nLIGHT, Inc. Announces Third Quarter 2024 Results

About this update from Nlight, Inc.

Revenues of $56.1 million for the third 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 third quarter of 2024. "Driven by record results in Aerospace & Defense, third quarter revenue of $56.1 million was above the midpoint of our guidance range and increased 11% compared to the third quarter of 2023,” commented Scott Keeney , nLIGHT’s President & Chief Executive Officer. “Strong execution across multiple programs in both directed energy and laser sensing resulted in record Aerospace & Defense product revenue during the quarter, and we remain well-positioned for near- and long-term growth in the Aerospace & Defense market.” Mr. Keeney continued, “A strong growth quarter in Microfabrication coupled with higher A&D products revenue enabled us to increase products gross margin to 29%, an improvement of approximately 500 basis points compared to the third quarter of 2023. Our balance sheet remains strong as we ended the quarter with approximately $107 million in cash and investments with no debt.” Third Quarter 2024 Financial Highlights Three Months Ended September 30 , (In thousands, except percentages) 2024 2023 % Change Revenues $ 56,129 $ 50,634 10.9 % Gross margin 22.4 % 19.6 % Loss from operations $ (11,799 ) $ (12,531 ) 5.8 % Operating margin (21.0 )% (24.7 )% Net loss $ (10,335 ) $ (11,879 ) 13.0 % Adjusted EBITDA(1) $ (994 ) $ (1,919 ) NM* Adjusted EBITDA, as a percentage of revenues (1.8 )% (3.8 )% (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 $56.1 million for the third quarter of 2024 were up 10.9% compared to $50.6 million for the third quarter of 2023. Gross margin was 22.4% for the third quarter of 2024 compared to 19.6% for the third quarter of 2023. GAAP net loss for the third quarter of 2024 was $10.3 million , or $0.21 per diluted share, compared to net loss of $11.9 million , or $0.26 per diluted share, for the third quarter of 2023. Non-GAAP net loss for the third quarter of 2024 was $3.7 million , or $0.08 per diluted share, compared to non-GAAP net loss of $4.9 million , or $0.10 per diluted share, for the third 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 fourth quarter of 2024, nLIGHT expects revenues to be in the range of $49 million to $54 million . The midpoint of $51.5 million includes Laser Products revenue of approximately $36.5 million and Advanced Development revenue of approximately $15 million . nLIGHT expects overall gross margin to be in the range of 17% to 21%, with Laser Products gross margin in the range of 21% to 25% and Advanced Development gross margin of approximately 8%. nLIGHT expects Adjusted EBITDA to be in the range of ($5) million to ($2) 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, November 7, 2024 Parties interested in listening to nLIGHT’s quarterly conference call may do so by dialing 1-800-579-2543 ( U.S. , toll-free) or +1-785-424-1789 (international and toll), with the conference title: nLIGHT Third 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 September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 Revenue: Products $ 41,132 $ 38,103 $ 104,960 $ 118,802 Development 14,997 12,531 46,207 39,227 Total revenue 56,129 50,634 151,167 158,029 Cost of revenue: Products 29,286 29,015 76,528 84,813 Development 14,293 11,681 42,751 36,907 Total cost of revenue(1) 43,579 40,696 119,279 121,720 Gross profit 12,550 9,938 31,888 36,309 Operating expenses: Research and development(1) 11,328 10,744 33,723 34,049 Sales, general, and administrative(1) 13,021 11,725 37,372 34,684 Total operating expenses 24,349 22,469 71,095 68,733 Loss from operations (11,799 ) (12,531 ) (39,207 ) (32,424 ) Other income: Interest income, net 394 303 1,308 990 Other income, net 1,331 536 2,594 1,997 Loss before income taxes (10,074 ) (11,692 ) (35,305 ) (29,437 ) Income tax expense 261 187 525 (1,005 ) Net loss $ (10,335 ) $ (11,879 ) $ (35,830 ) $ (28,432 ) Net loss per share, basic $ (0.21 ) $ (0.26 ) $ (0.75 ) $ (0.62 ) Net loss per share, diluted $ (0.21 ) $ (0.26 ) $ (0.75 ) $ (0.62 ) Shares used in per share calculations: Basic 48,133 46,403 47,679 45,857 Diluted 48,133 46,403 47,679 45,857 (1)Includes stock-based compensation as follows: Three Months Ended September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 Cost of revenues $ 629 $ 508 $ 1,829 $ 1,871 Research and development 2,046 2,613 5,834 7,537 Sales, general, and administrative 3,852 3,506 11,298 10,237 $ 6,527 $ 6,627 $ 18,961 $ 19,645 nLIGHT, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) As of September 30, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 41,456 $ 53,210 Marketable Securities 65,241 59,672 Accounts receivable, net 40,282 39,585 Inventory 48,828 52,160 Prepaid expenses and other current assets 14,975 15,927 Total current assets 210,782 220,554 Restricted cash 258 256 Lease right-of-use assets 11,270 12,616 Property, plant and equipment, net 47,889 52,300 Intangible assets, net 981 1,652 Goodwill 12,408 12,399 Other assets, net 7,706 7,026 Total assets $ 291,294 $ 306,803 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 16,467 $ 12,166 Accrued liabilities 14,141 12,556 Deferred revenue 2,921 4,849 Current portion of lease liabilities 2,616 3,181 Total current liabilities 36,145 32,752 Non-current income taxes payable 5,638 5,391 Long-term lease liabilities 10,017 10,978 Other long-term liabilities 4,224 3,263 Total liabilities 56,024 52,384 Stockholders' equity: Common stock - par value 16 16 Additional paid-in capital 537,776 521,184 Accumulated other comprehensive loss (2,388 ) (2,477 ) Accumulated deficit (300,134 ) (264,304 ) Total stockholders’ equity 235,270 254,419 Total liabilities and stockholders’ equity $ 291,294 $ 306,803 nLIGHT, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30 , 2024 2023 Cash flows from operating activities: Net loss $ (35,830 ) $ (28,432 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 9,356 9,292 Amortization 3,403 2,697 Reduction in carrying amount of right-of-use assets 1,367 947 Provision for losses on (recoveries of) accounts receivable 1,489 (2 ) Stock-based compensation 18,961 19,645 Deferred income taxes — 7 Loss on disposal of property, plant and equipment 76 525 Changes in operating assets and liabilities: Accounts receivable, net (2,119 ) 2,308 Inventory 3,348 5,491 Prepaid expenses and other current assets 954 1,358 Other assets, net (3,351 ) (442 ) Accounts payable 4,628 (2,079 ) Accrued and other long-term liabilities 2,511 161 Deferred revenues (1,931 ) 617 Lease liabilities (1,546 ) (1,076 ) Non-current income taxes payable 212 (1,330 ) Net cash provided by operating activities 1,528 9,687 Cash flows from investing activities: Purchases of property, plant and equipment (5,313 ) (4,386 ) Purchase of marketable securities (88,643 ) (103,008 ) Proceeds from maturities and sales of marketable securities 83,033 94,231 Net cash used in investing activities (10,923 ) (13,163 ) Cash flows from financing activities: Proceeds from employee stock plan purchases 1,355 1,220 Proceeds from stock option exercises 221 385 Tax payments related to stock award issuances (3,945 ) (3,667 ) Net cash used in financing activities (2,369 ) (2,062 ) Effect of exchange rate changes on cash 12 (198 ) Net increase (decrease) in cash, cash equivalents and restricted cash (11,752 ) (5,736 ) Cash, cash equivalents and restricted cash, beginning of period 53,466 58,078 Cash, cash equivalents and restricted cash, end of period $ 41,714 $ 52,342 Supplemental disclosures: Cash paid for interest, net $ 40 $ 20 Cash paid for income taxes 302 270 Operating cash outflows from operating leases 3,057 2,890 Right-of-use assets obtained in exchange for lease liabilities 995 1,295 Accrued purchases of property, equipment and patents 415 561 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 41,456 $ 52,087 Restricted cash 258 255 Total cash, cash equivalents, and restricted cash $ 41,714 $ 52,342 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 September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 Net loss $ (10,335 ) $ (11,879 ) $ (35,830 ) $ (28,432 ) Income tax expense 261 187 525 (1,005 ) Other income, net (1,331 ) (536 ) (2,594 ) (1,997 ) Interest income, net (394 ) (303 ) (1,308 ) (990 ) Depreciation and amortization 4,278 3,985 12,759 11,983 Stock-based compensation 6,527 6,627 18,961 19,645 Adjusted EBITDA $ (994 ) $ (1,919 ) $ (7,487 ) $ (796 ) Reconciliation of GAAP to Non-GAAP Net Loss, and GAAP to Non-GAAP Net Loss per Share, Basic and Diluted Three Months Ended September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 Net loss $ (10,335 ) $ (11,879 ) $ (35,830 ) $ (28,432 ) Add back: Stock-based compensation(1) 6,527 6,627 18,961 19,645 Amortization of purchased intangibles(1) 149 383 446 1,151 Non-GAAP net loss (3,659 ) (4,869 ) (16,423 ) (7,636 ) GAAP weighted-average shares outstanding 48,133 46,403 47,679 45,857 Participating securities — — — — Non-GAAP weighted-average number of shares, basic 48,133 46,403 47,679 45,857 Dilutive effect of common stock equivalents — — — — Non-GAAP weighted-average number of shares, diluted 48,133 46,403 47,679 45,857 Non-GAAP net loss per share, basic and diluted $ (0.08 ) $ (0.10 ) $ (0.34 ) $ (0.17 ) (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/20241107730057/en/ For more information, contact: John Marchetti Vice President, Corporate Development & Investor Relations nLIGHT, Inc. (360) 566-4460 [email protected] Source: nLIGHT, Inc.

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