Slide 1: Earnings Presentation Q4 2021
This presentation contains nLIGHT, Inc. proprietary information. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from nLIGHT, Inc. Earnings Presentation Q4 2021 February 17, 2022
Slide 2: Forward-looking statements
2 Certain statements in this presentation are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Words such as “outlook
Slide 3: nLIGHT 2021 Business Highlights
3 • Record annual revenues with 21% growth (year-over-year) – Full year growth (y-o-y) in all market segments (Microfabrication, Industrial, Aerospace and Defense) • Growth driven from key strategic areas – Industrial outside of China and Aerospace & Defense – 80% of 2021 revenue from outside of Chi
Slide 4: 2021 Revenue | 21% y-o-y growth in '21
4 2021 Revenue | 21% y-o-y growth in ‘21 – in line with historical CAGR YOY Growth $63 $87 $101 $139 $191 $177 $223 $270 $0 $50 $100 $150 $200 $250 $300 2014 2015 2016 2017 2018 2019 2020 2021 T h o u s a n d s CAGR 23% 37% 16% 37% 38% -8% 26% 21% nLIGHT Worldwide Revenue $ Millions
Slide 5: 2021 Revenue | non-China revenue grew 41% y-o-y
5 62% 60% 63% 64% 68% 80% 38% 40% 37% 36% 32% 20% $101 $139 $191 $177 $223 $270 $0 $50 $100 $150 $200 $250 $300 2016 2017 2018 2019 2020 2021 Percentages may not sum to 100% due to rounding. 2021 Revenue | non-China revenue grew 41% y-o-y to a record $215M China -22% Non-China +41% Geography 2021 vs
Slide 6: Quarterly Revenue | non-China revenue increased to 89%
6 71% 59% 60% 60% 60% 57% 60% 62% 64% 54% 67% 68% 67% 62% 60% 65% 72% 59% 69% 72% 75% 73% 81% 89% 29% 41% 40% 40% 40% 43% 40% 38% 36% 46% 33% 32% 33% 38% 40% 35% 28% 41% 31% 28% 25% 27% 19% 11% $22 $25 $26 $29 $30 $35 $37 $37 $42 $52 $51 $46 $42 $48 $44 $43 $43 $52 $62 $66 $61 $69 $72 $67 $0 $15 $30
Slide 7: Strategy | vertically integrated from semiconductor to beam control
7Percentages may not sum to 100% due to rounding. Strategy | vertically integrated from semiconductor to beam control nLIGHT Acquires Plasmo Industrietechnik real-time process monitoring solutions
Slide 8: Revenue | focused on growing applications
8 19% 15% 18% 24% 39% 39% 34% 41% 43% 43% 38% 35% 47% 44% 39% 32% 23% 26% $101 $139 $191 $177 $223 $270 $0 $50 $100 $150 $200 $250 $300 2016 2017 2018 2019 2020 2021 Percentages may not sum to 100% due to rounding. Revenue | focused on growing applications Microfabrication +36% Industrial +12% +66%
Slide 9: Revenue | by end market
9 19% 19% 17% 20% 18% 14% 14% 16% 18% 13% 20% 21% 22% 19% 26% 30% 39% 29% 42% 44% 40% 35% 38% 42% 28% 35% 33% 38% 38% 40% 42% 44% 45% 49% 41% 38% 43% 44% 43% 43% 37% 43% 35% 36% 35% 36% 37% 33% 51% 46% 50% 42% 44% 46% 45% 40% 37% 38% 39% 41% 35% 38% 30% 26% 24% 27% 23% 20% 25% 29% 24% 25% $22 $25 $2
Slide 10: Industrial Revenue | 57% y-o-y growth in non-China Industrial
10 $10 $12 $19 $0 $5 $10 $15 $20 Q419 Q420 Q421 Percentages may not sum to 100% due to rounding. Industrial Revenue | 57% y-o-y growth in non-China Industrial revenue in Q4 ‘21 Non-China Industrial Revenue $ Millions YOY Growth 22% 57% ~ 2x Increase
Slide 11: Financial Update
Financial Update
Slide 12: Summary Financial Results | Revenue and Gross Margin
12 Summary Financial Results | Revenue and Gross Margin Full Year and Q4 $ Millions; % of Revenue Q4 2020 Q4 2021 2020 2021 Total Revenue $65.7 $67.5 $222.8 $270.1 Products Revenue 51.7 50.9 184.8 206.2 Development Revenue 14.0 16.5 37.9 64.0 Gross Margin 29.9% 26.6% 26.6% 28.6% Products Margin 35.9
Slide 13: Gross Margin | Product and Development
13 Gross Margin | Product and Development 15% 24% 22% 29% 30% 31% 34% 33% 35% 34% 35% 36% 32% 33% 30% 23% 22% 25% 28% 30% 29% 29% 30% 27% 24% 24% 28% 32% 36% 36% 36% 37% 33% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% $0 $10 $20 $30 $40 $50 $60 $70 $80 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 14: Operating Expenses | R&D and SG&A
14 Operating Expenses (Non-GAAP) $ Millions; % of Revenue Note: Excluding stock-based compensation expense, amortization of purchased intangibles and acquisition and integration-related costs. See Appendix for a reconciliation to GAAP operating expenses. Operating Expenses | R&D and SG&A 4.3 4.7 5.0
Slide 15: Summary Financial Results | Profitability and Cash Flow
15 * See Appendix for reconciliation to most directly comparable GAAP measure Q4 2020 Q4 2021 2020 2021 Net Income (Loss) ($4.5) ($8.8) ($20.9) ($29.7) Non-GAAP Net Income (Loss)* 5.2 (0.2) 7.3 10.7 Net Income (Loss) Per Share (diluted) (0.12) (0.20) (0.55) (0.70) Non-GAAP Net Income (Loss) Per Shar
Slide 16: Strong Balance Sheet and Working Capital Management
16 Strong Balance Sheet and Working Capital Management $46 $49 $51 $53 $55 $59 $63 $71 $74 126 128 115 105 106 117 113 119 131 0 15 30 45 60 75 90 105 120 135 150 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 Q419 Q220 Q420 Q221 Q421 Inventory ($M) and Days of Inventory (DOI) Inventory DOI $27 $27 $24 $23
Slide 17: Outlook | Q1 2022
17 • Q1 2022 Revenues of $61 million to $67 million; midpoint of $64 million – Laser Products: approximately $49 million at midpoint – Advanced Development: approximately $15 million at midpoint • Q1 2022 Gross Margin of 21% to 25% – Laser Products: 26% to 30% – Advanced Development: approximately 6
Slide 18: Simply brilliant
Ve eece ee Simply brilliant
Slide 19: Appendix
Appendix
Slide 20: nLIGHT Income Statement Summary
20 nLight, Inc. (in thousands, except per share data) Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Revenue: Products $ 42,467 $ 51,705 $ 51,025 $ 46,162 $ 191,359 $ 41,861 $ 48,048 $ 43,814 $ 40,336 $ 174,059 $ 36,930 $ 45,104 $ 51,117 $ 51,690 $ 184,841 $ 47,335 $ 53,
Slide 21: GAAP to Non-GAAP Reconciliation | Operating Expenses
21 GAAP to Non-GAAP Reconciliation | Operating Expenses nLight, Inc. (in thousands, except per share data) Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals GAAP research and development ("R&D") expense $ 4,283 $ 4,898 $ 5,475 $ 6,398 $ 21,054 $ 6,422 $ 6,494 $ 6,402 $ 8,81
Slide 22: GAAP to Non-GAAP Reconciliation | Adjusted EBITDA, Net Income and EPS
22 (1) There is no income tax effect related to the stock-based compensation, acquisition and integration-related costs, and amortization of purchased intangibles adjustments due to the full valuation allowance in the U.S. GAAP to Non-GAAP Reconciliation | Adjusted EBITDA, Net Income and EPS nLight,
Slide 23: Supplemental Information | Key Revenue Metrics
23 Supplemental Information | Key Revenue Metrics Note: Percentages may not total to 100 due to rounding. nLight, Inc. (in thousands, except per share data) Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Q1 Q2 Q3 Q4 Totals Revenues by end market Industrial $ 19,146 $ 25,251 $ 20,890 $ 17,4
Slide 24: Supplemental Information | Revenue by power level
24 Supplemental Information | Revenue by power level 2% 4% 13% 14% 17% 24% 30% 27% 24% 35% 40% 47% 49% 54% 58% 47% 54% 51% 50% 40%40% 41% 36% 39% 40% 45% 39% 43% 49% 44% 43% 51% 57% 48% 39% 39% 39% 35% 34% 39% 29% 32% 23% 29% 60% 59% 64% 61% 58% 51% 49% 43% 34% 32% 27% 22% 19% 17% 20% 14% 12% 11% 9%