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01/11 11:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with record revenue growth in aerospace and defense, improved margins, and a reduced net loss. The Q&A section reveals management's optimism about future growth despite tariff uncertainties, with plans to mitigate risks through alternative sourcing. The positive sentiment is further reinforced by the expectation of a stronger second half and continued backlog growth. These factors suggest a likely positive stock price movement over the next two weeks.
Total Revenue $51.7 million, an increase of 16% compared to $44.5 million in Q1 2024.
Aerospace and Defense Revenue $32.7 million, up 50.4% year-over-year, driven by increased defense products revenue which grew more than 150% due to increased deliveries of components into the HELSI-2 program.
Commercial Markets Revenue $19 million, a decrease of 16.8% year-over-year, but up 9.9% sequentially, largely due to weak industrial demand.
Product Revenue $35.7 million, an increase of 21.5% compared to $29.4 million in Q1 2024, driven by growth in defense product revenue.
Development Revenue $16 million, an increase of 5.4% compared to the same quarter a year ago.
Total Gross Margin 26.7%, compared to 16.8% in Q1 2024, including a $1.9 million benefit related to duty reclaim.
Products Gross Margin 33.5%, compared to 20.9% in Q1 2024, positively impacted by higher product volumes and a favorable mix.
Development Gross Margin 11.5%, compared to 8.9% in the same quarter a year ago, due to program mix.
Operating Expenses $23.4 million, compared to $22.2 million in Q1 2024.
GAAP Net Loss $8.1 million or $0.16 per share, compared to a net loss of $13.8 million or $0.29 per share in Q1 2024.
Adjusted EBITDA $116,000, compared to a loss of $4.9 million in Q1 2024.
Total Cash and Investments $117 million at the end of Q1 2025.
Inventory $43.8 million at the end of Q1 2025, up from $40.8 million at the end of 2024, to support the forecasted ramp in directed energy products.
Defense Product Sales Growth: Defense product sales grew more than 150% year-over-year, contributing significantly to total revenue.
HELSI-2 Program: The HELSI-2 program is a $171 million DoD initiative to develop a 1-megawatt high-energy laser, with completion expected in 2026.
Commercial Laser Production Shift: Production of commercial lasers has shifted from Shanghai to the U.S. and Thailand to manage tariff risks.
A&D Revenue Growth: Aerospace and Defense revenue was $32.7 million, up 50.4% year-over-year, with expectations for at least 25% growth in 2025.
International Opportunities: Progress on the Israeli Iron Beam program and a growing pipeline of international opportunities.
Operational Efficiency in Microfabrication: Stabilization of operations at the Thai manufacturing partner has improved microfabrication sales.
Inventory Management: Inventory increased to $43.8 million to support the forecasted ramp in directed energy products.
Vertical Integration Strategy: The success in key programs reinforces the importance of the vertical integration strategy in the directed energy market.
Response to Tariffs: The company is evaluating tariff impacts and has shifted production to mitigate risks.
Defense Revenue Growth: The company reported a significant increase in defense revenue, which represented over 63% of total sales, up from 49% year-over-year. However, there is a risk of margin variability in defense products due to tariffs on materials used in manufacturing.
Tariff Impact: The company is facing uncertainty regarding tariffs, which could affect material costs and overall demand. While they do not expect a long-term negative impact on defense business, short-term margin variability is anticipated.
Commercial Market Challenges: The industrial and microfabrication markets remain challenging, with a reported 16.8% decrease in revenue year-over-year. Demand is expected to remain weak throughout the year.
Supply Chain Risks: The company has shifted production from Shanghai to the U.S. and Thailand to mitigate tariff risks. However, ongoing supply chain challenges could impact their ability to meet customer demand.
Economic Factors: The company is navigating a highly uncertain global trade market, which could lead to further margin pressure if tariffs remain in place.
Defense Revenue Growth: Defense revenue represented more than 63% of total sales in Q1 2025, up from 49% in Q1 2024, with a growth of over 150% year-over-year.
HELSI-2 Program: A $171 million DoD program to develop a 1-megawatt high-energy laser, expected completion in 2026.
A&D Revenue Growth Projection: nLIGHT expects to grow revenue in aerospace and defense by at least 25% in 2025.
International Opportunities: Progress on the Israeli Iron Beam program and a growing pipeline of new opportunities expected to close in upcoming quarters.
Laser Sensing Market: Increased opportunities in missile guidance, proximity detection, and range finding, with potential growth from the Golden Gnome initiative in 2026 and beyond.
Q2 2025 Revenue Guidance: Expected revenue range of $53 million to $59 million, with A&D revenue expected to increase sequentially and year-over-year.
Q2 2025 Gross Margin Guidance: Products gross margin expected to be in the range of 27% to 33%, with total gross margin range of 19% to 25%.
Q2 2025 Adjusted EBITDA Guidance: Expected adjusted EBITDA in the range of approximately negative $4 million to positive $1 million.
Long-term EBITDA Expectation: Expecting breakeven adjusted EBITDA with quarterly revenue in the $55 million to $60 million range.
Share Repurchase Program: None
The earnings call summary shows strong financial metrics, improved non-GAAP net income, and positive cash flow. Despite some concerns about gross margin decline, the growth in advanced development and the HELSI-2 program provide optimism. The Q&A session reveals confidence in offsetting future revenue losses and highlights opportunities in counter-drone technology. The company's strategic initiatives and guidance suggest a positive market reaction, likely resulting in a stock price increase of 2% to 8%.
The earnings call reveals strong financial performance with significant growth in defense revenue and improved gross margins. While commercial revenue declined YoY, it showed sequential improvement. The Q&A session highlighted management's confidence in future growth, particularly in defense and international markets, despite some uncertainty about specific future projections. The improvement in non-GAAP net income and positive adjusted EBITDA also bolster a positive outlook. Given these factors, the stock is likely to experience a positive movement, although the lack of specific guidance for 2026 and some execution risks temper the outlook slightly.
The earnings call highlights strong financial performance with record revenue growth in aerospace and defense, improved margins, and a reduced net loss. The Q&A section reveals management's optimism about future growth despite tariff uncertainties, with plans to mitigate risks through alternative sourcing. The positive sentiment is further reinforced by the expectation of a stronger second half and continued backlog growth. These factors suggest a likely positive stock price movement over the next two weeks.
The earnings call revealed a decline in total revenue and gross margins, with increased losses and reduced cash reserves. The Q&A highlighted concerns about commercial revenue decline and unresolved manufacturing issues. While A&D revenue growth is positive, overall guidance remains weak, and management's unclear responses add uncertainty. These factors suggest a negative sentiment, likely leading to a stock price decline.
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