NLIGHT, INC.

Previous wording

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 new import and export controls; the impact of changes in regulations and customs, tariffs and trade barriers, or the perception that any of them could occur; 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.

Current wording

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 new import and export controls; the impact of changes in regulations and customs, tariffs and trade barriers, or the perception that any of them could occur; the impact of ongoing supply chain disruptions; 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.

Previous wording

Revenues increased to $80.2 million in the three months ended March 31, 2026 compared to $51.7 million in the same period in 2025 due primarily to an increase in both product and development revenue from the Aerospace and

Current wording

Revenues increased to $162.8 million in the six months ended June 30, 2026 compared to $113.4 million in the same period in 2025 due primarily to an increase in both product and development revenue from the Aerospace and Defense end market. We generated net loss of $0.7 million for the six months ended June 30, 2026 compared to a net loss of $11.7 million for the same period in 2025.

Previous wording

Changes in global economic conditions and tariffs on goods to and from the U.S. did not have a material impact on our financial results in the three months ended March 31, 2026. However, changes in global economic conditions and uncertainty related to tariffs could increase our operational complexity, and have a negative impact on revenue and profitability in the future.

Current wording

Global Economic Conditions and Trade Policies

Previous wording

A portion of our sales are generated from products manufactured outside the United States and we sell our products globally. Changing trade dynamics, including changes in tariffs and export regulations, could disrupt our supply chain, disrupt customer sales, and increase input costs. We continue to monitor macroeconomic trends, global inflationary pressures, and uncertainties related to international trade policy, including tariff actions and regulatory shifts. For instance, in February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). In March 2026, the U.S. Court of International Trade Court issued an additional ruling stating that importers that have paid tariffs under IEEPA are due refunds. We are currently evaluating the impact of this decision on our business, as the ultimate timing and amount of any potential refunds is uncertain and subject to further legal and regulatory developments.

Current wording

We sell our products globally, and a portion of our sales are generated from products that are manufactured outside the United States. or rely on components from suppliers who are located outside of the United States. Changing trade dynamics, including changes in tariffs, export regulations, and customs enforcement, could disrupt our supply chain and production, disrupt customer sales, and increase input costs. We continue to monitor macroeconomic trends, global inflationary pressures, and uncertainties related to international trade policy, including tariff actions and regulatory shifts.

Previous wording

The increase in revenue from the Aerospace and Defense market for the three months ended March 31, 2026 compared to the same period in 2025 was driven by increased unit sales of directed energy laser products across all regions and progress on existing development contracts. The increase in revenue from the Microfabrication market for the three months ended March 31, 2026 compared to the same period in 2025 was primarily attributable to increased unit sales of semiconductor lasers in all regions. The increase in revenue from the Industrial markets for the three months ended March 31, 2026 compared to the same period in 2025 was the result of increased unit sales of additive fiber lasers in North America, partially offset by decreased unit sales of other industrial laser products.

Current wording

The increases in revenue from the Aerospace and Defense end market for the three and six months ended June 30, 2026, compared to the same periods in 2025, were driven primarily by increased unit sales of directed energy laser products, increased unit sales of laser components for defense programs, and progress on existing research and development contracts. The increases in revenue from the Microfabrication end market for the three and six months ended June 30, 2026 compared to the same periods in 2025 were primarily attributable to increased unit sales of semiconductor lasers in all regions. The increases in revenue from the Industrial end market for the three and six months ended June 30, 2026, compared to the same periods in 2025, were the result of increased unit sales of additive fiber lasers in North America, partially offset by decreased unit sales of other industrial laser products.

Previous wording

The increase in Laser Products revenue for the three months ended March 31, 2026 compared to the same period in 2025 was the result of increased units sales across all end markets. The increase in Advanced Development revenue for the three months ended March 31, 2026 compared to the same period in 2025 was driven by progress on existing research and development contracts. All Advanced Development revenue is included in the Aerospace and Defense market.

Current wording

The increases in Laser Products revenue for the three and six months ended June 30, 2026 compared to the same periods in 2025 were the result of increased unit sales across all end markets. The increases in Advanced Development revenue for the three and six months ended June 30, 2026, compared to the same periods in 2025, were driven by progress on existing research and development contracts. All Advanced Development revenue is included in the Aerospace and Defense market.

Previous wording

Geographic revenue information is based on the location to which we ship our products. The increase in North America Revenue for the three months ended March 31, 2026 was due to increased revenue across all end markets, with revenue from the Aerospace and Defense market representing most of the increase. The increases in Asia Pacific and EMEA revenues for the three months ended March 31, 2026 compared to the same period in 2025 were the result of increased revenues from the Aerospace and Defense and Microfabrication markets, partially offset by decreased revenue from the Industrial market.

Current wording

Geographic revenue information is based on the location to which we ship our products. The increases in North America revenues for the three and six months ended June 30, 2026 compared to the same periods in 2025, were due to increased revenue across all end markets, with revenue from the Aerospace and Defense end market representing most of the increase.

Previous wording

Products cost of revenue consists primarily of manufacturing materials, labor, shipping and handling costs, duties, and manufacturing-related overhead. We order materials and supplies based on backlog and forecasted customer orders. We expense all warranty costs and inventory provisions as cost of revenues.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

The increase in products gross margin for the three months ended March 31, 2026 compared to the same period in 2025 was driven primarily by sales mix and the impact of increased production volumes on fixed manufacturing costs due to the overall increase in sales. The decrease in development gross margin for the three months ended March 31, 2026 compared to the same period in 2025 was primarily the result of an increase in revenue from cost-plus fixed fee (CPFF) contracts relative to firm fixed price (FFP) contracts. CPFF contracts generally have a lower average gross margin than FFP contracts.

Current wording

The increase in Laser Products gross margin for the three and six months ended June 30, 2026 compared to the same periods in 2025 were driven primarily by sales mix and the impact of increased production volumes on fixed manufacturing costs due to the overall increase in sales. The decrease in development gross margin for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily the result of an increase in revenue from cost-plus fixed fee (CPFF) contracts relative to firm fixed price (FFP) contracts. CPFF contracts generally have a lower average gross margin than FFP contracts.

Previous wording

The increase in sales, general and administrative expense for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to an increase in stock-based compensation of $3.9 million and an increase in employee compensation, partially offset by a higher allocation of costs from sales, general and administrative to development projects, and decrease in bad debt recoveries.

Current wording

The increases in sales, general and administrative expense for the three and six months ended June 30, 2026, compared to the same periods in 2025, were driven primarily by increases in employee and incentive compensation, and increases in stock-based compensation of $3.1 million and $7.0 million, respectively, partially offset by decreases in bad debt recoveries and a higher allocation of costs from sales, general and administrative to development projects.

Previous wording

The decrease in interest income, for the three months ended March 31, 2026 compared to the same period in 2025 was driven primarily by a decrease in income earned from marketable securities, partially offset by an increase in income earned from cash equivalents.

Current wording

The increases in interest income for the three and six months ended June 30, 2026, compared to the same periods in 2025, were driven primarily by an increase in the average balance of cash, cash equivalents and marketable securities.

Previous wording

We record income tax expense for taxes in our foreign jurisdictions including Finland, Italy, Austria, China and South Korea. While our tax expense is largely dependent on the geographic mix of earnings related to our foreign operations, we also record tax expense 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, we continue to maintain a full valuation allowance on deferred tax assets in the United States, and a partial valuation allowance in China as of March 31, 2026. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates and deductibility of certain costs and expenses by jurisdiction.

Current wording

We record income tax expense for taxes in our foreign jurisdictions including Finland, Italy, Austria, and South Korea. While our tax expense is largely dependent on the geographic mix of earnings related to our foreign operations, we also record tax expense 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, we continue to maintain a full valuation allowance on deferred tax assets in the United States, and a partial valuation allowance in China as of June 30, 2026. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates and deductibility of certain costs and expenses by jurisdiction.

Previous wording

The decrease in income tax expense for the three months ended March 31, 2026, compared to the same period in 2025 was driven by a decrease in income from our foreign operations. Our tax expense is dependent on the geographic mix of earnings and primarily related to our foreign operations.

Current wording

The decrease in income tax expense for the six months ended June 30, 2026 compared to the same period in 2025 was driven by a decrease in income in foreign jurisdictions and discrete tax benefits for expiring statutes of limitations on unrecognized tax positions that were partially reduced by an increase in valuation allowance in China in the second quarter of 2026. Our tax expense is dependent on the geographic mix of earnings and primarily related to our foreign operations.

Previous wording

We had cash and cash equivalents and restricted cash of $298.5 million and $99.0 million as of March 31, 2026 and December 31, 2025, respectively. In addition, we had marketable securities of $34.4 million and $34.9 million at March 31, 2026 and December 31, 2025, respectively. Our total balance of cash, cash equivalents, restricted cash and marketable securities increased by $199.0 million from December 31, 2025 to March 31, 2026.

Current wording

We had cash and cash equivalents and restricted cash of $296.1 million and $99.0 million as of June 30, 2026 and December 31, 2025, respectively. In addition, we had marketable securities of $34.7 million and $34.9 million at June 30, 2026 and December 31, 2025, respectively. Our total balance of cash, cash equivalents, restricted cash and marketable securities increased by $196.8 million from December 31, 2025 to June 30, 2026.

Previous wording

For the three months ended March 31, 2026, our principal sources of liquidity was from our public offering and cash collected 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.

Current wording

For the six months ended June 30, 2026, our principal sources of liquidity were from our public offering and cash collected 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.

Previous wording

During the three months ended March 31, 2026, net cash provided by operating activities was $9.7 million, which was the result of $0.6 million net income and non-cash expenses totaling $15.1 million related primarily to depreciation, amortization, and stock-based compensation, offset by cash used in net working capital of $6.0 million. The cash used in net working capital in the three months ended March 31, 2026 was driven by $8.2 million increase in prepaid expenses and other current assets, $2.5 million decrease in accrued and other long-term liabilities, $1.6 million decrease in accounts payable, and $0.6 million decrease in lease liabilities. The uses of cash were offset by a $2.7 million decrease in accounts receivable, $2.6 million increase in deferred revenues, $1.3 million decrease in inventory, and $0.2 million decrease in other assets, net.

Current wording

During the six months ended June 30, 2026, net cash provided by operating activities was $30.4 million, which was the result of cash provided by net working capital of $1.6 million and by non-cash expenses totaling $29.5 million related primarily to depreciation, amortization, and stock-based compensation, offset by net loss of $0.7 million. The cash provided by net working capital in the six months ended June 30, 2026 was driven by a $9.2 million increase in deferred revenues, $4.0 million decrease in accounts receivable, $3.0 million increase in accounts payable, and $0.5 million decrease in other assets, net. The cash provided by working capital was offset by a $8.5 million increase in prepaid expenses and other current assets, $3.0 million increase in inventory, $2.2 million decrease in accrued and other long-term liabilities, $1.3 million decrease in lease liabilities, and $0.2 million decrease in non-current income taxes payable.

Previous wording

During the three months ended March 31, 2026, net cash used in investing activities was $1.4 million, which was driven by net capital expenditures of $2.1 million, offset by the net proceeds from maturities and sales of marketable securities of $0.7 million.

Current wording

During the six months ended June 30, 2026, net cash used in investing activities was $6.2 million, which was driven by net capital expenditures of $7.0 million, offset by the net proceeds from maturities and sales of marketable securities of $0.7 million.

Previous wording

During the three months ended March 31, 2026, net cash provided by financing activities was $191.2 million, which consisted of proceeds from our public offering, net of underwriting discounts and offering costs, of $191.3 million and proceeds from stock option exercises of $0.2 million, offset by tax payments related to stock award issuances of $0.2 million.

Current wording

During the six months ended June 30, 2026, net cash provided by financing activities was $173.0 million, which consisted of proceeds from our public offering, net of underwriting discounts and offering costs, of $191.3 million and proceeds from stock option exercises and employee stock plan purchases of $1.9 million, offset by repayment of $20.0 million of the LOC and tax payments related to stock award issuances of $0.2 million.

Previous wording

As of March 31, 2026, $20.0 million was outstanding on the LOC and we were in compliance with all covenants. The remaining $20.0 million unused portion of the LOC is available for borrowing.

Current wording

As of June 30, 2026, no amounts were outstanding on the LOC and we were in compliance with all covenants. The remaining $40.0 million unused portion of the LOC is available for borrowing.