Planned Inventory Management and Tariffs Impacted Gross Margin
MARLBOROUGH, Mass., Feb. 12, 2026 (GLOBE NEWSWIRE) -- IPG Photonics Corporation (NASDAQ:IPGP) today reported financial results for the fourth quarter ended December 31, 2025.
Three Months Ended December 31,
Twelve Months Ended December 31,
(In millions, except per share data and percentages)
2025
2024
Change
2025
2024
Change
Revenue
$
274.5
$
234.3
17
%
$
1,003.8
$
977.1
3
%
Gross margin
36.1
%
38.6
%
38.0
%
34.6
%
Operating income (loss)
$
3.3
$
14.0
(76)%
$
13.1
$
(208.3
)
NM
Operating margin
1.2
%
6.0
%
1.3
%
(21.3)%
Net income (loss)
$
13.3
$
7.8
71
%
$
31.1
$
(181.5
)
NM
Earnings (loss) per diluted share
$
0.31
$
0.18
72
%
$
0.73
$
(4.09
)
NM
Non-GAAP Measures*
Adjusted gross margin
37.6
%
38.8
%
38.7
%
37.9
%
Adjusted EBITDA
$
41.2
$
37.3
11
%
$
142.4
$
144.8
(2)%
Adjusted earnings per diluted share
$
0.46
$
0.30
53
%
$
1.42
$
1.66
(14)%
*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 fourth quarter results above our expectations with another quarter of double-digit year-over-year revenue growth," said Dr. Mark Gitin, Chief Executive Officer of IPG Photonics. "Our performance was driven by the team's execution on our key strategic initiatives, growth in additive and battery manufacturing, and continued stabilization in industrial demand. We have strengthened our organization, improved operational discipline, and continued to invest in innovation and new product roadmaps to ensure that IPG is well positioned for long-term, sustainable and profitable growth."
Financial Highlights
Fourth quarter revenue of $274 million increased 17% year over year, driven by growth across materials processing, medical, and advanced applications. Changes in foreign exchange rates increased revenue growth by approximately 2%. Materials processing sales accounted for 85% of total revenue and increased 17% year over year, driven by growth in welding, marking, additive manufacturing applications, and cleaning, partially offset by lower sales in micromachining. Other applications sales increased 15% year over year, driven by higher revenue in medical and advanced applications. Emerging growth products accounted for 54% of total revenue, increasing from 52% in the prior quarter. By region, sales increased 19% in Asia, 23% in North America, and 6% in Europe on a year-over-year basis.
GAAP gross margin of 36.1% decreased year over year due to higher product cost and tariffs, partially offset by lower inventory provisions. Adjusted EBITDA was $41.2 million and adjusted earnings per diluted share (EPS) was $0.46 in the fourth quarter. During the fourth quarter, IPG spent $18 million on capital expenditures and $4 million on share repurchases.
Authorization of New Share Repurchase Program
The Board of Directors has authorized a new program to purchase up to $100 million of IPG common stock. Share repurchases may be made periodically in open-market or other transactions and are subject to market conditions, legal requirements and other factors. The share repurchase program authorization does not obligate the Company to repurchase any dollar amount or number of its shares. Repurchases may be commenced or suspended from time to time without prior notice.
Business Outlook and Financial Guidance
"Our focus on execution with a backdrop of improving market demand is reflected in the fourth quarter book-to-bill ratio, which was firmly above one on higher revenue. We are seeing signs of improved industrial activity as the U.S. continues to strengthen and demand across Asia remains resilient, balanced against a more cautious outlook in parts of Europe and some lingering macroeconomic uncertainty. We remain well positioned to drive revenue growth by leveraging our market leadership in industrial applications and expanding laser use cases into high-growth areas such as medical, micromachining, and defense," concluded Dr. Gitin.
For the first quarter of 2026, IPG expects revenue of $235 million to $265 million, adjusted gross margin between 37% and 39% and operating expenses of $90 million to $92 million. IPG anticipates delivering adjusted earnings per diluted share in the range of $0.10 to $0.40 and adjusted EBITDA in the range of $25 million to $40 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 157 and Chinese yuan 7.03, respectively.
Supplemental Financial Information
Additional supplemental financial information is provided in the unaudited Financial Data Workbook and Fourth 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, February 12, 2026 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 IPG being well positioned for long-term, sustainable and profitable growth, signs of improved industrial activity, being well positioned to drive revenue growth by leveraging our market leadership in industrial applications and expanding laser use cases into high-growth areas such as medical, micromachining, and defense, and statements related to shares repurchases, 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 the first quarter of 2026. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated with the strength or weakness of 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 December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
(In thousands, except per share data)
Net sales
$
274,471
$
234,337
$
1,003,777
$
977,134
Cost of sales
175,398
143,993
622,314
638,979
Gross profit
99,073
90,344
381,463
338,155
Operating expenses:
Sales and marketing
24,109
21,864
97,862
89,582
Research and development
28,771
25,738
117,402
109,783
General and administrative
40,358
28,893
143,140
124,313
Net loss from divestiture and sale of assets
—
—
—
190,201
Impairment of long-lived assets
—
440
—
27,006
Restructuring charges
176
—
601
—
Loss (gain) on foreign exchange
2,341
(543
)
9,354
5,524
Total operating expenses
95,755
76,392
368,359
546,409
Operating income (loss)
3,318
13,952
13,104
(208,254
)
Other income, net:
Interest income, net
7,129
7,409
29,857
45,467
Other income, net
109
651
2,135
899
Total other income
7,238
8,060
31,992
46,366
Income (loss) before provision for income taxes
10,556
22,012
45,096
(161,888
)
Provision for income taxes
(2,714
)
14,197
14,000
19,638
Net income (loss)
$
13,270
$
7,815
$
31,096
$
(181,526
)
Net income (loss) per common share:
Basic
$
0.32
$
0.18
$
0.73
$
(4.09
)
Diluted
$
0.31
$
0.18
$
0.73
$
(4.09
)
Weighted average common shares outstanding:
Basic
