nLight still hampered by optics supply chain

nLight, the Nasdaq-listed developer of high-energy lasers for deployment in industrial and - increasingly - defense applications, has reported sales of $73.8 million in its latest financial quarter.

That total slightly exceeded the range of expectations issued by the Camas, Washington, firm back in August, although optical supply chain issues mean that the sales figure is around $15 million short of the total that nLight would otherwise have been able to report, and 11 per cent lower than nLight posted in the June quarter.

CEO Scott Keeney commented in a company statement: “Demand for our products remains strong and our pipeline of opportunities continues to expand across directed energy, laser sensing and advanced manufacturing.

“We are making important investments in our manufacturing capacity and supply chain to support this expected growth, and we believe nLight is well positioned as our defense programs increasingly transition from development toward fielding and production.”

According to the latest investor presentation, just over two-thirds of the September quarter revenues related to defense and space applications, up 15 per cent year-on-year. On the bottom line nLight’s pre-tax loss of $6.9 million widened slightly from $6.6 million a year ago.

Pent-up demand

Discussing the latest results with investors, Keeney said that nLight had been working to reduce its exposure to China for a number of years, including re-shoring manufacturing to the US, and qualifying alternative sources of optics that feature in its products.

“During the third quarter, we completed our efforts to cease all operations in the country,” he said. “However, the optical supply chain remains heavily concentrated in China, and qualifying a new source takes time.”

As well as working to bring qualified second sources online and evaluating new suppliers, the firm is modifying product designs to enable greater flexibility in sourcing components, and, in certain cases, considering bringing critical capabilities in-house.

Keeney also highlighted demand flowing from the US government’s pursuit of laser weapons with the ability to down ballistic missiles, with nLight and Lockheed Martin both involved in the Joint Laser Weapon System (JLWS) effort.

nLight’s “HADES” platform is based on a common modular architecture that can scale from tens of kilowatts to a megawatt output while maintaining the performance required to address increasingly difficult threats, the CEO said.

“The Department of War has discussed plans to move JLWS towards fielding in 2028, and has emphasized that the next phase of the market will be defined not only by technical performance, but also by producibility, affordability, and deployability of systems in meaningful quantities,” Keeney told investors.

Looking ahead, the nLight executive team is expecting sales to recover in the closing quarter of 2026 despite the ongoing supply-chain issues, and rise to between $84 million and $90 million.

Supply has improved to where nLight expects to be able to ship to demand in the fourth quarter but does not expect to be able to deliver the $15 million of ‘pent-up’ demand that was deferred from the third quarter until the first half of next year.