nLIGHT, Inc.

Non-GAP operating expenses were $16.8 million in the second quarter, down from $18.1 million in the second quarter of 2024, and $17.7 million last quarter. We expect non-GAP OPEX to remain in the $18 million range in the third quarter. Gap net loss for the second quarter was $3.6 million, or 7 cents per share, compared to a net loss of $11.7 million, or 25 cents per share in the same quarter a year ago, and a loss of $8.1 million, or 16 cents per share in the first quarter of 2025. On a non-GAP basis, net income for the second quarter was $2.9 million, or 6 cents per diluted share, compared to a non-GAP net loss of $4.6 million, or 10 cents per share in the second quarter of 2024, and a non-GAP net loss of $1.9 million, or 4 cents per share last quarter. Adjusted EBITDA for the second quarter was a positive $5.6 million, compared to a loss of $1.6 million in the second quarter last year, and a positive $116,000 in the first quarter of 2025. Turning to the balance sheet. We ended the second quarter with total cash, cash equivalents, restricted cash, and investments of $114 million. We continue to make progress on improving our working capital. Our cashflow conversion days have improved over the last several quarters, and we remain focused on further improvement going forward. Turning to guidance. Based on the information available today, we expect revenue for the third quarter of 2025 to be in the range of $62 million to $67 million. The midpoint of $64.5 million includes approximately $45 million of product revenue and $19 million of development revenue. We expect A&D revenue in the third quarter of 2025 to increase sequentially and year over year. Turning to gross margin. Product gross margin in the third quarter is expected to be in the range of 32% to 36%, and we expect development gross margins to be approximately 8%, resulting in a total gross margin range of 24% to 30%. As we've mentioned previously, as a vertically integrated manufacturing business, gross margin is largely dependent on production volumes and absorption of fixed manufacturing costs. Finally, we expect adjusted EBITDA for the third quarter to be in the range of approximately $2 million to $6 million. With that, I will turn the call over to the operator for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star, followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star, followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from the line of Greg Palm from Greg Hallam Capital Group. Your line is now open. Please go ahead.

Yeah, thanks. This is Danny Egreton for Greg today. Congrats on the really good results guys. Thanks. I think we'll just start obviously with A and D, really good from both a product and development standpoint. So I guess you gave the guy last quarter and you kind of blew through that. So maybe just looking back, what went better than expected, what drove that outperformance between both product and development. I know there's some project timing in there and whatnot, but maybe if you could just dig into that a little bit more.