Earnings call transcript: AXT Inc. Q2 2025 reveals revenue miss, stock dips

AXT Inc. reported its second-quarter 2025 earnings, revealing a revenue miss against forecasts, which led to a slight dip in its stock price. The company posted a non-GAAP net loss of $0.15 per share, slightly worse than the expected $0.13. Revenue came in at $18 million, falling short of the anticipated $19.78 million. Following the announcement, AXT’s stock decreased by 1.89% to close at $2.12, although it rebounded by 4.25% in aftermarket trading. According to InvestingPro analysis, the stock appears undervalued at current levels, despite experiencing a significant 12.24% decline over the past week. With a beta of 2.07, investors should note the stock’s higher volatility compared to the broader market.

Key Takeaways

• AXT Inc. reported a revenue of $18 million, missing forecasts by approximately 9%.
• The stock price fell 1.89% following the earnings release but rose 4.25% in aftermarket trading.
• Non-GAAP net loss per share was $0.15, slightly below expectations.
• The company secured its first export license for indium phosphide, boosting its international sales.

Company Performance

AXT Inc. experienced a challenging second quarter in 2025, with revenues declining from $19.4 million in Q1 2025 and $27.9 million in Q2 2024. The company attributed the revenue shortfall to delays in export permits for key materials like gallium arsenide and indium phosphide. Despite these challenges, AXT demonstrated resilience with an improvement in gross margin to 8.2%, up from -6.1% in the previous quarter. InvestingPro data reveals the company maintains a healthy liquidity position with a current ratio of 1.99, indicating sufficient assets to cover short-term obligations. However, the company’s overall financial health score remains weak at 1.29, suggesting ongoing operational challenges. For deeper insights into AXT’s financial position and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Financial Highlights

• Revenue: $18 million (down from $19.4 million in Q1 2025 and $27.9 million in Q2 2024)
• Earnings per share: -$0.15 (below the forecast of -$0.13)
• Non-GAAP Gross Margin: 8.2% (improved from -6.1% in Q1 2025)

Earnings vs. Forecast

AXT’s earnings per share of -$0.15 were below the forecast of -$0.13, representing a 15.38% surprise. The revenue of $18 million missed the forecast by 9%, a significant deviation that impacted investor sentiment and the stock’s initial reaction.

Market Reaction

Following the earnings announcement, AXT’s stock price fell by 1.89% to $2.12. However, in aftermarket trading, the stock rebounded by 4.25%, reaching $2.21. This volatility reflects investor uncertainty but also optimism about future growth prospects, particularly in the indium phosphide market.

Outlook & Guidance

For Q3 2025, AXT anticipates revenue between $19 million and $21 million, with a projected non-GAAP net loss per share of $0.11 to $0.13. The company expects gross margins to improve into the low to mid-teens. AXT is optimistic about a 30% growth in indium phosphide revenue, driven by rising demand for AI data center applications. InvestingPro analysts forecast an 18% revenue decline for the full year 2025, suggesting continued near-term headwinds. However, with the stock trading at just 0.5 times book value, long-term investors might find current levels attractive. Discover more exclusive insights and detailed valuation metrics with an InvestingPro subscription.

Executive Commentary

Dr. Morris Young, CEO of AXT, stated, "We believe we are either number one or number two in the world of indium phosphide substrate supply." Tim Bettles, VP of Business Development, emphasized the rapid market growth, saying, "The market is just growing too fast to be adequately serviced by just two players."

Risks and Challenges

• Export Permit Delays: Ongoing challenges in securing export permits could hinder revenue growth.
• Market Competition: Increasing competition in the optical interconnectivity market may pressure margins.
• Supply Chain Disruptions: Potential disruptions could impact production and delivery timelines.

Q&A

During the earnings call, analysts focused on the impact of export permit delays and the company’s ability to meet growing demand. Executives reassured investors of their capacity to quickly address backlogs once permits are obtained, highlighting a backlog exceeding $10 million for key substrates.

Full transcript - AXT Inc (AXTI) Q2 2025:

Audra, Conference Call Coordinator: Good afternoon, everyone, and welcome to AXT Inc. Second Quarter twenty twenty five Financial Conference Call. Leading the call today is Doctor. Morris Young, Chief Executive Officer and Gary Fisher, Chief Financial Officer. In addition, Tim Bettles, VP of Business Development, will be participating in the Q and A portion of the call.

My name is Audra, and I will be your coordinator today. I would now like to turn the call over to Leslie Green, Investor Relations for AXT. Please go ahead.

Leslie Green, Investor Relations, AXT Inc.: Thank you, Audra, and good afternoon, everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide projections or make other forward looking statements regarding, among other things, the future financial performance of the company, market conditions and trends, emerging applications using chips or devices fabricated on our substrates, our product mix, global economic and political conditions, including trade tariffs and import and export restrictions, our ability to increase orders in succeeding quarters to control costs and expenses to improve manufacturing yields and efficiencies of or to use or to utilize our manufacturing capacity. We wish to caution you that such statements deal with future events, are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results or events to differ materially. In addition to the matters just listed, these uncertainties and risks include, but are not limited to, the financial performance of our partially owned supply chain companies, increased environmental regulations in China and COVID-nineteen or other outbreaks of contagious disease. In addition to the factors just mentioned or that may be discussed in this call, we refer you to the company’s periodic reports filed with the Securities and Exchange Commission.

These are available online by link from our website and contain additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website at axt.com through 07/31/2026. I also want to note that shortly following the close of market today, we issued a press release reporting financial results for the 2025. This information is available on the Investor Relations portion of our website at axt.com. I would now like to turn the call over to Gary Fisher for a review of our second quarter twenty twenty five results.

Gary? Thank you, Leslie,

Gary Fisher, Chief Financial Officer, AXT Inc.: and good afternoon to everyone. Revenue for the 2025 was $18,000,000 compared with $19,400,000 in the 2025 and $27,900,000 in the 2024. To break down our Q2 twenty twenty five revenue per unit by product category, indium phosphide was $3,600,000 primarily from PON and data center applications in China. Gallium arsenide was 6,200,000.0 germanium substrates were $1,500,000 Finally, revenue from our consolidated raw material joint venture companies in Q2 was $6,700,000 In the 2025, revenue from Asia Pacific was 90%, Europe was 9% and North America was 1%. The top five customers generated approximately 30.9% of total revenue and one customer was over the 10% level.

Non GAAP gross margin in the second quarter was 8.2% reflecting a solid improvement from the prior quarter. For comparison, we reported a negative 6.1% gross margin in Q1 and a 27.6% gross margin last year in 2024. For those who prefer to track results on a GAAP basis, gross margin in the second quarter was 8% compared with negative 6.4% in Q1 and 27.4% last year. We continue to be highly focused on driving continued improvement including further recovery in Q3. Moving to operating expenses.

Given the difficult climate, we have been working hard to hold OpEx down. Total non GAAP operating expense in Q2 was $7,600,000 compared with $8,500,000 in Q1 and $8,900,000 in 2024. On a GAAP basis, total operating expense in Q2 was 8,200,000 compared with $9,000,000 in Q1 and $9,500,000 in 2024. Our non GAAP operating loss for the 2025 was $6,100,000 compared with a non GAAP operating loss in 2025 of $9,600,000 and a non GAAP operating loss of $1,200,000 in 2024. For reference, our GAAP operating line for the 2025 was a loss of 6,700,000 compared with an operating loss of $10,300,000 in Q1 and an operating loss of $1,900,000 in 2024.

Non operating other income and expense and other items below the operating line for the 2025 was a net loss of $400,000 The details can be seen in the P and L included in our press release today. For 2025, we had a non GAAP net loss of $6,400,000 or $0.15 per share compared with a non GAAP net loss of $8,200,000 or $0.19 per share in the 2025. Non GAAP net loss in 2024 was $800,000 or $02 per share. On a GAAP basis, net loss in Q2 was $7,000,000 or $0.16 per share. By comparison, net loss was $8,800,000 or $0.20 per share in the 2025.

GAAP net loss in 2024 was $1,500,000 or $04 per share. Weighted average basic shares outstanding in 2025 was $43,700,000 Cash and cash equivalents and investments decreased by 3,100,000 to $35,100,000 as of June 30. By comparison at March 31, was $38,200,000 Depreciation and amortization in the second quarter was $2,500,000 Total stock comp was $600,000 Net inventory was down by approximately $300,000 in the second quarter to $80,100,000 This continues to be a focus for us and we expect to bring it down further in quarters to come. Okay. This concludes the presentation of our quarterly financial results.

Turning to our plan to list our subsidiary, Tongmei, in China on the STAR Market in Shanghai. We’ve continued to keep our IPO application current. Tongmei remains in process as part of a much more selective and smaller group of prospective listings than

Unidentified Speaker: a few years ago. While we are not insensitive to the current geopolitical environment, Tongmei is considered a Chinese company and continues to be regarded in China as a

Gary Fisher, Chief Financial Officer, AXT Inc.: good IPO candidate. We will keep you informed of any updates. With that, I’ll now turn the call over to Doctor. Morris Young for a review of our business and markets. Morris?

Dr. Morris Young, Chief Executive Officer, AXT Inc.: Thank you, Gary,

Unidentified Speaker: and

Dr. Morris Young, Chief Executive Officer, AXT Inc.: thank you to our customers and investors for your ongoing support as we navigate this unique macroeconomic environment. As Gary mentioned, our substrate revenue increased in Q2 from the prior quarter, but the increase was less than we had expected as a result of longer processing time for gallium arsenide export permits, coupled with some sluggishness in the demand environment in China. That said, we made good progress in driving recovery in our gross margins with a strong focus on manufacturing process and efficiency. We also saw healthy growth in AI related demand for indium phosphide substrate in China. And as a result of obtaining our first export license in June, we were able to ship initial orders of indium phosphide substrates to our customers outside of China.

Since export restrictions are top of our buy for our investors, I’d like to begin there with an update and then we will discuss our key markets. As many of you know, the China government imposed trade restrictions on export of gallium arsenide in August 2023 and our indium phosphide in February 2025. These regulations expressly seek to restrict the export of materials used for military applications and require that we file an export permit for every customer orders. In our experience, we typically hear back our initial applications with 45 businesses, and repeat applications are often processed faster. With that said, we filed the permitting process in q two for gallium arsenide to be slower than we typically see over the last two years.

The delays in Q2 resulted in our being able to ship less material outside of China than we had anticipated. About half our revenue shortfall in Q2 was the result of this factor. On a positive note, the pace of permits in the month of July has improved meaningfully, mostly on small orders, but this improvement is good news and we do expect gallium arsenide revenue to grow sequentially. We’re pleased to be granted our first permit for indium phosphide in late June and we were able to ship nearly $700,000 of material from for our non China backlog in indium phosphide in Q2. Although the process for indium phosphide has been a bit slower than we expected as well, have received additional permits in July and expect to see more over the coming months.

Based on the pace so far, we’re taking a conservative view of the timing of larger permits in Q3. As we have mentioned previously, we don’t believe that any of our indium phosphide cells go into military applications, So we feel we are in a good position to realize millions of dollars of sales backlog once we navigate the per permit process. While the recent geopolitical environment present a near term headwind for our business, we are also taking advantage of some of the unique opportunities. The cloud and data center connectivity market in China is accelerating. And in an effort to promote innovation and reduce dependency on foreign suppliers, we’re seeing a significant effort to develop domestic source of EML and silicon photonics based lasers.

We estimate that China data center optical interconnect market is currently around one third of the global market. However, most of the optical devices for these interconnects sourced from outside of China and applications for indium phosphide substrate within China remain focused on PON business only. Further, laser manufacturers in China are developing a appreciation for the critical benefit of low EPD material in high speed interconnect interconnect devices, both in the traditional PoNS market and in the new data center market. As a result, our sales of indium phosphide within China are increasing. In q two, we nearly doubled our revenue for AI for indium phosphide within China and our revenue for AI related application in China, although are increasing, although the revenue base is small.

And we expect to continue to grow in Q3. The 10 for data center market in China remains small at this moment, but we expect to see significant growth over the next few years. As the PON laser providers expand their portfolio to include EML and silicon photonics solutions. Broadly speaking, we expect to grow our total indium phosphide revenue by 30% or more in Q3 as a result of growth in applications for PON, data center connectivity and virus indium phosphide based sensors. Now turning to gallium arsenide.

Demand in China was sluggish in q two, and customers are taking a more cautious approach to ordering and holding inventory. Despite the lackluster environment, we were pleased to be able to grow our wireless business in China during the quarter with continued growth expected in Q3. As we mentioned, there’s a sizable opportunity in the wireless market for which our technology and product are well suited. During Q2, we took a more measured approach to market expansion and were able to service a portion of the customer opportunity while executing effectively at modestly higher production levels. The adjustment we made in our approach along with the strong focus from our manufacturing organization on yield and efficiency allowed us to drive meaningful improvements in gallium arsenide gross margins, which contributed to our overall progress to our good margin recovery.

This should continue to be a top priority for us in the second half of the year. Turning to germanium business, we saw growth in our revenue in Q2 driven by satellite solar cell applications in China. This market is highly price sensitive, and we continue to be very selective in the business opportunities we choose to support as the sharp rise in germanium raw material pricing in the last several years has severely constrained gross margins. In addition, germanium substrates permits for sales outside of China have been difficult to obtain. Therefore, in Q3, we expect to see our sales come down again and we may remain at lower level rate through the second half of the year.

With regard to our raw material joint ventures, our consolidated revenue in Q2 declined by approximately $1,600,000 compared to Q1. The economic climate was one factor, and the other factor relates to the mix of revenue from the two service model a customer choose for our germanium for their gallium for their gallium purification process. On a positive note, the pricing environment has been relatively stable. Globally, there continues to be a greater awareness of the importance of earth material, and we’re ahead of the curve in developing this unique and integrated supply chain. In summary, though the export permit process has been slower than we would like to be, we are making progress against a backlog of more than $10,000,000 in customer orders for gallium arsenide and indium phosphide substrates.

We’re also encouraged to see growth in strategic applications within China, including indium phosphide for AI related data center connectivity and gallium arsenide for wireless devices. With a strong focus on gross margin improvement across our product portfolio, We delivered meaningful recovery in Q2 and expect to continue our progress in the second half of the year. Our competitive positioning continues to be enhanced by superior product performance in key specifications such as low EVD and we’re working diligently to support the next generation technology requirements of our global customer base. With that said, I will now turn the call back to Gary for our third quarter guidance. Gary?

Gary Fisher, Chief Financial Officer, AXT Inc.: Thank you, Morris. In keeping with our comments today, we believe Q3 revenue will grow sequentially to be in the range of $19,000,000 to $21,000,000 This guidance range includes a modest contribution from indium phosphide and gallium arsenide for our customers outside of China and only includes revenue for which we currently have permits. Within China, we continue to optimize emerging opportunities to grow our business and strategic applications for both indium phosphide and gallium arsenide. And finally, we expect our germanium revenue to be down and our raw material business to be approximately flat in Q3 from the prior quarter. As Morris mentioned, we continue to focus strongly on gross margin improvement.

In Q3, we expect our margins to improve again and to be in the low mid to mid teens. Based on this revenue range and gross margin improvement, we believe our non GAAP net loss will be in the range of $0.11 to $0.13 and GAAP net loss will be in the range of $03 to $0.15 Share count will be approximately 43,800,000 shares. Okay. This concludes our prepared comments. We’d be glad now to answer any of your questions.

Tim Bettles, VP of Business Development, AXT Inc.: Audra?

Audra, Conference Call Coordinator: Thank you. We will now begin the question and answer session. We’ll go first to Ross Cole at Needham and Company.

Ross Cole, Analyst, Needham and Company: And thank you for taking my question. And it’s great to hear that you’re starting to, you know, get some of the permits, especially for indium phosphide. But I was wondering, given that there’s still been a bit

Dr. Morris Young, Chief Executive Officer, AXT Inc.: of a delay in the

Ross Cole, Analyst, Needham and Company: permitting, are you concerned about any potential share loss to customers if they’re continuing to wait for this licensing process? Thank you.

Unidentified Speaker: I

Dr. Morris Young, Chief Executive Officer, AXT Inc.: Tim, go ahead.

Tim Bettles, VP of Business Development, AXT Inc.: Yes. Sorry. Sorry, Morris. Yes. I can answer some answer to that.

So in the near term, obviously, it has taken some extra time to get these permits. And the customers are working every channel they can to get material in on time. But we do continue to receive permits. And if we continue to receive permits for those specifically for those larger orders, we have a very healthy backlog that’s ready to ship. And we believe that the market is just growing too fast to be adequately serviced by just two players at this moment.

So long term, I think the business still holds good.

Dr. Morris Young, Chief Executive Officer, AXT Inc.: Yeah. If I may yeah. If I may add to that point, I think, you know, indium phosphide is a is at a critical juncture at this point, I think. You know, I think indium phosphide traditionally has been serving the faster data center activities such as transceivers. But now with AI going from 800 gs to 1.6 t to 3.2 t, as the speed goes up higher and higher, there’s a the the the need for any classifier is more and also the for lower EPD material becomes that much more important.

And so not only I believe with AI’s advancement in data center applications will increase the need for indium phosphide tremendously. And also because of the device size becomes larger and the power requirement for these higher speed indium phosphide devices will need better quality material. And that all that said should increase our indium phosphide business opportunity for AXT. And with all that said, AXT is also a significant player in the phosphide substrate supply overall. We believe we are either number one or number two in the world of Indian phosphide substrate supply, which we estimated to be at least 40% of the world in the phosphide supply.

So I think although the permitting and the geopolitical restriction is hurting our business at this point, but I think the demand is there, we believe we should recover.

Ross Cole, Analyst, Needham and Company: Great. Thank you so much. That was really helpful. And then I have another question. It looks like it’s great to see your gross margin improving again.

And I wanted just to confirm, I remember in the first quarter,

Dr. Morris Young, Chief Executive Officer, AXT Inc.: there had been a bit of

Ross Cole, Analyst, Needham and Company: a yield issue associated with germanium arsenide for a wireless HPT customer. It seems like that’s been resolved. And have you, you know, resumed the business opportunity with that customer at this time?

Dr. Morris Young, Chief Executive Officer, AXT Inc.: Yes. We we have. But although we’re we’re taking as we said in the the the the script, we’re taking a fairly conservative approach. And so we’re not taking a big portion of it, but we want to not only serve the customer well, also holding our improving our margin. So I think we should be able to continue to see the improvement throughout the second half of the year on that business.

And if we can improve the margin, so that also implies better yield and efficiency, We should ask for a higher portion of our business with that customer. So that should grow our revenue as well.

Ross Cole, Analyst, Needham and Company: Great. Thank you so much. And that’s all for me.

Audra, Conference Call Coordinator: Next, we’ll move to Tim Savageaux at Northland Capital Market.

Unidentified Speaker: Hey, good afternoon. Sorry about that. I want to go back to something Tim said, or the other Tim, about the market growing too fast to be serviced by two players. And I want to kind of dig into that a little bit more. Obviously, we’ve got a lot of indications of that, both from what the hyperscale guys are planning to spend and what we’re hearing from various members of the technology kind of ecosystem, demand seems to be pretty strong.

I wonder from AXTI’s perspective, any more details on what you’re seeing there in terms of the growth and or growth potential and whether that’s how your backlog may have increased during the quarter given the export issues and how you see that playing out for the rest of the year? I guess, were not facing these export issues in indium phosphide? Is the growth rate that you had been looking for before, has that accelerated? What are the trends there?

Tim Bettles, VP of Business Development, AXT Inc.: Right. Yes. Thank you all for you, Tim.

Unidentified Speaker: It’s a good question.

Tim Bettles, VP of Business Development, AXT Inc.: So yes, I just basically want to repeat a little bit what Morris has just said. Obviously, we are seeing market trends that the demand for optical interconnectivity is growing rapidly. The move to higher speed transceivers is is moving rapidly just as we expect. This not only we’ve said for a long time now, this has a a bit of a double benefit for us because we are not only seeing that people as we move to larger and larger higher and higher speeds, the constraints on the lasers and detectors become higher and higher. So higher quality material is required, lower VPD material is required.

So we also see some market share coming our way because of that. But in addition to that, a lot of these new devices are large. You know, as we move into some of the larger EML devices and we move to silicon photonics, the acreage of indium phosphide that is used goes up too. So we do see the demand for indium phosphide substrates increasing very healthily, certainly at least at the growth rates that we were predicting earlier this year and probably even higher. As Morris again said, we own about 40% market share in this.

So when I say difficult for this market to be served by two players, we’ve got a quality and technology improvement over our competition. We’ve got 40% market share already. It’s very difficult to fill that hole very quickly. We are still seeing orders. Although the permit process is going slow, we’re receiving new orders on pretty much a daily basis for indium phosphide.

So we’re definitely seeing the demand for AXT is still there. Once we start getting these orders these permits come through, I’m sure we’re going to see more demand coming our way.

Unidentified Speaker: Okay, thanks. And then just a follow-up, I think you mentioned the $10,000,000 backlog for both indium phosphide and gallium arsenide. And I guess looking at the shortfall in the quarter, think you said half of that was gallium arsenide exports. So should we infer from that that the majority, not the vast majority of that backlog is indium phosphide? And without the permits, I mean, could you ship all that this quarter?

Or I guess,

Tim Bettles, VP of Business Development, AXT Inc.: how quickly do you think you get back

Unidentified Speaker: to $10,000,000 or get to $10,000,000 a quarter in indium phosphide substrate revenue?

Tim Bettles, VP of Business Development, AXT Inc.: Right. Okay. Good question. Thank you, Tim. So yes, more than 50% of backlog is indium phosphide.

And we’ve got a large amount of capacity there right now. We’re typically turning orders around in four to six weeks. Sometimes, if we need to, we can turn them around faster than that. Of course, before, all of this this permit procedure that came into place, we’ve got a lot of WIP, and we’ve built up WIP waiting to go to get some of those permits coming in as well. So it is possible that we can turn all of this backlog around pretty quickly.

But, of course, it’s going to be very dependent on the timing that those permits come in and how they come in throughout Q3. But we do anticipate that this will should we get more permits, we’re confident we will we’ll see an upside to our Q3 guidance.

Unidentified Speaker: Great. Thanks very much.

Audra, Conference Call Coordinator: We’ll go next to Richard Shannon at Craig Hallum Capital Group.

Tyler Anderson, Analyst, Craig Hallum Capital Group: Hi. This is Tyler Anderson on for Richard Shannon. Thank you for taking my questions. Could you expand upon why the gallium arsenide export licenses slowed down as the indium phosphide licenses began to be issued. And is this the same agency that’s issuing these?

And are you expecting any lower cadence of the indium phosphide licenses than what you expected before because of the gallium arsenide slowdown?

Tim Bettles, VP of Business Development, AXT Inc.: I again, I can answer I can I can at least start towards that, and then Morris can probably elaborate a little bit more? It it’s difficult for us to speculate, really, what is going on here. But we do know is that it it is not AXT specific. The whole industry has been faced with delays with gallium arsenide permits. What what we have seen, however, is that, through q three and certainly through this this past month, the the permits seem to be the permit approval process seems to be speeding up again.

And we’ve received quite a few more permits just in July, But I think it looks like they’re they’re now catching up through some of the backlog that we’ve seen there. So hopefully, things will return to normal fairly soon, both on gallium arsenide. And then hopefully, we’ll see the same kind of cadence on indium phosphide as we approach normality on gallium arsenide.

Dr. Morris Young, Chief Executive Officer, AXT Inc.: Yeah. I I I think Tim doesn’t want to speculate, but I can sort of tell you if you see the news that, you know, the the ongoing of the restriction of rare earths in China implementing the policy probably has something to do with it. In other words, China will answer use this as a negotiating tool. So I think they started to restrict the number of permits, but I think we are seeing the latter part of it. They start to relax more now.

I think it’s hopefully it’s getting into a more regular session that they would that we should be able to get more permits regularly.

Tyler Anderson, Analyst, Craig Hallum Capital Group: Thank you for that. And are you seeing any sort of advanced order makings where customers are starting to build inventory? And could we see any kind of spikes in your revenue moving forward as you work through the backlog and people start to place larger orders while they can get a permit?

Dr. Morris Young, Chief Executive Officer, AXT Inc.: I I would tend to think they are they are threatening to give us big inventory orders to anticipate the getting the permits, but I don’t think we are at that stage yet because we’re not delivering the even the first big large orders. We we do have a lot of very urgent order needs to be delivered. And so the customer said, okay, if we could get the first order through, they will give us other anticipated order they want to build inventory. But I don’t think we are at that stage to worry about that yet because we’re not even delivering the first batch. I mean, as far as big orders concerned, we we we we we so far deliver, we said, $700,000 worth of indium phosphide orders outside of China.

But, you know, the backlog is, you know, six, seven times or even 10 times that.

Tyler Anderson, Analyst, Craig Hallum Capital Group: Awesome. Thank you. That is all of my questions.

Audra, Conference Call Coordinator: And that concludes our Q and A session. I will now turn the conference back over to Leslie Green for closing remarks.

Leslie Green, Investor Relations, AXT Inc.: Thank you all for participating in our conference call. We will be participating in the annual Needham Virtual Semiconductor and Semi Cap Conference in August and hope to see many of you there. And as always, please feel free to contact us if you would like to set up a call.

Dr. Morris Young, Chief Executive Officer, AXT Inc.: We look

Leslie Green, Investor Relations, AXT Inc.: forward to speaking with you in the near future. Thanks.

Audra, Conference Call Coordinator: And this concludes today’s conference call. Thank you for your participation. You may now disconnect.

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