UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2025 Or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (State or other jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.) for the transition period from to Commission File Number 000-24085 AXT, INC. (Exact name ...

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]

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]

Financial Performance - Total revenue increased by $23.6 million, or 31.1%, in 2024 to $99.4 million from $75.8 million in 2023, driven by higher demand for InP and GaAs wafer substrates [288]. - Gross profit increased by $10.5 million in 2024, resulting in a gross margin of 24.0% compared to 17.6% in 2023 [297]. - Revenue from customers in China increased by 41.1% in 2024, primarily due to higher demand for GaAs, InP, and Ge wafer substrates [293]. - Revenue from customers in Taiwan surged by 63.0% in 2024, primarily due to increased demand for GaAs and InP wafer substrates [293]. - Revenue from North America increased by 14.9% in 2024, primarily due to higher demand for InP wafer substrates [293]. Expenses and Costs - Research and development expenses rose by $2.5 million, or 20.4%, to $14.5 million in 2024, mainly due to higher development costs for GaAs and InP wafer substrates [301]. - Selling, general and administrative expenses increased by $1.3 million, or 5.7%, to $24.1 million in 2024, attributed to higher legal and professional service expenses [299]. - Interest expense, net decreased by $187,000, or 12.2%, to $1.34 million in 2024 compared to $1.53 million in 2023, while it increased by $456,000, or 42.6%, from $1.07 million in 2022 [303]. Assets and Liabilities - The company recorded accounts receivable net balance of $25.6 million as of December 31, 2024, compared to $19.3 million in 2023, reflecting an increase of approximately 32.1% [266]. - The allowance for credit losses decreased by $432,000 during 2024, while it increased by $272,000 in 2023, indicating a shift in credit risk assessment [266]. - As of December 31, 2024, the company had an inventory reserve of $24.1 million for excess and obsolete inventory, up from $21.9 million in 2023, representing a 10.1% increase [268]. - The accrued product warranties decreased to $451,000 in 2024 from $703,000 in 2023, a reduction of approximately 35.8% due to fewer quality claims [267]. - The company has no impairment of long-lived assets as of December 31, 2024, and 2023, indicating stable asset valuations [276]. Tax and Deferred Assets - The company’s deferred tax assets have been reduced to zero by a valuation allowance, reflecting uncertainties in realizing these assets [281]. - The company recorded a valuation allowance against net deferred tax assets of $20.7 million and $17.5 million for the years 2024 and 2023, respectively [309]. - Provision for income taxes increased by $974,000, or 608.8%, to $1.1 million in 2024 from $0.2 million in 2023, while it decreased by $2.0 million, or 92.7%, from $2.2 million in 2022 [308]. Cash Flow and Financing - Net cash used in operating activities was $12.1 million in 2024, primarily due to a net loss of $11.8 million and a net change in operating assets and liabilities of $11.7 million [315]. - Total cash, restricted cash, and cash equivalents decreased by $16.3 million in 2024, ending the year at $33.8 million [313]. - Net cash used in investing activities was $4.4 million in 2024, primarily for property, plant, and equipment [318]. - The company has no current intentions to distribute earnings to investors under its corporate structure, maintaining cash management policies for funding between subsidiaries [330]. - The company reported net cash provided by financing activities of $38.0 million for 2022, with $53.1 million from short-term loans in China and $2.2 million from capital increases in subsidiary shares [323]. Investments and Equity - The company sold approximately 7.28% of Tongmei to private equity investors for about $49 million as part of its IPO process on the STAR Market [331]. - The IPO application for Tongmei was accepted for review by the Shanghai Stock Exchange on January 10, 2022, and approved on July 12, 2022 [332]. - Dividends received from PRC subsidiaries were approximately $2.4 million, $4.3 million, and $2.9 million for the years ended December 31, 2024, 2023, and 2022, respectively [329]. - Minority investments under the fair value method totaled $0.6 million as of December 31, 2024, unchanged from 2023, while investments under the equity method increased from $12.5 million in 2023 to $14.1 million in 2024 [354]. Regulatory and Economic Environment - The company faced significant economic challenges due to escalating trade tensions, with U.S. tariffs on imports from China increasing to 70% [286]. - The company anticipates potential delays in export permit processing for indium phosphide substrates due to new regulations, impacting future operations [286]. - Approximately 92% of the company's revenue in 2024 came from customers located outside of North America [292]. Miscellaneous - The company has no off-balance sheet financing arrangements or special purpose entities established [341]. - The company has committed to a total investment of approximately $90 million in Dingxing, China, including cash for land and buildings, equipment, and local employment [344]. - The company has instituted a foreign currency hedging program to mitigate foreign exchange exposure related to Japanese yen, which may also be applied to the Chinese renminbi in the future [351]. - A registration statement was filed with the SEC to offer up to $60 million in various securities for working capital and potential acquisitions [335].

Group 1 - AXT, Inc. reported a 23% year-over-year increase in revenues for Q4 2024, driven by high demand for indium phosphide wafers [1] - The growth in AI computing and data centers is significantly contributing to the increased demand for the company's products [1]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $25.1 million, up from $23.6 million in Q3 2024 and $20.4 million in Q4 2023, reflecting a strong year-over-year growth [6][16] - Non-GAAP gross margin in Q4 was 17.9%, down from 24.3% in Q3 2024 and 23.2% in Q4 2023, primarily due to lower benefits from recycling and under-absorption of manufacturing overhead [9][10] - Non-GAAP net loss for Q4 was $4.3 million or $0.10 per share, compared to a loss of $2.1 million or $0.05 per share in Q3 2024 and a loss of $2.8 million or $0.07 per share in Q4 2023 [12][17] Business Line Data and Key Metrics Changes - Revenue breakdown for Q4 2024: Indium phosphide at $9.1 million, gallium arsenide at $5.4 million, germanium substrates at $1.6 million, and revenue from joint ventures at $9.0 million [7][8] - The company reported a non-GAAP operating loss of $5.4 million in Q4 2024, compared to a loss of $2.6 million in Q3 2024 and a loss of $2.7 million in Q4 2023 [11] Market Data and Key Metrics Changes - Revenue from Asia Pacific accounted for 79%, Europe for 11%, and North America for 10% in Q4 2024 [8] - The top five customers contributed approximately 36% of total revenue, with one customer exceeding the 10% threshold [8] Company Strategy and Development Direction - The company plans to list its subsidiary Tongmei on the STAR Market in Shanghai, viewing it as a good IPO candidate [18] - AXT is focusing on expanding its portfolio of raw material companies to create a valuable supply chain and explore new markets [22][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to new trade restrictions on indium phosphide exports but expressed confidence in navigating the permit process [23][24] - The company anticipates a revenue impact of approximately $4 million to $5 million in Q1 2025 due to these restrictions but expects to recover once permits are secured [25][41] Other Important Information - The company reported a total revenue of $99.4 million for fiscal year 2024, a 31% increase from $75.8 million in fiscal year 2023 [16][17] - Cash, cash equivalents, and investments decreased by $5.0 million to $33.8 million as of December 31, 2024 [13] Q&A Session Summary Question: Concerns about gross margins and operating expenses - Management expects gross margins to remain low in Q1 due to reduced indium phosphide sales but anticipates recovery to mid-20s in subsequent quarters [49] - R&D investments in indium phosphide are ongoing, with expected benefits from improved yields and performance [50][51] Question: Opportunities in datacenters and photodetectors - Growth is expected in both photodetector and laser segments, particularly with the transition to silicon photonics and EML applications [56][58] Question: Impact of export controls on revenue - Management believes that the permitting process for indium phosphide will be manageable, similar to gallium arsenide, and expects to secure permits for non-military applications [70] Question: Revenue recovery in Q2 - If permits are obtained, management is optimistic about recovering lost sales in Q2 and potentially achieving strong revenue levels [77] Question: Market share in the wireless sector - The HBT market is estimated at $80 million to $100 million annually, with a target to grow market share from 10% to approximately 13% to 14% this year [80][81] Question: Growth outlook for indium phosphide - Expected growth for indium phosphide in 2025 is around 20%, driven by demand in AI and silicon photonics [91][92]

Revenue Performance - Revenue for the fourth quarter of 2024 was $25.1 million, a 31% increase year-on-year from $20.4 million in Q4 2023[3] - Fiscal year 2024 revenue reached $99.4 million, up from $75.8 million in fiscal year 2023, representing a 31% increase[7] Gross Margin - GAAP gross margin for fiscal year 2024 improved to 24.0% of revenue, compared to 17.6% in fiscal year 2023[7] - Non-GAAP gross margin for fiscal year 2024 was 24.3%, up from 18.1% in fiscal year 2023[7] Net Loss - GAAP net loss for fiscal year 2024 was $11.6 million, or $0.27 per share, an improvement from a net loss of $17.9 million, or $0.42 per share in fiscal year 2023[7] - Non-GAAP net loss for fiscal year 2024 was $8.5 million, or $0.20 per share, compared to a net income of $14.3 million, or $0.34 per share in fiscal year 2023[7] - AXT, Inc. reported a GAAP net loss of $5,088,000 for Q4 2024, compared to a net loss of $3,621,000 in Q4 2023, representing an increase in loss of approximately 40.5% year-over-year[16] - Non-GAAP net loss for the year ended December 31, 2024, was $8,527,000, compared to $14,341,000 in 2023, showing an improvement of about 40.3%[16] Operational Performance - AXT, Inc. reported a GAAP loss from operations of $6,165,000 for Q4 2024, compared to a loss of $3,560,000 in Q4 2023, indicating a year-over-year increase of 73.1%[16] - The company’s operating expenses for the year ended December 31, 2024, were $38,639,000, an increase from $34,887,000 in 2023, representing an increase of about 10.1%[16] Assets and Liabilities - Total current assets decreased to $158,272,000 as of December 31, 2024, down from $170,656,000 in 2023, reflecting a decline of approximately 7.3%[15] - Cash and cash equivalents decreased to $22,833,000 in 2024 from $37,752,000 in 2023, a decline of about 39.5%[15] - Total liabilities decreased to $84,406,000 in 2024 from $89,555,000 in 2023, a reduction of approximately 5.5%[15] - The company’s accumulated deficit increased to $43,664,000 in 2024 from $32,040,000 in 2023, reflecting a rise of approximately 36.4%[15] - AXT, Inc. reported total stockholders' equity of $216,331,000 as of December 31, 2024, down from $227,483,000 in 2023, a decrease of approximately 4.9%[15] Market and Technical Advancements - AXT has successfully penetrated the cell phone market, which is estimated to be close to a $100 million addressable market[2] - The company is advancing technical specifications of its materials to address next-generation connectivity challenges, particularly in cloud and data center infrastructure[2] - AXT's subsidiary, Tongmei, is in the process of an IPO on the STAR Market, which is subject to review and approval by regulatory authorities[6] - The company aims to develop larger diameter substrates to enable next-generation technology innovations across various end-markets[12]

Revenue and Sales Performance - AXT's substrate product group generated 63% of consolidated revenue in 2023, while the raw materials product group accounted for 37%[157]. - AXT's consolidated revenue percentages for substrate and raw materials were 79% and 21% in 2022, and 75% and 25% in 2021, respectively[157]. - Revenue increased by $6.3 million, or 36.2%, to $23.6 million for the three months ended September 30, 2024, compared to $17.4 million for the same period in 2023[212]. - Revenue increased by $18.9 million, or 34.1%, to $74.3 million for the nine months ended September 30, 2024, compared to $55.4 million for the same period in 2023[213]. - Substrate revenue for the nine months ended September 30, 2024, increased by $16.8 million, or 48.0%, to $51.7 million from $34.9 million in the same period in 2023[214]. - Revenue in China increased by $13.6 million, or 47.3%, for the nine months ended September 30, 2024, primarily due to higher demand for GaAs, InP, and Ge wafer substrates[218]. - Revenue in Taiwan increased by $3.8 million, or 59.2%, for the nine months ended September 30, 2024, driven by higher demand for GaAs and InP wafer substrates[219]. - Revenue in North America increased by $1.8 million, or 260.8%, for the three months ended September 30, 2024, primarily due to higher demand for InP wafer substrates[217]. - Revenue in Europe increased by $2.1 million, or 23.8%, for the nine months ended September 30, 2024, primarily due to higher demand for GaAs and InP wafer substrates[220]. Product and Market Strategy - The demand for InP substrates is expected to increase due to growth in AI applications and high-speed data transfer needs in data centers[156]. - AXT's supply chain strategy includes partial ownership of raw material companies in China, providing pricing advantages and reliable supply[162]. - The company is focused on expanding its market presence and increasing sales through new product development and applications[150]. - AXT's substrates are used in various applications, including 5G infrastructure, fiber optics, and consumer electronics[156]. Manufacturing and Operations - AXT's manufacturing operations are primarily located in China, benefiting from lower costs compared to the US, Europe, or Japan[162]. - The relocation of gallium arsenide production lines was completed, with 100% of ingot production transferred to new facilities, enhancing capacity and technological sophistication[164]. - The company has invested in additional buildings and advanced equipment to support future capacity needs[164]. Financial Performance and Expenses - Gross profit for the nine months ended September 30, 2024, increased by $10.7 million, or 123.5%, to $19.4 million from $8.7 million for the same period in 2023[222]. - Gross margin as a percentage of revenue increased to 26.2% for the nine months ended September 30, 2024, compared to 15.7% for the same period in 2023[222]. - Selling, general and administrative expenses increased by $217,000, or 1.2%, to $17.7 million for the nine months ended September 30, 2024, compared to $17.4 million for the same period in 2023[225]. - Research and development expenses increased by $1.1 million, or 12.4%, to $10.4 million for the nine months ended September 30, 2024, primarily due to higher development expenses for crystal ingot processing[227]. Cash Flow and Liquidity - Cash and short-term investments decreased by $11.3 million in the nine months ended September 30, 2024, primarily due to net cash used in operating activities of $13.4 million[237]. - As of September 30, 2024, the principal source of liquidity was $38.8 million, consisting of cash of $24.9 million and restricted cash of $13.9 million[237]. - Net cash used in operating activities was $13.4 million for the nine months ended September 30, 2024, primarily due to a net loss before income attributable to noncontrolling interests of $6.1 million[239]. - The company has adequate cash and investments to meet operating needs and capital expenditures over the next 12 months[259]. Investments and Financing - The company has a total investment target of approximately $90 million in value, assets, and capital for its new manufacturing facility in Dingxing, China[262]. - The company expects to use net proceeds from a $60 million Shelf Registration Statement for working capital, capital expenditures, and potential acquisitions[258]. - The company secured a new line of credit amounting to $9.7 million, structured as a five-year bank loan with an interest rate of 6.5% per annum[255]. - The company recorded a foreign exchange gain of $0.2 million in 2023, down from $1.6 million in 2022, and a net foreign exchange loss of $0.4 million in 2021[266]. Regulatory and Geopolitical Risks - The company anticipates potential challenges related to geopolitical tensions and regulatory changes affecting its operations in China[150]. - Effective August 1, 2023, the PRC government requires export licenses for gallium and germanium-related materials, impacting shipment timelines[176]. - The company is subject to unique legal and operational risks associated with its corporate structure, which could materially affect operations and stock value[179]. Corporate Structure and Governance - AXT's PRC subsidiary, Tongmei, received a total investment of approximately $49 million from private equity firms, granting them a 7.28% redeemable noncontrolling interest[168]. - The company has no current intentions to distribute earnings to investors under its corporate structure[251]. - Approximately 7.28% of Tongmei was sold to private equity investors for approximately $49 million as part of the IPO process[252]. - Tongmei's IPO application was accepted for review by the Shanghai Stock Exchange on January 10, 2022, and approved on July 12, 2022[253].

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $23.6 million, down from $27.9 million in Q2 2024 and up from $17.4 million in Q3 2023 [4] - Non-GAAP gross margin in Q3 was 24.3%, compared to 27.6% in Q2 2024 and 11.3% in Q3 2023 [5] - Non-GAAP net loss for Q3 was $2.1 million or $0.05 per share, compared to a loss of $800,000 or $0.02 per share in Q2 2024 and a loss of $4.9 million or $0.12 per share in Q3 2023 [7] Business Line Data and Key Metrics Changes - Indium phosphide revenue was $6.8 million, driven by demand in data center applications and AI [4] - Gallium arsenide revenue was $6.6 million, reflecting a pullback after strong growth in Q2 [4] - Revenue from germanium substrates was $1.6 million, down from the prior quarter due to a strategic decision to avoid low-margin opportunities [4] Market Data and Key Metrics Changes - Revenue from Asia Pacific was 77%, Europe 12%, and North America 11% [5] - The top five customers accounted for approximately 29.4% of total revenue, with no single customer exceeding 10% [5] Company Strategy and Development Direction - The company is focusing on expanding its indium phosphide business, particularly in data center applications and high-speed optical connectivity [12] - Plans to list its subsidiary, Tongmei, on the STAR Market in Shanghai are ongoing, with optimism about the IPO due to recent economic stimulus in China [10][11] - The company aims to improve its cost structure and competitiveness in the gallium arsenide market by leveraging advancements from its 8-inch development to its 6-inch wafer production [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in the indium phosphide sector, particularly related to data centers and AI [18] - The company anticipates a slight revenue increase in Q4 2024, driven by indium phosphide and raw material revenues, despite a decrease in germanium revenues [19] - Management noted that the market for low orbit satellites presents future opportunities, and they are strategically selective in their participation in the germanium substrate market [16] Other Important Information - Cash, cash equivalents, and investments decreased by $4.5 million to $38.8 million as of September 30, 2024 [7] - The company is fully licensed for gallium arsenide recycling, contributing positively to revenue and gross margin [15] Q&A Session Summary Question: Dynamics of the germanium business and pricing environment - Management noted that germanium raw material prices more than doubled, leading to a strategic decision to decline low-margin business opportunities [22] Question: Growth drivers for indium phosphide - Management highlighted strong demand for high-speed photo detectors in data centers and silicon photonics as key growth drivers [25][26] Question: Visibility and engagement in the silicon photonics market - Management confirmed active participation with key customers and a design win for a new product targeting silicon photonics and EML applications [28] Question: Opportunities in the HPT market - Management indicated a market size of $80 million to $100 million for HPT applications, with expectations of increasing market share due to competitive advantages [30][31] Question: Impact of China's stimulus on product lines - Management expects the stimulus to positively impact demand across various applications, including industrial lasers and LEDs [35] Question: Progress on the STAR listing - Management expressed cautious optimism about the IPO process, noting improvements in the Shanghai Stock Exchange environment due to economic stimulus [41][42]