nLight Q1 Earnings Call Highlights

Key Points

• nLight posted an “exceptional” Q1 with total revenue of $80.2 million (up 55% YoY), record product gross margin of ~44%, GAAP net income of $645,000 and record adjusted EBITDA of $13.9 million.
• Management officially launched the HADES portfolio and is prioritizing directed‑energy as its highest‑growth opportunity, aiming to scale coherent beam‑combined lasers toward the hundreds of kilowatts while advancing HELSI‑2 and HELCAP programs.
• nLight raised more than $190 million (ending cash and investments ~$332.9 million) to fund a new 50,000‑sq‑ft Longmont facility and R&D, and guided Q2 revenue of $75–81 million with adjusted EBITDA of $8–12 million.

nLight NASDAQ: LASR reported what management called an “exceptional” first quarter of 2026, with revenue, margins, and profitability coming in ahead of internal expectations as aerospace and defense demand remained the primary growth driver.

Chairman and CEO Scott Keeney said Q1 results “comfortably” beat the company’s expectations, highlighting record product gross margin and record adjusted EBITDA. CFO Joseph Corso added that the quarter marked the company’s fifth consecutive period of product revenue growth and its third consecutive quarter of positive operating cash flow.

Q1 revenue rises 55% on aerospace and defense growth

Corso said total revenue was $80.2 million, up 55% from $51.7 million in Q1 2025 and down 1% sequentially from Q4 2025. Aerospace and Defense (A&D) revenue was $51.1 million, up 69% year-over-year, supported by what Corso described as record A&D product revenue that grew 98% year-over-year and 10% sequentially.

Development revenue was $22 million, up 38% year-over-year, as nLight executed across “multiple directed energy and laser sensing programs,” Corso said. Development revenue fell 16% sequentially, which he attributed primarily to the successful delivery of a 50 kW directed-energy M-SHORAD high-energy laser effector in Q4 2025, partially offset by ongoing HELCAP work.

Commercial revenue, which includes industrial and microfabrication markets, came in at $25 million, up 32% year-over-year and ahead of management’s expectations, according to Corso. Microfabrication revenue was $13 million, slightly ahead of expectations, while industrial revenue was $12 million, reflecting increased demand for additive manufacturing products and “last time buys” in cutting and welding.

Corso reiterated that the company is exiting its legacy cutting and welding markets and said nLight does not expect to generate material revenue from those markets after Q2.

Margins expand; company posts GAAP profit and record adjusted EBITDA

On profitability, Keeney said product gross margins reached a record 44% in Q1, up from 33% a year earlier, and adjusted EBITDA hit a record $14 million. Corso provided additional detail, stating GAAP gross margin was 33.1% versus 26.7% in Q1 2025 and 30.7% in Q4 2025. On a non-GAAP basis, gross margin was 34.4%.

Product gross margin was 43.6% (44.6% non-GAAP), up from 33.5% in the year-ago quarter. Corso said Q1 product margin benefited from favorable customer and product mix tied to record A&D product revenue, along with higher volumes. Development gross margin was 5.1% (7.2% non-GAAP), with Corso pointing to contract mix and timing of deliverables as key drivers of variability.

Operating expenses also reflected discipline on a non-GAAP basis. Corso said GAAP operating expenses were $27.2 million, up year-over-year due primarily to higher stock-based compensation. Non-GAAP operating expenses were $17.1 million, down from both the year-ago quarter and the prior quarter, and Corso said the company expects non-GAAP operating expenses to remain in the $17 million to $19 million range for the rest of the year.

nLight reported GAAP net income of $645,000, or $0.01 per diluted share, compared with a GAAP net loss of $8.1 million in Q1 2025 and a GAAP net loss of $4.9 million in Q4 2025. Non-GAAP net income was $11.8 million, or $0.20 per diluted share, versus a non-GAAP net loss in the year-ago quarter and non-GAAP net income of $7.8 million in the prior quarter. Adjusted EBITDA was $13.9 million, up from $116,000 in Q1 2025 and $10.7 million in Q4 2025.

Corso also noted improving working capital performance, saying cash flow conversion days were 97 compared with 125 days in Q1 2025. The company generated $9.7 million in cash from operations during the quarter.

Directed energy focus: HADES launch and program updates

Keeney focused much of his prepared remarks on directed energy, describing it as nLight’s “most strategic and highest growth opportunity.” He said customers are increasingly seeking solutions emphasizing “power scaling, high brightness, and atmospheric correction,” areas where nLight believes it has competitive advantages stemming from decades of investment.

During the call, nLight “officially launched” its HADES portfolio of scalable, beam-combined high-energy lasers and effectors with integrated atmospheric correction. Keeney said production-ready HADES is based on nLight’s vertically integrated “laser technology stack,” including semiconductor laser diodes, fiber amplifiers, beam combination, and atmospheric correction. He said the architecture is intended to enable growth to “hundreds of kilowatts” while maintaining beam quality and supporting integration with existing beam directors, sensors, and battle management systems.

As an example of power scaling, Keeney cited nLight’s work producing a 1-megawatt coherent beam combining (CBC) high-energy laser as part of HELSI-2. In response to an analyst question, he said nLight exceeded “over 300 kilowatts” in the prior HELSI program and is “on track” for HELSI-2, emphasizing that it is a “demonstration of that technology,” not a product delivery.

Keeney also said the company continues to make progress on the U.S. Navy’s HELCAP program by combining a 300 kilowatt CBC laser delivered under HELSI with an advanced beam control system incorporating nLight’s adaptive optics for atmospheric correction.

In the Q&A, Keeney said HADES is designed to scale upward from the “greater than 50 kilowatt class,” and he highlighted coherent beam combining’s ability to support higher power, a brighter beam, and atmospheric correction. Asked about platform integration, Keeney said HADES’ small size is important for integration opportunities, including Navy platforms, and noted that size, weight, and power (SWaP) becomes even more critical for airborne applications, where nLight believes it has “leading performance.”

Keeney also addressed opportunities in lower-power systems, saying nLight is “excited” about providing key components in the 30 kW class through partners, while positioning HADES for higher-power requirements where beam quality and atmospheric correction become more important.

Capital raise strengthens balance sheet; Longmont facility planned

Keeney said the company’s expanding directed energy pipeline was a primary factor behind its decision to raise capital via a follow-on equity offering during the quarter. He said nLight raised “over $190 million after fees and expenses,” and Corso reported ending Q1 with $332.9 million in cash, cash equivalents, restricted cash, and investments, including approximately $191 million in net proceeds from the February offering.

According to Keeney, the company intends to use proceeds to:

• Build out and equip a new 50,000-square-foot manufacturing facility in Longmont, Colorado
• Invest ahead of demand and support the supply chain
• Increase staffing to accelerate new directed energy product development

Asked about potential capacity constraints, Corso said nLight is “not capacity constrained today,” citing improvements in capacity and manufacturing efficiency. He added that breaking above roughly the $80 million revenue level depends primarily on customer demand signals.

Guidance: Q2 revenue outlook of $75 million to $81 million

For Q2 2026, Corso guided revenue to a range of $75 million to $81 million, with the $78 million midpoint including about $58 million of product revenue and $20 million of development revenue. He said nLight expects sequential growth from its A&D markets in Q2.

Gross margin is expected to be 29% to 33% overall, with product gross margin of 37% to 41% and development gross margin of about 8%. Corso said gross margin is heavily influenced by production volumes and absorption of fixed manufacturing costs. Adjusted EBITDA is expected to be $8 million to $12 million for Q2.

On the directed energy funding environment, Keeney pointed to the president’s budget request as a “signal” of priorities, while cautioning that the budget process will take time to work through Congress. He said nLight hopes to have more insight in coming quarters and suggested there could be more clarity in the fall, while noting that timing can be delayed.

About nLight NASDAQ: LASR

nLIGHT, Inc designs, develops, manufactures, and sells semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. The company operates in two segments, Laser Products and Advanced Development. It offers semiconductor lasers with various ranges of power levels, wavelengths, and output fiber sizes; and programmable and serviceable fiber lasers for use in industrial and aerospace and defense applications. The company also provides laser sensors, including light detection and ranging technologies for intelligence, surveillance, and reconnaissance applications; and fiber amplifiers, beam combination, and control systems for use in high-energy laser systems in directed energy applications.

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