IPG Photonics (IPGP) investor relations material

Executive summary

• Q3 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.

• Gross margin improved to 39.5% from 23.2% year-over-year, with adjusted EBITDA and EPS at the top end of guidance, reflecting better manufacturing cost absorption and lower inventory provisions.

• Net income was $7.5 million, reversing a net loss of $233.6 million in the prior year, with adjusted EBITDA at $37 million, up 33% year-over-year.

• Strategic transformation and investments in leadership, product development, and innovation continue, with key growth initiatives in medical, micro-machining, and defense gaining traction.

• Share repurchases totaled $16 million in Q3, and tuck-in M&A opportunities are being explored.

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 was $7.9 million, compared to a loss of $253.3 million in Q3 2024.

• Free cash flow for the year-to-date was $61 million; cash and short-term investments at quarter end were $870 million.

• Capital expenditures totaled $21 million in Q3.

Outlook and guidance

• Q4 2025 revenue expected between $230 million and $260 million; adjusted gross margin guidance 36%-39%; adjusted EPS forecast $0.05 to $0.35; adjusted EBITDA $21 million to $38 million.

• Operating expenses projected at $90-$92 million in Q4 due to ongoing investments.

• Book-to-bill ratio remained at approximately one, indicating stable demand.

• Guidance assumes a stable operating environment and includes estimated tariff impacts.

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