nLIGHT, Inc. (NASDAQ:LASR) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET

Company Participants

Joseph Corso – Chief Financial Officer

Scott Keeney – Chairman and Chief Executive Officer

Conference Call Participants

Ruben Roy – Stifel

Jim Ricchiuti – Needham & Co.

Greg Palm – Craig-Hallum Capital Group

Mark Miller – The Benchmark Company

Operator

Good afternoon, and welcome to the nLIGHT First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Joseph Corso, Chief Financial Officer. Please go ahead.

Joseph Corso

Thank you, and good afternoon, everyone. I’m Joe Corso, nLIGHT’s Chief Financial Officer. With me today is Scott Keeney, nLIGHT’s Chairman and CEO.

Today’s discussion will contain forward-looking statements, including financial projections and plans for our business. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected on today’s call and we undertake no obligation to update publicly any forward-looking statement except as required by law.

During the call, we will be discussing certain non-GAAP financial measures. We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings release, which can be found on the Investor Relations section of our website.

I will now turn the call over to Scott.

Scott Keeney

Thank you, Joe. Q1 was a good start to the year for nLIGHT. Financial results were better than our expectations. Revenue of $54.1 million was above the midpoint of the guidance range. Product gross margin of 33% and adjusted EBITDA of $1.3 million were both above our guidance range. And finally, we generated positive cash flow and ended the quarter with over $108 million of cash with no debt.

In addition to strong financial results, we made significant progress in three areas critical to our strategic growth objectives. In aerospace and defense, we made excellent progress in programs and applications. In industrial, we continue to position ourselves well in key applications outside of China. And operationally, we executed on a range of key initiatives that will enable us to generate profitable revenue growth.

I will provide a brief update on each of these three initiatives and then turn the call over to Joe for a more detailed financial review of the quarter. In aerospace and defense, I’m pleased to report that we’ve made significant progress in directed energy. Earlier this afternoon, we announced that we have been awarded a new $86 million contract to produce a high energy laser prototype in support of the Department of Defense High Energy Laser Scaling Initiative, HELSI. Today’s award is a follow on to the $48 million award to be received in 2019 to produce a 300 kilowatt class high energy laser as part of the first phase of HELSI.