAAP net loss

​

$

(2,937)

​

$

(5,823)

​

$

(6,536)

​

$

(14,260)

Stock-based compensation expense

​

​

820

​

​

891

​

​

2,344

​

​

2,718

Non-GAAP net loss

​

$

(2,117)

​

$

(4,932)

​

$

(4,192)

​

$

(11,542)

​

​

​

​

​

​

​

​

​

​

​

​

​

GAAP net loss per diluted share

​

$

(0.07)

​

$

(0.14)

​

$

(0.15)

​

$

(0.34)

Stock-based compensation expense per diluted share

​

$

0.02

​

$

0.02

​

$

0.05

​

$

0.06

Non-GAAP net loss per diluted share

​

$

(0.05)

​

$

(0.12)

​

$

(0.10)

​

$

(0.27)

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​

​

​

​

​

​

​

​

​

​

​

​

Shares used to compute diluted net income per share

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43,157

​

42,638

​

43,079

​

42,574

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Document and Entity Information	Oct. 31, 2024
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Oct. 31, 2024
Entity File Number	000-24085
Entity Registrant Name	AXT, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3031310
Entity Address, Address Line One	4281 Technology Drive
Entity Address, City or Town	Fremont
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94538
City Area Code	510
Local Phone Number	438-4700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	AXTI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001051627
Amendment Flag	false

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