IPG Photonics Experiences 10% Q2 Revenue Growth Amid Stabilizing End Markets and Strong Bookings

IPG Photonics reported Q2 2025 revenue of $251 million, up 10% sequentially, marking its first year-over-year increase since 2022. Adjusted gross margin reached 37.8%, exceeding guidance, and adjusted EPS of $0.30 surpassed expectations. The company's global book-to-bill ratio was approximately one in Q2 2025, reflecting stable orders against elevated revenue, driven by improvements in welding, cutting, and marking. Revenue from advanced applications reached record levels, buoyed by strength in directed energy, semiconductor, and scientific verticals.

IPG Photonics Corporation (NASDAQ: IPGP) reported its second quarter 2025 earnings on August 5, 2025, with results that exceeded market expectations. The company's shares surged 9.3% in premarket trading, reaching $84.66, reflecting investor optimism about the performance and outlook.

The fiber laser manufacturer reported quarterly revenue of $250.7 million, up 10% sequentially from Q1’s $227.8 million, marking the first year-over-year increase since 2022. Adjusted gross margin reached 37.8%, exceeding guidance, while adjusted earnings per share (EPS) of $0.30 surpassed expectations. The company's global book-to-bill ratio was approximately one in Q2 2025, indicating stable orders against elevated revenue, driven by improvements in welding, cutting, and marking applications.

Revenue from advanced applications reached record levels, buoyed by strength in directed energy, semiconductor, and scientific verticals. The company's diversified application portfolio helped buffer against weakness in certain segments. Welding applications remained the largest contributor at 37% of total revenue, followed by cutting at 21%.

Geographically, IPG Photonics experienced varied performance across regions. North American sales rebounded to $74 million, driven by higher revenue in cutting, cleaning, medical, and advanced applications. Asian markets continued to show strength, with revenue increasing to $117 million, primarily due to growth in welding, cutting, and advanced applications. European sales remained flat sequentially at $57 million.

IPG Photonics' financial performance showed mixed results compared to both the previous quarter and the same period last year. Gross margin held steady year-over-year at 37.3% but declined from 39.4% in Q1 2025. Operating expenses increased to $90.4 million from $81.6 million a year ago and $85.6 million in the previous quarter, reflecting investments in growth opportunities and organizational changes.

Looking ahead to the third quarter of 2025, IPG Photonics expects revenue between $225 million and $255 million, with adjusted gross margin of 36-38%. Adjusted EPS is projected at $0.05-$0.35, while adjusted EBITDA is expected to range from $22 million to $36 million.

Despite near-term challenges, IPG Photonics emphasized its fundamental strengths that position it for long-term success. The company highlighted its global leadership in fiber lasers, vertical integration advantages, and focus on expanding laser applications while displacing non-laser technologies.

References:
[1] https://www.investing.com/news/company-news/ipg-photonics-q2-2025-slides-revenue-beats-expectations-amid-industrial-market-stabilization-93CH-4170183
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-ipg-photonics-q2-2025-beats-earnings-expectations-93CH-4171002