nLIGHT, Inc. (NASDAQ:LASR) Q4 2022 Results Conference Call February 23, 2023 5:00 PM ET

Company Participants

Scott Keeney - Chairman and Chief Executive Officer

Joseph Corso - Chief Financial Officer

Conference Call Participants

Greg Palm - Craig-Hallum Capital Group

Ruben Roy - Stifel

Mark Miller - Benchmark Company

Operator

Hello and welcome to the nLIGHT Fourth Quarter 2022 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 Chief Financial Officer, Joseph Corso. Joe, 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. Our revenue performance in 2022 reflects the continuing evolution of our business model. Revenue declined 10% to $242 million driven by a 62% decline in revenue to customers in China, which now represents less than 10% of our business. We also experienced a 23% decline in our government funded research programs due to timing of key programs.

However, during 2022, we saw continued growth in our product revenue outside of China that grew 14% to a record $171 million. In particular, strong execution of our strategic growth initiatives enabled us to achieve 21% growth in industrial and Microfabrication revenue outside of China this year, which grew to record $133 million, more than double the revenues achieved in these markets in 2020.

There are two fundamental themes I would like to highlight and describe further on our call today. Our focus on markets outside of China, and our progress on key operations initiatives. I will begin with our focus on key growth markets outside of China.