nLIGHT delivered a quarter that exceeded Wall Street’s expectations on both revenue and non-GAAP profit, prompting a strong positive market reaction. Management attributed the robust performance to continued momentum in aerospace and defense, where record product sales and strong execution in directed energy and laser sensing programs were key. CEO Scott Keeney highlighted that defense product revenue grew over 70% year-over-year, mainly due to shipments tied to major government contracts and successful transition of amplifier production lines. The team also noted improved gross margins, benefiting from favorable product mix and manufacturing scale.
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nLIGHT (LASR) Q3 CY2025 Highlights:
- Revenue: $66.74 million vs analyst estimates of $63.33 million (18.9% year-on-year growth, 5.4% beat)
- Adjusted EPS: $0.08 vs analyst estimates of $0.02 (significant beat)
- Adjusted EBITDA: $7.11 million vs analyst estimates of $3.30 million (10.7% margin, significant beat)
- Revenue Guidance for Q4 CY2025 is $75 million at the midpoint, above analyst estimates of $61.07 million
- EBITDA guidance for Q4 CY2025 is $8.5 million at the midpoint, above analyst estimates of $1.87 million
- Operating Margin: -10.9%, up from -21% in the same quarter last year
- Market Capitalization: $1.69 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From nLIGHT’s Q3 Earnings Call
- Greg Palm (Craig-Hallum): Asked whether the HELSI-2 program timeline could accelerate amid strong volumes. CEO Scott Keeney confirmed the schedule remains unchanged with completion expected in 2026.
- Sahej Singh (Stifel): Inquired about margin benefits from amplifier production and whether sensing contracts would offset HELSI-2 revenue declines. CFO Joseph Corso explained that gross margins are expanding due to high-margin amplifier sales and a pipeline of new programs is expected to fill any revenue gaps.
- James Ricchiuti (Needham & Co.): Queried about the timing of new orders to replace HELSI-2 revenue and the nature of recent sensing contracts. Corso stated that programs to offset HELSI-2 are already booked and a follow-on laser sensing contract extends existing work.
- Keith Housum (Northcoast Research): Asked about the impact of amplifier production transitions and restructuring in China. Corso said amplifier manufacturing scale is driving margin gains and restructuring aligns resources to core growth markets.
- Brian Gesuale (Raymond James): Sought details on the global pipeline and urgency of directed energy adoption. Keeney described strong engagement in both U.S. and international markets, with rising urgency for laser-based defense technologies.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of new contract wins in directed energy and sensing, especially those tied to U.S. government initiatives; (2) execution on amplifier production scaling and margin retention as manufacturing volumes increase; and (3) signs of stabilization or renewed weakness in commercial markets. The potential for international contract acceleration and ongoing restructuring efforts will also be key indicators for nLIGHT’s execution.
nLIGHT currently trades at $33.07, up from $29.72 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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