Loading...
01/11 11:26
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total Revenue $61.7 million, an increase of 22% compared to $50.5 million in Q2 2024. The growth was driven by record aerospace and defense (A&D) revenue and better-than-expected performance in commercial markets.
Aerospace and Defense Revenue $40.7 million, up 48.6% year-over-year and 24% sequentially. Growth was driven by record defense products revenue, which grew 74.5% year-over-year, primarily due to increased deliveries of directed energy products.
Commercial Revenue $21 million, a decrease of 9% year-over-year but up 11% sequentially. Sequential improvement was due to satisfying pent-up demand from the transfer of manufacturing operations from Shanghai to Thailand.
Total Gross Margin 29.9%, compared to 23.5% in Q2 2024 and 26.7% in Q1 2025. Improvement was due to higher revenue, favorable business mix skewed towards defense products, and better factory absorption.
Products Gross Margin 38.5%, compared to 30.3% in Q2 2024 and 33.5% in Q1 2025. Improvement was driven by higher revenue, favorable mix towards defense products, and exceptional manufacturing execution.
Development Gross Margin 13.1%, compared to 8.7% in Q2 2024 and 11.5% in Q1 2025. Improvement was due to better performance on fixed-price programs completed during the quarter.
Operating Expenses $22.7 million, compared to $24.5 million in Q2 2024 and $23.4 million in Q1 2025. Non-GAAP operating expenses were $16.8 million, down from $18.1 million in Q2 2024 and $17.7 million in Q1 2025.
GAAP Net Loss $3.6 million or $0.07 per share, compared to a net loss of $11.7 million or $0.25 per share in Q2 2024 and a loss of $8.1 million or $0.16 per share in Q1 2025. The improvement was due to better revenue and margin performance.
Non-GAAP Net Income $2.9 million or $0.06 per diluted share, compared to a non-GAAP net loss of $4.6 million or $0.10 per share in Q2 2024 and a non-GAAP net loss of $1.9 million or $0.04 per share in Q1 2025.
Adjusted EBITDA $5.6 million, compared to a loss of $1.6 million in Q2 2024 and a positive $116,000 in Q1 2025. Improvement was driven by better revenue, gross margin, and operating expense discipline.
Cash and Investments $114 million at the end of Q2 2025. Improvement in working capital and cash flow conversion days contributed to this result.
High-power laser technology: nLIGHT has developed leading high-power laser technology over the past two decades, which is a key driver for their aerospace and defense (A&D) growth.
Directed energy products: The company is progressing on the HELSI-2 program, a $171 million DoD initiative to develop a 1-megawatt high-energy laser, with completion expected in 2026. Shipments of critical components for this program significantly contributed to record defense product revenue.
SWaP amplifier products: Transitioning low size, weight, and power amplifier products into advanced production to optimize for higher volumes.
Aerospace and Defense (A&D) market: A&D revenue grew 48.6% year-over-year to $40.7 million, representing 66% of total sales. The company expects A&D revenue to grow by at least 40% in 2025.
International directed energy market: Began shipping to a new international customer and sees a growing pipeline of global opportunities as allied nations accelerate directed energy programs.
Manufacturing transition: Completed the transfer of manufacturing operations from Shanghai to a Thai partner in 2024, with no remaining manufacturing in China.
Gross margin improvement: Total gross margin improved to 29.9% in Q2 2025, up from 23.5% in Q2 2024, driven by higher revenue, favorable business mix, and better factory absorption.
Golden Dome initiative: Responding to RFPs and RFQs under the U.S. President's Golden Dome executive order, which focuses on non-kinetic missile defense capabilities. This initiative could drive significant growth in 2026 and beyond.
Additive manufacturing alignment: Optimizing investments in commercial markets and focusing on additive manufacturing, which aligns with A&D customers and leverages differentiated technology.
Transitioning SWaP amplifier products to advanced production: The transition to advanced production for low size, weight, and power (SWaP) amplifier products involves risks, including potential challenges in optimizing the amplifier production line for higher volumes.
Commercial market demand: Despite sequential improvements in commercial revenue, the company does not expect a sustained improvement in overall demand, particularly for industrial applications. This could impact resource allocation and growth opportunities.
Dependence on U.S. manufacturing: The company has shifted all manufacturing operations out of China and relies on U.S. manufacturing sites. This dependence could pose risks related to supply chain disruptions or capacity constraints.
Fixed price development programs: Development gross margins are expected to remain low (around 8%), which could limit profitability on fixed price programs.
Economic uncertainties in industrial markets: The industrial market demand remains uncertain, and the company has indicated no significant change in the overall demand picture, which could affect revenue stability.
Aerospace and Defense Revenue Growth: The company expects aerospace and defense (A&D) revenue to grow sequentially throughout the remainder of 2025, with an anticipated growth of at least 40% in 2025.
HELSI-2 Program: The HELSI-2 program, a $171 million DoD initiative to develop a 1-megawatt high-energy laser, is expected to be completed in 2026 and will continue to contribute significantly to revenue growth in 2025.
Golden Dome Initiative: The company is responding to RFPs and RFQs under the Golden Dome executive order, which could lead to significant growth opportunities in 2026 and beyond.
International Directed Energy Markets: The company has begun shipping to a new international customer and sees a growing pipeline of global opportunities in directed energy programs, particularly for counter UAS and other threats.
Commercial Revenue Outlook: While commercial revenue improved sequentially, the company does not expect a sustained improvement in overall demand for industrial applications. However, it remains optimistic about long-term growth in additive manufacturing.
Q3 2025 Revenue Guidance: Revenue for Q3 2025 is expected to be in the range of $62 million to $67 million, with approximately $45 million from product revenue and $19 million from development revenue.
Q3 2025 Gross Margin Guidance: Products gross margin is expected to be in the range of 32% to 36%, and development gross margins are expected to be approximately 8%, resulting in a total gross margin range of 24% to 30%.
Q3 2025 Adjusted EBITDA Guidance: Adjusted EBITDA for Q3 2025 is expected to be in the range of $2 million to $6 million.
The selected topic was not discussed during the call.
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.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
