nLIGHT, Inc. Announces Third Quarter 2024 Results

Rhea-AI Summary

nLIGHT, a provider of high-power semiconductor and fiber lasers, reported its Q3 2024 financial results. Revenues increased by 10.9% year-over-year to $56.1 million, driven by record results in Aerospace & Defense, which saw significant growth in directed energy and laser sensing programs. Gross margin improved to 22.4% from 19.6% in Q3 2023. Despite these gains, the company posted a net loss of $10.3 million, a slight improvement from a $11.9 million loss in Q3 2023. Adjusted EBITDA also improved but remained negative at -$0.994 million. nLIGHT expects Q4 2024 revenues to range between $49 million and $54 million, with an overall gross margin between 17% and 21%.

Positive

• Revenue increased by 10.9% year-over-year to $56.1 million.
• Gross margin improved to 22.4%, up from 19.6% in Q3 2023.
• Record revenue in Aerospace & Defense sector.

Negative

• Net loss of $10.3 million, although improved from $11.9 million in Q3 2023.
• Adjusted EBITDA remained negative at -$0.994 million.
• Q4 2024 revenue guidance lower than Q3 2024, ranging between $49 million and $54 million.

Insights

Financial Analyst

nLIGHT's Q3 2024 results show mixed performance with some positive developments. Revenue grew 10.9% year-over-year to $56.1 million, driven by record performance in Aerospace & Defense. Products gross margin improved significantly to 29%, up 500 basis points from last year.

However, concerns remain as the company continues to operate at a loss, with a net loss of $10.3 million in Q3. The Q4 guidance suggests potential sequential revenue decline to $49-54 million with lower gross margins of 17-21%. The projected negative Adjusted EBITDA of ($5) to ($2) million indicates ongoing profitability challenges.

The strong balance sheet with $107 million in cash and no debt provides financial flexibility, but the company needs to demonstrate a clear path to profitability to justify its $657 million market cap.

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

john.marchetti@nlight.net

Source: nLIGHT, Inc.

FAQ

What were nLIGHT's Q3 2024 revenues?

nLIGHT reported Q3 2024 revenues of $56.1 million, a 10.9% increase compared to Q3 2023.

What is nLIGHT's Q4 2024 revenue guidance?

nLIGHT expects Q4 2024 revenues to range between $49 million and $54 million.

How did nLIGHT's Aerospace & Defense sector perform in Q3 2024?

The Aerospace & Defense sector achieved record revenue due to strong execution in directed energy and laser sensing programs.

What was nLIGHT's net loss in Q3 2024?

nLIGHT's net loss for Q3 2024 was $10.3 million, compared to a net loss of $11.9 million in Q3 2023.

What was nLIGHT's gross margin for Q3 2024?

nLIGHT reported a gross margin of 22.4% for Q3 2024, up from 19.6% in Q3 2023.