Contradictions Unveiled: nLIGHT's Q2 2025 Earnings Call Highlights Amplifier Transition and Revenue Growth Challenges

Amplifier transition and production impact, commercial market performance and strategy, defense backlog and revenue expectations, manufacturing transition and volume growth, and defense revenue growth expectations are the key contradictions discussed in nLIGHT's latest 2025Q2 earnings call.



Aerospace and Defense Revenue Growth:
- nLIGHT reported a record $40.7 million in Aerospace and Defense (A&D) revenue for Q2 2025, up 48.6% year-over-year and 24% sequentially.
- Growth was primarily driven by record defense products revenue, particularly the HELSI-2 program, and strong performance in directed energy and laser sensing markets.

Record Directed Energy Sales:
- Directed energy products experienced record sales during Q2, contributing significantly to the overall A&D revenue growth.
- The improvement was primarily due to the successful execution in HELSI-2 program shipments and increasing orders from international customers.

Gross Margin Improvement:
- nLIGHT achieved a record total gross margin of 29.9% for the second quarter, compared to 23.5% in the same quarter last year and 26.7% in Q1 2025.
- The increase was attributed to higher revenue, favorable mix of business, increased factory absorption, and exceptional execution from manufacturing and operations teams.

Cash Flow and Working Capital Management:
- The company ended Q2 with $114 million in total cash, cash equivalents, restricted cash, and investments, having made progress in improving cash flow conversion days.
- This was achieved through effective working capital management and a focus on improving cash flow efficiency.