IPGP

A month has gone by since the last earnings report for IPG Photonics (IPGP). Shares have lost about 16.6% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is IPG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. IPG Photonics Corporation reported second-quarter 2026 adjusted earnings of 58 cents per share, up 93% year over year. The figure beat the Zacks Consensus Estimate by 45%.Revenues of $278.58 million rose 11% year over year but missed the consensus mark by 0.2%. Strong demand across Industrial Solutions, particularly battery manufacturing, supported growth. Emerging growth products represented 58% of revenues, up from 53% in the prior quarter. Industrial Solutions revenues increased 16% year over year to $237 million and accounted for 85% of total sales. Growth was driven by higher welding, marking, cleaning and additive manufacturing revenues. Sequentially, the segment advanced 4%, led by welding and cleaning applications.Battery manufacturing remained an important demand driver for welding products. The performance helped IPGP deliver its third consecutive quarter of double-digit year-over-year revenue growth. Changes in foreign exchange rates added roughly 2% to total revenues. Advanced Solutions revenues declined 9% year over year to $41.5 million. Lower micromachining and defense sales more than offset growth in semiconductor applications. However, revenues improved 10% sequentially as semiconductor and micromachining demand strengthened.The company continues to pursue expansion opportunities in higher-growth applications. Its planned acquisition of Lumibird Medical is expected to establish a larger medical laser platform, including ophthalmology treatment and diagnostic systems, while complementing IPG Photonics’ existing urology presence. Asia revenues increased 19% year over year, primarily reflecting stronger welding sales. The region also posted sequential growth as demand for Industrial Solutions remained robust.Europe revenues rose 5% from the year-ago quarter, supported by cleaning and additive manufacturing applications. North American sales decreased 2% due to lower cutting, medical and defense revenues, although marking and defense sales improved sequentially. GAAP gross margin increased 310 basis points year over year to 40.4%. Adjusted gross margin expanded 290 basis points to 40.7%. Both measures also improved sharply from the first quarter.The margin gains reflected lower product costs, reduced inventory provisions and $4.7 million in tariff refunds recorded during the quarter. Operating expenses, excluding foreign exchange and other items, were $91.4 million, up 1% year over year but down 2% sequentially. Expenses benefited from a $1.8 million German research and development tax credit. Adjusted EBITDA rose 54% to $48.5 million, exceeding the upper end of management’s second-quarter guidance. Adjusted operating income surged 246% year over year to $23.9 million. IPG Photonics ended the quarter with $871 million in cash and short-term investments and $33 million in long-term investments. The company had no debt.For the second quarter of 2026, Cash generated from operations was $37.8 million. For the third quarter of 2026, IPGP expects revenues between $265 million and $295 million. Adjusted gross margin is projected to be in the range of 37.5% to 40.5%, while adjusted operating expenses are expected to be between $92 million and $95 million.Adjusted earnings are forecasted to be between 30 cents and 60 cents per share. Adjusted EBITDA is expected to be in the range of $35 million-$51 million. It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 5.58% due to these changes. At this time, IPG has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, IPG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IPG Photonics Corporation (IPGP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The gain was set before the results crossed, and its optical peers rose with it. Coherent (COHR) stock gained about 9% on Wednesday, which reads like a market applauding a good quarter. The timing says otherwise. The fourth-quarter results did not cross until after the closing bell, so the entire session's gain was locked in before anyone outside the company had seen a figure, and the coverage that followed the release reported the stock slipping despite the beat. Its Optical Peers Rose That Same Session The tape points away from anything Coherent-specific. LITE gained 13.6% over the same window, MKSI 4.2%, IPGP 1.8%, against 0.3% for the S&P 500. The day was framed in advance as a same-session read on the AI networking build-out, with Cisco Systems also reporting after that close, and buyers who could not yet have seen either set of numbers paid up across the group. That is exposure to a theme, not to a company, and a single session can reprice an entire group. The Trefis High Quality Portfolio does not depend on the handful of largest technology names to produce its returns. Indium Phosphide, Not Orders, Sets The Ceiling Coming into Wednesday, the stock was already up about 205% over the trailing year. On a run like that, a beat and an above-consensus outlook are the price of admission, not a surprise. The fiscal Q4 report (ended June) put record revenue of $2.05 billion on the board, up 34% year over year and 42% excluding two businesses sold during the year, with data center and communications at 79% of the total. What the report did not settle is how fast that demand converts into product. Management names Indium Phosphide capacity as the primary constraint, and Indium Phosphide lasers are what sit inside its 800G and 1.6T transceivers. The company produced about 80% more of those lasers in the June quarter than a year earlier, and yields on its 6-inch lines in Texas and Sweden are running above those on its 3-inch lines. Watch The Ramp, Not The Reaction Management expects internal Indium Phosphide output capacity to double year over year by the end of the September quarter, a quarter ahead of the original plan, with guidance for that period of $2.2 billion to $2.4 billion. Beyond transceivers, first revenue from co-packaged optics is expected in the December quarter, carried by ultra-high-power CW lasers that its Texas plant has begun to ramp. Those two ramps decide whether the order book turns into revenue. The stock itself is the noisier variable: in the six sessions before Wednesday it rose 13.4% on one day and fell 14.2% on another, which is a wide swing for a business whose order book management describes as booked out. If you are sizing a position around the next print, the useful record is how this stock has actually traded through its own earnings, rather than how it traded into this one. A Ramp Is A Schedule, And Schedules Slip Coherent's demand looks booked, but its delivery runs through one material and a small number of plants, and that is timing risk no single position can spread. The Trefis High Quality (HQ) Portfolio is built the other way, as a system rather than a bet on one company's schedule. That portfolio has a track record of outpacing the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. IPG Photonics (IPGP) reported second quarter 2026 earnings on 4 August, with higher sales but lower net income and earnings per share. The company also issued third quarter revenue guidance of US$265 million to US$295 million. See our latest analysis for IPG Photonics. Since the start of 2026, IPG Photonics has delivered a 15.85% year to date share price return, although recent momentum has faded, with the share price down 10.25% over 30 days and the 1 year total shareholder return at 16.02% against weaker multi year results. If this earnings reaction has you looking beyond IPG Photonics, it can be helpful to scan for other automation and laser related opportunities using a focused robotics and automation screener such as 36 robotics and automation stocks. The share price pullback after IPG Photonics’ earnings leaves investors weighing two readings. Has the recent rebound already priced in most of the recovery, or is there still meaningful upside left as the fundamentals are reassessed next? Analysts following IPG Photonics see a fair value of $130.50 per share, compared with the latest close at $86.70. That gap hinges on a detailed story about future growth, profitability, and what multiple investors might be willing to pay for those earnings. Read the complete narrative. Want to understand why this narrative supports a higher fair value for IPG Photonics? The core assumptions blend steady revenue expansion, rising margins, and a future earnings multiple that stands well above the broader electronics sector. Curious how those three ingredients interact to produce a $130.50 figure from a discount rate just under 9% and a long term earnings target years from now? The full narrative sets out that blueprint in detail. Result: Fair Value of $130.50 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, IPG Photonics still faces meaningful risks, including softness in core materials processing and higher spending on R&D and expansion that could weigh on profitability if newer segments underperform. Find out about the key risks to this IPG Photonics narrative. The earlier narrative framed IPG Photonics as 33.6% undervalued based on future earnings and a higher P/E in 2029. On today’s numbers, the picture looks very different. IPG Photonics trades on a P/E of 133.8x versus 32.2x for the US Electronic industry and 39.3x for peers, while the fair ratio is 51.8x. That gap points to meaningful valuation risk if sentiment or growth expectations cool. Which story do you think better fits your own assumptions about the next few years? See what the numbers say about this price — find out in our valuation breakdown. With IPG Photonics showing both supportive narratives and clear points of concern, it makes sense to review the data yourself and move quickly while sentiment is still forming. To see the key issues and potential upsides in one place, start with the 3 key rewards and 2 important warning signs. If you are reassessing IPG Photonics after these earnings, this is a good moment to broaden your watchlist using focused sets of stock ideas that match your style. Target potential mispricings by reviewing companies that screen well on value through the 50 high quality undervalued stocks. Strengthen your income stream by assessing candidates with higher yields and resilient payouts in the 9 dividend fortresses. Prioritise resilience by focusing on companies that pass strict balance sheet and fundamentals checks in the solid balance sheet and fundamentals stocks screener (49 results). This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include IPGP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. IPG Photonics stock has delivered a strong gain over the past year yet remains well below its level from five years ago, and the current valuation checks flag the shares as leaning expensive rather than a clear bargain. Over the last five years, IPG Photonics shareholders have seen the stock fall 47.0%, which raises questions about how much fundamental progress is now already reflected in the current price. Future revenue growth and margin resilience can support today’s price, while any setback in cash flow generation or higher perceived business risk may quickly pressure what investors are willing to pay. IPG Photonics currently passes 0 of 6 valuation checks, which suggests the stock does not screen as attractively priced on Simply Wall St’s broader tests of value based on 0. The issue now is whether the recent share price recovery leaves enough upside potential to compensate you for the risks implied by these valuation signals. Find out why IPG Photonics' 27.2% return over the last year is lagging behind its peers. The P/E ratio is a useful starting point for IPG Photonics because the company is currently profitable and investors often anchor on earnings when thinking about valuation. Right now IPG Photonics trades on a P/E of about 141.6x, which is more than three times the Electronic industry average of roughly 32.2x and also well above the peer group average of about 39.6x. That puts the stock at a clear premium to many companies investors might see as alternatives in the same space. The fair P/E ratio from Simply Wall St’s model is about 52.3x. This is the multiple that would typically line up with IPG Photonics given its sector, quality profile and risk inputs. The current market P/E is therefore far higher than this modelled level, which implies that a lot of optimism is already embedded in the share price and leaves less room for disappointment if conditions turn out to be less favourable than implied. On this P/E basis, IPG Photonics stock currently screens as overvalued. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives take the valuation puzzle around IPG Photonics' current P/E and turn it into explicit paths for how growth, margins and earnings might evolve, so you can see what would need to happen for the stock to be worth materially more or less than today's price based on those assumptions. Each narrative links its number to a clear view on where IPG Photonics' growth, profitability and business risk could go next, which you can revisit as fresh information comes through. One of the top community narratives on IPG Photonics: 30% undervalued Read one of the top narratives on IPG Photonics Do you think there's more to the story for IPG Photonics? Head over to our Community to see what others are saying! IPG Photonics currently looks overvalued on earnings based measures, with the market asking a premium multiple relative to its sector and peers. The broader valuation checks also come out weak, which suggests little margin of safety is built into the current share price. From here, the key question is whether IPG Photonics can deliver the level of revenue growth and margin strength that would keep investors comfortable paying this kind of P/E, or whether any disappointment forces that multiple to reset. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include IPGP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

IPG Photonics Corporation IPGP reported second-quarter 2026 adjusted earnings of 58 cents per share, up 93% year over year. The figure beat the Zacks Consensus Estimate by 45%.Revenues of $278.58 million rose 11% year over year but missed the consensus mark by 0.2%. Strong demand across Industrial Solutions, particularly battery manufacturing, supported growth. Emerging growth products represented 58% of revenues, up from 53% in the prior quarter. Industrial Solutions revenues increased 16% year over year to $237 million and accounted for 85% of total sales. Growth was driven by higher welding, marking, cleaning and additive manufacturing revenues. Sequentially, the segment advanced 4%, led by welding and cleaning applications.Battery manufacturing remained an important demand driver for welding products. The performance helped IPGP deliver its third consecutive quarter of double-digit year-over-year revenue growth. Changes in foreign exchange rates added roughly 2% to total revenues. IPG Photonics Corporation price-consensus-eps-surprise-chart | IPG Photonics Corporation Quote Advanced Solutions revenues declined 9% year over year to $41.5 million. Lower micromachining and defense sales more than offset growth in semiconductor applications. However, revenues improved 10% sequentially as semiconductor and micromachining demand strengthened.The company continues to pursue expansion opportunities in higher-growth applications. Its planned acquisition of Lumibird Medical is expected to establish a larger medical laser platform, including ophthalmology treatment and diagnostic systems, while complementing IPG Photonics’ existing urology presence. Asia revenues increased 19% year over year, primarily reflecting stronger welding sales. The region also posted sequential growth as demand for Industrial Solutions remained robust.Europe revenues rose 5% from the year-ago quarter, supported by cleaning and additive manufacturing applications. North American sales decreased 2% due to lower cutting, medical and defense revenues, although marking and defense sales improved sequentially. GAAP gross margin increased 310 basis points year over year to 40.4%. Adjusted gross margin expanded 290 basis points to 40.7%. Both measures also improved sharply from the first quarter.The margin gains reflected lower product costs, reduced inventory provisions and $4.7 million in tariff refunds recorded during the quarter. Operating expenses, excluding foreign exchange and other items, were $91.4 million, up 1% year over year but down 2% sequentially. Expenses benefited from a $1.8 million German research and development tax credit.Adjusted operating income surged 246% year over year to $23.9 million.  Adjusted EBITDA rose 54% to $48.5 million, exceeding the upper end of management’s second-quarter guidance. IPG Photonics ended the quarter with $871 million in cash and short-term investments and $33 million in long-term investments. The company had no debt.For the second quarter of 2026, Cash generated from operations was $37.8 million. For the third quarter of 2026, IPGP expects revenues between $265 million and $295 million. Adjusted gross margin is projected to be in the range of 37.5% to 40.5%, while adjusted operating expenses are expected to be between $92 million and $95 million.Adjusted earnings are forecasted to be between 30 cents and 60 cents per share. Adjusted EBITDA is expected to be in the range of $35 million-$51 million. IPG Photonics currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader Zacks Computer and Technology sector include Applied Materials AMAT, ACI Worldwide ACIW and Analog Devices ADI. Each stock carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Applied Materials shares have gained 112.7% in the year-to-date period. Applied Materials is set to report second-quarter 2026 results on Aug. 13.Shares of ACI Worldwide have gained 19.7% in the year-to-date period. ACI Worldwide is set to report the second-quarter 2026 results on Aug. 6.Shares of Analog Devices have rallied 40.3% year to date. Analog Devices is slated to report fiscal third-quarter 2026 results on Aug. 19. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IPG Photonics Corporation (IPGP) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report ACI Worldwide, Inc. (ACIW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

IPG Photonics (IPGP) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.3 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +45.00%. A quarter ago, it was expected that this high-powered laser maker would post earnings of $0.32 per share when it actually produced earnings of $0.29, delivering a surprise of -9.38%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. IPG, which belongs to the Zacks Lasers Systems and Components industry, posted revenues of $278.58 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.21%. This compares to year-ago revenues of $250.72 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. IPG shares have added about 21.8% since the beginning of the year versus the S&P 500's gain of 11%. While IPG has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for IPG was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.47 on $277.13 million in revenues for the coming quarter and $1.66 on $1.11 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Lasers Systems and Components is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Computer and Technology sector, Inseego (INSG), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This holding company is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of -250%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Inseego's revenues are expected to be $40.1 million, down 0.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IPG Photonics Corporation (IPGP) : Free Stock Analysis Report Inseego (INSG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Improving Industrial Demand and Continued Focus on Strategic Initiatives Drive Results Managing Costs and Driving Gross Margin Improvement MARLBOROUGH, Mass., Aug. 04, 2026 (GLOBE NEWSWIRE) -- IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the second quarter ended June 30, 2026. *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 “We delivered our third consecutive quarter of double-digit year-over-year revenue growth, with revenue above the midpoint of our guidance and adjusted gross margin and adjusted EPS above our expectations,” said Dr. Mark Gitin, Chief Executive Officer of IPG Photonics. “Industrial Solutions generated strong revenue growth, supported by robust demand and disciplined execution across different markets and applications, particularly in battery manufacturing. Advanced Solutions revenue benefited from our continued focus on key strategic initiatives, resulting in strong sales growth in semiconductor applications. We see continued interest in our CROSSBOW™ directed energy system. Additionally, our recently announced acquisition of Lumibird Medical will further accelerate our strategic expansion into attractive medical markets in Advanced Solutions.” Financial Highlights Second quarter revenue of $279 million increased 11% year over year, driven by 16% growth in Industrial Solutions. Changes in foreign exchange rates increased revenue by approximately 2%. Industrial Solutions sales, accounting for 85% of total revenue, were driven by growth in welding, marking, cleaning and additive manufacturing applications. Advanced Solutions sales decreased 9% year over year due to lower revenue in micromachining and defense applications, partially offset by increased sales in semiconductor applications. Emerging growth products accounted for 58% of total revenue, up from 53% in the prior quarter. By region, sales increased 19% in Asia and 5% in Europe, while decreasing 2% in North America on a year-over-year basis. GAAP gross margin of 40.4% and adjusted gross margin of 40.7% increased year over year, driven by lower product costs, lower inventory provisions, and $4.7 million in tariff refunds recorded in the period. Adjusted EBITDA was $48.5 million and adjusted earnings per diluted share (EPS) was $0.58 in the second quarter. During the second quarter, IPG generated $37.8 million in cash flow from operations and spent $20.7 million on capital expenditures. Business Outlook and Financial Guidance “Our book-to-bill remained above one in the second quarter, pointing to ongoing robust demand for our solutions and the team's focused execution of our growth strategy. Our technological leadership in lasers and photonics and proven track record of solving challenging customer problems continues to create compelling opportunities for laser adoption in attractive markets and applications. Supported by the One IPG Operating Model, which drives operational excellence, and an innovation engine, we are unlocking areas of significant additional and lasting value for our customers and stockholders,” concluded Dr. Gitin. For the third quarter of 2026, IPG expects revenue of $265 million to $295 million, adjusted gross margin between 37.5% and 40.5% and adjusted operating expenses of $92 million to $95 million. IPG anticipates delivering adjusted earnings per diluted share in the range of $0.30 to $0.60 and adjusted EBITDA in the range of $35 million to $51 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 0.88, Japanese yen 162 and Chinese yuan 6.81, respectively. Supplemental Financial Information Additional supplemental financial information is provided in the unaudited Financial Data Workbook and Second 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, August 4, 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 FedotoffSenior Director, Investor Relations IPG Photonics Corporation [email protected] About IPG Photonics Corporation Innovation is at the heart of IPG Photonics. As a global leader in laser technology, we apply light to transform the world. From manufacturing to medical and beyond, our breakthrough laser solutions power our customers’ success and expand what's possible. Discover more at 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 acquisition of Lumibird Medical further accelerating our strategic expansion into attractive medical markets in Advanced Solutions, ongoing robust demand for our solutions and the team’s focused execution of our growth strategy, our technological leadership in lasers and photonics and proven track record of solving challenging customer problems continuing to create compelling opportunities for laser adoption in attractive markets and applications, the One IPG Operating Model driving operational excellence, and an innovation engine, unlocking areas of significant additional and lasting value for our customers and stockholders, and statements related to share 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 third 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 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. 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) impairment charges, (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 second quarter of 2026 is 29%. 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 CORPORATIONSUPPLEMENTAL SCHEDULE OF NON-GAAP MEASUREMENTS (UNAUDITED) Reconciliation of Gross Profit to Adjusted Gross Profit, Adjusted Gross Margin Reconciliation of Operating income (loss) to Adjusted Operating Income Reconciliation of Net income to Adjusted EBITDA Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Diluted Reconciliation of GAAP to Non-GAAP Effective Tax Rate

(Bloomberg) -- SpaceX’s first earnings report following its blockbuster initial public offering is one of the most anticipated events of the summer on Wall Street. Whether it’ll give investors a reason to buy the sinking stock is another matter. Most Read from Bloomberg Beer Dynasty Families Sell €731 Million Stake in AB InBev Apple’s New CEO Taps Retired Hardware Executive for Management Team Taco Bell Met With Michigan on Parasite Weeks Before Recall Mamdani Dismisses Business Leaders Advising NYC’s Mayor’s Fund S&P 500 Closes Near Record High on US-Iran Hopes: Markets Wrap Elon Musk’s satellite, space and artificial intelligence company went public at $135 in June, and the shares have been on a roller coaster ride ever since, shooting up to $225 in the first days of trading and then plunging below the offering price. They closed Monday at $114.53, down 15% from the IPO and 49% from their high on June 16, erasing more than $1 trillion in market value from that peak. Earnings will give investors a chance to reassess the stock. The problem is SpaceX isn’t profitable and has a very speculative business at this point, so the results may end up raising more questions than they answer. With the shares still trading at a sky-high valuation despite the selloff, it will be difficult to entice new buyers. “There is so much that’s in the future of the SpaceX story, so much that hasn’t been done yet, or ever, so there’s nothing to make you comfortable,” said Drew Cupps, portfolio manager and head of the 5Perspectives Growth Team investment group at Polen Capital, which owns a small position in the company. “There’s not a lot of here and now. There’s no, look at last year to justify what you should pay now.” To make matters even more challenging for the stock, a flood of fresh SpaceX shares also is about to hit the market, as the first of many lockups that ban early investors from selling expires two days after the earnings report. As many as 911.5 million SpaceX shares worth more than $100 billion will be released on Aug. 6. And that’s just the start as billions of additional shares will be eligible for trading before the end of the year. All of which will weigh on the stock price simply based on the market’s supply and demand function. “It’s a total mess,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. Wall Street expects SpaceX to report a loss of 24 cents per share in the second quarter on $6.8 billion of revenue. The results have been somewhat of a moving target, however, because so little information about the business is available. Analysts have widened their estimates for the company’s loss by 18% in the past month. “I have very little confidence in those estimates,” said Jim Lebenthal, chief market strategist at Cerity Partners. “I don’t mean this obnoxiously, but I think they’re mostly licking their fingers and sticking it in the wind.” What investors and analysts will primarily be looking for is management’s comments on the company’s progress with AI, Starlink and its rocket launch business. “We don’t have concrete earnings power that would be analogous to other parts of the market, but we do have a visionary set of massively capable assets that are in some cases unrivaled over all others,” said Polen Capital’s Cupps. SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders, including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. Investors are particularly rewarding companies that are showing clear payoffs from their capital expenditures. For example, shares of Amazon and Microsoft surged following the companies’ results. With a market capitalization of roughly $1.5 trillion, SpaceX rivals the size of many megacap tech firms and is bigger than Musk’s other company, Tesla Inc. But its financials aren’t close, at least not yet, meaning investors may apply additional scrutiny to its spending plans. Analysts expect the company to report capital expenditures of $18.5 billion in the quarter and $45.5 billion for 2026. The primary issue facing SpaceX shares is their extreme market valuation. The stock trades at about 448 times earnings estimated over the next 12 months, the highest multiple of any member of the Nasdaq 100 Index, and 26 times estimated sales, which is among the 10 highest ratios in the technology-heavy benchmark. That helps explain why the short interest in SpaceX, which measures bearish bets against the stock, jumped to 34% of the company’s float, or the number shares available to trade in the market, from about 18% a month ago, according to data from S3 Partners. There are already more short bets against SpaceX than there are against Tesla. Still, Wall Street remains overwhelmingly bullish on the stock. Of the 39 analysts tracked by Bloomberg who cover the company, 30 have buy ratings. And few have backtracked on their extravagant predictions from when SpaceX went public. Raymond James analyst Brian Gesuale is sticking with his call for the shares to reach $800 within the next 12 months on exponential revenue growth. Adam Jonas at Morgan Stanley recently reiterated his $300 price target and said that shares trading at $100 values the company’s AI business at zero, making this an attractive entry point for investors. And Bernstein’s Douglas Harned is urging investors to ignore the specifics of the earnings report and focus instead on the company’s confidence in the future. “We believe the quarterly results should not matter,” Bernstein analysts led by Harned wrote in a note to clients on Friday. “What will be important is the level of confidence projected by management regarding the company’s growth path. Investors should look beyond short term stock movements as we view the case for a multi-trillion dollar valuation is about ‘if’ not ‘when’, for orbital data center plans.” Tech Chart of the Day Amazon.com Inc. surpassed $3 trillion in market value for the first time, becoming only the fifth company to ever reach the milestone. Top Tech Stories Palantir Technologies Inc. raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand for its data analytics tools as “otherworldly.” Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Grab Holdings Ltd. raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict. Apple Inc. briefly removed the Telegram messaging app from its App Store after finding content on the platform that violated a ban on child sexual abuse material. China is growing anxious that Anthropic PBC’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Donald Trump. Earnings Due Earnings Premarket: Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek Americans Are Rethinking Their Love Affair With Plant Milks A Wall Street Troll Reinvented Himself as the Groypers’ Pick for Governor. The GOP Can’t Get Rid of Him Trump’s Arctic Mining Deal Signals a New Era of State Capitalism Tokenmaxxing Is Dead. Now Comes the Belt Tightening Why Wall Street Is Getting Angry ©2026 Bloomberg L.P.

Interested in IPG Photonics Corporation? Here are five stocks we like better. IPG Photonics reported strong second-quarter growth: Revenue rose 11% year over year to $279 million, marking the third straight quarter of double-digit growth. Industrial solutions led performance, particularly battery-welding applications, while bookings improved and book-to-bill stayed above one. Semiconductor and medical opportunities are expanding: Advanced solutions revenue increased sequentially on semiconductor demand tied to AI-related GPUs and high-bandwidth memory. IPG also agreed to acquire Lumibird Medical, which it expects to expand its medical addressable market by about $1 billion. Profitability exceeded expectations, but third-quarter guidance reflects tariff pressure: Adjusted gross margin was 40.7%, adjusted EPS was $0.58, and the company ended the quarter with $904 million in cash and investments and no debt. IPG forecast third-quarter revenue of $265 million to $295 million and adjusted EPS of $0.30 to $0.60, including an estimated 150-basis-point tariff impact on gross margin. 3 Photonics Companies Making Quantum Tech Possible IPG Photonics (NASDAQ:IPGP) reported second-quarter 2026 revenue of $279 million, up 11% from a year earlier and representing its third consecutive quarter of double-digit year-over-year sales growth. Revenue exceeded the midpoint of the company’s guidance, while bookings improved and book-to-bill remained above one, according to management. CEO Mark Gitin said growth was led by industrial solutions, particularly welding applications tied to battery manufacturing. The company also cited contributions from cleaning and additive manufacturing, while advanced solutions improved sequentially on demand from semiconductor customers. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Coherent gains from the AI chip boom “Growth in both revenue and bookings points to sustained demand for our products across our end markets,” Gitin said. Industrial solutions revenue increased 16% year over year and 4% sequentially in the second quarter. CFO Tim Mammen attributed the annual increase to growth in welding, marking, cleaning and additive manufacturing, while the sequential gain was driven primarily by welding and cleaning. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? This mid-cap tech stock just jumped 30%...and is still cheap Management said demand in battery manufacturing remained strong across electric-vehicle and stationary-storage applications. Gitin said stationary storage is increasingly being supported by data-center energy requirements associated with artificial intelligence, as well as grid stability needs tied to solar and other renewable-energy sources. The company said its battery-related wins have been supported by its Adjustable Mode Beam lasers, beam-delivery technology and real-time process monitoring capabilities. Gitin said those offerings have helped IPG secure recent business with two major global automotive manufacturers. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Additive manufacturing revenue also grew significantly from the prior year. Gitin said IPG’s latest laser products can raise process speeds by roughly 1.5 to two times in certain applications, which the company said can improve customer productivity and lower the total cost per part. The company is working with OEM customers to expand additive manufacturing beyond its traditional aerospace and defense uses into areas including medical and consumer devices. Sales of emerging growth products represented 58% of total second-quarter revenue, up from 53% in the first quarter. Mammen said the increase was driven by strong growth in lasers and solutions for battery manufacturing processes. Advanced solutions revenue declined 9% year over year, as growth in semiconductor applications was offset by lower micromachining and defense revenue. However, the segment increased 10% sequentially, supported by semiconductor growth and an improvement in micromachining applications. Gitin said the company is gaining business with large semiconductor-equipment manufacturers in lithography, metrology and inspection applications. He said IPG is working with customers on product design and development opportunities as demand rises for GPUs and high-bandwidth memory chips used in AI-related applications. In defense, IPG began shipping Lockheed Martin’s order for its CROSSBOW directed-energy system during the second quarter and expects to ship additional units in the third quarter. Gitin said the company recently demonstrated CROSSBOW at White Sands Missile Range and that the system has undergone testing in domestic and overseas environments. Management said it sees potential for the system in military and civilian infrastructure applications, citing the need for cost-effective countermeasures against Group 1 and Group 2 drones. On July 16, IPG entered into a binding offer to acquire Lumibird Medical, which provides diagnostic and treatment systems for ophthalmology. The company expects the transaction to close in the fourth quarter of 2026. Gitin said the acquisition would expand IPG’s advanced solutions business into medical markets, combine its urology business with Lumibird Medical’s ophthalmology operations, and increase the company’s addressable medical market by approximately $1 billion. IPG expects the deal to be accretive to gross margin, EBITDA and adjusted earnings per share in its first year. Separately, management said medical bookings and backlog remain strong, with shipments expected to increase during the second half of 2026. Gitin said the company expects its existing medical business, currently representing roughly 7% to 8% of revenue according to comments on the call, to more than double over the next two to three years. New product approvals and introductions are planned for 2026 and 2027. GAAP gross margin was 40.4%, while adjusted gross margin was 40.7%, above the company’s guidance range. Results included approximately $4.7 million in tariff refunds, contributing about 170 basis points to gross margin. Lower inventory provisions and product costs also helped margins, though Mammen said manufacturing cost absorption remains below the company’s medium-term target. GAAP operating income was $5 million, and GAAP diluted earnings per share were $0.12. Adjusted operating income was $24 million, while adjusted diluted earnings per share were $0.58. Adjusted EBITDA totaled $49 million. The company ended the quarter with $871 million in cash equivalents and short-term investments, $33 million in long-term investments and no debt. Cash flow from operations was $38 million, while capital expenditures were $21 million during the quarter. IPG maintained its full-year capital-expenditure outlook of $90 million to $100 million, including spending for a major fiber manufacturing facility in Germany. For the third quarter, the company forecast revenue of $265 million to $295 million, adjusted gross margin of 37.5% to 40.5%, and adjusted diluted earnings per share of $0.30 to $0.60. The outlook incorporates an estimated tariff impact of about 150 basis points on adjusted gross margin. IPG expects third-quarter adjusted EBITDA of $35 million to $51 million. Mammen said the company expects operating expenses to rise modestly as it continues investing in growth initiatives, while management continues to pursue product-cost reductions, manufacturing-efficiency improvements and pricing optimization in differentiated applications. IPG Photonics Corporation is a global leader in the design and manufacture of high-performance fiber lasers and amplifiers used in industrial, medical, scientific, and telecommunications applications. The company's core products include ytterbium and erbium fiber lasers, diode lasers, and fiber amplifiers that deliver high power and efficiency for precision cutting, welding, marking, and engraving. IPG's systems are engineered to optimize process speed, reliability, and energy consumption, making them a preferred choice for advanced manufacturing environments. In addition to stand-alone laser sources, IPG offers turnkey laser systems and integrated solutions tailored to sectors such as automotive, electronics, aerospace, additive manufacturing, and life sciences. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "IPG Photonics Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: Total revenue was $279 million, up 11% year-over-year, marking the third consecutive quarter of double-digit sales growth. Industrial Solutions Revenue: Increased 16% year-over-year, driven by growth in welding, marking, cleaning, and additive manufacturing. Advanced Solutions Revenue: Decreased 9% year-over-year but improved 10% sequentially, with growth in semiconductor applications. GAAP Gross Margin: 40.4%. Adjusted Gross Margin: 40.7%, above the top end of guidance, benefiting from a $4.7 million tariff refund (approximately 170 basis points). Adjusted Operating Expenses: $91 million, excluding $17.6 million in impairment charges and other one-time items. GAAP Operating Income: $5 million. GAAP Net Income: $5 million, or $0.12 per diluted share. Adjusted Operating Income: $24 million. Adjusted Net Income: $25 million. Adjusted EPS: $0.58 per diluted share, above the top end of guidance. Adjusted EBITDA: $49 million. Cash and Investments: $871 million in cash, cash equivalents, and short-term investments, with no debt. Cash Flow from Operations: $38 million in the quarter. Capital Expenditures: $21 million in the quarter; year-to-date CapEx of $37 million. Emerging Growth Products Sales: Accounted for 58% of total revenue, up from 53% in the prior quarter. Regional Revenue: North America decreased 2% year-over-year; Europe increased 5%; Asia increased 19%. Book-to-Bill: Remained above one. Third Quarter 2026 Guidance: Revenue expected between $265 million and $295 million; adjusted gross margin between 37.5% and 40.5%; adjusted EPS between $0.30 and $0.60; adjusted EBITDA between $35 million and $51 million. Warning! GuruFocus has detected 5 Warning Signs with IPGP. Is IPGP fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. IPG Photonics Corp (NASDAQ:IPGP) reported double-digit year-over-year revenue growth for the third consecutive quarter, with Q2 revenue reaching $279 million, up 11%. Bookings remained strong with book-to-bill above 1 for the third consecutive quarter, indicating sustained demand. Adjusted gross margin and adjusted EPS exceeded expectations, with adjusted EPS at $0.58 and adjusted EBITDA at $49 million. The company is making significant progress in strategic growth areas, including battery manufacturing, additive manufacturing, and semiconductor applications, with emerging growth products now accounting for 58% of total revenue. IPG Photonics Corp (NASDAQ:IPGP) announced a binding offer to acquire Lumibird Medical, which is expected to expand its medical laser platform, be accretive to margins and EPS in the first year, and increase its addressable medical market by approximately $1 billion. The company is seeing strong demand and positive momentum for its CROSSBOW directed energy defense system, having begun shipping Lockheed Martin's order and demonstrating capabilities in harsh conditions. Advanced Solutions revenue decreased 9% year-over-year, driven by lower revenue in micromachining and defense. North American revenue declined 2% year-over-year due to lower sales in cutting, defense, and medical applications. The company faces ongoing headwinds from tariffs, which are expected to impact gross margin by approximately 150 basis points in Q3 2026. Manufacturing cost absorption remains below target levels, limiting gross margin expansion. Europe continues to be impacted by higher oil prices and geopolitical tensions, affecting demand in that region. The company expects operating expenses to modestly increase going forward due to continued investments in growth initiatives. Q: Ruben Roy (Stifel) asked about the sustainability of the strong bookings trend (book-to-bill above 1 for three consecutive quarters) and how the company is building a shippable backlog against the Q3 revenue guidance, which is roughly flat at the midpoint. A: Mark Gitin (CEO) confirmed the company is seeing double-digit year-over-year growth for the third consecutive quarter, with book-to-bill above one again. He highlighted encouraging signs across the business, particularly in industrial solutions (battery, additive manufacturing, cleaning) and noted that global PMIs have been expansive and stable, providing positive momentum for advanced solutions. Q: Ruben Roy (Stifel) followed up on the battery commentary, asking about the durability of demand in welding and battery manufacturing, and specifically about IPG's performance in China, including market share gains and the pricing environment. A: Mark Gitin (CEO) explained that demand is driven by high-capacity batteries for EVs and, increasingly, stationary storage for data centers and grid stability. In China, IPG is winning design wins against both local and Western competitors due to differentiation from its Adjustable Mode Beam (AMB) lasers, beam delivery, and measurement capabilities. He noted the company has pricing power in areas of strong differentiation and highlighted growth in additive manufacturing, where new lasers improve throughput by 1.5 to 2 times, expanding the market into medical and consumer devices. Q: Ruben Roy (Stifel) asked CFO Tim Mammen about the progress on structural cost-out initiatives and how he is thinking about utilization leverage and gross margins going forward. A: Timothy Mammen (CFO) detailed several drivers for gross margin improvement: taking cost out of products by moving to higher-power optical components (like diodes), optimizing pricing where IPG has differentiation, and driving improvements in manufacturing absorption. He stated that while the company is still behind on absorption targets, initiatives gaining momentum in the second half of 2026 and into 2027 should drive continued gross margin improvements. Q: Jim Ricchiuti (Needham) asked about the decline in North America revenue, specifically the softer medical business, and what the expectations are for that segment going forward, apart from the Lumibird acquisition. A: Mark Gitin (CEO) stated that medical demand and backlog are very strong, and the company is confident in another good year. He cited new product approvals and introductions planned for 2026 and 2027, a key new product launched at the end of last year, and a new key customer. He reiterated confidence in more than doubling the medical business over the next two to three years. Q: Jim Ricchiuti (Needham) asked about the tone of demand for the rest of the North American business and whether expectations for CROSSBOW in 2027 have changed. A: Mark Gitin (CEO) noted that overall bookings are strong with a book-to-bill above one for the third consecutive quarter, with strength in Asia (Japan and China) and improvement in Europe. On CROSSBOW, he expressed excitement about the program, citing daily headlines on drone threats and the system's compelling cost-exchange ratio. He highlighted recent successful tests at White Sands Missile Range with multiple agencies, including extreme environmental conditions and cooperative engagement tactics, and remains optimistic about both military and civilian applications. Q: Jim Ricchiuti (Needham) asked if the book-to-bill ratio was consistent across major regions or if there was any variability. A: Timothy Mammen (CFO) said there wasn't much variability, with good bookings in Asia (Japan and China), North America, and Europe. He noted Europe is the area most impacted by higher oil prices and the geopolitical environment. He also mentioned strong medical bookings and progress in advanced applications like semiconductor and micromachining, which are still small but gaining a beachhead. Q: Scott Graham (Seaport Research) asked about the company's efforts to get customers to upgrade lasers and change out machinery, citing the 1.5 to 2 times efficiency gain in additive manufacturing. A: Mark Gitin (CEO) explained that IPG's unique strength lies in combining laser/photonics strength with deep application understanding. In additive, this led to specialized mode structures that improved throughput. In semiconductor, the company works with customers on roadmaps to develop specialized solutions for lithography, metrology, and inspection, getting designed into their systems. He also highlighted the subsystems business, where IPG provides full solutions including beam delivery and scanning capabilities. Q: Scott Graham (Seaport Research) asked about the pricing environment, specifically whether recent price increases are intended to fully offset inflation or just partially. A: Mark Gitin (CEO) said pricing power exists where IPG has strong differentiation and adds the most value. Timothy Mammen (CFO) added that the goal is to offset inflationary pressures on material and labor costs while also staying ahead of the curve by reducing product costs through higher-power components and improved manufacturing efficiency, leading to overall gross margin improvement. Q: Keith Housum (Northcoast Research) asked about the size of the Adjustable Mode Beam (AMB) business and whether it is growing faster than the overall business. A: Mark Gitin (CEO) confirmed that AMB lasers are a key piece of the battery welding growth, driven by stationary storage for data centers and longer-range EVs. He noted the high differentiation of the product, particularly the high-power single-mode beam, and highlighted that it is a significant driver of the emerging growth products, which accounted for 58% of total revenue in Q2, up from 53% in the prior quarter. Q: Keith Housum (Northcoast Research) asked to confirm the size of the medical business, given the goal to double it in two to three years. A: Mark Gitin (CEO) confirmed that medical is in the 7% to 8% range of total revenue. For the complete transcript of the earnings call, please refer to the full earnings call transcript.