Overview

• U.S. fiber laser maker's Q1 revenue rose 17% yr/yr, beating analyst expectations

• Adjusted EPS for Q1 fell 6% yr/yr to $0.29

• Gross margin declined due to tariffs and higher product costs

Outlook

• IPG Photonics expects Q2 revenue between $260 mln and $290 mln

• Company sees Q2 adjusted gross margin between 37% and 40%

• IPG Photonics anticipates Q2 adjusted EPS of $0.25 to $0.55

Result Drivers

• INDUSTRIAL SOLUTIONS DEMAND - Revenue growth was driven by higher sales in Industrial Solutions, particularly welding, cutting, marking, and cleaning applications

• TARIFFS AND COSTS - Gross margin declined due to tariffs and higher product costs, partially offset by lower inventory provisions

• REGIONAL SALES GROWTH - Sales increased 14% in Asia, 27% in North America, and 4% in Europe yr/yr

Company press release: ID:nGNX2fZKm4

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue	Beat	$265.5 mln	$256.94 mln (7 Analysts)
Q1 EPS		$0.04
Q1 Net Income		$1.6 mln
Q1 Gross Margin		37.5%
Q1 Operating Income		-$7.7 mln
Q1 Operating Margin		-2.9%

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the electronic equipment & parts peer group is "buy"

• Wall Street's median 12-month price target for IPG Photonics Corp is $163.00, about 33.2% above its May 4 closing price of $122.33

• The stock recently traded at 66 times the next 12-month earnings vs. a P/E of 64 three months ago

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