nLIGHT Surges on Defense and Commercial Strength, EPS Beats by 150%

nLIGHT's Q1 FY2026 revenue of $80.2 million marked a 55% year-over-year increase, significantly outpacing the $51.7 million reported in Q1 FY2025. This growth was driven by a 69% year-over-year increase in aerospace and defense revenue to $51.1 million, as highlighted by CEO Scott Keeney: "First quarter revenue of $80 million grew 55% year-over-year and was driven by aerospace and defense revenue of $55 million, which grew 69% year-over-year." Additionally, commercial markets, including industrial and microfabrication, saw a 32% year-over-year increase to $25 million.

On the earnings front, nLIGHT reported a GAAP net income of $645,000, or $0.01 per diluted share, a stark improvement from the $8.1 million net loss, or $0.16 per share, in the same quarter last year. On a non-GAAP basis, net income was $11.8 million, or $0.20 per diluted share, compared to a non-GAAP net loss of $1.9 million, or $0.04 per share, in the first quarter of 2025. CFO Joseph Corso noted, "On a non-GAAP basis, net income for the first quarter was $11.8 million or $0.20 per diluted share, compared to a non-GAAP net loss of $1.9 million or $0.04 per share in the first quarter of 2025, and a non-GAAP net income of $7.8 million or $0.14 per diluted share last quarter."

The company's gross margin expanded to 33.1% in Q1 FY2026, up from 26.7% in the same quarter last year and 30.7% in the previous quarter. On a non-GAAP basis, the gross margin was 34.4%, up from 27.8% in the same period last year and 31.6% last quarter. The product gross margin reached a record 43.6%, compared to 33.5% in the first quarter of 2025 and 37.3% last quarter.

GAAP operating expenses in the first quarter were $27.2 million, compared to $23.4 million in the first quarter of 2025 and $30.4 million in the prior quarter. Non-GAAP operating expenses were $17.1 million, down from $17.8 million in the first quarter of 2025 and $18.4 million last quarter. CFO Joseph Corso stated, "We expect non-GAAP OpEx to remain in the $17 million to $19 million range for the balance of the year."

Adjusted EBITDA for the first quarter was a record $13.9 million, compared to $116,000 in the same quarter last year and $10.7 million in the fourth quarter of 2025.

For the second quarter of 2026, nLIGHT expects revenue to be in the range of $75 million to $81 million. The midpoint of $78 million includes approximately $58 million of product revenue and $20 million of development revenue.

Overall gross margin in the second quarter is expected to be in the range of 29% to 33%, with product gross margin in the range of 37% to 41%, and development gross margin of approximately 8%. Adjusted EBITDA for the second quarter is expected to be in the range of $8 million to $12 million.

nLIGHT raised over $190 million after fees and expenses, bringing the total cash on the balance sheet to approximately $330 million. CEO Scott Keeney outlined the company's plans: "We intend to use a portion of these proceeds to build out and equip our new 50,000 square foot manufacturing facility in Longmont, Colorado, invest ahead of our demand and supply chain and increase staffing to help accelerate new directed energy product development."

The tone of the earnings call reflected a balanced and cautious optimism. The sentiment score for the call was 0.31, with a guidance tone of 0.10, indicating a slightly more conservative outlook compared to the previous quarter. The prepared sentiment score was 0.41, and the QA sentiment score was 0.18, suggesting a positive but measured tone in both the prepared remarks and the Q&A session. The uncertainty index increased by 11.5 points, and the QA evasiveness index rose by 16.6 points, indicating a higher level of caution and less direct answers to analyst questions.

Full call-over-call delivery metrics are in the tone history.

Comparing nLIGHT's performance to its peers in the Photonics and Optoelectronics subsector, the company's revenue growth of 55% year-over-year stands out. Among the peers, LITE reported the highest revenue growth at 90.1%, followed by AAOI at 51.4%. nLIGHT's gross margin of 33.1% is competitive, falling between 6925.T's 22.8% and 6965.T's 50.5%.

While nLIGHT did not explicitly mention specific customers or suppliers in the earnings call, the strong performance in both aerospace and defense and commercial markets suggests a positive read-through for the broader supply chain. The company's focus on directed energy and laser sensing programs, as well as its investment in a new manufacturing facility, indicates a continued commitment to innovation and capacity expansion.

In conclusion, nLIGHT's Q1 FY2026 results demonstrate strong revenue and earnings growth, driven by significant advancements in aerospace and defense and commercial markets. The company's strategic investments and positive outlook for the second quarter position it well for continued success.