AXT Inc

Refresh delta (since 2026-06-18)

1. Q2-2026 revenue $47.6M (Q1: $26.9M; Q2-2025: $18.0M), up 165% year on year; six-month revenue $74.5M ($37.3M). GAAP gross margin 44.9% (Q1 29.6%; Q2-2025 8.0%). Operating income $10.4M (Q2-2025: $(6.7)M). Net income attributable to AXT $11.1M, $0.17 diluted per share (Q1: $(1.6)M; Q2-2025: $(7.0)M). Non-GAAP net income $11.9M, $0.19 per share. [sec.gov: 8-KForm 8-KA filing for something that happened between reports and matters enough to tell shareholders now. 2026-07-30 exhibit 99.1, https://www.sec.gov/Archives/edgar/data/1051627/000143774926025061/ex_974537.htm; sec.gov: 10-QForm 10-QThe quarterly version of the annual report. Lighter, and not audited. 2026-08-13, https://www.sec.gov/Archives/edgar/data/1051627/000143774926027677/axti20260630_10q.htm; three and six months ended 2026-06-30]
2. April 2026 equity raise. On 2026-04-21 AXT sold shares in a public offering at $64.25; with the underwriters' option, 9,844,357 shares for gross proceeds of about $632.5M. Cash and cash equivalents were $412.2M at 2026-06-30 ($120.3M at 2025-12-31), plus restricted cash $33.1M, short-term investments $5.0M and long-term investments $298.6M; total assets $1,097.2M ($433.8M). Short-term loans were $84.2M ($62.8M). Basic weighted shares were 61.2M in Q2 against 43.7M a year earlier. [sec.gov: 10-Q 2026-08-13, Note on 2026 Secondary Public Offering, https://www.sec.gov/Archives/edgar/data/1051627/000143774926027677/axti20260630_10q.htm; sec.gov: 8-K 2026-07-30 exhibit 99.1, https://www.sec.gov/Archives/edgar/data/1051627/000143774926025061/ex_974537.htm; as of 2026-06-30]
3. Customer capacity agreements with cash deposits (three, all InP). (a) Casela, signed 2026-06-11: Tongmei reserves capacity for 2027 purchases of RMB 173M (about $25.4M), with 50% prepaid within 15 business days and the rest due by 2026-12-31. (b) Coherent, signed 2026-06-26 (effective 2026-06-25), 3-year term, 6-inch InP: prepayment of $22,288,500, refundable at Coherent's option if not applied by expiry; capacity expansion at the Beijing facility through 2028. (c) Lumentum, signed 2026-07-26, reservation through 2031-12-31: an initial deposit of $43.5M and a second of $43.5M with timing to be set in 2028, applied as shipment credits; AXT must refund unapplied deposit if it fails to deliver the minimum capacity and does not cure the breach, but keeps unallocated deposit on termination for convenience or changes in demand. The first-tranche cash is about $78.5M; Lumentum's second $43.5M is not yet scheduled. [sec.gov: 10-Q 2026-08-13, https://www.sec.gov/Archives/edgar/data/1051627/000143774926027677/axti20260630_10q.htm; sec.gov: 8-K 2026-07-02, https://www.sec.gov/Archives/edgar/data/1051627/000143774926022557/axti20260630_8k.htm; sec.gov: 8-K 2026-07-29, https://www.sec.gov/Archives/edgar/data/1051627/000143774926024883/axti20260715_8k.htm]
4. Tongmei IPO withdrawn; redemption rights triggered. On 2026-06-26 Tongmei told the Shanghai Stock Exchange it was withdrawing its STAR Market IPO application; the exchange accepted the withdrawal on 2026-07-08. Eleven Chinese private equity funds that invested RMB 324.4M (about $49M) hold a right, not an obligation, to require AXT or Tongmei to redeem at the original amount without interest; AXT also has the right to redeem. AXT says it can redeem in full if required, and the companies are discussing with each fund whether to stay in for a Hong Kong listing that will emphasise the InP business. The balance sheet carries redeemable noncontrolling interests of $39.7M. [sec.gov: 8-K 2026-07-08 (item 2.04), https://www.sec.gov/Archives/edgar/data/1051627/000143774926022984/axti20260629_8k.htm; sec.gov: 10-Q 2026-08-13, https://www.sec.gov/Archives/edgar/data/1051627/000143774926027677/axti20260630_10q.htm]
5. China export permits (unchanged risk, restated). InP substrates have required China Ministry of Commerce export permits since 2025-02-04. The 10-Q says permits continue to be received, but a backlog of orders still lacks permits and the company cannot predict when applications will be reviewed. [sec.gov: 10-Q 2026-08-13, Item 2 MD&A, https://www.sec.gov/Archives/edgar/data/1051627/000143774926027677/axti20260630_10q.htm]
6. Governance. The board grew from four to five on 2026-06-17 (Tracy Liu, audit chair experience at ACM Research) and from five to six on 2026-07-16 (Jia-Bin Duh); the board adopted a bylaw amendment on 2026-07-26 cutting the shareholder-meeting quorum from a majority to 33⅓% of shares entitled to vote. [sec.gov: 8-K 2026-06-22, https://www.sec.gov/Archives/edgar/data/1051627/000143774926021307/axti20260622_8k.htm; sec.gov: 8-K 2026-07-22, https://www.sec.gov/Archives/edgar/data/1051627/000143774926024184/axti20260720_8k.htm; sec.gov: 8-K 2026-07-29, https://www.sec.gov/Archives/edgar/data/1051627/000143774926024882/axti20260729_8k.htm]

Bearing on the position seed (facts only; the seed is unchanged). The verdict describes an "$88M-revenue, loss-making" base; the filings now show six-month 2026 revenue of $74.5M and a Q2 operating profit of $10.4M (item 1); the dossier's Lens 7 describes the $88M as trailing revenue. The seed's China-permit risk is restated in the 10-Q (item 5).

What held

• InP remains gated by Chinese export permits, with an unpermitted order backlog still disclosed (item 5).
• Demand for InP from optical-connectivity customers is now backed by signed capacity agreements (item 3), which the dossier did not have.
• The single-country manufacturing base is unchanged: the Coherent agreement expands capacity at the Beijing facility (item 3).