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NLIGHT, INC. (LASR)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue and EPS both beat consensus; Q2 revenue was $61.7M vs $55.2M consensus and non-GAAP diluted EPS was $0.06 vs -$0.09 consensus. Gross margin rose to 29.9% on defense mix and execution; Adjusted EBITDA turned positive at $5.6M. Management raised full-year Aerospace & Defense (A&D) growth outlook to “at least 40%” from “at least 25%,” citing stronger visibility and execution *.
  • Q3 guidance implies sequential growth: revenue $62–$67M, total GM 24–30% (Products GM 32–36%, Development ~8%), and Adjusted EBITDA $2–$6M. Mix: ~$45M Products, ~$19M Development .
  • What drove the beat: record A&D product deliveries (amplifiers) into HELSI-2 and strong Development program performance (fixed price programs), plus higher factory absorption and disciplined OpEx .
  • Commercial markets improved sequentially (microfabrication and additive), but management remains cautious on sustained demand; tariff uncertainty may widen margin ranges in 2H .
  • Potential stock-reaction catalysts: raised A&D outlook, Q3 guide above Q2, new international directed energy customer momentum, and announced intent for special performance-based equity awards tied to stock price appreciation for CEO and senior leadership .

What Went Well and What Went Wrong

What Went Well

  • Record A&D revenue driving upside: “Revenue, gross margin and adjusted EBITDA were all ahead of our expectations,” with A&D ~66% of sales and visibility improving; A&D growth outlook raised to ≥40% YoY .
  • Execution on HELSI‑2 amplifiers and sensing: “Shipment of critical components toward HELSI‑2 was a significant driver of record defense product revenue,” with growing pipeline in directed energy and laser sensing programs domestically and internationally .
  • Margin leverage and operations: Products GM 38.5% and Development GM 13.1% on favorable mix and better factory absorption; non‑GAAP OpEx down to $16.8M, demonstrating operating leverage .

What Went Wrong

  • Industrial demand remains weak; sequential commercial improvement is not seen as durable. Management continues to rationalize investments away from lower-growth industrial markets .
  • Tariff uncertainty: management widened margin ranges for 2H; while minimal near‑term impact, tariffs could pressure margins by a few hundred bps in later quarters depending on inputs and macro demand .
  • Near-term margin step-down in Q3 guidance (Products GM guide 32–36% vs 38.5% in Q2) as management avoids baking in Q2-specific execution upsides .

Financial Results

Headline Metrics vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$47.381 $51.668 $61.735
Gross Margin %2.4% 26.7% 29.9%
GAAP Diluted EPS ($)-$0.51 -$0.16 -$0.07
Non-GAAP Diluted EPS ($)-$0.30 -$0.04 $0.06
Adjusted EBITDA ($USD Millions)-$11.301 $0.116 $5.550

Actuals vs S&P Global Consensus

MetricQ4 2024Q1 2025Q2 2025
Revenue Actual ($USD Millions)$47.381 $51.668 $61.735
Revenue Consensus Mean ($USD Millions)$46.619*$47.311*$55.242*
Primary EPS Actual (Non-GAAP, $)-$0.30 -$0.04 $0.06
Primary EPS Consensus Mean ($)-$0.1975*-$0.1875*-$0.09*
  • Bold beats/misses in Q2: Revenue beat by ~$6.5M; EPS beat by ~$0.15.
  • Values retrieved from S&P Global; asterisk denotes SPGI consensus/actual from S&P Global estimates.

Segment Breakdown (Revenue)

MetricQ4 2024Q1 2025Q2 2025
Products ($USD Millions)$31.699 $35.678 $40.824
Development ($USD Millions)$15.682 $15.990 $20.911
Total Revenue ($USD Millions)$47.381 $51.668 $61.735

End Market Breakdown (YoY comparison)

End Market Revenue ($USD Millions)Q2 2024Q2 2025
Aerospace & Defense$27.390 $40.695
Industrial$12.905 $9.746
Microfabrication$10.216 $11.294
Total$50.511 $61.735

Margin Detail (Quarterly)

Margin MetricQ2 2024Q1 2025Q2 2025
Total Gross Margin %23.5% 26.7% 29.9%
Products Gross Margin %30.3% 33.5% 38.5%
Development Gross Margin %8.7% 11.5% 13.1%
GAAP OpEx ($USD Millions)n/a$23.4 $22.7
Non-GAAP OpEx ($USD Millions)n/a$17.8 $16.8

Balance Sheet KPIs (Selected)

KPIQ4 2024Q1 2025Q2 2025
Cash & Cash Equivalents ($USD Millions)$65.829 $82.196 $78.812
Marketable Securities ($USD Millions)$34.868 $34.522 $34.888
Restricted Cash ($USD Millions)$0.259 $0.260 $0.261
Cash+Investments+Restricted ($USD Millions)$100.956 $117.0 ~$114.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
A&D Revenue Growth YoYFY 2025≥25% ≥40% Raised
Revenue ($USD Millions)Q3 2025n/a$62–$67 New
Products Revenue ($USD Millions)Q3 2025n/a~$45 New
Development Revenue ($USD Millions)Q3 2025n/a~$19 New
Total Gross Margin %Q3 202519–25% for Q2, directional 24–30% Raised vs Q2 guide context
Products Gross Margin %Q3 202527–33% (Q2 guide) 32–36% Raised vs prior quarter guide
Development Gross Margin %Q3 2025~8% (Q2 guide) ~8% Maintained
Adjusted EBITDA ($USD Millions)Q3 2025(4) to +1 (Q2 guide) +2 to +6 Raised
Non-GAAP OpEx ($USD Millions)Q3 2025n/a~$18 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Directed Energy (HELSI‑2)Key growth driver; shipments of components begin; defense revenue scaled in 2024 (A&D $110M, 55% of sales) Amplifier shipments drove record defense product revenue; scaling production and quality processes Accelerating execution and volume ramp
Laser SensingEarly success; bidding on multiple programs Pipeline expanding; existing platforms restocking depleted inventories; LRIP phase expected in 2H Building into 2026 and beyond
International DE CustomerInternational pipeline growing; Iron Beam support ongoing Began shipping to a new international customer; opportunities material and early-stage International traction emerging
Tariffs/MacroDuty reclaim benefit ~$1.9M in Q1; widened margin ranges for uncertainty Minimal near-term impact; potential 2H margin pressure of a few hundred bps; mitigations via sourcing and Thailand/U.S. manufacturing Manageable but uncertain
Commercial MarketsIndustrial weak; microfab stabilized via Thai partner; additive opportunity Sequential improvement (microfab, additive) but not viewed as sustained; reallocating engineers to defense lasers Focus shifting to A&D

Management Commentary

  • “Increased demand for our portfolio of directed energy products and laser sensing solutions is providing us with better visibility into the second half of the year, and we are increasing our aerospace and defense outlook for 2025 to growth of at least 40% year-over-year, up from our prior outlook calling for growth of at least 25%.” — Scott Keeney, CEO .
  • “Products gross margin… was positively impacted by higher revenue, a favorable mix… higher factory absorption and exceptional execution… Development gross margin… upside largely the result of better performance on some fixed price programs.” — Joe Corso, CFO .
  • “We have generated revenue at nearly every level of vertical integration in the directed energy market… established ourselves as one of the most comprehensive suppliers to the U.S. Government, other prime contractors and foreign allies.” — Scott Keeney .

Q&A Highlights

  • A&D outperformance drivers: “continued success… with our amplifier sales… selling into our HELSI‑2 program… better than expected purely based on execution.” — CFO .
  • Margin sustainability: Q3 step-down is conservative as Q2 had several execution upsides; don’t model those repeating .
  • 2026 outlook: Too early to guide; backlog and pipeline strong, variability in timing keeps commentary cautious .
  • Amplifier production transition: Moving from R&D to manufacturing teams to scale volumes and quality; key for long-term capacity .
  • International opportunity: New customer; programs material but early-stage, expect larger opportunities ahead .
  • Tariffs and mitigation: Most impact on industrial fiber lasers; expect only several hundred bps potential margin pressure in 2H; mitigations include reclaim, alternate sourcing, Thailand/U.S. production .
  • Liquidity and LOC use: Drew $20M to buffer working capital for A&D ramp; management targets being “more than adequately capitalized” around $100M cash .

Estimates Context

  • Q2 2025 results vs consensus: Revenue $61.7M vs $55.2M consensus; Primary EPS $0.06 vs -$0.09 consensus; consensus expected negative EBITDA (~-$1.5M), while company reported positive Adjusted EBITDA $5.6M. Note: SPGI EBITDA consensus may not align with company’s Adjusted EBITDA definition *.
  • Prior quarters: Q1 2025 revenue $51.7M vs $47.3M consensus; EPS -$0.04 vs -$0.19 consensus. Q4 2024 revenue $47.4M vs $46.6M consensus; EPS -$0.30 vs -$0.20 consensus *.
MetricQ4 2024Q1 2025Q2 2025
Revenue Actual ($USD Millions)$47.381 $51.668 $61.735
Revenue Consensus Mean ($USD Millions)$46.619*$47.311*$55.242*
Primary EPS Actual (Non-GAAP, $)-$0.30 -$0.04 $0.06
Primary EPS Consensus Mean ($)-$0.1975*-$0.1875*-$0.09*
  • Values retrieved from S&P Global; asterisk denotes SPGI consensus/actual from S&P Global estimates.

Key Takeaways for Investors

  • Mix and execution are driving margin leverage; with A&D at ~66% of revenue and Products GM at 38.5%, the business is demonstrating operating leverage as volumes scale .
  • Raised A&D outlook to ≥40% YoY, supported by HELSI‑2 amplifier shipments, sensing LRIP progression in 2H, and international customer wins—expect sequential A&D growth through year-end .
  • Q3 guide implies continued top-line growth but a conservative margin reset vs Q2’s exceptional execution; model GM within guided bands and avoid extrapolating Q2 overperformance .
  • Watch tariff developments: near-term impact limited, but margin ranges may widen in 2H; mitigations (Thailand/U.S. manufacturing, reclaim, sourcing) in place—adjust scenarios by 100–300bps on GM if tariff regime persists .
  • Liquidity sufficient for ramp: ~$114M cash/investments and $20M LOC usage to support working capital—no constraints indicated for A&D scaling .
  • International directed energy demand is emerging; early shipments underway—adds optionality beyond U.S. DoD programs .
  • Near-term trading: favor beat-and-raise setup anchored by Q2 beat and A&D guide raise; monitor Q3 margin cadence and amplifier production scaling milestones. Medium-term thesis: vertically integrated DE/sensing supplier with growing pipeline, improving absorption, and disciplined OpEx—path to sustained profitability as volumes scale .

Footnotes:

  • Non-GAAP metrics (non-GAAP EPS, Adjusted EBITDA) per company reconciliations; definitions and reconciliations provided in the press release .
  • SPGI estimates marked with asterisks; Values retrieved from S&P Global.