nLIGHT(US:LASR)2025-08-07 22:00Financial Data and Key Metrics Changes - Total revenue for the second quarter was $61.7 million, an increase of 22% compared to $50.5 million in the same quarter last year and up 19.5% compared to the previous quarter [12] - Aerospace and Defense (A&D) revenue reached a record $40.7 million, up 48.6% year over year and 24% sequentially [12] - Gross margin for the second quarter was 29.9%, compared to 23.5% in the same quarter last year and 26.7% in the previous quarter [14] - Non-GAAP net income for the second quarter was $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 the same quarter last year [18] Business Line Data and Key Metrics Changes - A&D revenue growth was driven by record defense products revenue, which grew 74.5% year over year and 18% compared to the last quarter [12] - Development revenue was $20.9 million, also a record, growing more than 30% both sequentially and year over year [13] - Commercial revenue was $21 million, a decrease of 9% year over year but up 11% sequentially [13] Market Data and Key Metrics Changes - A&D revenue represented approximately 66% of total sales in the quarter, up from 54% in the same quarter a year ago [4] - The company began shipping to a new international customer in the directed energy market, indicating a growing pipeline of global opportunities [9] Company Strategy and Development Direction - The company is well positioned to drive continued growth in A&D with leading high-power laser technology developed over the past two decades [5] - The focus remains on directed energy and laser sensing, aligning with critical priorities of the Department of Defense [5] - The company is rationalizing investments in commercial markets to align resources with growth opportunities, particularly in additive manufacturing [11][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growing A&D revenues by at least 40% in 2025, supported by a growing pipeline of directed energy programs and laser sensing opportunities [10] - The company expects revenue for 2025 to be in the range of $62 million to $67 million, with A&D revenue expected to grow sequentially and year over year [19] - Management noted that while there were improvements in commercial markets, they do not expect sustained demand growth in the majority of industrial applications [11] Other Important Information - The company ended the second quarter with total cash, cash equivalents, restricted cash, and investments of $114 million [18] - The transition of amplifier products into advanced production is critical for scaling operations and increasing volume [44] Q&A Session Summary Question: What drove the outperformance in A&D? - Management attributed the outperformance to strong execution in existing programs, particularly in amplifier sales [25] Question: Any updates on laser sensing programs? - Management indicated continued success in existing platforms and expected higher volumes as customers restock inventory [29] Question: Insights on gross margin expectations? - Management noted that the high gross margin in Q2 was due to better factory absorption and execution, but a step down is expected in Q3 [31] Question: Initial views on 2026? - Management stated it is too early to provide guidance for 2026 but remains confident in the growth pipeline [39] Question: Details on the amplifier transition? - The transition involves moving amplifier manufacturing from R&D to normal manufacturing groups, which is crucial for scaling production [43]