[Form 8-K Current Report Filing](index=1&type=section&id=Form_8K_Current_Report_Filing) This report details AXT, Inc.'s Form 8-K filing, covering registrant information, preliminary Q2 2025 revenue, and regulatory disclosures [Registrant and Filing Details](index=1&type=section&id=Registrant_Filing_Details) This section identifies AXT, Inc. as the registrant, specifies the Form 8-K filing date, and lists its common stock trading on NASDAQ - Registrant: **AXT, INC.**[2](index=2&type=chunk) - Date of Report (Date of earliest event reported): **July 9, 2025**[2](index=2&type=chunk) Common Stock Listing | 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 | [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) AXT, Inc. announced unaudited preliminary revenue results for the second quarter ended June 30, 2025, via a press release furnished as Exhibit 99.1 - AXT, Inc. issued a press release announcing certain unaudited preliminary revenue results for the second quarter ended June 30, 2025[5](index=5&type=chunk) - The press release, dated July 9, 2025, is furnished as Exhibit 99.1 and incorporated herein by reference[5](index=5&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) This item incorporates by reference the information disclosed under Item 2.02, ensuring public dissemination of preliminary financial results in compliance with Regulation FD - The information in Item 2.02 of this report is incorporated by reference into this Item 7.01[6](index=6&type=chunk) [Disclaimer on Information Status](index=2&type=section&id=Disclaimer_on_Information_Status) Information in Items 2.02 and 7.01, including Exhibit 99.1, is furnished, not filed, limiting liabilities and preventing automatic incorporation by reference - The information in Items 2.02 and 7.01, including Exhibit 99.1, is being 'furnished' and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934[7](index=7&type=chunk) - It shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference[7](index=7&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This item lists the exhibits accompanying the Form 8-K filing, specifically Exhibit 99.1, the press release, and Exhibit 104, the Cover Page Interactive Data File Exhibits | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press release, dated July 9, 2025 | | 104 | Cover Page Interactive Data File (formatted as inline XBRL) | [Signatures](index=3&type=section&id=Signatures) The report was signed on July 9, 2025, by Gary L. Fischer, Chief Financial Officer and Corporate Secretary of AXT, Inc., in compliance with regulatory requirements - The report was signed on behalf of **AXT, INC.** by **Gary L. Fischer**[12](index=12&type=chunk)[13](index=13&type=chunk) - **Gary L. Fischer** holds the titles of Chief Financial Officer and Corporate Secretary[13](index=13&type=chunk) - Date of signature: **July 9, 2025**[13](index=13&type=chunk)

Company Overview - AXT (AXTI) is expected to report a year-over-year decline in earnings due to lower revenues for the quarter ended June 2025, with a consensus estimate indicating a quarterly loss of $0.13 per share, representing a -550% change from the previous year [1][3] - Revenues are projected to be $19.96 million, down 28.5% from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised 3.13% lower in the last 30 days, reflecting a reassessment by analysts [4] - AXT's Earnings ESP (Expected Surprise Prediction) is currently at 0%, indicating no recent differing analyst views from the consensus estimate [12] Historical Performance - In the last reported quarter, AXT was expected to post a loss of $0.13 per share but actually reported a loss of -$0.19, resulting in a surprise of -46.15% [13] - Over the last four quarters, AXT has beaten consensus EPS estimates two times [14] Industry Context - Another player in the semiconductor industry, Impinj (PI), is expected to report earnings of $0.71 per share for the same quarter, reflecting a year-over-year change of -14.5% [18] - Impinj's revenues are expected to be $93.97 million, down 8.3% from the previous year [18] - Impinj's consensus EPS estimate has been revised down 100% in the last 30 days, and it currently has an Earnings ESP of -0.94% combined with a Zacks Rank of 4 (Sell), making it difficult to predict an earnings beat [19]

Group 1 - AXT Inc (AXTI) has reached a key level of support, with its 50-day simple moving average crossing above its 200-day simple moving average, indicating a "golden cross" which is a bullish signal for potential breakout [1] - The golden cross consists of three stages: a downtrend that bottoms out, the shorter moving average crossing above the longer moving average, and the stock continuing to rise [2] - AXTI shares have increased by 24.7% over the past four weeks, and the company holds a 3 (Hold) rating on the Zacks Rank, suggesting a potential breakout [3] Group 2 - The positive earnings outlook for AXTI is supported by no earnings estimate cuts and one revision higher in the past 60 days, with the Zacks Consensus Estimate also increasing [3] - The combination of earnings estimate revisions and the technical level achieved makes AXTI a stock to watch for potential gains in the near future [4]

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Company Overview - AXT was founded in 1986 and had its IPO in 1998[4] - The company operates in three locations in China: Beijing, Kazuo, and Dingxing[4] Products and Markets - Indium Phosphide (InP) is a growth engine, with expanding applications and a long product life cycle[6] - Gallium Arsenide (GaAs) has a long product life cycle with new applications, and AXT supplied first 8-inch GaAs wafers in April 2021[14] - Germanium (Ge) is primarily used in satellite solar cells, and the satellite solar cell market is increasing[22, 25] Financial Performance - In 2023, AXT's revenue was $75.8 million[29] - In 2022, AXT's revenue was $141.1 million[29] - In 2023, the Non-GAAP Gross Margin was 18.1%[29] - In 2023, the Non-GAAP Net Profit/(Loss) was ($14.3) million[29] Tongmei STAR Market Listing - AXT currently owns approximately 85.5% of Tongmei[31] - If the IPO is approved, AXT would own approximately 77% of Tongmei, selling an additional 10%[31]

PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Q1 2025 and 2024, including balance sheets, statements of operations, comprehensive loss, cash flows, and explanatory notes Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $149,531 | $158,272 | | **Total assets** | $333,477 | $339,314 | | **Total current liabilities** | $75,256 | $74,176 | | **Total liabilities** | $87,305 | $84,406 | | **Total stockholders' equity** | $208,047 | $216,331 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $19,356 | $22,688 | | Gross profit (loss) | $(1,241) | $6,094 | | Loss from operations | $(10,275) | $(3,347) | | Net loss | $(10,016) | $(2,048) | | Net loss attributable to AXT, Inc. | $(8,798) | $(2,083) | | Diluted net loss per share | $(0.20) | $(0.05) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,346) | $(8,806) | | Net cash used in investing activities | $(786) | $(3,912) | | Net cash provided by financing activities | $6,882 | $2,000 | | **Net increase (decrease) in cash** | **$4,373** | **$(10,514)** | [Notes To Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial items, including revenue breakdown, Tongmei STAR Market IPO risks, debt, stock-based compensation, and legal proceedings Revenue by Product Type (in thousands) | Product Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Substrates | $11,082 | $16,903 | | Raw Materials and Other | $8,274 | $5,785 | | **Total** | **$19,356** | **$22,688** | Revenue by Geographic Region (in thousands) | Geographical region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | China | $13,426 | $11,517 | | Taiwan | $1,221 | $4,582 | | Europe | $2,101 | $3,725 | | North America | $1,109 | $1,076 | | Other | $1,499 | $1,788 | | **Total** | **$19,356** | **$22,688** | - Tongmei's STAR Market IPO application was approved by the Shanghai Stock Exchange and is under review by the CSRC[135](index=135&type=chunk)[136](index=136&type=chunk) - Investors hold a redemption right for their **~$49 million investment** if the IPO is not successfully completed[135](index=135&type=chunk)[136](index=136&type=chunk) - As of March 31, 2025, the company had **$52.5 million in short-term loans** and **$7.9 million in long-term loans** (net of current portion)[122](index=122&type=chunk) - The company is facing a putative shareholder class action and a related derivative lawsuit, which is currently on appeal after being dismissed[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - The company believes the claims are meritless[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, financial condition, and outlook, highlighting Q1 2025 revenue decline, gross margin compression, US-China trade tensions, and the Tongmei STAR Market IPO initiative - AXT is a materials science company producing high-performance compound semiconductor substrates (InP, GaAs, Ge) and related raw materials, with all manufacturing operations located in the PRC[148](index=148&type=chunk)[149](index=149&type=chunk)[154](index=154&type=chunk) - The business is significantly impacted by escalating US-China trade tensions, with US tariffs on its products increasing to as high as **100%** and China imposing export permit requirements on all three of its substrate product lines (GaAs, Ge, and InP)[170](index=170&type=chunk)[202](index=202&type=chunk) - The strategic initiative to list its subsidiary Tongmei on the STAR Market is a key focus[162](index=162&type=chunk) - The process is lengthy and subject to CSRC approval[162](index=162&type=chunk) - Failure could trigger a **~$49 million redemption** by investors[237](index=237&type=chunk) [Results of Operations](index=70&type=section&id=Results%20of%20Operations) Q1 2025 revenue decreased 14.7% year-over-year to $19.4 million, driven by a substrate revenue decline, while gross margin collapsed to negative 6.4% due to production issues and export restrictions Revenue Change Q1 2024 to Q1 2025 (in thousands) | Product Type | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Substrates | $11,082 | $16,903 | $(5,821) | (34.4)% | | Raw materials and other | $8,274 | $5,785 | $2,489 | 43.0% | | **Total revenue** | **$19,356** | **$22,688** | **$(3,332)** | **(14.7)%** | - Gross profit decreased by **$7.3 million (120.4%)** to a loss of **$1.2 million** in Q1 2025[209](index=209&type=chunk) - The gross margin was **-6.4%** compared to **26.9%** in Q1 2024, attributed to significant unfavorable yields in gallium arsenide production and reduced sales of higher-margin indium phosphide due to export restrictions[209](index=209&type=chunk) - SG&A expenses decreased by **5.0%** to **$5.9 million**, while R&D expenses decreased by **3.0%** to **$3.1 million** compared to the prior-year period[210](index=210&type=chunk)[211](index=211&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held $38.2 million in cash and restricted cash. During the quarter, cash increased by $4.4 million, primarily due to $6.9 million in net proceeds from financing activities (net debt issuance), which more than offset the $3.3 million cash used in operations. Management believes current liquidity is adequate for the next 12 months, but acknowledges the significant risk of a potential ~$49 million cash outflow if the Tongmei IPO fails and investors exercise their redemption rights - Principal source of liquidity as of March 31, 2025 was **$38.2 million**, consisting of **$31.6 million in cash** and **$6.6 million in restricted cash**[221](index=221&type=chunk) Q1 2025 Cash Flow Summary (in millions) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(3.3) | | Net cash used in investing activities | $(0.8) | | Net cash provided by financing activities | $6.9 | | **Net increase in cash** | **$4.4** | - A key risk to liquidity is the potential redemption of Tongmei shares by investors for approximately **$49 million** if the STAR Market IPO is not successfully completed[237](index=237&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=83&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are identified as foreign currency fluctuations, interest rate changes, and credit risk. Significant business is conducted in Chinese Renminbi and Japanese Yen, creating exposure to currency volatility, which is partially managed by a hedging program for the Yen. Interest rate risk is considered minimal. Credit risk is concentrated, with one customer accounting for over 10% of accounts receivable - The company has significant foreign currency risk exposure from operations in China (Renminbi) and sales to Japan (Yen)[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - A hedging program is in place to mitigate risk from the Japanese Yen[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - Interest rate risk is low; a **10% change in rates** would have an immaterial impact on interest income[254](index=254&type=chunk) - One customer accounted for more than **10% of the accounts receivable balance** as of March 31, 2025[255](index=255&type=chunk) [Controls and Procedures](index=85&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of the end of the quarter, the CEO and CFO concluded that the company's disclosure controls and procedures were effective. No material changes to internal control over financial reporting were identified during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025[257](index=257&type=chunk) - There were no changes in internal control over financial reporting during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[259](index=259&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=86&type=section&id=Item%201.%20Legal%20Proceedings) The company is currently defending against a putative shareholder class action lawsuit and a related derivative action. The class action, filed in May 2024, alleges violations of federal securities laws. The derivative suit was dismissed in March 2025, but the plaintiff has filed a notice of appeal. AXT believes the claims in both cases are meritless - A putative shareholder class action was filed on **May 6, 2024**, against the company, its CEO, and CFO, alleging violations of the Securities Exchange Act[263](index=263&type=chunk) - The case is pending[263](index=263&type=chunk) - A related derivative lawsuit was dismissed by the court on **March 17, 2025**, but the plaintiff filed a notice of appeal on **May 13, 2025**[264](index=264&type=chunk) [Risk Factors](index=86&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could adversely affect the company's business. Major risks include the severe impact of escalating US-China trade tariffs and export restrictions; operational and regulatory risks tied to its manufacturing base in China, such as potential government intervention and mandatory shutdowns; high volatility in financial results and gross margins; the potential failure of the Tongmei STAR Market IPO, which carries a ~$49 million redemption obligation; and intense competition and pricing pressure in the semiconductor materials market - Escalating and volatile trade tariffs from the U.S. and export restrictions from China on key materials (gallium, germanium, indium phosphide) pose a material threat to the business[338](index=338&type=chunk)[340](index=340&type=chunk) - The PRC central government may intervene in or influence PRC operations at any time, and regulations can change quickly[346](index=346&type=chunk)[348](index=348&type=chunk)[350](index=350&type=chunk) - This includes risks of mandatory factory shutdowns due to environmental policies[346](index=346&type=chunk)[348](index=348&type=chunk)[350](index=350&type=chunk) - The proposed IPO of subsidiary Tongmei on the STAR Market could fail, triggering a right for investors to redeem their shares for approximately **$49 million**[386](index=386&type=chunk) - Gross margins are highly volatile and can be negatively impacted by product mix, manufacturing yields, capacity utilization, and pricing pressure[276](index=276&type=chunk) - The gross margin was **negative (-6.4%)** in Q1 2025[276](index=276&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=138&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds from such sales during the reporting period - None [Defaults upon Senior Securities](index=138&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None [Mine Safety Disclosures](index=138&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable [Other Information](index=140&type=section&id=Item%205.%20Other%20Information) The company disclosed that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the last fiscal quarter - No director or officer, as defined in Rule 16a-1(f), adopted or terminated a Rule 10b5-1 trading arrangement during the last fiscal quarter[418](index=418&type=chunk) [Exhibits](index=140&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed concurrently with the Form 10-Q, which include the CEO and CFO certifications required under the Sarbanes-Oxley Act of 2002 (Sections 302 and 906) and the Inline XBRL data files for financial reporting - The filed exhibits include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL files (101 series)[420](index=420&type=chunk)

Company Performance - AXT reported a quarterly loss of $0.19 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.13, and compared to a loss of $0.03 per share a year ago, indicating an earnings surprise of -46.15% [1] - The company posted revenues of $19.36 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.50%, but down from $22.69 million in the same quarter last year [2] - AXT has surpassed consensus EPS estimates two times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Stock Outlook - AXT shares have declined approximately 35.5% since the beginning of the year, while the S&P 500 has only declined by -5.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $24.15 million, and for the current fiscal year, it is -$0.26 on revenues of $102.01 million [7] - The estimate revisions trend for AXT is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Electronics - Semiconductors industry, to which AXT belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact AXT's stock performance [5]

AXT (AXTI) Q1 2025 Earnings Call May 01, 2025 04:30 PM ET Company Participants Leslie Green - Investor RelationsGary Fischer - CFO, VP & Corporate SecretaryMorris Young - Co-Founder, CEO & ChairmanRoss Cole - Equity Research AssociateTim Bettles - VP Business Development, Strategic Sales and MarketingMatthew Bryson - MD - Equity Research Conference Call Participants Richard Shannon - Senior Research AnalystDave Kang - Senior Analyst Operator Good afternoon, everyone, and welcome to AXT's First Quarter twent ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $19.4 million, down from $25.1 million in Q4 2024 and $20.2 million in Q1 2024 [5][6] - Non-GAAP gross margin was negative 6.1% in Q1 2025, compared to 17.9% in Q4 2024 and 27.3% in Q1 2024 [6][9] - Non-GAAP net loss for Q1 2025 was $8.2 million or $0.19 per share, compared to a loss of $4.3 million or $0.10 per share in Q4 2024 [9][10] Business Line Data and Key Metrics Changes - Revenue from indium phosphide was $3.8 million, gallium arsenide was $6.7 million, and germanium substrates were $600,000 in Q1 2025 [5] - Revenue from consolidated raw material joint ventures was $8.3 million, indicating healthy demand [5] Market Data and Key Metrics Changes - Revenue distribution: Asia Pacific region accounted for 83%, Europe 11%, and North America 6% in Q1 2025 [5] - The Chinese data center optical interconnect market is estimated to be one-third of the global market, with increasing sales of indium phosphide within China [16] Company Strategy and Development Direction - The company is focusing on optimizing growth opportunities in China, particularly in high-speed data center connectivity and sensors for autonomous driving [25] - Plans to improve gross margins through a more measured approach to production and addressing yield issues [21][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by geopolitical factors and trade restrictions but expressed optimism about future growth opportunities in the Chinese market [15][25] - Expected healthy double-digit growth for revenue from data center applications in China in Q2 2025 [17] Other Important Information - The company is preparing for an IPO of its subsidiary in China, Tongmei, on the STAR Market [11] - Cash and cash equivalents increased to $38.2 million as of March 31, 2025, from $33.8 million at the end of 2024 [10] Q&A Session Summary Question: Yield issues for semi-insulating gallium arsenide - Management acknowledged yield problems due to aggressive market penetration but believes solutions are in place for recovery [30][32] Question: Timeline for resolving yield issues - Management indicated that while the product is established, changes in customer specifications require careful recalibration, which may take time [36][38] Question: Indium phosphide permitting process - Management expressed confidence in obtaining permits by mid-June, allowing for backlog shipments [41][46] Question: Risk of losing customers due to shipping delays - Management believes they hold a significant market share and that customers are willing to wait for shipments [55][60] Question: Impact of tariffs on gross margin - Management noted that tariffs are a concern but not a significant factor affecting gross margins at this time [72][78]

Financial Performance - Revenue for Q1 2025 was $19.4 million, down 22.8% from $25.1 million in Q4 2024 and down 14.8% from $22.7 million in Q1 2024[4] - GAAP gross margin for Q1 2025 was (6.4)%, a significant decline from 17.6% in Q4 2024 and 26.9% in Q1 2024[4] - Non-GAAP gross margin for Q1 2025 was (6.1)%, compared to 17.9% in Q4 2024 and 27.3% in Q1 2024[5] - GAAP net loss for Q1 2025 was $8.8 million, or $0.20 per share, compared to a net loss of $5.1 million, or $0.12 per share, in Q4 2024[7] - Non-GAAP net loss for Q1 2025 was $8.2 million, or $0.19 per share, compared to a net loss of $4.3 million, or $0.10 per share, in Q4 2024[7] - GAAP net loss for Q1 2025 was $8.798 million, compared to a net loss of $2.083 million in Q1 2024, representing a significant increase in losses[16] - Non-GAAP net loss for Q1 2025 was $8.152 million, compared to a net loss of $1.274 million in Q1 2024, indicating a worsening financial performance year-over-year[16] - GAAP loss from operations for Q1 2025 was $10.275 million, up from a loss of $3.347 million in Q1 2024, reflecting increased operational challenges[16] - Non-GAAP loss from operations for Q1 2025 was $9.629 million, compared to a loss of $2.538 million in Q1 2024, highlighting a decline in operational efficiency[16] - GAAP gross profit for Q1 2025 was $(1.241) million, a decrease from a gross profit of $6.094 million in Q1 2024, indicating a significant drop in profitability[16] - Non-GAAP gross profit for Q1 2025 was $(1.178) million, down from $6.199 million in Q1 2024, further emphasizing the decline in revenue generation[16] - GAAP net loss per diluted share for Q1 2025 was $(0.20), compared to $(0.05) in Q1 2024, reflecting a deterioration in per-share performance[16] - Non-GAAP net loss per diluted share for Q1 2025 was $(0.19), compared to $(0.03) in Q1 2024, indicating a negative trend in earnings per share[16] - Total shares used to compute diluted net income per share increased to 43,554 thousand in Q1 2025 from 42,987 thousand in Q1 2024[16] - Stock-based compensation expense for Q1 2025 was $646 thousand, compared to $809 thousand in Q1 2024, showing a reduction in compensation costs[16] Operational Challenges - The decline in gross margin was primarily due to a 58% reduction in indium phosphide sales, yield reduction on gallium arsenide wafers, and under-absorbed factory overhead[5] - AXT is taking a more measured approach to market share expansion to improve execution and production levels[3] Strategic Focus - The company is focusing on growth opportunities in China, particularly in high-speed data center connectivity and LIDAR for autonomous driving[2] - The STAR Market IPO application for Tongmei is under review, with hopes to complete the process in the coming months[6] Asset Management - AXT's total assets as of March 31, 2025, were $333.5 million, a decrease from $339.3 million as of December 31, 2024[15]