AXT Inc. reported significant financial performance improvements in its latest 10-Q filing for the third quarter of 2024. The company achieved total revenue of $23.6 million for the three months ended September 30, 2024, marking a 36.2% increase from $17.4 million in the same period of 2023. For the nine months ended September 30, 2024, revenue reached $74.3 million, up 34.1% from $55.4 million year-over-year. This growth was primarily driven by increased demand for gallium arsenide (GaAs) and indium phosphide (InP) substrates, particularly in data center applications.

Gross profit for the third quarter of 2024 was $5.7 million, a substantial increase of 204.5% from $1.9 million in Q3 2023. The gross margin improved significantly due to higher unit volumes and a favorable product mix. Operating income for the quarter was $4.1 million, compared to $2.0 million in the prior year, while net income attributable to AXT was $3.4 million, up from $1.4 million in Q3 2023.

Despite these gains, AXT reported a net loss of $2.9 million for the third quarter, a reduction from a loss of $5.8 million in the same period last year. For the nine months ended September 30, 2024, the net loss attributable to AXT was $6.5 million, down from $14.3 million in 2023. The company’s accumulated deficit increased to $(38.6 million) as of September 30, 2024, compared to $(32.0 million) at the end of 2023.

AXT's cash position decreased to $24.9 million as of September 30, 2024, from $37.8 million at the end of 2023, primarily due to net cash used in operating activities. Accounts receivable rose to $28.0 million, reflecting increased sales activity. The company also reported a decrease in total stockholders' equity to $224.98 million from $227.48 million at the end of 2023.

Strategically, AXT has been active in joint ventures and investments in China, including a significant investment in ChaoYang XinMei. The company is also pursuing an initial public offering (IPO) for its subsidiary, Tongmei, which has been under review by the China Securities Regulatory Commission since 2022. AXT's management remains optimistic about the future, despite ongoing challenges such as tariffs and regulatory changes affecting its operations in China.

Overall, AXT's financial results reflect a positive trajectory in revenue and profitability, driven by strong demand for its semiconductor substrates, while also navigating the complexities of international operations and market conditions.