# IPG PHOTONICS CORP (IPGP)

Informational only - not investment advice.

CIK: 0001111928
SIC: 3674 Semiconductors & Related Devices
SIC breadcrumb: [Manufacturing](/division/D/) > [Electronic And Other Electrical Equipment And Components, Except Computer Equipment](/major-group/36/) > [SIC 3674 Semiconductors & Related Devices](/industry/3674/)
Latest 10-K filed: 2026-02-23
SEC page: https://www.sec.gov/edgar/browse/?CIK=1111928
Filing source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-23 · accession 0001111928-26-000040 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001111928.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 1,003,777,000 USD | 2025 | verified |
| Net income | 31,096,000 USD | 2025 | verified |
| Assets | 2,424,280,000 USD | 2025 | verified |
| Free cash flow | -3,454,000 USD | 2025 | computed |
| Net margin | 3.10% | 2025 | computed |
| Operating margin | 1.31% | 2025 | computed |
| Revenue YoY | +2.73% | 2025 | computed |
| ROE | 1.46% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | IPGP | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 3.1% | 4.9% | 47 | 59 |
| Operating margin | 1.3% | 3.7% | 39 | 58 |
| Revenue growth | 2.7% | 15.5% | 25 | 61 |
| FCF margin | -0.3% | 8.9% | 20 | 60 |
| ROE | 1.5% | 3.8% | 42 | 58 |
| ROA | 1.3% | 1.6% | 47 | 61 |
| Liabilities / equity | 0.14 | 0.51 | 14 | 59 |
| Current ratio | 6.08 | 2.70 | 83 | 61 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 3674 Semiconductors & Related Devices, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 1003777000 | USD | 2025 | 2026-02-23 |
| Net income | 31096000 | USD | 2025 | 2026-02-23 |
| Assets | 2424280000 | USD | 2025 | 2026-02-23 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001111928.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 1,006,173,000 | 1,408,889,000 | 1,459,874,000 | 1,314,581,000 | 1,200,724,000 | 1,460,860,000 | 1,429,547,000 | 1,287,439,000 | 977,134,000 | 1,003,777,000 |
| Net income | 260,752,000 | 347,614,000 | 404,027,000 | 180,234,000 | 159,572,000 | 278,416,000 | 109,909,000 | 218,878,000 | -181,526,000 | 31,096,000 |
| Operating income | 364,313,000 | 551,112,000 | 523,405,000 | 233,793,000 | 198,659,000 | 367,883,000 | 169,500,000 | 231,973,000 | -208,254,000 | 13,104,000 |
| Gross profit | 552,240,000 | 796,911,000 | 800,268,000 | 606,209,000 | 538,996,000 | 696,398,000 | 555,413,000 | 541,698,000 | 338,155,000 | 381,463,000 |
| Diluted EPS | 4.85 | 6.36 | 7.38 | 3.35 | 2.97 | 5.16 | 2.16 | 4.63 | -4.09 | 0.73 |
| Operating cash flow | 297,696,000 | 405,395,000 | 393,301,000 | 323,521,000 | 285,335,000 | 389,700,000 | 212,649,000 | 295,986,000 | 247,896,000 | 75,344,000 |
| Capital expenditures | 127,042,000 | 126,535,000 | 160,343,000 | 133,536,000 | 87,696,000 | 123,108,000 | 110,141,000 | 110,483,000 | 98,524,000 | 78,798,000 |
| Share buybacks | 8,946,000 | 39,987,000 | 176,065,000 | 40,732,000 | 37,884,000 | 134,889,000 | 499,506,000 | 223,496,000 | 343,816,000 | 53,132,000 |
| Assets | 1,789,999,000 | 2,367,255,000 | 2,574,450,000 | 2,730,436,000 | 2,935,700,000 | 3,170,540,000 | 2,743,280,000 | 2,698,898,000 | 2,289,264,000 | 2,424,280,000 |
| Liabilities | 232,275,000 | 344,933,000 | 368,215,000 | 327,993,000 | 341,589,000 | 423,319,000 | 357,920,000 | 283,513,000 | 264,793,000 | 296,150,000 |
| Stockholders' equity | 1,557,558,000 | 2,022,322,000 | 2,205,548,000 | 2,401,726,000 | 2,592,819,000 | 2,746,582,000 | 2,385,360,000 | 2,415,385,000 | 2,024,471,000 | 2,128,130,000 |
| Cash and cash equivalents | 623,855,000 | 909,900,000 | 544,358,000 | 680,070,000 | 876,231,000 | 709,105,000 | 698,209,000 | 514,674,000 | 620,040,000 | 403,790,000 |
| Free cash flow | 170,654,000 | 278,860,000 | 232,958,000 | 189,985,000 | 197,639,000 | 266,592,000 | 102,508,000 | 185,503,000 | 149,372,000 | -3,454,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 25.92% | 24.67% | 27.68% | 13.71% | 13.29% | 19.06% | 7.69% | 17.00% | -18.58% | 3.10% |
| Operating margin | 36.21% | 39.12% | 35.85% | 17.78% | 16.54% | 25.18% | 11.86% | 18.02% | -21.31% | 1.31% |
| Return on equity | 16.74% | 17.19% | 18.32% | 7.50% | 6.15% | 10.14% | 4.61% | 9.06% | -8.97% | 1.46% |
| Return on assets | 14.57% | 14.68% | 15.69% | 6.60% | 5.44% | 8.78% | 4.01% | 8.11% | -7.93% | 1.28% |
| Liabilities / equity | 0.15 | 0.17 | 0.17 | 0.14 | 0.13 | 0.15 | 0.15 | 0.12 | 0.13 | 0.14 |
| Current ratio | 8.22 | 8.82 | 7.35 | 9.88 | 10.01 | 7.49 | 7.23 | 8.91 | 6.98 | 6.08 |

## As-reported value updates

1 tracked difference above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/IPGP/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001111928.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 1.47 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 1.26 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 1.31 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 301,401,000 | 54,994,000 | 1.16 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 298,893,000 | 41,428,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 252,009,000 | 24,099,000 | 0.52 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 257,645,000 | 20,154,000 | 0.45 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 233,143,000 | -233,594,000 | -5.33 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 234,337,000 | 7,815,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 227,793,000 | 3,758,000 | 0.09 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 250,721,000 | 6,605,000 | 0.16 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 250,792,000 | 7,463,000 | 0.18 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 274,471,000 | 13,270,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 265,497,000 | 1,584,000 | 0.04 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 278,580,000 | 5,242,000 | 0.12 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from IPGP's latest 10-K: [/company/IPGP/business/](/company/IPGP/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from IPGP's latest 10-K: [/company/IPGP/risk-factors/](/company/IPGP/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000153/ipgp-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-08-04
Report date: 2026-06-30

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward looking statements that are based on management's current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements. See "Cautionary Statement Regarding Forward-Looking Statements."

Overview

We develop, manufacture and sell high-performance fiber lasers that are used for diverse end markets and applications, primarily in industrial manufacturing, medical, defense and other advanced applications. We also manufacture and sell complete laser-based systems for certain markets and applications. Additionally, we manufacture complementary products used with our lasers and laser-based systems, including optical delivery cables, fiber couplers, beam switches, optical processing heads, in-line sensors and chillers. We sell our products globally to original equipment manufacturers ("OEMs"), system integrators and end users. We market our products internationally, primarily through our direct sales force. Our manufacturing facilities are located in the United States, Germany, Italy, and Poland. We have sales and service offices and applications laboratories worldwide.

We are vertically integrated such that we design and manufacture most of the key components used in our finished products, from semiconductor diodes to optical fiber preforms, finished fiber lasers and complementary products. Our vertically integrated operations allow us to reduce manufacturing costs, control quality, rapidly develop and integrate advanced products and protect our proprietary technology.

Factors and Trends That Affect Our Operations and Financial Results

In reading our financial statements, you should be aware of the following factors and trends that our management believes are important in understanding our financial performance.

U.S. Government Tariffs. We continue to closely monitor changes in international trade relations and economic and monetary policies, including tariffs on imports into the U.S. from China, Germany and other countries, as well as retaliatory tariffs in affected countries, which could adversely impact the global economy and our operating results.

On February 20, 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs. The decision did not affect tariffs imposed under Section 232, including tariffs on steel and aluminum. We subsequently applied for refunds of tariffs assessed under IEEPA in accordance with processes established by U.S. Customs.

We account for IEEPA tariff refunds, and claims made under other tariff relief mechanisms, as recoveries of previously incurred tariff costs when such refunds are deemed probable of recovery. During the three and six months ended June 30, 2026, we recognized $4.7 million and $5.1 million, respectively, as a reduction of Cost of sales related to these programs. The benefit to gross margin from tariff recoveries for the three and six months ended June 30, 2026 was approximately 170 and 90 basis points, respectively. We will continue to evaluate developments and recognize additional recoveries when the applicable recognition criteria are met.

Middle East Conflict. The ongoing conflict involving Iran and related instability in the Middle East has contributed to volatility in global transportation markets, including periodic increases in ocean freight, air cargo, fuel, insurance, and other shipping-related costs, as well as the potential for longer transit times on certain international routes. We continue to monitor these developments and work with logistics providers and suppliers to manage sourcing and distribution activities, including evaluating alternative routing and supply chain strategies where appropriate. Based on information currently available, we have not experienced material disruption to our operations and do not presently expect the related impact on freight and shipping costs to have a material effect on our business, results of operations, liquidity, or financial condition. However, the extent and duration of these conditions remain uncertain and could change in future periods.

Belarusian Operations. In response to the Russia-Ukraine conflict, the EU issued additional sanctions impacting commerce with Belarus on June 29, 2024, which restricted the supply of laser cabinets and other mechanical components from our factory in Belarus to our Germany operations after October 2, 2024. Because of sanctions, we completed an impairment analysis of our Belarus assets during the third quarter of 2024 and recorded $26.6 million of impairment of long-lived asset in our Condensed Consolidated Statements of Operations.

During the second quarter of 2026, we entered into an agreement to sell our Belarusian operations and concluded that the related assets and liabilities of the business met the criteria to be classified as held for sale. Accordingly, the disposal group was

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remeasured at the lower of carrying value or estimated fair value less costs to sell, resulting in an impairment charge of $17.6 million in the quarter, primarily attributed to the inclusion of cumulative currency translation adjustments in the carrying value of the subsidiary's net assets. Future changes in estimated fair value less costs to sell, foreign currency exchange rates, or other developments related to the planned disposition could result in additional charges or adjustments.

Net sales. Our net sales have historically fluctuated from quarter to quarter. The increase or decrease in sales from a prior quarter can be affected by the timing of orders received from customers, the timing of shipments, the mix of OEM orders and one-time orders for products with large purchase prices, competitive pressures, acquisitions, economic and political conditions in a certain country or region and seasonal factors such as the purchasing patterns and levels of activity throughout the year in the regions where we operate. Net sales can be affected by the time taken to qualify our products for use in new applications in the end markets that we serve. Our sales cycle varies substantially, ranging from a period of a few weeks to as long as one year or more, but is typically several months. The adoption of our products by a new customer or qualification in a new application can lead to an increase in net sales for a period, which may then slow until we penetrate new markets or obtain new customers. Foreign exchange rates also affect our net sales, due to changes in the U.S. dollar value of sales made in foreign currencies.

Our business depends substantially upon capital expenditures by end users, particularly by manufacturers using our products for industrial manufacturing, which includes general industrial manufacturing, automotive including electric vehicles ("EV"), battery energy storage systems ("BESS"), aerospace, heavy industry, but also may include consumer, semiconductor and electronics. Approximately 85% of our revenues for the first half of 2026, and 84% for the full fiscal year of 2025 were in Industrial Solutions and used in industrial applications, mostly for materials processing. Although applications within Industrial Solutions are broad, the capital equipment market in general is cyclical and historically has experienced sudden and severe downturns. For the foreseeable future, our operations will continue to depend upon capital expenditures by end users of industrial equipment and will be subject to the broader fluctuations of capital equipment spending.

In recent years, our net sales and margins have been negatively impacted by tariffs and trade policy. Tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries, and certain foreign governments. We are also susceptible to global or regional disruptions such as political instability, geopolitical conflicts, acts of terrorism, significant fluctuations in currency values, natural disasters and pandemics to the extent that they affect macroeconomic conditions, global supply chains or individual IPG locations.

The average selling prices of our products generally decrease as the products mature. These decreases result from factors such as increased competition, decreased manufacturing costs and increased unit volumes. We may also reduce selling prices in order to penetrate new markets and applications. Furthermore, we may negotiate discounted selling prices from time to time with certain customers that place high unit-volume orders.

The secular shift to fiber laser technology in large industrial processing applications, such as welding and cutting applications, had a positive effect on our sales trends in the past such that our sales trends were often better than other capital equipment manufacturers in both positive and negative economic cycles. As the secular shift to fiber laser technology matures in such applications, our sales trends are more susceptible to economic cycles, which can broadly affect the demand for capital equipment including machine tools and industrial lasers, and competition from other fiber laser manufacturers. Additionally, as our technology matures, we become subject to more competition which can affect sales trends.

Gross margin. Our total gross margin in any period can be significantly affected by a number of factors, including net sales, production volumes, competitive factors, product mix, and by other factors such as changes in foreign exchange rates relative to the U.S. dollar, tariffs and shipping costs. Many of these factors are not under our control. The following are examples of factors affecting gross margin:

•As our products mature, we can experience additional competition which tends to decrease average selling prices and affects gross margin;

•Our gross margin can be significantly affected by product mix. Within each of our product categories, the gross margin is generally higher for devices with greater average power. These higher power products often have better performance, more difficult specifications to attain and fewer competing products in the marketplace;

•Higher power lasers also use a greater number of optical components, improving absorption of fixed overhead costs and enabling economies of scale in manufacturing;

•The gross margin for certain specialty products may be higher because there are fewer or sometimes no equivalent competing products;

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•Customers that purchase devices in greater unit volumes generally are provided lower prices per device than customers that purchase fewer units. In general, lower selling prices to high unit volume customers reduce gross margin although this may be partially offset by improved absorption of fixed overhead costs associated with larger product volumes, which drive economies of scale;

•Gross margin on systems can be lower than gross margin for our lasers and sub-systems, depending on the configuration, volume and competitive forces, among other factors;

•Persistent inflation leading to increases in average manufacturing salaries as well as an increase in the purchase price of components including, but not limited to, electronic components and metal parts could negatively impact gross margin if we are not able to pass those increases on to customers by increasing the selling price of our products;

•Tariffs and counter-tariffs added, increased, reduced or eliminated in any period;

•Changes in relative exchange rates between currencies we receive when selling our products and currencies we

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm
Complete FY 2025 MD&A: /company/IPGP/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-02-23
Report date: 2025-12-31

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors including, but not limited to, those discussed under Item 1A, "Risk Factors." The following analysis generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 20, 2025.

Overview

We develop, manufacture and sell high-performance fiber lasers, fiber amplifiers, diode lasers and laser-based systems that are used for diverse applications, primarily in materials processing, medical and advanced applications. We also

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manufacture and sell complementary products used with our lasers including optical delivery cables, fiber couplers, beam switches, optical processing heads, in-line sensors and chillers. We sell our products globally to original equipment manufacturers ("OEMs"), system integrators and end users. We market our products internationally, primarily through our direct sales force. Our major manufacturing facilities are located in the United States and Germany. In response to the risks from the Russia-Ukraine conflict and related sanctions, we have ceased new investment in our Belarusian operations and expanded our manufacturing operations in Germany, the United States and Italy, and have added manufacturing capacity in Poland to meet the demand for our products and our sales and support needs. We have sales and service offices and applications laboratories worldwide.

We are vertically integrated such that we design and manufacture most of the key components used in our finished products, from semiconductor diodes to optical fiber preforms, finished fiber lasers and complementary products. Our vertically integrated operations allow us to reduce manufacturing costs, control quality, rapidly develop and integrate advanced products and protect our proprietary technology.

Description of Our Net Sales, Costs and Expenses

Net sales. We derive net sales primarily from the sale of fiber lasers, fiber amplifiers, diode lasers, laser and non-laser based systems and complementary products. We sell our products to OEMs that supply materials processing laser systems, medical laser systems and other laser systems to end users. We also sell our laser products and laser and non-laser based systems to end users. Our scientists and engineers work closely with OEMs, systems integrators and end users to analyze their system requirements and match appropriate fiber laser, amplifier or system specifications to those requirements. Our sales cycle varies substantially, ranging from a period of a few weeks to as long as one year or more, but is typically several months.

Sales of our products are generally recognized upon shipment, provided that no obligations remain and collection of the receivable is reasonably assured. Sales of customized large scale material processing systems are recognized over time. Our sales typically are made on a purchase order basis rather than through long-term purchase commitments.

We develop our products to standard specifications and use a common set of components within our product architectures. Our major products are based upon a common technology platform. We continually enhance these and other products by improving their components and developing new components and new product designs.

Cost of sales. Our cost of sales consists primarily of the cost of raw materials and components, direct labor expenses and manufacturing overhead. We are vertically integrated and currently manufacture all critical components for our products and assemble finished products. We believe our vertical integration allows us to increase efficiencies, leverage our scale and lower our cost of sales. Cost of sales also includes personnel costs and overhead related to our manufacturing, engineering and service operations, related occupancy and equipment costs, shipping costs and reserves for inventory obsolescence and for warranty obligations. Inventories are written off and charged to cost of sales when identified as excess or obsolete.

Due to our vertical integration strategy and ongoing investment in plant and machinery, we maintain a relatively high fixed manufacturing overhead. We may not be able to or choose not to adjust these fixed costs to adapt to rapidly changing market conditions. Our gross margin is therefore significantly affected by our sales volume and the corresponding utilization of capacity and absorption of fixed manufacturing overhead expenses.

Sales and marketing. Our sales and marketing expense consists primarily of costs related to compensation, trade shows, professional and technical conferences, travel, facilities, amortization of intangible assets identified from acquisitions, depreciation of equipment used for demonstration purposes and other marketing costs.

Research and development. Our research and development expense consists primarily of compensation, development expenses related to the design of our products and certain components, the cost of materials and components to build prototype devices for testing, facilities costs and depreciation of equipment and facilities used for research and development purposes. Costs related to product development are recorded as research and development expenses in the period in which they are incurred.

General and administrative. Our general and administrative expense consists primarily of compensation and associated costs for executive management, finance, legal, human resources, information technology and other administrative personnel, outside legal and professional fees, insurance premiums and fees, allocated facilities costs, depreciation of facilities and other corporate expenses such as charges and benefits related to the change in allowance for credit losses.

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Factors and Trends That Affect Our Operations and Financial Results

In reading our financial statements, you should be aware of the following factors and trends that our management believes are important in understanding our financial performance.

Recently announced U.S. Government Tariffs. We continue to closely monitor changes in international trade relations and economic and monetary policies, including recently announced tariffs on imports into the U.S. from China, Germany and other countries, as well as retaliatory tariffs in affected countries, which could adversely impact the global economy and our operating results. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. This decision introduces uncertainty regarding potential refund processes and future trade policy actions. We continue to monitor developments around the Supreme Court’s decision and evaluate its potential impact on our future financial results and business. The Supreme Court's ruling has no direct impact on the tariffs in place under Section 232, including tariffs on steel and aluminum. The impact to gross margin related to higher tariffs for the year ended December 31, 2025 was approximately 120 basis points, respectively, as compared to the year ended December 31, 2024.

Sale of our Russian Operations. On August 29, 2024, we completed the sale of our Russian subsidiary, Scientific and Technical Association “IRE-Polus”, pursuant to a share purchase agreement with a purchaser entity associated with Softline Projects LLC and existing management of IRE-Polus for $51.1 million. We recorded a loss on divestiture of $197.7 million for the quarter ended September 30, 2024, which was included in Net loss from divestiture and sale of assets in our Consolidated Statements of Operations. The loss included $59.3 million related to the carrying value of net assets of our Russian subsidiary that was in excess of net proceeds received on the sale. Included in the net assets sold was cash and cash equivalents of $74.0 million. Also included in the loss was $135.3 million related to the cumulative translation adjustment component of other comprehensive loss that was previously included in stockholders' equity of our Consolidated Balance Sheets. As a result of the Russia-Ukraine conflict and related sanctions, our ability to ship and receive components from our Russian operations was significantly curtailed. In response, we expanded our manufacturing capacity in Germany, the United States and Italy, and added new manufacturing capacity in Poland which effectively offset our inability to utilize the Russian operations.

Belarusian Operations. We manufacture laser cabinets and other mechanical components in Belarus. In response to the Russia-Ukraine conflict, the EU issued additional sanctions impacting commerce with Belarus on June 29, 2024, which restricted the supply of laser cabinets and other mechanical components from our factory in Belarus to our Germany operations after October 2, 2024. As a result of the sanctions and their impact on our Belarus operations, we completed an impairment analysis of our Belarus assets during the third quarter of 2024 and recorded $26.6 million of impairment of long-lived assets in our Consolidated Statements of Operations. At December 31, 2025, the remaining value of the long-lived assets in Belarus was $4.4 million, net working capital deficit excluding cash was $0.8 million and cash on hand was $1.5 million. The net asset value of our Belarus subsidiary has been reduced by $17.4 million due to the cumulative translation effect of the Belarusian ruble compared to the U.S. dollar, which is included in the accumulated other comprehensive loss component of stockholders' equity. We may incur additional asset impairment charges related to the Belarus operations and the other comprehensive loss that is currently in the equity section of our Consolidated Balance Sheets could be charged to our Consolidated Statements of Operations.

We continue to review our operations in Belarus including potential strategic alternatives. We have qualified third party vendors to supply components previously supplied from Belarus and have begun purchasing from them. Our Board of Directors monitors and continues to assess risks associated with our Belarusian operations.

Net sales.  Net sales increased by 3% in 2025, decreased by 24% in 2024, and decreased by 10% in 2023. Our growth rates are subject to several factors, many of which are not under our control.

Our business depends substantially upon capital expenditures by end users, particularly by manufacturers using our products for materials processing, which includes general manufacturing, automotive including electric vehicles ("EV"), other transportation, aerospace, heavy industry, consumer, semiconductor and electronics. Approximately 86% of our revenues in 2025 were from customers using our products for materials processing. Although applications within materials processing are broad, the capital equipment market in general is cyclical and historically has experienced sudden and severe downturns. For the foreseeable future, our operations will continue to depend upon capital expenditures by end users of materials processing equipment and will be subject to the broader fluctuatio

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/IPGP/mda/fy2025/
All MD&A years: /company/IPGP/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/IPGP/mda/fy2024/): filed 2025-02-20; accession 0001111928-25-000023 (https://www.sec.gov/Archives/edgar/data/1111928/000111192825000023/ipgp-20241231.htm)
- [FY 2023 MD&A](/company/IPGP/mda/fy2023/): filed 2024-02-21; accession 0001111928-24-000019 (https://www.sec.gov/Archives/edgar/data/1111928/000111192824000019/ipgp-20231231.htm)
- [FY 2022 MD&A](/company/IPGP/mda/fy2022/): filed 2023-02-27; accession 0001111928-23-000039 (https://www.sec.gov/Archives/edgar/data/1111928/000111192823000039/ipgp-20221231.htm)
- [FY 2021 MD&A](/company/IPGP/mda/fy2021/): filed 2022-02-22; accession 0001111928-22-000025 (https://www.sec.gov/Archives/edgar/data/1111928/000111192822000025/ipgp-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3674 Semiconductors & Related Devices) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/IPGP.md · JSON record: /company/IPGP.json · verified financials: /company/IPGP/financials.json / /company/IPGP/financials.csv · machine TOC for the whole site: /llms.txt