Nlight Guides Down on Supply Chain Delay Despite Record Defense Sales
Nlight posted second-quarter revenue of $82.6 million, then told investors to expect as little as $63 million next quarter after supply chain problems pushed roughly $17 million of product revenue out of the period.
Nlight (LASR) reported second-quarter revenue of $82.6 million, up 33.8% from a year earlier, then guided third-quarter revenue to a range of $63 million to $73 million, below the quarter it had just closed. The laser and optical systems maker attributed the shortfall to supply chain challenges that would push about $17 million of product revenue out of the current quarter.
The guide-down arrived alongside a quarter that, on its own, continued a pattern of slowing growth. Revenue rose 33.8% year over year in the second quarter, down from 55.2% growth in the first quarter and 71.3% in the fourth quarter of 2024, even as the $82.6 million figure came in above the prior quarter's $80.2 million. Gross margin reached 31.1%, up from 29.9% a year earlier but down from 33.1% in the first quarter, a level the company had described as a peak. Adjusted EBITDA of $10.7 million more than doubled from $5.55 million in the year-ago quarter but fell short of the first quarter's $13.8 million, and non-GAAP net income of $9.6 million came in below the first quarter's $11.8 million.
The underlying defense business kept expanding faster than the headline numbers suggest. Aerospace and defense revenue rose to $57.3 million from $40.7 million a year earlier, a 41% increase that outpaced growth in both the industrial segment, at $12.0 million, and microfabrication, at $13.3 million. Products revenue hit a record $59.4 million, up 45% year over year, building on a first quarter in which A&D product revenue alone rose 98% to $33.1 million. Deferred revenues jumped to $10.7 million at quarter-end from $1.5 million at the end of 2024, a roughly sevenfold increase tied to customer prepayments.
The third-quarter guidance marks a reversal from the pattern Nlight had set over the prior year, when it beat its own preliminary estimates rather than missing them; a January 2025 preliminary update had lifted fourth-quarter revenue guidance to $78 million to $80 million from a prior range of $72 million to $78 million, and the company then reported $81.2 million in actual results. For the third quarter, the company guided gross margin to 24% to 30%, below both the second quarter's 31.1% actual and the 29% to 33% range it had set for the second quarter back when it issued first-quarter results. Adjusted EBITDA guidance of $1 million to $7 million sits well under the $8 million to $12 million range the company had projected for the second quarter in that same earlier outlook.
Operating losses continued to narrow on a year-over-year basis even as the sequential trend reversed. Operating margin improved to negative 4.4% in the second quarter from negative 6.8% a year earlier, extending a run that took the figure from negative 18.6% in the first quarter of 2024 to near breakeven at negative 0.9% in the first quarter of 2025. The second-quarter figure nonetheless worsened from that near-breakeven mark, consistent with the margin and EBITDA pullback seen elsewhere in the results.
Nlight entered the current quarter with a markedly stronger balance sheet than it had at the start of the year. Cash and cash equivalents rose to $295.8 million as of June 30 from $98.7 million at the end of 2024, after the company completed a public equity offering that raised $192.2 million net. Total stockholders' equity nearly doubled to $439.9 million from $226.7 million over the same period, and the company used part of the proceeds to repay its $20 million line of credit balance in full. A $295,000 restructuring charge appeared in the first-half results, a new line item not present in the prior-year period or in the standalone first-quarter release.