Earnings release
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IPG PHOTONICS ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS Double-Digit Revenue Growth Driven by Strategic Initiatives Across Industrial and Advanced Solutions Focused on Driving Margin Expansion MARLBOROUGH, Mass. – November 3, 2026 - IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the third quarter ended September 30, 2026. Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share data and percentages) 2026 2025 Change 2026 2025 Change Revenue $ 287.5 $ 250.8 15 % $ 831.6 $ 729.3 14 % Gross margin 40.7 % 39.5 % 39.6 % 38.7 % Operating income $ 20.8 $ 7.9 NM $ 17.6 $ 9.8 NM Operating margin 7.2 % 3.1 % 2.1 % 1.3 % Net income $ 20.3 $ 7.5 171 % $ 27.1 $ 17.8 52 % Earnings per diluted share $ 0.47 $ 0.18 161 % $ 0.63 $ 0.42 50 % Non-GAAP Measures* Adjusted gross margin 41.0 % 39.8 % 39.9 % 39.2 % Adjusted EBITDA $ 51.5 $ 37.0 39 % $ 135.2 $ 101.2 34 % Adjusted earnings per diluted share $ 0.61 $ 0.35 74 % $ 1.49 $ 0.96 55 % *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 fourth consecutive quarter of double-digit year-over-year revenue growth, with revenue above the midpoint of our guidance,” said Dr. Mark Gitin, Chief Executive Officer of IPG Photonics. “Our performance reflects the strength of our technology, disciplined execution, and continued progress in expanding our presence in attractive, higher-growth markets. Strong demand for our differentiated welding and additive manufacturing solutions drove growth in Industrial Solutions while disciplined execution of our key strategic initiatives across defense and semiconductor markets led to strong growth in Advanced Solutions. Additionally, I anticipate that our acquisition of Lumibird Medical, which is expected to close in the fourth quarter, will further strengthen our reach, accelerate growth across medical markets, and increase revenue in Advanced Solutions.” Financial Highlights Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 Change 2026 2025 Change Sales by Application Industrial Solutions $ 239,548 $ 214,697 12 % $ 704,181 $ 607,593 16 % Advanced Solutions 47,952 36,095 33 % 127,396 121,713 5 % Total $ 287,500 $ 250,792 15 % $ 831,577 $ 729,306 14 % 1
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Third quarter revenue of $288 million increased 15% year over year, driven by 12% growth in Industrial Solutions and 33% growth in Advanced Solutions. Changes in foreign exchange rates increased revenue by approximately 1%. Industrial Solutions sales, accounting for 83% of total revenue, were driven by strong performance in welding and additive manufacturing applications. Advanced Solutions sales improved, driven by higher sales in semico nductor and defense applications. Emerging growth products accounted for 52% of total revenue, down from 58% in the prior quarter due to product mix. By region, sales increased 14% in Asia and 33% in North America and decreased 1% in Europe on a year-over-year basis. GAAP gross margin of 40.7% and adjusted gross margin of 41.0% increased year over year, driven by lower product costs and $5.0 million in net tariff refunds recorded in the period, partially offset by lower fixed cost absorption. Net income was $20 million, or $0.47 per diluted share, and a djusted EBITDA was $52 million and adjusted earnings per diluted share (EPS) was $0.61 in the third quarter. During the third quarter, IPG generated $46 million in cash flow from operations and spent $17 million on capital expenditures. Business Outlook and Financial Guidance “Our third quarter book-to-bill was approximately one as we continued to see improved industrial demand and executed on our strategic growth initiatives, driving adoption for our differentiated laser and photonics solutions that deliver measurable value to customers. As we move forward, we remain focused on driving profitable growth through innovation, technology differentiation, and operational excellence across our portfolio,” concluded Dr. Gitin. For the fourth quarter of 2026, IPG expects revenue of $265 million to $295 million, adjusted gross margin between 37.0% and 40.0% and adjusted operating expenses of $91 million to $94 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 $33 million to $50 million. The guidance assumes no contribution from the acquisition of Lumibird Medical. 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 157 and Chinese yuan 6.74, respectively. Supplemental Financial Information Additional supplemental financial information is provided in the unaudited Financial Data Workbook and Third 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, November 3, 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 efedotoff@ipgphotonics.com 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. 2
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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 strength of our technology, disciplined execution, and continued progress in expanding our presence in attractive, higher- growth markets, the expected timing of the closing of our acquisition of Lumibird Medical and the expectation that the acquisition will increase revenue in Advanced Solutions and strengthen our reach and accelerate growth across medical markets, strategic growth initiatives, driving adoption for our differentiated laser and photonics solutions that deliver measurable value to customers, driving profitable growth through innovation, technology differentiation, and operational excellence across our portfolio, revenue, adjusted gross margin and adjusted 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 fourth 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 for the fiscal year ended December 31, 2025), IPG's Quarterly Report on Form 10-Q (filed with the SEC for the quarter ended June 30, 2026), and other reports filed with the SEC, as applicable. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date hereof. IPG undertakes no obligation to update the forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. 3
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IPG PHOTONICS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (In thousands, except per share data) Net sales $ 287,500 $ 250,792 $ 831,577 $ 729,306 Cost of sales 170,446 151,787 502,500 446,916 Gross profit 117,054 99,005 329,077 282,390 Operating expenses: Sales and marketing 23,934 23,771 72,286 73,753 Research and development 31,335 30,358 95,648 88,631 General and administrative 37,502 35,092 110,139 102,782 Settlement of litigation matters — — 13,334 — Impairment charges 231 — 17,805 — Restructuring charges — 425 — 425 Loss on foreign exchange 3,275 1,504 2,293 7,013 Total operating expenses 96,277 91,150 311,505 272,604 Operating income 20,777 7,855 17,572 9,786 Other income, net: Interest income, net 7,688 7,283 21,720 22,728 Other (expense) income, net (50) 516 2,683 2,026 Total other income 7,638 7,799 24,403 24,754 Income before provision for income taxes 28,415 15,654 41,975 34,540 Provision for income taxes 8,142 8,191 14,876 16,714 Net income $ 20,273 $ 7,463 $ 27,099 $ 17,826 Net income per common share: Basic $ 0.48 $ 0.18 $ 0.64 $ 0.42 Diluted $ 0.47 $ 0.18 $ 0.63 $ 0.42 Weighted average common shares outstanding: Basic 42,531 42,199 42,416 42,427 Diluted 42,840 42,556 42,904 42,659 4
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IPG PHOTONICS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, December 31, 2026 2025 (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $ 710,688 $ 403,790 Short-term investments 215,304 435,538 Accounts receivable, net 191,150 181,734 Inventories 337,890 313,416 Prepaid income taxes 33,145 43,196 Prepaid expenses and other current assets 54,460 45,766 Total current assets 1,542,637 1,423,440 Long-term investments — 76,533 Deferred income taxes, net 122,235 123,889 Goodwill 70,281 71,735 Intangible assets, net 42,777 49,933 Property, plant and equipment, net 648,326 637,516 Other assets 45,787 41,234 Total assets $ 2,472,043 $ 2,424,280 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 48,782 $ 39,288 Accrued expenses and other current liabilities 204,874 184,849 Income taxes payable 3,858 9,900 Total current liabilities 257,514 234,037 Other long-term liabilities and deferred income taxes 59,581 62,113 Total liabilities 317,095 296,150 Commitments and contingencies Stockholders' equity: Common stock, $0.0001 par value, 175,000,000 shares authorized; 57,380,668 and 42,508,140 shares issued and outstanding, respectively, at September 30, 2026; 56,964,939 and 42,127,067 shares issued and outstanding, respectively, at December 31, 2025. 6 6 Treasury stock, at cost, 14,872,528 and 14,837,872 shares held at September 30, 2026 and December 31, 2025, respectively. (1,558,277) (1,555,629) Additional paid-in capital 1,097,673 1,077,172 Retained earnings 2,672,063 2,644,964 Accumulated other comprehensive loss (56,517) (38,383) Total stockholders' equity 2,154,948 2,128,130 Total liabilities and stockholders' equity $ 2,472,043 $ 2,424,280 5
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IPG PHOTONICS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, 2026 2025 (In thousands) Cash flows from operating activities: Net income $ 27,099 $ 17,826 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 47,377 46,799 Impairment charges 17,805 — Provisions for inventory, warranty & bad debt 33,594 31,766 Other 25,081 21,119 Changes in assets and liabilities that provided (used) cash: Accounts receivable and accounts payable 1,535 18,787 Inventories (60,189) (52,005) Other (13,771) (37,757) Net cash provided by operating activities 78,531 46,535 Cash flows from investing activities: Purchases of and deposits on property, plant and equipment (54,437) (60,907) Proceeds from sales of property, plant and equipment 2,204 605 Purchases of investments (360,732) (866,402) Purchases of equity investment (8,000) — Proceeds from maturities of investments 663,124 633,731 Deposit received from buyer for assets held for sale 2,000 — Other 111 69 Net cash provided by (used in) investing activities 244,270 (292,904) 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 and purchase plans (11,053) (4,316) Purchase of treasury stock net of excise tax, at cost (2,648) (46,603) Net cash used in financing activities (13,701) (50,919) Effect of changes in exchange rates on cash, cash equivalents and cash held for sale (1,727) 23,274 Net increase (decrease) in cash, cash equivalents and cash held for sale 307,373 (274,014) Cash and cash equivalents — Beginning of period 403,790 620,040 Cash, cash equivalents and cash held for sale — End of period $ 711,163 $ 346,026 Supplemental disclosures of cash flow information: Cash paid for interest $ 54 $ 136 Cash paid for income taxes, net of refunds $ 9,273 $ 44,258 6
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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. 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. The following information provides the definition of adjusted gross profit, adjusted gross margin, adjusted operating expense and resultant 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 expense and resultant 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. We define adjusted gross profit as reported gross profit, adjusted for non-recurring, infrequent, or unusual charges, 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 expense and resultant adjusted operating income as reported operating expenses and resultant operating income, adjusted for non-recurring, infrequent, or unusual charges, including impairment charges, settlement and fees of litigation matters, restructuring charges, 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, restructuring charges, impairment charges, settlement and fees of litigation matters, 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 charges, and other adjustments that the Company believes appropriate, including impairment charges, settlement and fees of litigation matters, restructuring charges, 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) amortization of acquisition- related intangibles, (ii) restructuring charges, (iii) acquisition and integration costs, (iv) impairment charges, (v) foreign 7
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exchange gains/losses, (vi) interest income, (vii) benefit (provision) from income taxes, (viii) depreciation, (ix) amortization, (x) stock-based compensation, (xi) gain/loss on disposal of assets/divestiture, (xii) settlement and fees of litigation matters, (xiii) certain discrete tax items, and (xiv) 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 third quarter of 2026 is 23%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments. 8
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IPG PHOTONICS CORPORATION SUPPLEMENTAL SCHEDULE OF NON-GAAP MEASURES (UNAUDITED) Reconciliation of Gross Profit to Adjusted Gross Profit, Adjusted Gross Margin Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (in thousands, except percentages) Gross profit $ 117,054 $ 99,005 $ 329,077 $ 282,390 Gross margin 40.7 % 39.5 % 39.6 % 38.7 % Amortization of acquisition-related intangibles 720 851 2,360 2,928 Acquisition and integration charges — — — 482 Adjusted gross profit $ 117,774 $ 99,856 $ 331,437 $ 285,800 Adjusted gross margin 41.0 % 39.8 % 39.9 % 39.2 % Reconciliation of Operating Expenses to Adjusted Operating Expenses Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (in thousands) Operating expenses $ 96,277 $ 91,150 $ 311,505 $ 272,604 Less: Amortization of acquisition-related intangibles 1,231 1,551 3,701 4,570 Acquisition and integration charges 151 246 987 1,823 Impairment charges 231 — 17,805 — Restructuring charges 149 425 500 425 Settlement and fees of litigation matters — — 14,435 — Loss on foreign exchange 3,275 1,504 2,293 7,013 Adjusted operating expenses $ 91,240 $ 87,424 $ 271,784 $ 258,773 Reconciliation of Operating Income to Adjusted Operating Income Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (in thousands) Operating income $ 20,777 $ 7,855 $ 17,572 $ 9,786 Amortization of acquisition-related intangibles 1,951 2,402 6,061 7,498 Acquisition and integration charges 151 246 987 2,305 Impairment charges 231 — 17,805 — Restructuring charges 149 425 500 425 Settlement and fees of litigation matters — — 14,435 — Loss on foreign exchange 3,275 1,504 2,293 7,013 Adjusted operating income $ 26,534 $ 12,432 $ 59,653 $ 27,027 9
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Reconciliation of Net income to Adjusted EBITDA Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (in thousands) Net income $ 20,273 $ 7,463 $ 27,099 $ 17,826 Interest income, net (7,688) (7,283) (21,720) (22,728) Provision for income taxes 8,142 8,191 14,876 16,714 Depreciation 12,986 12,392 38,447 36,120 Amortization 2,976 3,240 8,930 10,679 EBITDA $ 36,689 $ 24,003 $ 67,632 $ 58,611 Impairment charges 231 — 17,805 — Stock based compensation 11,022 10,780 31,597 32,834 Restructuring charges 149 425 500 425 Acquisition and integration charges 151 246 987 2,305 Settlement and fees of litigation matters — — 14,435 — Loss on foreign exchange 3,275 1,504 2,293 7,013 Adjusted EBITDA $ 51,517 $ 36,958 $ 135,249 $ 101,188 Reconciliation of GAAP to Non-GAAP Net Income, and GAAP to Non-GAAP Net Income per Share, Diluted Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (in thousands, except per share data) Net income $ 20,273 $ 7,463 $ 27,099 $ 17,826 Impairment charges 231 — 17,805 — Amortization of acquisition-related intangibles 1,951 2,402 6,061 7,498 Restructuring charges 149 425 500 425 Acquisition and integration charges 151 246 987 2,305 Settlement and fees of litigation matters — — 14,435 — Loss on foreign exchange 3,275 1,504 2,293 7,013 Certain discrete tax items 949 3,414 84 8,303 Tax impact of non-GAAP adjustments (711) (613) (5,337) (2,471) Adjusted net income $ 26,268 $ 14,841 $ 63,927 $ 40,899 Adjusted net earnings per diluted share $ 0.61 $ 0.35 $ 1.49 $ 0.96 Weighted average diluted shares outstanding 42,840 42,556 42,904 42,659 Reconciliation of GAAP to Non-GAAP Effective Tax Rate Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Tax rate 29 % 52 % 35 % 48 % Discrete tax items (3) % (22) % — % (24) % Net impact of non-GAAP adjustments (3) % (3) % (11) % (3) % Adjusted tax rate 23 % 27 % 24 % 21 % 10