nLIGHT, Inc. Announces Second Quarter 2024 Results

About this update from Nlight, Inc.

Revenues of $50.5 million for the second quarter of 2024 CAMAS, Wash. --(BUSINESS WIRE)-- nLIGHT, Inc. (Nasdaq: LASR), a leading provider of high-power semiconductor and fiber lasers used in the industrial, microfabrication, and aerospace and defense markets, today reported financial results for the second quarter of 2024. “Second quarter revenue of $50.5 million was at the upper end of our guidance range and increased 13% compared to the first quarter,” commented Scott Keeney , nLIGHT’s President & Chief Executive Officer. “Strong execution in directed energy and in existing laser sensing programs resulted in 26% quarter-over-quarter growth in our Aerospace & Defense business. We also announced a strategic partnership with EOS, an industry leader in additive manufacturing. Additive manufacturing remains a key growth area for nLIGHT and we believe our work with EOS positions us even better for long-term growth in this market.” Mr. Keeney continued, “Higher volumes and a more favorable mix of business during the second quarter enabled us to increase products gross margin to 30%, above the high end of our guidance range. We generated approximately $7 million from cash flow from operations during the first six months of the year and we ended the quarter with approximately $115 million of cash and investments with no debt.” Second Quarter 2024 Financial Highlights Three Months Ended June 30 , (In thousands, except percentages) 2024 2023 % Change Revenues $ 50,511 $ 53,304 (5.2)% Gross margin 23.5 % 22.7 % Loss from operations $ (12,690 ) $ (11,686 ) (8.6)% Operating margin (25.1 )% (21.9 )% Net loss $ (11,729 ) $ (8,823 ) (32.9)% Adjusted EBITDA(1) $ (1,599 ) $ (150 ) NM* Adjusted EBITDA, as a percentage of revenues (3.2 )% (0.3 )% (1) A reconciliation of the non-GAAP metrics presented here to the most directly comparable GAAP metric has been provided in the tables included at the end of this release. * Not meaningful Revenues of $50.5 million for the second quarter of 2024 were down 5.2% compared to $53.3 million for the second quarter of 2023. Gross margin was 23.5% for the second quarter of 2024 compared to 22.7% for the second quarter of 2023. GAAP net loss for the second quarter of 2024 was $11.7 million , or $0.25 per diluted share, compared to net loss of $8.8 million , or $0.19 per diluted share, for the second quarter of 2023. Non-GAAP net loss for the second quarter of 2024 was $4.6 million , or $0.10 per diluted share, compared to non-GAAP net loss of $0.9 million , or $0.02 per diluted share, for the second quarter of 2023. Reconciliations of the non-GAAP metrics presented here to the most directly comparable GAAP metric have been provided in the tables included at the end of this release. Outlook For the third quarter of 2024, nLIGHT expects revenues to be in the range of $53 million to $58 million . The midpoint of $55.5 million includes Laser Products revenue of approximately $39.5 million and Advanced Development revenue of approximately $16 million . nLIGHT expects overall gross margin to be in the range of 22% to 26%, with Laser Products gross margin in the range of 28% to 32% and Advanced Development gross margin of approximately 8%. nLIGHT expects Adjusted EBITDA to be in the range of ($2) million to $1 million . We have not reconciled our outlook for Adjusted EBITDA because unrealized and realized foreign exchange gains and losses cannot be reasonably calculated or predicted nor can the probable significance be determined at this time. Accordingly, a reconciliation is not available without unreasonable effort. Investor Conference Call at 2:00 p.m. Pacific Time , Thursday, August 1, 2024 Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-844-282-4705 ( U.S. , toll-free) or +1-412-317-5625 (international and toll), with the conference title: nLIGHT Second Quarter 2024 Earnings. The call can also be accessed via the web by going to nLIGHT’s Investor Relations page at http://investors.nlight.net . Use of Non-GAAP Financial Results In addition to U.S. GAAP results, this press release contains non-GAAP financial results, including Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted. We use Adjusted EBITDA to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA is a meaningful measure of performance as it is commonly utilized by us and the investment community to analyze operating performance in our industry. Similarly, we believe that providing non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted, is useful to our investors as they present an informative supplemental view of our results from period to period by removing the effect of stock-based compensation expense and other non-recurring items. However, the non-GAAP metrics presented herein are specific to us and may not be comparable to similar metrics disclosed by other companies because of differing methods used by other companies in calculating them. We define Adjusted EBITDA as net income (loss) adjusted for income tax expense (benefit), other non-operating income or expense, interest income or expense, depreciation and amortization, stock-based compensation, acquisition and integration-related costs, and other non-recurring items as determined by management, as applicable. We define non-GAAP net income (loss) as GAAP net income (loss) adjusted for stock-based compensation, amortization of purchased intangibles, acquisition and integration-related costs, and other non-recurring items as determined by management, as applicable. We define non-GAAP net income (loss) per share, basic and diluted, as non-GAAP net income (loss) divided by the weighted-average number of shares outstanding during the respective period plus the dilutive effect of any common stock equivalents during the period in the case of non-GAAP net income (loss) per share, diluted. Tables presenting the reconciliation of net loss to Adjusted EBITDA, as well as the reconciliation of GAAP to non-GAAP net income (loss) and GAAP to non-GAAP net income (loss) per share, basic and diluted, are included at the end of this press release. Safe Harbor Statement 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,” “guidance,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions may identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected revenues, gross margin, and Adjusted EBITDA, and our business strategy and ability to profitably grow our business, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including but not limited to our ability to compete successfully in the markets for our products; changes in the markets we serve or in the global economy; our ability to increase our volumes and decrease our costs to offset potential declines in the average selling prices of our products; rapid technological changes in the markets that we participate in; our ability to develop and maintain products that can achieve market acceptance; our ability to generate sufficient revenues to achieve or maintain profitability in the future; our high levels of fixed costs and inventory and their effect on our gross profits and results of operations if demand for our products declines or we maintain excess inventory levels; our ability to manage growth and spending during economic downturns; our manufacturing capacity and operations and their suitability for future levels of demand; our reliance on third parties to manufacture certain of our products and product components; our reliance on a small number of customers for a significant portion of our revenues; our ability to manage risks associated with international customers and operations; the effect of government export and import controls on our ability to compete in international markets; our ability to protect our proprietary technology and intellectual property rights; fluctuations in our quarterly results of operations and other operating measures; and the effect on our business of claims, lawsuits, government investigations, other legal or regulatory proceedings, or commercial or contractual disputes that we are or may become involved in. Additional information concerning these and other factors can be found in nLIGHT's filings with the Securities and Exchange Commission (the “SEC”), including other risks, relevant factors and uncertainties identified in the “Risk Factors” section of nLIGHT's most recent Annual Report on Form 10-K or subsequent filings with the SEC . nLIGHT undertakes no obligation to update publicly or revise any forward-looking statements contained herein to reflect future events or developments, except as required by law. The nLIGHT logo and “nLIGHT” are registered trademarks or trademarks of nLIGHT, Inc. in various jurisdictions. About nLIGHT nLIGHT, Inc. is a leading provider of high-power semiconductor and fiber lasers for industrial, microfabrication, aerospace and defense applications. Our lasers are changing not only the way things are made but also the things that can be made. Headquartered in Camas, Washington , nLIGHT employs over 900 people with operations in the U.S. , China , Finland , Korea and Italy . For more information, please visit www.nlight.net . nLIGHT, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended June 30 , Six Months Ended June 30 , 2024 2023 2024 2023 Revenue: Products $ 34,458 $ 39,592 $ 63,828 $ 80,699 Development 16,053 13,712 31,210 26,696 Total revenue 50,511 53,304 95,038 107,395 Cost of revenue: Products 24,011 28,272 47,242 55,798 Development 14,650 12,924 28,458 25,226 Total cost of revenue(1) 38,661 41,196 75,700 81,024 Gross profit 11,850 12,108 19,338 26,371 Operating expenses: Research and development(1) 11,736 12,004 22,395 23,305 Sales, general, and administrative(1) 12,804 11,790 24,351 22,959 Total operating expenses 24,540 23,794 46,746 46,264 Loss from operations (12,690 ) (11,686 ) (27,408 ) (19,893 ) Other income: Interest income, net 459 350 914 687 Other income, net 622 1,057 1,263 1,461 Loss before income taxes (11,609 ) (10,279 ) (25,231 ) (17,745 ) Income tax expense 120 (1,456 ) 264 (1,192 ) Net loss $ (11,729 ) $ (8,823 ) $ (25,495 ) $ (16,553 ) Net loss per share, basic $ (0.25 ) $ (0.19 ) $ (0.54 ) $ (0.36 ) Net loss per share, diluted $ (0.25 ) $ (0.19 ) $ (0.54 ) $ (0.36 ) Shares used in per share calculations: Basic 47,658 45,717 47,450 45,580 Diluted 47,658 45,717 47,450 45,580 (1)Includes stock-based compensation as follows: Three Months Ended June 30 , Six Months Ended June 30 , 2024 2023 2024 2023 Cost of revenues $ 659 $ 663 $ 1,200 $ 1,363 Research and development 2,175 2,826 3,788 4,924 Sales, general, and administrative 4,169 4,026 7,446 6,731 $ 7,003 $ 7,515 $ 12,434 $ 13,018 nLIGHT, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) As of June 30, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 49,386 $ 53,210 Marketable Securities 65,173 59,672 Accounts receivable, net 32,192 39,585 Inventory 52,321 52,160 Prepaid expenses and other current assets 13,432 15,927 Total current assets 212,504 220,554 Restricted cash 257 256 Lease right-of-use assets 11,934 12,616 Property, plant and equipment, net 49,428 52,300 Intangible assets, net 1,130 1,652 Goodwill 12,377 12,399 Other assets, net 6,669 7,026 Total assets $ 294,299 $ 306,803 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 13,360 $ 12,166 Accrued liabilities 12,894 12,556 Deferred revenue 5,651 4,849 Current portion of lease liabilities 2,930 3,181 Total current liabilities 34,835 32,752 Non-current income taxes payable 5,505 5,391 Long-term lease liabilities 10,452 10,978 Other long-term liabilities 3,975 3,263 Total liabilities 54,767 52,384 Stockholders' equity: Common stock - par value 16 16 Additional paid-in capital 531,822 521,184 Accumulated other comprehensive loss (2,507 ) (2,477 ) Accumulated deficit (289,799 ) (264,304 ) Total stockholders’ equity 239,532 254,419 Total liabilities and stockholders’ equity $ 294,299 $ 306,803 nLIGHT, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Six Months Ended June 30 , 2024 2023 Cash flows from operating activities: Net loss $ (25,495 ) $ (16,553 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 6,240 6,230 Amortization 2,241 1,768 (Increase) reduction in carrying amount of right-of-use assets 669 292 Provision for losses on (recoveries of) accounts receivable 467 (2 ) Stock-based compensation 12,434 13,018 Loss on disposal of property, plant and equipment 44 — Changes in operating assets and liabilities: Accounts receivable, net 6,869 (8,449 ) Inventory (167 ) 2,197 Prepaid expenses and other current assets 2,479 951 Other assets, net (1,399 ) (319 ) Accounts payable 1,438 (941 ) Accrued and other long-term liabilities 1,134 158 Deferred revenues 818 (46 ) Lease liabilities (764 ) (374 ) Non-current income taxes payable 137 (1,393 ) Net cash provided by operating activities 7,145 (3,463 ) Cash flows from investing activities: Purchases of property, plant and equipment (3,702 ) (1,640 ) Purchase of marketable securities (54,506 ) (59,273 ) Proceeds from maturities and sales of marketable securities 49,265 50,089 Net cash used in investing activities (8,943 ) (10,824 ) Cash flows from financing activities: Proceeds from employee stock plan purchases 1,355 1,220 Proceeds from stock option exercises 137 332 Tax payments related to stock award issuances (3,288 ) (3,132 ) Net cash used in financing activities (1,796 ) (1,580 ) Effect of exchange rate changes on cash (229 ) (139 ) Net increase (decrease) in cash, cash equivalents and restricted cash (3,823 ) (16,006 ) Cash, cash equivalents and restricted cash, beginning of period 53,466 58,078 Cash, cash equivalents and restricted cash, end of period $ 49,643 $ 42,072 Supplemental disclosures: Cash paid for interest, net $ 20 $ 20 Cash paid for income taxes 307 262 Operating cash outflows from operating leases 2,042 1,931 Right-of-use assets obtained in exchange for lease liabilities 882 1,197 Accrued purchases of property, equipment and patents 518 1,157 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 49,386 $ 41,818 Restricted cash 257 254 Total cash, cash equivalents, and restricted cash $ 49,643 $ 42,072 nLIGHT, Inc. Reconciliation of GAAP Financial Metrics to Non-GAAP (In thousands, except per share data) (Unaudited) Reconciliation of Net Loss to Adjusted EBITDA Three Months Ended June 30 , Six Months Ended June 30 , 2024 2023 2024 2023 Net loss $ (11,729 ) $ (8,823 ) $ (25,495 ) $ (16,553 ) Income tax expense 120 (1,456 ) 264 (1,192 ) Other income, net (622 ) (1,057 ) (1,263 ) (1,461 ) Interest income, net (459 ) (350 ) (914 ) (687 ) Depreciation and amortization 4,088 4,021 8,481 7,998 Stock-based compensation 7,003 7,515 12,434 13,018 Adjusted EBITDA $ (1,599 ) $ (150 ) $ (6,493 ) $ 1,123 Reconciliation of GAAP to Non-GAAP Net Loss, and GAAP to Non-GAAP Net Loss per Share, Basic and Diluted Three Months Ended June 30 , Six Months Ended June 30 , 2024 2023 2024 2023 Net loss $ (11,729 ) $ (8,823 ) $ (25,495 ) $ (16,553 ) Add back: Stock-based compensation(1) 7,003 7,515 12,434 13,018 Amortization of purchased intangibles(1) 148 384 297 768 Non-GAAP net loss (4,578 ) (924 ) (12,764 ) (2,767 ) GAAP weighted-average shares outstanding 47,658 45,717 47,450 45,580 Participating securities — — — — Non-GAAP weighted-average number of shares, basic 47,658 45,717 47,450 45,580 Dilutive effect of common stock equivalents — — — — Non-GAAP weighted-average number of shares, diluted 47,658 45,717 47,450 45,580 Non-GAAP net loss per share, basic and diluted $ (0.10 ) $ (0.02 ) $ (0.27 ) $ (0.06 ) (1) There is no income tax effect related to the stock-based compensation and amortization of purchased intangibles adjustments due to the full valuation allowance in the United States . View source version on businesswire.com : https://www.businesswire.com/news/home/20240801695121/en/ Joseph Corso Chief Financial Officer nLIGHT, Inc. (360) 566-4460 [email protected] Source: nLIGHT, Inc.

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