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    LASR
    Earnings call· Mar 2026(Q1 FY26)

    NLIGHT Q1 FY26 earnings call LASR

    May 7, 2026 Source

    Executive summary

    nLIGHT Q1 FY26 — Record Revenue, Gross Margin, and Adjusted EBITDA Driven by Aerospace & Defense

    nLIGHT delivered an exceptional quarter, with record revenue, gross margin, and adjusted EBITDA, primarily fueled by robust growth in its Aerospace and Defense segment and the successful launch of the HADES high-energy laser platform. The company significantly strengthened its balance sheet through a recent equity offering, positioning it to invest in new manufacturing facilities and accelerate Directed Energy product development, despite the planned exit from legacy cutting and welding markets.

    Highlights

    5

    • Total revenue of $80 million grew 55% year-over-year, comfortably beating expectations.

    • Aerospace and Defense revenue grew 69% year-over-year to $55 million, driven by record A&D products revenue up 98% year-over-year.

    • Product gross margins reached a record 44%, an increase from 33% in Q1 FY25.

    • Adjusted EBITDA was a record $14 million, demonstrating strong operating leverage.

    • Ended the quarter with $332.9 million in cash, cash equivalents, restricted cash, and investments after raising $191 million from a follow-on equity offering.

    Concerns

    3

    • Development revenue declined 16% quarter-over-quarter to $22 million due to the successful delivery of the 50-kilowatt DE M-SHORAD laser in Q4 FY25.

    • Legacy cutting and welding markets are being exited, with no material revenue expected after Q2 FY26.

    • Development gross margin was 5.1% in Q1 FY26, compared to 11.5% in Q1 FY25 and 16.8% in Q4 FY25, due to contract mix and timing.

    Guidance & targets

    8
    CategoryTargetConfidence
    Revenue
    $75 million to $81 million
    high materiality
    High
    Product Revenue
    $58 million
    medium materiality
    High
    Development Revenue
    $20 million
    medium materiality
    High
    Overall Gross Margin
    29% to 33%
    high materiality
    High
    Product Gross Margin
    37% to 41%
    medium materiality
    High
    Development Gross Margin
    approximately 8%
    medium materiality
    High
    Adjusted EBITDA
    $8 million to $12 million
    high materiality
    High
    Non-GAAP Operating Expenses
    $17 million to $19 million range
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Aerospace and Defense
    Driven by record A&D products revenue.
    A&D products revenue: grew 98% YoYA&D products revenue: grew 10% sequentially
    		$51.1 million69%——
    Development
    Q-o-Q decline due to successful delivery of 50kW DE M-SHORAD laser in Q4 FY25, partially offset by HELSI-2 work. Variability due to contract mix and timing.
    Non-GAAP development gross margin: 7.2%
    		$22 million38%-16%5.1%
    Commercial Markets
    Ahead of expectations, includes Industrial and Microfabrication.
    		$25 million32%——
    Microfabrication
    Slightly better than expectations.
    		$13 million———
    Industrial
    Benefited from increased demand for additive manufacturing products and last-time buys for cutting and welding products.
    		$12 million———

    Operational metrics

    17
    Total Revenue
    $80.2 millionup 55% YoY; down 1% QoQ (vs $51.7 million in Q1 FY25)
    Q1 FY26

    Exceeded expectations.

    Total Gross Margin
    33.1%vs 26.7% in Q1 FY25; vs 30.7% in Q4 FY25
    Q1 FY26

    Increased year-over-year and quarter-over-quarter.

    Non-GAAP Total Gross Margin
    34.4%up from 27.8% in Q1 FY25; up from 31.6% in Q4 FY25
    Q1 FY26

    Excluding stock-based compensation.

    Product Gross Margin
    43.6%vs 33.5% in Q1 FY25; vs 37.3% in Q4 FY25
    Q1 FY26

    Record product gross margin, positively impacted by favorable customer and product mix and increased volume.

    Non-GAAP Product Gross Margin
    44.6%vs 35.1% in Q1 FY25; vs 38.6% in Q4 FY25
    Q1 FY26

    Record non-GAAP product gross margin.

    GAAP Operating Expenses
    $27.2 millionvs $23.4 million in Q1 FY25; vs $30.4 million in Q4 FY25
    Q1 FY26

    Year-over-year increase primarily due to higher stock-based compensation.

    Non-GAAP Operating Expenses
    $17.1 milliondown from $17.8 million in Q1 FY25; down from $18.4 million in Q4 FY25
    Q1 FY26

    Continued operating expense discipline.

    GAAP Net Income
    $645,000vs net loss of $8.1 million in Q1 FY25; vs net loss of $4.9 million in Q4 FY25
    Q1 FY26

    Achieved positive GAAP net income.

    GAAP EPS
    $0.01vs loss of $0.16 in Q1 FY25; vs loss of $0.10 in Q4 FY25
    Q1 FY26

    Positive GAAP EPS.

    Non-GAAP Net Income
    $11.8 millionvs net loss of $1.9 million in Q1 FY25; vs net income of $7.8 million in Q4 FY25
    Q1 FY26

    Strong non-GAAP net income.

    Non-GAAP EPS
    $0.20vs loss of $0.04 in Q1 FY25; vs income of $0.14 in Q4 FY25
    Q1 FY26

    Strong non-GAAP EPS.

    Adjusted EBITDA
    $13.9 millionvs $116,000 in Q1 FY25; vs $10.7 million in Q4 FY25
    Q1 FY26

    Record adjusted EBITDA.

    Cash and investments balance
    $332.9 million
    Q1 FY26 end

    Includes cash, cash equivalents, restricted cash, and investments.

    Net proceeds from equity offering
    $191 million
    Q1 FY26

    Raised during February follow-on offering, after fees and expenses.

    Cash flow conversion days
    97 daysvs 125 days in Q1 FY25
    Q1 FY26

    Improved working capital management.

    Directed Energy budget for prototypes and procurement
    ~$400 million
    FY27 and FY28

    Budgeted for each of the two fiscal years.

    Overall annual budget for Directed Energy laser weapons
    ~$1 billion
    FY27 and FY28

    Includes high-power multi-hundred kilowatt direct energy prototypes funded through science and technology.

    Industry KPIs

    5
    MetricValueDetails
    Segment revenue growthAerospace and Defense: $51.1 million; Development: $22 million; Commercial: $25 millionUSD
    Design wins product cycle ramps1-megawatt CBC high energy laser (HELSI-2); 300-kilowatt CBC laser (HELCAP)kilowatt
    Capacity expansion internal sourcing50,000 square footsquare feet
    End market revenue mix organic growthAerospace and Defense: $51.1 million; Commercial: $25 millionUSD
    Operating margin incremental leverage17.3%%

    Product announcements

    1
    ProductTypeDetails
    HADES portfoliolaunch

    Capital programs

    1
    New manufacturing facility in Longmont, Coloradounderway
    Funding: Portion of $190M+ equity offering proceeds

    Benefit: 50,000 square feet manufacturing facility, equip it, invest ahead of demand and supply chain, increase staffing to accelerate new directed energy product development.

    We intend to use a portion of these proceeds to build out and equip our new 50,000 square foot manufacturing facility in Longmont, Colorado, invest ahead of our demand and supply chain and increase staffing to help accelerate new directed energy product development.

    Risks & headwinds

    3
    Variability in development gross marginQuarterly

    Development gross margin was 5.1% in Q1 FY26, compared to 11.5% in Q1 FY25 and 16.8% in Q4 FY25.

    Mitigation: Primarily the result of contract mix and the timing of program deliverables in any given quarter.

    Exiting legacy cutting and welding marketsAfter Q2 FY26

    No material revenue expected from these markets after Q2 FY26.

    Mitigation: Strategic decision to narrow focus.

    Budget process for Directed Energy funding takes timeComing quarters, insights expected this fall, but can be delayed.

    President's budget for FY27/28 ($400M for prototypes/procurement, $1B total annual) needs to work through Congress.

    Mitigation: Management monitors the process and focuses on current opportunities.

    What to watch in Q2 FY26

    4

    Directed Energy budget appropriation

    This fall
    CurrentPresident's budget request for FY27/28 includes ~$400M for prototypes/procurement and ~$1B total annual.
    TargetCongressional approval and appropriation of the stated budget figures.

    Why it matters

    Confirms long-term funding for nLIGHT's core growth market and provides visibility into future program awards.

    The budget numbers that we provided were the President's budget request, and that will work its way through the appropriations process in the coming quarters⏳. We should have more insights this fall, but those -- that can be delayed.

    Q&A highlights

    5

    How should investors think about the timing of the increased Directed Energy budgets, and how does the newly launched HADES platform differentiate itself from other products?

    Scott Keeney explained that the President's budget for Directed Energy, while significant ($400M in FY27/28 for prototypes/procurement, $1B total annual budget), will take time to work through Congress, with more insights expected in the fall. He highlighted HADES as a platform for scaling to higher power, offering brighter beams, atmospheric correction, and a smaller form factor suitable for challenging integrations like the Stryker.

    “The budget numbers that we provided were the President's budget request, and that will work its way through the appropriations process in the coming quarters. We should have more insights this fall, but those -- that can be delayed.”

    asked by Peter Arment · answered by Scott Keeney

    1 min read5 chapters

    Detailed Narrative

    01

    Directed Energy Market Focus

    nLIGHT emphasized Directed Energy as its most strategic and highest growth opportunity, driven by increasing demand for scalable, low-cost per shot solutions to counter evolving threats. The company is positioning itself as a system-level partner, focusing on power scaling, high brightness, and atmospheric correction, areas where its two-decade investment provides a competitive advantage.

    02

    HADES Platform Launch

    The company officially launched its HADES portfolio of scalable beam combined high-energy lasers and effectors with integrated atmospheric correction. This production-ready platform is designed around nLIGHT's vertically integrated technology stack and enables system growth to hundreds of kilowatts while maintaining pristine beam quality, offering a modular foundation for defense customers.

    03

    Key Program Progress

    nLIGHT remains on track with the 1-megawatt CBC high-energy laser for the HELSI-2 program, which uses the same architecture as the HADES portfolio. Progress is also being made on the U.S. Navy's HELCAP program, combining a 300-kilowatt CBC laser with nLIGHT's advanced beam control system for atmospheric correction, accelerating future multi-hundred kilowatt systems.

    04

    Budgetary Support for Directed Energy

    The U.S. government's budget includes nearly $400 million in each of FY27 and FY28 for Directed Energy prototypes and procurement, with the overall annual budget for laser weapons increasing to approximately $1 billion in those fiscal years, including high-power multi-hundred kilowatt prototypes funded through science and technology. This indicates strong governmental support for the sector.

    05

    Strategic Investments and Balance Sheet

    Following a follow-on equity offering that raised over $190 million, bringing the cash balance to $330 million, nLIGHT plans to use these proceeds to build out a new 50,000 square foot manufacturing facility in Longmont, Colorado, invest in supply chain, and increase staffing to accelerate new Directed Energy product development. This proactive investment aims to support long-term growth and value creation.

    AI-generated summary of the company’s earnings call. Not investment advice.