IPG Photonics (IPGP) investor relations material

Executive summary

• Third quarter 2025 revenue reached $250.8 million, up 8% year-over-year (11% excluding divestitures), driven by strong demand in battery production, welding, additive manufacturing, and advanced applications, with strategic initiatives and new product launches in medical and defense expected to drive future growth.

• Gross margin improved to 39.5% (up from 23.2% prior year), with adjusted EBITDA and EPS at the top end of guidance, reflecting lower inventory provisions and unabsorbed expenses.

• Net income was $7.5 million, reversing a net loss of $233.6 million in the prior year, and adjusted EBITDA rose to $37 million.

• Book-to-bill ratio remained healthy at approximately one, with stable industrial demand and positive leading indicators.

• $21 million was spent on capital expenditures and $16 million on share repurchases in Q3, with continued exploration of tuck-in M&A opportunities.

Financial highlights

• Q3 2025 revenue: $250.8 million (up 8% year-over-year); adjusted EBITDA: $37 million; adjusted EPS: $0.35 (up 9% year-over-year); GAAP EPS: $0.18.

• GAAP gross margin: 39.5% (up from 23.2%); adjusted gross margin: 39.8% (up from 36.2%).

• Operating income: $7.9 million (vs. $-253.3 million prior year); net income: $7.5 million (vs. $-233.6 million prior year).

• Cash and short-term investments: $870.4 million; cash and cash equivalents: $346 million; no debt or $30 million total debt reported.

• Free cash flow for YTD 2025: $61 million; operating cash flow for nine months: $46.5 million.

Outlook and guidance

• Q4 2025 revenue expected between $230 million and $260 million; adjusted gross margin guidance: 36%–39%, including 140 bps tariff impact.

• Operating expenses projected at $90–$92 million in Q4; adjusted EPS guidance: $0.05–$0.35; adjusted EBITDA: $21–$38 million.

• CapEx for 2025 expected well below $100 million, with similar levels likely in 2026 due to project timing.

• Management expects continued investment in R&D, capital expenditures, and expansion outside Russia and Belarus.

• The company believes its liquidity position is strong, supported by cash, investments, and undrawn credit lines.