nLight Q2 Earnings Call Highlights

nLight reported record second-quarter results: Revenue rose 34% year over year to $82.6 million, product revenue increased 45% to $59 million, and adjusted EBITDA nearly doubled to $10.7 million. Aerospace and defense revenue reached a record $57.3 million, up 41%. Defense growth is supported by major laser programs: The multiyear JLWS award has a contract ceiling exceeding $600 million, with revenue expected to begin in the third quarter and ramp in 2027. The company’s 1-megawatt HELSI-2 laser remains on track for delivery late in 2026.

Delays affecting optics and other materials are expected to defer roughly $17 million of otherwise anticipated third-quarter product shipments. nLight forecast third-quarter revenue of $63 million to $73 million, with gross margin projected at 24% to 30%.

nLight NASDAQ: LASR reported record second-quarter revenue and product sales as demand increased across its defense, space and advanced-manufacturing markets, while management said supply-chain constraints involving materials sourced from China are expected to reduce third-quarter shipments. Second-quarter revenue rose 34% year over year to $82.6 million, including record product revenue of $59 million, up 45%. Chairman and CEO Scott Keeney said revenue, gross margin and adjusted EBITDA were at or above the company’s expectations. Adjusted EBITDA totaled $10.7 million, compared with $5.6 million a year earlier, while operating cash flow reached a record $20.7 million.

“Demand for our products remains strong,” Keeney said, citing a growing pipeline across the company’s defense and advanced-manufacturing portfolio.

Aerospace and defense revenue reached a record $57.3 million in the quarter, up 41% from the prior-year period. Aerospace and defense product revenue increased 72% year over year, while development revenue rose 11% to $23.2 million.

Chief Financial Officer Joe Corso said the growth reflected continued work on the HELSI-2 program, expansion in munitions programs, and execution on directed-energy and laser-sensing programs. The company also said its products for kinetic weapons recorded strong growth, supported by global restocking activity and expanding mission applications.

The company highlighted its recent Joint Laser Weapon System, or JLWS, award from the Department of War. The multiyear agreement has a contract ceiling of more than $600 million. Under the program, nLight is expected to develop, integrate and deliver high-energy laser weapon systems built on its HADES directed-energy technology platform.

Keeney said the JLWS program builds on the company’s delivery of a 300-kilowatt laser under HELSI-1 and a 50-kilowatt laser for the DE M-SHORAD program. nLight is also continuing work on a 1-megawatt coherent beam-combined laser under HELSI-2, which Corso said remains on track for delivery late in 2026.

Corso said JLWS revenue will begin contributing in the third quarter, continue through the fourth quarter and ramp more substantially in 2027. He characterized the expected JLWS contribution as “a nice replacement and then some” relative to the anticipated wind-down of HELSI-2 work. Management said JLWS and HELSI-2 are separate contracts. The company also said initial JLWS work, including work beyond the initially funded $44 million, is expected to be largely unaffected by current supply-chain issues.

Commercial-market revenue, including industrial and microfabrica...