Laser Photonics Q3 2026 Earnings Call Transcript

Laser Photonics (NASDAQ:LASE) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Laser Photonics reported third quarter net sales of $1.1 million, marking a 25% increase from the previous year, although gross margins remained negative at 39%.

The company has reoriented its long-term strategy to focus on defense, pharmaceuticals, semiconductors, and industrial markets, with quantum technology as a cornerstone.

Laser Photonics is set to introduce its Quantum Bullet Laser Shield anti-drone system at an industry trade show, targeting the growing defense market.

Operational highlights include the relocation and integration of the BIMO laser product line, as well as the consolidation of facilities in Florida.

Management has strengthened corporate governance and financial transparency, with a focus on achieving operational cash flow breakeven in the near term.

The company ended the quarter with $7.6 million in cash and short-term investments, marking an improvement in working capital.

Laser Photonics aims to advance its Quantum Bullet technology and convert its order backlog into revenue, with plans to grow in defense-related opportunities.

Full Transcript

OPERATOR

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Laser Photonics third quarter 2026 earnings conference call. During today’s presentation, all parties will be in a listen-only mode. This conference is being recorded today, Thursday, November 12, 2026, and the press release accompanying this conference call was issued before the market opened this morning. On our call today are Laser Photonics Founder and Executive Chairman Dmitri Nikitin and Chief Financial Officer Tim Peterman. Before we get started, I’d like to note that some of the statements on this call will be forward-looking statements that reflect management’s current expectations about future operating and financial results, including statements regarding the development, testing, launch, and commercialization of the company’s directed energy products; the timing and outcome of U.S. government evaluations; potential customer orders; the conversion of the company’s order backlog into revenue; and the company’s strategy, liquidity, and capital resources. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties. Actual results for future periods may differ materially from what is stated or implied during today’s call.

For more information, please refer to the company’s forward-looking statements section in today’s press release and the risk factors disclosed in the company’s most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the SEC. At this time, I’d like to turn the call over to Laser Photonics Founder and Executive Chairman Dmitri Nikitin. Dmitri, the floor is yours.

Dmitri Nikitin (Executive Chairman)

Thank you, Lukas, and good morning to our investors. We appreciate you taking time to learn more about our company. Since this is my first discussion with shareholders, I want to begin today by discussing something much bigger than lasers or even the defense industry. I want to draw your attention to quantum mechanics, which is the core of every modern technology including industrial lasers, directed energy weapons, semiconductors, quantum computing, and pharmaceuticals, and is the driver of our growth strategy.

I want to make a few statements. We conducted a strategic reevaluation of our markets and established a long-term strategy that focuses the company, with razor-sharp precision, on four: defense, pharmaceutical, semiconductor, and industrial. Quantum technology is the cornerstone for all four. In defense markets, all the future wars will be fought with directed energy, not with kinetic missiles. The battleground will extend into space and the targets will be military communication and surveillance systems.

If a target can be identified and located, its destruction will be imminent. In pharmaceuticals, GLP-1 therapies derive from advanced DNA and gene research, evolving into slow-release personalized medication in the form of pills and capsules, and that evolution is driven by quantum laws. Semiconductor AI chips are all high-density electronic and photonic architecture and require methods that process materials at the molecular level, replacing mechanical tools with quantum technologies.

And lastly, manufacturing and robotics of the future are headed toward additive manufacturing, not subtractive, built on the laws and principles of quantum mechanics. All those processes and technologies follow the laws of quantum mechanics: processing at the speed of light; quantum precision at a molecular and atomic level; and quantum-level energy conversion, storage, and discharge. Quantum computing today is taking shape and, together with AI, is about to bring dramatic change to the planet. Every business sector associated with quantum computing and components will experience unprecedented growth, and we are shaping the company to be in those business sectors.

We define the core competency of our business as our ability to develop the most advanced products from a conceptual idea through every step of their life cycle, all the way to the revenue-generating stage. We do not intend to be just a volume manufacturer of well-developed industrial laser equipment. We intend to focus on high-growth, high-return products and technologies that are currently in the R&D and commercialization stages. I have been building towards this future for more than 25 years. I was personally involved in developing and licensing a number of patent-protected technologies and systems: equipment for non-dimensional cutting of semiconductors at the quantum level; specialized electronic material processing equipment for space exploration projects and telecommunications fiber; a laser-based landmine sweeping system; and the world’s first high-power fiber laser cutting machine.

What’s different today is that over the past five years we have seen an accelerating convergence of quantum technologies with material science, unlocking vast business opportunities in defense, pharmaceutical, industrial—mainly AI and robotics—semiconductor, and quantum component markets, including emerging inexpensive laser counter-drone, or C-UAS, weapons for Group 1 and Group 2 drones. I believe the next major advancement will come from our ability to control laser energy with extraordinary precision, potentially beyond what conventional industrial laser systems can achieve in certain applications, and direct it to produce highly specific effects on materials, electronics, and physical systems that range in size from small drones to a military landmine. Just imagine a 200-gallon barrel suspended in the air and filled with water from a garden hose.

It may take 30 minutes to fill the barrel, but you can empty it in a split second, creating a huge energy impact from 200 gallons of water released all at once. This is what happens in the nonlinear crystal inside a quantum device called a Q-switch. It accumulates optical energy and then suddenly discharges it, creating extremely high photon energy levels on target that lead to its complete destruction. There are records of clouds being discharged by creating plasma tunnels, of lasers being used to defeat moving objects, and even of highly energetic particle beams creating a massive-like explosion effect on the target surfaces.

Unlike conventional impact technologies, which rely on the kinetic energy of moving physical objects to produce an effect, directed energy systems use concentrated electromagnetic energy. Lasers are one example, but the field also includes high-power microwaves, particle beams, and other electromagnetic technologies. We call our directed energy platform Quantum Bullet. We believe the military conflicts in the future will be conducted with Quantum Bullets replacing kinetic weapons.

Over the next five years, I expect directed energy systems to become an increasingly important and pervasive part of modern defense, complementing and, in certain applications, replacing conventional kinetic weapons. The convergence of those technologies could create opportunities difficult to imagine today, and that possibility is what brings me to the vision here at Laser Photonics. The future definitely will come, and we intend to be there. Where is Laser Photonics today as a business, and why do I believe we are uniquely positioned to capture this opportunity? Today we develop advanced laser solutions serving three established and one emerging markets—pharmaceuticals, semiconductor, and industrial manufacturing, and defense. These businesses represent more than commercial opportunity. They are enabling us to build scalable applications of the underlying technologies and engineering capabilities that we believe will shape the future of directed energy.

The third quarter was another period of consolidating our recent acquisitions of product lines and operating companies into one cohesive operation. We completed the relocation of the BIMO laser product line from Michigan to Florida and its integration into our enterprise resource planning system. We also finished adapting our Lake Mary facility to the needs of our operation and consolidated our Orlando and Maitland facilities into one location. Most of our products are now at the revenue-generating stage, and our recent purchase orders reflect that.

They include Laser Photonics robotic laser cleaning cells; BIMO laser industrial marking systems; automatic semiconductor wafer marking systems; and, in particular, CMS Laser proprietary laser pill drillers for slow-release and personalized medication. Starting with pharmaceutical and medical, since its acquisition and integration, CMS Laser has performed well, supported by its long history of innovation in slow-release, or smart pill, medications. We’re expanding its leading CO2 pill drillers into next-generation UV marking anti-counterfeit systems for pills, capsules, and liquid gel medication, and we have orders in hand from prominent customers that we expect to translate into revenue over the next year.

We strongly believe the global move towards GLP-1 and personalized slow-release medication is a significant opportunity for CMS Laser, which pioneered this technology two decades ago, and that investment in this area offers attractive growth and strong return on capital for Laser Photonics and its shareholders. Moving to semiconductor, this business is beginning to take shape and we have shipped our first system to customers. Our core competency here is a proprietary, exclusive-licensed technology for splitting materials on the molecular level. It produces non-dimensional cutting of brittle materials such as electronic glass for flat-panel displays, industrial optical filters, scanners, infrared camera windows and glass wafers in semiconductor wafers. It enables high-speed laser singulation of silicon wafers into individual chips with a narrow heat-affected zone.

We believe that in future all high-density electronics will be separated by methods that work at the molecular and quantum level, not by the diamond saws and scribe-and-break methods widely used today. We intend to take full advantage of our exclusive knowledge and experience in this area and to advance this product from industrial prototype stage to commercial applications and revenue. Now to industrial and robotics. With the BIMO laser product line relocated and manufacturing restarted in Lake Mary, we are seeing strong bookings of individual laser cutting systems. We also designed, manufactured, delivered, and installed a robotic laser system for manufacture of data center equipment.

This brings me to defense. We have identified counter-drone as a market with explosive potential and one where we have accumulated extensive knowledge, experience, and capabilities. Small drones have a big problem, and the economics are simple. Defending against a drone that costs a few hundred dollars with a missile that costs millions is not sustainable. As we advance our capabilities in laser physics; AI-driven computer vision; advanced targeting, tracking, and dynamic focusing using the NVIDIA Jetson Orin chip; near-diffraction-limited energy delivery; optics; precision control; and advanced material science—these innovations together form part of the technological foundation on our roadmap towards a scalable, affordable, directed energy Quantum Bullet line of products. We have invested heavily in the core development of inexpensive, modular, laser-based anti-drone systems, and we will introduce our first-generation Quantum Bullet Laser Shield anti-drone, or LSAT, system at I/ITSEC at the end of this month.

We believe competing systems lack the key ingredients of an effective directed energy system against Group 1 and Group 2 drones: affordability, quick deployment, field repairability, and flexible configuration. Modern counter-UAS systems must be scalable and truly modular, tailored to specific tactical requirements and able to operate from any available power source, including batteries. Protecting government assets is different from protecting military assets, particularly in active conflict areas.

This system should be able to operate as part of a modern multi-layered command-and-control, or C2, platform, but also be deployed quickly and operate independently without being networked into one. That became possible when the Pentagon introduced the concept of Pyramid of Protection, under which the decision to destroy an intruding drone is made locally by the commanding officer. That single policy decision replaced a slew of complicated technical requirements and made our technological solution a viable business.

As a milestone, we have completed the integration of our Quantum Bullet product line with a multi-layered air defense C2 and the RAIL Lattice Prop platform. The system can operate in hunting mode through the C2 integration, or fully and independently as a perimeter protection laser weapon. This market is still in its infancy, and revenue at this stage is unpredictable. But we believe our technology, our vision, our cooperation with leading defense contractors, and our prior experience in directed energy laser systems, combined with decades of experience in laser system manufacturing, give us a solid foundation.

We believe our experience in AI-enabled machine vision at a distance, optical removal, and the precision beam control and steering used in our laser cleaning product will allow us to take a leading position in this market. But what makes Laser Photonics particularly different is not simply our technology. It is our strategic freedom to pursue technology that we believe could disrupt established defense business models built around conventional kinetic weapons. Companies such as Lockheed Martin and other major defense contractors have extraordinary engineering capabilities and resources, but they also have enormous investments in conventional weapon platforms, missile systems, and technologies that directed energy laser weapons could eventually disrupt.

We do not face the same legacy business considerations. We do not depend on selling the weapons that our future technologies may replace. We can focus our engineering capital and strategic priorities on developing the next generation of directed energy laser weapons. Our ambition is not to follow the evolution of directed energy; it is to help lead it with our Quantum Bullet platform. It is important for management to have a vision for the future, but the ability to execute that vision is what ultimately creates value for shareholders—and execution begins with trust. Over the past 60 days, we have taken significant steps to strengthen the foundation of Laser Photonics. Since assuming my role as Executive Chairman, I have made improving accountability, transparency, and corporate governance a central priority.

We have strengthened our financial and accounting leadership with experienced and highly qualified personnel, added experienced board members, and worked closely with the board to improve our governing principles, internal controls, board committee charters, financial reporting process, and corporate governance practices. We have also made significant improvements to our investor relations website in terms of compliance, visibility, and transparency.

And we simplified our corporate identity by changing our name to Laser Photonics, which prepares the company to operate under three—CMS Laser, Laser Photonics, and BIMO Laser. And through a service agreement with our affiliate Phonum Technologies, we also acquired the lays.com domain. We expect that the company name, stock symbol, and web address that all read LAYS will make our marketing more effective and make it easier for investors, customers, and partners to understand who we are and where we are going.

But this is only the beginning. Our commitment is to deliver timely and accurate SEC filings, maintain strong board oversight, communicate transparently with our shareholders, and establish the financial discipline necessary to support sustainable growth. We will continue this work in the fourth quarter, bringing the company to the next level of accountability, transparency, corporate governance, and compliance with SEC and NASDAQ trading requirements.

We understand that investors’ confidence is earned through actions, not promises. Our objective is to build a company where the quality of our governance and financial reporting matches our ambitions in our technology. We have a vision for the future of directed energy, we have the technological foundation to pursue it, and we are building the organization, discipline, and accountability necessary to execute it. That is how we intend to earn your trust, create long-term shareholder value, and bring our vision for Quantum Bullet to market.

With that, I’ll turn the call over to Tim to discuss our financial performance, the improvements we are making, and our efforts to strengthen the balance sheet.

Tim Peterman (Chief Financial Officer)

Thank you, Dmitri, and good morning everyone. We made solid progress this quarter on three financial fronts. We grew net sales, narrowed our net loss, and strengthened our balance sheet. That said, our gross margin and operating cash flow performance still need significant work. I’ll first walk through our third quarter results, and then I’ll explain our fourth quarter priorities. Third quarter net sales were $1.1 million, up 25% from $0.9 million a year ago. This was the first quarter of year-over-year sales growth since the fourth quarter of 2025. Better execution in production contributed to this increase, and although gross margin improved by 8 percentage points, it was still negative 39%.

For the first nine months of 2026, net sales were $3.9 million, compared with $5.8 million last year. Our third quarter net sales growth only partially offset the first half net sales decline, which was primarily driven by a $1.1 million decrease in laser cleaning products and services and a $0.8 million decline in affiliate net sales. Our third quarter operating expenses were $1.8 million, a reduction of 34% from $2.8 million the year before, driven primarily by lower general and administrative expenses, partially offset by increases in marketing and research and development.

Net interest expense declined 86% year over year following our 2026 debt repayments. Our third quarter net loss of $2.5 million was a 46% improvement from the $4.7 million net loss in 2025. Turning to the balance sheet, we ended September with $7.6 million in cash and short-term investments. That was the highest reported quarter-end balance of cash and short-term investments since September 2023 and was the primary driver of our $11 million improvement in working capital in September 2026 compared to the prior year. For the first nine months of 2026, we raised $19.6 million in net proceeds from equity offerings and warrant transactions and repaid $6.4 million in third-party and related-party notes.

We used $7.4 million of cash in operations during that first nine months—$4.7 million in the first half and $2.7 million in the third quarter of 2026. I want to close my comments today with this thought. I joined Laser Photonics in September and Dmitri joined as Executive Chairman in October. We’ve made solid progress in a short period of time, but we are really just getting started. As we disclosed in the 10-Q, we have not yet changed the company’s view that substantial doubt remains about our ability to continue as a going concern over the year following the issuance of our third quarter financial statements.

Our near-term goal is to reach operating cash flow breakeven during the fourth quarter. Our plan is to focus on establishing a cost structure that is optimized for our level of sales, while improving the utilization of our production capacity and establishing more accountable sales processes that are operated by talented sales teams. We plan to do this while strengthening our internal controls and our external reporting processes. In terms of our guidance, we expect to continue to serve our established pharmaceutical, semiconductor, and industrial markets while allocating increasing resources toward defense-related opportunities. Management remains focused on improving operating performance, maintaining financial discipline, strengthening corporate governance, and building a more transparent relationship with our shareholders. Thank you for your time today. Dmitri, back to you.

Dmitri Nikitin (Executive Chairman)

Thank you, Tim. Looking ahead, our priorities are clear. First, introduce Quantum Bullet at the I/ITSEC trade show later this month and work to convert our engagement with U.S. and allied defense customers into programs and orders. Second, grow our revenue-generating businesses and convert our order book into deliveries and revenue. Third, advance the next generation of technologies with clear gates and disciplined investments. And fourth, integrate our acquisitions and product lines into one coherent organization supported by financial controls and the governance of a well-run public company.

I have spent more than three decades taking laser technologies from an idea to products that customers depend on. I believe Laser Photonics has the technology, the heritage, and the team to do that again in directed energy and to build durable value for our shareholders along the way. To our employees in Lake Mary and across our brands, thank you for your hard work during this period of significant change. To our shareholders, thank you for your patience and your support.

And to those who will attend the I/ITSEC trade show, we look forward to seeing you in Orlando.

OPERATOR

Ladies and gentlemen, this does conclude today’s teleconference. If you have any further questions, you can reach the company’s Investor Relations at layszgroup us or alternatively@investor relationsheise.com. With that, I’d like to thank you all for your participation. You may now disconnect your lines at this time and have a wonderful day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.