IPG Photonics delivered a fourth quarter that exceeded market expectations, with management attributing the results to a stabilizing industrial demand environment and the success of its growth initiatives. CEO Mark Gitin highlighted robust performance in medical and advanced applications, noting, “Materials processing revenue was up 6% sequentially and 17% year over year, driven by stable general industrial demand and increased demand in battery and additive manufacturing applications.” The company also benefited from new product traction in medical and increased synergies from its Clean Laser acquisition.
Is now the time to buy IPGP? Find out in our full research report (it’s free for active Edge members).
IPG Photonics (IPGP) Q4 CY2025 Highlights:
- Revenue: $274.5 million vs analyst estimates of $249.6 million (17.1% year-on-year growth, 10% beat)
- Adjusted EPS: $0.46 vs analyst estimates of $0.25 (85.2% beat)
- Adjusted EBITDA: $41.23 million vs analyst estimates of $30.12 million (15% margin, 36.9% beat)
- Revenue Guidance for Q1 CY2026 is $250 million at the midpoint, above analyst estimates of $245 million
- Adjusted EPS guidance for Q1 CY2026 is $0.25 at the midpoint, below analyst estimates of $0.25
- EBITDA guidance for Q1 CY2026 is $32.5 million at the midpoint, above analyst estimates of $29.67 million
- Operating Margin: 1.2%, down from 6% in the same quarter last year
- Inventory Days Outstanding: 163, down from 194 in the previous quarter
- Market Capitalization: $5.83 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 IPG Photonics’s Q4 Earnings Call
- Ruben Roy (Stifel): Asked whether cutting applications are stable or face further downside, and about long-term growth targets in new investment areas. CEO Mark Gitin responded that cutting revenue has stabilized, with growth expected in medical, micromachining, and defense, targeting several billion dollars in total addressable market.
- James Ricchiuti (Needham & Company): Inquired about plans to expand investment in directed energy and the outlook for the Crossbow system. Gitin said a higher-power roadmap is in place, and strong customer interest supports further investment.
- Scott Graham (Seaport Research Partners): Requested clarification on welding growth drivers, particularly in batteries. Gitin highlighted that both EV and stationary storage batteries are fueling demand, with technology differentiation supporting higher-value applications.
- Rodney McMullen (Northcoast Research): Questioned the competitive environment in Asia and whether pricing pressure is spreading to advanced applications. Gitin replied that pricing is holding up in differentiated areas like batteries and additive manufacturing, as cutting is a small part of the company’s Asian business.
- James Ricchiuti (Needham & Company): Asked about semiconductor exposure and 2026 growth prospects. Gitin explained that while current exposure is small, new products and quality improvements are expected to drive increased engagement in lithography and inspection.
Catalysts in Upcoming Quarters
Looking ahead, our analyst team is monitoring (1) the launch and customer adoption rates of new medical and defense products, (2) the pace of recurring revenue growth from consumables in medical applications, and (3) continued progress integrating and scaling recent acquisitions like Clean Laser. Execution on cost reduction initiatives and margin improvement, particularly in the face of ongoing tariff pressures, will also be critical signposts for sustainable growth.
IPG Photonics currently trades at $138.75, up from $110.90 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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