Company: IPGP
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001111928-25-000069
Chunk: 43

Company: IPG PHOTONICS CORP
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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,216)(9.6)%

Materials processing sales accounted for 86% of total revenue and decreased 14% year over year, as a result of lower sales in welding and cutting applications, partially offset by higher revenue in micromachining, cleaning and additive manufacturing applications. Other applications sales increased 25% year over year driven by higher revenue in medical and advanced applications. 

Cost of sales and gross margin. Cost of sales decreased by $16.5 million, or 10.7%, to $138.0 million for the three months ended March 31, 2025 from $154.5 million for the three months ended March 31, 2024. Our gross margin increased to 39.4% for the three months ended March 31, 2025 from 38.7% for the three months ended March 31, 2024. The increase in gross margin was driven primarily by decreased provisions for excess and obsolete inventory and a decrease in unabsorbed manufacturing costs, partially offset by higher product costs, as a percentage of sales.

Sales and marketing expense. Sales and marketing expense increased by $1.4 million, or 6.1%, to $24.4 million for the three months ended March 31, 2025 from $23.0 million for the three months ended March 31, 2024. The increase is due to increases in personnel and related expenses as well as in depreciation and amortization expense. As a percentage of sales, sales and marketing expense increased to 10.7% from 9.1% for the three months ended March 31, 2025 and 2024, respectively. 

Research and development expense. Research and development expense decreased by $1.1 million, or 3.7%, to $28.3 million for the three months ended March 31, 2025, compared to $29.4 million for the three months ended March 31, 2024. The decrease is due to a gain on lease termination as well as a decrease in personnel and related expenses. The decrease in personnel and related expenses was partly attributed to the disposal of our Russian operations. As a percentage of sales, research and development expense increased to 12.4% from 11.7% for the three months ended March 31, 2025 and 2024, respectively. 

General and administrative expense. General and administrative expense increased by $1.6 million, or 5.1%, to