Slide 1: Earnings Presentation Q2 2022
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 Q2 2022 August 4, 2022
Slide 2: Forward-looking statements
2 Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Words such as “outlook,” “guida
Slide 3: Q2 22 Business Highlights
3 • Solid Q2 financial performance – Total revenue of $60.8 million was in the range of guidance provided in early May • Product revenue of $48.2 million was at the midpoint of guidance – Continued shift of sales outside of China, which grew 12% y-o-y and accounted for 92% of total revenue – Gross m
Slide 4: Quarterly Revenue – Geography
4 71% 59% 60% 60% 60% 57% 60% 62% 64% 54% 67% 68% 67% 62% 60% 65% 72% 59% 69% 72% 75% 73% 81% 89% 89% 92% 29% 41% 40% 40% 40% 43% 40% 38% 36% 46% 33% 32% 33% 38% 40% 35% 28% 41% 31% 28% 25% 27% 19% 11% 11% 8% $22 $25 $26 $29 $30 $35 $37 $37 $42 $52 $51 $46 $42 $48 $44 $43 $43 $52 $62 $66 $61 $69 $72
Slide 5: Quarterly Revenue – By Market
5 19% 19% 17% 20% 18% 14% 14% 16% 18% 13% 20% 21% 22% 19% 26% 30% 39% 29% 42% 44% 40% 35% 38% 42% 36% 37% 28% 35% 33% 38% 38% 40% 42% 44% 45% 49% 41% 38% 43% 44% 43% 43% 37% 43% 35% 36% 35% 36% 37% 33% 37% 36% 51% 46% 50% 42% 44% 46% 45% 40% 37% 38% 39% 41% 35% 38% 30% 26% 24% 27% 23% 20% 25% 29% 24
Slide 6: Non-China Industrial Revenue
6 $9 $14 $20 $0 $5 $10 $15 $20 $25 Q220 Q221 Q222 Industrial Revenue | 43% y-o-y growth in non-China Industrial revenue in Q2 ‘22 Non-China Industrial Revenue $ Millions YOY Growth 54% 43% ~ 2x Increase
Slide 7: Financial Update
Financial Update
Slide 8: Summary Financial Results | Revenue and Gross Margin
8 Summary Financial Results | Revenue and Gross Margin Quarterly $ Millions; % of Revenue Q2 2021 Q2 2022 Total Revenue $69.1 $60.8 Products Revenue 53.6 48.2 Development Revenue 15.5 12.6 Gross Margin 29.4% 25.3% Products Margin 36.1% 30.1% Development Margin 6.5% 7.0%
Slide 9: Gross Margin | Product and Development
9 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% 25% 25% 24% 24% 28% 32% 36% 36% 36% 37% 33% 30% 30% 0% 5% 10% 15% 20% 25% 30% 35% 40% $0 $10 $20 $30 $40 $50 $60 $70 $80 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 10: Operating Expenses (Non-GAAP)
10 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 11: Summary Financial Results | Profitability and Cash Flow
11 * See Appendix for reconciliation to most directly comparable GAAP measure Summary Financial Results | Profitability and Cash Flow Quarterly $ Millions; % of Revenue Q2 2021 Q2 2022 Net Income (Loss) ($7.9) ($10.3) Non-GAAP Net Income (Loss)* 4.4 (3.3) Net Income (Loss) Per Share (diluted) (0.19)
Slide 12: Strong Balance Sheet and Working Capital Management
12 Strong Balance Sheet and Working Capital Management $51 $53 $55 $59 $63 $71 $74 $77 $80 115 105 106 117 113 119 131 141 157 0 20 40 60 80 100 120 140 160 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 Q220 Q420 Q221 Q421 Q222 Inventory ($M) and Days of Inventory (DOI) Inventory DOI $24 $23 $32 $32 $37 $3
Slide 13: Outlook | Q3 2022
13 • Q3 2022 Revenues of $60 million to $66 million; midpoint of $63 million – Laser Products: approximately $49 million at midpoint – Advanced Development: approximately $14 million at midpoint • Q3 2022 Gross Margin of 21% to 25% – Laser Products: 26% to 30% – Advanced Development: approximately 6
Slide 14: Simply brilliant
Ve eece ee Simply brilliant
Slide 15: Appendix
Appendix
Slide 16: Quarterly GAAP financial results
16 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 Q1 Q2 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 $
Slide 17: Non-GAAP operating expense reconciliation
17 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 Q1 Q2 Totals GAAP research and development ("R&D") expense $ 4,283 $ 4,898 $ 5,475 $ 6,398 $ 21,054 $ 6,422 $ 6,494 $ 6,402 $ 8,819 $ 28,137 $ 8,538 $ 9,472 $ 11,126 $ 12
Slide 18: Adjusted EBITDA reconciliation
18 nLight, Inc. (in thousands, except per share data) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Total Net income (loss) $ 2,916 $ 4,653 $ 4,009 $ 2,360 $ 13,938 $ (1,235) $ (155) $ (778) $ (10,716) $ (12,884) $ (7,475) $ (6,830) $ (2,110) $ (4,517) $ (20,932) $ (6
Slide 19: Revenues by end market
19 nLight, Inc. 2022 (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 Q1 Q2 Totals Revenues by end market Industrial $ 19,146 $ 25,251 $ 20,890 $ 17,476 $ 82,762 $ 18,124 $ 20,920 $ 18,977 $ 18,647 $ 76,669 $ 15,990 $ 22,630 $ 21,880 $
Slide 20: Fiber Laser Revenue by Power Level
20 2% 4% 13% 14% 17% 24% 30% 27% 24% 35% 40% 47% 49% 54% 58% 47% 54% 51% 50% 40% 39% 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% 26% 19% 60% 59% 64% 61% 58% 51% 49% 43% 34% 32% 27% 22% 19% 17% 20% 14% 12% 11% 9% 14% 17% 17% 27% 31% 35% 41% 0% 10