Laser company nLIGHT announces financial results for the second quarter of 2024

Recently, nLIGHT, a manufacturer of high-power semiconductors and fiber lasers, announced its financial performance for the second quarter of 2024.

According to the financial report, nLIGHT achieved a revenue of $50.5 million in the second quarter of 2024, a year-on-year decrease of 5.2% and an increase of 13% compared to the first quarter; The GAAP net loss for the second quarter was $11.7 million, an increase of 32.9% compared to the net loss of $8.8 million in the second quarter of 2023, indicating a greater magnitude of the loss; The gross profit margin for the second quarter was 23.5%, compared to 22.7% in the second quarter of 2023.

Based on the comprehensive financial report of nLIGHT for the second quarter of 2024, nLIGHT achieved a revenue of $95.04 million in the first half of 2024, a year-on-year decrease of 11%; The GAAP net loss for the first half of the year was $25.5 million (equivalent to RMB 182 million), an increase of 54% year-on-year, indicating a greater magnitude of the loss.

In terms of segmentation, nLIGHT's product revenue for the second quarter of 2024 was 34.5 million US dollars, an increase of 17% compared to the previous quarter, but a decrease of 13% compared to the second quarter of 2023; The development revenue was $16.1 million, an increase of 6% from the previous quarter and a 17% increase from the second quarter of 2023.

According to the CFO of nLIGHT, in the second quarter of 2024:
The revenue in the aerospace and defense sectors was $27.4 million, accounting for 54% of the total revenue, a year-on-year increase of 12%;
Revenue in the field of laser sensing increased by 5% year-on-year and 72% month on month;

In the industrial sector, the revenue reached 12.9 million US dollars, accounting for 26% of the total revenue, a year-on-year decrease of 22%;
In the field of precision machining, the revenue reached 10.2 million US dollars, accounting for 20% of the total revenue, a year-on-year decrease of 16%.

Overall, nLIGHT Laser performed strongly in the aerospace, defense, and laser sensing fields in the second quarter of 2024, with the former being an important growth opportunity for nLIGHT's current business.

The complexity and variability of today's global landscape highlight the growing demand for advanced and cost-effective defense weapon technologies. In terms of directional energy lasers, nLIGHT Laser holds an important solution and is an important component of defense strategies for various countries.

Therefore, in this quarter, nLIGHT Laser has continuously executed multiple high visibility and strategically significant directional energy laser projects. Among them, there is a project called HELSI-2, which mainly develops a 1 MW laser and is currently making good progress. The total investment of the project is 171 million US dollars, and it is expected to be completed in 2026.

Another important project is the DE M-SHORAD program, which mainly develops a 50 kW high-energy laser for short-range air defense missile defense. In this project, nLIGHT Laser is responsible for delivering a 50 kW high-energy laser to the general contractor in the first half of 2025.

The key to participating in so many major projects of directed energy lasers is the unique and crucial differentiation advantage of nLIGHT Laser in this field, which is the vertical integration of semiconductor chips into beam combination lasers. nLIGHT Laser enables design and manufacturing decisions at the component and subsystem level by vertically integrating the field of directional energy lasers, thereby optimizing system level performance at the most attractive cost point.

In addition, the vertical integration method also enables nLIGHT Laser to meet market demand and generate revenue at every level. According to Scott Keeney, Chairman and CEO of nLIGHT Laser, nLIGHT Laser is expected to complete the design and begin manufacturing some of the most critical hardware components in the beam combination laser in the second half of 2024.

In addition to the field of directional energy lasers, nLIGHT also performs excellently in laser sensing products. It is understood that nLIGHT's laser sensing products include missile guidance, close range detection, ranging, and countermeasures.

The field was able to achieve a 72% month on month increase in this quarter, mainly due to nLIGHT Laser winning a long-term missile program order worth $25 million in the second quarter. This plan requires the purchase of a laser sensing product from nLIGHT, which has been a long-term supplier for the plan. It is expected that the customer will continue to expand the plan in the coming years.

Compared to the strong performance of defense products, nLIGHT's commercial business did not achieve good results in the first half of the year.
In the field of microfabrication, nLIGHT mainly provides high brightness and high power semiconductor lasers to many world leading suppliers of diode pulse solid-state lasers. In the past few quarters, its total revenue in the microfabrication field has been between $10 million and $11 million, generally lower than before. But according to nLIGHT, they have initially observed positive signs of demand recovery.

In the industrial field, nLIGHT Laser mainly focuses on three major markets: laser cutting, laser welding, and additive manufacturing.
The laser cutting field has the largest proportion in nLIGHT's industrial business and achieved small growth this quarter. At present, nLIGHT is still shifting towards higher power solutions, and the main source of revenue in this field comes from its innovative high-power programmable lasers.

However, nLIGHT believes that due to the current branching strategy adopted by most equipment integrators using Chinese suppliers, the market share of Chinese laser suppliers in standard lasers has increased.

In the field of laser welding, which has a relatively small business share, nLIGHT focuses on the electric vehicle and battery markets, and has launched three new products in the first half of the year.

APT， An automatic parameter adjustment software for the process monitoring market. This product shortens the time required to implement process monitoring solutions on welding production lines;

WELDform， By combining spatial and temporal control to optimize the melt pool, harmful defects such as splashing and porosity are reduced;
ProcessGuard， Integrating process monitoring functionality into the laser itself further simplifies integration with factory production lines, improves reliability, and reduces costs. It is worth mentioning that ProcessGuard is the first product to fully integrate nLIGHT laser technology and Plasmo process monitoring technology.

In the field of additive manufacturing, nLIGHT Laser recently reached a strategic cooperation agreement with EOS, a leader in the additive manufacturing industry, aiming to apply nLIGHT's beamforming laser to EOS's metal additive manufacturing system.

It is understood that Enna's programmable beam shaping laser Corona AFX can provide seven different beam profiles through a single laser, ranging from an 85 micron spot for printing high-precision features and smooth surfaces to a 210 micron circular profile for faster printing of bulk materials, improving mechanical performance, and reducing soot and splatter.

As is well known, shortening the overall construction time of parts is one of the most critical challenges faced by the additive manufacturing industry, as shorter construction time directly means lower costs for each part produced by the machine.

Compared to the previous standard 400W laser process, Enna's Corona AFX laser can provide up to three times the printing speed for steel and aluminum alloys, significantly improving the production efficiency of EOS's metal 3D printing equipment and reducing single machine costs. Last year, the sales of key customers in the additive manufacturing field of nLIGHT Laser declined, but this phenomenon did not repeat in the second quarter of this year, and this field remains a key growth area for nLIGHT.

According to nLIGHT Laser, its expected revenue for the third quarter of 2024 will be between $53 million and $58 million, with an overall gross profit margin of 22% to 26%, with laser products having a gross profit margin of 28% to 32%.

Overall, in the first half of the year, some of nLIGHT Laser's business revenue increased, but the overall revenue ability is not strong and it is still in a loss making situation, with the extent of losses continuing to expand. According to its performance forecast for the third quarter of this year, some industry insiders believe that nLIGHT Laser may not be able to achieve profitability this year.

Source: OFweek