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G PHOTONICS IPG PHOTONICS REPORTS THIRD QUARTER 2021 FINANCIAL RESULTS Improved Demand in Europe and U.S. and Growth in Emerging Products and Applications Drive Revenue of $ 379 Million and Earnings per Diluted Share of $ 1.40 OXFORD , Mass . – November 2 , 2021 - IPG Photonics Corporation ( NASDAQ : IPGP ) today reported financial results for the third quarter ended September 30 , 2021 . Three Months Ended September 30 , Nine Months Ended September 30 , ( In millions , except per share data and percentages ) 2021 2020 Change 2021 Revenue 379.2 $ 318.4 19 % $ 1,096.4 $ 2020 864.1 Change 27 % Gross margin 49.0 % 48.0 % 48.4 % 45.4 % Operating income $ 102.0 $ 41.4 146 % $ 283.1 $ 133.4 112 % Operating margin 26.9 % 13.0 % 25.8 % 15.4 % Net income attributable to IPG Photonics Corporation $ Earnings per diluted share 75.4 $ 1.40 $ 35.6 0.66 112 % $ 112 % $ 213.3 $ 3.95 $ 110.2 94 % 2.05 93 % Management Comments " We are very pleased with our results and execution this quarter as an increasing geographic and product diversification helped us deliver one of the highest quarterly revenues in the Company's history , " said Dr. Eugene Scherbakov , IPG Photonics ' Chief Executive Officer . " Growth in demand in welding applications across most geographies and higher revenue in cutting in North America and Europe as well as emerging products and applications , such as foil cutting , cleaning , 3D printing , drilling , medical and solar cell applications drove strong revenue in the quarter , despite significantly softer demand in cutting applications in China . " Financial Highlights Third quarter revenue of $ 379 million increased 19 % year over year . Materials processing sales accounted for 91 % of total revenue and increased 19 % year over year driven by higher sales in welding , marking and additive manufacturing applications , while revenue in Other applications increased 17 % year over year due to higher medical sales . Increased sales in welding and strong growth in cutting in North America and Europe were offset by lower revenue in cutting applications in China , which resulted in a decrease of 4 % year over year in sales of high power continuous wave ( CW ) lasers . Pulsed and medium power lasers revenue increased , driven by growth in emerging products and applications . Systems also generated solid growth in the quarter helped by a sharp increase in LightWELD sales . By region , sales increased 50 % in Europe and 55 % in North America , and decreased 7 % in China , on a year - over - year basis . Earnings per diluted share ( EPS ) of $ 1.40 increased 112 % year over year . Foreign exchange gains increased EPS by $ 0.04 . The effective tax rate in the quarter was 26 % . During the third quarter , IPG generated $ 102 million in cash from operations . Capital expenditures were $ 40 million and stock repurchases totaled $ 36 million in the quarter . Business Outlook and Financial Guidance " Third quarter book - to - bill was slightly greater than one as we continued to see strong demand from emerging products and applications and benefit from macro trends such as investments into EV , clean energy and automation . We remain excited about growth prospects for IPG in EV applications , medical , handheld laser , ultrafast lasers , and many other opportunities , which we believe will drive our revenue growth in the future . However , ongoing weakness in cutting applications in China resulted in a more cautious near - term outlook , " concluded Dr. Scherbakov . For the fourth quarter of 2021 , IPG expects revenue of $ 330 to $ 360 million . The Company expects the fourth quarter tax rate to be approximately 25 % . IPG anticipates delivering earnings per diluted share in the range of $ 1.00 to $ 1.30 . 1