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., Aug. 05, 2025 (GLOBE NEWSWIRE) -- 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)
2025
2024
Change
2025
2024
Change
Revenue
$
250.7
$
257.6
(3
)%
$
478.5
$
509.7
(6
)%
Gross margin
37.3
%
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 margin
37.8
%
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.
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 FedotoffSenior Director, Investor Relations IPG Photonics Corporation
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.
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.
IPG PHOTONICS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
(In thousands, except per share data)
Net sales
$
250,721
$
257,645
$
478,514
$
509,654
Cost of sales
157,148
161,459
295,129
315,932
Gross profit
93,573
96,186
183,385
193,722
Operating expenses:
Sales and marketing
25,552
22,487
49,982
45,485
Research and development
29,937
27,487
58,273
56,868
General and administrative
34,882
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 expenses
93,469
84,146
181,454
162,582
Operating income
104
12,040
1,931
31,140
Other income, net:
Interest income, net
8,001
12,778
15,445
26,955
Other income, net
166
194
1,510
519
Total other income
8,167
12,972
16,955
27,474
Income before provision for income taxes
8,271
25,012
18,886
58,614
Provision for income taxes
1,666
4,858
8,523
14,361
Net income
$
6,605
