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nLight sees positive signs in directed energy and additive manufacturing sectors

12 May 2021

Laser firm reports jump in sales and is expecting further growth in the current quarter.

nLight, the Vancouver-based manufacturer of high-power laser diodes and fiber lasers, has reported a strong increase in revenues for the opening quarter of 2021.

At $61 million, the total represented a 42 per cent jump on the same period last year, with sales up across all major market sectors.

That increase also resulted from much higher revenues generated from project work on directed energy weapons for the US military being carried out by nLight’s subsidiary Nutronics.

However, that development business carries a significantly lower profit margin compared with sales of laser products. As a result, nLight’s pre-tax loss of $5.8 million in the latest quarter was only marginally better than the $6.6 million loss posted a year ago.

That shift also means that nLight is less reliant on sales in China, which accounted for only 25 per cent of sales in the three months ending March 31 - the lowest proportion in at least five years.

Additive momentum
Addressing an investor conference call discussing the latest results, nLight’s CEO Scott Keeney highlighted the growing opportunities in applications like electric vehicle (EV) battery welding, metal additive manufacturing with programmable lasers, and laser weapons.

“Directed-energy lasers are becoming a critical requirement to address emerging threats to our national security,” he said, pointing out that sales attributed to aerospace and defense applications jumped 47 per cent year-on-year, and accounted for 40 per cent of sales in the latest quarter.

“The response we've received through our newly released programmable single mode laser [the AFX-1000] has been positive,” Keeney said. “Multiple leading metal additive manufacturing tool companies are in the process of qualifying our lasers based on the improvements in build rate and part quality.”

In laser microfabrication, nLight reported a similarly sharp jump in sales, ahead of the company’s internal expectations.

“We believe that improving demand from our customers is being driven by increased demand for laser processing solutions required to manufacture 5G infrastructure and handsets, and advanced electronics,” the CEO told investors.

“Our high-brightness, high-power semiconductor lasers offer the best performance in the industry and are the critical enabling component of many of the leading pulsed nano, pico, and femtosecond lasers available in the market today.”

Looking ahead, Keeney and his executive team are anticipating another rise in sales, with revenues for the current quarter expected to be somewhere between $62 million and $68 million.

Project development work should again account for around $14 million of that total. If nLight does hit the upper end of its guidance, it would represent a record revenue figure - beating the current high of $66 million reported in the closing quarter of 2020.

• Following the latest update, nLight’s stock price rose in value on the Nasdaq to trade at around $27 - equivalent to a market capitalization of just over $1 billion. The stock had briefly touched an all-time high of $46 in mid-February.

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