LASR - Earnings call transcript Q4 2018

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Operator

Good afternoon and welcome to the nLIGHT Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation there’ll be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Jason Willey, would Corporate like Investor to to over Development. conference the nLIGHT’s and turn Relations I Senior of Director ahead. go Please

Jason Willey

Thank you afternoon, everyone. and good

nLIGHT's said, the today's am and operator speakers Development. Chief Ran on nLIGHT, Keeney, call. Officer Scott of Officer, Bareket, the As Chief Corporate Jason Willey, Financial Investor Senior I Relations of and Executive Director will be

copy XXX-XXX-XXXX, of call, the earnings If you or direct to available jason.willey@nlight.net. me questions A at is have release please at website www.nlight.net. today's them press after our any on

version In today's today's penetrating addressable addition, prospects you contain about can access our discussion growth, and our markets, future from an forward-looking In factors, focus archived trends website. projections, expanding including and related objectives. statements of financial for our and will strategic statements, call call, business and

and filings. to uncertainties risks of are SEC our time risks are statements from the described uncertainties, Forward-looking including our and beyond many in control, time subject which to

from Our undertake any results may differ forward-looking statements. update those projected obligation to no today's publicly We call. on materially

be non-GAAP on certain will discussed measures financial this call. Additionally,

including We outlook. of for our at GAAP several then measures Investor like Conference our end conferences comment have in measures the release, non-GAAP I on these attending will investor Ran members turn management Institutional a on trends on will Investor Conference York. Scott earnings found our can March discuss each weeks to financials through website. the of the in of before financial over Raymond I which the markets. that be New would Technology Relations to brief be in note call and goes most the fourth section in Scott James Orlando March provided the and XXth Susquehanna now reconciliations the senior will against of directly-comparable financial also coming nLIGHT’s

will to then take glad questions. We be your

Scott Keeney

raised we April improved In transformative financial was by Jason solidified XXX In for margin over offering expanded XXXX points, which not across nLIGHT's by public and with afternoon only XX%, EBITDA year everyone. the revenue nLIGHT. completed customers and good but our by gross XXXX profile you our also a XX%. grew initial Thank basis we position globe.

to up with made also started even are our which rapid customers the more to enthusiastic innovation across portfolio about that additions each today. semiconductor significant end We almost our new our of greatly With vision opportunities. vision product two We we laser serve significant market expanded our ago decades nLIGHT evolution this would portfolio in markets. open technology in product ability

update an the Before financial markets end providing full Ran year. on quarter details our for and in the each of over to I fourth the on our turn will call performance

Ran Bareket

up by Thank reached nLIGHT. the million we basis grow adjusted revenues. or market core we improved XXXX growth EBITDA to the XX% markets of delivered in record of you XXX afternoon year industry geographies for end saw XXX was year-over-year. of Scott margin We to million Revenues we points regions across over Gross and serve. our a good continue than everyone. XX% and each and during XX XXXX faster of each we strong believe XX% and

XX.X the in XX% were results on revenues million up quarter, year-over-year. Focusing fourth

revenues year-over-year. revenues, China was less Gross more an of margin XXX fourth the by end XX% improvement total was XX XX market. QX or compared The North revenues. industrial overall up fourth points quarter and up Sales revenues micro to with Rest million percent the were and of Chinese market revenues XX% XXXK and activity basis XX% XX during during of revenue total mix were end of total of margin America and of on Sales approximately or total for full fourth sales million industrial the Aerospace quarter with XX.X% XXXX XX Operating with markets the fabrication Chinese the the year-over-year. sales XXXX. defense growing price in representing markets X.X partially XXXX. and was of fourth The implemented favorable industrial and world XX% million basis end approximately to fourth points. of XX% QX were million quarter fourth U.S. or than offset total compared sales tariff XXXX of of in XX up revenue XX% basis driven total gross up were in quarter volume with XXX end geographic year-over-year. of quarter expenses the the in of of grew XX million compared of was quarter XX% XX% During higher the recently QX were X.X% impact to represented million fourth quarter representing XX% the China year-over-year. improvement total XXXX On by compared XX% in XX% X% sales XXXX. were was million X.X of of The end aggressive XX% revenues the XXXX. and million markets and year or

$X.XX Our revenues in XX.X% operating operating revenues. We and QX in was This or comparison XX.X% of stock for an of million the the expenses was compared for of net X.X compensation, compared $X.XX period the in QX revenues million fourth for X.X of the income million QX was research GAAP increase stock which quarter XXXX. million per to the an Non-GAAP X.X income with XXXX of was the XXXX of included assume fourth million compares all necessary EPS the X.X invest stock revenue with based million X.X support $X.XX fourth or preferred development or was XXXX. of share conversion compared outstanding to QX approximately zero per in X.X of in of growth X.X% and diluted in fourth adjusted quarter in the XXXX. of EPS quarter EBITDA impact million of business. in of diluted stock X.X% and XXXX a per fourth Fourth with of for X.X infrastructure share the GAAP common continued share quarter income QX based exclude X.X with XXXX year-over-year. during corporate the the compensation EPS quarter to XXXX. quarter of the XXXX million to

credit. balance quarter outstanding the was in representing with to days. total million a was sheet, ended our XXX and the XX DSO XXXX the repaid Inventory of of QX million lines equivalents XX for Turning we million. end December at fourth XX cash inventories. quarter the we In days of on of XXX cash

cash partially offset reflecting an activities million expansion. the profitability working Capital or capital X.X X.X for improved generated we was from X.X% QX of revenue. quarter operating from million by During expenditure

generated XXXX of operating and X.X flow invested million of year revenues. activity full cash million in XX from from X.X% the For or capital we expenditure

the the the revenues be expect XXXX, of of first of guidance to mid-point similar a for the range revenue million. in range at this XXXX. quarter quarter XX Turning XX we first million to implies of level the to a At of

and the outlook XX% we to This to XXXX. gross of product U.S. months, is XXXX Based expectation we tariff the our mix points see While disputes. order basis a for margin in seen ongoing reduction approximately China range XXX sentiment due the incorporates due XX%. QX for have past improving in two introduced in activity current to margin on in trade limited our visibility over China customer

For based million. EBITDA to be the a first Stock in quarter range in to million $X we of is X expect adjusted X expected million. compensation approximately

in to and average We fully share basis be QX. share average expect a diluted level with QX similar

a provide to half in our our can revenue XXXX not position first we Similar outlook full current the While the half. the Based put moderate growth we visibility expect current in to in year. does condition believe specific the than we a be year for higher market to XXXX. second of us on deliver

reflects profitability Our the by call in the and around turn outlook for I the activity amplified the Year slower back into being now New business over view typical customer which incorporates the is the our region. Scott. border to China current uncertainty revenue will in seasonal Chinese and

Scott Keeney

of a the business five the momentum XXXX experienced was Ran, we you years. Thank strong past continuation over

quarter. is of the outperformance region. or market But in Our in which end the relative enabled our year and of lasers to new power revenue laser defense fluctuations, to we technology fiber penetration and not our we offerings and markets. these market driving dramatically year-over-year XXXX three the industrial products are the not in the on to high full end fiber and outperformance XX% micro for expanded industrial, markets. foundation semiconductor X% in laser and focused we In in each laser existing fourth geographic the has grow across of our us driven immune industry core market customers innovation tied to our aerospace The continued are overall one fabrication, short-term

XXXX access to the of availability opens enter of high new new the and an portfolio segments of Corona customers power we market. lasers expanded and As fiber

We fiber are shipped today to XX that excited KW have lasers. our first we announce

new solutions our factor. semiconductor high steadily reduced power improved in to portfolio fiber customers laser a from XXXX. cost of our structure and provide ramp but integrate for at offerings in power expect Our lasers as higher increasing form volumes lasers see not come smaller interest in fiber powered power we only latest we high We a can

their all mobile programmability we all offers in customer that rapid X in from laser market KW program from believe exceeded is on fiber laser. to period the were Corona outside customers that fiber differentiate of initial which enables require September in of Corona today their Corona an Others in is an third special innovation Prism of key programmable over performance compared XX% up this SPIE In outside heads in San sales lasers sales approximately XXXX. at to sales beam Corona XXXX tool. around to were at clearly one Sales photonics. QX industrial to fiber the in to and awarded XX% In XXX% users the process our or the expectations. global comparable competitors, excitement sales was XX% examples same levels. add range in KW our the offer XXXX fiber us the and helping than laser west in provides not Francisco. trade has our This laser QX technology We our industry optics, flexibility accomplish from our Award their X fiber lasers the end XX% in approach XXXX X through job this of true KW were Corona profiles We month China for and outstanding fiber, optimizing over expand unique QX of as equates During in fiber in provisioning beam for of innovation laser material. this year-over-year customers XXXX. XXXX recognizing approach our growth China. of with launched or sales customers. and up share show systems flexibility does earlier specific the response in fiber above less photonics that over officially XX%

to industrial full end in We fabrication role grew expect key our market in the fourth we beyond. play and Corona in year-over-year In the market presence the expand micro to during for a revenues year and XXXX. global XX% quarter continuing XX% XXXX

customers fabrication semiconductor of served markets electronics, including range micro solar automotive, and a equipment, scientific capital Our end research. consumer wide

for evolve cost to diode growth our many leading applications penetration solid-state and in lasers enable lasers. end lasers laser has serve these Within pulse which the we source industry's demand This legacy replacement as of the performance of semiconductor technologies. pump the see pump driven for continue the of increased and

programs. power continue of the the greatly which was we and hand. of enough existing the growth it by micron architecture direct eXXi factor In fiber the a eXXi diodes, fourth a XXX hold and defense lead form solid-state, directed the full from as newer base both small fiber palm This year lasers. January grew XX% XX% world and customer our in watts delivers your the revenues year-over-year to quarter. the allow in us expand further XXX system highest and We contracts lasers in semiconductor output in energy aerospace market introduced in for will to driven we of to and simplifies brightness

aerospace large including have history to energy. government defense numerous measurement, support a applications We of and with contractors directed and long working the U.S. guidance, countermeasures, and

opportunities. a lumpy anticipate technology are energy positions we industry growth be in highly in which weight reliable of semiconductor in particularly coming market the we ever. in innovations more efficiency, years. we leads the semiconductor market Our laser size, Revenue In in while with this coming XXXX Directed vision for expanding Corona. a important the expect near-term power, technology market this portfolio that new semiconductor the beneficiary ongoing in over see would conclusion and These significant lasers, XXXX premise us progress the over related In fiber energy position key power the increasing evident to our nLIGHT founded laser development years. to XXXX this higher open Today opportunity contributions the in made in long-term that sizable be to XXXX innovations rapid opportunity. product and with up applications opportunity than long-term. and well grew from and us we this we lasers, direct of newer is

to that I nLIGHT we we result continue to in team In confident a remain hand Q&A. thank their during it than market. will over like to the ability for efforts As the with faster XXXX entire closing our grow now and would to

Operator

Instructions]. [Operator

Please question comes ahead. Patrick first go Stifel. with The Ho from

Patrick Ho

much off server on market adoption changing maybe dynamics of is about XXXX. industrial of takes and usually environment year congrats new of for with Thank today you're one how given you from very a first side growth your lot very introduced. a products, Scott product prospects about looking talked in for you some the things, and nice the the the

products? As half taking you or or bump the with see be in you in transition the customers the up new who do the you the products they'll customers second look existing new forward XXXX by adopting new products are step driven of a from believe up new do

Scott Keeney

believe we from customers come new but Okay, current globe. thanks customers growth growth from substantial around the will Patrick. more Certainly seeing

the expect continue growth in We continue we more all sales however rapid in we We sectors are that expand China. XXXX. our geographies and saw that all of seeing XXXX to outside to and in

Patrick Ho

and past the and of think follow-up look some how very at well terms so, I gross managed in but you're as at line over expense new with expect I then Great year margins which today the goes of products, that grow you do how do on when as to you XXXX it line as you looking generation as for look R&D progress item next expect revenues I'm guess do percentage you as there especially same revenues dynamics operating percentage OPEX maybe ramp? to to of an facing basis up and an the the or have question guys market and come are is moving you stay opportunity for on my OPEX pressures as understood the of for or and absolute the Ran, a dollar down at OPEX some your

Ran Bareket

from in from Sure, the so recall when spend revenue in day terms XX% from we if are put revenue did SG&A. and one when of we about that R&D we aiming OPEX roughly roughly we talked to model the, XX% on you midterm

for term. them mid we long as However -- have is call this it

XX%. plus everything or However, had very at in seeing the XX% a higher when right target the market. end that could that when will into it good KW than we and was will The in we new again than R&D more of definitely slightly in from roughly investment this opportunity Definitely here SG&A. XX% minus put the have could that it XX there near when we grow XXXX example to but do R&D you in investment so to was an and on of be Corona -- level will now are we some we the invest business product will invest R&D that future XX% go that we we higher year get

Patrick Ho

Thank you Great, much. very

Ran Bareket

Patrick. you Thank

Jason Willey

please. question next Operator

Operator

ahead. delay. Instructions]. Please the Diffely D.A. question with go The me, sorry Tom [Operator Davidson. next Pardon from for comes

Thomas Diffely

here between segments? Yes, expectations are is remind it in your afternoon. first then normal the interest for bit seasonality and differing us what a quite you your quarter different could Hopefully good

Ran Bareket

the of Yeah, not we is QX we would we that think same year. definitely to -- it yeah, all go terms guidance would seasonality, what not the go in to in terms different trend we Tom, in but for of saw segment however last the QX

remarks Will in first to to the again. this trend revenue are half. in will now than last least mentioned be the higher at similar year opening similar be trend second what my right we I would saw half the what we fully year, be expected As that seeing be

to I'm quarter seasonality specifically limited China, this given our that saying versus know New last any need we I'm the the visibility year sure But if better. differences in will that You of understand Year you of end after year in the Chinese that specifically or everything terms the see by we'll quarter before. this don't

Thomas Diffely

is higher to customers, power same higher you customers for And move your the using or Alright, by the -- driven when at power that's for application helpful. Scott are your it higher new then the this the is with look tools? power applications they

Scott Keeney

the Well, certainly market for to are powered the high and there is largest in what metal. migrating seeing those lasers today market we're cutting thicker customers say

high our in we powered metal but thicker lasers being new where applications so by today. will opportunities today welding metal. thick other other see out time cutting Over largely and see very we certainly And are and fiber cutting driven that is

Thomas Diffely

is makes the move of components Okay, of sense. to like this while? lot to a is And finally that moves plans be when point. that market more Are by it system a more a at sale seems for there then at aerospace a you to that going complete look business semiconductor that driven to market your or of

Scott Keeney

we there integration. aerospace are higher components it other call good, what the a play. defense of we And be and today and components. system levels Yeah lasers there wouldn't continue progress as will I largely both in semiconductor sell to

ours levels integration. from different certainly that a but the higher I think very see certainly of defense have primes role is we'll

Thomas Diffely

helpful. Okay, Thank you. that's

Operator

ahead. Susquehanna Please comes from with question go Financial Ryzhik Group. next The David

David Ryzhik

Thanks for the taking question.

in -- are customers? follow out in? or kick the pipeline these actually And of I context terms are some customers a to a waiting they for are stimulus what orders resolved provide up. for So constructive you can in to some or tariff more signs situation had saying, waiting China, around the if And you've measures noted they are with little be

Scott Keeney

good, yes. Very seeing Certainly in are increase we orders.

positive. And so that is certainly

However, more the frankly those the And still uncertainties around due we're trade waiting you in to people limited world China issues. for is know around and the visibility certainty issues. seeing around

seeing resolution. some So we is are improvement everybody for but waiting positive

David Ryzhik

market in that hasn't much and you much nLIGHT? an thanks. size can an a customers Corona from welding demand Okay, within And increase anyway too on to for typically welding you welding focused but seen have this been opportunity of with how become

Scott Keeney

question. Good our increased seeing are power interest We certainly due and it higher and to is lasers. fiber Corona

valid, it space. requires for in more is see vehicle focus confident a various But been into a cutting it a different for it is has will to further been so Well continued further applications market, generally for lower again addressable automotive applications. Over be differentiation industrial much this set we that we those point key has there applications. time And large a relatively requires more more strong market it's and growth creates your However, a investing end opportunities of and -- ranging the to date. from is not us being fragmented electric say us. refined that Corona integration priority from market, to we're there

So we'll looking that. talking about ahead be more

David Ryzhik

Great, Scott. thanks

Operator

with ahead. comes and next go Please Needham from Jim Ricchiuti The Company. question

James Ricchiuti

but trying verticals? of and in do what to down I'm some about you trying visibility I'm aerospace that get micro of about sense, pin quarter the you've limited. in by fabrication I just the visibility defense midpoint afternoon. your not a good Hi, given the have to industrial and guidance you us respect kind vertical with the market color to forecasting think If being

Ran Bareket

fabrication the fundamentals by By obviously the it in have Obviously defense than better that in the question. is in hi the those industrial business have much good industrial better it definition Jim, here. no than it in visibility end the end in nothing micro changed way Obviously, better we market. China, And much, is much time market much, definitely than question. aerospace this is

low end and as Year everything than due currently the market to even in industrial the the the know New is that trade visibility QX with Specifically you on visibility going Chinese usually that. on it and is mentioned lower Scott the world is else

James Ricchiuti

industrial providing that So of that to business? guidance segment your QX safe of the variability in of say that range is to revenues boils much you're it down the

Ran Bareket

is correct. This

James Ricchiuti

the alluded seeing and if you Corona for wondering and customer and geographic bit strongest exceeding to Okay, reception are applications a reception regions you little expectations which technology? either the I'm can to about which the you talk verticals, which

Scott Keeney

of Jim. industrial interest across end markets. We're in a strong Good, Corona seeing our all thanks

right are of However exceeding outside the on various provide cutting in and seeing benefits that's a generally And our a the more to China. outside current the Corona and process design us near-term our and in their over it's customers leading of win of they're we're larger rapid for focused design China. that substantial typically to is largely now wins differentiate market expectations, What applications companies approaches. and advantage allowing cutting are

James Ricchiuti

back in and question last jump I'll the queue. And

You but may may at you missed concentration the it customer and have all in it have talk quarter? given about did I

Ran Bareket

For QX for the or guidance?

James Ricchiuti

to Well, for color and that's provide QX want your to if respect with large customers the you for fine? outlook QX some

Ran Bareket

different in on can provide concentration the QX previous will imagine not didn't quarter. we customer showed and not versus significantly in it was comment we QX. I so as in what you customer Yeah, concentration And

James Ricchiuti

But around is -- that... customer, it is XXX%

Ran Bareket

that, Close yes. to

James Ricchiuti

you. thank Okay,

Operator

James. The ahead. go and Brian next please Raymond comes with question this, mispronounce Please from if Gesuale me I pardon

Brian Gesuale

Hey taking outperformed guys, really maybe bit, XXXX, to expectations Wanted business question. a in thanks XX%. little grew for defense the my explore it

bit of a at you progresses XXXX? of I of think rate XX% us growth as should XX% a we on might be it many color how it the the or just year, grower the were start think of give maybe little can in thinking

Scott Keeney

directed faster energy. we growth migration XXXX grow that do speaks that XXXX. the to expect in rate Brian. particularly in had growth XX% We certainly not good than We same in and expected Yeah, towards lasers higher did power

applications to the will speak and for this it long-term do And clear. expect those does that growth adoption in that becoming is continue of grow think coming prospect we the to lasers I years. again However,

Brian Gesuale

and basis, can on up, follow volume seasonality Okay, imagine helps shape up a help mix out picks the the of very to margin gross just year, maybe new first to Can not begin might increasing maybe penetrate you thoughts the precise an we like just wondering at eXXi, half how I then Ran products if little our cost bit half, if progression margins, a second rate. just you but of think of great for you a we know I are as think gross of sounds help the us was there?

Ran Bareket

The me full two improve last let in managed in margin last, significantly think you remind XXXX, so we sure, the years. specifically the how to the I

business If which will definitely I three grow you XXXX to coming mainly utilization believe XXX basis points the is XXXX areas to very XXXX better reminder XXXX margin a basis improvements at costs. it the a and look impressive. as points of Where it was from, you again we was and if it XXX get just as between coming is we fixed from it's between

new reduction, those see so and impact the are Corona. as in margin less that and a and secondly we this reduce first automation about point, But grow to which continue we improvement. product as the not that QX, important lot talk just the I with not forward QX is us And investing XXXX the products cost due that cost. benefits for move with the to help in introduce year forward low those we are some XX KW, is seasonality to margin going significantly power, will about as Corona revenue in a those getting when the it's margin. better the new example But products similarly not better i.e. market new is In the are to higher the talking we we the so continue technology, we coming business we will to those

Brian Gesuale

to bit Okay, I a just it that. in even up year higher volumes I approach the great, higher margins periodically if or this where a macro actually quarter million a we on to not the mean mean or that we $XX is just or is pricing -- $XX this the bringing follow going can last even we that little million see something and top just on is saw volumes? environment the is gross support quick

Ran Bareket

little and that to on a mix is impact say. are many a mix is There different that's impact is difficult quarterly the margin there say a between to basis. many basis why margin. is different a There on it's bit It the things geographies, that so products, things between quarterly difficult there

However, we continue the understand, really the two improvement. see as and last this in a as products those is to introduce new market and continue we conceptually important what to to saw that the business we the years grow trend we margin we definitely to will is

Brian Gesuale

guys. lot a thanks Great,

Operator

question from Please DeGasperi next The comes Andrew Berenberg. with go ahead.

Andrew DeGasperi

and a you the lasers? over, relative have Thanks mid question. for power powered efforts sales are little to high taking XX KW that your these super now lasers my I guess -- the first different

Scott Keeney

the a power of that think customers. lasers I are high can customers limited fairly Well, set use the

customers sales in of structure change So no the our limited. dramatic power using high that that but or more are capable are efforts

Andrew DeGasperi

that like historical or other some have is quiet you and reasons regards with it's I on are happening Chinese know based I you is noticed why of a New and been some commentary a there there's earlier a now to it there things forward the are that right pull because low seeing that you bit little Year because guess Got -- have of something visibility historically? orders, was little reason your

Scott Keeney

general. there working well many Year Chinese a our through -- lot New of Year Chinese always years relative there's New to Yeah, of around is in less visibility

to customers it after New weeks Years it come less As buy to a tend you into couple and that takes provide visibility.

industrial general a of sort seasonal that's trend market. the China So in

those that New you've we amplify because that amplifying is trade was are as visibility overlaid some the so sort Year first that issues. in dispute to before know hesitant those got the trends is uncertainty. You trade of Again to exacerbating year said quarter, with top limited on Chinese we that seen the and of deadline due I this the have positive

Andrew DeGasperi

that Right, the assumption there question side and in you trade do it should be second of some view on across really three is last that then kind dispute? segments or stronger, half on or see industrial the resolution is my a this of baked all it mostly on

Scott Keeney

Yeah assuming markets and question perspective worse in could plans. plans a what we're not on products we of our base there's into expecting assuming base all new get adoption glorious have that's our that We're don't that plans upside some from. in second end good, provide we're last those things half resolution the and continued but visibility comes do three our the that's in where in

Andrew DeGasperi

Great, thanks.

Operator

question with ahead. Palm go from comes next Craig-Hallum. The Please Greg

Greg Palm

thanks. curious near-term as would if out based your sense Yeah, basket to changed point? get QX way if thinking it [ph] at you're of really I'm guidance overly at you maybe all or there of on conservative lack a if just just you've based the the uncertainty I'm about just is kind visibility, this trying the on characterize this

Ran Bareket

we provide right are we that's information more Year this now. would off get the we based we Yeah, point. information Usually with is the now, on right optimistic. so this New that not limited and what This weeks now better visibility see investors is no. Chinese two pessimistic the wait we call and from have. right our can best we over that to now we this it and we but are three doing over right be at is And is what see the this weeks, Ran. seeing No, It's another not what again answer

Greg Palm

that this a or remind could maybe the I Understood, industrial that guess orders specifically the and event would quarter I referring to us recognized am more be and coming of receive in some product? those weeks just are now as be of China still QX revenue you or

Ran Bareket

specifically in end Sure, will question industrial the get end March in we no market, will we that the deliver we it. the are orders at quarter, about of

Greg Palm

trying margin Yup, that impacts out costs additional hopping on I'm negative just one tariffs, okay. just any the from figure just for and specifically? mix, from last And sort way me guess I to one break to out from guidance, of pricing gross

Ran Bareket

you if the the is or quarter in first you basis prefer. into it let quantified about so instead quarter XXX take talked impact points. to Yes, it, of already to try year-over-year which it. me tariff already But all need the compare consideration of year-over-year like We we previous previous

some new will margin us product that on And XX for you Secondly lastly not a the significantly margin talked the It's market. we We but there last Corona in is last to industrial that we end saw QX see the will least of China and of just better introduced significant at we price market that the of a an end at that year. pricing. impact in KW Again give know impact is later pressure about what definitely. the in there most was two quarters yes, in QX. the

Greg Palm

queue. I in fair the Thanks. will hop Okay, enough, back

Scott Keeney

you. Thank

Operator

from comes Genuity. Jed question Dorsheimer Canaccord with next go The Please ahead.

Jed Dorsheimer

give for that guess you been Hi, that quick if market fewer the to given would in for the year, be you what particular two what competitors the just product question, a just as ones. thanks? on had thanks revenues perspective that my look is same healthy at XX I'm is for had I on taking -- the introduction might next of that wondering have year, whole there just that

Scott Keeney

spot to space. on competition Okay other question your but that think in speculate that a real power limited Can't certainly I estimates good. see real Really, in in that difficult And on products. has those see very it product. there is that only competitor space we scaling to one industrial very really the is levels fact the particular

limited we're power and to So higher there. we're seeing a competition shift seeing

we excited prospects in are XXXX. there growth So about the

Jed Dorsheimer

happening the micro faster And is CAPEX it or issue example, seeing to and fully there company just uptake thanks. it, equipment in depreciated for is is just of the versus what's with business cycle a curious the now, Got not terms aren't leverage why lasers? specifically just of you mechanical of side a a technology right or is the it a looking -- I'm then VS terms in in

Scott Keeney

different increased micro. lasers applications Yes, of not a in range technology of issue. penetration wide in We're seeing a

in our seeing time anticipate be and applications we there end Having micro with new in the continued what space. we are processes we're products other that will space. that of are continued now. right So, cycles there and displacement But softer we're that market mechanical said the there those confident some in over markets growth of and launching are with fabrication

Jed Dorsheimer

I'll thanks. it, Got the jump back queue. in

Operator

with Please question Benchmark The Company. ahead. comes Mark [Operator Miller from go Instructions]. The next

Mark Miller

industrial or for was it driven also you that pricing sales units? by declined, Thank declined was question. the The sequentially -- primarily

Ran Bareket

Give me is there just one you of if compare XXXX market second. The increase an X%. industrials end QX the XXXX quarter-to-quarter QX actually to

Mark Miller

about? was were sales I talking But sequentially, that's down what

Ran Bareket

mainly reduction yes in some coming, there mainly see end we industrial Sequentially, end from China right, well, was Yes, in it are industrial market am and you flights the revenue in is the sorry. that yes. is coming unit end reduction markets I as China

Mark Miller

So both.

Scott Keeney

sequentially. Both

Mark Miller

Okay, in all quarter, concentrated the industrial? or your in for decline revenue guidance across three is spread segments the current

Ran Bareket

not split guidance by end will markets. the We

Mark Miller

Thank you.

Operator

go question is Susquehanna follow Ryzhik with Financial Please next David a up ahead. from Group. The

David Ryzhik

Hi, thanks so follow up. much for taking the

down does have comment KW pricing it's little ago outside updated to up on that it months creep the thanks? maybe drill bit a can to to you how seen or X since that wanted on of to market you environment, us and changed X Just segment, you pricing confined begin three remain

Scott Keeney

that described we then. time will continued the But stable us. anticipate past since in the price what environment prices. for prices we changes reductions in year seen markets last changes open haven't previously we seen we've up Yeah, continue certainly over was relatively quarter mid with to new Certainly that significant

David Ryzhik

QX was to DSO should in one XQ? Great, and for expect we follow There quick this in pickup in normalize Ran. a just

Ran Bareket

and a QX The and of the result it Yes, normalized. end as were revenue up. back was they day loaded went

to receivable which go Go the back will If you accounts days XX in down of days QX. talked recall normal. as about we

David Ryzhik

thanks Okay, again.

Operator

to back would to any This question-and-answer I concludes over our session. closing the Jason turn remarks. for Willey conference like

Jason Willey

your and speaking continued with you a of to everyone look Thank for in forward and Have day. we the your interest nLIGHT participation weeks. coming good rest over you

Operator

The for attending concluded. Thank presentation. conference now today's you has

now disconnect. may You

nLIGHT (LASR) 20 Feb 192018 Q4 Earnings call transcript