Why Material Science Company AXT Shares Are Shooting Up Premarket Today

AXT, Inc. AXTI shares are trading higher after the company reported better-than-expected Q4 financial results yesterday.

Revenue of $20.4 million beat the consensus of $17.6 million. Revenue was $17.4 million in the third quarter of 2023 and $26.8 million in the last quarter of 2022.

Adjusted operating expenses declined to $7.5 million from $9.0 million the prior year. The company reported an adjusted operating loss of $(2.7) million, which widened from $(0.3) a prior year quarter.

The company reported adjusted EPS loss of $(0.07) in the fourth quarter vs. adjusted EPS of $0.05 in the fourth quarter of 2022.

Adjusted gross margin was 23.2% compared with 11.3% prior quarter and 32.5% in the fourth quarter of 2022. As of December 31, cash and cash equivalent stood at $52.3 million. 

Morris Young, chief executive officer said, “We believe we are now beginning to see a recovery in our markets…While the overall demand environment remains somewhat soft, we are seeing increased orders for indium phosphide for both artificial intelligence (AI) and fiber optic applications.”

“We believe that the trends that have driven our revenue and customer expansion remain very much intact, with new catalysts such as AI providing strong incremental opportunity. AI will drive up the need for massive data transfer requirements with increased bandwidth, low attenuation and low distortion. We believe this will result in increased demand for indium phosphide as the best platform for rapid data transfer.”

Price Action: AXTI shares are up 37.7% at $3.15 premarket on the last check Friday. 

Photo: Gerd Altmann from Pixabay