0001124796-26-000028
SEC filingRevenue surged 55% YoY to $80.2M, driven by Aerospace & Defense growth; net income turned positive with gross margin expanding 640 bps to 33.1%.
For the three months ended March 31, 2026, nLIGHT reported total revenue of $80.2 million, a 55.2% increase from $51.7 million in the same period last year. The growth was primarily driven by a 68.6% surge in Aerospace & Defense revenue, which reached $55.1 million, reflecting increased unit sales of directed energy laser products and progress on development contracts. Microfabrication and Industrial markets also contributed, with revenue up 28.9% and 35.8%, respectively.
Gross profit improved to $26.5 million (33.1% gross margin) from $13.8 million (26.7% gross margin) in the prior year. The 640 bps expansion was driven by favorable product mix and higher production volumes absorbing fixed manufacturing costs. Products gross margin increased to 43.6% from 33.5%, while development gross margin declined to 5.1% from 11.5% due to a shift toward cost-plus fixed fee contracts.
Operating loss narrowed significantly to $0.7 million (0.9% of revenue) from $9.6 million (18.6% of revenue) in the prior year, reflecting operational leverage. Net income turned positive at $0.6 million compared to a net loss of $8.1 million. Free cash flow was $7.6 million, driven by operating cash flow of $9.7 million offset by $2.1 million in capital expenditures.
Laser Products segment revenue grew 63.1% YoY to $58.2 million, representing 72.6% of total revenue. The increase was broad-based across all end markets, with strong demand for semiconductor and fiber lasers. Advanced Development segment revenue increased 37.5% to $22.0 million, driven by progress on existing research and development contracts for directed energy applications. All Advanced Development revenue is from the Aerospace & Defense market.
Geographically, North America revenue rose 64.2% to $59.3 million, accounting for 73.9% of total revenue. Asia Pacific and EMEA grew 30.1% and 40.3%, respectively, driven by Aerospace & Defense and Microfabrication.
Management highlighted continued investment in technology and new product development, with R&D expense increasing 4.1% YoY to $11.8 million. The company expects demand to fluctuate with market cycles, competitive dynamics, and tariff uncertainties. A recent U.S. Supreme Court ruling on tariffs may result in refunds, but the impact is uncertain. nLIGHT believes existing liquidity of $332.9 million in cash, cash equivalents, restricted cash, and marketable securities, plus a $20.0 million undrawn credit facility, is sufficient to meet working capital and capex needs for at least 12 months. No specific revenue or margin guidance was provided.
As of March 31, 2026, nLIGHT reported cash and cash equivalents of $298.2M and marketable securities of $34.4M, totaling $332.6M in liquid assets. This significant increase from $133.6M at December 31, 2025 was primarily driven by a $191.3M net proceeds from a follow-on equity offering. The company also has $20.0M outstanding on its $40.0M revolving line of credit, resulting in total debt of $35.6M including lease liabilities. Shareholders' equity stood at $429.2M, up from $226.7M at year-end 2025, reflecting the equity raise and modest net income of $0.6M.
Notes disclose $1.4M of performance obligations related to firm fixed price contracts not qualifying for disclosure exemptions, with 96% expected to be recognized by end of 2026 and the remainder by 2027. Operating lease commitments total $18.3M in undiscounted payments, with a present value of $15.6M. No other material purchase commitments or contractual obligations were reported. The company recognized $295K in restructuring charges during Q1 2026, primarily for lease exit costs, with an accrual balance of $378K at quarter end.
No share repurchases or dividends were disclosed. The primary capital allocation activity was the February 2026 underwritten public offering of 4.6 million shares (including 0.6 million from underwriters' option exercise), generating $191.3M net proceeds. Stock-based compensation totaled $10.9M for the quarter, up from $6.1M a year ago. Capital expenditures were not disclosed in the Notes, but the cash flow statement within the financial statements shows $2.1M in purchases of property, plant and equipment.
The company operates two reportable segments: Laser Products and Advanced Development. For Q1 2026, Laser Products revenue was $58.2M (up 63% YoY) with a gross margin of 44.6%, compared to 11.5% a year ago. Advanced Development revenue was $22.0M (up 37% YoY) with a gross margin of 7.2%, versus 11.5% previously. The improvement in Laser Products margin reflects operating leverage. Geographically, North America contributed 74% of total revenue ($59.3M), followed by Asia Pacific 15% ($11.9M) and EMEA 11% ($9.1M). Sales to the U.S. Government directly accounted for 36% of revenue.