EX-99.1 2 ipgp06302025exhibit991.htm EX-99.1 Document
Exhibit 99.1

 image1a.jpg

IPG PHOTONICS ANNOUNCES SECOND QUARTER 2025 FINANCIAL RESULTS
Demand Recovery and Strategic Initiatives Drove Revenue Above Expectations
Book-to-Bill was Approximately One as Bookings Also Remained Strong
MARLBOROUGH, Mass. – August 5, 2025 - IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the second quarter ended June 30, 2025.
Three Months Ended June 30,Six Months Ended June 30,
(In millions, except per share data and percentages)20252024Change20252024Change
Revenue$250.7 $257.6 (3)%$478.5 $509.7 (6)%
Gross margin37.3 %37.3 %38.3 %38.0 %
Operating income
$0.1 $12.0 (99)%$1.9 $31.1 (94)%
Operating margin— %4.7 %0.4 %6.1 %
Net income
$6.6 $20.2 (67)%$10.4 $44.3 (77)%
Earnings per diluted share
$0.16 $0.45 (64)%$0.24 $0.97 (75)%
Non-GAAP Measures*
Adjusted gross margin37.8 %37.5 %38.9 %38.2 %
Adjusted EBITDA$31.5 $39.4 (20)%$64.2 $79.6 (19)%
Adjusted earnings per diluted share$0.30 $0.52 (42)%$0.61 $1.03 (41)%

*Adjusted gross margin, adjusted EBITDA and adjusted earnings per diluted share include non-GAAP adjustments. A reconciliation from GAAP to non-GAAP metrics is provided in this earnings release.
Management Comments
“I am happy to report that we delivered second quarter results well above expectations. Our revenue improved sequentially, driven by modest demand recovery in general industrial and e-mobility markets. Excluding the impact of a divestiture, this was our first year-over-year revenue increase since 2022. We’re making progress on our strategy to drive profitable growth with initiatives that are already yielding results. This quarter, we saw higher revenue in medical, supported by a customer win earlier in the year, and reported strong growth in advanced applications. We are also launching a directed energy system for counter-UAV applications, which we believe will unlock significant value for our customers,” said Dr. Mark Gitin, Chief Executive Officer of IPG Photonics. "At the same time, we have significantly strengthened our leadership team and are continuing our investments in growth opportunities."
Financial Highlights
Second quarter revenue of $251 million decreased 3% year over year due to divestitures, and was higher year over year excluding divestitures as lower sales in materials processing were offset by growth in medical and advanced applications. Changes in foreign exchange rates increased revenue growth by approximately 1%. Materials processing sales accounted for 85% of total revenue and decreased 6% year over year, as a result of divestitures and lower sales in cutting, welding and additive manufacturing applications, partially offset by higher revenue in micromachining and the cleanLASER acquisition. Other applications sales increased 21% year over year driven by higher revenue in medical and advanced applications. Emerging growth products sales accounted for 54% of total revenue, increasing from 51% in the prior quarter. By region, sales increased 14% in Asia, and decreased 4% in North America and 24% in Europe on a year-over-year basis.
GAAP gross margin of 37.3% was flat year over year as a decrease in unabsorbed expenses and lower inventory provisions were offset by higher product cost and tariffs. Adjusted EBITDA was $31.5 million and adjusted earnings per diluted share (EPS) were $0.30 in the second quarter. During the second quarter, IPG spent $15 million on capital expenditures and $30 million on share repurchases.
1
Exhibit 99.1
Business Outlook and Financial Guidance
“The second quarter book-to-bill ratio was approximately one on the higher revenue. We are seeing continued demand into the third quarter despite the uncertainty related to tariffs. We have been successfully adapting to the current operating environment and taking advantage of our flexible global manufacturing footprint and supply chain capabilities to address tariffs," concluded Dr. Gitin.

For the third quarter of 2025, IPG expects revenue of $225 million to $255 million, adjusted gross margin between 36% and 38% and operating expenses of $89 million to $91 million. IPG anticipates delivering adjusted earnings per diluted share in the range of $0.05 to $0.35 and adjusted EBITDA in the range of $22 million to $36 million.
As discussed in more detail in the "Safe Harbor" passage of this news release, actual results may differ from this guidance due to various factors including, but not limited to, trade policy changes and trade restrictions, product demand, order cancellations and delays, competition, tariffs and retaliatory tariffs, currency fluctuations and general economic conditions. The current uncertainty related to the trade environment and tariff policies increases the risks to the outlook that we have provided. This guidance is based upon current market conditions and expectations, and is subject to the risks outlined in the Company's reports filed with the SEC, and assumes exchange rates relative to the U.S. dollar of euro 0.85, Japanese yen 144 and Chinese yuan 7.16, respectively.
Supplemental Financial Information
Additional supplemental financial information is provided in the unaudited Financial Data Workbook and Second Quarter 2025 Earnings Call Presentation available on the investor relations section of the Company's website at investor.ipgphotonics.com.
Conference Call Reminder
The Company will hold a conference call today, August 5, 2025 at 10:00 am ET. To access the call, please dial 877-407-6184 in the US or 201-389-0877 internationally. A live webcast of the call will also be available and archived on the investor relations section of the Company's website at investor.ipgphotonics.com.
Contact
Eugene Fedotoff
Senior Director, Investor Relations
IPG Photonics Corporation
508-597-4713
efedotoff@ipgphotonics.com
About IPG Photonics Corporation
IPG Photonics Corporation is the leader in high-power fiber lasers and amplifiers used primarily in materials processing and other diverse applications. The Company’s mission is to develop innovative laser solutions making the world a better place. IPG accomplishes this mission by delivering superior performance, reliability and usability at a lower total cost of ownership compared with other types of lasers and non-laser tools, allowing end users to increase productivity and decrease costs. IPG is headquartered in Marlborough, Massachusetts and has more than 30 facilities worldwide. For more information, visit www.ipgphotonics.com.
2
Exhibit 99.1
Safe Harbor Statement
Information and statements provided by IPG and its employees, including statements in this press release, that relate to future plans, events or performance are forward-looking statements. These statements involve risks and uncertainties. Any statements in this press release that are not statements of historical fact are forward-looking statements, including those statements related to our strategy to drive profitable growth, launching a directed energy system for counter-UAV applications that we believe will unlock significant value for our customers, continuing our investments in growth opportunities, continuous demand into the third quarter despite the uncertainty related to tariffs, successfully adopting to the current operating environment and taking advantage of our flexible global manufacturing footprint and supply chain capabilities to address tariffs, and statements related to revenue, adjusted gross margin and operating expenses outlook, adjusted earnings per diluted share and adjusted EBITDA guidance, including the expected impact of tariffs, and the impact of the U.S. dollar on our guidance for third quarter of 2025. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated with the strength or weakness of the business conditions in industries and geographic markets that IPG serves, particularly the effect of downturns in the markets IPG serves; uncertainties and adverse changes in the general economic conditions of markets; inability to manage risks associated with international customers and operations; changes in trade controls and tariff policies; IPG's ability to penetrate new applications for fiber lasers and increase market share; the rate of acceptance and penetration of IPG's products; foreign currency fluctuations; high levels of fixed costs from IPG's vertical integration; the appropriateness of IPG's manufacturing capacity for the level of demand; competitive factors, including declining average selling prices; the effect of acquisitions and investments; inventory write-downs; asset impairment charges; intellectual property infringement claims and litigation; interruption in supply of key components; manufacturing risks; government regulations and trade sanctions; and other risks identified in IPG's SEC filings. Readers are encouraged to refer to the risk factors described in IPG's Annual Report on Form 10-K (filed with the SEC on February 20, 2025) and IPG's reports filed with the SEC, as applicable. Actual results, events and performance may differ materially. Readers are cautioned not to rely on the forward-looking statements, which speak only as of the date hereof. IPG undertakes no obligation to update the forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
3
Exhibit 99.1
IPG PHOTONICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(In thousands, except per share data)
Net sales$250,721 $257,645 $478,514 $509,654 
Cost of sales157,148 161,459 295,129 315,932 
Gross profit93,573 96,186 183,385 193,722 
Operating expenses:
Sales and marketing25,552 22,487 49,982 45,485 
Research and development29,937 27,487 58,273 56,868 
General and administrative34,882 31,602 67,690 62,760 
Gain on sale of assets
— (674)— (7,450)
Loss on foreign exchange
3,098 3,244 5,509 4,919 
Total operating expenses93,469 84,146 181,454 162,582 
Operating income
104 12,040 1,931 31,140 
Other income, net:
Interest income, net8,001 12,778 15,445 26,955 
Other income, net166 194 1,510 519 
Total other income8,167 12,972 16,955 27,474 
Income before provision for income taxes
8,271 25,012 18,886 58,614 
Provision for income taxes1,666 4,858 8,523 14,361 
Net income
$6,605 $20,154 $10,363 $44,253 
Net income per share:
Basic$0.16 $0.45 $0.24 $0.97 
Diluted$0.16 $0.45 $0.24 $0.97 
Weighted average common shares outstanding:
Basic42,481 44,918 42,543 45,439 
Diluted42,577 45,012 42,720 45,601 

4
Exhibit 99.1
IPG PHOTONICS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
June 30,December 31,
20252024
(In thousands, except share and 
per share data)
ASSETS
Current assets:
Cash and cash equivalents$359,184 $620,040 
Short-term investments540,414 310,152 
Accounts receivable, net201,038 171,131 
Inventories303,841 284,780 
Prepaid income taxes28,813 17,592 
Prepaid expenses and other current assets40,866 27,300 
Total current assets1,474,156 1,430,995 
Deferred income taxes, net114,268 115,031 
Goodwill71,763 67,241 
Intangible assets, net54,653 55,376 
Property, plant and equipment, net621,352 588,375 
Other assets43,256 32,246 
Total assets$2,379,448 $2,289,264 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$41,522 $35,385 
Accrued expenses and other current liabilities170,790 152,048 
Income taxes payable4,640 17,586 
Total current liabilities216,952 205,019 
Other long-term liabilities and deferred income taxes57,944 59,774 
Total liabilities274,896 264,793 
Commitments and contingencies
IPG Photonics Corporation equity:
Common stock, $0.0001 par value, 175,000,000 shares authorized; 56,905,313 and 42,329,918 shares issued and outstanding, respectively, at June 30, 2025; 56,632,974 and 42,548,561 shares issued and outstanding, respectively, at December 31, 2024.
6 6 
Treasury stock, at cost, 14,575,395 and 14,084,413 shares held at June 30, 2025 and December 31, 2024, respectively.
(1,535,525)(1,505,321)
Additional paid-in capital1,053,080 1,035,285 
Retained earnings2,624,231 2,613,868 
Accumulated other comprehensive loss(37,240)(119,367)
Total IPG Photonics Corporation stockholders' equity2,104,552 2,024,471 
Total liabilities and equity$2,379,448 $2,289,264 

5
Exhibit 99.1
IPG PHOTONICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
Six Months Ended June 30,
20252024
(In thousands)
Cash flows from operating activities:
Net income
$10,363 $44,253 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization31,167 31,506 
Provisions for inventory, warranty & bad debt22,080 30,365 
Other17,162 (8)
Changes in assets and liabilities that (used) provided cash, net of acquisitions:
Accounts receivable and accounts payable(14,061)39,736 
Inventories(23,837)17,041 
Other(31,645)(54,839)
Net cash provided by operating activities11,229 108,054 
Cash flows from investing activities:
Purchases of and deposits on property, plant and equipment(40,176)(52,270)
Proceeds from sales of property, plant and equipment563 28,274 
Purchases of short-term investments(579,814)(301,541)
Proceeds from short-term investments357,859 633,993 
Other52 188 
Net cash (used in) provided by investing activities(261,516)308,644 
Cash flows from financing activities:
Payments for taxes related to net share settlement of equity awards less proceeds from issuance of common stock under employee stock options
(4,253)1,792 
Purchase of treasury stock net of excise tax, at cost
(30,204)(212,020)
Net cash used in financing activities(34,457)(210,228)
Effect of changes in exchange rates on cash and cash equivalents23,888 (604)
Net (decrease) increase in cash and cash equivalents
(260,856)205,866 
Cash and cash equivalents — Beginning of period620,040 514,674 
Cash and cash equivalents — End of period$359,184 $720,540 
Supplemental disclosures of cash flow information:
Cash paid for interest$8 $94 
Cash paid for income taxes$32,918 $34,165 

6
Exhibit 99.1
IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Use of Non-GAAP Adjusted Financial Information

We refer to certain financial measures that are not recognized under United States generally accepted accounting principles (“GAAP”) and are provided as supplemental information to enhance understanding of the Company’s financial performance. These measures should not be considered as a substitute for, or superior to, GAAP financial measures. The following information provides the definition of adjusted gross profit, adjusted gross margin, adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, adjusted net earnings per share (EPS), and adjusted tax rate as presented, which are financial measures that are not calculated or presented in accordance with GAAP, and reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided adjusted gross profit, adjusted gross margin, adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS, and an adjusted tax rate as supplemental information and in addition to the financial measures presented by the Company that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measure presented by the Company.

We define adjusted gross profit as reported gross profit, adjusted for non-recurring, infrequent, or unusual changes, including acquisition and integration charges and amortization of acquisition-related intangibles.

We define adjusted gross margin as adjusted gross profit divided by total revenue.

We define adjusted operating income as reported income from operations, adjusted for non-recurring, infrequent, or unusual charges, including acquisition and integration charges, amortization of acquisition-related intangibles, foreign exchange gains/losses and gain/loss on disposal of assets/divestiture.

We define EBITDA as net income plus interest expense (income), provision for income taxes, depreciation expense, and amortization expense.

We define adjusted EBITDA as EBITDA adjusted for non-recurring, infrequent, or unusual charges, and other adjustments that the Company believes appropriate, including stock-based compensation, acquisition and integration charges, foreign exchange gains/losses and gain/loss on disposal of assets/divestiture.

We define adjusted net income as reported net income, adjusted for non-recurring, infrequent, or unusual changes, and other adjustments that the Company believes appropriate, including amortization of acquisition-related intangibles, acquisition and integration charges, foreign exchange gains/losses and gain/loss on disposal of assets/divestiture, certain discrete tax items and non-GAAP income tax reconciling adjustments.

We define adjusted EPS as adjusted net income divided by the weighted-average diluted shares outstanding.

We define adjusted tax rate as the GAAP tax rate, adjusted for discrete tax items and the net impact of non-GAAP adjustments.
Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. Specifically, these non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management’s ability to make useful forecasts.

In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies. Management may, however, utilize other measures to illustrate performance in the future. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided below. These non-GAAP measures exclude (i) special inventory provisions, (ii) amortization of acquisition-related intangibles, (iii) restructuring charges, (iv) acquisition and integration charges, (v) goodwill and intangible asset impairments, (vi) foreign exchange gains/losses, (vii) interest income, (viii) benefit (provision) from
7
Exhibit 99.1
income taxes, (ix) depreciation, (x) amortization, (xi) stock-based compensation, (xii) gain/loss on disposal of assets/divestiture, (xiii) certain discrete tax items, and (xiv) non-GAAP income tax reconciling adjustments.

We have not provided a quantitative reconciliation of forward-looking Non-GAAP adjusted earnings per diluted share and adjusted EBITDA to their most directly comparable GAAP financial measures because we are unable to estimate with reasonable certainty the ultimate timing or amount of certain significant items without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact adjusted earnings per diluted share and adjusted EBITDA. This includes items that have not yet occurred, are out of the Company’s control, cannot be reasonably predicted and/or for which there would not be any meaningful adjustment or difference. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

Our non-GAAP tax provision for the fiscal second quarter of 2025 is 14%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments.

8
Exhibit 99.1
IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF NON-GAAP MEASUREMENTS (UNAUDITED)


Reconciliation of Gross Profit to Adjusted Gross Profit, Adjusted Gross Margin
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(in thousands, except per share data)
Gross profit$93,573$96,186$183,385$193,722
Gross margin37.3%37.3%38.3%38.0%
Amortization of acquisition-related intangibles1,0614402,077928
Acquisition and integration charges260—482—
Adjusted gross profit$94,894$96,626$185,944$194,650
Adjusted gross margin37.8%37.5%38.9%38.2%


Reconciliation of Operating Income to Adjusted Operating Income
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(in thousands, except per share data)
Operating income$104$12,040$1,931$31,140
Amortization of acquisition-related intangibles2,5941,3775,0962,802
Acquisition and integration charges1,068—2,059—
Loss on foreign exchange3,0983,2445,5094,919
Gain on sale of assets
———(6,776)
Adjusted operating income$6,864 $16,661 $14,595 $32,085 

Reconciliation of Net income to Adjusted EBITDA
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(in thousands, except per share data)
Net income$6,605$20,154$10,363$44,253
Interest income, net
(8,001)(12,778)(15,445)(26,955)
Provision for income taxes1,6664,8588,52314,361
Depreciation12,17213,30923,72827,236
Amortization3,6542,0107,4394,270
EBITDA$16,096$27,553$34,608$63,165
Stock based compensation11,2878,57022,05418,302
Acquisition and integration charges1,068—2,059—
Loss on foreign exchange3,0983,2445,5094,919
Gain on sale of assets
———(6,776)
Adjusted EBITDA$31,549$39,367$64,230$79,610

9
Exhibit 99.1
Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Diluted
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(in thousands, except per share data)
Net income$6,605 $20,154 $10,363 $44,253 
Amortization of acquisition-related intangibles2,594 1,377 5,096 2,802 
Acquisition and integration charges1,068 — 2,059 — 
Loss on foreign exchange
3,098 3,244 5,509 4,919 
Gain on sale of assets
— — — (6,776)
Certain discrete tax items275 (85)4,889 1,912 
Tax impact of non-GAAP adjustments(710)(1,075)(1,858)(342)
Adjusted net income$12,930 $23,615 $26,058 $46,768 
Adjusted net earnings per diluted share$0.30 $0.52 $0.61 $1.03 
Weighted average diluted shares outstanding42,577 45,012 42,720 45,601 


Reconciliation of GAAP to Non-GAAP Effective Tax Rate
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Tax rate
20 %19 %45 %25 %
Discrete tax items(3)%— %(26)%(3)%
Net impact of non-GAAP adjustments(3)%1 %(2)%(1)%
Adjusted tax rate
14 %20 %17 %21 %

During the first fiscal quarter of 2025, the Company refined its methodology to report non-GAAP measures. The change does not impact the Company’s financial position, cash flows, or GAAP consolidated results of operations. Prior period non-GAAP financial measures and the associated GAAP to non-GAAP reconciliations presented in this press release have been recast to conform to the current presentation.
10