A month has gone by since the last earnings report for IPG Photonics (IPGP Quick QuoteIPGP - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is IPG due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for IPG Photonics Corporation before we dive into how investors and analysts have reacted as of late.

IPG Photonics' Q3 Earnings Beat Estimates, Revenues Rise Y/Y

IPG Photonics reported third-quarter 2025 adjusted earnings of 35 cents per share, which beat the Zacks Consensus Estimate by 19 cents and climbed 9% year over year.

Revenues of $250.8 million increased 8% on a year-over-year basis and beat the consensus mark by 6.59%. Favorable forex contributed 1% to revenue growth. Book-to-bill ratio was roughly one in the reported quarter.

The year-over-year revenue growth was primarily due to higher Materials processing, medical and advanced applications sales. Emerging growth product sales accounted for 52% of revenues, which declined from 54% reported in the previous quarter.

IPGP’s Q3 Quarterly Details

Materials processing (88% of total revenues) increased 6% year over year to $212.3 million. The upside was mainly due to higher sales in welding, additive manufacturing applications, cleaning and higher revenue in micromachining. Strong demand in battery production, driven by e-mobility and stationary storage, supported higher sales in welding. Cleaning continued to benefit from the cleanLASER acquisition.

Revenues from other applications increased 20% year over year, primarily due to higher revenues in medical and advanced applications.

Sales declined 7% in Europe, while increasing 8% and 15% year over year in North America and Asia, respectively. 

IPG Photonics reported an adjusted gross margin of 39.8% up 360 basis points on a year-over-year basis. 

Adjusted EBITDA jumped 33% year over year to $37 million in the reported quarter.

IPGP’s Balance Sheet & Cash Flow Details

As of Sept. 30, 2025, IPG Photonics had $900.6 million in cash & cash equivalents, short-term investments and long-term investments.

In the third quarter, the company spent $21 million on capital expenditures and $16 million on share repurchases.

IPGP Offers Positive Guidance

For fourth-quarter 2025, IPG Photonics anticipates sales to be $230-$260 million. 

IPG Photonics expects fourth-quarter 2025 adjusted gross margin between 36% and 39%. Operating expenses are expected to be within $90 million to $92 million. Adjusted EBITDA is expected between $21 million and $38 million.

IPG Photonics expects fourth-quarter 2025 earnings between 5 cents and 35 cents per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -25.39% due to these changes.

VGM Scores

At this time, IPG has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, IPG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.