nLIGHT — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $73.8 million, a 10.5% increase compared to $66.7 million in the same period in 2025.
• Gross margin was 33.1% for the quarter, up from 31.1% in the prior year period.
• GAAP net loss was $7.2 million ($0.12 per diluted share), compared to a net loss of $6.9 million ($0.14 per diluted share) in the prior year.
• Non-GAAP net income was $10.2 million ($0.16 per diluted share), compared to non-GAAP net income of $4.3 million ($0.08 per diluted share) in the prior year.
• Adjusted EBITDA was $11.1 million, a 55.4% increase from $7.1 million in the prior year.
• For the nine months ended September 30, 2026, total revenue was $236.5 million compared to $180.1 million in 2025.
• Cash and cash equivalents increased to $279.4 million as of September 30, 2026, from $98.7 million as of December 31, 2025.
• Deferred revenue increased to $9.9 million as of September 30, 2026, from $1.5 million as of December 31, 2025.
• The company had no outstanding balance on its line of credit as of September 30, 2026, having repaid the $20.0 million outstanding at the end of 2025.

Guidance and Future Outlook:

• For the fourth quarter of 2026, nLIGHT expects revenue between $84 million and $90 million, with a midpoint of $87 million.
• Q4 2026 guidance includes approximately $63 million in Products revenue and $24 million in Advanced Development revenue.
• Due to ongoing supply chain constraints, Q4 guidance excludes approximately $15 million of product revenue expected to be delivered in the first half of 2027.
• Overall gross margin for Q4 2026 is expected to be between 30% and 36%, with Products gross margin between 40% and 46% and Advanced Development gross margin approximately 8%.
• Adjusted EBITDA for Q4 2026 is expected to be between $12 million and $18 million.
• Management noted that defense programs are increasingly transitioning from development toward fielding and production.

Business Segments and Product Lines:

• Revenue by end market for the three months ended September 30, 2026, was $52.5 million in Defense & Space and $21.3 million in Advanced Manufacturing.
• Revenue by end market for the nine months ended September 30, 2026, was $164.9 million in Defense & Space and $71.7 million in Advanced Manufacturing.
• Products revenue for the quarter was $48.0 million, compared to $47.6 million in the prior year.
• Development revenue for the quarter was $25.7 million, compared to $19.1 million in the prior year.
• The company is making investments in manufacturing capacity and supply chain to support expected growth.

Risks and Challenges:

• The company faces ongoing supply chain constraints impacting revenue recognition and delivery schedules.
• Forward-looking statements are subject to risks including the ability to compete successfully, changes in global markets, rapid technological changes, and the ability to maintain profitability.
• Risks include high levels of fixed costs and inventory, reliance on third-party manufacturers, and reliance on a small number of customers for a significant portion of revenues.
• Potential impacts from government export and import controls, fluctuations in quarterly results, and legal or regulatory proceedings are noted.

Management Commentary and Tone:

• CEO Scott Keeney described the quarter as demonstrating "solid execution" with revenue above the high end of guidance, record product gross margins, and strong Adjusted EBITDA.
• Management expressed confidence that demand remains strong and the pipeline of opportunities is expanding across directed energy, laser sensing, and advanced manufacturing.
• The tone indicates the company is well-positioned as defense programs transition from development to fielding and production.

Other Key Points:

• The company raised $192.2 million in net proceeds from a public offering during the nine months ended September 30, 2026.
• Restructuring charges for the quarter were $7.5 million, compared to $1.7 million in the prior year.
• Stock-based compensation for the quarter was $9.9 million, compared to $9.4 million in the prior year.
• Inventory increased to $59.8 million as of September 30, 2026, from $45.4 million as of December 31, 2025.
• The company employs more than 900 people with operations in the United States, Europe, and Asia.