nLIGHT’s second quarter results were shaped by robust execution in its aerospace and defense segment, which management described as the primary contributor to revenue and margin outperformance. CEO Scott Keeney credited record shipments for directed energy and laser sensing programs and highlighted the transition of amplifier products into advanced manufacturing as a key driver. Notably, the company began shipping to a new international defense customer, expanding its global footprint. Commercial markets, including industrial and microfabrication, showed sequential improvement, but management emphasized these gains were due to backlogged orders and not a sustained change in market demand.
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nLIGHT (LASR) Q2 CY2025 Highlights:
- Revenue: $61.74 million vs analyst estimates of $55.63 million (22.2% year-on-year growth, 11% beat)
- Adjusted EPS: $0.06 vs analyst estimates of -$0.09 (significant beat)
- Adjusted EBITDA: $5.55 million vs analyst estimates of -$1.52 million (9% margin, significant beat)
- Revenue Guidance for Q3 CY2025 is $64.5 million at the midpoint, above analyst estimates of $56.66 million
- EBITDA guidance for the full year is $4 million at the midpoint, above analyst estimates of -$4.94 million
- Operating Margin: -6.9%, up from -25.1% in the same quarter last year
- Market Capitalization: $1.36 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From nLIGHT’s Q2 Earnings Call
- Daniel Eggerichs (Craig-Hallum Capital Group) asked what drove the outperformance in aerospace and defense. CFO Joseph Corso credited stronger execution on amplifier shipments for the HELSI-2 program and clarified there were no new surprise customers.
- Eggerichs (Craig-Hallum) also requested details on laser sensing program wins and revenue timing. Corso explained that existing programs saw higher volumes as customers restocked inventory, while new classified programs are progressing but awaiting next-phase orders.
- Eggerichs (Craig-Hallum) questioned the sustainability of the high product gross margin. Corso responded that the Q2 margin benefited from multiple small operational wins and cautioned that Q3 guidance assumes more normalized performance.
- James Ricchiuti (Needham & Company) inquired about the increased 2025 outlook and A&D growth drivers versus prior expectations. Corso highlighted broad-based growth across defense programs, with HELSI-2 and new international wins as incremental contributors.
- Ruben Roy (Stifel) probed the amplifier production transition’s impact and required milestones. John Marchetti, VP of Corporate Development, emphasized internal process improvements and quality controls as key to scaling production for future growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of shipments and backlog conversion for key defense programs like HELSI-2 and international directed energy contracts, (2) progress in transitioning amplifier production to high-volume manufacturing and its impact on gross margins, and (3) the company’s ability to win new classified and Golden Dome-related sensing contracts. Shifts in U.S. and allied defense budgets and any signs of sustained improvement in commercial laser demand will also be key markers of execution.
nLIGHT currently trades at $27.25, up from $20.46 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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