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IPG PHOTONICS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 2025 2024 (In thousands, except per share data)Net sales$227,793 $252,009 Cost of sales 137,981 154,473 Gross profit 89,812 97,536 Operating expenses: Sales and marketing 24,430 22,998 Research and development 28,336 29,381 General and administrative 32,808 31,158 Gain on sale of assets — (6,776)Loss on foreign exchange 2,411 1,675 Total operating expenses 87,985 78,436 Operating income 1,827 19,100 Other income, net: Interest income, net 7,444 14,177 Other income, net 1,344 325 Total other income 8,788 14,502 Income before provision for income taxes 10,615 33,602 Provision for income taxes 6,857 9,503 Net income$3,758 $24,099 Net income per share: Basic$0.09 $0.52 Diluted$0.09 $0.52 Weighted average common shares outstanding: Basic 42,605 45,960 Diluted 42,832 46,175 IPG PHOTONICS CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2025 2024 (In thousands, except share andper share data)ASSETSCurrent assets: Cash and cash equivalents$363,046 $620,040 Short-term investments 563,832 310,152 Accounts receivable, net 176,909 171,131 Inventories 287,623 284,780 Prepaid income taxes 16,955 17,592 Prepaid expenses and other current assets 35,022 27,300 Total current assets 1,443,387 1,430,995 Deferred income taxes, net 109,232 115,031 Goodwill 68,617 67,241 Intangible assets, net 54,297 55,376 Property, plant and equipment, net 603,271 588,375 Other assets 38,544 32,246 Total assets$2,317,348 $2,289,264 LIABILITIES AND EQUITYCurrent liabilities: Accounts payable$37,923 $35,385 Accrued expenses and other current liabilities 152,829 152,048 Income taxes payable 6,282 17,586 Total current liabilities 197,034 205,019 Other long-term liabilities and deferred income taxes 59,872 59,774 Total liabilities 256,906 264,793 Commitments and contingencies IPG Photonics Corporation equity: Common stock, $0.0001 par value, 175,000,000 shares authorized; 56,813,839 and 42,729,426 shares issued and outstanding, respectively, at March 31, 2025; 56,632,974 and 42,548,561 shares issued and outstanding, respectively, at December 31, 2024. 6 6 Treasury stock, at cost, 14,084,413 shares held at both March 31, 2025 and December 31, 2024. (1,505,216) (1,505,321)Additional paid-in capital 1,040,264 1,035,285 Retained earnings 2,617,626 2,613,868 Accumulated other comprehensive loss (92,238) (119,367)Total IPG Photonics Corporation stockholders' equity 2,060,442 2,024,471 Total liabilities and equity$2,317,348 $2,289,264 IPG PHOTONICS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 2025 2024 (In thousands)Cash flows from operating activities: Net income$3,758 $24,099 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 15,341 16,214 Provisions for inventory, warranty & bad debt 11,876 14,761 Other 14,796 143 Changes in assets and liabilities that provided (used) cash, net of acquisitions: Accounts receivable and accounts payable 1,378 32,579 Inventories (8,967) 1,498 Other (24,737) (34,698)Net cash provided by operating activities 13,445 54,596 Cash flows from investing activities: Purchases of and deposits on property, plant and equipment (24,818) (28,052)Proceeds from sales of property, plant and equipment 183 25,262 Purchases of short-term investments (333,009) (226,521)Proceeds from short-term investments 83,206 252,890 Other 52 157 Net cash (used in) provided by investing activities (274,386) 23,736 Cash flows from financing activities: Payments for taxes related to net share settlement of equity awards less proceeds from issuance of common stock under employee stock options (5,775) (1,158)Purchase of treasury stock net of excise tax, at cost 105 (89,616)Net cash used in financing activities (5,670) (90,774)Effect of changes in exchange rates on cash and cash equivalents 9,617 (5,780)Net decrease in cash and cash equivalents (256,994) (18,222)Cash and cash equivalents — Beginning of period 620,040 514,674 Cash and cash equivalents — End of period$363,046 $496,452 Supplemental disclosures of cash flow information: Cash paid for interest$5 $4 Cash paid for income taxes$10,574 $8,005 IPG PHOTONICS CORPORATIONSUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Use 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.
IPG PHOTONICS CORPORATIONSUPPLEMENTAL SCHEDULE OF NON-GAAP MEASUREMENTS (UNAUDITED) Reconciliation of Gross Profit to Adjusted Gross Profit, Adjusted Gross Margin Three Months Ended March 31, 2025 2024 (in thousands, except per share data)Gross profit$89,812 $97,536 Gross margin 39.4% 38.7%Amortization of acquisition-related intangibles 1,016 488 Acquisition and integration charges 222 — Adjusted gross profit$91,050 $98,024 Adjusted gross margin 40.0% 38.9% Reconciliation of Operating Income to Adjusted Operating Income Three Months Ended March 31, 2025 2024 (in thousands, except per share data)Operating income$1,827 $19,100 Amortization of acquisition-related intangibles 2,502 1,425 Acquisition and integration charges 991 — Loss on foreign exchange 2,411 1,675 Gain on sale of assets — (6,776)Adjusted operating income$7,731 $15,424 Reconciliation of Net income to Adjusted EBITDA Three Months Ended March 31, 2025 2024 (in thousands, except per share data)Net income$3,758 $24,099 Interest income, net (7,444) (14,177)Provision for income taxes 6,857 9,503 Depreciation 11,556 13,927 Amortization 3,785 2,287 EBITDA$18,512 $35,639 Stock based compensation 10,767 9,732 Acquisition and integration charges 991 — Loss on foreign exchange 2,411 1,675 Gain on sale of assets — (6,776)Adjusted EBITDA$32,681 $40,270 Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Diluted Three Months Ended March 31, 2025 2024 (in thousands, except per share data)Net income$3,758 $24,099 Amortization of acquisition-related intangibles 2,502 1,425 Acquisition and integration charges 991 — Loss on foreign exchange 2,411 1,675 Gain on sale of assets — (6,776)Certain discrete tax items 4,614 1,997 Tax impact of non-GAAP adjustments (1,148) 739 Adjusted net income$13,128 $23,159 Adjusted net earnings per diluted share$0.31 $0.50 Weighted average diluted shares outstanding 42,832 46,175 Reconciliation of GAAP to Non-GAAP Effective Tax Rate Three Months Ended March 31, 2025 2024 Tax rate 65% 28%Discrete tax items (43)% (6)%Net impact of non-GAAP adjustments (1)% 1%Adjusted tax rate 21% 23% During the first fiscal quarter of 2025, the Company refined its methodology to report non-GAAP measures.
Any statements in this press release that are not statements of historical fact are forward-looking statements, including those statements related to being confident that our strategy will further differentiate our products, unlock new market opportunities, and fuel the long-term expansion of laser applications, actively taking advantage of our global manufacturing footprint and our in-house supply chain to mitigate potential impacts from tariffs, potential delays in shipping product due to tariffs, the expectation of fulfilling such orders and optimizing production across our global footprint, and statements related to revenue, adjusted gross margin and operating expenses outlook, adjusted earnings per diluted share and adjusted EBITDA guidance, including the expected impact of tariffs, and the impact of the U.S.dollar on our guidance for second quarter of 2025.
