Industry Overview - The global market for laser technology is valued at approximately $24 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 8% to nearly $30 billion by 2029 [1] Company Analysis: nLIGHT Inc. - nLIGHT develops semiconductor and fiber lasers and sensors for various applications, including industrial, aerospace, and defense [2] - The company reported a 16% year-over-year (YOY) revenue increase to nearly $52 million in the first quarter, surpassing analyst expectations [3] - Gross margin improved to 26.7%, up from 16.8% in the same quarter last year [3] - Aerospace and defense operations are expected to grow by at least 25% this year, contributing to continued revenue growth [4] - Analysts have a consensus Buy rating for nLIGHT, with a 12-month price target of $14.90, indicating a potential upside of 4.78% from the current price of $14.22 [4] Company Analysis: Coherent Corp. - Coherent manufactures a wide range of lasers and optoelectronic components, with a market cap of $12.3 billion, making it one of the largest laser companies globally [7] - The company experienced a 24% YOY revenue increase in its third-quarter fiscal 2025 earnings, with a gross margin improvement to 35.2% [6] - Coherent's data center business has been a significant growth driver, while its optical networking technologies remain crucial to its operations [7] - Despite a year-to-date share price drop of over 18%, Coherent's price-to-sales ratio is now at 2.21, attracting value investors [8] - The stock has a consensus price target of $102.80, suggesting a potential upside of 30.40% from the current price of $78.84 [5][9] Company Analysis: Cognex Corp. - Cognex specializes in machine vision products aimed at automating manufacturing and distribution across various industries [10] - The company reported a 2.5% YOY sales growth, which is less impressive compared to nLIGHT and Coherent, but remains profitable with an adjusted EPS of 16 cents, reflecting a 41% YOY improvement [10] - Cognex's In-Sight 8900 smart camera utilizes AI to enhance manufacturing automation [11] - The company faces challenges in the automotive and consumer electronics sectors, which may impact future performance [11] - Analysts have a consensus price target of $39.17 for Cognex, indicating a potential upside of 31.04% from the current price of $29.89 [10][12]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Unaudited Interim Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Interim%20Financial%20Statements) Unaudited Q1 2025 financials show a reduced net loss of $8.1 million and asset growth to $290.0 million [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $290.0 million, funded by a $20.0 million draw on the company's line of credit Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $215,772 | $194,089 | | **Total Assets** | $289,996 | $270,241 | | **Total Current Liabilities** | $37,163 | $34,235 | | **Line of credit** | $20,000 | $0 | | **Total Liabilities** | $77,237 | $53,811 | | **Total Stockholders' Equity** | $212,759 | $216,430 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Revenue grew 16.0% YoY to $51.7 million, driving a near-doubling of gross profit and a smaller net loss Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenue** | $51,668 | $44,527 | | **Gross Profit** | $13,799 | $7,488 | | **Loss from Operations** | $(9,610) | $(14,718) | | **Net Loss** | $(8,093) | $(13,766) | | **Net Loss per Share** | $(0.16) | $(0.29) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Financing activities provided $18.8 million, leading to a net cash increase of $16.4 million for the quarter Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(20) | $11,375 | | **Net cash used in investing activities** | $(2,433) | $(1,548) | | **Net cash provided by (used in) financing activities** | $18,765 | $(1,615) | | **Net increase in cash, cash equivalents, and restricted cash** | $16,368 | $8,097 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes disaggregate revenue, showing strong Aerospace & Defense growth and a $20.0 million credit facility draw Sales by End Market (in thousands) | End Market | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Industrial | $8,856 | $11,985 | | Microfabrication | $10,106 | $10,797 | | Aerospace and Defense | $32,706 | $21,745 | - The U.S. Government accounted for **35% of total revenues** in Q1 2025, a significant increase from 19% in Q1 2024[36](index=36&type=chunk) - During Q1 2025, the company drew **$20.0 million** under its revolving line of credit (LOC) to support working capital and general corporate purposes[51](index=51&type=chunk) Segment Gross Profit and Margin (in thousands) | Segment | Q1 2025 Gross Profit | Q1 2025 Gross Margin | Q1 2024 Gross Profit | Q1 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Laser Products | $12,524 | 35.1% | $6,680 | 22.7% | | Advanced Development | $1,845 | 11.5% | $1,349 | 8.9% | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong revenue growth from Aerospace & Defense, improved margins, and sufficient liquidity [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Revenue grew 16.0% to $51.7 million, led by a 50.4% increase in the Aerospace and Defense end market Revenue by End Market and YoY Change (in thousands) | End Market | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Industrial | $8,856 | $11,985 | $(3,129) | (26.1)% | | Microfabrication | $10,106 | $10,797 | $(691) | (6.4)% | | Aerospace and Defense | $32,706 | $21,745 | $10,961 | 50.4% | | **Total** | **$51,668** | **$44,527** | **$7,141** | **16.0%** | - The increase in Laser Products gross margin (to **35.1%** from 22.7% YoY) was driven by product sales mix and better absorption of fixed manufacturing costs, while Advanced Development gross margin increased (to **11.5%** from 8.9% YoY) due to higher-margin fixed-price contracts[92](index=92&type=chunk) - Research and development expenses increased **6.7% YoY** to $11.4 million, while Sales, general and administrative expenses increased **4.2% YoY** to $12.0 million[93](index=93&type=chunk)[94](index=94&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity remains sufficient, bolstered by a $20.0 million draw on the revolving line of credit - Total cash, cash equivalents, restricted cash, and marketable securities increased by **$16.0 million** during the quarter to a total of **$117.0 million** as of March 31, 2025[101](index=101&type=chunk) - The principal source of liquidity in Q1 2025 was a **$20.0 million draw** on the company's line of credit (LOC)[102](index=102&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(20) | $11,375 | | Net cash used in investing activities | $(2,433) | $(1,548) | | Net cash provided by (used in) financing activities | $18,765 | $(1,615) | [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk is materially unchanged, except for new interest rate risk from a $20.0 million variable-rate loan - The company's exposure to market risk has not materially changed since December 31, 2024, except for the introduction of interest rate risk from the **$20.0 million draw** on its variable-rate line of credit[112](index=112&type=chunk) - A hypothetical **10% change in interest rates** would result in an approximate **$0.1 million** change in annual obligations under the outstanding loan facility[113](index=113&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[114](index=114&type=chunk) - There were **no material changes** in internal control over financial reporting during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[115](index=115&type=chunk) [Part II. Other Information](index=28&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Current legal proceedings are not expected to materially impact the company's consolidated financial statements - As of March 31, 2025, the company believes that pending legal matters will **not have a material adverse effect** on its consolidated financial statements[61](index=61&type=chunk)[118](index=118&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) Risk factors are materially unchanged, with continued focus on international operations and trade policy risks - There have been **no material changes** to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[119](index=119&type=chunk) - The company emphasizes risks related to international operations, including tariffs, trade barriers, and political instability, particularly noting the uncertainty in **U.S.-China trade relations**[120](index=120&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading plans during the quarter - During the last fiscal quarter, **no director or officer** adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[123](index=123&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including Sarbanes-Oxley certifications and XBRL data files - The exhibits filed with the report include certifications from the CEO and CFO as required by the Sarbanes-Oxley Act of 2002, as well as Inline XBRL documents[124](index=124&type=chunk)

Company Performance - nLight reported a quarterly loss of $0.04 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.18, and an improvement from a loss of $0.17 per share a year ago, representing an earnings surprise of 77.78% [1] - The company posted revenues of $51.67 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 10.37% and up from $44.53 million in the same quarter last year [2] - Over the last four quarters, nLight has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Outlook - nLight shares have declined approximately 21.9% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.12 on revenues of $49.67 million, and for the current fiscal year, it is -$0.51 on revenues of $205.63 million [7] Industry Context - The Electronics - Semiconductors industry, to which nLight belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact nLight's stock performance [5]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $51.7 million, a 16% increase from $44.5 million in Q1 2024 [14] - Aerospace and Defense (A&D) revenue was $32.7 million, up 50.4% year over year and 8.6% sequentially [14] - Gross margin for Q1 2025 was 26.7%, compared to 16.8% in Q1 2024, with a benefit of approximately $1.9 million related to duty reclaim [17] - GAAP net loss for Q1 2025 was $8.1 million or $0.16 per share, improved from a net loss of $13.8 million or $0.29 per share in the same quarter a year ago [19] Business Line Data and Key Metrics Changes - Defense product sales grew more than 150% year over year, primarily due to increased deliveries for the Healthy II direct energy laser program [14][15] - Commercial markets revenue, including industrial and microfabrication, was $19 million, a decrease of 16.8% year over year but up 9.9% sequentially [16] - Product revenue for Q1 was $35.7 million, a 21.5% increase compared to $29.4 million in Q1 2024 [16] Market Data and Key Metrics Changes - The defense sector represented over 63% of total sales in Q1 2025, up from 49% in the same quarter a year ago [4] - The company expects A&D revenue to grow at least 25% year over year in 2025, driven by a strong pipeline of opportunities [10][14] Company Strategy and Development Direction - The company is focused on vertical integration in the directed energy market to deliver high-performing and cost-effective high energy lasers [7] - There is an ongoing effort to respond to RFPs and RFQs related to nonkinetic missile defense capabilities, positioning the company to benefit from U.S. government initiatives [8] - Long-term growth opportunities are anticipated in metal additive manufacturing, particularly in aerospace and defense markets [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of A&D revenue, citing a strong start to 2025 and a growing pipeline of opportunities [10][13] - The company is navigating uncertainties related to tariffs, with expectations of some margin variability in defense products due to increased material costs [12][22] - Management remains optimistic about the long-term growth potential in A&D, despite challenges in commercial markets [10][11] Other Important Information - The company ended Q1 2025 with total cash and investments of $117 million, having drawn down $20 million from its $40 million line of credit [19][20] - Inventory increased to $43.8 million, primarily to support the forecasted ramp in directed energy products [20] Q&A Session Summary Question: Visibility on A&D product sales beyond Q2 - Management indicated strong visibility on the Healthy II program and increasing orders contributing to the outlook for A&D product revenue [26] Question: Impact of tariffs on different business segments - The CFO noted that the industrial fiber laser business would be most affected by tariffs, particularly those related to input costs from China [28] Question: Changes in A&D outlook and conditions for increasing guidance - Management highlighted traction in both U.S. and international markets for directed energy applications, but noted tariffs add uncertainty to the global environment [35] Question: Update on commercial markets and full-year outlook - The CFO confirmed no significant changes in the commercial markets outlook, with expectations of a decline of 15% to 20% [49] Question: Ability to pass through costs due to tariffs - Management acknowledged some areas where costs could be passed on, but emphasized the complexity of the situation and potential long-term impacts on margins [51][53] Question: Update on funded and unfunded backlog - The CFO stated that there were no major updates on backlog progression, but activity around responding to proposals remains healthy [56]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $51.7 million, a 16% increase from $44.5 million in Q1 2024 [13] - Aerospace and Defense (A&D) revenue was $32.7 million, up 50.4% year over year and 8.6% sequentially [13] - Gross margin for Q1 2025 was 26.7%, compared to 16.8% in Q1 2024, with a benefit of approximately $1.9 million related to duty reclaim [15][16] - GAAP net loss for Q1 2025 was $8.1 million or $0.16 per share, an improvement from a net loss of $13.8 million or $0.29 per share in the same quarter a year ago [17] Business Line Data and Key Metrics Changes - Defense product sales grew more than 150% year over year, significantly contributing to the overall revenue increase [4][13] - Commercial markets, including industrial and microfabrication, saw revenue of $19 million, a decrease of 16.8% year over year but up 9.9% sequentially [14] Market Data and Key Metrics Changes - The defense sector represented over 63% of total sales in Q1 2025, up from 49% in the same quarter a year ago [4] - The company expects A&D revenue to grow at least 25% year over year in 2025, driven by a strong pipeline of opportunities [9][13] Company Strategy and Development Direction - The company is focused on vertical integration in the directed energy market, leveraging its technology stack to deliver high-performance lasers [6][7] - The Healthy II program, a $171 million DoD initiative, is expected to be a significant growth driver through 2026 [6] - The company is optimistic about long-term growth in metal additive manufacturing, particularly in aerospace and defense [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of A&D revenue, citing strong demand and a growing pipeline of opportunities [9][12] - Concerns were raised about the potential impact of tariffs on margins, particularly in the industrial fiber laser business [26][27] - The company does not expect a significant long-term impact from tariffs on defense business but acknowledges potential short-term margin variability [11][20] Other Important Information - The company ended Q1 2025 with total cash and investments of $117 million and drew down $20 million from its $40 million line of credit [17][18] - Inventory increased to $43.8 million, primarily to support the forecasted ramp in directed energy products [18] Q&A Session Summary Question: Visibility on A&D product sales beyond Q2 - Management indicated strong visibility due to the Healthy II program and increasing orders contributing to defense revenue growth [22][25] Question: Impact of tariffs on different business segments - The industrial fiber laser business is expected to be most affected by tariffs, with potential indirect impacts on demand across commercial markets [26][28] Question: Changes in A&D outlook and conditions for guidance increase - Management noted continued traction in both US and international markets for directed energy applications, with tariffs adding uncertainty [32] Question: Update on commercial market outlook - The outlook remains unchanged, with expectations of a decline of 15% to 20% in the commercial segment, despite a better quarter in microfabrication [42][44] Question: Gross margin expectations and tariff-related risks - Management acknowledged the complexity of passing through costs and indicated a potential impact on gross margins depending on the tariff situation [46][48] Question: Funded and unfunded backlog updates - No major updates were provided, but management expressed satisfaction with the current level of backlog and pipeline development [49]

Q1 2025 Performance Highlights - Total revenue reached $51.7 million, a 16% increase year-over-year[8, 9] - Aerospace & Defense (A&D) revenue was $32.7 million, up 50% year-over-year[4, 9] - Product revenue increased by 22% year-over-year[17] - Total gross margin was 26.7%, compared to 16.8% in Q1 2024[8, 14] - Adjusted EBITDA was $0.10 million, a significant improvement from $(4.9) million in Q1 2024[8, 14] Revenue Breakdown - Industrial revenue was $8.9 million, a decrease of 26% year-over-year[9] - Microfabrication revenue was $10.1 million, a decrease of 6% year-over-year[9] Q2 2025 Outlook - Revenue is projected to be between $53 million and $59 million[28] - Gross margin is expected to be between 19% and 25%[28] - Adjusted EBITDA is forecasted to be between $(4) million and $1 million[28]

[nLIGHT, Inc. First Quarter 2025 Financial Results](index=1&type=section&id=nLIGHT_Inc_Announces_First_Quarter_2025_Results) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First_Quarter_2025_Financial_Highlights) nLIGHT reported strong Q1 2025 results with **$51.7 million** revenue, a **16.0% YoY increase**, driven by record aerospace and defense performance, significantly improving gross margin to **26.7%** and reducing GAAP net loss to **$8.1 million**, with Adjusted EBITDA turning positive - Total revenue of **$51.7 million** exceeded guidance, propelled by record aerospace and defense market results[2](index=2&type=chunk) - The company anticipates continued sequential revenue growth in Q2 and projects at least **25% year-over-year growth** for the aerospace and defense business in 2025[2](index=2&type=chunk) Q1 2025 Key Financial Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $51.7 million | $44.5 million | 16.0% | | Gross Margin | 26.7% | 16.8% | +9.9 p.p. | | Loss from Operations | ($9.6 million) | ($14.7 million) | 34.7% improvement | | Net Loss | ($8.1 million) | ($13.8 million) | 41.2% improvement | | Adjusted EBITDA | $0.1 million | ($4.9 million) | NM | [Business Outlook for Q2 2025](index=2&type=section&id=Outlook) For Q2 2025, nLIGHT projects revenues between **$53 million** and **$59 million**, with overall gross margin in the **19% to 25%** range and Adjusted EBITDA between a loss of **$4 million** and a profit of **$1 million** Q2 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenues | $53 million - $59 million | | Products Revenue | ~$38 million | | Advanced Development Revenue | ~$18 million | | Overall Gross Margin | 19% - 25% | | Adjusted EBITDA | ($4) million - $1 million | [Consolidated Financial Statements](index=5&type=section&id=Consolidated_Financial_Statements) The consolidated financial statements detail the company's performance and financial position, showing a **16% revenue increase** and reduced net loss, growth in total assets and liabilities, and near breakeven cash flow from operating activities [Consolidated Statements of Operations](index=5&type=section&id=Consolidated_Statements_of_Operations) In Q1 2025, total revenue grew to **$51.7 million**, driven by a **21.5% increase** in Products revenue, with gross profit nearly doubling to **$13.8 million** and net loss narrowing significantly to **$8.1 million** Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenue** | **$51,668** | **$44,527** | | Products Revenue | $35,678 | $29,370 | | Development Revenue | $15,990 | $15,157 | | **Gross Profit** | **$13,799** | **$7,488** | | Loss from Operations | ($9,610) | ($14,718) | | **Net Loss** | **($8,093)** | **($13,766)** | | Net Loss per Share (basic & diluted) | ($0.16) | ($0.29) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed_Consolidated_Balance_Sheets) As of March 31, 2025, total assets increased to **$290.0 million** from **$270.2 million**, driven by cash and inventory, while total liabilities grew to **$77.2 million** due to a **$20.0 million** line of credit draw Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $82,196 | $65,829 | | Inventory | $43,793 | $40,800 | | **Total Assets** | **$289,996** | **$270,241** | | Line of credit | $20,000 | $0 | | **Total Liabilities** | **$77,237** | **$53,811** | | **Total Stockholders' Equity** | **$212,759** | **$216,430** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated_Statements_of_Cash_Flows) For Q1 2025, net cash used in operating activities was minimal at **($20) thousand**, a significant decrease from **$11.4 million** provided in Q1 2024, with financing activities providing **$18.8 million** from a new line of credit Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | ($20) | $11,375 | | Net cash used in investing activities | ($2,433) | ($1,548) | | Net cash provided by (used in) financing activities | $18,765 | ($1,615) | | **Net increase in cash** | **$16,368** | **$8,097** | | **Cash, cash equivalents and restricted cash, end of period** | **$82,456** | **$61,563** | [Reconciliation of GAAP to Non-GAAP Financial Metrics](index=8&type=section&id=Reconciliation_of_GAAP_Financial_Metrics_to_Non-GAAP) This section reconciles non-GAAP measures like Adjusted EBITDA and non-GAAP net loss, adjusting for stock-based compensation, depreciation, and amortization to provide a supplemental view of core operational performance [Reconciliation of Net Loss to Adjusted EBITDA](index=8&type=section&id=Reconciliation_of_Net_Loss_to_Adjusted_EBITDA) The company reconciled its Q1 2025 GAAP net loss of **$8.1 million** to a positive Adjusted EBITDA of **$0.1 million**, a substantial improvement from Q1 2024, with key adjustments including **$6.1 million** in stock-based compensation Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net loss** | **($8,093)** | **($13,766)** | | Depreciation and amortization | $3,670 | $4,393 | | Stock-based compensation | $6,056 | $5,431 | | Other adjustments | ($1,517) | ($952) | | **Adjusted EBITDA** | **$116** | **($4,894)** | [Reconciliation of GAAP to Non-GAAP Net Loss](index=8&type=section&id=Reconciliation_of_GAAP_to_Non-GAAP_Net_Loss) Adjusting for stock-based compensation and amortization, the GAAP net loss of **$8.1 million** was reconciled to a non-GAAP net loss of **$1.9 million** for Q1 2025, comparing favorably to Q1 2024 Non-GAAP Net Loss Reconciliation (in thousands, except per share data) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP Net loss** | **($8,093)** | **($13,766)** | | Stock-based compensation | $6,056 | $5,431 | | Amortization of purchased intangibles | $149 | $149 | | **Non-GAAP net loss** | **($1,888)** | **($8,186)** | | **Non-GAAP net loss per share** | **($0.04)** | **($0.17)** |

Company Overview - nLIGHT, Inc. is a leading manufacturer of high-power semiconductor and fiber lasers globally, serving over 300 customers across various sectors including industrial, microfabrication, aerospace, and defense [1] Strategic Focus - The company is currently shifting most of its efforts towards enhancing its product offerings and market presence in the technology and infrastructure sectors [1] Analyst Background - The analysis is conducted by a financial analyst with a strong foundation in financial modeling, valuation, and data analysis, holding certifications from the Corporate Finance Institute [1] Investment Philosophy - The focus remains on identifying companies with strong fundamentals and growth potential, particularly in technology, infrastructure, and internet services [1]

Financial Performance - The company has experienced recurring net losses since its inception in 2000, highlighting ongoing financial challenges [61]. - Net loss for 2024 was $60.792 million, compared to a net loss of $41.670 million in 2023, reflecting a 45.9% increase in losses [234]. - Net loss per share for 2024 was $1.27, compared to $0.90 in 2023 [231]. - Comprehensive loss for 2024 was $61.647 million, an increase from $41.399 million in 2023 [234]. - Total revenue for 2024 was $198.548 million, a decrease of 5.5% from $209.921 million in 2023 [231]. - Product revenue declined to $136.659 million in 2024, down 12.8% from $156.666 million in 2023 [231]. - Gross profit for 2024 was $33.019 million, representing a gross margin of 16.6%, compared to $46.113 million and 22.0% in 2023 [231]. - Operating expenses increased to $98.655 million in 2024, up 6.5% from $92.879 million in 2023 [231]. - Cash flows from operating activities resulted in a net cash used of $2.36 million in 2024, a significant decrease from net cash provided of $10.09 million in 2023 [239]. - The company reported a loss before income taxes of $60.87 million in 2024, compared to a loss of $42.65 million in 2023, indicating a worsening of approximately 42.6% [305]. Revenue and Sales - Industrial sales decreased to $45.6 million in 2024 from $71.0 million in 2023, a decline of 35.8% [273]. - Aerospace and Defense sales increased to $109.5 million in 2024, up 19.9% from $91.4 million in 2023 [273]. - The U.S. Government accounted for 19% of total revenues in 2024, up from 18% in 2023 [276]. - North America sales were $132.8 million in 2024, slightly up from $129.3 million in 2023 [273]. Assets and Liabilities - Total assets decreased to $270.2 million in 2024 from $306.8 million in 2023, reflecting a decline of about 11.9% [229]. - Total liabilities increased slightly to $53.8 million in 2024 from $52.4 million in 2023, representing a rise of approximately 2.7% [229]. - The accumulated deficit grew to $325.1 million in 2024, up from $264.3 million in 2023, indicating an increase of about 23% [229]. - The company reported inventory of $40.8 million as of December 31, 2024, down from $52.2 million in 2023, indicating a reduction of approximately 21.2% [223]. - Contract assets increased by 99% to $14.5 million in 2024 from $7.3 million in 2023 [273]. - Contract liabilities increased by 7% to $6.8 million in 2024 from $6.4 million in 2023 [273]. Cash and Investments - As of December 31, 2024, cash and cash equivalents totaled $65.8 million, while marketable securities amounted to $34.9 million [207]. - The company had a net cash provided by investing activities of $16.69 million in 2024, contrasting with a net cash used of $14.10 million in 2023 [239]. - Realized gains from marketable securities were $3.4 million for the year ended December 31, 2024, compared to $2.4 million in 2023 [279]. Research and Development - Research and development expenses were $45.107 million in 2024, slightly down from $46.163 million in 2023 [231]. - Research and development costs are expensed as incurred, reflecting the company's commitment to innovation and product development [257]. Employment and Workforce - Approximately 650 out of nearly 800 full-time employees are based in the United States, indicating a strong domestic workforce [51]. - Labor shortages and turnover can impact operational efficiency and increase labor costs, affecting overall business performance [83]. Market and Competition - The laser industry is facing declining average selling prices, necessitating increased volumes and cost reductions to maintain profitability [60]. - Competition in the industry is intense, with larger competitors having greater resources, which may pressure pricing and market share [42]. - The markets served are characterized by rapid technological change, requiring significant research and development expenditures [57]. Risks and Compliance - The company is subject to risks related to U.S. government contracts, including potential termination and changes in government spending, which could impact financial results [90]. - The company faces risks from international operations, including macroeconomic conditions, regulatory changes, and political instability, particularly in China [93]. - The company is exposed to foreign currency risk, which may adversely affect revenues and operating margins due to fluctuations in exchange rates [95]. - The company must comply with U.S. export controls, and failure to obtain necessary export licenses could harm international revenues [99]. - The company faces significant compliance costs related to privacy, data protection, and information security laws, which could adversely affect its financial condition [111]. Tax and Deferred Tax Assets - The company has estimated U.S. federal net operating loss carryforwards (NOLs) of $169.6 million and state NOLs of $52.9 million as of December 31, 2024 [120]. - The company reported U.S. research and development credit carryforwards of $9.9 million, which will also expire between 2025 and 2044 if not utilized [308]. - The total gross deferred tax assets amounted to $84.403 million, an increase from $75.037 million in 2023, reflecting a growth of 12.4% year-over-year [306]. - The net deferred tax assets increased to $710 thousand in 2024, compared to $89 thousand in 2023, indicating significant improvement in tax asset realizability [306]. - The valuation allowance for deferred tax assets saw increases of $9.0 million in 2024, highlighting ongoing uncertainty regarding the realizability of these assets [307]. Inventory and Fixed Costs - The company has high levels of fixed costs and inventory, which may adversely affect gross profits if product demand declines [65]. - The company recorded an adjustment to inventory values due to excess and obsolete inventory, which was assessed at $40.8 million as of December 31, 2024 [223]. - The product warranty liability decreased from $4.47 million in 2023 to $3.47 million in 2024, a decline of about 22.4% [294]. Other Financial Metrics - The company recorded an adjustment to inventory values due to excess and obsolete inventory, which was assessed at $40.8 million as of December 31, 2024 [223]. - The company performed a quantitative test for goodwill impairment in 2024, concluding that the fair value of reporting units significantly exceeded their carrying values, indicating no impairment [247]. - The total restructuring charges for 2024 amounted to $4.29 million, significantly higher than the $0.82 million recorded in 2023 [303].

nLIGHT, Inc. (NASDAQ:LASR) Q4 2024 Earnings Call Transcript February 27, 2025 5:00 PM ET Company Participants John Marchetti - Vice President of Corporate Development and Head of Investor Relations Scott Keeney - Co Founder and Chief Executive Officer Joe Corso - Chief Financial Officer Conference Call Participants Jim Ricchiuti - Needham & Company Greg Palm - Craig Hallum Capital Group Troy Jensen - Cantor Fitzgerald Rodney McFall - North Coast Research Mark Miller - Benchmark Operator Good afternoon, ladi ...