IPG Photonics Corporation

Good morning and welcome to IPG Photonics first quarter 2026 conference call. Today's call is being recorded and webcast. At this time, I'd like to turn the call over to Eugene Fedorov, IPG Senior Director, Investor Relations for introductions. Please go ahead with your conference.

Thank you and good morning, everyone. With me today is IPG Photonics CEO, Dr. Mark Eden and Senior Vice President, and see what's in mind. On today's call, Mark will provide a summary of our first quarter results, as well as the overall demand environment, and then walk you through the progress we are making on our long-term strategy. After that, he will turn it over to Tim to provide financial details. Let me remind you that statements made during this call that discuss our expectations or predictions of the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause the company's actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties are detailed in our Reform 10-K for period ended December 31st, 2025, and our reports on file with the Securities and Exchange Commission. Any forward-looking statements made on this call are the company's expectations or predictions as of today, May 5th, 2026 only. And the company assumes no obligations to public entities, any updates or revisions to any such statements. During this call, we will be referencing certain non-GAAP measures. For more information on how we define these non-GAAP measures and the reconciliation of such measures to the most directly comparable GAAP measures, as well as additional details on reported results, Please refer to the earnings press release, earnings call presentation, and the financial data will be posted on our investor relations website. We will also post these prepared remarks on our website after this call.

With that, I'll now turn the call over to Mark. Thanks, Eugene. Good morning, everyone. First quarter revenue exceeded our expectations, increasing 17% year over year. we continued to see improved demand for our laser solutions, particularly in battery manufacturing and medical applications, which drove our strong performance in the quarter. We maintained a disciplined focus on our growth initiatives across all of our markets, delivering solid first quarter results and building momentum for future growth. Before looking more closely at our first quarter sales performance, I would like to highlight our updated revenue reporting frameworks, which better aligns with our strategic growth initiatives, making it easier to understand and track our progress. It also provides a clearer separation between our industrial and non-industrial revenue streams, giving better visibility into our focus areas and splitting the business into two distinct buckets with unique performance and growth profiles. This reporting combines applications into two categories, industrial solutions and advanced solutions. Today, most of our business is in industrial solutions where we are building on our strong foundation, expanding our addressable market by displacing incumbent technologies, and enhancing our value proposition by offering differentiated system and subsystem solutions. This includes applications such as cutting, welding, cleaning, and additive manufacturing, and other industrial offerings. In the first quarter, industrial solutions revenue accounted for 86% of total sales, increasing 21% year over year as our design wins took hold and general industrial demand improved. Welding, cutting, marking, and cleaning applications drove higher revenue. Welding and cutting, our two largest applications, posted double-digit growth, benefiting from solid demand and new orders from battery manufacturing. Sequentially, industrial solutions revenue was relatively flat and outperformed typical seasonality driven by business wins in cutting and additive manufacturing. In advanced solutions, which is another important driver of our future growth, we are applying our laser technologies and applications expertise, solving challenging problems for customers. Advanced solutions serves markets such as medical, defense, micromachining, semiconductor manufacturing, and others that present strong growth opportunities and collectively represent a $5 billion cap. We've already established a solid presence in these markets and are excited about the opportunities that lie ahead. Advanced solutions represented 14% of our revenue in the first quarter and declined modestly year over year. Revenue growth in medical and semiconductor applications was offset by lower micromachining sales due to cyclical demand in solar cell manufacturing. Sequentially, revenue declined due to lower medical sales following an exceptionally strong fourth quarter of 2025. We were particularly encouraged by increased sales in semiconductor applications as we gained traction with large equipment manufacturers. Total bookings were strong in the quarter, with book to build firmly above one for the second consecutive quarter. This gives us confidence in our outlook and points to robust demand for our solutions, despite elevated levels of macroeconomic uncertainty. We see this strong demand to remain focused on executing our key growth initiatives across industrial solutions and advanced solutions, building upon our strong foundation in industrial innovation, expanding our leadership in laser technology into new high-growth applications such as medical, micromachining, and defense. While our initiatives target a wide range of opportunities, our path to success is consistent, leveraging differentiated laser technology and deep applications expertise to deliver clear performance advantages that incumbent approaches cannot match. Together, these initiatives represent compelling opportunities to meaningfully expand our addressable market and support sustained long-term growth. In industrial solutions, welding revenue is growing, driven by our advanced capabilities for battery manufacturing, across both electric vehicles and stationary storage applications. Global stationary storage deployment is growing rapidly to support data center energy requirements and it's gaining increasing share of battery manufacturing. These batteries use larger cells with thicker bus bars, requiring higher-power lasers and process monitoring. This aligns directly with our strengths. Our unique combination of adjustable-mode beam lasers, advanced beam delivery, and real-time process monitoring ensures weld quality and sets us apart from the competition. Beyond lasers and subsystems, we continued to make meaningful progress in our systems business, which posted another strong quarter. We're moving up the value chain by integrating our fiber lasers into differentiated, complete systems, which together with our applications expertise enables us to tackle complex problems that incumbent technologies cannot address. This approach allows us to deepen our partnerships with customers across a wide range of markets, from welding to cleaning. Turning to advanced solutions, we continue to make progress with our growth strategy by targeting opportunities across defense, medical, and micromachining applications. In February, we announced that Lockheed Martin placed a $10 million follow-on order for Crossbow, our scalable, cost-effective, high-energy laser defense system for countering Group 1 and Group 2 drone threats. Shipments for that order are expected to begin in the second quarter, We also showcased Crossbow at the 2026 AUSA Global Force Symposium in Huntsville, Alabama, where we engaged with defense industry leaders on how our solutions can address escalating drone threats at a significantly improved cost exchange ratio. Crossbow continues to generate interest from potential customers, and we're gaining traction on converting that interest into orders. In medical, Revenue grew significantly year over year, driven by sales to a new customer as our solutions continue to deliver clinically meaningful outcomes. We are advancing our innovation roadmap and expect several new product approvals and introductions in 2026 and 2027. We have a very strong backlog for 2026, giving us excellent visibility and full-year revenue that points to another good year in medical. In semiconductor, revenue grew this quarter as we ramped up new lithography, metrology, and inspection business with large semiconductor equipment manufacturers. This market is being driven by the accelerating adoption of AI, which is fueling demand for GPUs and high bandwidth memory chips. We continue to advance our product development and are working closely with customers on design and opportunities supported by the clear performance advantages of our solutions. Our strategic progress is enabled by the organizational changes and investments we have made. We have streamlined operations, strengthened decision-making, and accelerated product development, translating into better performance and greater consistency across the business. While our entrepreneurial and innovative spirit remains at the heart of IPG, we are building the operating discipline required to scale these capabilities effectively. In summary, Our team delivered another growth. Customer demand for our differentiated laser solutions continue to strengthen across our markets. We're making meaningful progress on our strategic objectives, outperforming the market, and creating lasting value for our customers and our shareholders. With that, I will now turn the call over to Tim.