IPG Photonics Corp (IPGP) 2024 Q1 法說會逐字稿

Good morning, and welcome to IPG Photonics' First Quarter 2024 Conference Call. Today's call is being recorded and webcast.

早安，歡迎參加 IPG Photonics 2024 年第一季電話會議。今天的通話正在錄音並進行網路直播。

At this time, I'd like to turn the call over to your host, Eugene Fedotoff, IPG's Senior Director, Investor Relations, for introductions. Please go ahead with your conference.

現在，我想將電話轉給主持人、IPG 投資者關係高級總監尤金·費多夫 (Eugene Fedotoff) 進行介紹。請繼續您的會議。

Thank you, Rob, and good morning, everyone. With me today is IPG Photonics' CEO, Dr. Eugene Scherbakov; and Senior Vice President and CFO, Tim Mammen.

謝謝你，羅布，大家早安。今天與我在一起的是 IPG Photonics 執行長 Eugene Scherbakov 博士；以及資深副總裁兼財務長 Tim Mammen。

Let me remind you that statements made during the course of this call that discuss management's or the company's intentions, expectations or predictions of the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause the company's actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties are detailed in IPG Photonics' Form 10-K for the period ended December 31, 2023 and other reports on file with the Securities and Exchange Commission. Copies of these filings may be obtained by visiting the Investors section of IPG's website or on the SEC's website.

讓我提醒您，在本次電話會議期間發表的討論管理層或公司的意圖、期望或對未來的預測的聲明均為前瞻性聲明。這些前瞻性陳述存在風險和不確定性，可能導致公司的實際結果與此類前瞻性陳述中的預測有重大差異。這些風險和不確定性詳見 IPG Photonics 截至 2023 年 12 月 31 日期間的 10-K 表格以及向美國證券交易委員會提交的其他報告。可透過造訪 IPG 網站或 SEC 網站的投資者部分取得這些文件的副本。

Any forward-looking statements made on this call are the company's expectations or predictions as of today, April 30, 2024, only and the company assumes no obligation to publicly release any updates or revisions to any such statements. For additional details on our reported results, please refer to the earnings press release, earnings call presentation and the financial data workbook posted on our investor relations website. We will also post these prepared remarks on the website following the completion of this call.

本次電話會議中所做的任何前瞻性陳述僅是本公司截至今天（2024 年 4 月 30 日）的預期或預測，本公司不承擔公開發布任何此類陳述的任何更新或修訂的義務。有關我們報告結果的更多詳細信息，請參閱收益新聞稿、收益電話會議演示以及我們投資者關係網站上發布的財務數據工作簿。電話會議結束後，我們也會在網站上發布這些準備好的評論。

With that, I'll now turn the call over to Eugene Scherbakov.

現在，我將把電話轉給尤金·謝爾巴科夫 (Eugene Scherbakov)。

Good morning, everyone. In addition to our earnings release, we announced a leadership transition this morning. Let me start by commenting on the quarterly results first and then I will speak about the CEO change later in the call. In the first quarter, we continued to generate strong operating cash flow, reduced inventories, managed product costs and returned capital to shareholders. We achieved this while facing soft demand in general industrial manufacturing and e-mobility end markets, which together represented over 60% of our total sales and negatively impacted revenue across many applications.

大家，早安。除了發布財報外，我們今天早上還宣布了領導層換屆。讓我先評論季度業績，然後我將在稍後的電話會議中談論執行長的變更。第一季度，我們持續產生強勁的營運現金流、減少庫存、管理產品成本並向股東返還資本。我們實現這一目標的同時，也面臨著一般工業製造和電動車終端市場的疲軟需求，這兩個市場合計占我們總銷售額的 60% 以上，並對許多應用的收入產生了負面影響。

Our book- to-bill was above one and we believe that we are seeing a bottom in demand with a potential modest improvement toward the end of the year. At the same time, we remain focused on execution of our long-term strategy to displace other laser or nonlaser tools with our fiber lasers and grow revenue in a number of focus applications such as welding, cleaning, heating and medical, diversifying away from more competitive applications such as cutting and marking.

我們的訂單出貨比高於 1，我們相信需求已見底，到年底可能會出現適度改善。同時，我們仍然專注於執行我們的長期策略，用我們的光纖雷射取代其他雷射或非雷射工具，並在焊接、清潔、加熱和醫療等許多重點應用領域增加收入，實現多元化具有競爭力的應用，例如切割和打標。

Revenue in our emerging growth products accounted for 45% of total sales in the first quarter. These laser products and solutions can provide significant improvements in speed and quality of manufacturing processes while reducing energy consumption and other environmental impacts. I will cover highlights and comment on revenue by applications first and Tim will cover our financial results in more details.

我們的新興成長產品營收佔第一季總銷售額的45%。這些雷射產品和解決方案可以顯著提高製造過程的速度和質量，同時減少能源消耗和其他環境影響。我將首先介紹亮點並評論應用程式的收入，蒂姆將更詳細地介紹我們的財務業績。

Starting with our largest application, welding revenue declined year over year, primarily due to lower demand from e-mobility customers. Significant reduction in new battery investments in China, compared to the prior year, and delayed EV battery projects in North America reduced demand for our welding products and solutions. At the same time, we believe that we are able to gain some market share in EV welding, closing new business opportunities both with significant new customers and in new applications.

從我們最大的應用開始，焊接收入比去年同期下降，主要是由於電動車客戶的需求下降。與前一年相比，中國的新電池投資大幅減少，北美電動車電池計畫的延遲也減少了對我們焊接產品和解決方案的需求。同時，我們相信我們能夠在電動車焊接領域獲得一定的市場份額，從而在重要的新客戶和新應用中實現新的商機。

Additionally, we are working with a number of leading automotive manufacturers on new fiber laser applications in batteries and general automotive assembly. We remain optimistic that EV battery investments may increase again toward the end of 2024 into 2025, resuming a multi-year trend of building out required battery capacity to support the transition from internal combustion vehicles to battery electric cars or plug-in hybrids.

此外，我們還與許多領先的汽車製造商合作，開發新型光纖雷射在電池和通用汽車組裝中的應用。我們仍然樂觀地認為，電動車電池投資可能會在2024 年底至2025 年期間再次增加，恢復建立所需電池產能的多年趨勢，以支持從內燃機汽車向電池電動汽車或插電式混合動力汽車的過渡。

Additionally, we were pleased to see a pickup in demand from consumer electronics battery applications as well as growth in welding revenue in general automotive and general industrial applications. Adoption of our real time welding monitoring system and complete automated welding solutions are also showing good results.

此外，我們很高興看到消費性電子電池應用的需求回升以及一般汽車和一般工業應用的焊接收入的成長。採用我們的即時焊接監控系統和完整的自動化焊接解決方案也顯示出良好的效果。

Our handheld welder sales slowed in North America in the quarter with some smaller customers being impacted by uncertainty in demand and higher financing costs, but order pipeline and customer interest remain strong. In addition, we are starting to ship these devices to Miller Electric, which will help handheld welder sales in the second quarter and will have a more measurable impact in the second half of the year.

本季我們在北美的手持焊接機銷售放緩，一些較小的客戶受到需求不確定性和融資成本上升的影響，但訂單管道和客戶興趣仍然強勁。此外，我們開始向米勒電氣運送這些設備，這將有助於第二季度手持焊接機的銷售，並將在下半年產生更可衡量的影響。

Sale in cutting applications declined in the first quarter due to continued soft industrial demand across all major geographies. Large OEM customers were managing their inventories, which negatively impacted our cutting sales in Europe, North America and Japan.

由於所有主要地區的工業需求持續疲軟，第一季切割應用的銷售量有所下降。大型 OEM 客戶正在管理庫存，這對我們在歐洲、北美和日本的銷售產生了負面影響。

Market conditions remain difficult, but appear to be more stable compared to the last several quarters and we expect that improvements in general economic conditions and reduced customer inventories should result in more stable demand in the second half of the year.

市場狀況仍然困難，但與過去幾季相比似乎更加穩定，我們預計總體經濟狀況的改善和客戶庫存的減少應會導致下半年的需求更加穩定。

Foil cutting sales also remained soft due to weak demand in e-mobility, but our systems sales showed some improvement year over year. In other materials processing applications, cleaning sales were negatively impacted by softer demand in e-mobility, but we are making progress introducing our cleaning solutions across many general manufacturing applications.

由於電動車需求疲軟，箔切割銷售也保持疲軟，但我們的系統銷售較去年同期有所改善。在其他材料加工應用中，清潔銷售受到電動車需求疲軟的負面影響，但我們在許多通用製造應用中推出清潔解決方案方面取得了進展。

Cleaning revenue has been increasing and the application is becoming a meaningful contributor to total sales. While still relatively small, heating and drying lasers is another area of future growth for IPG. The application delivered strong increase in sales this quarter as we shipped a large order for foil drying to an e-mobility customer.

清潔收入一直在增加，該應用程式正在成為總銷售額的重要貢獻者。雖然加熱和乾燥雷射仍然相對較小，但它是 IPG 未來成長的另一個領域。該應用程式在本季度實現了銷售額的強勁增長，因為我們向電動車客戶運送了一大筆鋁箔乾燥訂單。

Additionally, we are working with a number of large manufacturers from across a number of application areas to build innovative heating and drying solutions to suit their needs. Finally, revenue increased in 3D printing applications as the industry is using a large number of high-quality lasers to melt metal powder to create parts.

此外，我們也與多個應用領域的多家大型製造商合作，建構創新的加熱和乾燥解決方案，以滿足他們的需求。最後，隨著該行業使用大量高品質雷射熔化金屬粉末來製造零件，3D 列印應用的收入增加。

IPG has a strong position in this market, providing lasers with high stability beam characteristics. Outside of materials processing, other applications revenue declined due to the lower sales in medical and advanced applications.

IPG 在該市場中擁有強大的地位，提供具有高穩定性光束特性的雷射。除材料加工之外，由於醫療和先進應用領域的銷售下降，其他應用領域的收入也下降。

Our medical business was negatively impacted by a large customer managing inventories in the first quarter. We expect medical revenue to normalize in the second quarter and we are working on several new opportunities that will launch in 2025 and 2026 and should help this business to grow and become a more meaningful contributor to IPG's total sales.

我們的醫療業務在第一季受到大客戶管理庫存的負面影響。我們預計醫療收入將在第二季正常化，我們正在尋找將於2025 年和2026 年推出的幾個新機會，這些機會將有助於該業務成長並成為IPG 總銷售額的更有意義的貢獻者。

Before I turn the call to Tim, I will provide a few comments on the leadership transition we announced this morning. I would like to welcome Mark Gitin as IPG's next CEO. The Board performed an extensive search and selection process and chose Mark Gitin because he possesses a unique combination of relevant scientific expertise and a proven ability as a successful operator in our industry. I look forward to helping him to make the transition seamless for our customers, employees and other stakeholders.

在打電話給蒂姆之前，我將就我們今天早上宣布的領導層換屆發表一些評論。我熱烈歡迎 Mark Gitin 成為 IPG 的下一任執行長。董事會進行了廣泛的搜尋和選擇過程並選擇了 Mark Gitin，因為他擁有相關科學專業知識的獨特組合以及作為我們行業成功運營商的經過驗證的能力。我期待著幫助他為我們的客戶、員工和其他利害關係人實現無縫過渡。

I also would like to thank the IPG team for its contributions over the last 30 years. I was fortunate enough to be a part of the team that transformed the laser industry and helped IPG to become a global industry leader. I believe that the best opportunities are still ahead for IPG, and fiber lasers will continue to displace other technologies, driving future growth for the company.

我還要感謝 IPG 團隊在過去 30 年所做的貢獻。我很幸運能夠成為改變雷射產業並幫助 IPG 成為全球產業領導者的團隊的一員。我相信，對於 IPG 來說，最好的機會仍在前方，光纖雷射將繼續取代其他技術，推動公司未來的成長。

I will miss my day-to-day interactions with my IPG colleagues, but I make this transition knowing that we have accomplished great things. This will be my last earnings call, but I will remain on the Board supporting the next leg of the journey for IPG and I will also be involved as an advisor to Mark and to the Board.

我會懷念與 IPG 同事的日常互動，但我知道我們已經取得了偉大的成就，因此我做出了這一轉變。這將是我最後一次財報電話會議，但我將繼續留在董事會，支持 IPG 的下一步發展，我也將作為 Mark 和董事會的顧問參與其中。

With that, I will now turn the call over to Tim to discuss financial results.

現在，我將把電話轉給提姆，討論財務表現。

Thank you, Eugene, and good morning, everyone. My comments generally will follow the earnings call presentation, which is available on our investor relations website.

謝謝尤金，大家早安。我的評論通常會在收益電話會議的演示之後進行，該演示可以在我們的投資者關係網站上找到。

I will start with the financial review on Slide 5. Despite the headwinds to our revenue, I am pleased with the resilience of our financial model and the company's ability to generate strong cash flow from operations to support current and future investments as well as continued opportunistic share repurchases.

我將從幻燈片 5 的財務審查開始。回購。

Revenue in the first quarter was $252 million, a decline of 27% year over year. Foreign currency headwinds reduced revenue growth by approximately 2%. Revenue from materials processing applications decreased 28% year over year, while revenue from other applications decreased 25%.

第一季營收為2.52億美元，年減27%。外匯不利因素導致收入成長下降約 2%。材料加工應用的收入年減 28%，其他應用的收入下降 25%。

GAAP gross margin was 38.7%, a decrease of 360 basis points year over year due to lower absorption of manufacturing costs, as a result of lower revenue, and higher inventory provisions. These negative impacts were partially offset by improved product costs, mostly as a result of product mix, and lower shipping and tariff costs.

GAAP 毛利率為 38.7%，年減 360 個基點，原因是收入下降和庫存撥備增加導致製造成本吸收減少。這些負面影響被產品成本的提高（主要是由於產品組合）以及運輸和關稅成本的降低所部分抵消。

On a sequential basis, gross margin improved, due to lower product cost, a decrease in expenses related to scrap and duty, which were partially offset by an increase in inventory provisions and unabsorbed manufacturing expenses expressed as a percent of revenue.

環比來看，毛利率有所改善，原因是產品成本降低、廢品和關稅相關費用減少，但庫存撥備和未吸收製造費用佔收入百分比的增加部分抵消了毛利率的下降。

Operating expenses came in at the high end of our expectations and increased both year over year and sequentially, primarily in research and development and sales and marketing, as we invested in resources to drive future growth while still controlling general and administrative expenses.

營運費用達到了我們預期的上限，並且逐年和連續增長，主要是在研發以及銷售和行銷方面，因為我們投資資源以推動未來成長，同時仍然控制一般和管理費用。

FX headwinds also had a negative impact on revenue and gross profit in the quarter. If exchange rates relative to the U.S. dollar had been the same as 1 year ago, we would have expected revenue to be $8 million higher and gross profit to be $5 million higher. GAAP operating income was $19 million and operating margin was 7.6%. Net income was $24 million, or $0.52 per diluted share. The effective tax rate in the quarter was 28%.

外匯逆風也對該季度的收入和毛利產生了負面影響。如果相對於美元的匯率與 1 年前相同，我們預計收入將增加 800 萬美元，毛利將增加 500 萬美元。 GAAP 營業收入為 1,900 萬美元，營業利潤率為 7.6%。淨利潤為 2,400 萬美元，或攤薄後每股收益 0.52 美元。本季的有效稅率為28%。

Foreign currency transaction losses related to remeasuring foreign currency assets and liabilities to period-end exchange rates, had a negative impact on operating income of $2 million, or $0.03 per share. We continued to optimize our footprint and, as a result, we sold 2 buildings during the quarter. The gain on sale of these assets increased operating income by $7 million and increased diluted EPS by $0.11.

與根據期末匯率重新計量外幣資產和負債相關的外幣交易損失，對營業收入產生了 200 萬美元的負面影響，即每股 0.03 美元。我們繼續優化我們的足跡，因此，我們在本季出售了 2 棟建築。出售這些資產的收益使營業收入增加了 700 萬美元，稀釋後每股收益增加了 0.11 美元。

Moving to revenue performance by region on Slide 6. Sales in North America decreased 16%. We saw a decline in revenue in medical, welding, cleaning and advanced applications, partially offset by growth in cutting systems and increased revenue in parts and services. Uncertainty in the general demand environment and lower e-mobility sales as well as cutting OEMs and medical customers managing inventories were the main reasons behind the decline in North America.

轉到幻燈片 6 上按地區劃分的收入表現。我們看到醫療、焊接、清潔和先進應用領域的收入下降，但部分被切割系統的成長以及零件和服務收入的增加所抵消。整體需求環境的不確定性、電動車銷售的下降以及原始設備製造商和醫療客戶管理庫存的削減是北美地區銷售下滑的主要原因。

In Europe, sales decreased 21% as growth in welding was more than offset by reduced sales in cutting applications due to large cutting OEM customers reducing purchases to manage inventories. Demand in 3D printing applications was also soft in the region. Economic conditions in Europe remain challenging, but we saw some improvements in e-mobility sales and benefited from a continued rollout of LightWELD in the region.

在歐洲，銷售額下降了 21%，焊接領域的成長被切割應用領域的銷售下降所抵消，而切割應用領域的銷售額下降是由於大型切割 OEM 客戶減少採購來管理庫存。該地區 3D 列印應用的需求也疲軟。歐洲的經濟狀況仍然充滿挑戰，但我們看到電動車銷售有所改善，並受益於 LightWELD 在該地區的持續推出。

Revenue in China decreased 38% year-over-year as demand declined in general industrial and e-mobility markets, negatively impacting sales across cutting and welding applications. On the other hand, sales to 3D printing applications increased in China as the industry is seeing growing investments in the region.

由於一般工業和電動車市場的需求下降，對切割和焊接應用的銷售產生負面影響，中國的收入較去年同期下降 38%。另一方面，隨著該行業在該地區的投資不斷增加，中國 3D 列印應用的銷售額有所增加。

Moving to a summary of our balance sheet and cash flow on Slide 7. We ended the quarter with cash, cash equivalents, and short-term investments of $1.1 billion and no debt. Our inventories continued to decrease sequentially and we are targeting further reductions over the course of 2024. Cash provided by operations was $55 million and capital expenditures were $28 million during the first quarter. As I mentioned earlier, we sold 2 buildings in the quarter, realizing $25 million in proceeds, which means net capital expenditures were just under $3 million, well below the same period last year.

接下來是投影片 7 上我們的資產負債表和現金流的摘要。我們的庫存持續減少，我們的目標是在 2024 年進一步減少庫存。正如我之前提到的，我們在本季度出售了 2 棟建築，實現了 2500 萬美元的收益，這意味著淨資本支出略低於 300 萬美元，遠低於去年同期。

While maintaining a strong balance sheet, we have been returning a significant amount of capital to shareholders through opportunistic share repurchases. We spent $90 million on share repurchases in the first quarter and continue to view current share prices attractive at current levels.

在維持強勁的資產負債表的同時，我們一直透過機會性股票回購向股東返還大量資本。我們在第一季花費了 9,000 萬美元用於股票回購，並繼續認為當前股價在當前水準上具有吸引力。

Moving to our outlook on Slide 9. First quarter book-to-bill was slightly above 1. However macroeconomic uncertainty is still negatively impacting demand across all of our major markets and resulting in project delays and reduced orders. Additionally, project delays related to battery capacity expansion are providing headwinds to our sales in China and North America.

轉向我們對幻燈片 9 的展望。此外，與電池產能擴張相關的專案延誤也為我們在中國和北美的銷售帶來了阻力。

On a bright side, leading manufacturing indicators have been improving in U.S. and China and bottoming in Europe and Japan, which should lead to more stable demand for our customers. We also expect that medical and LightWELD will return to more normalized revenue levels in the second quarter.

從好的一面來看，美國和中國的領先製造業指標一直在改善，歐洲和日本的領先製造業指標已經觸底，這將為我們的客戶帶來更穩定的需求。我們也預期醫療和 LightWELD 將在第二季恢復到更正常的收入水準。

For the second quarter of 2024, we expect revenue of $240 million to $270 million. The second quarter gross margin estimate is between 37% and 40%. We anticipate delivering earnings per diluted share in the range of $0.30 to $0.60, with approximately 46 million diluted common shares outstanding.

我們預計 2024 年第二季的營收為 2.4 億至 2.7 億美元。第二季毛利率預計在37%至40%之間。我們預計稀釋後每股盈餘將在 0.30 美元至 0.60 美元之間，稀釋後流通普通股約為 4,600 萬股。

As discussed in the safe harbor passage of today's earnings press release, our guidance is based upon current market conditions and expectations, assumes exchange rates referenced in our earnings press release, and is subject to risks outlined in the safe harbor and the company's reports with the SEC.

正如今天收益新聞稿的安全港段落中所討論的，我們的指導基於當前的市場狀況和預期，假設我們的收益新聞稿中引用的匯率，並受到安全港和公司報告中概述的風險的影響。美國證券交易委員會。

Before we move on to questions, I would like to express our gratitude to Dr. Scherbakov on behalf of the Board, management team and employees of IPG. He has made vast contributions over the past 30 years, too many to describe today. But we should recognize his contributions particularly during his time as CEO, including by strengthening IPG’s competitive position and laying the foundation for our next phase by establishing a clear strategic plan focused on key growth markets and applications, reorganizing R&D and disposing of non-core assets. We all look forward to continuing to work with Dr. Scherbakov in his capacity as a director.

在我們開始提問之前，我謹代表 IPG 董事會、管理團隊和員工向 Scherbakov 博士表示感謝。他在過去30年裡做出的巨大貢獻，今天無法一一描述。但我們應該認識到他的貢獻，特別是在他擔任執行長期間，包括加強 IPG 的競爭地位，並透過制定專注於關鍵成長市場和應用的明確戰略計劃、重組研發和處置非-核心資產。我們都期待著繼續與謝爾巴科夫博士作為主任合作。

With that, we will be happy to take your questions.

這樣，我們將很樂意回答您的問題。

(Operator Instructions). Our first question comes from James Ricchiuti with Needham & Company.

（操作員說明）。我們的第一個問題來自 Needham & Company 的 James Ricchiuti。

First, Dr. Scherbakov, congratulations on your many accomplishments at IPG, and I wish you the best of luck.

首先，Scherbakov 博士，恭喜您在 IPG 取得的許多成就，並祝您好運。

A couple of questions. The book-to-bill at 1, you seem to be suggesting a bottoming and a recovery later in the year. And I'm just trying to get a sense as to the -- what's giving you the confidence of the -- albeit probably a modest recovery in the back half of the year. What are you seeing in some of the emerging areas, including the EV and the welding market?

有幾個問題。訂單出貨比為 1，您似乎暗示今年稍後將觸底並復甦。我只是想了解一下——是什麼給了你信心——儘管今年下半年可能會出現溫和的復甦。您對電動車和焊接市場等一些新興領域有何看法？

So Jim, I think the first positive or slight glimmer of light perhaps at the end of the tunnel is the fact that book-to-bill albeit off a relatively low revenue number was above 1 for the first time in a year, right? So we've gone through a period of serious macroeconomic headwinds.

所以吉姆，我認為隧道盡頭的第一個積極的或輕微的曙光可能是這樣一個事實：儘管收入數字相對較低，但訂單出貨比一年來首次高於 1，對嗎？因此，我們經歷了一段宏觀經濟嚴重逆風的時期。

I think as well, when you couple that with some of the key economic data that we look at, there's some improvements in that in North America, even in China, there's a bit of an uptick in the PMI data. The PMI data, as we mentioned, in Europe and Japan, has -- seems to have bottomed, and it's certainly not strong in Europe, but improving in Japan.

我也認為，當你將其與我們看到的一些關鍵經濟數據結合起來時，北美的情況有所改善，甚至在中國，PMI 數據也有所上升。正如我們所提到的，歐洲和日本的 PMI 數據似乎已經觸底，歐洲的數據肯定不強勁，但日本的數據有所改善。

More specific to our business, I mean, the cutting market ex China is still quite weak. You perhaps have seen some of the results from the major cutting companies in Europe that are public. So they're not seeing a specific churn in that business at this point in time, but they do expect some improvement in the second half of the year. I'd say that improvement is probably more towards the latter part of the year at this point. They are starting to run down some of the inventories that they've had.

更具體地說，就我們的業務而言，我的意思是，中國以外的切割市場仍然相當疲軟。您可能已經看到了歐洲主要上市切割公司的一些結果。因此，他們目前還沒有看到該業務出現具體的流失，但他們確實預計下半年會出現一些改善。我想說，目前的情況可能會在今年下半年有所改善。他們開始消耗一些現有的庫存。

On the EV side, there are -- there's always some positives out of that as well, particularly in Europe, where we qualified with several new customers and are working on projects there. So the welding business in Europe was actually quite reasonable. There are a number of projects in Asia and China that we're hoping to get more visibility into. There's a lot of work, I think, going on with those that should crystallize one way or another in June with some of the feedback I've had from the sales folks.

在電動車方面，也總是有一些積極的一面，特別是在歐洲，我們在那裡與幾個新客戶取得了資格，並正在那裡開展專案。所以歐洲的焊接業務其實是相當合理的。我們希望能夠更了解亞洲和中國的許多項目。我認為，還有很多工作正在進行，這些工作應該會在 6 月根據我從銷售人員那裡得到的一些反饋以某種方式具體化。

So there is at least some activity that appears to be starting in that direction. I'd say though that it still remains a difficult time and improvements. Clearly, the guidance in Q2 only shows a very small improvement that reflects the modest positive book to bill that we've seen. I think I covered a lot of different things in my answer.

因此，至少有一些活動似乎朝著這個方向開始。但我想說的是，這仍然是一個困難時期和改進的時期。顯然，第二季的指導僅顯示出非常小的改善，這反映了我們所看到的適度積極的帳面價值。我想我的回答涵蓋了很多不同的內容。

You did, Tim. And actually, I appreciate that color. I'm wondering as we think about -- it's a little further out, as we look out to '25 and you look at some of these emerging opportunities, are there any that you feel more strongly about that could be meaningful?

你做到了，提姆。事實上，我很欣賞這種顏色。我想知道，當我們思考時，這有點遙遠，當我們展望 25 年時，您會看到其中一些新興機會，您是否更強烈地認為這可能是有意義的？

I mean, I was a little surprised at LightWELD maybe it's some seasonality, but that I thought would gain a little bit more traction and maybe it's early days with the partnership with Miller and maybe that plays out over the next year or so. But just thinking about the emerging opportunities medical, what gives you more confidence as you look out beyond this rough spot here?

我的意思是，我對 LightWELD 感到有點驚訝，也許這是季節性的，但我認為這會獲得更多的關注，也許與 Miller 的合作還處於早期階段，也許會在明年左右發揮作用。但是，只要想想新興的醫療機會，當您超越這裡的困境時，是什麼讓您更有信心呢？

I think, well, with LightWELD, you've got the Miller relationship that's starting to accelerate. You're seeing the demand cycle in Europe as we've introduced that product start to ramp up, an improvement in the underlying macro in North America will help with that. The product still has tremendous acceptance in the market. So we strategically remain very optimistic about that.

我認為，透過 LightWELD，米勒關係開始加速發展。當我們介紹產品開始增加時，您會看到歐洲的需求週期，北美基礎宏觀經濟的改善將有助於這一點。該產品在市場上仍然具有巨大的接受度。因此，我們在戰略上對此保持非常樂觀。

We still remain optimistic about the EV market. I think one of the largest battery makers in China discussed that their utilization was at about 70% overall last year. EV battery demand grew globally, I think by about 37% and 35% in China specifically. The growth, by the way, in storage battery was over 50% last year.

我們仍然對電動車市場保持樂觀。我認為中國最大的電池製造商之一表示，去年他們的總體利用率約為 70%。全球電動車電池需求成長，我認為特別是中國成長了 37% 和 35% 左右。順便說一下，去年蓄電池的成長超過了50%。

So whilst utilization is still not like at 80% or 90%, it continues to increase. So we think that perhaps about 1.5 terawatts of battery capacity is being built out and that still needs to increase dramatically over time as both EV sales continue to grow and storage capacity is added to.

因此，儘管利用率仍達不到 80% 或 90%，但它仍在繼續增加。因此，我們認為，也許正在建造約 1.5 太瓦的電池容量，隨著電動車銷量的持續增長和儲存容量的增加，這一容量仍需要隨著時間的推移而大幅增加。

I think the other areas of strategic growth, the medical business is going to come back in Q2. We're working with numerous new product introductions and other major partners on medical. I think that we'll start to bear greater performance and better performance and traction around growth in 2025 and we actually had a good quarter on some of our micro processing business. It's still small, but some of the ultrafast business performed reasonably well with strong deliveries of ultrafast product. I think we have the strongest quarter on ultrafast.

我認為醫療業務等其他策略成長領域將在第二季度捲土重來。我們正在與眾多新產品的推出以及其他主要醫療合作夥伴合作。我認為，到 2025 年，我們將開始獲得更好的業績、更好的業績和成長牽引力，而且我們的一些微處理業務實際上有一個不錯的季度。它仍然很小，但一些超快業務表現相當不錯，超快產品交付強勁。我認為我們在超高速方面經歷了最強勁的季度。

And then we continue to remain -- have a very strong conviction around the work we're doing on cleaning and heating and drying applications. So I think strategically, as we said, there's a very strong foundation here that various headwinds around these different parts of the business, but there's a lot of work going on with developing relationships with customers for the longer term in each of those areas.

然後我們繼續對我們在清潔、加熱和乾燥應用方面所做的工作抱有非常堅定的信念。因此，我認為，從戰略上講，正如我們所說，圍繞業務的這些不同部分存在各種阻力，這裡有一個非常堅實的基礎，但在每個領域與客戶建立長期關係方面還有很多工作要做。

I also add something for new products, which we will start to introduce this quarter. It's single-mode laser, especially for our 3D applications and we already shipped the first party to our potential customer and existing customer. And the first feedback was very positive. The main advantage of these lasers. First of all, of course, it's much more compact, much more efficient and cost reduces -- always with cost optimization. And we see that it will be also a potential for us. We will take the additional business for 3D applications.

我還為新產品添加了一些內容，我們將在本季開始推出。它是單模雷射器，特別適合我們的 3D 應用，我們已將第一方交付給我們的潛在客戶和現有客戶。第一次回饋非常正面。這些雷射的主要優點。首先，當然，它更加緊湊、更有效率且成本降低——始終伴隨著成本優化。我們看到這對我們來說也將是一個潛力。我們將承擔3D應用的額外業務。

Congratulations, Dr. Scherbakov.

恭喜你，謝爾巴科夫博士。

Our next question comes from Ruben Roy with Stifel.

我們的下一個問題來自魯本·羅伊和斯蒂菲爾。

And I'd like to echo my congratulations and best wishes to you, Dr. Scherbakov.

我謹向您表示祝賀和最美好的祝愿，謝爾巴科夫博士。

For my first question, it's sort of a follow-up, I guess, to Jim's question, Tim, which is sort of thinking through the improving book-to-bill and what sounds like a little bit of improving visibility on where your customers stand with inventory and project delays, et cetera. But at the same time, it seems like there's been a little bit of a push out on how you're thinking about recovery. So recovery modest and maybe pushed out to the end of the year versus last quarter when we were thinking about a second half recovery in EV perhaps.

對於我的第一個問題，我想這是吉姆問題的後續問題，蒂姆，這是通過改進訂單到帳單進行思考，以及聽起來有點提高對客戶立場的可見性庫存和項目延誤等。但同時，你對復原的看法似乎也受到了一些影響。因此，與上季相比，復甦幅度不大，可能會推遲到今年年底，當時我們正在考慮電動車下半年的復甦。

Is that the right way to think about it? Are you being conservative on recovery just because of what we've seen and the difficulty in assessing customer progression? Or has something changed on kind of the timing or scheduling of the recovery as you're thinking about it?

這是正確的思考方式嗎？您是否僅僅因為我們所看到的情況以及評估客戶進展的困難而對恢復持保守態度？或者您正在考慮的恢復時間或安排是否發生了變化？

Yes, I would say I think we have moderated the expectations of the degree of pickup in the second half of the year. I think our book-to-bill being a bit stronger in Q1, and that momentum was definitively starting to accelerate, that would give us a lot more confidence. I think it is more later in the year. As I said, there's several projects on the EV side that we're waiting to hear about in June that we're working on is to -- I think those projects sort of have a bit of a go, no-go gate around them.

是的，我想說，我認為我們已經緩和了對下半年回升程度的期望。我認為我們的訂單量在第一季有所增強，而且這種勢頭肯定開始加速，這會給我們更多信心。我認為今年晚些時候會更晚。正如我所說，電動車方面有幾個項目，我們正在等待 6 月份的消息，我們正在研究這些項目，我認為這些項目有一些允許或禁止的限制。

I think you can see from the cutting business, whilst it was okay in North America, Europe is really challenged by that if you've seen some of the results from some of the major players there. So I think we're feeling that we're turning the corner of it. But I would say our tone around that is that it's not going to be an immediate ramp into the end of Q2, Q3, with some more modest improvement into the end of the year. It's how I characterize it.

我想你可以從切割業務中看到，雖然北美的情況還不錯，但如果你看到歐洲一些主要參與者的一些結果，歐洲確實面臨挑戰。所以我認為我們感覺我們正在扭轉局面。但我想說的是，我們的基調是，不會在第二季末、第三季末立即成長，並在年底前出現一些更溫和的改善。我就是這樣描述它的。

Right. Okay. That's helpful. And then just a question on the gross margins as inventory comes down again and just thinking through perhaps a little bit of a better half revenue-wise. I know you're working on working cap, et cetera. But from here, it looks like we've got sort of stabilization in gross margins.

正確的。好的。這很有幫助。然後是一個關於毛利率的問題，因為庫存再次下降，並且只是考慮一下收入方面的更好的一半。我知道你正在研究工作上限等等。但從現在來看，我們的毛利率似乎已經趨於穩定。

So as revenue improves, one would expect that you get a little bit of a additional bump as your inventories have come down. Can you just walk me through how you're thinking about the second half on gross margins?

因此，隨著收入的提高，人們會期望隨著庫存的下降，你會得到一點額外的成長。您能否向我介紹一下您對下半年毛利率的看法？

Yes. I mean revenue, clearly, revenue going up, your absorption improves. What I actually -- again, when I came back to this and looked at it in Q1 in detail, I was actually pleased with the gross margin of the actual product. There was some mix benefit in there. We had some ultra-high power single-mode lasers. We're starting to introduce, as Dr. Scherbakov mentioned on the additive, the single-mode laser is a better cost profile, but we're also introducing the rollout of the higher-power lasers with the lower bill of material, that is still on target to start delivering product into, I think, the end of Q2, beginning of Q3, Q4.

是的。我的意思是收入，顯然，收入增加，你的吸收能力提高。實際上，當我回到這一點並詳細查看第一季時，我實際上對實際產品的毛利率感到滿意。其中有一些混合效益。我們有一些超高功率單模雷射。我們開始介紹，正如 Scherbakov 博士在添加劑方面提到的那樣，單模雷射具有更好的成本配置，但我們也推出了具有較低材料成本的更高功率雷射器，即我認為，仍然目標是在第第二季末、第三季初、第四季開始交付產品。

So one of the things I always look at is what's the gross margin of the product, and that's holding up pretty well, and we have these cost reduction initiatives that should start to benefit things. If revenue picks up, that will help with the absorption side. So it's really relative to a year ago, it was absorption rather than, say, pricing or a structural shift on product gross margin that affected us in actually both Q4 and Q1 this year.

因此，我一直關注的一件事是產品的毛利率是多少，這保持得很好，我們有這些成本削減舉措，應該會開始讓事情受益。如果收入增加，這將有助於吸收方面。因此，這實際上是相對於一年前而言的，實際上今年第四季度和第一季影響我們的是吸收，而不是定價或產品毛利率的結構性轉變。

Our next question comes from Mark Miller with The Benchmark Company.

我們的下一個問題來自 The Benchmark Company 的 Mark Miller。

Let me also add my congratulations to Dr. Scherbakov and I enjoyed working with him and certainly appreciate all the contributions he's made to IPG.

我還要向 Scherbakov 博士表示祝賀，我很高興與他一起工作，並且非常感謝他對 IPG 所做的所有貢獻。

I just wanted to maybe dig a little deeper into -- you mentioned some factors, I think welding and cutting remains weak, but the drop-off there was a double-digit drop-off sequentially in high-power laser sales. Can you provide any more insights about that?

我只是想更深入地研究一下——你提到了一些因素，我認為焊接和切割仍然疲軟，但高功率雷射器銷售量連續出現兩位數的下降。您能就此提供更多見解嗎？

I mean that's continued to be the weakness on the cutting market, particularly in Europe. And then also, we had -- at the end of last year, we had quite a number of EV welding programs that we supply product into in North America. So that EV demand in North America was also weak in Q1. Those will be the 2 main things. There's a couple of quite large projects in Q4 for EV welding market in North America.

我的意思是，這仍然是切割市場的弱點，尤其是在歐洲。然後，去年年底，我們有相當多的電動車焊接項目，我們向北美供應產品。因此，第一季北美的電動車需求也疲軟。這些將是兩件主要的事情。第四季北美電動車焊接市場有幾個相當大的項目。

You mentioned a large order. I think it was full related. Can you give a little more color on that also?

你提到了一個大訂單。我認為這完全相關。你能對此多加一點顏色嗎？

A large order for where, sorry?

哪裡有大訂單，抱歉？

I thought you said it was a full application, maybe I'm wrong. So a large order you received?

我以為你說這是一個完整的應用程序，也許我錯了。那麼您收到了一份大訂單嗎？

You mean the drying applications, what? Yes. We've seen this big enough order this quarter is for foil drying. It's a very important customer for us. And also the first demonstration that how successful can be used our diode, high-efficiency diode lasers with efficiency more than 57% for such kind of applications. And of course, it's only first such kind of shipment and you'll see a very big opportunity to use this later for such kind of application.

你指的是乾燥應用，什麼？是的。本季我們已經看到足夠大的訂單用於鋁箔乾燥。這對我們來說是一個非常重要的客戶。這也是我們的二極體、高效能二極體雷射（效率超過 57%）在此類應用中的成功使用的首次演示。當然，這只是第一次此類發貨，您將看到稍後將其用於此類應用的巨大機會。

Okay. So it was full drying application.

好的。所以這是充分乾燥的應用。

(Operator Instructions). Our next question comes from Keith Housum with Northcoast Research.

（操作員說明）。我們的下一個問題來自 Northcoast Research 的 Keith Housum。

Great. And once again, I'll echo congratulations, Dr. Scherbakov for a great career and all you've done.

偉大的。我再次祝賀謝爾巴科夫博士的偉大職業生涯和你所做的一切。

Just if I can ask real quick in terms of the performance during the quarter. I understand the markets are a challenge right now, but in terms of the mix between the price -- the impact that pricing had versus volume, can you add any color on the impact of one versus the other?

只要我能快速詢問本季的業績就好了。我知道市場現在是一個挑戰，但就價格之間的組合而言——定價對銷售的影響，你能對其中一種與另一種的影響添加任何色彩嗎？

It's all -- it's basically all volume-related pricing continues to be pretty stable in the market. We continued -- we haven't changed our pricing policy. There was on an average basis, maybe a little bit of mix benefit because we sold some ultra-high (inaudible) for advanced applications that had very strong average selling price per kilowatt. And its volume is the primary driver of the poorer results at the moment.

就是這樣——基本上所有與銷售相關的定價在市場上仍然相當穩定。我們繼續——我們沒有改變我們的定價政策。平均而言，也許有一點混合效益，因為我們為高級應用出售了一些超高（聽不清楚）的產品，這些應用的每千瓦平均售價非常高。其成交量是目前業績不佳的主因。

Got you. I appreciate that. In terms of the gross margins, can you help us understand the inventory reserves or provisions you took in the quarter and the impact that had on gross margins this quarter versus perhaps last year?

明白你了。我很感激。就毛利率而言，您能否幫助我們了解您在本季採取的庫存儲備或準備金，以及本季與去年相比對毛利率的影響？

Specific amount, I haven't got to hand. It was probably 100 basis points higher or something like that on the total provision. The provision will be in the Q, the specific number.

具體金額，我沒拿到手。總準備金可能高出 100 個基點或類似水準。規定將在Q中，具體數字。

We reach the end of the question-and-answer session. I'd now like to turn the call back over to Eugene Fedotoff for closing comments.

問答環節即將結束。現在我想將電話轉回尤金費多托夫（Eugene Fedotoff）以徵求結束意見。

Thank you for joining us this morning and your continued interest in IPG. We will be participating in a number of investor events this quarter and are looking forward to speaking with you again soon. Have a great day, everyone.

感謝您今天早上加入我們以及您對 IPG 的持續關注。本季我們將參加許多投資者活動，並期待很快再次與您交談。祝大家有個美好的一天。

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

今天的會議到此結束。此時您可以斷開線路，我們感謝您的參與。