Company: IPGP
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001111928-25-000132
Chunk: 86

Company: IPG PHOTONICS CORP
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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 to improve our existing components and products and develop new components, products, systems and applications technology. We believe that these investments will sustain our position as a leader in the fiber laser industry and will support development of new products that can address new markets and growth opportunities. The amount of research and development expense we incur may vary from period to period. 

In 2025, we increased spending in multiple areas to support our strategic initiatives and growth. Operating expenses rose as we hired additional executives and managers to strengthen management capabilities. We also invested in several key areas, including:

•software enhancements to improve the seamless integration of products and components to drive their ease of use and functionality;

•component and product cost reductions to improve profitability; 

•new product development for medical, advanced and micromachining; and

•sales and marketing to better service our customers, improve the customer experience and our new product introductions.

To set the foundation for growth, we expect such spending to remain at current or at increased levels.

Goodwill and long-lived assets impairments. We review our intangible assets and property, plant and equipment for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required 

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to be tested for impairment at least annually. Negative industry or economic trends, including reduced estimates of future cash flows, disruptions to our business, slower growth rates, lack of growth in our relevant business units, differences in the estimated product acceptance rates, or market prices below the carrying value of long-lived assets evaluated for sale could lead to impairment charges against our long-lived assets, including goodwill and other intangible assets. 

Our valuation methodology for assessing impairment requires management to make significant judgments and assumptions based on historical experience and to rely heavily on projections of future operating performance and future strategic use of our asset footprint. Also, the process of evaluating the potential impairment of goodwill is subjective. We operate in a highly competitive environment and projections of future operating results, asset usage and cash flows may vary significantly from actual results. If our analysis indicates potential impairment to goodwill in one or more of our reporting units, we may be required to record charges to earnings in our financial statements, which could negatively affect our results of operations.

Foreign exchange. Because we are a U.S.-based company doing business globally, we have both translational and transactional exposure to fluctuations in foreign currency exchange rates. Changes in the relative exchange rate between the U.S. dollar and the foreign currencies in which our subsidiaries operate directly affects our sales, costs and earnings.