IPG Photonics Corp. (NASDAQ:IPGP) stock climbed Thursday after the company reported fourth-quarter results that exceeded Wall Street expectations, pushing the stock toward a fresh 52-week high.

The rally was amplified by elevated short interest, with a short float of 3.245 million shares, or 27.11% of the publicly traded float, indicating heavy bearish positioning.

Strong Financial Performance Across Segments

The company posted adjusted earnings of 46 cents per share, topping analysts' consensus estimate of 20 cents. Net sales rose 17% year over year to $274.47 million, surpassing expectations of $249.45 million, supported by gains in materials processing, medical, and advanced applications.

Materials processing accounted for 85% of revenue and increased 17% year over year, driven by welding, marking, additive manufacturing, and cleaning demand, partially offset by lower micromachining sales. Other applications grew 15%. Emerging growth products represented 54% of revenue, up from 52% in the prior quarter. Regionally, sales climbed 19% in Asia and 23% in North America, while Europe rose 6%.

Margins, Cash Position, And Capital Allocation

Adjusted gross margin declined to 37.6% from 38.8% due to higher product costs and tariffs, while GAAP gross margin fell to 36.1% from 38.6%. Adjusted EBITDA totaled $41.23 million.

The adjusted operating income for the quarter increased to $16.35 million, up from $15.85 million in the year-ago period. The margin for the quarter declined to 6.0% from 6.8% a year ago.

Cash and equivalents stood at $839.33 million. IPG spent $18 million on capital expenditures and $4 million on share repurchases, and the board authorized a new program to purchase up to $100 million shares.

Management Commentary And Outlook

CEO Dr. Mark Gitin credited the performance to the team's progress on key strategic initiatives, rising demand from additive manufacturing and battery production, and continued stabilization across industrial markets.

Gitin noted that IPG's execution showed up in the fourth-quarter book-to-bill ratio, which remained firmly above one alongside higher revenue.

He said the company is seeing improving industrial activity in the U.S. and resilient demand across Asia, while Europe remains more cautious amid lingering macroeconomic uncertainty.

He emphasized that IPG is positioned to drive further revenue growth by building on its leadership in industrial lasers and expanding into high-growth applications such as medical, micromachining, and defense.

For the first quarter, IPG expects adjusted EPS of 10–40 cents versus a 20-cent estimate, revenue of $235 million–$265 million versus $243.422 million expected, adjusted EBITDA of $25 million–$40 million, and adjusted gross margin of 37%–39%.

IPGP Price Action: IPG Photonics shares were up 15.42% at $128.00 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

Photo by Pavel Kapysh via Shutterstock

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