Company: IPGP
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001111928-25-000023
Chunk: 120

Company: IPG PHOTONICS CORP
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 120
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.1)%

Materials Processing

Sales for materials processing applications decreased primarily due to lower sales of high power CW lasers, pulsed lasers, and other laser products and services. 

•High power CW laser sales decreased due to lower sales for cutting and welding applications, and were primarily impacted by softer industrial demand and a decrease in e-mobility investments. Pulsed laser sales decreased due to lower demand in foil cutting and micro-machining applications.

Other Applications

Sales from other applications decreased primarily due to decreased demand for lasers used in medical procedures. 

Our net sales were derived from customers in the following geographic regions:

 Year Ended December 31, 20242023Change(In thousands, except for percentages)Sales by Geography% of Total% of TotalNorth America (1)$258,888 26.5 %$313,986 24.4 %$(55,098)(17.5)%Europe:Germany87,800 9.0 %88,026 6.8 %(226)(0.3)%Other Europe197,152 20.1 %291,336 22.6 %(94,184)(32.3)%Asia:China244,996 25.1 %355,321 27.6 %(110,325)(31.0)%Japan62,352 6.4 %72,333 5.6 %(9,981)(13.8)%Other Asia113,232 11.6 %142,378 11.1 %(29,146)(20.5)%Rest of World12,714 1.3 %24,059 1.9 %(11,345)(47.2)%Total$977,134 100.0 %$1,287,439 100.0 %$(310,305)(24.1)%

(1)The substantial majority of sales in North America are to customers in the United States.

Cost of sales and gross margin. Cost of sales decreased by $106.7 million, or 14.3%, to $639.0 million in 2024 from $745.7 million in 2023. Our gross margin decreased to 34.6% in 2024 from 42.1% in 2023. Gross margin decreased mainly due to increased provisions for excess and obsolete inventory, specifically additional inventory provisions of $29.5 million attributed to items previously considered safety stock and items that became