Page 1

G PHOTONICS IPG PHOTONICS REPORTS SECOND QUARTER 2021 FINANCIAL RESULTS Improved Demand in Europe and U.S. Drives Revenue of $ 372 Million and Earnings per Diluted Share of $ 1.29 OXFORD , Mass . - August 3 , 2021 - IPG Photonics Corporation ( NASDAQ : IPGP ) today reported financial results for the second quarter ended June 30 , 2021 . Three Months Ended June 30 , ( In millions , except per share data and percentages ) 2021 2020 Change 2021 Six Months Ended June 30 , 2020 Change Revenue $ 371.7 $ 296.4 25 % $ 717.2 $ 545.7 31 % Gross margin 48.6 % 46.0 % 48.0 % 43.9 % Operating income $ 92.3 $ 47.2 96 % $ 181.1 $ 92.0 97 % Operating margin 24.8 % 15.9 % 25.2 % 16.9 % Net income attributable to IPG Photonics Corporation $ 69.8 $ 38.2 Earnings per diluted share $ 1.29 $ 0.71 83 % $ 82 % $ 137.9 $ 74.6 85 % 2.55 $ 1.39 83 % Management Comments " Increased economic activity across our core markets and focus on execution and growth opportunities by the team drove our performance in the second quarter , " said Dr. Valentin Gapontsev , IPG Photonics ' Executive Chair of the Board . " We were pleased with our revenue growth this quarter , driven by improved underlying demand in cutting applications in Europe and U.S. and robust growth in welding applications across most geographies , which was partially offset by moderated demand for cutting in China and an impact from supply chain constraints , " said Dr. Eugene Scherbakov , IPG Photonics ' Chief Executive Officer . " Strong demand in emerging materials processing applications , such as solar cell manufacturing , cleaning and 3D printing , also contributed to our revenue growth in the quarter . " Financial Highlights Second quarter revenue of $ 372 million increased 25 % year over year . Materials processing sales accounted for 93 % of total revenue in the quarter and increased 27 % year over year due to higher sales in welding , cutting , solar cell manufacturing , cleaning and additive applications with a growing contribution from service and parts . Sales into other applications increased 5 % year over year due to higher sales in medical and advanced applications . Sales of high power continuous wave ( " CW " ) lasers , representing 51 % of total revenue , increased 20 % year over year . Ultra- high power fiber lasers ( 6 kilowatts of power or greater ) represented 51 % of all high power CW laser sales in the quarter . Second quarter sales benefited from strong growth in adjustable mode beam ( AMB ) and pulsed lasers . Systems sales also generated significant growth in the quarter . By region , sales increased 10 % in China , 50 % in Europe , and 23 % in North America on a year - over - year basis . Earnings per diluted share ( " EPS " ) of $ 1.29 increased 82 % year over year . Foreign exchange losses decreased EPS by $ 0.04 . The effective tax rate in the quarter was 24 % . During the second quarter , IPG generated $ 116 million in cash from operations . Capital expenditures were $ 27 million and stock repurchases totaled $ 39 million . 1