IPG Photonics (IPGP) 29 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to IPG Photonics Third Quarter 2024 Conference Call. Today's call is being recorded and webcast.

At this time, I'd like to turn the call over to Eugene Fedotoff, IPG's Senior Director, Investor Relations for introductions. Please go ahead with your conference.

Thank you, and good morning, everyone. IPG of is today me Photonics Dr. CEO With President Tim Mammen. Gitin; and CFO, Vice Senior Mark and

Let IPG you risks our may the results and Commission. XX-K company's this uncertainties forward-looking risks SEC's with such Photonics' call forward-looking those Investors or direct. me in December and course from and of to statements. Form these be that the the remind detailed predictions in XXXX, could are the projected statements. the discuss differ that the visiting reports website These section ended period statements filings uncertainties forward-looking materially These by Copies management's subject future that of actual or the Exchange company's statements for expectations IPG's during intentions, are of are or file made obtained to of Securities XX, and on the website cause

made as revisions no company's publicly on such company the assumes any this obligation are October Any statements. day any the on or updates today, forward-looking XXXX, release of statements and call predictions to to or expectations XX,

posted presentation additional the the earnings call refer on financial our to For release Relations earnings data reported please press website. Investor details results, on workbook our and

We these after will website prepared also post this call. remarks our on

now call that, over the turn With I'll to Mark.

Thank everyone. you, morning, Gene, good and

high operations at our guidance, of of in sale Russian end guidance. at adjusted end also our Adjusted in August. Our the the third earnings in top revenue quarter the of per the came came for share

more environment good on that and I about of joining our into opportunities muted. when joined. what strategy. we on key even business can aspects We future excited our and while in We're diving continue a focused Since control on remained I'm initiatives, executing making to demand deep navigating and key progress has IPG's June, I focus

highlights. our of few Russian start with share I'll I operations. a will the sale

our job tremendous single to done serve this war customers quickly was of -- call, ensure task. an manufacturing since on flawlessly by easy the our our a of a As not team in last I our Ukraine, needs miss shipment the rebuilding mentioned to has did executing start not we the infrastructure

completely sale operations quarters. we uptick country. in with better were the manufacturing finally of this Russia mirror, focusing our demand exit ensuring our transition for the With footprint an in on drive able global This to capacity enough in rearview to the we are future efficiency, while optimizing quarter, in now

with laser we to addition, the products diodes In generation new fiber high-power cost enable significant a our working of that of are will form of a also lasers. in decrease the our factor reduction

that in leader announcement to Second highlight Germany. laser acquire we our in is Clean an cleaning today agreement Laser, based systems signed a

acquisition It lasers where expand of solutions usage driving Clean highlights differentiation about more talk this This more this our enable has labor into of record to strong see of the and IPG of The use on attractive shortly. track tuck-in the lot of remains business I'll quickly new our a advances opportunities. area. fits a we IPG growth. and a in market and this cleaning the growth key strategy. capabilities acquisition large and part applications in our focus long-term will Laser us how

of and know-how strength review market pipeline, the future My business technical the product our of confirms opportunities.

to be investing do going we're a execute these on of number to We have key opportunities, in work and areas. to

and such the to make on resources also we're on will ensure medical, that in programs organization strengthening opportunities. to cleaning and capitalize micromachining execute we are as allocating high-value sure We to optimized areas these

lasers and support and around solutions, our opportunities drive to process pipeline differentiation product world-class to deliver robust to know-how a have attractive We customers. presents complete and systems that

competitors. by replicated easily be cannot this of All

and and support service focus Our lowering of for level customers. total cost the will on maximizing remain ownership high uptime of providing our a

a level. how need at On are we we throughout executing to the to includes front, go-to-market and stronger we This get the drive approach. organization ensure high our organization decisions, efficiency

making color be theme we and on stronger here, investments But formidable some are competitors the and to main provide calls. more I'll future we going demand current operators more will is We the exit be as that downturn.

need prolonged sure make agility invest the industrial as we're in term. we with Because the the that of cycle we're long to managing down market that facing, for we

in we've targeted implemented executed months, recently avoidance efficiencies a cost Over and additional achieved the more reduction. initiatives the past few headcount cost

drive We expect long-term to reallocate these opportunities for will growth that IPG. to savings

coming on share underway we to and it make recovery no are sheets, and opportunities as are operating in agility in we including put IPG strong both with that customer billion for products, the now, strong relationships, a in initiatives foundation $X balance more and But demand moving industry's for have for I'll months. we position And in all generation industry. clear a cash let me long-term this X debt. and from growth the of our great with best starting solid flow cash purposefully

business conversations general and spending e-mobility. turn across many markets, environment the to a bounce demand along by driven indicate market end manufacturing demand in the key uncertainty current areas continues and reduced the cautious environment. to Let's and economic Overall now of bottom. political Customer

of visibility this demand an quarter currently have don't trend, into and any guidance reflects continuation fourth Our environment. improved a we

to signs several In it's welding have there year-over-year been for that applications. key IPG. X our the demand Despite welding, note in stable progress revenue e-mobility to important relatively decreased comparison remaining and China. last over modestly good sales of that year-over-year Turning lower are for to negative, the primarily quarters due

applications our welding driving large automotive customers solutions. We're general some with further in winning and adoption and global of business

acceptance with and weld critical of automotive is is where customers safe real-time gaining monitoring quality products. Our their system well nonautomotive performance for

sales share system with improved welding also demonstrates systems battery sales both a encouraged applications growth which automated in installations. handheld EV year-over-year Additionally, capacity are better we in market sequentially, despite see results. downturn and EV gaining in our I'm to posting

we're that are adoption the we're strong around favorable medical important indicate great a for this for seeing and curve, market. world, traction solutions having conversations systems demand longer-term customers We're our gaining in device with Welding manufacturing well Overall, for providing monitoring to gains. by continue applications, automation lasers customers' focus to challenges. solution real-time we and on best-in-class positioned full manufacturing customers further weld solve and across the in-line for total welding

although In not inventories. an have cutting, have flat remains manufacturing Europe of sales PMI, made normal Amid as declined of year-over-year, our progress purchasing primarily and working in weak. weaker them U.S. significantly sheet customers cutting activities, down some resumed environment

environmentally consumables On industrial an opportunities That's on can and such to important opportunity as acids growth cleaning because water must cleaning fiber lasers behind involve areas as Clean a continue the where unfriendly applications. our that Laser abrasives reason into acquisition high Cleaning be look be traditional about our enthusiastic rely penetration the also of. positive consumption. incumbent in technologies. increase we note, I the to levels is of The disposed may high often processes applications replace

and Europe environmentally in or strong ownership. leader cost Laser By process friendly compelling cleaning as waste limited the with a have contrast, of total a foothold laser are space. a no in long-time cleaning systems Clean has

approach, will a customers medical, food great in have wide prudent aerospace, you activity. us industries is other see targeted an automotive, as and and take This markets. example We array of M&A a such a of

laser to known of number sources them years. for We've a Clean the supplied have Laser our team and

Tim and many customer complementary laser provide in as and respective in some together, will are Our Europe as America North we bases cleaning. technology We bringing and product ways, its together and the believe industrial deal strong the can help structure systems of the our impact. details synergies. on accelerate well that of more financial businesses adoption

want development. emphasize, a number I excited technologies and I'm products to about extremely of and

years. couple be So the down will them doubling over some we of on next of

market share differentiation While and products for all provide believe I can and large details, which the early IPG micromachining significant to and opportunities for these of advanced too us. it's medical attractive applications, provide

outlook. Moving to our

X, Russian quarter third sales. was Our excluding book-to-bill

I As in we've Europe of U.S. seen Across uncertainty stability we continue believe that demand macro the continued China, cycle. the offset our this and we some in bouncing demand earlier, geographies, are bottom in mentioned along by to

the visibility more in limited but current hopeful quarter have remaining XXXX. are beyond We stability for

Tim. With I call now the that, over to will turn

generally which Investor website. presentation Relations good you, comments Mark, will earnings Thank the and morning, available our call on follow is My everyone.

We'll adjusted our came for when start Slide in Revenue a third which million, $XXX sequentially X. and revenue, review in was with of quarter X% $X decline on financial quarter. of Russian the million the Revenue top guidance. down the the was XX% year-over-year in at

quarter. impact advanced Foreign revenue to not Revenue from decreased a primarily have application applications currency applications sales, due this medical to while processing materials unevenness XX% due and decreased XX% in cutting from revenue lower on other year-over-year and sales. did meaningful

excess the inventory point of guidance. GAAP which this gross XX.X%, XX was margin quarter. percentage year-over-year a points primarily to margin over midpoint XX.X decrease headwind GAAP of gross was due margin provided a to XX%, above gross Adjusted our percentage provisions,

Additionally, decrease lower and gross $X lower costs import manufacturing impacts effort further basis gross margin to decrease absorption and inventory as by manufacturing a result partially These in reduced as were in million by of our margin points. revenue shipping a negative sequential of rightsize to continued well XXX offset of a costs duty expenses. as

by provisions a past provision the strategic of supply of increase the the items backlog. as affected years, several electronic which to related and the over The electronic of Most the that was issues decrease significant to diode inventory in related these driven components. strategic was in -- quantities purchases chain electronic excess severe resulted components

business, in uncertain. more market, of is the Given high-power now and of value unsuccessful the from generation the the transition sell result to current realizable inventory to for excess in new, platform. the the the diodes items electronic slowdown diode secondary components of is cost-effective these a Provision our attempts

will next happen transition to Although XX this the XX over months.

in $X due translation on sale operating revenue million expenses our or and not business that quarter Currency existing the had end of transaction at a the shows approximately impact impact analysis negative of inventory. Russian Operating consume $X.XX we the minor our efficiencies. income focus in on will a on had million. and to came the expectations all per $X of profit low operating Our of losses gross Currency share.

GAAP which in ability loss impairment recent and $XXX operating Russian charges sale of due asset controls, Belarus. on $XX loss to in operate million of to included our to was million operations trade $XXX and related our curtailed EU million the disposal assets

this We to are options related currently strategic business. evaluating

As a diluted net these a $X.XX or result loss items, reported million of of $XXX per share. we

EPS assets, sale adjusted on of third asset the top impairment of the excess inventory provisions, guidance. and loss charges our was $X.XX our in Excluding at quarter

reconciliation a net income and release share adjusted earnings presentation. press have call We earnings and the to per provided in adjusted

region sales a year-over-year due applications XX% performance decreased North Moving by lower decline Slide to the and revenue. on in to medical America cutting Sales in revenue X. in

fluctuate can their inventory these unevenness customer quarter-over-quarter revenues. large Our to medical a orders significantly adding due some from management practices, to

to Other being with applications welding bouncing to be only low XX% year with to traditional lower and performed cutting to in automotive due Europe, manage is to order rates better compared weak Europe conditions decreased but In delayed cutting in growth seem applications, the back slightly. sales continue inventories region, remains be in sales continue large OEM muted. investment industrial marking economic their and EV prior demand customers and investments the as

China XX% as applications. competitive partially industrial cutting sales soft year-over-year by by which Cutting general XD in applications markets. of sales a were challenging and due to also in the Revenue was in and environment. impacted printing demand decreased e-mobility growth welding offset in lower result

$XX our balance the summary million $XX to billion quarter. and X. the cash cash, ended $X on by We cash operations Moving equivalents and was investments of with and million debt. capital provided of Cash and short-term Slide sheet quarter flow were during a expenditures no

cash We received operations continue as in a manage The from million. to in from generate outflow the $XX of cash capital. resulted our net our of proceeds investment divestiture we inventory working Russian

We million million and repurchases third the share spent in on year-to-date. $XX $XXX quarter

we of While maintaining share beginning of a capital XXXX. balance since a amount strong returned to have repurchases the sheet, through significant shareholders

definitive approximately million. a Clean acquire Laser As mentioned agreement signed for we earlier, to $XX

quarter fourth of outlook Moving X on to XXXX. Slide the our for

million similar $XXX revenue range to after sales last the to reflects expect sequentially. quarter, revenue Adjusting million increase adjusting guidance of revenue million. $XX an Russian of We is in for for guidance but range $XXX the The

We diluted in margin to to with earnings $X.XX and delivering range The fourth common $X.XX the XX%. quarter million diluted XX% shares XX be gross approximately is per estimated of share outstanding. between anticipate

business of was $XX on impact restructuring. neutral Russia additional sale provide acquisitions. the have impact as the me to and is after Let guidance a financial expected The running on breakeven operating income annual reduce million revenue an basis, the the our by divestitures at on should but of approximately approximately

increase. collaboration decrease support by in and and and come the Clean sale, of will is will close our the sales Our be announced total technology The regulatory offset continue operating approvals expenses we of our annual result research the to in marketing development Laser to development is of acquisition merit expected with but partially invest a will not as and down guidance. pending and fourth part a closer to customers. quarter, Furthermore,

$XX growth this revenue the and for add expect approximately approximately earnouts income million the to neutral operating year. It acquisition to based to to We first will accruals GAAP in targets profitability business. future on be due for

safe is expectations, is the exchange to release, the SEC. in assumes discussed rates and press safe As earnings company's earnings release with outlined conditions our and of risks and upon our guidance today's harbor in in reports the market harbor referenced the passage subject based current press

happy With that, we'll questions. your be to take

coming Our first from is from Instructions] Stifel. Ruben Roy question [Operator

Tim, sort of from into bookings context that, here. bit visibility Maybe quarter this and a with a demand Mark, maybe about the applications, comment book-to-bill just either could to to Mark of more the little bit of back -- on wanted on the were on front a about environment an you getting et markets, thinking in context specificity bookings of to last the start, or how of improved I within geographies talk in improvement the maybe in you're linearity cetera. X drilling or the no quarter geography of

you, would be in it next to week to talk to and nice great you It's Ruben. see Sure, Chicago.

so been stabilizing. again, on we the -- -- things as yes, So mentioned, have

you as look So if I now at mentioned, the X. book-to-bill, is

we're So there. seeing some stabilization

if we're area, at the If look the that's you affected been look seeing, cutting areas that at macro. the you by right,

a that's piece there. key So been

we're in are -- so we China, we've driving the -- the comeback seeing to PMIs be business as both actually, real as number effect really industrial in so that's been has areas, there We're mostly North that's that automotive welding seeing exciting some we us. continuing in and really really that has markets, world. really -- been -- market. And for good in the that America industrial the in mostly across some well EV seen Europe we're a progress quite in Mostly again, been down have been in on of side. general That's the seeing win as areas

of some gaining market that We're now, seeing share. again, happening

draining -- still While the gaining pulling the those still down, areas. overall we're EV in market is share

So really excited about the progress in welding.

And So that the those again, are gives gains world. you across some sense. really

helpful... Very

medical saw we're in little strength than a And buildings Korea. little we so think bit weaker little was a we're flat, I QX. and North pretty was total, of Geographically stable. quarter stable. but was in then China expecting, Europe bit a were also by in medical bit good. was in weaker, a actually a offset expecting coming on into good Japan revenue bookings pickup That America.

on forecast positive that. a got We've

much stability real the General I'd too board, no of momentum. not So across a say, but bag. mixed

linearity, still out quarter. The a of environment it's there. I the weighted think end were bookings towards Your question the difficult around

slowdown Some to of you have and that places Europe to because you have in in at look August. other summer

yes, you quarter drop But beginning on door at people got the at of pounding you. haven't orders the the to

is So along of it's bouncing a we think why struggle, we're a the which bottom. bit still

helpful. Very

there's development QX? you we OpEx And down any that cetera. should terms will in comment implications with programs a that about Mark, to there of follow-up, in cycle. Tim, the some like think et as are a But collaborating about It talked customers, maybe invest beyond time some this made good we seems recent As investments you're coming. as be

Yes.

on by guidance Russia, to QX offset related some in our the the merit reflects increase increase. benefit related to expenses So

investments I'd we Next to call on given level go to higher we year, want business where next with the that of in spending. making those relationships customer to selling think, developing -- year, the annual -- median we've operating year But as expect right and some for plan relative of analysis we're go through to the are this be the our through they our on line and we than that our side still comps, of done the average out, are overall and really R&D carry going of and expenses on process. some I slightly and we'll

So we're in looking you context at and in that can additional remain give Mark, some disciplined. detail.

Yes. in we continuing to key down R&D about I the area of mean excited of focus where that areas areas. doubling We've been these That's again, mentioned of areas growth. on. see we're some welding. an I some

laser the now is micro Of the exciting, course, Clean application with processing. of combination with that material cleaning some

nice some continue organization also in and then improvements focus again, get to in to better. make to So to areas being really able the

sales As Tim service we're in us mentioned, continue improvements as mentioned, go-to-market and those in disciplined investments doing that, some in pieces again, very make will way. the and some work a that and Tim But to stronger.

talked costs be organization And allow additional remarks, of reallocating that and some investments. areas in we the took these cover we'll you out of the as to some this prepared I and saw that

X last the as talking me think that there. XX guys, the you saying to that XX%. percentage accurate? just to see you around so last XX the we're more XX%, this were revenue Tim, cost-effective high-power And months, transition remind what one, straight, of Can we about? the progress just somewhere I next to have nice diodes are over I Is talked, time

to our example, So using limited cost in aggressively lasers for of which and on will the a way. We're we'll some the on a which those applications, applications, high-power roll sensitive some to customers less to price newer of lasers continue existing to cutting diodes going enable go the the more pass are and benefit initially some benefit devices over really bit on going the time. transition are market out the us to

total, Power and about is say of spectrum. which of still, of on sales mean, is XX% the XX% cutting I'd is I think, power the total high revenue, most in about I total

level transition to of through So completely revenue. Initially, be the be cost then we XX% And percent that sales. the generation of will up ultimately, as of XX-plus it existing should benefiting

Rashidi coming Company. & question . is from Jim SPX Next from today Needham

it's small your until be Wondering with you of a acquisition how I business, -- give but a business might been us fairly helpful. if the be it it's now, big will the sense, Clean Laser. could know cleaning part of up

talk Great is Jim, to you this to Mark. again.

we a out the the area. it's tens million. break this don't to cleaning where adoption in drive as Clean mentioned, the drive which with cleaning -- of area is Very is of about Laser but excited Clean together business, So then and the cleaning is it's This industrial about large markets, can of round, place a $XX millions adoption in is really adding we've great dollars Laser because we the the market. tremendously

And it's to done we again, we've opportunities us see large Welding, laser, markets really for from that in it's penetrate growth and just area. as moving us nonlaser in allowing with

Got assuming, whether to of now opportunity But R&D plans evaluate more objectives a the wondering I'm is new strategies to we'll greater M&A talked bit I'm IPG. about as a the and in you future and the some to play establish said. that, it. going wondering, I'm you've little role And about pipeline, had Mark, hear you business. the

Jim. Yes. much, Thanks very

great investment. our a the there's strategy, as technologies, gets us great great us some gives we that's market do have market But M&A additional or great of saw and that to faster. us you -- primary if to area R&D, programs, a access opportunity So certainly

as us doing to lasers. clean you've with open certainly seen We're that do

M&A and is be primary example what makes open programs certainly those, it to going of great sense. a it's again, in doing when the always but it's driving And to that. So internal

question for Last me, Okay. Tim.

possibly had You've the as about parts you wondering be lot I'm about how some I clearly an might if us over parameters if know, to year. margins given able revenue us moving business. past of just There's in to of give levels. think at recover. to margins But update, gross as you revenues past, gross the there's -- think the higher a

don't the the really at in that's Yes. at changed Jim, of performing terms think I all model is the way moment.

the a at relative profit stable remains under-absorption So your tend where kind you're mix. look of very change upon It is is can at that little bit to -- the what that. strong your quarter-to-quarter. gross to products. depending really And and looking relatively of then

get basis pricing to So under-absorption maintain under-absorption efficiencies start strong was recover our driven mentioned if that the getting the some then which at points. product. to XXX you to continue in the gross product, down can of you the And of is margin the by can for market that you're moment, pricing continuing the manufacturing

a will If was were points get running or XXX back down XX% or that when basis year, at gross level, you to can -- put more revenue that so lower. you XX% margin. normal XX% last we XX% It

there, above revenue the strong. that. you between $XXX And going expect $XXX up of of million and closer $XXX XX% you to million. $XXX million, on in get the a $XXX as XXX million, momentum that terms I'd towards to somewhere above XXX midpoint In million, margin, million. very gross bit -- to see little between tend be think and certainly as back flow-through I some is in to XXX, get the model you're

changed really that. nothing's fundamentally So on

inventory underlying I down see more reduction, on as inventory quarter that come provisions down X%, happened we get a incurring, the provisions with been of of provisions should inventory control. more inventories normalized compared level as disposal Russia think the actually underlying much running but we're at. X.XX% inventory comes X.X% well, hand under other generate to as to, the have the continue a cash reduce in should benefit say, and is Part which and obviously, out that's days to of made, the of we've as also we this we

Housum Next Research. Keith question coming is [Operator Northcoast . from Instructions] from

to I us of there. perhaps what's with think on the through there now. remind But you regulations you some next just can is guys steps an are maybe you're about based going company out mentioned happening more you Mark, important there. on And analysis how what color thinking give Belarus some the that to

for Yes, question. absolutely. the Thanks

-- So supply Belarus, organization. into lines have others all and more the we of this potential the covered a by ago, we been than year Belarus was of And saw the just the from a them. supply issue

we've So that done that. covers other outsourcing

the at risk supply, no no and but all for now risk to options forward, on all the we're business. really on at the business, working going that no strategic So really . effect that

appreciate been Obviously, a it. in or I you've I your the And a terms guess, few that months are mind, in now. got at now, top the X of lot there guess, end you've of Mark, strategies. of things the that until I looking on you're and X you're what investments year? focused strategies

sure. Yes, is IPG company. thing in, said first this and a I say, great would mean I I the coming

is in really quarter, process is really stressed systems, a as technical components, tremendous this this company building. about know-how It's last IPG So I -- foundation, the And change. has tremendous. knowledge about not the applications. lasers, across team, is great

like to well. where as we've us do we're in doing actually with incumbent you replace as welding same -- technology, And laser like allows done that technologies laser things can Clean with

in So of no number great of relationships. applications. a that's a And in really grow Tim business. got differentiated sheet number have we offerings the places We've growth $X and great mentioned, cash the brand really strong of billion a big a the as see debt. with And we balance marketplace, excellent opportunities, to

micromachining X want medical And to drive I say welding some these long-term excited we're creation, things. better to then to need this we really I cleaning discussed at get examples. of Some as earlier, just value about

I drive this second is targeted really The is And programs, first R&D our focus some the on these the organization areas. execution. strengthening to some this have -- we'll some and highest sharpening is in of the mentioned; will better value additions

as we'll investments, Tim more these making we mentioned, on And we're -- about, But calls. do how I there. being efforts and these We've talked manufacturing about really we've that earlier. with can we're control these what too, future talk we about mentioned in how already, We're more smart got headcount this, targeted execute. incremental as as and opportunities implemented we such control reductions managing controlling and efficiencies, we've agility

long-term so applications. So again, again, strong process the of to we've create growth really this applications critical that's in these that that got drive really, creation, foundation value opportunities and technologies, confidence including differentiated high therefore, on growing technology really top

talked and the again, cash best And balance generation sheet the leverage model. business industry's Tim through the about

of the putting all key pieces that together, I of those of some in. see So those kind are areas investing us

And the it's sounds more of can more being here. in Laser systems the just Is not acquisition. for bit driving laser it into If opposed and acquisition forward. laser-driven as squeeze systems move the perhaps openness little company like a I to organization -- X The it's more more One, component? Clear specifically. this further to a .

areas. So we what I'd these say of there is need each to on operate

adoption again, these markets. nonlaser it's So into driving about

like it's and it's cleaning -- the laser, understanding it's the solution something lasers, a with So able being but to process look to if really the at clean that customer. you deliver

we'll then for and lasers right scan faster then. Develop So again, to then be right able we're and playing those cutting, portfolio. fast energy just just subsystems example, in can doing the clean solution. to across better process, just able as process, power speed components point needed. we right proper value profile, that the scan to that understand markets, do lasers to And supplying fit pulling enough that we be with and it's that the supplying adoption as these be like about welding, and will do various that the like Again, we'll at systems be those in in profile together the -- provide we at in providing components a

Miller from is next from Mark coming [Operator question Instructions] Our Benchmark.

think programs. will China has recently a on wondering, beneficial have just if impact stimulus IPG? that And announced so, when? I'm do you more

stimulus EV. think be programs, I may in for So example, there areas,

we're EVs in is becoming of that that faster. things China the adoption the seeing of One is

EV will half now into the Tim, you of on maybe capacity, the some EV to may stalled. battery other vehicles know, think and more drive a stimulus thoughts than the I that adoption will flow of and some that areas been now of So where factories capacity these into in. flow and continue some have don't auto of I of all flow bit if some of are that Maybe TV has that.

see Not watch bit It's has but specifically, that relatively out I think are continued we towards things to have think which not weak. economy. the indicators some be in creating I the a stimulus the data to bad, there, is of to the really momentum of key PMI whether

more we of the . And bit is is as stimulus if some I coming some slightly a on tailwind. was a of can stable that improved with seen quarters. -- we've for last potentially benefit that performance. environment of with a then couple August that the It us, think build business over

we're think of lot put behind challenges I the it. economy Chinese still a still

So the much But stimulus out got let's stable there we've have. can at benefit business moment. a see that how

Yes. centering important We've seen manufacturing XD printing, the some an uptick metals our part. of in areas are such where single-mode XD lasers like

whole that's industrial this understand pull point. particular piece. the that hard area, Tim an at to to So again, across But it's economy said, an It's as segment. that X

is... Point on on that that formal point

meaningfully. manufacturers the We've actually utilization have the of some largest up heard that pick of started of battery to some

in future So some be in our I that yes. a slightly quarter-over-quarter, demand. total could the think pickup that in point coming was sales And into in EV for catalyst a China up

that's So . another Yes. positive slightly viewpoint.

I drones. and terms fire previous have have against area? if in the it's missiles know of any irons be a Israel done that -- to going laser-based any in wondering and what's you've just you in defense work. deploying going on I'm said, you contracts Do system development some

performance very used into across are our -- Yes, lasers been single-mode I world, they and an the overall -- I those high have just specific, supply we are the of but applications, part overall can't could sure. we important the . be that's say there but that are to do market in are now. most

you programs there. ongoing So still have

a business We're today, but in we irons selling market. -- that It's into do us those still lasers for to have not are we huge fires.

or session. of comments. back like end the our turn reached We've the further for over floor any I'd question-and-answer closing to

investor of in soon great We'll IPG. participating and looking everyone. events with and Thank you your number day, speaking Have . this for we to joining quarter a us again. this are forward interest morning you continued for be in a

Thank you. today's That teleconference. does conclude

You your wonderful may today. day. We a have your time, at you for this thank line participation disconnect and