nLIGHT, Inc. (NASDAQ:LASR) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET

Company Participants

Joe Corso – Chief Financial Officer

Scott Keeney – Chairman and Chief Executive Officer

Conference Call Participants

Greg Palm – Craig-Hallum

Jim Ricchiuti – Needham & Company

Patrick Ho – Stifel

Hans Chung – D.A. Davidson

Paretosh Misra – Berenberg Capital Markets

Mark Miller – The Benchmark Company

Operator

Good day, and welcome to the nLIGHT Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

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

Joe 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 nonfinancial 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. Starting on Slide 3. Q2 was a solid quarter for nLIGHT. Despite the significant operational challenges and uncertainties we faced due to the prolonged COVID-related lockdown in Shanghai, we delivered revenue that was within our guidance range. Favorable product mix and solid execution of our strategic growth objectives helped drive gross margins above the high end of our guidance, which resulted in positive adjusted EBITDA for the quarter.

Turning to Slide 4. Growth in revenue from strategic areas enabled us to generate $60.8 million of revenue in Q2. Our second quarter revenue reflects the continued geographic and strategic transformation of our business. In Q2, revenue from customers outside of China grew 12% year-over-year to $56.2 million or approximately 92% of revenue compared to $50.3 million or 73% in Q2 2021. Our focus on strategic growth areas outside of China have resulted in eight consecutive quarters with year-over-year growth in our non-China industrial and microfabrication business.