Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 5 of last 6 quarters
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nLIGHT's record A&D revenue and JLWS win underscore accelerating defense investment in directed energy, a key pillar of the AI infrastructure buildout's security ecosystem. The supply chain hiccup highlights the fragility of global optics supply, potentially prompting further reshoring and dual-sourcing efforts across the industry.
nLIGHT delivered record Q2 revenue of $82.6M, up 34% YoY, driven by record A&D product revenue (up 72% YoY) and strong commercial growth. The company won the Department of War's Joint Laser Weapon System (JLWS) contract with a ceiling over $600M, building on its HADES platform. Product gross margin expanded to 41.2% YoY, and adjusted EBITDA reached $10.7M. However, Q3 guidance was impacted by supply chain delays from Chinese suppliers, causing ~$17M of product revenue to be pushed to future quarters.
Management guided Q3 2026 revenue to $63M-$73M (midpoint $68M), with product revenue of ~$43M and development revenue of ~$25M. The guide excludes ~$17M of product revenue delayed by supply chain issues from certain Chinese suppliers, primarily affecting commercial products. Overall gross margin is expected at 24%-30%, product gross margin at 34%-40%, and adjusted EBITDA of $1M-$7M. The JLWS award will begin contributing revenue in Q3 and ramp meaningfully in 2027, more than offsetting the HELSI-2 wind-down. Management expects non-GAAP OpEx to remain in the $17M-$19M per quarter range in H2 2026.
“Q2 represented another strong quarter of execution for nLIGHT with revenue, gross margin and adjusted EBITDA at or above our expectations.”
on Quarterly performance
“The JLWS award will start to contribute revenue in the current quarter. We will run into the fourth quarter and then really start to ramp up in 2027.”
on JLWS ramp
“We are currently experiencing challenges in getting some parts and materials from certain Chinese suppliers. While these materials do not represent a large portion of the overall bill of material of our products, delays in sourcing these materials, which primarily affect our commercial products, will not allow us to fully satisfy our customer demand in the third quarter.”
on Supply chain impact
Could you talk about how the JLWS award rolls into '26 and '27, and how it offsets the HELSI-2 headwind?
JLWS will start contributing revenue in Q3, ramp in Q4, and really ramp in 2027. It will be a nice replacement and then some relative to the HELSI-2 wind-down.
How is the JLWS prototype different from HELSI-2 and HADES, and what is the timeline for fielding at scale?
JLWS is a continuation/transition of HELSI work into production-ready products at high power levels, building on HADES. Fielding at scale depends on U.S. budget progress; initial prototypes for higher power levels are expected in the coming couple of years, then low-rate production.
Can you elaborate on the supply chain situation and the risk it persists?
The delays are from Chinese suppliers of optics, affecting mostly commercial products. The company has been derisking China for years, but requalifying and redesigning takes time. The issue could resolve quickly or take months/quarters depending on mitigation.