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Earnings Call Presentation Third Quarter 2025 • By phone: 877-407-6184 in the US or 201-389-0877 internationally • A live webcast of the call will be available and archived on the investor relations section of the Company's website at investor.ipgphotonics.com November 4, 2025 10:00 am ET
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2 © 2025 IPG PHOTONICS Information and statements provided by IPG and its employees, including statements in this presentation, that relate to future plans, events or performance are forward-looking statements. These statements involve risks and uncertainties. Any statements in this presentation that are not statements of historical fact are forward-looking statements, including those statements related to being confident that our strategy will further differentiate our products, unlock new market opportunities, and fuel the long-term expansion of laser applications, actively taking advantage of our global manufacturing footprint and our in-house supply chain to mitigate potential impacts from tariffs, potential delays in shipping product rather than order cancellations, and statements related to revenue, gross margin and operating expenses outlook, adjusted earnings per share and adjusted EBITDA guidance, and the impact of the U.S. dollar on our guidance for fourth quarter of 2025. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated with the strength or weakness of the 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 trade 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 20, 2025) 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. Note Regarding Forward Looking Statements and Use of Non-GAAP Financials
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3 3© 2025 IPG PHOTONICS • Delivered improved results: ◦ Revenue up 8% (11% ex. divestitures) and Adj. EPS up 9% Y/Y, at the top end of the guidance ◦ Gross margin and Adj. EBITDA above expectations ◦ Stable industrial demand, business wins and growth in battery production ◦ Executing on strategic initiatives, driving growth in medical, micromachining and advanced applications ◦ Controlling operating expenses while investing in growth • Gross margin benefited from higher revenue and lower inventory provisions, offset by higher product costs and tariffs • Bought back $16M of shares and continued to explore tuck-in M&A opportunities Q3 '25 Summary $250.8M Revenue $37.0M Adj. EBITDA $0.35 Adj. EPS
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4 4© 2025 IPG PHOTONICS Welding – improved sequentially and Y/Y, driven by increased demand and business wins in battery manufacturing Cutting – demand stabilized and started shipping new generation of lasers to customers globally Cleaning* – benefited from acquisition of cleanLASER Micromachining* - revenue was strong compared with the prior year Medical – revenue grew significantly Y/Y, benefiting from shipments to a new customer; launching a new urology product in Q4 Advanced Applications – revenue growth was driven by semiconductor markets; increasing interest in CROSSBOW Summary by Application Cutting 21% Marking and Engraving 7% Other Materials Processing 23% Advanced Applications 6% Medical Procedures 6% Welding 37% Note: Percentages are based on full year 2024 revenue by application*included in Other Materials Processing
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5 5© 2025 IPG PHOTONICS North America - sales improved Y/Y driven by higher revenue in medical and advanced applications, but declined sequentially due to the timing of orders Europe* - sales were up sequentially driven by welding applications and Y/Y, excluding divestitures, driven by cleanLaser acquisition Asia - sales increased driven by growth in welding and additive manufacturing Revenue by Geography In millions 57 60 106 74 57 117 62 63 122 Q3 '24 Q2 '25 Q3 '25 North America Europe Asia *excluding divestitures
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6 6© 2025 IPG PHOTONICS Higher gross margin Y/Y due to decrease in unabsorbed expenses and lower inventory provisions, partially offset by higher product cost and tariffs Operating expenses, excluding FX impact and other gain/loss, were flat Q/Q but increased Y/Y driven by investments in growth opportunities Note: Q3 '24 includes inventory provision of $30 million, loss on divestitures of $198 million and asset impairment charges of $27 million In millions except per share Q3 '25 Q3 '24 Y/Y Q2 '25 Q/Q Revenue $250.8 $233.1 8% $250.7 —% Gross margin 39.5% 23.2% 37.3% Operating expenses excluding Fx and other items $89.6 $82.1 9% $90.4 (1)% Operating income (loss) $7.9 $(253.3) NM $0.1 NM Net income (loss) $7.5 $(233.6) NM $6.6 14% Earnings (loss) per diluted share $0.18 $(5.33) NM $0.16 13% Adjusted EBITDA $37.0 $27.9 33% $31.5 17% Adjusted EPS $0.35 $0.32 9% $0.30 17% Financial Review NM - not meaningful
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7 7© 2025 IPG PHOTONICS Balance Sheet and Cash Flow Summary In millions Q3 '25 Cash and Short-term Investments $870 Long-term Investments $30 Inventories $324 Total Debt $— Net Income to IPG $7 Cash from Operations $35 Depreciation and Amortization $16 Capital Expenditures $21 Stock Repurchases $16 Days Sales Outstanding 61 In millions 174 47 75 61 99 -14 Cash from operations CapEx Free cash flow YTD 2024 YTD 2025 Free cash flow is defined as cash flow from operations less capital expenditures
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8 8© 2025 IPG PHOTONICS ADDITIONAL DETAILS Q3 book-to-bill was approximately 1 Revenue outlook includes assumptions of continued stable operating environment Q4 gross margin includes a current estimate for tariff-related impact Q4 '25 Outlook Revenue $230M - $260M Adjusted Gross Margin 36% - 39% Operating Expenses $90M - $92M Adjusted EPS $0.05 - $0.35 Adjusted EBITDA $21M - $38M Tax Rate ~25% Diluted common shares ~42.5M
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9 © 2025 IPG PHOTONICS THE WORLD LEADER IN FIBER LASERS VERTICAL INTEGRATION PROVIDES COMPETITIVE EDGE EXPANDING LASER & DISPLACING NON-LASER APPLICATIONS STRONG MARGINS, BALANCE SHEET & CASH FLOW ENABLING GREATER AUTOMATION HIGH ELECTRICAL EFFICIENCY ENABLES LOWER CUSTOMER ENERGY USE
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10 10© 2025 IPG PHOTONICS Appendix: Reconciliation of Non-GAAP Financial Measures 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 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 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. 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. 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.
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11 11© 2025 IPG PHOTONICS Appendix: Reconciliation of Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except percentages) 2025 2024 2025 2024 Gross profit $ 99,005 $ 54,089 $ 282,390 $ 247,811 Gross margin 39.5 % 23.2 % 38.7 % 33.4 % Special Inventory Provision — 29,884 — 29,884 Amortization of acquisition-related intangibles 851 441 2,928 1,369 Acquisition and integration charges — — 482 — Adjusted gross profit $ 99,856 $ 84,414 $ 285,800 $ 279,064 Adjusted gross margin 39.8 % 36.2 % 39.2 % 37.6 % We define adjusted gross profit as reported gross profit, adjusted for non-recurring, infrequent, or unusual changes. We define adjusted gross margin as adjusted gross profit divided by total revenue.
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12 12© 2025 IPG PHOTONICS Appendix: Reconciliation of Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 2025 2024 Operating income (loss) $ 7,855 $ (253,346) $ 9,786 $ (222,206) Special inventory provisions — 29,884 — 29,884 Amortization of acquisition-related intangibles 2,402 1,378 7,498 4,180 Restructuring charges 425 — 425 — Acquisition and integration charges 246 — 2,305 — Impairment of long-lived assets — 26,566 — 26,566 Loss on foreign exchange 1,504 1,148 7,013 6,067 Net loss from divestiture and sale of assets — 197,651 — 190,875 Adjusted operating income $ 12,432 $ 3,281 $ 27,027 $ 35,366 We define adjusted operating income as reported income from operations, adjusted for non-recurring, infrequent, or unusual charges.
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13 13© 2025 IPG PHOTONICS Appendix: Reconciliation of Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 2025 2024 Net income (loss) $ 7,463 $ (233,594) $ 17,826 $ (189,341) Interest income, net (7,283) (11,103) (22,728) (38,058) Provision for income taxes 8,191 (8,920) 16,714 5,441 Depreciation 12,392 13,106 36,120 40,342 Amortization 3,240 2,012 10,679 6,282 EBITDA 24,003 (238,499) 58,611 (175,334) Special inventory provisions — 29,884 — 29,884 Impairment of long-lived assets — 26,566 — 26,566 Stock based compensation 10,780 11,128 32,834 29,430 Restructuring charges 425 — 425 — Acquisition and integration charges 246 — 2,305 — Loss on foreign exchange 1,504 1,148 7,013 6,067 Net loss from divestiture and sale of assets — 197,651 — 190,875 Adjusted EBITDA $ 36,958 $ 27,878 $ 101,188 $ 107,488 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.
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14 14© 2025 IPG PHOTONICS Appendix: Reconciliation of Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2025 2024 2025 2024 Net income (loss) $ 7,463 $ (233,594) $ 17,826 $ (189,341) Special inventory provisions — 29,884 — 29,884 Impairment of long-lived assets — 26,566 — 26,566 Amortization of acquisition-related intangibles 2,402 1,378 7,498 4,180 Restructuring charges 425 — 425 — Acquisition and integration charges 246 — 2,305 — Loss on foreign exchange 1,504 1,148 7,013 6,067 Net loss from divestiture and sale of assets — 197,651 — 190,875 Certain discrete tax items 3,414 (1,981) 8,303 (69) Tax impact of non-GAAP adjustments (613) (7,060) (2,471) (7,349) Adjusted net income $ 14,841 $ 13,992 $ 40,899 $ 60,813 Adjusted net earnings per diluted share $ 0.35 $ 0.32 $ 0.96 $ 1.35 Weighted average diluted shares outstanding 42,556 43,837 42,659 44,901 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. We define adjusted EPS as adjusted net income divided by the weighted-average diluted shares outstanding.
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15 15© 2025 IPG PHOTONICS Appendix: Reconciliation of Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Tax Rate 52 % 4 % 48 % (3) % Discrete tax items (22) % (1) % (24) % — % Net impact of non-GAAP adjustments (3) % (2) % (3) % 20 % Adjusted tax Rate 27 % 1 % 21 % 17 % We define adjusted tax rate as the GAAP tax rate, adjusted for discrete tax items and the net impact of non-GAAP adjustments.
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Thank you