nLIGHT(LASR)2024-08-04 12:47Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was 34.5 million, up 17% sequentially but down 13% year-over-year [15] - Development revenue reached 27.4 million, representing 54% of total revenue, which is a 26% increase quarter-over-quarter and a 12% increase year-over-year [15] - Industrial revenue was 10.2 million, representing 20% of total revenue, down 5% sequentially and 16% year-over-year [16] Market Data and Key Metrics Changes - The aerospace and defense sector showed strong growth, particularly in directed energy and laser sensing applications [3][4] - Microfabrication revenue has stabilized after a period of low demand, with signs of renewed interest emerging [9] - The industrial market is shifting towards higher power solutions, particularly in cutting applications [10] Company Strategy and Development Direction - The company is focusing on vertical integration in the directed energy market, which allows for optimized system-level performance at competitive costs [6] - Continued investment in R&D and new product development is aimed at addressing customer pain points in various markets, including EV and battery sectors [11] - The collaboration with EOS in additive manufacturing is expected to enhance product offerings and drive broader adoption of metal 3D printing technologies [12][28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of 2024, expecting growth to be higher than the first half, particularly in defense sectors [24] - The company anticipates continued sequential revenue growth in Q3 2024, with guidance in the range of 58 million [21] - Management highlighted the importance of maintaining a strong balance sheet and effective working capital management to support long-term growth objectives [20] Other Important Information - The company ended Q2 2024 with cash equivalents and investments of 1.6 million, an improvement from a loss of $4.9 million in Q1 2024 [18] Q&A Session Summary Question: Overview of segment performance and guidance - Management confirmed that the strong performance in aerospace and defense was a significant driver for the quarter, with a 26% increase in revenue [22][23] Question: Profitability outlook for fiscal 2025 - Management remains optimistic about achieving year-over-year revenue growth in fiscal 2024, with expectations for a strong second half [24] Question: Margin expectations despite revenue growth - Management explained that while revenue from laser products increased, the gross margin guidance reflects a more normalized flow-through from Q2 to Q3 [25][26] Question: Contribution of EOS partnership - The partnership with EOS is expected to enhance the company's position in the additive manufacturing space, reflecting the strength of its technology [27][28] Question: Success in the Chinese market - Management noted that revenue from China is a small part of the business, with slight improvements in ordering patterns observed [31] Question: Backlog margin profile - Management indicated that the backlog is skewing towards higher power sales, which should positively impact gross margins [33]