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07 May 2025
Fiber laser firm's stock drops 13% as industrial woes continue; CEO cites traction in medical and micromachining applications.
IPG Photonics, the US-headquartered fiber laser vendor, has reported sales revenues of just under $228 million for the opening quarter of 2025 - down 10 per cent on the same period last year.
Stemming from continued weakness in the market for laser welding and cutting applications, traditionally IPG’s key areas, that drop in sales saw the firm’s operating income fall from $19.1 million a year ago to just $1.8 million in the latest three months.
And although CEO Mark Gitin said that there were now signs of stabilization in laser welding, and a “modest uptick” in other areas, the firm’s immediate outlook has been further clouded by continued uncertainty over new US import tariffs.
$15M delayed shipments
Based on IPG’s current understanding of how those tariffs and retaliatory actions are being implemented, the company’s June quarter sales are expected to be in the region of $225 million - about $15 million lower than would otherwise have been the case.
“The guidance reflects approximately $15 million in potential shipment delays to customers,” Gitin told an investor conference call discussing the latest results. “These are not cancellations; we will fulfill these orders as we optimize production across our global footprint.”
IPG is adapting its manufacturing operations, which are located in the US, Germany, Italy, and Poland, and their respective supply chains, to minimize the impact of the new tariffs, with the CEO pointing out:
“We’ve demonstrated this agility before - most notably when we successfully navigated the loss of access to our Russian operations following the invasion of Ukraine.
“Looking ahead, our strong manufacturing base in North America positions us well, especially as reshoring drives renewed investment in local, automated industrial production.”
And while China remains a hugely important market for IPG, accounting for nearly a quarter of total sales in 2024 and a slightly higher proportion in the opening quarter of 2025, IPG’s CFO Tim Mammen pointed out that about 80 per cent of what the company produces for China is already made outside of the US.
Specific products that IPG does ship from the US to China will now be manufactured at other company locations, with the potential $15 million in delayed sales revenues from the current quarter expected to be recouped in the following three months.
Mammen also stressed that the tariff impact for IPG was calculated from the current rates being applied, and not from the original “Liberation Day” announcement of much higher rates in early April, which would imply much more significant disruption if enacted.
AkzoNobel powder coatings
Gitin told investors that he was encouraged by the momentum now building across applications outside of the workhorse industrial areas of cutting and welding, noting progress in urology, micromachining, and laser curing of powder coatings.
For urology, IPG is currently developing a new thulium laser that is set to launch later this year and expected to contribute significant sales from 2026. As well as working with key player Olympus, IPG has recently signed up another customer for what is said to be a multi-billion-dollar market.
“We also launched a new product in micromachining and secured new business that nearly doubled our revenue in that area this quarter,” added the CEO.
Meanwhile a “groundbreaking” new powder coating application involves global paint giant AkzoNobel, and is set to offer a faster and more energy efficient alternative to conventional curing methods using ovens.
IPG and AkzoNobel have signed an agreement for the partnership to exclusively serve customers in the Europe, Middle East and Africa region, using lasers to selectively heat the applied powder coating inside an otherwise cold oven.
“It means no heat escapes onto the factory floor and no energy is wasted heating the atmosphere or the curing enclosure,” announced the paint company.
“High-intensity laser heating also enables curing times to be reduced to just a few minutes, compared with the 15-20 minutes that's currently required using traditional curing methods. The IPG Photonics process also enables curing to occur in less than half the space required by a traditional oven.”
Jorrit van Rijn, the global marketing director for AkzoNobel's powder coatings business, added: “This is a hugely exciting partnership which has the potential to offer customers game-changing benefits in terms of process speed, efficiency and energy savings.”
• Immediately following IPG’s latest financial update, the firm’s Nasdaq-listed stock price dropped in value, ending the trading day 13 per cent down.
Closing at just under $55 on May 6, the stock is down 25 per cent since the start of 2025, and around 80 per cent lower than the all-time high of just over $250 achieved in 2021.
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