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11 Feb 2025
Latest figures show 24% decline on the 2023 total amid challenging conditions across the industrial laser sector.
IPG Photonics has reported annual sales of $977 million in 2024, down from $1.29 billion for the prior year and indicating continued tough market conditions for industrial laser vendors and stalled demand from electric vehicle battery manufacturing.
Down 24 per cent year-on-year, the latest total also compares negatively with $1.43 billion posted in 2022, and $1.46 billion in 2021. It is the first time in a decade that the fiber laser company has posted annual sales below $1 billion.
The extended downturn also saw IPG swing to a pre-tax loss of $162 million for the year, compared with pre-tax earnings of $275 million in 2023 - partly the result of a near-$200 million write-down associated with the company’s protracted exit from Russia.
Urology and micromachining
CEO Mark Gitin, who took charge of IPG last June, indicated that the tough environment was unlikely to change any time soon, saying in an investor call: “The business environment continues to bounce along the bottom."
“Global industrial demand remains subdued so far in early 2025, which was reflected in our book-to-bill ratio of slightly below one for the fourth quarter,” he added in a release accompanying the latest results, which showed sales were $234 million in the closing quarter of last year.
“However, with our leading product portfolio, expertise across laser solutions, and strong balance sheet, we believe that we will be well-positioned when the market rebounds.
“We are navigating through this environment by focusing on execution, managing costs and redeploying the savings to fund strategic investments in long-term growth opportunities, which we expect to show results in 2026 and beyond.”
Having completed a strategic review since his appointment, Gitin said during an investor conference call that among the key areas of focus were new lasers for applications in urology and micromachining.
For urology, IPG has developed a new thulium laser for treating kidney stones, and the CEO expects to see some initial sales revenues from that product line towards the end of the year. The firm has also signed up another customer in that area.
Gitin also highlighted the release of a new lower-cost high-power fiber laser at the recent SPIE Photonics West technology exhibition as a key element of the firm’s fightback against Chinese competition in cutting applications.
The “YLS-RI” fiber laser platform is said to have been built with an improved internal architecture to maximize performance and ease of integration, and features IPG’s latest pump laser diodes inside a much more compact design.
“[These high-power lasers] give our OEM customers a smaller form factor with lower cost,” Gitin told investors, adding that it was now possible to get a 40 kW output from fiber laser equipment the same size as an old 4 kW system.”
Tariff flexibility
Asked about the potential impact of US-imposed tariffs on the business, Gitin and CFO Tim Mammen both indicated that IPG had plenty of flexibility across its own manufacturing operations in the US and Europe to manage any further developments.
Noting that production of components previously made in Russia had now been shifted to Germany and elsewhere, and the near-completion of a new site in the US, Mammen said there would be no need for the company to engage in further construction in order to navigate the new tariff landscape.
“We can move supplies from one region to another quite flexibly,” he added. “It’s not possible to say [tariffs] will have no impact, but it should be manageable.”
Looking ahead, Gitin and Mammen are expecting sales in the current quarter to be similar to or slightly down on the total of $234 million posted for the three months ending December 31.
That quarterly run-rate seems unlikely to change much this year as IPG remains focused on investments in future product development and further streamlining its current operations, with any major uptick from the new applications earmarked for 2026 and beyond.
• Immediately following the firm’s latest update, IPG’s stock price dropped in value by around 7 per cent, continuing the generally downward trend seen over the past four years.
Now trading at close to $73 on the Nasdaq, it is down some 40 per cent in 12 months, and equivalent to a market capitalization of approximately $2.5 billion.
As indicated by Gitin, IPG’s balance sheet remains very strong, with more than $900 million in cash and equivalent liquid assets, giving the company plenty of flexibility to invest as it sees fit while the industrial laser market remains in the doldrums.
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