nLIGHT, Inc. LASR

The business

nLIGHT designs and builds high-power semiconductor and fiber lasers and reports in two segments: Laser Products (commercial and defense fiber and semiconductor lasers for cutting, welding, additive manufacturing, aerospace and defense sensing) and Advanced Development (mostly US government and Department of Defense funded development contracts, increasingly for directed energy, meaning high-energy laser weapons). The company also frames its end markets as three verticals, and the one carrying the franchise now is Aerospace and Defense: $175.3M of FY2025 revenue, 67% of the $261.3M total, up from $109.5M and 55% a year earlier, a ≈60% jump. Industrial (cutting and welding, the business most exposed to Chinese fiber-laser price competition) shrank to $38.8M, and Microfabrication was $47.2M. So the 20% of the story doing 80% of the work is defense, and management is actively shedding the low-margin commercial cutting and welding lines, a move it says costs $25M to $30M of 2026 revenue.

The qualitative fact the financials do not yet show is program mix inside that A&D number. The growth is being driven by directed-energy development, with named programs including the HELSI 2 one-megawatt coherent-beam-combined laser (a contract worth roughly $171M to nLIGHT across three years) and the Navy HELL CAP effort, plus a new beam-combined weapon family branded Hades. Q1 2026 (reported May) showed defense backlog at a record ≈$110M and A&D revenue up 69% year over year. The make-or-break question is whether these stay perpetual research contracts or transition into funded programs of record with real production volume; management points to nearly $400M in the US fiscal 2027 and 2028 budgets earmarked for directed-energy prototypes and procurement against an overall laser-weapons budget approaching $1B a year. The US government is a large, concentrated customer, and revenue is lumpy by program.