Ipg Photonics Corp 10-K for FY2023

Ipg Photonics Corp (IPGP)

10-K 2024-02-21 For: 2023-12-31

Added on April 12, 2026

About this 10-K

Ipg Photonics Corp filed this 10-K on February 21, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.29B; down 9.9% from $1.43B a year earlier
Net income: $218.88M; up 99.1% from net income of $109.91M a year earlier
Diluted EPS: $4.63; up 114.4% from $2.16 a year earlier

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Delaware						04-3444218
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)
377 Simarano Drive, Marlborough, Massachusetts						01752
(Address of principal executive offices)						(Zip Code)


Title of Class	Trading Symbol	Name of Exchange on Which Registered
Common Stock, Par Value $0.0001 per share	IPGP	The Nasdaq Stock Market LLC


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐



	PART I
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	13
ITEM 1B.	UNRESOLVED STAFF COMMENTS	28
ITEM 1C.	CYBERSECURITY	28
ITEM 2.	PROPERTIES	29
ITEM 3.	LEGAL PROCEEDINGS	29
ITEM 4.	MINE SAFETY DISCLOSURES	29

	PART II
ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	30
ITEM 6.	RESERVED	31
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	46
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	46
ITEM 9A.	CONTROLS AND PROCEDURES	46
ITEM 9B.	OTHER INFORMATION	49
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	49

	PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	50
ITEM 11.	EXECUTIVE COMPENSATION	50
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	50
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	50
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	50

	PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	50
ITEM 16.	FORM 10-K SUMMARY	53

SIGNATURES		54

INDEX TO FINANCIAL STATEMENTS		F-1


End Market	Applications	Principal Products
General Manufacturing	Welding, brazing, hardening and cladding	Continuous Wave ("CW") lasers (1-125 kW) and IPG systems
	Flat sheet, tube and 3D cutting	CW lasers (1-50 kW) and IPG systems
	Marking, engraving and printing	NS pulsed lasers (10-1,000 W) and Quasi-CW ("QCW") lasers (100-2,000 W)
	Surface cleaning and texturing, paint and coating stripping	Nanosecond ("NS") pulsed lasers (100-3,000 W), single-mode CW lasers (1-5 kW) and IPG systems
	Heating and drying	Diode lasers (1-40 kW)
	3D printing	CW lasers (200-6,000 W)
Automotive (including Electric Vehicles)	Welding, cleaning, drying, and cutting, including foil cutting	CW and QCW lasers, NS pulsed lasers and IPG systems
	Cutting of high-strength steel and aluminum	CW lasers (1-20 kW)
	Welding tailored blanks, frames and auto parts	CW lasers (1-50 kW)
	Seam welding and brazing	CW lasers( 1-20 kW) and IPG systems
Consumer Goods	Micro welding, cutting and marking	QCW and NS pulsed lasers
	Marking of polymers and other non-metals	Infrared ("IR"), green and ultraviolet ("UV") pulsed lasers
Medical Devices	Stent, pacemaker and other medical device manufacturing	CW, NS, Picosecond ("PS") and Femtosecond ("FS") pulsed lasers and IPG systems
Energy/Renewable Energy	Hardening and welding of tubes and pipes	CW lasers (4-50 kW) and IPG systems
	Cladding of turbine blades and drill bits	CW lasers (1-20 kW)
	Solar cell processing	Green NS pulsed lasers
Aerospace, Rail and Shipbuilding	Welding/cutting thick steel plates, titanium	CW lasers (1-50 kW) and IPG systems
	Percussion drilling of aerospace parts	QCW lasers (1-2 kW)
	Surface cleaning and texturing, paint and coating stripping and drying	NS pulsed lasers (100-3,000 W), single-mode CW lasers (1-5 kW), diode lasers (1-40 kW) and IPG systems
Micro Electronics	Wafer inspection and annealing, disk mastering, flat panel display, LED lift-off	Ultraviolet CW and NS pulsed lasers
	Processing of glass, ceramics, sapphire, silicon, diamond, Teflon, PCB, CFRP and other non-metals	IR, green and UV NS pulsed lasers, PS and FS pulsed lasers, QCW lasers


☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Year Ended December 31,
	2023				2022				2021
			% of Total				% of Total				% of Total
Materials processing	$	1,152,804	89.5	%	$	1,291,262	90.3	%	$	1,325,404	90.7	%
Medical procedures	71,571		5.6	%	70,402		4.9	%	42,936		2.9	%
Advanced applications	55,576		4.3	%	54,308		3.8	%	69,257		4.8	%
Communications	7,488		0.6	%	13,575		1.0	%	23,263		1.6	%
Total	$	1,287,439	100.0	%	$	1,429,547	100.0	%	$	1,460,860	100.0	%


	Base Period		5-Year Cumulative Total Return
	12/31/2018		12/31/2019		12/31/2020		12/31/2021		12/31/2022		12/31/2023
IPG Photonics Corporation	$	100.00	$	127.92	$	197.54	$	151.95	$	83.56	$	95.81

Russell 3000 Index	$	100.00	$	128.54	$	152.73	$	189.39	$	150.61	$	186.68
S&P Composite 1500 - Electronic Equipment, Instruments & Components Index	$	100.00	$	132.66	$	164.30	$	212.24	$	166.02	$	199.92


Date	Total Number of Shares (or Units) Purchased		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs









October 1, 2023 — October 31, 2023	340,488	(1), (2)	$	93.14	339,946	$	122,307
November 1, 2023 — November 30, 2023	242,335	(1), (2)	92.30		241,676	100,000
December 1, 2023 — December 31, 2023	87,273	(2)	108.65		87,273	90,518
Total	670,096		$	94.86	668,895	$	90,518


	As of December 31,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	514,674	$	698,209
Short-term investments	662,807		479,374
Unused credit lines and overdraft facilities	78,506		125,965
Working capital (excluding cash and cash equivalents and short-term investments)	522,312		534,045


	Payments Due in
	Total		Less Than 1 Year
	(In thousands)
Operating lease obligations	$	20,996	$	5,224
Purchase obligations	27,404		22,008


Total (1)	$	48,400	$	27,232


Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, RSUs and PSUs (a)	Weighted-Average Exercise Price of Outstanding Options, RSUs and PSUs (b)		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity Compensation Plans Approved by Security Holders (1)	1,388,347	$	144.72	3,247,512
Equity Compensation Plans Not Approved by Security Holders	—			—
Total	1,388,347			3,247,512


Exhibit Number						Description
3.1						Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q filed w i t h the Commission on August 1, 2023)

3.2						Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed with the Commission on January 23 , 202 3 )

4.1						Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement No. 333-136521 filed with the Commission on November 14, 2006)

4.2						Description of the Registrant's Securities Registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.2 to the Registrant's Annual Report on Form 10-K filed with the Commission on February 24, 2020)

10.1†						2006 Incentive Compensation Plan, as amended and restated effective May 23, 2023 (incorporated by reference to Exhibit 10 .1 to the Registrant's Quarterly Report on Form 10-Q filed w i t h the Commission on August 1, 2023)

10.2†						IPG Photonics Corporation Non-Employee Director Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on February 22, 2023)

10.3†						Senior Executive Annual Incentive Plan, as amended and restated April 28, 2020 (incorporated by reference to Exhibit 10.3 to the Registrant's Annual Report on Form 10-K filed with the Com mission on February 27, 2023)

10.4†						IPG Photonics Corporation 2008 Employee Stock Purchase Plan, as amended and restated effective December 1, 2018 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on June 3, 2019)

10.5†						Secondment Agreement dated May 4, 2021 among the Registrant, IPG Laser GmbH and Dr. Eugene Scherbakov (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on August 4, 2021)

10.6†						Service Agreement dated May 4, 2021 between IPG Laser GmbH and Dr. Eugene Scherbakov (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on August 4, 2021)

10.7†						Amendment to Dr. Scherbakov Service Agreement (incorporated by reference to Exhibit 10.1 to the Registrant 's Current Report on Form 8-K filed with the Commission on September 1, 2023)

10.8†						Confidentiality, Non-Competition and Confirmatory Assignment Agreement dated May 4, 2021 between the Registrant and Dr. Eugene Scherbakov (incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on August 4, 2021)

10.9†						Form of Employment Agreement dated May 30, 2019 between the Registrant and each of Timothy P.V. Mammen, Angelo P. Lopresti and Alexander Ovtchinnikov (incorporated by reference to Exhibit 10.7 to the Registrant's Annual Report on Form 10-K filed with the Commission on February 24, 2020)

10.10†						Form of Confidentiality, Non-Competition and Confirmatory Assignment Agreement between the Registrant and each of the named executive officers and certain other executive officers, (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed with the Commission on October 15, 2013)

10.11†						Form of Letter amending Confidentiality, Non-Competition and Confirmatory Assignment Agreements between the Registrant and each of the named executive officers and certain other executive officers (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K/A filed with the Commission on February 22, 2017)

10.12						Form of Indemnification Agreement between the Registrant and each of its Directors and Executive Officers (incorporated by reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K/A filed with the Commission on February 22, 2017)

10.13						Second Amended and Restated Loan Agreement, between the Registrant and Bank of America, N.A. dated as of March 25, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on March 26, 2020)


Exhibit Number						Description
10.14						Revolving Credit Note, between the Registrant and Bank of America, N.A., dated March 25, 2020 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on March 26, 2020)

21.1*						List of Subsidiaries

23.1*						Consent of Deloitte & Touche LLP

31.1*						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

31.2*						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

32.1**						Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 1350

97*						IPG Photonics Corporation Incentive Based Compensation Recoupment Policy

101.INS*						Inline XBRL Instance Document

101.SCH*						Inline XBRL Taxonomy Extension Schema

101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF*						Inline XBRL Taxonomy Definition Linkbase

101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase

101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase

104*						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


End Market	Applications	Principal Products
Aerospace and Defense	Directed energy	Single-mode CW lasers, amplifiers and diode lasers
	IR countermeasures, thermal imaging	Mid-IR NS pulsed lasers
Medical Procedures	Surgery, urology and soft tissue	Mid-infrared, thulium, FS and laser systems
	Therapeutic procedures	Diode lasers
	Aesthetic procedures - skin, wrinkle/hair/tattoo removal	Erbium, thulium, green lasers
	Dental procedures	Diode lasers
	Diagnostic procedures	Mid-infrared and FS
OEM Instrument Manufacturing	Biomedical analytical instruments, metrology, disinfection/sterilization, environmental and security monitoring, quantum computing	FS, PS, NS and CW lasers, Mid-infrared, IR, visible and UV lasers
Scientific	Academic research: sensing, imaging, microscopy, spectroscopy, quantum optics	Mid-infrared, IR, visible and UV lasers; diode, FS, PS, NS and CW lasers, linearly polarized and single frequency lasers and amplifiers


	Year Ended December 31,
	2023				2022				2021
	(In thousands, except percentages and per share data)
Net sales	$	1,287,439	100.0	%	$	1,429,547	100.0	%	$	1,460,860	100.0	%
Cost of sales	745,741		57.9		874,134		61.1		764,462		52.3
Gross profit	541,698		42.1		555,413		38.9		696,398		47.7
Operating expenses:
Sales and marketing	85,679		6.7		76,643		5.3		78,180		5.4
Research and development	98,704		7.7		116,114		8.1		139,573		9.6
General and administrative	125,749		9.7		131,253		9.2		125,882		8.6

Gain on divestiture and sale of asset	—		—		(31,846)		(2.2)		—		—
Impairment of long-lived assets	1,237		0.1		79,949		5.6		—		—
Restructuring charges (recoveries), net	(288)		—		9,697		0.7		—		—
(Gain) loss on foreign exchange	(1,356)		(0.1)		4,103		0.3		(15,120)		(1.0)
Total operating expenses	309,725		24.1		385,913		27.0		328,515		22.6
Operating income	231,973		18.0		169,500		11.8		367,883		25.2
Interest income (expense), net	41,735		3.2		12,620		0.9		(1,839)		(0.1)
Other income, net	1,167		0.1		1,231		0.1		437		—
Income before provision for income taxes	274,875		21.3		183,351		12.8		366,481		25.1
Provision for income taxes	55,997		4.3		72,589		5.1		88,615		6.1
Net income	218,878		17.0		110,762		7.7		277,866		19.0
Less: net income (loss) attributable to non-controlling interest	—		—		853		0.1		(550)		—
Net income attributable to IPG Photonics Corporation common stockholders	$	218,878	17.0	%	$	109,909	7.6	%	$	278,416	19.0	%
Net income attributable to IPG Photonics Corporation per common share:
Basic	$	4.64			$	2.17			$	5.21
Diluted	$	4.63			$	2.16			$	5.16
Weighted average common shares outstanding:
Basic	47,154				50,761				53,410
Diluted	47,320				50,925				53,930


	Year Ended December 31,
	2023				2022				Change
	(In thousands, except for percentages)
Sales by Product			% of Total				% of Total
High Power Continuous Wave ("CW") Lasers	$	524,981	40.8	%	$	613,734	42.9	%	$	(88,753)	(14.5)	%
Medium Power CW Lasers	71,672		5.6	%	77,079		5.4	%	(5,407)		(7.0)	%
Pulsed Lasers	185,581		14.4	%	250,677		17.5	%	(65,096)		(26.0)	%
Quasi-Continuous Wave ("QCW") Lasers	48,648		3.8	%	50,212		3.5	%	(1,564)		(3.1)	%
Laser and Non-Laser Systems	161,177		12.5	%	153,471		10.8	%	7,706		5.0	%
Other Revenue including Amplifiers, Service, Parts, Accessories and Change in Deferred Revenue	295,380		22.9	%	284,374		19.9	%	11,006		3.9	%
Total	$	1,287,439	100.0	%	$	1,429,547	100.0	%	$	(142,108)	(9.9)	%


	Year Ended December 31,
	2023				2022				Change
	(In thousands, except for percentages)
Sales by Geography			% of Total				% of Total
North America (1)	$	313,986	24.4	%	$	338,713	23.7	%	$	(24,727)	(7.3)	%
Europe:
Germany	88,026		6.8	%	85,491		6.0	%	2,535		3.0	%
Other Europe	291,336		22.6	%	294,481		20.6	%	(3,145)		(1.1)	%
Asia:
China	355,321		27.6	%	479,926		33.6	%	(124,605)		(26.0)	%
Japan	72,333		5.6	%	57,865		4.0	%	14,468		25.0	%
Other Asia	142,378		11.1	%	152,373		10.7	%	(9,995)		(6.6)	%
Rest of World	24,059		1.9	%	20,698		1.4	%	3,361		16.2	%
Total	$	1,287,439	100.0	%	$	1,429,547	100.0	%	$	(142,108)	(9.9)	%


IPG PHOTONICS CORPORATION

By:			/s/ Eugene A. Scherbakov
			Eugene A. Scherbakov Chief Executive Officer


	December 31,
	2023		2022
	(In thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	514,674	$	698,209
Short-term investments	662,807		479,374
Accounts receivable, net	219,053		211,347
Inventories	453,874		509,363
Prepaid income taxes	26,038		40,934
Prepaid expenses and other current assets	38,208		47,047

Total current assets	1,914,654		1,986,274
Deferred income taxes, net	88,788		75,152
Goodwill	38,540		38,325
Intangible assets, net	26,234		34,120
Property, plant and equipment, net	602,257		580,561
Other assets	28,425		28,848
Total assets	$	2,698,898	$	2,743,280
LIABILITIES AND EQUITY
Current liabilities:


Current portion of long-term debt	$	—	$	16,031
Accounts payable	28,618		46,233
Accrued expenses and other liabilities	181,350		202,764

Income taxes payable	4,893		9,618
Total current liabilities	214,861		274,646
Other long-term liabilities and deferred income taxes	68,652		83,274

Total liabilities	283,513		357,920

Commitments and contingencies (Note 14)
IPG Photonics Corporation equity:
Common stock, $0.0001 par value, 175,000,000 shares authorized; 56,317,438 and 46,320,671 shares issued and outstanding, respectively, at December 31, 2023; 56,017,672 and 48,138,257 shares issued and outstanding, respectively, at December 31, 2022.	6		6
Treasury stock, at cost, 9,996,767 and 7,879,415 shares held at December 31, 2023 and December 31, 2022, respectively.	(1,161,505)		(938,009)
Additional paid-in capital	994,020		951,371
Retained earnings	2,795,394		2,576,516
Accumulated other comprehensive loss	(212,530)		(204,524)
Total IPG Photonics Corporation stockholders' equity	2,415,385		2,385,360


Total liabilities and equity	$	2,698,898	$	2,743,280


	Year Ended December 31,
	Common Stock			Treasury Stock			Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Non- controlling Interest		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount		Shares	Amount
Balance, January 1, 2021	53,427,234	$	6	(2,034,012)	$	(303,614)	$	854,301	$	2,188,191	$	(146,065)	$	1,292	$	2,594,111
Vesting of RSUs and PSUs, net of shares withheld for taxes, and exercise of stock options	292,849	—		—	—		10,766		—		—		—		10,766
Common stock issued under employee stock purchase plan	34,151	—		—	—		5,492		—		—		—		5,492
Purchased common stock	(743,969)	—		(743,969)	(134,889)		—		—		—		—		(134,889)
Stock-based compensation	—	—		—	—		37,864		—		—		—		37,864


Net income	—	—		—	—		—		278,416		—		(550)		277,866
Foreign currency translation adjustments and other	—	—		—	—		—		—		(44,164)		(103)		(44,267)
Unrealized gain on derivatives, net of tax	—	—		—	—		—		—		278		—		278


Balance, December 31, 2021	53,010,265	6		(2,777,981)	(438,503)		908,423		2,466,607		(189,951)		639		2,747,221
Vesting of RSUs and PSUs, net of shares withheld for taxes, and exercise of stock options	167,193	—		—	—		693		—		—		—		693
Common stock issued under employee stock purchase plan	62,233	—		—	—		4,890		—		—		—		4,890
Purchased common stock	(5,101,434)	—		(5,101,434)	(499,506)		—		—		—		—		(499,506)
Stock-based compensation	—	—		—	—		38,302		—		—		—		38,302


Net income	—	—		—	—		—		109,909		—		853		110,762
Foreign currency translation adjustments and other	—	—		—	—		—		—		(14,909)		71		(14,838)
Purchase of non-controlling interests	—	—		—	—		(937)		—		—		(1,563)		(2,500)
Unrealized gain on derivatives, net of tax	—	—		—	—		—		—		336		—		336


Balance, December 31, 2022	48,138,257	6		(7,879,415)	(938,009)		951,371		2,576,516		(204,524)		—		2,385,360
Vesting of RSUs and PSUs, net of shares withheld for taxes, and exercise of stock options	241,782	—		—	—		(1,891)		—		—		—		(1,891)
Common stock issued under employee stock purchase plan	57,984	—		—	—		5,038		—		—		—		5,038
Purchased common stock	(2,117,352)	—		(2,117,352)	(223,496)		—		—		—		—		(223,496)
Stock-based compensation	—	—		—	—		39,502		—		—		—		39,502


Net income	—	—		—	—		—		218,878		—		—		218,878
Foreign currency translation adjustments and other	—	—		—	—		—		—		(7,854)		—		(7,854)

Unrealized loss on derivatives, net of tax	—	—		—	—		—		—		(152)		—		(152)


Balance, December 31, 2023	46,320,671	$	6	(9,996,767)	$	(1,161,505)	$	994,020	$	2,795,394	$	(212,530)	$	—	$	2,415,385



Category						Economic Useful Life
Buildings						20-30 years
Machinery and equipment						5-7 years
Office furniture and fixtures						5-7 years


	Foreign currency translation adjustments and other		Unrealized (loss) gain on derivatives, net of tax		Total
Balance, January 1, 2021	$	(145,603)	$	(462)	$	(146,065)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments and other, net of tax benefit of $246	(44,164)		—		(44,164)
Unrealized gain on derivatives, net of tax of $83	—		278		278
Total other comprehensive (loss) income	(44,164)		278		(43,886)
Balance, December 31, 2021	(189,767)		(184)		(189,951)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments and other before reclassification, net of tax of $156	(15,117)		—		(15,117)
Reclassification for foreign currency translation adjustments and other included in net income	208		—		208
Unrealized gain on derivatives, net of tax of $104	—		336		336
Total other comprehensive (loss) income	(14,909)		336		(14,573)
Balance, December 31, 2022	(204,676)		152		(204,524)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments and other before reclassification, net of tax of $151	(7,854)		—		(7,854)
Unrealized (loss) on derivatives, net of tax benefit of $46	—		(152)		(152)
Total other comprehensive loss	(7,854)		(152)		(8,006)
Balance, December 31, 2023	$	(212,530)	$	—	$	(212,530)




Sales by Geography
North America	$	313,986	$	338,713	$	314,984
Europe:
Germany	88,026		85,491		101,738
Other Europe	291,336		294,481		289,136
Asia:
China	355,321		479,926		548,348
Japan	72,333		57,865		54,077
Other	142,378		152,373		139,148
Rest of World	24,059		20,698		13,429
Total	$	1,287,439	$	1,429,547	$	1,460,860


Timing of Revenue Recognition
Goods and services transferred at a point in time	$	1,239,551	$	1,377,996	$	1,402,498
Goods and services transferred over time	47,888		51,551		58,362
Total	$	1,287,439	$	1,429,547	$	1,460,860


	December 31,		January 1,				December 31,		January 1,
	2023		2023		Change		2022		2022		Change
Contract assets
Contract assets	$	9,383	$	8,620	$	763	$	8,620	$	9,345	$	(725)
Contract liabilities
Contract liabilities - current	69,219		80,068		(10,849)		80,068		89,659		(9,591)
Contract liabilities - long-term	2,851		3,142		(291)		3,142		2,691		451


	Remaining Performance Obligations
	2024		2025		2026		2027		2028		Thereafter		Total
Revenue expected to be recognized for extended warranty agreements	$	3,008	$	1,287	$	910	$	552	$	98	$	4	$	5,859
Revenue to be earned over time from contracts to sell large scale materials processing systems	16,577		2,414		—		—		—		—		18,991

Total	$	19,585	$	3,701	$	910	$	552	$	98	$	4	$	24,850


	Fair Value Measurements at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market fund deposits	$	171,632	$	171,632	$	—	$	—
Term deposits	83,965		—		83,965		—

Corporate bonds	23,516		—		23,516		—
Commercial paper	6,369		—		6,369		—
Short-term investments:
Commercial paper	244,571		—		244,571		—
Corporate bonds	243,915		—		243,915		—
U.S. Treasury and agency obligations	171,316		—		171,316		—

Term deposits	3,009		—		3,009		—





Total assets	$	948,293	$	171,632	$	776,661	$	—


	December 31, 2023				December 31, 2022
	Book Value		Fair Value		Book Value		Fair Value
Investment maturity

Less than 1 year	$	662,807	$	662,811	$	479,374	$	478,737


	2023		2022
Balance at January 1	$	4,869	$	—
Charges	1,436		9,697
Cash payments	(3,719)		(4,493)
Recoveries	(1,724)		—
Foreign exchange adjustment	(862)		(335)
Balance at December 31	$	—	$	4,869


	December 31, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted- Average Lives	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted- Average Lives
Customer relationships	$	48,216	$	(25,973)	$	22,243	11 years	$	48,155	$	(21,734)	$	26,421	11 years
Technology, trademark and trade name	29,903		(25,960)		3,943		7 years	30,360		(23,189)		7,171		7 years
Production know-how	9,155		(9,155)		—		7 years	9,109		(8,818)		291		7 years
Patents	8,035		(7,987)		48		8 years	8,034		(7,797)		237		8 years
Total	$	95,309	$	(69,075)	$	26,234		$	95,658	$	(61,538)	$	34,120


		Year Ended December 31,
Account	Classification	2023		2022
Right-of-use assets	Other assets	$	13,947	$	15,564
Short-term lease liabilities	Accrued expenses and other liabilities	4,597		5,234
Long-term lease liabilities	Other long-term liabilities and deferred income taxes	13,664		16,787
Total lease liabilities		$	18,261	$	22,021


	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life	Aggregate Intrinsic Value









Outstanding at January 1, 2023	881,887	$	138.16
Granted	—	—
Exercised	(84,146)	66.90
Forfeited	(28,579)	180.77
Outstanding at December 31, 2023	769,162	$	144.38	3.21 years	$	6,271

Exercisable at December 31, 2023	769,162	$	144.38	3.21 years	$	6,271


	Number of Shares	Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2023	422,736	$	154.22
Granted	265,661	128.71
Vested	(190,133)	148.94
Forfeited	(22,333)	146.59
Nonvested at December 31, 2023	475,931	$	142.51


						2021
Performance term (years)						3.0
Volatility						29% - 51%
Risk-free rate of return						0.23% - 0.26%
Dividend yield						—%
Fair value per share						$248.49 - $165.15


Jurisdiction						Open Tax Years
United States						2019 - 2023
Germany						2021 - 2023
Russia						2021 - 2023


1.			I have reviewed this Annual Report on Form 10-K of IPG Photonics Corporation for the year ended December 31, 2023;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;