Third Quarter 2026
November 3, 2026 10:00 am ETBy phone
877-407-6184 in the US or 201-389-0877 internationally
A live webcast of the call will be available and archived on the investor relations section of the Company's website at investor.ipgphotonics.com
Q3'26 Summary$288M
Revenue
Delivered double-digit year-over-year revenue growth for the fourth consecutive quarter
Industrial Solutions: Strong growth in welding and additive manufacturing applications
$52M Adj. EBITDA
Advanced Solutions: Growth in defense and semiconductor sales, driven by our key strategic initiatives
$0.61
Adj. EPS
Gross margin increased YoY in Q3, benefiting from lower product costs and $5M in net tariff refunds recorded in the period
Delivered YoY growth in adjusted EBITDA and adjusted EPS
3
Revenue by ApplicationQ3'26
Q3'25
Y/Y
Q2'26
Q/Q
Industrial SolutionsAdvanced Solutions
YoY growth was driven by welding and additive manufacturing.
Sequential growth was driven by cutting, welding, and additive manufacturing.
Higher defense and semiconductor sales drove YoY and sequential growth.
$239.5M
$48.0M
$214.7M
$36.1M
12%
33%
$237.0M
$41.5M
1%
15%
$287.5M
$250.8M
15%
$278.6M 3%
4
Revenue by Geography
North AmericaSales grew sequentially and YoY with sequential growth driven by defense, medical, cleaning, cutting, and additive manufacturing while YoY growth was driven by welding and defense.
EuropeRevenue decreased slightly on a YoY basis, but improved sequentially, driven by increased sales in cutting, welding, and semiconductor applications.
83
72
62 63
59 62
In millions
122
139
139
AsiaSales were flat sequentially, but up YoY, driven by higher welding revenue.
North America Europe Asia
Q3 '25 Q2' 26 Q3' 26
5
Financial Review
In millions except per share | Q3'26 | Q3'25 | Y/Y | Q2'26 | Q/Q |
Revenue | $287.5 | $250.8 | 15% | $278.6 | 3% |
Gross margin | 40.7% | 39.5% | +120 bps | 40.4% | +30 bps |
Adjusted gross margin | 41.0% | 39.8% | +120 bps | 40.7% | +30 bps |
Adjusted operating expenses | $91.2 | $87.4 | 4% | $89.4 | 2% |
Operating income (loss) | $20.8 | $7.9 | NM | $4.5 | NM |
Adjusted operating income (loss) | $26.5 | $12.4 | 114% | $23.9 | 11% |
Net income (loss) | $20.3 | $7.5 | 171% | $5.2 | 290% |
Adjusted net income (loss) | $26.3 | $14.8 | 78% | $24.7 | 6% |
Earnings (loss) per diluted share | $0.47 | $0.18 | 161% | $0.12 | 292% |
Adjusted EPS | $0.61 | $0.35 | 74% | $0.58 | 5% |
Adjusted EBITDA | $51.5 | $37.0 | 39% | $48.5 | 6% |
NM - not meaningful |
Revenue increased YoY, marking a fourth consecutive quarter of double-digit revenue growth.
GAAP and adjusted gross margin improved on both a YoY and sequential basis, driven by lower product costs and $5M in net tariff refunds recorded in the period.
Operating expenses were higher sequentially, with Q2 benefiting from a German R&D tax credit of $1.8 million. The YoY increase in operating expenses was primarily driven by ongoing investments in growth opportunities.
o 2026 IPG PholonKs 6
Balance Sheet and Cash Flow SummaryIn millions | Q3'26 |
Cash and Short-term Investments | $926 |
Long-term Investments | $- |
Inventories | $338 |
Total Debt | $- |
Net Income to IPG | $20 |
Cash from Operations | $46 |
Depreciation and Amortization | $16 |
Capital Expenditures | $17 |
Stock Repurchases | $3 |
Days Sales Outstanding | 61 |
61
In millions
47
YTD 2025
-14
79
54
25
YTD 2026
Cash from operations CapEx Free cash flow
Free cash flow is defined as cash flow from operations less capital expenditures
Q4 '26 Outlook ADDITIONAL DETAILSRevenue | $265M - $295M |
Adjusted Gross Margin | 37.0% - 40.0% |
Adjusted Operating Expenses | $91M - $94M |
Adjusted EPS | $0.30 - $0.60 |
Adjusted EBITDA | $33M - $50M |
Tax Rate | ~25% |
Diluted common shares | ~43M |
Q3 book-to-bill was approximately 1
Our revenue outlook factors in assumptions of a generally stable operating environment and no contribution from the acquisition of Lumibird Medical
Q4 gross margin guidance includes current estimate for tariffs and assumes no refunds
Save The DateNew York City
on Tuesday, March 2, 2027
2027 Investor DayJoin us as we share:
A deeper view of our strategy to generate profitable growth
How we are solving complex challenges with innovative laser-based solutions
An introduction of our long-term financial targets Details will be announced soon
9
Appendix: Reconciliation of Non-GAAP Financial MeasuresUse of Non-GAAP Adjusted Financial Information
We refer to certain financial measures that are not recognized under United States generally accepted accounting principles ("GAAP") and are provided as supplemental information to enhance understanding of the Company's financial performance. These measures should not be considered as a substitute for, or superior to, GAAP financial measures. The following information provides the definition of adjusted gross profit, adjusted gross margin, adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, adjusted earnings per share (EPS), and adjusted tax rate as presented, which are financial measures that are not calculated or presented in accordance with GAAP, and reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided adjusted gross profit, adjusted gross margin, adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS, and adjusted tax rate as supplemental information and in addition to the financial measures presented by the Company that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measure presented by the Company.
Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. Specifically, these non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts.
In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies. Management may, however, utilize other measures to illustrate performance in the future. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.
We have not provided a quantitative reconciliation of forward-looking Non-GAAP adjusted earnings per diluted share and adjusted EBITDA to their most directly comparable GAAP financial measures because we are unable to estimate with reasonable certainty the ultimate timing or amount of certain significant items without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact adjusted earnings per diluted share and adjusted EBITDA. This includes items that have not yet occurred, are out of the Company's control, cannot be reasonably predicted and/or for which there would not be any meaningful adjustment or difference. For the same reasons, the Company is unable to address the probable significance of the unavailable information.
10
Three Months Ended September 30,
Nine Months Ended September 30,
Appendix: Reconciliation of Non-GAAP Financial Measures(In thousands, except percentages) | 2026 | 2025 | 2026 | 2025 |
Gross profit | $ 117,054 | $ 99,005 | $ 329,077 | $ 282,390 |
Gross margin | 40.7 % | 39.5 % | 39.6 % | 38.7 % |
Amortization of acquisition-related intangibles | 720 | 851 | 2,360 | 2,928 |
Acquisition and integration charges | - | - | - | 482 |
Adjusted gross profit | $ 117,774 | $ 99,856 | $ 331,437 | $ 285,800 |
Adjusted gross margin | 41.0 % | 39.8 % | 39.9 % | 39.2 % |
We define adjusted gross profit as reported gross profit, adjusted for non-recurring, infrequent, or unusual changes. We define adjusted gross margin as adjusted gross profit divided by total revenue.
Three Months Ended September 30,
Nine Months Ended September 30,
Appendix: Reconciliation of Non-GAAP Financial Measures(In thousands) | 2026 | 2025 | 2026 | 2025 |
Operating expenses | $ 96,277 | $ 91,150 | $ 311,505 | $ 272,604 |
Amortization of acquisition-related intangibles | 1,231 | 1,551 | 3,701 | 4,570 |
Acquisition and integration charges | 151 | 246 | 987 | 1,823 |
Impairment charges | 231 | - | 17,805 | - |
Restructuring charges | 149 | 425 | 500 | 425 |
Settlement and fees of litigation matters | - | - | 14,435 | - |
Loss on foreign exchange 3,275 1,504 2,293 7,013
Adjusted operating expenses $ 91,240 $ 87,424 $ 271,784 $ 258,773
We define adjusted operating expenses as reported operating expenses, adjusted for non-recurring, infrequent, or unusual charges.
Three Months Ended September 30,
Nine Months Ended September 30,
Appendix: Reconciliation of Non-GAAP Financial Measures(In thousands) | 2026 | 2025 | 2026 | 2025 |
Operating income | $ 20,777 | $ 7,855 | $ 17,572 | $ 9,786 |
Amortization of acquisition-related intangibles | 1,951 | 2,402 | 6,061 | 7,498 |
Acquisition and integration charges | 151 | 246 | 987 | 2,305 |
Impairment charges | 231 | - | 17,805 | - |
Restructuring charges | 149 | 425 | 500 | 425 |
Settlement and fees of litigation matters | - | - | 14,435 | - |
Loss on foreign exchange | 3,275 | 1,504 | 2,293 | 7,013 |
Adjusted operating income | $ 26,534 | $ 12,432 | $ 59,653 | $ 27,027 |
We define adjusted operating income as reported income from operations, adjusted for non-recurring, infrequent, or unusual charges.
Three Months Ended September 30,
Nine Months Ended September 30,
Appendix: Reconciliation of Non-GAAP Financial Measures(In thousands) | 2026 | 2025 | 2026 | 2025 |
Net income | $ 20,273 | $ 7,463 | $ 27,099 | $ 17,826 |
Interest income, net | (7,688) | (7,283) | (21,720) | (22,728) |
Provision for income taxes | 8,142 | 8,191 | 14,876 | 16,714 |
Depreciation | 12,986 | 12,392 | 38,447 | 36,120 |
Amortization | 2,976 | 3,240 | 8,930 | 10,679 |
EBITDA | 36,689 | 24,003 | 67,632 | 58,611 |
Impairment charges | 231 | - | 17,805 | - |
Stock based compensation | 11,022 | 10,780 | 31,597 | 32,834 |
Restructuring charges | 149 | 425 | 500 | 425 |
Acquisition and integration charges | 151 | 246 | 987 | 2,305 |
Settlement and fees of litigation matters | - | - | 14,435 | - |
Loss on foreign exchange | 3,275 | 1,504 | 2,293 | 7,013 |
Adjusted EBITDA | $ 51,517 | $ 36,958 | $ 135,249 | $ 101,188 |
We define EBITDA as net income plus interest expense (income), provision for income taxes, depreciation expense, and amortization expense.
We define Adjusted EBITDA as EBITDA adjusted for non-recurring, infrequent, or unusual charges, and other adjustments that the Company believes appropriate.
Three Months Ended September 30, Nine Months Ended September 30,
Appendix: Reconciliation of Non-GAAP Financial Measures(In thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | |
Net income | $ 20,273 | $ | 7,463 | $ 27,099 | $ 17,826 |
Impairment charges | 231 | - | 17,805 | - | |
Amortization of acquisition-related intangibles | 1,951 | 2,402 | 6,061 | 7,498 | |
Restructuring charges | 149 | 425 | 500 | 425 | |
Acquisition and integration charges | 151 | 246 | 987 | 2,305 | |
Settlement and fees of litigation matters | - | - | 14,435 | - | |
Loss on foreign exchange | 3,275 | 1,504 | 2,293 | 7,013 | |
Certain discrete tax items | 949 | 3,414 | 84 | 8,303 | |
Tax impact of non-GAAP adjustments | (711) | (613) | (5,337) | (2,471) | |
Adjusted net income | $ 26,268 | $ 14,841 | $ 63,927 | $ 40,899 | |
Adjusted net earnings per diluted share | $ 0.61 | $ 0.35 | $ 1.49 | $ 0.96 | |
Weighted average diluted shares outstanding | 42,840 | 42,556 | 42,904 | 42,659 | |
We define adjusted net income as reported net income, adjusted for non-recurring, infrequent, or unusual changes, and other adjustments that the Company believes appropriate.
We define adjusted EPS as adjusted net income divided by the weighted-average diluted shares outstanding.
Appendix: Reconciliation of Non-GAAP Financial MeasuresThree Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025
Tax Rate | 29 % | 52 % | 35 % | 48 % |
Discrete tax items | (3)% | (22)% | - % | (24)% |
Net impact of non-GAAP adjustments | (3)% | (3)% | (11)% | (3)% |
Adjusted tax Rate | 23 % | 27 % | 24 % | 21 % |
We define adjusted tax rate as the GAAP tax rate, adjusted for discrete tax items and the net impact of non-GAAP adjustments.
ContactEugene Fedotoff
Senior Director, Investor Relations IPG Photonics Corporation
508-597-4713
efedotoff@ipgphotonics.com
| Attention: This is an excerpt of the original content. To continue reading it, access the original document here. |