10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38462

________________________________________________________

NLIGHT, INC.

(Exact name of Registrant as specified in its charter)

________________________________________________________

Delaware	91-2066376
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

4637 NW 18th Avenue

Camas, Washington 98607

(Address of principal executive office, including zip code)

(360) 566-4460

(Registrant's telephone number, including area code)

__________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Exchange on which Registered
Common Stock, par value $0.0001 per share	LASR	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                     Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.    

Large Accelerated Filer	☐	Accelerated Filer	☒	Non-Accelerated Filer	☐	Smaller Reporting Company	☐
						Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.         ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes ☐    No ☒

As of August 1, 2023, the Registrant had 46,510,468 shares of common stock outstanding.

TABLE OF CONTENTS
	Page
Part I. Financial Information	1
Item 1. Unaudited Interim Financial Statements	1
Consolidated Balance Sheets: June 30, 2023 and December 31, 2022 (unaudited)	1
Consolidated Statements of Operations: Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	2
Consolidated Statements of Comprehensive Loss: Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	3
Consolidated Statements of Stockholders' Equity: Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	4
Consolidated Statements of Cash Flows: Six Months Ended June 30, 2023 and 2022 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	24
Item 4. Controls and Procedures	25
Part II. Other Information	25
Item 1. Legal Proceedings	25
Item 1A. Risk Factors	25
Item 5. Other Information	25
Item 6. Exhibits	26
Signatures	27

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

nLIGHT, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

	As of
	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	41,818	$	57,826
Marketable securities	59,893		50,391
Accounts receivable, net of allowances of $283 and $290	46,252		37,913
Inventory	64,937		67,600
Prepaid expenses and other current assets	16,076		17,026
Total current assets	228,976		230,756
Restricted cash	254		252
Lease right-of-use assets	13,561		13,893
Property, plant and equipment, net	57,124		60,693
Intangible assets, net	2,799		4,041
Goodwill	12,389		12,376
Other assets, net	6,797		7,222
Total assets	$	321,900	$	329,233
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	17,574	$	17,507
Accrued liabilities	14,083		12,820
Deferred revenues	1,365		1,407
Current portion of lease liabilities	3,089		2,758
Total current liabilities	36,111		34,492
Non-current income taxes payable	5,191		6,699
Long-term lease liabilities	12,113		12,852
Other long-term liabilities	3,122		4,345
Total liabilities	56,537		58,388
Stockholders' equity:
Common stock - $0.0001 par value; 190,000 shares authorized, 46,503 and 45,629 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	16		16
Additional paid-in capital	507,649		496,211
Accumulated other comprehensive loss	(3,115)		(2,748)
Accumulated deficit	(239,187)		(222,634)
Total stockholders’ equity	265,363		270,845
Total liabilities and stockholders’ equity	$	321,900	$	329,233

See accompanying notes to consolidated financial statements.

1

nLIGHT, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Products	$	39,592	$	48,180	$	80,699	$	99,241
Development	13,712		12,647		26,696		26,045
Total revenue	53,304		60,827		107,395		125,286
Cost of revenue:
Products	28,272		33,683		55,798		69,451
Development	12,924		11,759		25,226		24,273
Total cost of revenue	41,196		45,442		81,024		93,724
Gross profit	12,108		15,385		26,371		31,562
Operating expenses:
Research and development	12,004		13,788		23,305		27,499
Sales, general, and administrative	11,790		11,914		22,959		22,689
Total operating expenses	23,794		25,702		46,264		50,188
Loss from operations	(11,686)		(10,317)		(19,893)		(18,626)
Other income:
Interest income, net	350		71		687		71
Other income (expense), net	1,057		(106)		1,461		(77)
Loss before income taxes	(10,279)		(10,352)		(17,745)		(18,632)
Income tax expense (benefit)	(1,456)		(10)		(1,192)		333
Net loss	$	(8,823)	$	(10,342)	$	(16,553)	$	(18,965)
Net loss per share, basic and diluted	$	(0.19)	$	(0.23)	$	(0.36)	$	(0.43)
Shares used in per share calculations, basic and diluted	45,717		44,178		45,580		43,919

See accompanying notes to consolidated financial statements.

2

nLIGHT, Inc.

Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net loss	$	(8,823)	$	(10,342)	$	(16,553)	$	(18,965)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(1,054)		(1,868)		(685)		(1,964)
Unrealized gains on available-for-sale securities	104		—		318		—
Comprehensive loss	$	(9,773)	$	(12,210)	$	(16,920)	$	(20,929)

See accompanying notes to consolidated financial statements.

3

nLIGHT, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands)

(Unaudited)

	Three Months Ended June 30, 2023
	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance, March 31, 2023	45,785	$	16	$	501,675	$	(2,165)	$	(230,364)	$	269,162
Net loss	—	—		—		—		(8,823)		(8,823)
Issuance of common stock pursuant to exercise of stock options	100	—		189		—		—		189
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	484	—		(2,950)		—		—		(2,950)
Issuance of common stock under the Employee Stock Purchase Plan	134	—		1,220		—		—		1,220
Stock-based compensation	—	—		7,515		—		—		7,515
Unrealized gains on available-for-sale securities	—	—		—		104		—		104
Cumulative translation adjustment, net of tax	—	—		—		(1,054)		—		(1,054)
Balance, June 30, 2023	46,503	$	16	$	507,649	$	(3,115)	$	(239,187)	$	265,363

	Six Months Ended June 30, 2023
	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance, December 31, 2022	45,629	$	16	$	496,211	$	(2,748)	$	(222,634)	$	270,845
Net loss	—	—		—		—		(16,553)		(16,553)
Issuance of common stock pursuant to exercise of stock options	217	—		332		—		—		332
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	523	—		(3,132)		—		—		(3,132)
Issuance of common stock under the Employee Stock Purchase Plan	134	—		1,220		—		—		1,220
Stock-based compensation	—	—		13,018		—		—		13,018
Unrealized gains on available-for-sale securities	—	—		—		318		—		318
Cumulative translation adjustment, net of tax	—	—		—		(685)		—		(685)
Balance, June 30, 2023	46,503	$	16	$	507,649	$	(3,115)	$	(239,187)	$	265,363

4

nLIGHT, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands)

(Unaudited)

	Three Months Ended June 30, 2022
	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance, March 31, 2022	44,538	$	15	$	477,924	$	(683)	$	(176,678)	$	300,578
Net loss	—	—		—		—		(10,342)		(10,342)
Issuance of common stock pursuant to exercise of stock options	48	—		73		—		—		73
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	370	—		(2,468)		—		—		(2,468)
Issuance of common stock under the Employee Stock Purchase Plan	118	—		1,201		—		—		1,201
Stock-based compensation	—	—		6,680		—		—		6,680
Cumulative translation adjustment, net of tax	—	—		—		(1,868)		—		(1,868)
Balance, June 30, 2022	45,074	$	15	$	483,410	$	(2,551)	$	(187,020)	$	293,854

	Six Months Ended June 30, 2022
	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance, December 31, 2021	44,248	$	15	$	470,760	$	(587)	$	(168,055)	$	302,133
Net loss	—	—		—		—		(18,965)		(18,965)
Issuance of common stock pursuant to exercise of stock options	471	—		762		—		—		762
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	377	—		(2,546)		—		—		(2,546)
Restricted stock awards forfeited in connection with transition agreement	(140)	—		—		—		—		—
Issuance of common stock under the Employee Stock Purchase Plan	118	—		1,201		—		—		1,201
Stock-based compensation	—	—		13,233		—		—		13,233
Cumulative translation adjustment, net of tax	—	—		—		(1,964)		—		(1,964)
Balance, June 30, 2022	45,074	$	15	$	483,410	$	(2,551)	$	(187,020)	$	293,854

See accompanying notes to consolidated financial statements.

5

nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(16,553)	$	(18,965)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	6,230		5,214
Amortization	1,768		2,329
Reduction in carrying amount of right-of-use assets	292		1,571
(Recoveries of) provision for losses on accounts receivable	(2)		6
Stock-based compensation	13,018		13,233
Deferred income taxes	—		(1)
Changes in operating assets and liabilities:
Accounts receivable, net	(8,449)		(4,975)
Inventory	2,197		(7,383)
Prepaid expenses and other current assets	951		663
Other assets, net	(319)		(656)
Accounts payable	(941)		(1,726)
Accrued and other long-term liabilities	158		(1,191)
Deferred revenues	(46)		421
Lease liabilities	(374)		(409)
Non-current income taxes payable	(1,393)		104
Net cash used in operating activities	(3,463)		(11,765)
Cash flows from investing activities:
Purchases of property, plant and equipment	(1,640)		(12,893)
Acquisition of intangible assets and capitalization of patents	—		(228)
Purchase of marketable securities	(59,273)		(50,000)
Proceeds from maturities and sales of marketable securities	50,089		—
Net cash used in investing activities	(10,824)		(63,121)
Cash flows from financing activities:
Proceeds from employee stock plan purchases	1,220		1,201
Proceeds from stock option exercises	332		762
Tax payments related to stock award issuances	(3,132)		(2,546)
Net cash used in financing activities	(1,580)		(583)
Effect of exchange rate changes on cash	(139)		(432)
Net decrease in cash, cash equivalents, and restricted cash	(16,006)		(75,901)
Cash, cash equivalents, and restricted cash, beginning of period	58,078		146,784
Cash, cash equivalents, and restricted cash, end of period	$	42,072	$	70,883
Supplemental disclosures:
Cash paid for interest, net	$	20	$	—
Cash paid for income taxes	262		189
Operating cash outflows from operating leases	1,931		1,914
Right-of-use assets obtained in exchange for lease liabilities	1,197		1,222
Accrued purchases of property, equipment and patents	1,157		1,650

See accompanying notes to consolidated financial statements.

6

nLIGHT, Inc.

Notes to Consolidated Financial Statements

Note 1 - Basis of Presentation and New Accounting Pronouncements

Basis of Presentation

The accompanying unaudited consolidated financial statements of nLIGHT, Inc. and our wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The unaudited financial information reflects, in the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies

Our critical accounting policies have not materially changed during the six months ended June 30, 2023, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

New Accounting Pronouncements

None.

Note 2 - Revenue

We recognize revenue upon transferring control of products and services and the amounts recognized reflect the consideration we expect to be entitled to receive in exchange for these products and services. We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of our consideration of the contract, we evaluate certain factors, including the customer's ability to pay (or credit risk). For each contract, we consider the promise to transfer products, each of which is distinct, as the identified performance obligations.

We allocate the transaction price to each distinct product based on its relative standalone selling price. Master sales agreements or purchase orders from customers could include a single product or multiple products. Regardless, the contracted price with the customer is agreed to at the individual product level outlined in the customer contract or purchase order. We do not bundle prices; however, we do negotiate with customers on pricing for the same products based on a variety of factors (e.g., level of contractual volume). We have concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product.

We often receive orders with multiple delivery dates that may extend across several reporting periods. We allocate the transaction price of the contract to each delivery based on the product standalone selling price and invoice for each scheduled delivery upon shipment or delivery and recognize revenues for such delivery at that point, when transfer of control has occurred. As scheduled delivery dates are generally within one year, under the optional exemption provided by ASC 606-10-50-14a revenues allocated to future shipments of partially completed contracts are not disclosed as performance obligations for point in time revenue. Further, the Company recognizes over time revenue as per ASC 606-10-55-18 (invoice practical expedient) for its cost plus contracts and, accordingly, elects not to disclose information related to those performance obligations under ASC 606-10-50-14b.

Rights of return generally are not included in customer contracts. Accordingly, product revenue is recognized upon transfer of control at shipment or delivery, as applicable. Rights of return are evaluated as they occur.

Revenues recognized at a point in time consist of sales of semiconductor lasers, fiber lasers and other related products. Revenues recognized over time generally consist of development arrangements that are structured based on our costs incurred. For long-term contracts, the Company estimates the total expected costs to complete the contract and recognizes revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts.

7

Contract estimates are based on various assumptions to project the outcome of future events that may span several

years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. Billing under these arrangements generally occurs within one month of the costs being incurred or as milestones are reached.

The following tables represent a disaggregation of revenue from contracts with customers for the periods presented (in thousands):

Sales by End Market

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Industrial	$	16,569	$	21,899	$	36,471	$	45,895
Microfabrication	12,227		16,415		25,285		33,734
Aerospace and Defense	24,508		22,513		45,639		45,657
	$	53,304	$	60,827	$	107,395	$	125,286

Sales by Geography

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
North America	$	34,317	$	35,682	$	63,420	$	70,826
China	2,864		4,672		6,510		11,811
Rest of World	16,123		20,473		37,465		42,649
	$	53,304	$	60,827	$	107,395	$	125,286

Sales by Timing of Revenue

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Point in time	$	39,176	$	45,448	$	79,448	$	93,663
Over time	14,128		15,379		27,947		31,623
	$	53,304	$	60,827	$	107,395	$	125,286

Our contract assets and liabilities were as follows (in thousands):

	Balance Sheet Classification	As of
		June 30, 2023		December 31, 2022
Contract assets	Prepaid expenses and other current assets	$	8,676	$	10,377
Contract liabilities	Deferred revenues and other long-term liabilities	2,714		2,455

Contract assets generally consist of revenue recognized on an over-time basis where revenue recognition has been met, but the amounts are subsequently billed and collected in the following period. In our services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in unbilled receivables and retentions on the Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities recorded in customer advances on the Consolidated

8

Balance Sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. For our product revenue, we generally receive cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. For our contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

During the three and six months ended June 30, 2023, we recognized revenue of $0.4 million and $1.2 million, respectively, that was included in the deferred revenue balances at the beginning of the period as the performance obligations under the associated agreements were satisfied.

Note 3 - Concentrations of Credit and Other Risks

The following customer accounted for 10% or more of our revenues for the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
U.S. Government	20%	16%	18%	16%

Financial instruments that potentially expose us to concentrations of credit risk consist principally of receivables from customers. As of June 30, 2023, and December 31, 2022, three and two customers accounted for a total of 42% and 29%, respectively, of net customer receivables. No other customers accounted for 10% or more of net customer receivables at either date. 

Note 4 - Marketable Securities

Marketable securities consist primarily of highly liquid investments with original maturities of greater than 90 days when purchased. Our marketable securities are considered available-for-sale as they represent investments that are available to be sold for current operations. As such, they are included as current assets on our Consolidated Balance Sheets at fair value with unrealized gains and losses included in accumulated other comprehensive loss. Any unrealized gains and losses that are considered to be other-than-temporary are recorded in other income, net on our Consolidated Statements of Operations. Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in other income, net on our Consolidated Statements of Operations.

Realized gains were $0.6 million and $1.0 million for the three and six months ended June 30, 2023, respectively. Unrealized gains were $0.1 million and $0.3 million for the three and six months ended June 30, 2023, respectively. These unrealized gains are considered temporary and are reflected in the Consolidated Statements of Comprehensive Loss. There were no realized or unrealized gains or losses for the three and six months ended June 30, 2022.

See Note 5 for additional information.

Note 5 - Fair Value of Financial Instruments

The carrying amounts of certain of our financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities are shown at cost which approximates fair value due to the short-term nature of these instruments. The fair value of our term and revolving loans approximates the carrying value due to the variable market rate used to calculate interest payments.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

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•Level 1 Inputs: Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

•Level 2 Inputs: Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 Inputs: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our financial instruments that are carried at fair value consist of Level 1 assets which include highly liquid investments and bank drafts classified as cash equivalents and marketable securities.

Our fair value hierarchy for our financial instruments was as follows (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	20,105	$	—	$	—	$	20,105
Commercial paper	849		—		—		849
	20,954		—		—		20,954
Marketable Securities:
U.S. treasuries	59,893		—		—		59,893
Total	$	80,847	$	—	$	—	$	80,847

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	31,658	$	—	$	—	$	31,658
Commercial paper	656		—		—		656
	$	32,314	$	—	$	—	$	32,314
Marketable Securities:
U.S. treasuries	50,391		—		—		50,391
Total	$	82,705	$	—	$	—	$	82,705

Cash Equivalents

The fair value of cash equivalents is determined based on quoted market prices for similar or identical securities.

Marketable Securities

We classify our marketable securities as available-for-sale and value them utilizing a market approach that uses observable inputs without applying significant judgment.

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Note 6 - Inventory

Inventory is stated at the lower of average cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory includes raw materials and components that may be specialized in nature and subject to obsolescence. On a quarterly basis, we review inventory quantities on hand in comparison to our past consumption, recent purchases, and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we write down the affected inventory value for estimated excess and obsolescence charges. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Inventory consisted of the following (in thousands):

	As of
	June 30, 2023		December 31, 2022
Raw materials	$	29,841	$	32,515
Work in process and semi-finished goods	20,933		19,056
Finished goods	14,163		16,029
	$	64,937	$	67,600

Note 7 - Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):

	Useful life	As of
	(years)	June 30, 2023		December 31, 2022
Automobiles	3	$	116	$	110
Computer hardware and software	3 - 5	8,883		8,712
Manufacturing and lab equipment	2 - 7	90,163		89,230
Office equipment and furniture	5 - 7	2,524		2,410
Leasehold and building improvements	2 - 12	31,742		30,675
Buildings	30	9,392		9,392
Land	N/A	3,399		3,399
		146,219		143,928
Accumulated depreciation		(89,095)		(83,235)
		$	57,124	$	60,693

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Note 8 - Intangible Assets and Goodwill

Intangible Assets

The details of definite lived intangible assets were as follows (in thousands):

	Estimated useful life (in years)	As of
		June 30, 2023		December 31, 2022
Patents	3 - 5	$	6,334	$	6,322
Development programs	2 - 4	7,200		7,200
Developed technology	5	2,961		2,930
		16,495		16,452
Accumulated amortization		(13,696)		(12,411)
		$	2,799	$	4,041

Amortization related to intangible assets was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Amortization expense	$	609	$	711	$	1,263	$	1,487

Estimated amortization expense for future years is as follows (in thousands):

2023	$	972
2024	929
2025	593
2026	305
Thereafter	—
	$	2,799

Goodwill

The carrying amount of goodwill by segment was as follows (in thousands):

	Laser Products		Advanced Development		Totals
Balance, December 31, 2022	$	2,128	$	10,248	$	12,376
Currency exchange rate adjustment	13		—		13
Balance, June 30, 2023	$	2,141	$	10,248	$	12,389

Note 9 - Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	As of
	June 30, 2023		December 31, 2022
Accrued payroll and benefits	$	8,168	$	8,233
Product warranty, current	3,686		2,601
Other accrued expenses	2,229		1,986
	$	14,083	$	12,820

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Note 10 - Product Warranties

We provide warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based on historical experience, any specifically identified failures, and our estimate of future costs. The current portion of our product warranty liability is included in the accrued liabilities and the long-term portion is included in other long-term liabilities in our Consolidated Balance Sheets.

Product warranty liability activity was as follows for the periods presented (in thousands):

	Six Months Ended June 30,
	2023		2022
Product warranty liability, beginning	$	5,441	$	5,371
Warranty charges incurred, net	(1,862)		(409)
Provision for warranty charges, net of adjustments	1,348		198
Product warranty liability, ending	4,927		5,160
Less: current portion of product warranty liability	(3,686)		(2,325)
Non-current portion of product warranty liability	$	1,241	$	2,835

Note 11 - Stockholders' Equity and Stock-Based Compensation

Restricted Stock Awards and Units

Restricted stock award ("RSA") and restricted stock unit ("RSU") activity under our equity incentive plan was as follows:

		Number of Restricted Stock Awards and Units (Thousands)	Weighted-Average Grant Date Fair Value
Balance, December 31, 2022		2,784	$	17.63
	Granted	1,591	11.10
	Vested	(744)	18.53
	Forfeited	(250)	20.79
Balance, June 30, 2023		3,381	14.12

The total fair value of RSUs and RSAs vested during the six months ended June 30, 2023, was $13.8 million. Awards outstanding as of June 30, 2023 include 1.1 million performance-based awards that will vest upon meeting certain performance criteria. Approximately 0.5 million performance-based awards were granted in the second quarter of 2023. These awards vest based on a market metric called Total Shareholder Return ("TSR") for the performance period of three years relative to the TSR of companies in the Russell 2000 Index and had a grant date fair value of $14.12 per share using a Monte Carlo simulation pricing model.

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Stock Options

The following table summarizes our stock option activity during the six months ended June 30, 2023:

	Number of Options (Thousands)	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Thousands)
Outstanding, December 31, 2022	1,827	$1.29	3.4	$16,156
Options exercised	(217)	1.53
Outstanding, June 30, 2023	1,610	1.27	2.9	22,783
Options exercisable at June 30, 2023	1,610	1.27	2.9	22,783
Options vested as of June 30, 2023, and expected to vest after June 30, 2023	1,610	1.27	2.9	22,783

Total intrinsic value of options exercised for the six months ended June 30, 2023 and 2022, was $1.9 million and $6.9 million, respectively. We received proceeds of $0.3 million and $0.8 million from the exercise of options for the six months ended June 30, 2023 and 2022, respectively.

Stock-Based Compensation

Total stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	663	$	684	$	1,363	$	1,393
Research and development	2,826		3,117		4,924		6,239
Sales, general and administrative	4,026		2,879		6,731		5,601
	$	7,515	$	6,680	$	13,018	$	13,233

Unrecognized Compensation Costs

As of June 30, 2023, total unrecognized stock-based compensation was $43.4 million, which will be recognized over an average expected recognition period of 2.1 years.

Note 12 - Commitments and Contingencies

Leases

See Note 13.

Legal Matters

On March 25, 2022, Lumentum Operations LLC filed a complaint against nLIGHT, Inc. and certain of its employees in the U.S. District Court for the Western District of Washington. The complaint alleges that Lumentum is the partial or full owner of certain of our patents and requests corresponding relief from the court. We are vigorously defending against Lumentum’s allegations. Loss in this matter is not probable or reasonably estimable and, as such, no loss contingency has been recorded.

From time to time, we may be subject to various other legal proceedings and claims in the ordinary course of business. As of June 30, 2023, we believe these matters will not have a material adverse effect on our consolidated financial statements.

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Note 13 - Leases

We lease real estate space under non-cancelable operating lease agreements for commercial and industrial space. Facilities-related operating leases have remaining terms of 0.4 to 11.9 years, and some leases include options to extend up to 15 years. Other leases for automobiles, manufacturing and office and computer equipment have remaining lease terms of 0.4 to 4.8 years. These leases are primarily operating leases; financing leases are not material. We did not include any renewal options in our lease terms for calculating the lease liabilities as we are not reasonably certain we will exercise the options at this time. The weighted-average remaining lease term for the lease obligations was 8 years as of June 30, 2023, and the weighted-average discount rate was 3.7%. The weighted-average remaining lease term for the lease obligations was 8 years as of December 31, 2022, and the weighted-average discount rate was 3.6%.

The components of lease expense related to operating leases were as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Lease expense:
	Operating lease expense	$	894	$	965	$	1,815	$	1,996
	Short-term lease expense	113		131		206		252
	Variable and other lease expense	248		241		473		435
		$	1,255	$	1,337	$	2,494	$	2,683

Future minimum payments under our non-cancelable lease obligations were as follows as of June 30, 2023 (in thousands):

2023	$	1,852
2024	3,442
2025	2,172
2026	1,681
2027	1,671
Thereafter	6,809
Total minimum lease payments	17,627
Less: interest	(2,425)
Present value of net minimum lease payments	15,202
Less: current portion of lease liabilities	(3,089)
Total long-term lease liabilities	$	12,113

Note 14 - Segment Information

We operate in two reportable segments consisting of the Laser Products segment and the Advanced Development segment. The following table summarizes the operating results by reportable segment (dollars in thousands):

	Three Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	39,592		$	13,712		$	—	$	53,304
Gross profit	$	11,983		$	788		$	(663)	$	12,108
Gross margin	30.3		%	5.7		%	NM*		22.7		%

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	Six Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	80,699		$	26,696		$	—	$	107,395
Gross profit	$	26,264		$	1,470		$	(1,363)	$	26,371
Gross margin	32.5		%	5.5		%	NM*		24.6		%

	Three Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	48,180		$	12,647		$	—	$	60,827
Gross profit	$	15,182		$	888		$	(685)	$	15,385
Gross margin	31.5		%	7.0		%	NM*		25.3		%

	Six Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	99,241		$	26,045		$	—	$	125,286
Gross profit	$	31,184		$	1,772		$	(1,394)	$	31,562
Gross margin	31.4		%	6.8		%	NM*		25.2		%

Corporate and Other is unallocated expenses related to stock-based compensation.

There have been no material changes to the geographic locations of our long-lived assets, net, based on the location of the assets, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Note 15 - Net Loss per Share

Basic and diluted net loss and the number of shares used for basic and diluted net loss calculations were the same for all periods presented because we were in a loss position.

The following potentially dilutive securities were not included in the calculation of diluted shares as the effect would have been anti‑dilutive (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Restricted stock units and awards	1,277	1,158	1,028	1,241
Common stock options	1,469	1,745	1,522	1,922
	2,746	2,903	2,550	3,163

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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the following words: "ability," "anticipate," "attempt," "believe," "can be," "continue," "could," "depend," "enable," "estimate," "expect," "extend," "grow," "if," "intend," "likely," "may," "objective," "ongoing," "plan," "possible," "potential," "predict," "project," "propose," "rely," "should," "target," "will," "would" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements include, but are not limited to, statements about: our business model and strategic plans; our expectations regarding manufacturing; our future financial performance; demand for our semiconductor and fiber laser solutions; our ability to develop innovative products; our expectations regarding product volumes and the introduction of new products; our technology and new product research and development activities; the impact of inflation; the impact of seasonality; the effect on our business of litigation to which we are or may become a party; and the sufficiency of our existing liquidity sources to meet our cash needs.

You should refer to the "Risk Factors" section of this report for a discussion of other important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this report will prove to be accurate. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, which although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Overview

nLIGHT, Inc., is a leading provider of high‑power semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. Headquartered in Camas, Washington, we design, develop, and manufacture the critical elements of our lasers, and believe our vertically integrated business model enables us to rapidly introduce innovative products, control our costs and protect our intellectual property.

We operate in two reportable segments consisting of the Laser Products segment and the Advanced Development segment. Sales of our semiconductor lasers, fiber lasers, fiber amplifiers, and other directed energy laser products are included in the Laser Products segment, while revenue earned from research and development contracts are included in the Advanced Development segment.

Revenues decreased to $107.4 million in the six months ended June 30, 2023 compared to $125.3 million in the same period of 2022 due primarily to decreased sales in the Laser Products segment, particularly in China. We generated a net loss of $16.6 million for the six months ended June 30, 2023 compared to a net loss of $19.0 million for the same period of 2022.

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Factors Affecting Our Performance

Demand for our Semiconductor and Fiber Laser Solutions

In order to continue to grow our revenues, we must continue to achieve design wins for our semiconductor and fiber lasers. We consider a design win to occur when a customer notifies us that it has selected one of our products to be incorporated into a product or system under development by such customer. For the foreseeable future, our operations will continue to depend upon capital expenditures by customers in the Industrial and Microfabrication markets, which, in turn, depend upon the demand for these customers’ products or services. In addition, in the Aerospace and Defense market, our business depends in large part on continued investment in laser technology by the U.S. government and its allies, and our ability to continue to successfully develop leading technology in this area and commercialize that technology in the future.

Demand for our products also fluctuates based on market cycles, continuously evolving industry supply chains, trade and tariff terms, as well as evolving competitive dynamics in each of our end-markets. Erosion of average selling prices, or ASPs, of established products is typical in our industry, and the ASPs of our products generally decrease as our products mature. We may also negotiate discounted selling prices from time to time with certain customers that purchase higher volumes, or to penetrate new markets or applications. Historically, we have been able to offset decreasing ASPs by introducing new and higher value products, increasing the sales of our existing products, expanding into new applications and reducing our product and manufacturing costs. Although we anticipate further increases in product volumes and the continued introduction of new and higher value products, ASP reduction may cause our revenues to decline or grow at a slower rate.

Technology and New Product Development

We invest heavily in the development of our semiconductor, fiber laser and directed energy technologies to provide solutions to our current and future customers. We anticipate that we will continue to invest in research and development to achieve our technology and product roadmap. Our product development is targeted to specific sectors of the market where we believe the performance of our products provide a significant benefit to our customers. We believe our close coordination with our customers regarding their future product requirements enhances the efficiency of our research and development expenditures.

Manufacturing Costs and Gross Margins

Our product gross profit, in absolute dollars and as a percentage of revenues, is impacted by our product sales mix, sales volumes, changes in ASPs, production volumes, the corresponding absorption of manufacturing overhead expenses, production costs and manufacturing yields. Our product sales mix can affect gross profits due to variations in profitability related to product configurations and cost profiles, customer volume pricing, availability of competitive products in various markets, and new product introductions, among other factors. We have invested heavily in U.S.-based manufacturing capabilities in the last several years. Capacity utilization affects our gross margin because we have a high fixed cost base due to our vertically integrated business model. Increases in sales and production volumes drive favorable absorption of fixed costs, improved manufacturing efficiencies and lower production costs. Gross margins may fluctuate from period to period depending on product mix and the level of capacity utilization.

Our Development gross profit varies with the type and terms of contracts, contract volume, project mix, execution on projects during the period, and estimated costs to project completion. Most of our Development contracts are structured as cost plus fixed fee due to the technical complexity of the research and development services.

Seasonality

Our quarterly revenues can fluctuate with general economic trends, the timing of capital expenditures by our customers, holidays, and general economic trends. In addition, as is typical in our industry, we tend to recognize a larger percentage of our quarterly revenues in the last month of the quarter, which may impact our working capital trends.

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Results of Operations

The following table sets forth our operating results as a percentage of revenues for the periods indicated (which may not add up due to rounding):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Products	74.3	%	79.2	%	75.1	%	79.2	%
Development	25.7		20.8		24.9		20.8
Total revenue	100.0		100.0		100.0		100.0
Cost of revenue:
Products	53.0		55.4		52.0		55.4
Development	24.3		19.3		23.4		19.4
Total cost of revenue	77.3		74.7		75.4		74.8
Gross profit	22.7		25.3		24.6		25.2
Operating expenses:
Research and development	22.5		22.7		21.7		21.9
Sales, general, and administrative	22.1		19.6		21.4		18.1
Total operating expenses	44.6		42.3		43.1		40.0
Loss from operations	(21.9)		(17.0)		(18.5)		(14.8)
Other income:
Interest income, net	0.7		0.1		0.6		0.1
Other income (expense), net	2.0		(0.2)		1.4		(0.1)
Loss before income taxes	(19.3)		(17.1)		(16.5)		(14.8)
Income tax expense (benefit)	(2.7)		—		(1.1)		0.3
Net loss	(16.6)	%	(17.1)	%	(15.4)	%	(15.1)	%

Revenues by End Market

Our revenues by end market were as follows for the periods presented (dollars in thousands):

	Three Months Ended June 30,								Change
	2023		% of Revenue		2022		% of Revenue		$		%
Industrial	$	16,569	31.1	%	$	21,899	36.0	%	$	(5,330)	(24.3)	%
Microfabrication	12,227		22.9		16,415		27.0		(4,188)		(25.5)
Aerospace and Defense	24,508		46.0		22,513		37.0		1,995		8.9
	$	53,304	100.0	%	$	60,827	100.0	%	$	(7,523)	(12.4)	%

	Six Months Ended June 30,								Change
	2023		% of Revenue		2022		% of Revenue		Amount		%
Industrial	$	36,471	34.0	%	$	45,895	36.6	%	$	(9,424)	(20.5)	%
Microfabrication	25,285		23.5		33,734		26.9		(8,449)		(25.0)
Aerospace and Defense	45,639		42.5		45,657		36.5		(18)		—
	$	107,395	100.0	%	$	125,286	100.0	%	$	(17,891)	(14.3)	%

The decreases in revenue from the Industrial and Microfabrication markets for the three and six months ended June 30, 2023, compared to the same periods in 2022, were driven by decreases in unit sales due to lower market demand. The increase in revenue from the Aerospace and Defense market for the three months ended June 30, 2023, compared to the same period in 2022, was the result of new contracts for research and development, and an

19

increase in unit sales. The was no significant change in revenue from the Aerospace and Defense market for the six months ended June 30, 2023, compared to the same period in 2022.

Revenues by Segment

Our revenues by segment were as follows for the periods presented (dollars in thousands):

	Three Months Ended June 30,								Change
	2023		% of Revenue		2022		% of Revenue		$		%
Laser Products	$	39,592	74.3	%	$	48,180	79.2	%	$	(8,588)	(17.8)	%
Advanced Development	13,712		25.7		12,647		20.8		1,065		8.4
	$	53,304	100.0	%	$	60,827	100.0	%	$	(7,523)	(12.4)	%

	Six Months Ended June 30,								Change
	2023		% of Revenue		2022		% of Revenue		Amount		%
Laser Products	$	80,699	75.1	%	$	99,241	79.2	%	$	(18,542)	(18.7)	%
Advanced Development	26,696		24.9		26,045		20.8		651		2.5
	$	107,395	100.0	%	$	125,286	100.0	%	$	(17,891)	(14.3)	%

The decreases in Laser Products revenue for the three and six months ended June 30, 2023, compared to the same periods in 2022, were primarily the result of decreased revenue from the Industrial and Microfabrication markets as discussed above, partially offset by increased revenue from the Aerospace and Defense market in the second quarter of 2023.

The increase in Advanced Development revenue for the three and six months ended June 30, 2023, compared to the same periods in 2022, were driven by new contracts for research and development. Most of our Advanced Development revenue is generated from cost plus fixed fee research and development contracts, and all Advanced Development revenue is included in the Aerospace and Defense market.

Revenues by Geographic Region

Our revenues by geographic region were as follows for the periods presented (dollars in thousands):

	Three Months Ended June 30,								Change
	2023		% of Revenue		2022		% of Revenue		$		%
North America	$	34,317	64.4	%	$	35,682	58.7	%	$	(1,365)	(3.8)	%
China	2,864		5.4		4,672		7.7		(1,808)		(38.7)
Rest of World	16,123		30.2		20,473		33.6		(4,350)		(21.2)
	$	53,304	100.0	%	$	60,827	100.0	%	$	(7,523)	(12.4)	%

	Six Months Ended June 30,								Change
	2023		% of Revenue		2022		% of Revenue		Amount		%
North America	$	63,420	59.1	%	$	70,826	56.5	%	$	(7,406)	(10.5)	%
China	6,510		6.1		11,811		9.4		(5,301)		(44.9)
Rest of World	37,465		34.8		42,649		34.1		(5,184)		(12.2)
	$	107,395	100.0	%	$	125,286	100.0	%	$	(17,891)	(14.3)	%

Geographic revenue information is based on the location to which we ship our products. The decreases in North America revenue for the three and six months ended June 30, 2023, compared to the same periods in 2022, were driven by decreased revenue from the Industrial and Microfabrication markets as previously discussed, partially offset by increased revenue from the Aerospace and Defense market in the second quarter of 2023. The decreases

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in China revenue for the three and six months ended June 30, 2023, compared to the same periods in 2022, were the result of decreased revenue from the Industrial and Microfabrication markets due to a decline in market conditions and our decision to exit the fiber laser cutting market in China during the fourth quarter of 2022. The decreases in Rest of World revenue for the three and six months ended June 30, 2023, compared to the same periods in 2022, were the result of decreased revenue from the Microfabrication and Industrial markets due primarily to lower demand.

Cost of Revenues and Gross Margin

Cost of Laser Products revenue consists primarily of manufacturing materials, labor, shipping and handling costs, tariffs and manufacturing-related overhead. We order materials and supplies based on backlog and forecasted demand from our customers. We expense all warranty costs and inventory provisions as cost of revenues.

Cost of Advanced Development revenue consists of materials, labor, subcontracting costs, and an allocation of indirect costs including overhead and general and administrative.

Our gross profit and gross margin were as follows for the periods presented (dollars in thousands):

	Three Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Total
Gross profit	$	11,983		$	788		$	(663)	$	12,108
Gross margin	30.3		%	5.7		%	NM*		22.7		%

	Six Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Total
Gross profit	$	26,264		$	1,470		$	(1,363)	$	26,371
Gross margin	32.5		%	5.5		%	NM*		24.6		%

	Three Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Total
Gross profit	$	15,182		$	888		$	(685)	$	15,385
Gross margin	31.5		%	7.0		%	NM*		25.3		%

	Six Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Total
Gross profit	$	31,184		$	1,772		$	(1,394)	$	31,562
Gross margin	31.4		%	6.8		%	NM*		25.2		%

*NM = not meaningful

The decrease in Laser Products gross margin for the three months ended June 30, 2023, compared to the same period in 2022, was driven by negative manufacturing variances, partially offset by changes in product sales mix and decreased manufacturing costs. The increase in Laser Products gross margin for the six months ended June 30, 2023, compared to the same period in 2022, was the result of changes in product sales mix and decreased manufacturing costs, partially offset by negative manufacturing variances in the second quarter of 2023.

The decrease in Advanced Development gross margin for the three and six months ended June 30, 2023, compared to the same periods in 2022, were primarily due to changes in the mix of research and development contracts. Most of our Advanced Development revenue consists of cost plus fixed fee contracts, and the fee earned on costs incurred vary by contract.

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Operating Expenses

Our operating expenses were as follows for the periods presented (dollars in thousands):

Research and Development

	Three Months Ended June 30,				Change
	2023		2022		$		%
Research and development	$	12,004	$	13,788	$	(1,784)	(12.9)	%

	Six Months Ended June 30,				Change
	2023		2022		Amount		%
Research and development	$	23,305	$	27,499	$	(4,194)	(15.3)	%

The decreases in research and development expense for the three and six months ended June 30, 2023, compared to the same periods in 2022, were driven by decreases in employee headcount and project-related expenses, and decreases in stock-based compensation of $0.3 million and $1.3 million, respectively.

Sales, General and Administrative

	Three Months Ended June 30,				Change
	2023		2022		$		%
Sales, general, and administrative	$	11,790	$	11,914	$	(124)	(1.0)	%

	Six Months Ended June 30,				Change
	2023		2022		Amount		%
Sales, general, and administrative	$	22,959	$	22,689	$	270	1.2	%

The decrease in sales, general and administrative expense for the three months ended June 30, 2023, compared to the same period in 2022, was primarily due to a decrease in employee compensation, amortization, and an increase in administrative costs allocated to development projects, partially offset by an increase in stock-based compensation of $1.1 million. The increase in sales, general and administrative expense for the six months ended June 30, 2023, compared to the same period in 2022, was driven by an increase in stock-based compensation of $1.1 million, and an increase in professional fees, partially offset by decreases in employee compensation, amortization, and an increase in administrative costs allocated to development projects.

Interest Income, net

	Three Months Ended June 30,				Change
	2023		2022		$		%
Interest income, net	$	350	$	71	$	279	393.0%

	Six Months Ended June 30,				Change
	2023		2022		Amount		%
Interest income, net	$	687	$	71	$	616	867.6	%

The increases in interest income, net, for the three and six months ended June 30, 2023, compared to the same periods in 2022, were driven by increases in interest rates and increased investment in marketable securities.

22

Other Income (Expense), net

	Three Months Ended June 30,				Change
	2023		2022		$		%
Other income (expense), net	$	1,057	$	(106)	$	1,163	1,097.2%

	Six Months Ended June 30,				Change
	2023		2022		Amount		%
Other income (expense), net	$	1,461	$	(77)	$	1,538	1,997.4	%

Changes in other income (expense), net, are primarily attributable to realized gains on the sale of marketable securities and changes in net realized and unrealized foreign exchange transactions resulting from currency rate fluctuations.

Income Tax Expense (Benefit)

	Three Months Ended June 30,				Change
	2023		2022		$		%
Income tax expense (benefit)	$	(1,456)	$	(10)	$	(1,446)	14,460.0	%

	Six Months Ended June 30,				Change
	2023		2022		Amount		%
Income tax expense (benefit)	$	(1,192)	$	333	$	(1,525)	458.0	%

We record income tax expense (benefit) for taxes in our foreign jurisdictions including Finland, Italy, and Korea. While our tax expense is largely dependent on the geographic mix of earnings related to our foreign operations, we also record tax expense (benefit) for uncertain tax positions taken and associated penalties and interest. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets. Due to the uncertainty with respect to their ultimate realizability in the United States, Austria, and China, we continue to maintain a full valuation allowance in these jurisdictions as of June 30, 2023.

The decrease in income tax expense for the three and six months ended June 30, 2023 compared to the same periods of 2022 were driven by expiring statutes of limitations on unrecognized tax positions in the second quarter of 2023.

Liquidity and Capital Resources

We had cash and cash equivalents of $41.8 million and $57.8 million as of June 30, 2023 and December 31, 2022, respectively. In addition, we had marketable securities of $59.9 million and $50.4 million at June 30, 2023 and December 31, 2022, respectively.

For the six months ended June 30, 2023, our principal uses of liquidity were to fund our working capital needs. The primary source of cash was collections from customers. We believe our existing sources of liquidity will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements may vary materially from period to period and will depend on many factors, including the timing and extent of spending on research and development efforts, the expansion of sales and marketing activities, the continuing market acceptance of our products and ongoing investments to support the growth of our business. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies and intellectual property rights. From time to time, we may explore additional financing sources which could include equity, equity‑linked and debt financing arrangements.

23

The following table summarizes our cash flows for the periods presented (in thousands):

	Six Months Ended June 30,
	2023		2022
Net cash used in operating activities	$	(3,463)	$	(11,765)
Net cash used in investing activities	(10,824)		(63,121)
Net cash used in financing activities	(1,580)		(583)
Effect of exchange rate changes on cash	(139)		(432)
Net decrease in cash, cash equivalents and restricted cash	$	(16,006)	$	(75,901)

Net Cash Used in Operating Activities

During the six months ended June 30, 2023, net cash used in operating activities was $3.5 million, which was the result of a $16.6 million net loss and use of cash for working capital of $8.2 million, offset by non-cash expenses totaling $21.3 million related primarily to depreciation, amortization, and stock-based compensation. Changes in working capital were driven by an $8.3 million increase in accounts receivable, net, due to the timing of invoicing and collections.

Net Cash Used in Investing Activities

During the six months ended June 30, 2023, net cash used in investing activities was $10.8 million, which was driven by the net purchase of marketable securities of $9.2 million and capital expenditures of $1.6 million.

Net Cash Used in Financing Activities

During the six months ended June 30, 2023, net cash used in financing activities was $1.6 million, which consisted of taxes paid on the net settlement of stock awards of $3.1 million, partially offset by proceeds from stock option exercises and employee stock plan purchases of $1.6 million.

Credit Facilities

We have a $40.0 million revolving line of credit, or LOC, with Pacific Western Bank dated September 24, 2018, which is secured by our assets and matures September 24, 2024.

The LOC agreement contains restrictive and financial covenants and bears an unused credit fee of 0.20% on an annualized basis. The interest rate on the LOC is based on the Prime Rate, minus a margin based on our liquidity levels. No amounts were outstanding under the LOC at June 30, 2023 and we were in compliance with all covenants.

Contractual Obligations

There have been no material changes to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Inflation

While we do not believe that inflation had a material effect on our business, financial condition or results of operations during the six months ended June 30, 2023, we experienced increases in wages and other compensation costs, materials, and shipping costs in 2022 and the six months ended June 30, 2023. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could materially adversely affect our business, financial condition and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For financial market risks related to changes in interest rates and foreign currency exchange rates, reference is made to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in Part II of our Annual

24

Report on Form 10-K for the year ended December 31, 2022. Our exposure to market risk has not changed materially since December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and our chief financial officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our chief executive officer and our chief financial officer have concluded that, as of such date, our disclosure controls and procedures were, in design and operation, effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Control

Control systems, including ours, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems’ objectives are being met. Further, the design of any control systems must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Control systems can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based, in part, on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see Note 12, Commitments and Contingencies, to our consolidated financial statements included elsewhere in this report.

ITEM 1A. RISK FACTORS

For risk factors related to our business, reference is made to Item 1A, "Risk Factors," contained in Part I of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 5. OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2023, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

25

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit Number		Incorporated by Reference				Filed Herewith
	Description	Form	File No.	Exhibit	Filing Date
31.1	Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.2	Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1*	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					X

* The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		NLIGHT, INC.
		(Registrant)
August 4, 2023	By:	/s/ SCOTT KEENEY
Date		Scott Keeney
		President and Chief Executive Officer (Principal Executive Officer)
August 4, 2023	By:	/s/ JOSEPH CORSO
Date		Joseph Corso
		Chief Financial Officer (Principal Financial Officer)
August 4, 2023	By:	/s/ JAMES NIAS
Date		James Nias
		Chief Accounting Officer (Principal Accounting Officer)

27

EX-31.1

Exhibit 31.1

NLIGHT, INC.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a - 14(a) OR RULE 15d - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Scott Keeney, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of nLIGHT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2023

/s/ SCOTT KEENEY

Scott Keeney

President, Chief Executive Officer and Chairman (Principal Executive Officer)

EX-31.2

Exhibit 31.2

NLIGHT, INC.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a - 14(a) OR RULE 15d - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Joseph Corso, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of nLIGHT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2023

/s/ JOSEPH CORSO

Joseph Corso

Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report") by nLIGHT, Inc. (the "Company"), Scott Keeney, as the Chief Executive Officer of the Company, and Joseph Corso, as the Chief Financial Officer of the Company, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2023

/s/ SCOTT KEENEY

Scott Keeney

President, Chief Executive Officer and Chairman (Principal Executive Officer)

/s/ JOSEPH CORSO

Joseph Corso

Chief Financial Officer (Principal Financial Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-38462
Entity Registrant Name	NLIGHT, INC.
Entity Incorporation, Date of Incorporation	DE
Entity Tax Identification Number	91-2066376
Entity Address, Address Line One	4637 NW 18th Avenue
Entity Address, City or Town	Camas
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98607
City Area Code	360
Local Phone Number	566-4460
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	LASR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Smaller Reporting Company	false
Emerging Growth	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		46,510,468
Entity Central Index Key	0001124796
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 41,818	$ 57,826
Marketable securities	59,893	50,391
Accounts receivable, net of allowances of $283 and $290	46,252	37,913
Inventory	64,937	67,600
Prepaid expenses and other current assets	16,076	17,026
Total current assets	228,976	230,756
Restricted cash	254	252
Lease right-of-use assets	13,561	13,893
Property, plant and equipment, net	57,124	60,693
Intangible assets, net	2,799	4,041
Goodwill	12,389	12,376
Other assets, net	6,797	7,222
Total assets	321,900	329,233
Current liabilities:
Accounts payable	17,574	17,507
Accrued liabilities	14,083	12,820
Deferred revenues	1,365	1,407
Current portion of lease liabilities	3,089	2,758
Total current liabilities	36,111	34,492
Non-current income taxes payable	5,191	6,699
Long-term lease liabilities	12,113	12,852
Other long-term liabilities	3,122	4,345
Total liabilities	56,537	58,388
Stockholders' equity:
Common stock - $0.0001 par value; 190,000 shares authorized, 46,503 and 45,629 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	16	16
Additional paid-in capital	507,649	496,211
Accumulated other comprehensive loss	(3,115)	(2,748)
Accumulated deficit	(239,187)	(222,634)
Total stockholders’ equity	265,363	270,845
Total liabilities and stockholders’ equity	$ 321,900	$ 329,233

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 283	$ 290
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	190,000	190,000
Common stock, shares issued (in shares)	46,503	45,629
Common stock, shares outstanding (in shares)	46,503	45,629

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Total revenue	$ 53,304	$ 60,827	$ 107,395	$ 125,286
Total cost of revenue	41,196	45,442	81,024	93,724
Gross profit	12,108	15,385	26,371	31,562
Operating expenses:
Research and development	12,004	13,788	23,305	27,499
Sales, general, and administrative	11,790	11,914	22,959	22,689
Total operating expenses	23,794	25,702	46,264	50,188
Loss from operations	(11,686)	(10,317)	(19,893)	(18,626)
Other income:
Interest income, net	350	71	687	71
Other income (expense), net	1,057	(106)	1,461	(77)
Loss before income taxes	(10,279)	(10,352)	(17,745)	(18,632)
Income tax expense (benefit)	(1,456)	(10)	(1,192)	333
Net loss	$ (8,823)	$ (10,342)	$ (16,553)	$ (18,965)
Net loss per share, basic (in dollars per share)	$ (0.19)	$ (0.23)	$ (0.36)	$ (0.43)
Net loss per share, diluted (in dollars per share)	$ (0.19)	$ (0.23)	$ (0.36)	$ (0.43)
Shares used in per share calculations, basic (in shares)	45,717	44,178	45,580	43,919
Shares used in per share calculations, diluted (in shares)	45,717	44,178	45,580	43,919
Products
Total revenue	$ 39,592	$ 48,180	$ 80,699	$ 99,241
Total cost of revenue	28,272	33,683	55,798	69,451
Development
Total revenue	13,712	12,647	26,696	26,045
Total cost of revenue	$ 12,924	$ 11,759	$ 25,226	$ 24,273

XML

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (8,823)	$ (10,342)	$ (16,553)	$ (18,965)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(1,054)	(1,868)	(685)	(1,964)
Unrealized gains on available-for-sale securities	104	0	318	0
Comprehensive loss	$ (9,773)	$ (12,210)	$ (16,920)	$ (20,929)

XML

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common stock	Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit
Beginning balance (in shares) at Dec. 31, 2021		44,248
Beginning balance at Dec. 31, 2021	$ 302,133	$ 15	$ 470,760	$ (587)	$ (168,055)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(18,965)				(18,965)
Issuance of common stock pursuant to exercise of stock options (in shares)		471
Issuance of common stock pursuant to exercise of stock options	762		762
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax (in shares)		377
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	(2,546)		(2,546)
Issuance of common stock under the Employee Stock Purchase Plan (in shares)		118
Issuance of common stock under the Employee Stock Purchase Plan	1,201		1,201
Restricted stock awards forfeited in connection with transition agreement (in shares)		(140)
Stock-based compensation	13,233		13,233
Cumulative translation adjustment, net of tax	(1,964)			(1,964)
Ending balance (in shares) at Jun. 30, 2022		45,074
Ending balance at Jun. 30, 2022	293,854	$ 15	483,410	(2,551)	(187,020)
Beginning balance (in shares) at Mar. 31, 2022		44,538
Beginning balance at Mar. 31, 2022	300,578	$ 15	477,924	(683)	(176,678)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,342)				(10,342)
Issuance of common stock pursuant to exercise of stock options (in shares)		48
Issuance of common stock pursuant to exercise of stock options	73		73
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax (in shares)		370
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	(2,468)		(2,468)
Issuance of common stock under the Employee Stock Purchase Plan (in shares)		118
Issuance of common stock under the Employee Stock Purchase Plan	1,201		1,201
Stock-based compensation	6,680		6,680
Cumulative translation adjustment, net of tax	(1,868)			(1,868)
Ending balance (in shares) at Jun. 30, 2022		45,074
Ending balance at Jun. 30, 2022	$ 293,854	$ 15	483,410	(2,551)	(187,020)
Beginning balance (in shares) at Dec. 31, 2022	45,629	45,629
Beginning balance at Dec. 31, 2022	$ 270,845	$ 16	496,211	(2,748)	(222,634)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (16,553)				(16,553)
Issuance of common stock pursuant to exercise of stock options (in shares)	217	217
Issuance of common stock pursuant to exercise of stock options	$ 332		332
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax (in shares)		523
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	(3,132)		(3,132)
Issuance of common stock under the Employee Stock Purchase Plan (in shares)		134
Issuance of common stock under the Employee Stock Purchase Plan	1,220		1,220
Stock-based compensation	13,018		13,018
Unrealized gains on available-for-sale securities	318			318
Cumulative translation adjustment, net of tax	$ (685)			(685)
Ending balance (in shares) at Jun. 30, 2023	46,503	46,503
Ending balance at Jun. 30, 2023	$ 265,363	$ 16	507,649	(3,115)	(239,187)
Beginning balance (in shares) at Mar. 31, 2023		45,785
Beginning balance at Mar. 31, 2023	269,162	$ 16	501,675	(2,165)	(230,364)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(8,823)				(8,823)
Issuance of common stock pursuant to exercise of stock options (in shares)		100
Issuance of common stock pursuant to exercise of stock options	189		189
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax (in shares)		484
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	(2,950)		(2,950)
Issuance of common stock under the Employee Stock Purchase Plan (in shares)		134
Issuance of common stock under the Employee Stock Purchase Plan	1,220		1,220
Stock-based compensation	7,515		7,515
Unrealized gains on available-for-sale securities	104			104
Cumulative translation adjustment, net of tax	$ (1,054)			(1,054)
Ending balance (in shares) at Jun. 30, 2023	46,503	46,503
Ending balance at Jun. 30, 2023	$ 265,363	$ 16	$ 507,649	$ (3,115)	$ (239,187)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (16,553)	$ (18,965)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	6,230	5,214
Amortization	1,768	2,329
Reduction in carrying amount of right-of-use assets	292	1,571
(Recoveries of) provision for losses on accounts receivable	(2)	6
Stock-based compensation	13,018	13,233
Deferred income taxes	0	(1)
Changes in operating assets and liabilities:
Accounts receivable, net	(8,449)	(4,975)
Inventory	2,197	(7,383)
Prepaid expenses and other current assets	951	663
Other assets, net	(319)	(656)
Accounts payable	(941)	(1,726)
Accrued and other long-term liabilities	158	(1,191)
Deferred revenues	(46)	421
Lease liabilities	(374)	(409)
Non-current income taxes payable	(1,393)	104
Net cash used in operating activities	(3,463)	(11,765)
Cash flows from investing activities:
Purchases of property, plant and equipment	(1,640)	(12,893)
Acquisition of intangible assets and capitalization of patents	0	(228)
Purchase of marketable securities	(59,273)	(50,000)
Proceeds from maturities and sales of marketable securities	50,089	0
Net cash used in investing activities	(10,824)	(63,121)
Cash flows from financing activities:
Proceeds from employee stock plan purchases	1,220	1,201
Proceeds from stock option exercises	332	762
Tax payments related to stock award issuances	(3,132)	(2,546)
Net cash used in financing activities	(1,580)	(583)
Effect of exchange rate changes on cash	(139)	(432)
Net decrease in cash, cash equivalents, and restricted cash	(16,006)	(75,901)
Cash, cash equivalents, and restricted cash, beginning of period	58,078	146,784
Cash, cash equivalents, and restricted cash, end of period	42,072	70,883
Supplemental disclosures:
Cash paid for interest, net	20	0
Cash paid for income taxes	262	189
Operating cash outflows from operating leases	1,931	1,914
Right-of-use assets obtained in exchange for lease liabilities	1,197	1,222
Accrued purchases of property, equipment and patents	$ 1,157	$ 1,650

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Basis of Presentation and New Accounting Pronouncements

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation and New Accounting Pronouncements

Basis of Presentation and New Accounting Pronouncements

Basis of Presentation

The accompanying unaudited consolidated financial statements of nLIGHT, Inc. and our wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The unaudited financial information reflects, in the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies

Our critical accounting policies have not materially changed during the six months ended June 30, 2023, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

New Accounting Pronouncements

None.

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Revenue

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

We recognize revenue upon transferring control of products and services and the amounts recognized reflect the consideration we expect to be entitled to receive in exchange for these products and services. We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of our consideration of the contract, we evaluate certain factors, including the customer's ability to pay (or credit risk). For each contract, we consider the promise to transfer products, each of which is distinct, as the identified performance obligations.

We allocate the transaction price to each distinct product based on its relative standalone selling price. Master sales agreements or purchase orders from customers could include a single product or multiple products. Regardless, the contracted price with the customer is agreed to at the individual product level outlined in the customer contract or purchase order. We do not bundle prices; however, we do negotiate with customers on pricing for the same products based on a variety of factors (e.g., level of contractual volume). We have concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product.

We often receive orders with multiple delivery dates that may extend across several reporting periods. We allocate the transaction price of the contract to each delivery based on the product standalone selling price and invoice for each scheduled delivery upon shipment or delivery and recognize revenues for such delivery at that point, when transfer of control has occurred. As scheduled delivery dates are generally within one year, under the optional exemption provided by ASC 606-10-50-14a revenues allocated to future shipments of partially completed contracts are not disclosed as performance obligations for point in time revenue. Further, the Company recognizes over time revenue as per ASC 606-10-55-18 (invoice practical expedient) for its cost plus contracts and, accordingly, elects not to disclose information related to those performance obligations under ASC 606-10-50-14b.

Rights of return generally are not included in customer contracts. Accordingly, product revenue is recognized upon transfer of control at shipment or delivery, as applicable. Rights of return are evaluated as they occur.

Revenues recognized at a point in time consist of sales of semiconductor lasers, fiber lasers and other related products. Revenues recognized over time generally consist of development arrangements that are structured based on our costs incurred. For long-term contracts, the Company estimates the total expected costs to complete the contract and recognizes revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts.

Contract estimates are based on various assumptions to project the outcome of future events that may span several

years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. Billing under these arrangements generally occurs within one month of the costs being incurred or as milestones are reached.

The following tables represent a disaggregation of revenue from contracts with customers for the periods presented (in thousands):

Sales by End Market

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Industrial	$	16,569	$	21,899	$	36,471	$	45,895
Microfabrication	12,227		16,415		25,285		33,734
Aerospace and Defense	24,508		22,513		45,639		45,657
	$	53,304	$	60,827	$	107,395	$	125,286

Sales by Geography

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
North America	$	34,317	$	35,682	$	63,420	$	70,826
China	2,864		4,672		6,510		11,811
Rest of World	16,123		20,473		37,465		42,649
	$	53,304	$	60,827	$	107,395	$	125,286

Sales by Timing of Revenue

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Point in time	$	39,176	$	45,448	$	79,448	$	93,663
Over time	14,128		15,379		27,947		31,623
	$	53,304	$	60,827	$	107,395	$	125,286

Our contract assets and liabilities were as follows (in thousands):

	Balance Sheet Classification	As of
		June 30, 2023		December 31, 2022
Contract assets	Prepaid expenses and other current assets	$	8,676	$	10,377
Contract liabilities	Deferred revenues and other long-term liabilities	2,714		2,455

Contract assets generally consist of revenue recognized on an over-time basis where revenue recognition has been met, but the amounts are subsequently billed and collected in the following period. In our services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in unbilled receivables and retentions on the Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities recorded in customer advances on the Consolidated

Balance Sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. For our product revenue, we generally receive cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. For our contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

During the three and six months ended June 30, 2023, we recognized revenue of $0.4 million and $1.2 million, respectively, that was included in the deferred revenue balances at the beginning of the period as the performance obligations under the associated agreements were satisfied.

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Concentrations of Credit and Other Risks

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Concentrations of Credit and Other Risks

Concentrations of Credit and Other Risks

The following customer accounted for 10% or more of our revenues for the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
U.S. Government	20%	16%	18%	16%

Financial instruments that potentially expose us to concentrations of credit risk consist principally of receivables from customers. As of June 30, 2023, and December 31, 2022, three and two customers accounted for a total of 42% and 29%, respectively, of net customer receivables. No other customers accounted for 10% or more of net customer receivables at either date.

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Marketable Securities

6 Months Ended

Jun. 30, 2023

Investments, All Other Investments [Abstract]

Marketable Securities

Marketable Securities

Marketable securities consist primarily of highly liquid investments with original maturities of greater than 90 days when purchased. Our marketable securities are considered available-for-sale as they represent investments that are available to be sold for current operations. As such, they are included as current assets on our Consolidated Balance Sheets at fair value with unrealized gains and losses included in accumulated other comprehensive loss. Any unrealized gains and losses that are considered to be other-than-temporary are recorded in other income, net on our Consolidated Statements of Operations. Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in other income, net on our Consolidated Statements of Operations.

Realized gains were $0.6 million and $1.0 million for the three and six months ended June 30, 2023, respectively. Unrealized gains were $0.1 million and $0.3 million for the three and six months ended June 30, 2023, respectively. These unrealized gains are considered temporary and are reflected in the Consolidated Statements of Comprehensive Loss. There were no realized or unrealized gains or losses for the three and six months ended June 30, 2022.

See Note 5 for additional information.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of certain of our financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities are shown at cost which approximates fair value due to the short-term nature of these instruments. The fair value of our term and revolving loans approximates the carrying value due to the variable market rate used to calculate interest payments.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

•Level 1 Inputs: Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

•Level 2 Inputs: Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 Inputs: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our financial instruments that are carried at fair value consist of Level 1 assets which include highly liquid investments and bank drafts classified as cash equivalents and marketable securities.

Our fair value hierarchy for our financial instruments was as follows (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	20,105	$	—	$	—	$	20,105
Commercial paper	849		—		—		849
	20,954		—		—		20,954
Marketable Securities:
U.S. treasuries	59,893		—		—		59,893
Total	$	80,847	$	—	$	—	$	80,847

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	31,658	$	—	$	—	$	31,658
Commercial paper	656		—		—		656
	$	32,314	$	—	$	—	$	32,314
Marketable Securities:
U.S. treasuries	50,391		—		—		50,391
Total	$	82,705	$	—	$	—	$	82,705

Cash Equivalents

The fair value of cash equivalents is determined based on quoted market prices for similar or identical securities.

Marketable Securities

We classify our marketable securities as available-for-sale and value them utilizing a market approach that uses observable inputs without applying significant judgment.

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Inventory

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory is stated at the lower of average cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory includes raw materials and components that may be specialized in nature and subject to obsolescence. On a quarterly basis, we review inventory quantities on hand in comparison to our past consumption, recent purchases, and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we write down the affected inventory value for estimated excess and obsolescence charges. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Inventory consisted of the following (in thousands):

	As of
	June 30, 2023		December 31, 2022
Raw materials	$	29,841	$	32,515
Work in process and semi-finished goods	20,933		19,056
Finished goods	14,163		16,029
	$	64,937	$	67,600

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):

	Useful life	As of
	(years)	June 30, 2023		December 31, 2022
Automobiles	3	$	116	$	110
Computer hardware and software	3 - 5	8,883		8,712
Manufacturing and lab equipment	2 - 7	90,163		89,230
Office equipment and furniture	5 - 7	2,524		2,410
Leasehold and building improvements	2 - 12	31,742		30,675
Buildings	30	9,392		9,392
Land	N/A	3,399		3,399
		146,219		143,928
Accumulated depreciation		(89,095)		(83,235)
		$	57,124	$	60,693

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Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Intangible Assets

The details of definite lived intangible assets were as follows (in thousands):

	Estimated useful life (in years)	As of
		June 30, 2023		December 31, 2022
Patents	3 - 5	$	6,334	$	6,322
Development programs	2 - 4	7,200		7,200
Developed technology	5	2,961		2,930
		16,495		16,452
Accumulated amortization		(13,696)		(12,411)
		$	2,799	$	4,041

Amortization related to intangible assets was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Amortization expense	$	609	$	711	$	1,263	$	1,487

Estimated amortization expense for future years is as follows (in thousands):

2023	$	972
2024	929
2025	593
2026	305
Thereafter	—
	$	2,799

Goodwill

The carrying amount of goodwill by segment was as follows (in thousands):

	Laser Products		Advanced Development		Totals
Balance, December 31, 2022	$	2,128	$	10,248	$	12,376
Currency exchange rate adjustment	13		—		13
Balance, June 30, 2023	$	2,141	$	10,248	$	12,389

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Accrued Liabilities

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	As of
	June 30, 2023		December 31, 2022
Accrued payroll and benefits	$	8,168	$	8,233
Product warranty, current	3,686		2,601
Other accrued expenses	2,229		1,986
	$	14,083	$	12,820

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Product Warranties

6 Months Ended

Jun. 30, 2023

Guarantees and Product Warranties [Abstract]

Product Warranties

Product Warranties

We provide warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based on historical experience, any specifically identified failures, and our estimate of future costs. The current portion of our product warranty liability is included in the accrued liabilities and the long-term portion is included in other long-term liabilities in our Consolidated Balance Sheets.

Product warranty liability activity was as follows for the periods presented (in thousands):

	Six Months Ended June 30,
	2023		2022
Product warranty liability, beginning	$	5,441	$	5,371
Warranty charges incurred, net	(1,862)		(409)
Provision for warranty charges, net of adjustments	1,348		198
Product warranty liability, ending	4,927		5,160
Less: current portion of product warranty liability	(3,686)		(2,325)
Non-current portion of product warranty liability	$	1,241	$	2,835

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Stockholders' Equity and Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Stockholders' Equity and Stock-Based Compensation

Stockholders' Equity and Stock-Based Compensation

Restricted Stock Awards and Units

Restricted stock award ("RSA") and restricted stock unit ("RSU") activity under our equity incentive plan was as follows:

		Number of Restricted Stock Awards and Units (Thousands)	Weighted-Average Grant Date Fair Value
Balance, December 31, 2022		2,784	$	17.63
	Granted	1,591	11.10
	Vested	(744)	18.53
	Forfeited	(250)	20.79
Balance, June 30, 2023		3,381	14.12

The total fair value of RSUs and RSAs vested during the six months ended June 30, 2023, was $13.8 million. Awards outstanding as of June 30, 2023 include 1.1 million performance-based awards that will vest upon meeting certain performance criteria. Approximately 0.5 million performance-based awards were granted in the second quarter of 2023. These awards vest based on a market metric called Total Shareholder Return ("TSR") for the performance period of three years relative to the TSR of companies in the Russell 2000 Index and had a grant date fair value of $14.12 per share using a Monte Carlo simulation pricing model.

Stock Options

The following table summarizes our stock option activity during the six months ended June 30, 2023:

	Number of Options (Thousands)	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Thousands)
Outstanding, December 31, 2022	1,827	$1.29	3.4	$16,156
Options exercised	(217)	1.53
Outstanding, June 30, 2023	1,610	1.27	2.9	22,783
Options exercisable at June 30, 2023	1,610	1.27	2.9	22,783
Options vested as of June 30, 2023, and expected to vest after June 30, 2023	1,610	1.27	2.9	22,783

Total intrinsic value of options exercised for the six months ended June 30, 2023 and 2022, was $1.9 million and $6.9 million, respectively. We received proceeds of $0.3 million and $0.8 million from the exercise of options for the six months ended June 30, 2023 and 2022, respectively.

Stock-Based Compensation

Total stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	663	$	684	$	1,363	$	1,393
Research and development	2,826		3,117		4,924		6,239
Sales, general and administrative	4,026		2,879		6,731		5,601
	$	7,515	$	6,680	$	13,018	$	13,233

Unrecognized Compensation Costs

As of June 30, 2023, total unrecognized stock-based compensation was $43.4 million, which will be recognized over an average expected recognition period of 2.1 years.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Leases

See Note 13.

Legal Matters

On March 25, 2022, Lumentum Operations LLC filed a complaint against nLIGHT, Inc. and certain of its employees in the U.S. District Court for the Western District of Washington. The complaint alleges that Lumentum is the partial or full owner of certain of our patents and requests corresponding relief from the court. We are vigorously defending against Lumentum’s allegations. Loss in this matter is not probable or reasonably estimable and, as such, no loss contingency has been recorded.

From time to time, we may be subject to various other legal proceedings and claims in the ordinary course of business. As of June 30, 2023, we believe these matters will not have a material adverse effect on our consolidated financial statements.

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Leases

We lease real estate space under non-cancelable operating lease agreements for commercial and industrial space. Facilities-related operating leases have remaining terms of 0.4 to 11.9 years, and some leases include options to extend up to 15 years. Other leases for automobiles, manufacturing and office and computer equipment have remaining lease terms of 0.4 to 4.8 years. These leases are primarily operating leases; financing leases are not material. We did not include any renewal options in our lease terms for calculating the lease liabilities as we are not reasonably certain we will exercise the options at this time. The weighted-average remaining lease term for the lease obligations was 8 years as of June 30, 2023, and the weighted-average discount rate was 3.7%. The weighted-average remaining lease term for the lease obligations was 8 years as of December 31, 2022, and the weighted-average discount rate was 3.6%.

The components of lease expense related to operating leases were as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Lease expense:
	Operating lease expense	$	894	$	965	$	1,815	$	1,996
	Short-term lease expense	113		131		206		252
	Variable and other lease expense	248		241		473		435
		$	1,255	$	1,337	$	2,494	$	2,683

Future minimum payments under our non-cancelable lease obligations were as follows as of June 30, 2023 (in thousands):

2023	$	1,852
2024	3,442
2025	2,172
2026	1,681
2027	1,671
Thereafter	6,809
Total minimum lease payments	17,627
Less: interest	(2,425)
Present value of net minimum lease payments	15,202
Less: current portion of lease liabilities	(3,089)
Total long-term lease liabilities	$	12,113

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Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate in two reportable segments consisting of the Laser Products segment and the Advanced Development segment. The following table summarizes the operating results by reportable segment (dollars in thousands):

	Three Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	39,592		$	13,712		$	—	$	53,304
Gross profit	$	11,983		$	788		$	(663)	$	12,108
Gross margin	30.3		%	5.7		%	NM*		22.7		%

	Six Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	80,699		$	26,696		$	—	$	107,395
Gross profit	$	26,264		$	1,470		$	(1,363)	$	26,371
Gross margin	32.5		%	5.5		%	NM*		24.6		%

	Three Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	48,180		$	12,647		$	—	$	60,827
Gross profit	$	15,182		$	888		$	(685)	$	15,385
Gross margin	31.5		%	7.0		%	NM*		25.3		%

	Six Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	99,241		$	26,045		$	—	$	125,286
Gross profit	$	31,184		$	1,772		$	(1,394)	$	31,562
Gross margin	31.4		%	6.8		%	NM*		25.2		%

Corporate and Other is unallocated expenses related to stock-based compensation.

There have been no material changes to the geographic locations of our long-lived assets, net, based on the location of the assets, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

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Net Loss per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Net Loss per Share

Net Loss per Share

Basic and diluted net loss and the number of shares used for basic and diluted net loss calculations were the same for all periods presented because we were in a loss position.

The following potentially dilutive securities were not included in the calculation of diluted shares as the effect would have been anti‑dilutive (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Restricted stock units and awards	1,277	1,158	1,028	1,241
Common stock options	1,469	1,745	1,522	1,922
	2,746	2,903	2,550	3,163

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (8,823)	$ (10,342)	$ (16,553)	$ (18,965)

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Basis of Presentation and New Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of nLIGHT, Inc. and our wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The unaudited financial information reflects, in the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

New Accounting Pronouncements

New Accounting Pronouncements

None.

Inventory

Inventory is stated at the lower of average cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory includes raw materials and components that may be specialized in nature and subject to obsolescence. On a quarterly basis, we review inventory quantities on hand in comparison to our past consumption, recent purchases, and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we write down the affected inventory value for estimated excess and obsolescence charges. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Product Warranties

We provide warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based on historical experience, any specifically identified failures, and our estimate of future costs. The current portion of our product warranty liability is included in the accrued liabilities and the long-term portion is included in other long-term liabilities in our Consolidated Balance Sheets.

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Revenue (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Sales by End Market

The following tables represent a disaggregation of revenue from contracts with customers for the periods presented (in thousands):

Sales by End Market

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Industrial	$	16,569	$	21,899	$	36,471	$	45,895
Microfabrication	12,227		16,415		25,285		33,734
Aerospace and Defense	24,508		22,513		45,639		45,657
	$	53,304	$	60,827	$	107,395	$	125,286

Schedule of Sales by Geography

Sales by Geography

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
North America	$	34,317	$	35,682	$	63,420	$	70,826
China	2,864		4,672		6,510		11,811
Rest of World	16,123		20,473		37,465		42,649
	$	53,304	$	60,827	$	107,395	$	125,286

Schedule of Sales by Timing of Revenue

Sales by Timing of Revenue

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Point in time	$	39,176	$	45,448	$	79,448	$	93,663
Over time	14,128		15,379		27,947		31,623
	$	53,304	$	60,827	$	107,395	$	125,286

Schedule of Contract Assets and Liabilities

Our contract assets and liabilities were as follows (in thousands):

	Balance Sheet Classification	As of
		June 30, 2023		December 31, 2022
Contract assets	Prepaid expenses and other current assets	$	8,676	$	10,377
Contract liabilities	Deferred revenues and other long-term liabilities	2,714		2,455

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Concentrations of Credit and Other Risks (Tables)

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Schedule of Concentration of Credit

The following customer accounted for 10% or more of our revenues for the periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
U.S. Government	20%	16%	18%	16%

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value Hierarchy for Its Cash Equivalents

Our fair value hierarchy for our financial instruments was as follows (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	20,105	$	—	$	—	$	20,105
Commercial paper	849		—		—		849
	20,954		—		—		20,954
Marketable Securities:
U.S. treasuries	59,893		—		—		59,893
Total	$	80,847	$	—	$	—	$	80,847

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	31,658	$	—	$	—	$	31,658
Commercial paper	656		—		—		656
	$	32,314	$	—	$	—	$	32,314
Marketable Securities:
U.S. treasuries	50,391		—		—		50,391
Total	$	82,705	$	—	$	—	$	82,705

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Inventory (Tables)

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Components of Inventory

Inventory consisted of the following (in thousands):

	As of
	June 30, 2023		December 31, 2022
Raw materials	$	29,841	$	32,515
Work in process and semi-finished goods	20,933		19,056
Finished goods	14,163		16,029
	$	64,937	$	67,600

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property, plant and equipment consisted of the following (in thousands):

	Useful life	As of
	(years)	June 30, 2023		December 31, 2022
Automobiles	3	$	116	$	110
Computer hardware and software	3 - 5	8,883		8,712
Manufacturing and lab equipment	2 - 7	90,163		89,230
Office equipment and furniture	5 - 7	2,524		2,410
Leasehold and building improvements	2 - 12	31,742		30,675
Buildings	30	9,392		9,392
Land	N/A	3,399		3,399
		146,219		143,928
Accumulated depreciation		(89,095)		(83,235)
		$	57,124	$	60,693

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Intangible Assets and Goodwill (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

The details of definite lived intangible assets were as follows (in thousands):

	Estimated useful life (in years)	As of
		June 30, 2023		December 31, 2022
Patents	3 - 5	$	6,334	$	6,322
Development programs	2 - 4	7,200		7,200
Developed technology	5	2,961		2,930
		16,495		16,452
Accumulated amortization		(13,696)		(12,411)
		$	2,799	$	4,041

Schedule of Finite-lived Intangible Assets Amortization Expense

Amortization related to intangible assets was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Amortization expense	$	609	$	711	$	1,263	$	1,487

Schedule of Estimated Future Amortization Expense

Estimated amortization expense for future years is as follows (in thousands):

2023	$	972
2024	929
2025	593
2026	305
Thereafter	—
	$	2,799

Schedule of Goodwill

The carrying amount of goodwill by segment was as follows (in thousands):

	Laser Products		Advanced Development		Totals
Balance, December 31, 2022	$	2,128	$	10,248	$	12,376
Currency exchange rate adjustment	13		—		13
Balance, June 30, 2023	$	2,141	$	10,248	$	12,389

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	As of
	June 30, 2023		December 31, 2022
Accrued payroll and benefits	$	8,168	$	8,233
Product warranty, current	3,686		2,601
Other accrued expenses	2,229		1,986
	$	14,083	$	12,820

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Product Warranties (Tables)

6 Months Ended

Jun. 30, 2023

Guarantees and Product Warranties [Abstract]

Schedule of Reconciliation of the Changes in the Aggregate Product Warranty Liability

Product warranty liability activity was as follows for the periods presented (in thousands):

	Six Months Ended June 30,
	2023		2022
Product warranty liability, beginning	$	5,441	$	5,371
Warranty charges incurred, net	(1,862)		(409)
Provision for warranty charges, net of adjustments	1,348		198
Product warranty liability, ending	4,927		5,160
Less: current portion of product warranty liability	(3,686)		(2,325)
Non-current portion of product warranty liability	$	1,241	$	2,835

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Stockholders' Equity and Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Restricted Stock Awards and Units

Restricted stock award ("RSA") and restricted stock unit ("RSU") activity under our equity incentive plan was as follows:

		Number of Restricted Stock Awards and Units (Thousands)	Weighted-Average Grant Date Fair Value
Balance, December 31, 2022		2,784	$	17.63
	Granted	1,591	11.10
	Vested	(744)	18.53
	Forfeited	(250)	20.79
Balance, June 30, 2023		3,381	14.12

Schedule of Stock Option Activity

The following table summarizes our stock option activity during the six months ended June 30, 2023:

	Number of Options (Thousands)	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Thousands)
Outstanding, December 31, 2022	1,827	$1.29	3.4	$16,156
Options exercised	(217)	1.53
Outstanding, June 30, 2023	1,610	1.27	2.9	22,783
Options exercisable at June 30, 2023	1,610	1.27	2.9	22,783
Options vested as of June 30, 2023, and expected to vest after June 30, 2023	1,610	1.27	2.9	22,783

Schedule of Stock-based Compensation Expense

Total stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	663	$	684	$	1,363	$	1,393
Research and development	2,826		3,117		4,924		6,239
Sales, general and administrative	4,026		2,879		6,731		5,601
	$	7,515	$	6,680	$	13,018	$	13,233

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of Components of Lease Expense

The components of lease expense related to operating leases were as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Lease expense:
	Operating lease expense	$	894	$	965	$	1,815	$	1,996
	Short-term lease expense	113		131		206		252
	Variable and other lease expense	248		241		473		435
		$	1,255	$	1,337	$	2,494	$	2,683

Schedule of Future Minimum Payments Under Non-cancelable Lease Obligations

Future minimum payments under our non-cancelable lease obligations were as follows as of June 30, 2023 (in thousands):

2023	$	1,852
2024	3,442
2025	2,172
2026	1,681
2027	1,671
Thereafter	6,809
Total minimum lease payments	17,627
Less: interest	(2,425)
Present value of net minimum lease payments	15,202
Less: current portion of lease liabilities	(3,089)
Total long-term lease liabilities	$	12,113

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of Operating Results by Reportable Segment

The following table summarizes the operating results by reportable segment (dollars in thousands):

	Three Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	39,592		$	13,712		$	—	$	53,304
Gross profit	$	11,983		$	788		$	(663)	$	12,108
Gross margin	30.3		%	5.7		%	NM*		22.7		%

	Six Months Ended June 30, 2023
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	80,699		$	26,696		$	—	$	107,395
Gross profit	$	26,264		$	1,470		$	(1,363)	$	26,371
Gross margin	32.5		%	5.5		%	NM*		24.6		%

	Three Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	48,180		$	12,647		$	—	$	60,827
Gross profit	$	15,182		$	888		$	(685)	$	15,385
Gross margin	31.5		%	7.0		%	NM*		25.3		%

	Six Months Ended June 30, 2022
	Laser Products			Advanced Development			Corporate and Other		Totals
Revenue	$	99,241		$	26,045		$	—	$	125,286
Gross profit	$	31,184		$	1,772		$	(1,394)	$	31,562
Gross margin	31.4		%	6.8		%	NM*		25.2		%

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Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Potentially Dilutive Shares Not Included in Calculation of Diluted Shares

The following potentially dilutive securities were not included in the calculation of diluted shares as the effect would have been anti‑dilutive (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Restricted stock units and awards	1,277	1,158	1,028	1,241
Common stock options	1,469	1,745	1,522	1,922
	2,746	2,903	2,550	3,163

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 53,304	$ 60,827	$ 107,395	$ 125,286
Point in time
Disaggregation of Revenue [Line Items]
Total revenue	39,176	45,448	79,448	93,663
Over time
Disaggregation of Revenue [Line Items]
Total revenue	14,128	15,379	27,947	31,623
North America
Disaggregation of Revenue [Line Items]
Total revenue	34,317	35,682	63,420	70,826
China
Disaggregation of Revenue [Line Items]
Total revenue	2,864	4,672	6,510	11,811
Rest of World
Disaggregation of Revenue [Line Items]
Total revenue	16,123	20,473	37,465	42,649
Industrial
Disaggregation of Revenue [Line Items]
Total revenue	16,569	21,899	36,471	45,895
Microfabrication
Disaggregation of Revenue [Line Items]
Total revenue	12,227	16,415	25,285	33,734
Aerospace and Defense
Disaggregation of Revenue [Line Items]
Total revenue	$ 24,508	$ 22,513	$ 45,639	$ 45,657

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Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract assets	$ 8,676	$ 10,377
Contract liabilities	$ 2,714	$ 2,455

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Revenue - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue recognized, previously included in customer advances and deferred revenue	$ 0.4	$ 1.2

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Concentrations of Credit and Other Risks (Details) - Customer Concentration Risk	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Sales Revenue | U.S. Government
Concentration Risk [Line Items]
Concentration risk (as a percent)	20.00%	16.00%	18.00%	16.00%
Accounts Receivable | Three Customers
Concentration Risk [Line Items]
Concentration risk (as a percent)			42.00%
Accounts Receivable | Two customers
Concentration Risk [Line Items]
Concentration risk (as a percent)					29.00%

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Marketable Securities (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Investments, All Other Investments [Abstract]
Realized gains	$ 0.6	$ 0.0	$ 1.0	$ 0.0
Unrealized gains	$ 0.1	$ 0.0	$ 0.3	$ 0.0

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	$ 20,954	$ 32,314
Total	80,847	82,705
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	20,954	32,314
Total	80,847	82,705
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	0	0
Total	0	0
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	0	0
Total	0	0
Money market securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	20,105	31,658
Money market securities | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	20,105	31,658
Money market securities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	0	0
Money market securities | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	0	0
Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	849	656
Commercial paper | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	849	656
Commercial paper | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	0	0
Commercial paper | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash Equivalents:	0	0
U.S. treasuries
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable Securities:	59,893	50,391
U.S. treasuries | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable Securities:	59,893	50,391
U.S. treasuries | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable Securities:	0	0
U.S. treasuries | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable Securities:	$ 0	$ 0

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Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 29,841	$ 32,515
Work in process and semi-finished goods	20,933	19,056
Finished goods	14,163	16,029
Inventory	$ 64,937	$ 67,600

XML

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 146,219	$ 143,928
Accumulated depreciation	(89,095)	(83,235)
Property and equipment, net	$ 57,124	60,693
Automobiles
Property, Plant and Equipment [Line Items]
Useful life (years)	3 years
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 116	110
Computer hardware and software
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 8,883	8,712
Computer hardware and software | Minimum
Property, Plant and Equipment [Line Items]
Useful life (years)	3 years
Computer hardware and software | Maximum
Property, Plant and Equipment [Line Items]
Useful life (years)	5 years
Manufacturing and lab equipment
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 90,163	89,230
Manufacturing and lab equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful life (years)	2 years
Manufacturing and lab equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful life (years)	7 years
Office equipment and furniture
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 2,524	2,410
Office equipment and furniture | Minimum
Property, Plant and Equipment [Line Items]
Useful life (years)	5 years
Office equipment and furniture | Maximum
Property, Plant and Equipment [Line Items]
Useful life (years)	7 years
Leasehold and building improvements
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 31,742	30,675
Leasehold and building improvements | Minimum
Property, Plant and Equipment [Line Items]
Useful life (years)	2 years
Leasehold and building improvements | Maximum
Property, Plant and Equipment [Line Items]
Useful life (years)	12 years
Buildings
Property, Plant and Equipment [Line Items]
Useful life (years)	30 years
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 9,392	9,392
Land
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 3,399	$ 3,399

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Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 16,495		$ 16,495		$ 16,452
Accumulated amortization	(13,696)		(13,696)		(12,411)
Net value	2,799		2,799		4,041
Amortization expense	609	$ 711	1,263	$ 1,487
Patents
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	6,334		6,334		6,322
Development programs
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 7,200		$ 7,200		7,200
Developed technology
Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	5 years		5 years
Gross carrying amount	$ 2,961		$ 2,961		$ 2,930
Minimum | Patents
Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	3 years		3 years
Minimum | Development programs
Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	2 years		2 years
Maximum | Patents
Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	5 years		5 years
Maximum | Development programs
Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	4 years		4 years

XML

Intangible Assets and Goodwill - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 972
2024	929
2025	593
2026	305
Thereafter	0
Net value	$ 2,799	$ 4,041

XML

Intangible Assets and Goodwill - Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 12,376
Currency exchange rate adjustment	13
Ending balance	12,389
Laser Products
Goodwill [Roll Forward]
Beginning balance	2,128
Currency exchange rate adjustment	13
Ending balance	2,141
Advanced Development
Goodwill [Roll Forward]
Beginning balance	10,248
Currency exchange rate adjustment	0
Ending balance	$ 10,248

XML

Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued payroll and benefits	$ 8,168	$ 8,233
Product warranty, current	3,686	2,601
Other accrued expenses	2,229	1,986
Total accrued liabilities	$ 14,083	$ 12,820

XML

Product Warranties (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Movement in Standard Product Warranty Accrual [Roll Forward]
Product warranty liability, beginning	$ 5,441	$ 5,371
Warranty charges incurred, net	(1,862)	(409)
Provision for warranty charges, net of adjustments	1,348	198
Product warranty liability, ending	4,927	5,160
Less: current portion of product warranty liability	(3,686)	(2,325)
Non-current portion of product warranty liability	$ 1,241	$ 2,835

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Stockholders' Equity and Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units shares in Thousands	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Number of Restricted Stock Awards and Units (Thousands)
Balance, beginning (in shares) | shares	2,784
Granted (in shares) | shares	1,591
Vested (in shares) | shares	(744)
Forfeited (in shares) | shares	(250)
Balance, ending (in shares) | shares	3,381
Weighted-Average Grant Date Fair Value
Balance, beginning (in dollars per share) | $ / shares	$ 17.63
Granted (in dollars per share) | $ / shares	11.10
Vested (in dollars per share) | $ / shares	18.53
Forfeited (in dollars per share) | $ / shares	20.79
Balance, ending (in dollars per share) | $ / shares	$ 14.12

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Stockholders' Equity and Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of options exercised		$ 1,900	$ 6,900
Proceeds from stock option exercises		332	$ 762
Unrecognized expense	$ 43,400	$ 43,400
Period for recognition (in years)		2 years 1 month 6 days
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested, fair value		$ (13,800)
Awards outstanding (in shares)	3,381,000	3,381,000		2,784,000
Granted (in shares)		1,591,000
Granted (in dollars per share)		$ 11.10
Performance-based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)	1,100,000	1,100,000
Granted (in shares)	500,000
Performance period	3 years
Granted (in dollars per share)		$ 14.12

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Stockholders' Equity and Stock-Based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Number of Options (Thousands)
Outstanding, beginning of period (in shares) | shares	1,827
Options exercised (in shares) | shares	(217)
Outstanding, end of period (in shares) | shares	1,610	1,827
Weighted-Average Exercise Price
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 1.29
Options exercised (in dollars per share) | $ / shares	1.53
Outstanding, end of period (in dollars per share) | $ / shares	$ 1.27	$ 1.29
Outstanding, Weighted average remaining contractual term (in years)	2 years 10 months 24 days	3 years 4 months 24 days
Outstanding, Aggregate intrinsic value | $	$ 22,783	$ 16,156
Options exercisable at end of period
Options exercisable (in shares) | shares	1,610
Weighted average exercise price (in dollars per share) | $ / shares	$ 1.27
Weighted-Average Remaining Contractual Term (Years)	2 years 10 months 24 days
Aggregate Intrinsic Value (Thousands) | $	$ 22,783
Options vested as of end of period and expected to vest after end of period
Options vested and expected to vest (in shares) | shares	1,610
Weighted average exercise price (in dollars per share) | $ / shares	$ 1.27
Weighted-Average Remaining Contractual Term (Years)	2 years 10 months 24 days
Aggregate Intrinsic Value (Thousands) | $	$ 22,783

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Stockholders' Equity and Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 7,515	$ 6,680	$ 13,018	$ 13,233
Cost of revenues
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	663	684	1,363	1,393
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	2,826	3,117	4,924	6,239
Sales, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 4,026	$ 2,879	$ 6,731	$ 5,601

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Leases - Narrative (Details)	Jun. 30, 2023	Dec. 31, 2022
Lessee, Lease, Description [Line Items]
Weighted-average remaining lease term for operating leases (in years)	8 years	8 years
Weighted-average discount rate for operating leases (as a percent)	3.70%	3.60%
Operating Leases, Facilities
Lessee, Lease, Description [Line Items]
Renewal lease term (in years)	15 years
Operating Leases, Facilities | Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term (in years)	4 months 24 days
Operating Leases, Facilities | Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term (in years)	11 years 10 months 24 days
Operating Leases, Automobiles and Equipment | Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term (in years)	4 months 24 days
Operating Leases, Automobiles and Equipment | Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term (in years)	4 years 9 months 18 days

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating lease expense	$ 894	$ 965	$ 1,815	$ 1,996
Short-term lease expense	113	131	206	252
Variable and other lease expense	248	241	473	435
Lease expense	$ 1,255	$ 1,337	$ 2,494	$ 2,683

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Leases - Future Minimum Payments Under Non-Cancelable Operating Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 1,852
2024	3,442
2025	2,172
2026	1,681
2027	1,671
Thereafter	6,809
Total minimum lease payments	17,627
Less: interest	(2,425)
Present value of net minimum lease payments	15,202
Less: current portion of lease liabilities	(3,089)	$ (2,758)
Total long-term lease liabilities	$ 12,113	$ 12,852

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Segment Information - Narrative (Details)	6 Months Ended
	Jun. 30, 2023 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Segment Information - Operating Results (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Revenue	$ 53,304	$ 60,827	$ 107,395	$ 125,286
Gross profit	$ 12,108	$ 15,385	$ 26,371	$ 31,562
Gross margin	22.70%	25.30%	24.60%	25.20%
Operating Segments | Laser Products
Segment Reporting Information [Line Items]
Revenue	$ 39,592	$ 48,180	$ 80,699	$ 99,241
Gross profit	$ 11,983	$ 15,182	$ 26,264	$ 31,184
Gross margin	30.30%	31.50%	32.50%	31.40%
Operating Segments | Advanced Development
Segment Reporting Information [Line Items]
Revenue	$ 13,712	$ 12,647	$ 26,696	$ 26,045
Gross profit	$ 788	$ 888	$ 1,470	$ 1,772
Gross margin	5.70%	7.00%	5.50%	6.80%
Corporate and Other
Segment Reporting Information [Line Items]
Revenue	$ 0	$ 0	$ 0	$ 0
Gross profit	$ (663)	$ (685)	$ (1,363)	$ (1,394)

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Net Loss per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	2,746	2,903	2,550	3,163
Restricted stock units and awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,277	1,158	1,028	1,241
Common stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,469	1,745	1,522	1,922