nLIGHT, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) As of June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 295,761 $ 98,699 Marketable securities 34,686 34,934 Accounts receivable, net of allowances of $488 and $520 46,825 50,836 Inventory 48,230 45,407 Prepaid expenses and other current assets 21,854 13,314 Total current assets 447,356 243,190 Restricted cash 322 322 Lease right-of-use assets 13,571 15,020 Property, plant and equipment, net 42,687 42,114 Goodwill 12,425 12,448 Other assets, net 1,228 2,116 Total assets 517,589 315,210 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable 23,946 20,890 Accrued liabilities 17,289 19,052 Deferred revenues 10,725 1,489 Current portion of lease liabilities 2,787 2,776 Line of credit — 20,000 Total current liabilities 54,747 64,207 Non-current income taxes payable 5,833 5,902 Long-term lease liabilities 12,056 13,431 Other long-term liabilities 5,050 4,921 Total liabilities 77,686 88,461 Stockholders' equity: Common stock - $0.0001 par value; 190,000 shares authorized, 57,658 and 51,163 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 17 16 Additional paid-in capital 792,595 578,360 Accumulated other comprehensive loss (3,452) (3,064) Accumulated deficit (349,257) (348,563) Total stockholders’ equity 439,903 226,749 Total liabilities and stockholders’ equity 517,589 315,210 See accompanying notes to consolidated financial statements. 1 nLIGHT, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Products $ 59,363 $ 40,824 $ 117,565 $ 76,502 Development 23,228 20,911 45,207 36,901 Total revenue 82,591 61,735 162,772 113,403 Cost of revenue: Products 34,929 25,105 67,739 48,829 Development 21,937 18,173 42,795 32,318 Total cost of revenue 56,866 43,278 110,534 81,147 Gross profit 25,725 18,457 52,238 32,256 Operating expenses: Research and development 13,130 11,012 24,976 22,386 Sales, general, and administrative 16,162 11,681 31,253 23,716 Restructuring — — 295 — Total operating expenses 29,292 22,693 56,524 46,102 Loss from operations (3,567) (4,236) (4,286) (13,846) Other income: Interest income 2,474 1,108 4,036 2,796 Interest expense (204) (388) (504) (436) Other income (expense), net 33 (58) 188 (44) Loss before income taxes (1,264) (3,574) (566) (11,530) Income tax expense 75 17 128 154 Net loss $ (1,339) $ (3,591) $ (694) $ (11,684) Net loss per share, basic and diluted $ (0.02) $ (0.07) $ (0.01) $ (0.24) Shares used in per share calculations, basic and diluted 56,983 49,581 55,560 49,338 See accompanying notes to consolidated financial statements. 2 nLIGHT, Inc. Consolidated Statements of Comprehensive Loss (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net loss $ (1,339) $ (3,591) $ (694) $ (11,684) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (105) 745 (345) 1,071 Change in unrealized gains on available-for-sale securities (2) (4) (40) (729) Comprehensive loss $ (1,446) $ (2,850) $ (1,079) $ (11,342) See accompanying notes to consolidated financial statements. 3 nLIGHT, Inc. Consolidated Statements of Stockholders' Equity (In thousands) (Unaudited) Three Months Ended June 30, 2026 Common stock Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Shares Amount Balance, March 31, 2026 56,406 $ 17 $ 780,482 $ (3,344) $ (347,918) $ 429,237 Net loss — — — — (1,339) (1,339) Issuance of common stock pursuant to exercise of stock options 38 — 67 — — 67 Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax 1,147 — — — — — Issuance of common stock under the Employee Stock Purchase Plan 67 — 1,668 — — 1,668 Stock-based compensation for equity-classified awards — — 10,377 — — 10,377 Change in unrealized gains on available-for-sale securities — — — (2) — (2) Cumulative translation adjustment, net of tax — — 1 (106) — (105) Balance, June 30, 2026 57,658 $ 17 $ 792,595 $ (3,452) $ (349,257) $ 439,903 Six Months Ended June 30, 2026 Common stock Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Shares Amount Balance, December 31, 2025 51,163 $ 16 $ 578,360 $ (3,064) $ (348,563) $ 226,749 Net loss — — — — (694) (694) Proceeds from follow-on offering, net of underwriting discount and offering costs 4,574 1 191,274 191,275 Issuance of common stock pursuant to exercise of stock options 160 — 217 — — 217 Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax 1,694 — (190) — — (190) Issuance of common stock under the Employee Stock Purchase Plan 67 — 1,668 — — 1,668 Stock-based compensation for equity-classified awards — — 21,263 — — 21,263 Change in unrealized gains on available-for-sale securities — — — (40) — (40) Cumulative translation adjustment, net of tax — — 3 (348) — (345) Balance, June 30, 2026 57,658 $ 17 $ 792,595 $ (3,452) $ (349,257) $ 439,903 4 Three Months Ended June 30, 2025 Common stock Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Shares Amount Balance, March 31, 2025 49,435 $ 16 $ 549,663 $ (3,731) $ (333,189) $ 212,759 Net loss — — — — (3,591) (3,591) Issuance of common stock pursuant to exercise of stock options 37 — 41 — — 41 Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax 255 — (1,705) — — (1,705) Issuance of common stock under the Employee Stock Purchase Plan 156 — 1,385 — — 1,385 Stock-based compensation — — 6,371 — — 6,371 Change in unrealized gains on available-for-sale securities — — — (4) — (4) Cumulative translation adjustment, net of tax — — — 745 — 745 Balance, June 30, 2025 49,883 $ 16 $ 555,755 $ (2,990) $ (336,780) $ 216,001 Six Months Ended June 30, 2025 Common stock Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Shares Amount Balance, December 31, 2024 48,948 $ 16 $ 544,842 $ (3,332) $ (325,096) $ 216,430 Net loss — — — — (11,684) (11,684) Issuance of common stock pursuant to exercise of stock options 185 — 162 — — 162 Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax 594 — (3,061) — — (3,061) Issuance of common stock under the Employee Stock Purchase Plan 156 — 1,385 — — 1,385 Stock-based compensation — — 12,427 — — 12,427 Change in unrealized gains on available-for-sale securities — — — (729) — (729) Cumulative translation adjustment, net of tax — — — 1,071 — 1,071 Balance, June 30, 2025 49,883 $ 16 $ 555,755 $ (2,990) $ (336,780) $ 216,001 5 Table of Contents nLIGHT, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ (694) $ (11,684) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 6,322 6,220 Amortization 382 865 Reduction in carrying amount of right-of-use assets 1,411 169 Provision for losses on (recoveries of) accounts receivable (36) (895) Stock-based compensation 21,849 12,427 Deferred income taxes 9 23 Loss on disposal of property, plant and equipment 47 98 Accrued interest earned on marketable securities (536) (597) Non-cash restructuring charges 50 — Changes in operating assets and liabilities: Accounts receivable, net 4,039 (8,546) Inventory (2,974) (6,949) Prepaid expenses and other current assets (8,496) 1,285 Other assets, net 499 955 Accounts payable 2,997 3,461 Accrued and other long-term liabilities (2,180) 3,165 Deferred revenues 9,238 (1,132) Lease liabilities (1,327) (252) Non-current income taxes payable (184) (18) Net cash provided by (used in) operating activities 30,416 (1,405) Cash flows from investing activities: Proceeds from sale of fixed assets — 443 Purchases of property, plant and equipment (6,963) (4,674) Purchase of marketable securities (34,173) (34,288) Proceeds from maturities and sales of marketable securities 34,918 34,136 Net cash used in investing activities (6,218) (4,383) Cash flows from financing activities: Proceeds from public offering, net of underwriting discounts 192,194 — Public offering costs (919) — Proceeds from line of credit — 20,000 Repayments of line of credit (20,000) — Proceeds from employee stock plan purchases 1,668 1,385 Proceeds from stock option exercises 217 162 Tax payments related to stock award issuances (190) (3,061) Net cash provided by financing activities 172,970 18,486 Effect of exchange rate changes on cash (106) 287 Net increase in cash, cash equivalents, and restricted cash 197,062 12,985 Cash, cash equivalents, and restricted cash, beginning of period 99,021 66,088 Cash, cash equivalents, and restricted cash, end of period $ 296,083 $ 79,073 Supplemental disclosures: Cash paid for interest, net $ 486 $ 423 Operating cash outflows from operating leases 1,711 1,738 Right-of-use assets obtained in exchange for lease liabilities (32) 1,222 Accrued purchases of property, equipment and patents 408 332 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 295,761 $ 78,812 Restricted cash 322 261 Total cash, cash equivalents, and restricted cash $ 296,083 $ 79,073 See accompanying notes to consolidated financial statements. 6 Table of Contents nLIGHT, Inc. Notes to Consolidated Financial Statements Note 1 - Basis of Presentation and New Accounting Pronouncements Basis of Presentation The accompanying unaudited consolidated financial statements of nLIGHT, Inc. and our wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The unaudited financial information reflects, in the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. Critical Accounting Policies Our critical accounting policies have not materially changed during the six months ended June 30, 2026, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. New Accounting Pronouncements ASU 2024-03 In November 2024, the FASB issued ASU 2024-03 related to the disaggregation of certain income statement expenses. The amendments in this update require public entities to disclose incremental information related to purchases of inventory, team member compensation and depreciation, which will provide investors the ability to better understand entity expenses and make their own judgments about entity performance. The amendments in this update are effective for fiscal years beginning after December 15, 2026. We plan to adopt this pronouncement and make the necessary updates to our disclosures for the year ending December 31, 2027, and, aside from these disclosure changes, we do not expect the amendments to have a material effect on our financial position, results of operations or cash flows. ASU 2025-10 In December 2025, the FASB issued ASU 2025‑10 related to government grants received by business entities. The amendments in this update establish recognition, measurement, presentation, and disclosure guidance for government grants and require such grants to be recognized only when it is probable that the entity will comply with the related conditions and that the grant will be received. The amendments in this update are effective for annual periods beginning after December 15, 2028. We are evaluating the amendments and expect to adopt the guidance when it becomes effective. We do not expect the amendments to have a material effect on our financial position, results of operations, or cash flows. ASU 2025-11 In December 2025, the FASB issued ASU 2025-11 related to interim reporting. The amendments in this update clarify and streamline interim reporting disclosure requirements. The amendments are effective for interim reporting periods within fiscal years beginning after December 15, 2027 for public business entities. We are evaluating the amendments and expect to adopt the guidance when it becomes effective. We do not expect the adoption of ASU 2025‑11 to have a material impact on our financial position, results of operations or cash flows. Note 2 - Revenue We recognize revenue upon transferring control of products and services and the amounts recognized reflect the consideration we expect to be entitled to receive in exchange for these products and services. We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of our consideration of the contract, we evaluate certain factors, including the customer's ability to pay (or credit risk). For each contract, we consider the promise to transfer products, each of which is distinct, as the identified performance obligations. We allocate the transaction price to each distinct product based on its relative standalone selling price. Master sales agreements or purchase orders from customers could include a single product or multiple products. Regardless, the 7 Table of Contents contracted price with the customer is agreed to at the individual product level outlined in the customer contract or purchase order. We do not bundle prices; however, we do negotiate with customers on pricing for the same products based on a variety of factors (e.g., level of contractual volume). We have concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product. We often receive orders with multiple delivery dates that may extend across several reporting periods. We allocate the transaction price of the contract to each delivery based on the product standalone selling price and invoice for each scheduled delivery upon shipment or delivery and recognize revenues for such delivery at that point, when transfer of control has occurred. As scheduled delivery dates are generally within one year, under the optional exemption provided by ASC 606-10-50-14a, revenues allocated to future shipments of partially completed contracts are not disclosed as performance obligations for point in time revenue. Further, we recognize, over time, revenue as per ASC 606-10-55-18 (invoice practical expedient) for our cost plus contracts and, accordingly, elect not to disclose information related to those performance obligations under ASC 606-10-50-14b. As of June 30, 2026, we had $1.5 million of performance obligations relating to firm fixed price contracts that did not qualify for the aforementioned disclosure exemptions. We expect to recognize 75% of these performance obligations by the end of 2026 and the remainder by the end of 2027. We have elected, per ASC 606-10-25-18B (shipping and handling practical expedient), to recognize shipping and handling services performed after control transfer as fulfillment costs. Rights of return generally are not included in customer contracts. Accordingly, product revenue is recognized upon transfer of control at shipment or delivery, as applicable. Rights of return are evaluated as they occur. Revenues recognized at a point in time consist of sales of semiconductor lasers, fiber amplifiers, fiber lasers and other related products. Revenues recognized over time generally consist of development arrangements that are structured based on our costs incurred. For long-term contracts, we estimate the total expected costs to complete the contract and recognize revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors costs, other direct costs, and indirect costs applicable on government and commercial contracts. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. Billing under these arrangements generally occurs within one month of the costs being incurred or as milestones are reached. The following tables represent a disaggregation of revenue from contracts with customers for the periods presented (in thousands): Sales by End Market Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Aerospace and Defense 57,298 40,695 112,425 73,401 Industrial 12,042 9,746 24,067 18,602 Microfabrication 13,251 11,294 26,280 21,400 $ 82,591 $ 61,735 $ 162,772 $ 113,403 8 Table of Contents Sales by Geography Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 North America $ 59,498 $ 45,171 $ 118,753 $ 81,256 Asia Pacific 9,186 8,662 21,058 17,790 EMEA(1) 13,907 7,902 22,961 14,357 $ 82,591 $ 61,735 $ 162,772 $ 113,403 (1) EMEA consists of Europe, the Middle East, and Africa. Sales by Timing of Revenue Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Point in time $ 57,969 $ 40,774 $ 114,977 $ 76,454 Over time 24,622 20,961 47,795 36,949 $ 82,591 $ 61,735 $ 162,772 $ 113,403 Our contract assets and liabilities were as follows (in thousands): Balance Sheet Classification As of June 30, 2026 December 31, 2025 Contract assets Prepaid expenses and other current assets $ 15,804 $ 6,188 Contract liabilities Deferred revenues and other long-term liabilities 16,254 5,566 Contract assets generally consist of revenue recognized on an over-time basis where revenue recognition has been met, but the amounts are billed and collected in a subsequent period. In our services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities recorded in deferred revenues on the Consolidated Balance Sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. For our product revenue, we generally receive cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. For our contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration. During the three and six months ended June 30, 2026, we recognized revenue of $0.3 million and $1.9 million that was included in the deferred revenues balance at the beginning of the period as the performance obligations under the associated agreements were satisfied. 9 Table of Contents Note 3 - Concentrations of Credit and Other Risks The following customers accounted for 10% or more of our revenues for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 U.S. Government* 37% 39% 37% 37% Raytheon Technologies 12% (1) 11% (1) *Excludes sales to customers who sell our products and services exclusively to the U.S. Government (1) Represents less than 10% of total revenues. Financial instruments that potentially expose us to concentrations of credit risk consist principally of receivables from customers. As of June 30, 2026, one customer accounted for a total of 30% of our net customer receivables. No other customers accounted for 10% or more of net customer receivables at this date. As of December 31, 2025, no customer accounted for 10% or more of our net customer receivables. Note 4 - Fair Value of Financial Instruments The carrying amounts of certain of our financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities are shown at cost which approximates fair value due to the short-term nature of these instruments. The fair value of our term and revolving loans approximates the carrying value due to the variable market rate used to calculate interest payments. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: •Level 1 Inputs: Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date. •Level 2 Inputs: Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. •Level 3 Inputs: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Our financial instruments that are carried at fair value consist of Level 1 assets which include highly liquid investments and bank drafts classified as cash equivalents and marketable securities. Our fair value hierarchy for our financial instruments was as follows (in thousands): June 30, 2026 Level 1 Level 2 Level 3 Total Cash Equivalents: Money market securities $ 145,072 $ — $ — $ 145,072 Commercial paper 1,206 — — 1,206 146,278 — — 146,278 Marketable Securities: U.S. treasuries 34,686 — — 34,686 Total $ 180,964 $ — $ — $ 180,964 10 Table of Contents December 31, 2025 Level 1 Level 2 Level 3 Total Cash Equivalents: Money market securities $ 22,761 $ — $ — $ 22,761 Commercial paper 2,232 — — 2,232 24,993 — — 24,993 Marketable Securities: U.S. treasuries 34,934 — — 34,934 Total $ 59,927 $ — $ — $ 59,927 Cash Equivalents The fair value of cash equivalents is determined based on quoted market prices for similar or identical securities. Marketable Securities Marketable securities consist primarily of highly liquid investments with original maturities of greater than 90 days when purchased. We classify our marketable securities as available-for-sale, as they represent investments that are available to be sold for current operations, and value them utilizing a market approach that uses observable inputs without applying significant judgment. Note 5 - Inventory Inventory is stated at the lower of average cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory includes raw materials and components that may be specialized in nature and subject to obsolescence. On a quarterly basis, we review inventory quantities on hand in comparison to our past consumption, recent purchases, and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we write down the affected inventory value for estimated excess and obsolescence charges. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Inventory consisted of the following (in thousands): As of June 30, 2026 December 31, 2025 Raw materials $ 28,092 $ 23,064 Work in process and semi-finished goods 17,833 19,408 Finished goods 2,305 2,935 $ 48,230 $ 45,407 Note 6 - Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): 11 Table of Contents Useful life As of (years) June 30, 2026 December 31, 2025 Automobiles 3 $ 64 $ 64 Computer hardware and software 3 - 5 9,623 9,399 Manufacturing and lab equipment 2 - 7 88,095 83,547 Office equipment and furniture 5 - 7 1,779 1,774 Leasehold and building improvements 2 - 12 36,861 34,861 Buildings 30 9,392 9,392 Land N/A 3,399 3,399 149,213 142,436 Accumulated depreciation (106,526) (100,322) $ 42,687 $ 42,114 Note 7 - Goodwill Goodwill The carrying amount of goodwill by segment was as follows (in thousands): Laser Products Advanced Development Totals Balance, December 31, 2025 $ 2,200 $ 10,248 $ 12,448 Currency exchange rate adjustment (23) — (23) Balance, June 30, 2026 $ 2,177 $ 10,248 $ 12,425 Note 8 - Line of Credit We have a $40.0 million revolving line of credit (LOC) with Banc of California dated September 24, 2018, which is secured by our assets and matures on September 24, 2027. The LOC agreement contains restrictive and financial covenants and bears an unused credit fee of 0.25% on an annualized basis. The interest rate of 5.75% on the LOC at June 30, 2026 is based on the Prime Rate, minus a margin based on our liquidity levels. During the three months ended June 30, 2026, we repaid the $20.0 million we had previously drawn under the LOC. As of June 30, 2026, no amount was outstanding on the LOC and we were in compliance with all covenants. Interest expense on the LOC for the three and six months ended June 30, 2026 was $0.2 million and $0.5 million. The full $40.0 million unused portion of the LOC is available for borrowing. Note 9 - Accrued Liabilities Accrued liabilities consisted of the following (in thousands): As of June 30, 2026 December 31, 2025 Accrued payroll and benefits $ 13,488 $ 14,845 Product warranty, current 3,173 3,147 Other accrued expenses 628 1,060 $ 17,289 $ 19,052 Note 10 - Product Warranties We provide warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based on historical experience, any specifically identified failures, and our estimate of future costs. The current portion of our product warranty liability is 12 Table of Contents included in the accrued liabilities and the long-term portion is included in Other long-term liabilities in our Consolidated Balance Sheets. Product warranty liability activity was as follows for the periods presented (in thousands): Six Months Ended June 30, 2026 2025 Product warranty liability, beginning $ 4,263 $ 3,473 Warranty charges incurred, net (1,103) (1,497) Provision for warranty charges, net of adjustments 1,034 2,079 Product warranty liability, ending 4,194 4,055 Less: current portion of product warranty liability (3,173) (2,884) Non-current portion of product warranty liability $ 1,021 $ 1,171 Note 11 - Stockholders' Equity and Stock-Based Compensation Public Offering In February 2026, we completed an underwritten public offering in which we issued and sold 4.6 million shares of our common stock, resulting in gross proceeds of $201.3 million. The aggregate number of shares of common stock offered in the offering included 0.6 million shares of common stock sold pursuant to the full exercise of the underwriters' option to purchase additional shares. Net proceeds after the underwriting discount and offering costs were $191.3 million. Restricted Stock Units Restricted stock unit (RSU) activity under our equity incentive plan was as follows: Number of Restricted Stock Units (Thousands) Weighted-Average Grant Date Fair Value Balance, December 31, 2025 1,801 $ 14.69 Granted 173 66.88 Vested (747) 14.08 Forfeited (40) 19.65 Balance, June 30, 2026 1,187 22.51 The total fair value of RSUs vested during the six months ended June 30, 2026, was $10.5 million. RSUs vest over time subject to the employee's continuing service. During the three months ended June 30, 2026, $0.6 million of previously equity-classified awards were settled in cash. As of June 30, 2026, no liability-classified awards were outstanding. Market-Based Performance Restricted Stock Units During the three months ended June 30, 2026, the payout factor for our market-based performance restricted stock units ("2023 PRSUs") granted in 2023 was measured. The number of shares that a participant receives is equal to the number of PRSUs granted multiplied by a payout factor ranging from 0% to 200%. The performance criteria that determines the payout factor is our Total Shareholder Return ("TSR") for a performance period of three years beginning on April 1, 2023 relative to the TSR of companies in the Russell 2000 Index. The payout factor for our 2023 PRSUs was measured at 200%. The table below includes details regarding the measurement and vesting of our 2023 PRSUs and subsequent issuance of shares (in thousands, except payout factor): 13 Table of Contents Fiscal Year Granted 2023 2023 PRSUs outstanding at measurement date 475 Performance period April 1, 2023 - March 31, 2026 Vesting date May 14, 2026 Payout factor 200% Number of shares issued 950 During the six months ended June 30, 2026, no PRSU awards were granted. As of June 30, 2026, there were approximately 3.1 million PRSU awards outstanding. Stock Options The following table summarizes our stock option activity during the six months ended June 30, 2026: Number of Options (Thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Thousands) Outstanding, December 31, 2025 611 $1.53 1.4 $21,964 Options exercised (161) 1.36 Outstanding, June 30, 2026 450 1.59 0.9 30,636 Options exercisable at June 30, 2026 450 1.59 0.9 30,636 Options vested as of June 30, 2026, and expected to vest after June 30, 2026 450 1.59 0.9 30,636 Total intrinsic value of options exercised for the six months ended June 30, 2026 and 2025, was $8.8 million and $1.8 million, respectively. We received proceeds of $0.2 million and $0.2 million from the exercise of options for the six months ended June 30, 2026 and 2025, respectively. Stock-Based Compensation Total stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenues $ 1,217 $ 598 $ 2,271 $ 1,168 Research and development 2,682 1,834 4,943 3,618 Sales, general and administrative 7,064 3,939 14,635 7,641 $ 10,963 $ 6,371 $ 21,849 $ 12,427 Unrecognized Compensation Costs As of June 30, 2026, total unrecognized stock-based compensation was $72.9 million, which will be recognized over an average expected recognition period of 2.0 years. 14 Table of Contents Note 12 - Commitments and Contingencies Leases See Note 13. Legal Matters From time to time, we may be subject to various legal proceedings and claims in the ordinary course of business. As of June 30, 2026 we believe these matters will not have a material adverse effect on our consolidated financial statements. Note 13 - Leases We lease real estate space under non-cancelable operating lease agreements for commercial and industrial space. Facilities-related operating leases have remaining terms of 0.2 to 8.9 years, and some leases include options to extend up to 10 years. Other leases for automobiles, manufacturing and office and computer equipment have remaining lease terms of 0.2 to 4.5 years. These leases are primarily operating leases; financing leases are not material. We did not include any renewal options in our lease terms for calculating the lease liabilities as we are not reasonably certain we will exercise the options at this time. The weighted-average remaining lease term for the lease obligations was 6 years as of June 30, 2026, and the weighted-average discount rate was 5.0%. The components of lease expense related to operating leases were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Lease expense: Operating lease expense $ 859 $ 763 $ 1,941 $ 1,579 Short-term lease expense 120 73 257 117 Variable and other lease expense 306 286 642 559 $ 1,285 $ 1,122 $ 2,840 $ 2,255 Future minimum payments under our non-cancelable lease obligations were as follows as of June 30, 2026 (in thousands): 2026 $ 1,813 2027 3,252 2028 2,776 2029 1,925 2030 1,966 Thereafter 5,608 Total minimum lease payments 17,340 Less: interest (2,497) Present value of net minimum lease payments 14,843 Less: current portion of lease liabilities (2,787) Total long-term lease liabilities $ 12,056 15 Table of Contents Note 14 - Restructuring There were no restructuring charges for the three months ended June 30, 2026 and 2025. Restructuring charges in the first quarter of 2026 consist of lease exit and termination costs related to excess manufacturing space as follows (in thousands): Six Months Ended June 30, 2026 2025 Other 295 — Total restructuring charges $ 295 $ — Restructuring accruals and payments were as follows (in thousands): Accrued restructuring charges at December 31, 2024 $ 1,122 Restructuring charges 2,348 Cash payments (2,045) Non-cash settlements (1,207) Accrual at December 31, 2025 218 Restructuring charges 295 Cash payments (463) Accrual at June 30, 2026 $ 50 The restructuring accrual was included as a component of Accrued Liabilities on our Consolidated Balance Sheets. All of the restructuring charges recorded in 2026 were attributable to the Laser Products segment. Note 15 - Segment Information We operate in two reportable segments consisting of the Laser Products segment and the Advanced Development segment. We organize our business segments based on the nature of products and services offered. Laser Products This segment includes the design, development, production and integration of high-power semiconductor lasers and fiber lasers and related components, modules and subsystems that are typically integrated into laser systems or manufacturing tools built by us or our customers for use in a range of commercial and defense applications. This segment also includes fiber amplifiers and beam combination and control systems for use in high-energy laser (HEL) systems in directed energy applications, and laser sensing products used in a wide range of defense applications. Advanced Development This segment focuses on technology integration as well as research, design, and prototyping of next-generation laser technologies for the defense industry, including the development of custom high-power fiber lasers and advanced beam combining technologies. Segment Financial Data Our Chief Executive Officer serves as the chief operating decision maker (CODM) and is responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODM uses revenue, gross profit, and gross margin to evaluate each segment's performance by comparing the metrics to historical results and previously forecasted financial information. Segment gross profit is the primary measure of segment profit or loss, and cost of revenue is the only significant expense category, and therefore we have no other segment items. In addition, our CODM does not evaluate operating segments using asset or liability information. The following table summarizes the operating results by reportable segment for the periods presented (dollars in thousands): 16 Table of Contents Three Months Ended June 30, 2026 2025 Laser Products Advanced Development Total Laser Products Advanced Development Total Revenue $ 59,363 $ 23,228 $ 82,591 $ 40,824 $ 20,911 $ 61,735 Cost of revenue (34,167) (21,482) (24,507) (18,173) Segment gross profit $ 25,196 $ 1,746 $ 26,942 $ 16,317 $ 2,738 $ 19,055 Segment gross margin 42.4 % 7.5 % 40.0 % 13.1 % Other cost of revenue 1,217 598 Gross profit 25,725 18,457 Total operating expenses (29,292) (22,693) Interest income 2,474 1,108 Interest expense (204) (388) Other income, net 33 (58) Income (loss) before income taxes $ (1,264) $ (3,574) Six Months Ended June 30, 2026 2025 Laser Products Advanced Development Total Laser Products Advanced Development Total Revenue $ 117,565 $ 45,207 $ 162,772 $ 76,502 $ 36,901 $ 113,403 Cost of revenue (66,387) (41,876) (47,661) (32,318) Segment gross profit $ 51,178 $ 3,331 $ 54,509 $ 28,841 $ 4,583 $ 33,424 Segment gross margin 43.5 % 7.4 % 37.7 % 12.4 % Other cost of revenue 2,271 1,168 Gross profit 52,238 32,256 Total operating expenses (56,524) (46,102) Interest income 4,036 2,796 Interest expense (504) (436) Other income, net 188 (44) Income (loss) before income taxes $ (566) $ (11,530) Other cost of revenue consists of stock-based compensation expense, which is not used in evaluating the results of, or in the allocation of resources to, our reportable segments. There have been no material changes to the geographic locations of our long-lived assets, net, based on the location of the assets, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. Note 16 - Net Loss per Share Basic and diluted net loss and the number of shares used for basic and diluted net loss calculations were the same for all periods presented because we were in a loss position. The following potentially dilutive securities were not included in the calculation of diluted shares as the effect would have been anti‑dilutive (in thousands): 17 Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Restricted stock units 4,858 966 5,116 926 Common stock options 467 607 505 642 5,325 1,573 5,621 1,568 18 Table of Contents