IPG Photonics Announces First Quarter 2026 Financial Results

IPG Photonics Announces First Quarter 2026 Financial Results May 5, 2026 Strong Start to the Year on Growing Demand and Continued Focus on Execution of Strategic Initiatives Managing Costs and Mitigating Tariff Impact on Gross Margin MARLBOROUGH, Mass., May 05, 2026 (GLOBE NEWSWIRE) -- IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the first quarter ended March 31, 2026. Three Months Ended March 31,(In millions, except per share data and percentages) 2026 2025 ChangeRevenue $265.5 $227.8 17%Gross margin 37.5% 39.4% Operating income (loss) $(7.7) $1.8 NMOperating margin (2.9)% 0.8% Net income $1.6 $3.8 (58)%Earnings per diluted share $0.04 $0.09 (56)%Non-GAAP Measures* Adjusted gross margin 37.8% 40.0% Adjusted EBITDA $35.2 $32.7 8%Adjusted earnings per diluted share $0.29 $0.31 (6)% *Adjusted gross margin, adjusted EBITDA and adjusted earnings per diluted share include non-GAAP adjustments. A reconciliation from GAAP to non-GAAP metrics is provided in this earnings release. NM - not meaningful. Management Comments “I am pleased to share that first-quarter revenue came in above our expectations. The team delivered our second consecutive quarter of double-digit year-over-year revenue growth, driven by disciplined execution of our key strategic initiatives and continued strong demand for our laser solutions,” said Dr. Mark Gitin, Chief Executive Officer of IPG Photonics. Financial Highlights Beginning in the first quarter, the Company revised its revenue disaggregation by application into two categories: Industrial Solutions and Advanced Solutions. This structure better reflects the Company's strategic growth initiatives and provides a clearer separation between the Company's industrial and non-industrial businesses, giving better visibility into the distinct performance and growth profiles of each. Three Months Ended March 31, 2026 2025 ChangeSales by Application Industrial Solutions$227,590 $188,016 21%Advanced Solutions 37,907 39,777 (5)%Total$265,497 $227,793 17% First quarter revenue of $265 million increased 17% year over year, driven by growth in Industrial Solutions. Changes in foreign exchange rates increased revenue growth by approximately 4%. Industrial Solutions sales accounted for 86% of total revenue and increased 21% year over year, driven by growth in welding, cutting, marking, and cleaning applications. Advanced Solutions sales decreased 5% year over year due to lower revenue in micromachining and defense applications, partially offset by increased sales in medical and semiconductor applications. Emerging growth products accounted for 53% of total revenue, consistent with the prior quarter. By region, sales increased 14% in Asia, 27% in North America, and 4% in Europe on a year-over-year basis. GAAP gross margin of 37.5% and adjusted gross margin of 37.8% decreased year over year due to tariffs and higher product cost, partially offset by lower inventory provisions. Adjusted EBITDA was $35.2 million and adjusted earnings per diluted share (EPS) was $0.29 in the first quarter. During the first quarter, IPG spent $16 million on capital expenditures. Business Outlook and Financial Guidance “Our book-to-bill was once again firmly above one in the first quarter, reflecting robust demand for our solutions despite elevated macroeconomic uncertainty. We remain focused on executing on our growth strategy supported by operational excellence and an innovation engine that is unlocking areas of significant additional opportunities. This foundation gives us confidence in our ability to achieve above-market growth and deliver lasting value for our customers and shareholders.” concluded Dr. Gitin. For the second quarter of 2026, IPG expects revenue of $260 million to $290 million, adjusted gross margin between 37% and 40% and adjusted operating expenses of $92 million to $95 million. IPG anticipates delivering adjusted earnings per diluted share in the range of $0.25 to $0.55 and adjusted EBITDA in the range of $32 million to $48 million. As discussed in more detail in the "Safe Harbor" passage of this news release, actual results may differ from this guidance due to various factors including, but not limited to, trade policy changes and trade restrictions, product demand, order cancellations and delays, competition, tariffs and retaliatory tariffs, currency fluctuations and general economic conditions. The current uncertainty related to the trade environment and tariff policies increases the risks to the outlook that we have provided. This guidance is based upon current market conditions and expectations, and is subject to the risks outlined in the Company's reports filed with the SEC, and assumes exchange rates relative to the U.S. dollar of euro 0.87, Japanese yen 159 and Chinese yuan 6.92, respectively. Supplemental Financial Information Additional supplemental financial information is provided in the unaudited Financial Data Workbook and First Quarter 2026 Earnings Call Presentation available on the investor relations section of the Company's website at investor.ipgphotonics.com. Conference Call Reminder The Company will hold a conference call today, May 5, 2026 at 10:00 am ET. To access the call, please dial 877-407-6184 in the US or 201-389-0877 internationally. A live webcast of the call will also be available and archived on the investor relations section of the Company's website at investor.ipgphotonics.com. Contact Eugene Fedotoff Senior Director, Investor Relations IPG Photonics Corporation 508-597-4713 [email protected] About IPG Photonics Corporation IPG Photonics Corporation is the leader in high-power fiber lasers and amplifiers used primarily in materials processing and other diverse applications. The Company’s mission is to develop innovative laser solutions, making the world a better place. IPG accomplishes this mission by delivering superior performance, reliability, and usability at a lower total cost of ownership compared with other types of lasers and non-laser tools, allowing end users to increase productivity and decrease costs. IPG is headquartered in Marlborough, Massachusetts and has more than 30 facilities worldwide. For more information, visit www.ipgphotonics.com. Safe Harbor Statement Information and statements provided by IPG and its employees, including statements in this press release, that relate to future plans, events or performance are forward-looking statements. These statements involve risks and uncertainties. Any statements in this press release that are not statements of historical fact are forward-looking statements, including those statements related to operational excellence, an innovation engine that is unlocking areas of significant additional opportunities, and the ability to achieve above-market growth and deliver lasting value for our customers and shareholders, and statements related to shares repurchases, 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 the second quarter of 2026. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated with the strength or weakness of business conditions in industries and geographic markets that IPG serves, particularly the effect of downturns in the markets IPG serves; uncertainties and adverse changes in the general economic conditions of markets; inability to manage risks associated with international customers and operations; changes in trade controls and tariff policies; IPG's ability to penetrate new applications for fiber lasers and increase market share; the rate of acceptance and penetration of IPG's products; foreign currency fluctuations; high levels of fixed costs from IPG's vertical integration; the appropriateness of IPG's manufacturing capacity for the level of demand; competitive factors, including declining average selling prices; the effect of acquisitions and investments; inventory write-downs; asset impairment charges; intellectual property infringement claims and litigation; interruption in supply of key components; manufacturing risks; government regulations and trade sanctions; and other risks identified in IPG's SEC filings. Readers are encouraged to refer to the risk factors described in IPG's Annual Report on Form 10-K (filed with the SEC on February 23, 2026) and IPG's reports filed with the SEC, as applicable. Actual results, events and performance may differ materially. Readers are cautioned not to rely on the forward-looking statements, which speak only as of the date hereof. IPG undertakes no obligation to update the forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. IPG PHOTONICS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 2026 2025 (In thousands, except per share data)Net sales $265,497 $227,793Cost of sales 165,998 137,981Gross profit 99,499 89,812Operating expenses: Sales and marketing 24,534 24,430Research and development 33,309 28,336General and administrative 36,092 32,808Settlement of litigation matters 13,500 —(Gain) loss on foreign exchange (200) 2,411Total operating expenses 107,235 87,985Operating (loss) income (7,736) 1,827Other income, net: Interest income, net 6,922 7,444Other income, net 1,833 1,344Total other income 8,755 8,788Income before provision for income taxes 1,019 10,615(Benefit) provision for income taxes (565) 6,857Net income $1,584 $3,758Net income per common share: Basic $0.04 $0.09Diluted $0.04 $0.09Weighted average common shares outstanding: Basic 42,245 42,605Diluted 42,912 42,832IPG PHOTONICS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2026 2025 (In thousands, except share and per share data)ASSETSCurrent assets: Cash and cash equivalents $480,761 $403,790 Short-term investments 332,144 435,538 Accounts receivable, net 192,437 181,734 Inventories 319,006 313,416 Prepaid income taxes 51,203 43,196 Prepaid expenses and other current assets 57,587 45,766 Total current assets 1,433,138 1,423,440 Long-term investments 70,567 76,533 Deferred income taxes, net 120,934 123,889 Goodwill 70,913 71,735 Intangible assets, net 47,171 49,933 Property, plant and equipment, net 636,242 637,516 Other assets 42,677 41,234 Total assets $2,421,642 $2,424,280 LIABILITIES AND EQUITYCurrent liabilities: Accounts payable $54,724 $39,288 Accrued expenses and other current liabilities 184,849 184,849 Income taxes payable 7,603 9,900 Total current liabilities 247,176 234,037 Other long-term liabilities and deferred income taxes 58,671 62,113 Total liabilities 305,847 296,150 Commitments and contingencies IPG Photonics Corporation equity: Common stock, $0.0001 par value, 175,000,000 shares authorized; 57,281,253 and 42,443,381 shares issued and outstanding, respectively, at March 31, 2026; 56,964,939 and 42,127,067 shares issued and outstanding, respectively, at December 31, 2025. 6 6 Treasury stock, at cost, 14,837,872 shares held at March 31, 2026 and December 31, 2025, respectively. (1,555,629) (1,555,629)Additional paid-in capital 1,075,709 1,077,172 Retained earnings 2,646,548 2,644,964 Accumulated other comprehensive loss (50,839) (38,383)Total stockholders' equity 2,115,795 2,128,130 Total liabilities and stockholders' equity $2,421,642 $2,424,280 IPG PHOTONICS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 2026 2025 (In thousands)Cash flows from operating activities: Net income $1,584 $3,758 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 15,892 15,341 Provisions for inventory, warranty & bad debt 9,348 11,876 Other 11,425 14,796 Changes in assets and liabilities that (used) provided cash: Accounts receivable and accounts payable 5,438 1,378 Inventories (19,417) (8,967)Other (29,733) (24,737)Net cash (used in) provided by operating activities (5,463) 13,445 Cash flows from investing activities: Purchases of and deposits on property, plant and equipment (16,311) (24,818)Proceeds from sales of property, plant and equipment 812 183 Purchases of investments (32,870) (333,009)Proceeds from maturities of investments 143,538 83,206 Other 77 52 Net cash provided by (used in) investing activities 95,246 (274,386)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 option plans (11,712) (5,775)Purchase of treasury stock net of excise tax, at cost — 105 Net cash used in financing activities (11,712) (5,670)Effect of changes in exchange rates on cash and cash equivalents (1,100) 9,617 Net increase (decrease) in cash and cash equivalents 76,971 (256,994)Cash and cash equivalents — Beginning of period 403,790 620,040 Cash and cash equivalents — End of period $480,761 $363,046 Supplemental disclosures of cash flow information: Cash paid for interest $3 $5 Cash paid for income taxes, net of refunds $7,689 $10,574 IPG PHOTONICS CORPORATION SUPPLEMENTAL 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. These measures should not be considered as a substitute for, or superior to, GAAP financial measures. The following information provides the definition of adjusted gross profit, adjusted gross margin, adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, adjusted net earnings per share (EPS), and adjusted tax rate as presented, which are financial measures that are not calculated or presented in accordance with GAAP, and reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided adjusted gross profit, adjusted gross margin, adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS, and an adjusted tax rate as supplemental information and in addition to the financial measures presented by the Company that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measure presented by the Company. We define adjusted gross profit as reported gross profit, adjusted for non-recurring, infrequent, or unusual changes, including acquisition and integration charges and amortization of acquisition-related intangibles. We define adjusted gross margin as adjusted gross profit divided by total revenue. We define adjusted operating income as reported income from operations, adjusted for non-recurring, infrequent, or unusual charges, including acquisition and integration charges, amortization of acquisition-related intangibles, foreign exchange gains/losses and gain/loss on disposal of assets/divestiture. We define EBITDA as net income plus interest expense (income), provision for income taxes, depreciation expense, and amortization expense. We define adjusted EBITDA as EBITDA adjusted for non-recurring, infrequent, or unusual charges, and other adjustments that the Company believes appropriate, including stock-based compensation, acquisition and integration charges, foreign exchange gains/losses and gain/loss on disposal of assets/divestiture. We define adjusted net income as reported net income, adjusted for non-recurring, infrequent, or unusual changes, and other adjustments that the Company believes appropriate, including amortization of acquisition-related intangibles, acquisition and integration charges, foreign exchange gains/losses and gain/loss on disposal of assets/divestiture, certain discrete tax items and non-GAAP income tax reconciling adjustments. We define adjusted EPS as adjusted net income divided by the weighted-average diluted shares outstanding. We define adjusted tax rate as the GAAP tax rate, adjusted for discrete tax items and the net impact of non-GAAP adjustments. Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. Specifically, these non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management’s ability to make useful forecasts. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies. Management may, however, utilize other measures to illustrate performance in the future. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided below. These non-GAAP measures exclude (i) special inventory provisions, (ii) amortization of acquisition-related intangibles, (iii) restructuring charges, (iv) acquisition and integration costs, (v) goodwill and intangible asset impairments, (vi) long-lived asset impairments and accelerated depreciation of certain long-lived assets, (vii) foreign exchange gains/losses, (viii) interest income, (ix) benefit (provision) from income taxes, (x) depreciation, (xi) amortization, (xii) stock-based compensation, (xiii) gain/loss on disposal of assets/divestiture, (xiv) settlement and fees of litigation matters (xv) certain discrete tax items, and (xvi) non-GAAP income tax reconciling adjustments. We have not provided a quantitative reconciliation of forward-looking Non-GAAP adjusted earnings per diluted share and adjusted EBITDA to their most directly comparable GAAP financial measures because we are unable to estimate with reasonable certainty the ultimate timing or amount of certain significant items without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact adjusted earnings per diluted share and adjusted EBITDA. This includes items that have not yet occurred, are out of the Company’s control, cannot be reasonably predicted and/or for which there would not be any meaningful adjustment or difference. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Our non-GAAP tax provision for the fiscal first quarter of 2026 is 30%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments. IPG PHOTONICS CORPORATION SUPPLEMENTAL SCHEDULE OF NON-GAAP MEASUREMENTS (UNAUDITED) Reconciliation of Gross Profit to Adjusted Gross Profit, Adjusted Gross Margin Three Months Ended March 31, 2026 2025 (in thousands, except percentages)Gross profit $99,499 $89,812 Gross margin 37.5% 39.4%Amortization of acquisition-related intangibles 852 1,016 Acquisition and integration charges — 222 Adjusted gross profit $100,351 $91,050 Adjusted gross margin 37.8% 40.0%Reconciliation of Operating income (loss) to Adjusted Operating Income Three Months Ended March 31, 2026 2025 (in thousands)Operating (loss) income $(7,736) $1,827Amortization of acquisition-related intangibles 2,089 2,502Restructuring charges 66 —Acquisition and integration charges 906 991Settlement and fees of litigation matters 14,128 —(Gain) loss on foreign exchange (200) 2,411Adjusted operating income $9,253 $7,731Reconciliation of Net income to Adjusted EBITDA Three Months Ended March 31, 2026 2025 (in thousands)Net income $1,584 $3,758 Interest income, net (6,922) (7,444)Provision for income taxes (565) 6,857 Depreciation 12,747 11,556 Amortization 3,145 3,785 EBITDA $9,989 $18,512 Stock based compensation 10,341 10,767 Restructuring charges 66 — Acquisition and integration charges 906 991 Settlement and fees of litigation matters 14,128 — (Gain) loss on foreign exchange (200) 2,411 Adjusted EBITDA $35,230 $32,681 Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Diluted Three Months Ended March 31, 2026 2025 (in thousands, except per share data)Net income $1,584 $3,758 Amortization of acquisition-related intangibles 2,089 2,502 Restructuring charges 66 — Acquisition and integration charges 906 991 Settlement and fees of litigation matters 14,128 — (Gain) loss on foreign exchange (200) 2,411 Certain discrete tax items (1,119) 4,614 Tax impact of non-GAAP adjustments (4,873) (1,148)Adjusted net income $12,581 $13,128 Adjusted net earnings per diluted share $0.29 $0.31 Weighted average diluted shares outstanding 42,912 42,832 Reconciliation of GAAP to Non-GAAP Effective Tax Rate Three Months Ended March 31, 2026 2025 Tax rate (55)% 65% Discrete tax items 110% (43)%Net impact of non-GAAP adjustments (25)% (1)%Adjusted tax rate 30% 21% Source: IPG Photonics Corporation