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AXT Q3 results benefit from shift to InP

InP overtakes GaAs as largest segment of company's substrate sales

Compound semiconductor substrate maker AXT has reported its Q3 2015 financial results with revenue down to $18.4 million compared with $21.0 million in Q2 2015, and $23.14 for Q3 2014. However, net profit in Q3 was $42,000 compared with a net loss of $3,000 in the previous quarter.

Q3 2015 gross margin was up to 25.1 percent of revenue compared with 20.9 percent of revenue in the previous quarter. Operating expenses were $5.3 million compared with $5.2 million in Q2 2015. Operating loss was $0.7 million compared with $0.8 million last quarter. Net interest and other income was $0.8 million, compared with $1.1 million in Q2 2015.

"Our business has continued to evolve as a direct reflection of the transformation in our industry," said Morris Young, CEO. "We are seeing a growing shift within our revenue base towards InP, which has surpassed both semi-insulating GaAs and semi-conducting GaAs as the single largest segment of substrates in our sales composition."

"Its growth as a percentage of our revenues has had a favourable effect on our results. This was evident in Q3 as softness in other parts of our business caused us to fall short of our revenue guidance, but we outperformed our bottom line guidance to achieve break even profitability.

He concluded: "We continue to actively invest in our future through focused R&D, technology M&A and the upgrade of our manufacturing infrastructure. We believe we are making the right investments to maximize our business opportunity and drive increased value for our shareholders."

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