NLIGHT : Q2 Earnings Presentation

Earnings Presentation

Q2 2023

August 3, 2023

This presentation contains nLIGHT, Inc. proprietary information. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from nLIGHT, Inc.

Safe Harbor Statement

Certain statements in this presentation are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Words such as "outlook," "guidance," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions may identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected revenues, gross margin, and Adjusted EBITDA, and our business strategy and ability to grow our business, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including but not limited to our ability to compete successfully in the markets for our products; changes in the markets we serve or in the global economy; our ability to increase our volumes and decrease our costs to offset potential declines in the average selling prices of our products; rapid technological changes in the markets that we participate in; our ability to develop and maintain products that can achieve market acceptance; our ability to generate sufficient revenues to achieve or maintain profitability in the future; our high levels of fixed costs and inventory and their effect on our gross profits and results of operations if demand for our products declines or we maintain excess inventory levels; widespread health crises, such as the COVID-19 pandemic, and their effect on our business, financial condition, or results of operations; our manufacturing capacity and operations and their suitability for future levels of demand; our reliance on a small number of customers for a significant portion of our revenues; our ability to manage risks associated with international customers and operations; the effect of government export and import controls on our ability to compete in international markets; our ability to protect our proprietary technology and intellectual property rights; fluctuations in our quarterly results of operations and other operating measures; and the effect on our business of claims, lawsuits, government investigations, other legal or regulatory proceedings, or commercial or contractual disputes that we are or may become involved in. Additional information concerning these and other factors can be found in nLIGHT's filings with the Securities and Exchange Commission (the "SEC"), including other risks, relevant factors and uncertainties identified in the "Risk Factors" section of nLIGHT's most recent Annual Report on Form 10-K and subsequent filings with the SEC. nLIGHT undertakes no obligation to update publicly or revise any forward-looking statements contained herein to reflect future events or developments, except as required by law.

This presentation includes certain non-GAAP financial measures as defined by the SEC rules, including Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share (diluted). These non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As required by Regulation G, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the appendix.

This presentation may also contain estimates, projections and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry and our business. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the accuracy and completeness of the information obtained by third parties included in this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.

The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the products, solutions and services of nLIGHT, Inc.

2

Q2 23 Business Highlights

• Q2 revenue above midpoint of guidance
• • $53.3M of total revenue, Products revenue of $39.6M and development revenue of $13.7M above mid-point of guidance
• Gross Margin and Adjusted EBITDA in-line with guidance
• • Products gross margin of approximately 29% at midpoint and overall gross margin of approximately 23% within range
  • Adjusted EBITDA above midpoint as a result of continued operating expense discipline
• Strong progress on automation and new outsourced semiconductor laser assembly partner
• • Achieved near-term U.S. automation output goals
  • Signed agreement with Fabrinet for additional capacity of semi lasers for commercial markets
• Growth in Defense but continued muted demand in Microfabrication and Industrial
• • Microfabrication: progress in medical lasers but muted demand globally
  • Industrial: continue to leverage Corona programmable lasers in all markets; increased adoption of process monitoring solutions for EV battery applications
  • Aerospace & Defense: kicked off new large Directed Energy program; well positioned for additional opportunities in the U.S. and internationally

3

Revenue | 95% of total revenue from non-China customers

Quarterly Revenue - Geography

$ Millions

$75																							$69	$72	$67
																					$66
																									$64
																				$62
																					$61					$61	$60
$60
										$52	$51	$46		$48	$44			$52												$57	$54	$53
$45							$35	$37	$37	$42				$42		$43	$43
$30				$26	$29	$30																		81%	89%
		$25																				89%				91%
		$22																								92%		93%
																			72%		73%									93%		95%
																						75%
																				69%
$15												67%
									64%	54%		68%	67%	62%		65%	72%	59%
												60%
									62%
								60%
							57%
					60%	60%
		71%		60%
		59%
$0
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1		Q2	Q3	Q4	Q1		Q2
			2016			2017			2018			2019			2020			2021			2022		2023

Geography

Q2 '23 vs. Q2 '22 Change -12%

China

-39%

Non-China

-10%

Percentages may not total to 100 due to rounding	4

Revenue | By end market

Quarterly Revenue - By Market

$ Millions

$75																				$62	$66		$69	$72	$67	$64
$60																					$61					24%								$61	$60
										$52	$51							$52 23%	20%	25%		29%						25%			27%								$57	$54	$53
																										27%
																												29%
											$46		$48																					20%
																																			24%
												$44																									23%
$45									$37	$42	38%	39%	$42	$43	$43 27%		36%					37%
							$37							33%
							38%
							$35					26% 24%
													30%
								37%			41%	35%			35%		35%	36%								37%
						$30																							36%						41%						31%
					$29																																37%
$30				$26			40%																																			37%
		$25			46%	45%									37% 43%
		$22
			42%	44%						41%			44% 43%	43%
		51%	46% 50%						45%	49%	38%	43%
$15
							44%												44%					38% 42%
				38% 38% 40% 42%											42%	40% 35%	36%		37%					39%					46%
			35%																							34%	39%
			33%														39%
		28%														29%
													22% 19% 26%	30%
		19% 19%	17% 20%	18%	14% 14% 16%	18%	13%	20% 21%
$0
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4		Q1		Q2
			2016			2017			2018			2019			2020			2021								2022					2023

Market

Q2 '23 vs. Q2 '22 Change -12%

Microfabrication

-26%

-25%Non-China-29%China

Industrial

-24%

-22%Non-China-56%China

Aerospace/Defense

9%

9% Products

8% Development

Percentages may not total to 100 due to rounding	5