AXT, Inc. announced a preliminary revenue range for its second quarter ended June 30, 2025, expecting revenue between $17.5 million and $18 million. This revised outlook is below the company's previously stated guidance of $20 million to $22 million, which was provided on May 1, 2025.
The primary reasons for the shortfall include slower than expected issuance of export control permits for the company's gallium arsenide products during Q2, coupled with a weaker demand environment in China. This sluggishness impacted both the gallium arsenide substrate business and consolidated raw material joint ventures.
Despite the revenue challenges, AXT reported a meaningful increase in AI-related demand for indium phosphide within China during the second quarter. Additionally, the company's subsidiary, Tongmei, received its first export control permits for indium phosphide late in the quarter, enabling initial international shipments. AXT expects to deliver Q2 2025 gross margins in the high single digits, despite the revenue shortfall.
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