Higher Revenue Resulted in Gross Margin Improvement
MARLBOROUGH, Mass., Nov. 04, 2025 (GLOBE NEWSWIRE) -- IPG Photonics Corporation (NASDAQ:IPGP) today reported financial results for the third quarter ended September 30, 2025.
Three Months Ended September 30,
Nine Months Ended September 30,
(In millions, except per share data and percentages)
2025
2024
Change
2025
2024
Change
Revenue
$
250.8
$
233.1
8
%
$
729.3
$
742.8
(2
)%
Gross margin
39.5
%
23.2
%
38.7
%
33.4
%
Operating income (loss)
$
7.9
$
(253.3
)
NM
$
9.8
$
(222.2
)
NM
Operating margin
3.1
%
(108.7
)%
1.3
%
(29.9
)%
Net income (loss)
$
7.5
$
(233.6
)
NM
$
17.8
$
(189.3
)
NM
Earnings (loss) per diluted share
$
0.18
$
(5.33
)
NM
$
0.42
$
(4.22
)
NM
Non-GAAP Measures*
Adjusted gross margin
39.8
%
36.2
%
39.2
%
37.6
%
Adjusted EBITDA
$
37.0
$
27.9
33
%
$
101.2
$
107.5
(6
)%
Adjusted earnings per diluted share
$
0.35
$
0.32
9
%
$
0.96
$
1.35
(29
)%
*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.
NM - not meaningful.
Management Comments
"We delivered third-quarter results at the top end of our expectations with double-digit revenue growth, excluding divestitures, driven by business wins and progress in key strategic initiatives as well as stable industrial demand and growth in battery production," said Dr. Mark Gitin, Chief Executive Officer of IPG Photonics. "We continue to balance expense management with investments we are making in innovation and strengthening the organization that will position IPG for the next phase of sustainable, profitable growth."
Financial Highlights
Third quarter revenue of $251 million increased 8% year over year driven by growth across materials processing, medical and advanced applications, and was 11% higher year over year excluding divestitures. Changes in foreign exchange rates increased revenue growth by approximately 1%. Materials processing sales accounted for 88% of total revenue and increased 6% year over year, driven by welding, additive manufacturing applications, cleaning and higher revenue in micromachining, partially offset by divestitures and lower sales in marking applications. Other applications sales increased 20% year over year driven by higher revenue in medical and advanced applications. Emerging growth products accounted for 52% of total revenue, declining slightly from 54% in the prior quarter. By region, sales increased 15% in Asia and 8% in North America and decreased 7% in Europe on a year-over-year basis.
GAAP gross margin of 39.5% increased year over year driven by a decrease in unabsorbed expenses and lower inventory provisions, partially offset by higher product cost and tariffs. Adjusted EBITDA was $37.0 million and adjusted earnings per diluted share (EPS) were $0.35 in the third quarter. During the third quarter, IPG spent $21 million on capital expenditures and $16 million on share repurchases.
Business Outlook and Financial Guidance
"The third quarter book-to-bill ratio was approximately one, reflecting stable demand across key markets. As industrial activity rebounds, we are well positioned to increase revenue by leveraging our market leadership and converting more applications to our laser-based solutions. Our strong laser and photonics technology foundation together with our differentiated applications expertise also enables us to expand into new high-growth markets where lasers offer clear performance or cost advantages," concluded Dr. Gitin.
For the fourth quarter of 2025, IPG expects revenue of $230 million to $260 million, adjusted gross margin between 36% and 39% and operating expenses of $90 million to $92 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 $21 million to $38 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 148 and Chinese yuan 7.11, respectively.
Supplemental Financial Information
Additional supplemental financial information is provided in the unaudited Financial Data Workbook and Third 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, November 4, 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 balance expense management with investments we are making in innovation and strengthening the organization that will position IPG for the next phase of sustainable, profitable growth, as industrial activity rebounds, being well positioned to increase revenue by leveraging our market leadership and converting more applications to our laser-based solutions, expanding into new high-growth markets where lasers offer clear performance or cost advantages, 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 fourth 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 September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
(In thousands, except per share data)
Net sales
$
250,792
$
233,143
$
729,306
$
742,797
Cost of sales
151,787
179,054
446,916
494,986
Gross profit
99,005
54,089
282,390
247,811
Operating expenses:
Sales and marketing
23,771
22,233
73,753
67,718
Research and development
30,358
27,177
88,631
84,045
General and administrative
35,092
32,660
102,782
95,420
Net loss from divestiture and sale of assets
—
197,651
—
190,201
Impairment of long-lived assets
—
26,566
—
26,566
Restructuring charges
425
—
425
—
Loss on foreign exchange
1,504
1,148
7,013
6,067
Total operating expenses
91,150
307,435
272,604
470,017
Operating income (loss)
7,855
(253,346
)
9,786
(222,206
)
Other income, net:
Interest income, net
7,283
11,103
22,728
38,058
Other income (loss), net
516
(271
)
2,026
248
Total other income
7,799
10,832
24,754
38,306
Income (loss) before provision for income taxes
15,654
(242,514
)
34,540
(183,900
)
Provision for income taxes
8,191
(8,920
)
16,714
5,441
Net income (loss)
$
7,463
$
(233,594
)
$
17,826
$
(189,341
)
Net income (loss) per common share:
Basic
$
0.18
$
(5.33
)
$
0.42
$
(4.22
)
Diluted
$
0.18
$
(5.33
)
$
0.42
$
(4.22
)
Weighted average common shares outstanding:
Basic
42,199
43,837
42,427
44,901
Diluted
42,556
43,837
42,659
44,901
