Nlight ((LASR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, nLIGHT, Inc. expressed a generally positive sentiment, highlighting strong revenue growth, particularly in the aerospace and defense sectors, alongside significant margin expansion. While challenges persist in the commercial markets and restructuring efforts in China, the overall outlook remains optimistic, buoyed by robust defense sector contracts and progress in key programs.
Strong Revenue Growth
The third quarter saw nLIGHT, Inc. achieve a revenue of $66.7 million, marking a 19% increase year-over-year and an 8% rise sequentially. This growth underscores the company’s ability to capitalize on its strategic initiatives and market opportunities.
Record Aerospace and Defense Revenue
Aerospace and defense sectors were standout performers, with revenues reaching a record $45.6 million. This represents a 50% increase year-over-year and a 12% sequential growth, highlighting the company’s strong foothold in these critical sectors.
Expansion of Product Gross Margin
The company reported a record product gross margin of 41%, up from 28.8% a year ago and 38.5% last quarter. This improvement was driven by a favorable customer and product mix, showcasing nLIGHT’s strategic pricing and product positioning.
Positive Adjusted EBITDA
nLIGHT achieved a positive adjusted EBITDA of $7.1 million for the third quarter, a significant turnaround from a loss of approximately $1 million in the same quarter last year, reflecting improved operational efficiencies and cost management.
Successful Progress on HELSI-2 Program
The company reported continued progress on the HELSI-2 program, a $171 million project, with significant contributions to revenue expected through 2026. This program is pivotal in driving future growth and revenue streams.
Significant Sensing Contract
A new $50 million contract for an existing missile program was secured, enhancing nLIGHT’s laser sensing product pipeline and reinforcing its position in the defense market.
Decline in Commercial Markets
Despite the overall positive performance, commercial revenue saw a decline to $21.2 million, an 18% decrease year-over-year. This decline highlights ongoing challenges in the commercial sector, despite slight sequential improvements.
Restructuring Charges
The company incurred a $1.7 million restructuring charge due to reduced activities in China and in cutting and welding, reflecting strategic adjustments to align with market demands.
GAAP Net Loss
nLIGHT reported a GAAP net loss of $6.9 million, or $0.14 per share, compared to a net loss of $10.3 million a year ago. This reduction in net loss indicates a positive trend towards financial stability.
Forward-Looking Guidance
Looking ahead, nLIGHT provided guidance for the upcoming quarter, expecting revenue between $72 million and $78 million, with a midpoint of $75 million. The company anticipates continued growth in the Aerospace and Defense sectors, with full-year 2025 revenue growth expected to surpass previous forecasts. Gross margins are projected to range between 27% and 32%, with adjusted EBITDA forecasted to fall between $6 million and $11 million. The company remains optimistic about its prospects in the directed energy and laser sensing markets.
In summary, nLIGHT’s earnings call reflected a positive sentiment with strong growth in key sectors, despite challenges in the commercial market and restructuring efforts. The company’s strategic focus on aerospace and defense, along with promising forward-looking guidance, positions it well for continued success and growth in the coming quarters.