Eugene Fedotoff; Senior Director, Investor Relations; IPG Photonics Corp
Mark M. Gitin; Chief Executive Officer, Director; IPG Photonics Corp
Timothy Mammen; Chief Financial Officer, Senior Vice President; IPG Photonics Corp
Ruben Roy; Analyst; Stifel Nicolaus and Company, Incorporated
James Ricchiuti; Analyst; Needham & Company Inc.
Michael Feniger; Analyst; Bank of America
Graham Scott; Analyst; Seaport Global Securities LLC
Keith Hasam; Analyst; North Coast Research
Mark Miller; Analyst; The Benchmark Company LLC
Operator
Good morning and welcome to IPG Platonic's first quarter 2025 conference call. Today's call is being recorded and webcast. At this time, I'd like to turn the call over to Eugene Fedotov, IPG senior director, Investor Relations for introductions. Please go ahead with your conference.
Eugene Fedotoff
Thank you and good morning, everyone. With me today is IPG Photonics CEO, Dr. Mark Gitin, and Senior Vice President and CFO, Tim Mammen.
Let me remind you that the statements made during the course of this call that discussed managements 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 and such forward-looking statements. These risks and certainties are defined in our Form 10-K for the period end of December 31, 2024, and our reports on file with the Securities and Exchange Commission.
Any forward-looking statements made on this call are the company's expectations or predictions as of today, May 6, 2025 only, and the company assumes no obligation to publicly release any updates or revisions to any such statements.
During this call, we will be referencing certain non-GAAP measures. For more information on how we define these non-GAAP measures and the reconsolidation of such measures to the most directly comparable GAAP measures, as well as additional details on our reported results, please refer to the earnings press release, earnings call presentation, and the financial data workbook posted on our industry relations website.
We will also post these prepared remarks on our website after this call. With that, I'll now turn the call over to Mark.
Mark M. Gitin
Thanks, Eugene. Good morning, everyone. We had a solid start to the year with continued signs of stabilization in the business and modest upticks in demand across some of our markets. I'll begin today with a quick look at our first quarter results and the overall demand environment, then walk through the progress we're making on our long-term strategy, what's working, where we're focused. Also, I will talk about where we're adapting to global trade dynamics and touch on the steps that we're taking to minimize risk and maintain flexibility in a shifting environment.
After that, I will turn it over to Tim to provide financial details, and then we'll open the call for questions. Starting with the first quarter, revenue came in above the mid-point of our guidance, reflecting business conditions generally consistent with the past few quarters, helped by early traction in key areas that are central to our strategy. Our bookings improved sequentially, and book to build was the strongest we've seen in more than two years.
Welding revenue continued to show signs of stabilization with share gains and immobility. While cutting revenue remained challenged, orders increased as business in Japan, Europe, and the US started to normalize. We also saw strong results in some other materials processing applications, including cleaning, which benefited from the clean laser acquisition and solid growth in additive manufacturing.
I'm very encouraged to see the momentum that we're starting to build in our medical micro-machining and advanced applications. We're gaining traction with key customers across several of these initiatives, and we're beginning to see a positive impact on revenue.
In our medical business, we added a new urology customer this year, which contributed to the strong revenue performance in the quarter. Urology is a multi-billion dollar market where our superior solutions are well positioned to replace legacy systems. We're currently developing the next generation of our thelum fiber laser urology systems with a launch plan later this year, positioning us for additional growth in 2026 and beyond.
We also launched a new product in micro machining and secured new business that nearly doubled our revenue in that area this quarter. This is a large market with significant long-term potential, and we are actively working on a strong product roadmap to continue gaining share.
In advanced applications, we reached a major milestone with one of our key customers, six months ahead of schedule. We look forward to sharing more on this program in the future. Many of these wins are a direct result of our differentiated technology, product expertise, and the team's ability to address customers' most difficult requirements.
Given the operating leverage in our financial model, revenue from these programs is expected to drive a meaningful bottom-line impact in the years ahead. These are early wins, and while they're not yet large enough to fully offset the headwinds in our more mature cutting applications, they're solid first steps. These and other strategic programs are targeting $5 billion in TAM and offer hundreds of millions of dollars in revenue opportunities for IPG over the next several years.
Turning to the near-term outlook, our first quarter book-to-build ratio was solidly above 1. We were encouraged by improving trends across several markets and regions heading into the second quarter. In fact, our revenue guidance today would have reflected sequential growth if not for the impact of recently imposed tariffs.
The guidance reflects approximately $15 million in potential shipment delays to customers. These are not cancellations. We will fulfill these orders as we optimize production across our global footprint. We're continuing to evaluate the dynamic operating environment and are leveraging the flexibility of our global manufacturing and supply chain to minimize the impact of tariffs.
We've demonstrated this agility before, most notably when we successfully navigated the loss of access to our Russian operations following the invasion of Ukraine. Looking ahead, our strong manufacturing base in North America positions as well, especially as reshoring drives renewed investment in local automated industrial production.
We continue to benefit from strong relationships with customers around the world. During my recent trip to Asia, I met with many of our top customers, and in those conversations, one message came through clearly a shared commitment to deeper collaboration. Our customers place a high value on IPG's technology, as well as our quality, reliability, and global technical support which they view as critical to their own success.
As a valued partner and a global leader in fiber laser solutions, we remain focused on investing in R&D and applications expertise. Our engineering teams are developing innovative solutions, including lasers, subsystems, and systems to meet evolving customer needs across materials processing medical and other strategic opportunities. One example is our recently announced partnership with AkzoNobel to apply laser technology to cure powder coatings. This novel solution provides advantages in energy efficiency, process speed, and space utilization with the potential to replace large industrial curing ovens.
As we navigate near-term headwinds, we're staying agile and leaning into the foundational strengths that set IPG apart. We have one of the strongest balance sheets in the industry with over $900 million in cash and no debt. This financial strength gives us the flexibility to move quickly and strategically, a key advantage in today's environment. It allows us to pursue acquisitions that enhance our market position, expand our technology portfolio, and accelerate our entry into high growth markets. A great example is our acquisition of clean laser late last year, which is already contributing to our growth. We will continue to look for targeted high impact acquisitions that align with our strategy and create long-term value.
In closing, while tariff-related uncertainty remains, we're energized by the progress we're making against our strategic priorities. We're encouraged by the early signs of momentum and remain confident in our ability to navigate the current environment while staying focused on the significant long-term opportunities ahead.
With that, I will now turn the call over to Tim.
Timothy Mammen
Thank you, Mark, and good morning, everyone. My comments will generally follow the earnings call presentation, which is available on our Investor Relations website. I will start with the financial review on slide 4.
Revenue came in above the midpoint of our guidance in the first quarter at $228 million which is roughly consistent level for the third consecutive quarter.
Revenue was down 10% year over year due to lower revenue and materials processing and the impact from the divestiture of our Russian operations offset by growth in medical and advanced applications and a contribution from the clean laser acquisition.
Foreign currency reduced revenue by approximately $5 million or 2% this quarter. Revenue from materials processing decreased 14% year over year, primarily due to lower sales and cutting and welding, partially offset by higher revenue in additive manufacturing and micro machining.
Revenue from other applications increased 25% driven by higher sales in medical and advanced applications. GAAP gross margin was 39.4%, an increase of 70 basis points year over year. Adjusted gross margin was 40% above the top end of our guidance range. The year-over-year improvement in gross margin, despite lower revenue, was driven by a decrease in inventory provisions and unabsorbed costs, partially offset by higher cost of products sold.
I am pleased to see that our effort to right size inventory in the last year is reflected in our margins. And our level of gross margin reflects the value that we deliver to customer. Operating expenses were above last year's level and our guidance range, primarily due to the investments we are making in key areas that are central to our strategy, which Mark highlighted earlier on this call.
Sequentially, $7.5 million of the increase in operating expenses is due to an increase in stock compensation. Normalized variable compensation accruals, as well as employee benefits, which are typically higher in the first quarter.
GAAP operating income was $2 million and our adjusted EBITDA was $33 million at the top end of our guidance. GAAP net income was $4 million or $0.09 per diluted share. Adjusted earnings per diluted share, which includes stock-based compensation but exclude amortization of intangibles, other acquisition-related charges, foreign exchange loss, and discrete tax items were $0.31 in the first quarter, also above the midpoint of our guidance range.
Looking at the revenue trends by application on slide 5, we saw demand stabilizing in welding and saw growth in demand for handheld welders and increased sales in e-mobility applications in China. Cutting revenue was weak both year over year and sequentially across most regions, but customer inventories continued to normalize and purchasing activity showed some improvement with the introduction of our new high power, low cost rack mounted platform.
Mark already highlighted strong results in our key applications in the quarter, so I won't go over them again. Our emerging growth products performed well in the quarter increasing to more than 50% of sales driven by a wide variety of products.
Moving to the revenue performance by region on slide 6, sales in North America decreased 7% sequentially. And we're down 12% year over year. Materials processing revenue was down year over year, but more stable sequentially.
Medical revenue increased year over year but it fluctuates on a quarterly basis and was down sequentially. We expected to be strong in the second quarter, and the overall outlook for this key strategic area is positive. Sales in Europe declined 11% sequentially, and 28% year over year, where higher revenue in cleaning driven by clean laser acquisition.
And growth in additive manufacturing was more than offset by lower cutting and welding revenue as well as divestitures. Revenue in Asia increased 5% sequentially. And 8% year over year. Benefiting from stronger sales and additive manufacturing, micro machining, advanced applications, and medical. As I mentioned, we also saw some recovery in immobility demand in China during the quarter.
Moving to a summary of our balance sheet and cash flow on slide 7. We ended the quarter with cash equivalents, and short-term investments of $927 million and no debt. Cash provided by operations was $13 million and capital expenditures were $25 million during the first quarter.
As a reminder, our cash flow generation is usually low in the first quarter due to the payments of variable compensation and the timing of tax payments. Moving to our outlook on slide 9 for the second quarter of 2025. We expect revenue of $210 million to $240 million.
As Mark mentioned, our revenue guidance range is approximately $15 million lower than it would have been due to the timing of shipments affected by the tariffs. We anticipate adjusted gross margin to be between 36% and 38%.
With approximately 150 basis points to 200 basis points impact from tariffs included in this guidance. We are addressing this impact with adjustments in our supply chain. Optimizing our manufacturing to serve different regions and selective pricing actions which will substantially offset the impact of tariffs in the future. As we've previously communicated, investments in the growth of our business and strengthening the organization will continue to drive elevated levels of operating expenses through 2025.
In the second quarter, our operating expenses are expected to be between $86 million to $88 million. We anticipate delivering adjusted earnings per diluted share in the range of $0.05 to $0.25, with approximately 43 million diluted common shares outstanding.
Our adjusted EBITDA is expected to be between $16 million and $0.31 million. In closing, we are pleased to see signs of demand improvements in key areas. As a broader recovery takes place and we begin delivering on our new product strategy, we believe we have significant operating leverage in our model.
In the meantime, our continued cash generation and strong balance sheet are a tremendous advantage in the current environment.
With that, we will be happy to take your questions.
Operator
Thank you. At this time we'll be conducting a question-and-answer session. (Operator Instructions) My first question comes from Ruben Roy with Stifel.
Ruben Roy
Thank you. Hi, Mark. Great to hear about the signs of stabilization and the bookings trends. I wonder if you could maybe dig into that just a little bit more and talk about it in markets where you're seeing strength geographies and I guess you maybe touch on China. Tim mentioned the recovery and immobility in China, but China, obviously had a pretty good. One and I'm just wondering, kind of what's driving that growth, I think it was up 22% sequentially, so can we start there, please?
Mark M. Gitin
Yeah, no, thanks very much for the question, Ruben. Good to hear from you. So yes, we saw a very strong bookings growth, with a book to bill of very strongly above 1.1 -- I'm sorry, above 1 is what I meant to say, and we saw that in a number of areas. So in China, we saw very good strength in mobility. So this is where our AMB lasers, our adjustable mode beam lasers and our LDD or laser depth dynamics together with our scanning systems, we're able to drive, good growth and immobility there in China as well as areas like micro machining areas also in additive manufacturing, good strength there.
We also saw strength other places in Asia within Japan, we saw some normalization of the inventories of key cutting OEMs in Japan and saw strength in bookings there. We saw strong bookings in medical and in in the US.
We picked up a new customer in medical, so, very key growth area along our urology platform and then, also saw some stabilization in in Europe. It was weaker, but we saw some stabilization. So it's really great to see is that the key areas that we've talked about last quarter, the key areas of our strategy, investment.
So in that area of medical, in the area of micromining where we brought out a new product. And we're starting to see great take up there also in our advanced market. We also saw strength there and as I mentioned in the call, that's a very key area where we where we also saw some advancement and one got to a key milestone early in that area. So overall, great growth among our strategic directions that were showing up in that growth.
Ruben Roy
Perfect, thanks for that detail, Mark and then if I could follow up with a question on the near-term delays in some of your orders, obviously, you mentioned no cancellations. I guess if you could maybe just detail kind of the moving parts in those delays, is that a factor of, you guys trying to proactively move, productions to areas where you could lower your costs and not have to raise costs for your customers and maybe that's causing the delays or is it just customer customers waiting to see kind of what happens, any detail on the extent of or why are those delays are happening if you have some, kind of thoughts on that. And then yeah, go ahead. I'm sorry, I was just going to finish by asking, on the gross margin side of it's a cost related thing, does this extend into the second half?
Mark M. Gitin
Thank you. Yeah. Sure. So let me first start with the delays. So the delays are simply a matter of moving our manufacturing around. So we're working very closely with the customers. The customers need the product, want the product. We're working closely with them on timing, and we're in the process of shifting our manufacturing, across our footprint, and that's one of the things. I talked about last quarter when asked, we do have this fungibility across our footprint and we have the capability both inside of the US as well as outside of the US. So being able to move some of those manufacturing to address areas that have the tariff issue, and that's the timing piece and we expect to ship most of that actually in Q3.
Ruben Roy
Okay, thanks. And then just on the margin side, Tim, would this go into Q3?
Timothy Mammen
Maybe a little bit. I mean, we're working on the reconfiguring of the supply chain, right, we're doing that as quickly as we can, the reconfiguring of the manufacturing. We said we expect to be delivering this product as we get into Q3 and then pricing. So substantially, can't say all of it will be done by Q3, but we expect to be significantly reducing the impact into Q3 and then probably eliminated by the time you get to Q4, that would be the target on it.
Just to add a little bit of color on sort of the delays, by the way, one of the customers actually we've received additional orders from them in April, so this is not the customer, this is us working with the customers to ensure that they don't get impacted on the cost side for this product.
Ruben Roy
Right, okay, that's great. Thank you, guys.
Operator
Jim Mersoi. With Needham and Company.
James Ricchiuti
Hi, thanks. Good morning. Yeah, hopefully you can hear me.
Mark M. Gitin
Okay. Be the beginning, yeah.
James Ricchiuti
Okay, thank you. I just wanted to ask you about the partnership with AkzoNobel that you announced. What kind of contribution are you expecting from that and maybe give us a sense as to how impactful that could be over the next year or so? And then are you exploring a similar application partnership in the US?
Mark M. Gitin
Yeah, thanks a lot. Good to hear from you, Jim. So we're excited with the partnership. This is an area where we're using our direct dial capability to cure these powder coatings and it happens when you do that, you're able to do it much faster. And much more efficiently. So you know this is replacing large convection ovens, large lines, large convection lines.
We're excited with the partnership, this is small starting but has good potential over the years to replace the way the powder coatings are put on today and yes, that, we are working with other players also around the world in that area, but it's -- we see it as a very interesting area for the future.
James Ricchiuti
Got it. Maybe just sticking with the theme on the emerging side, two quick questions. First, on medical, you sound on the margin, more optimistic about that, not only with the second customer. I don't know to what extent that'll be contributing meaningfully to the revenue in the back half, but the new urology system, is that expected to be a contributor in the back half or is that more 2026?
Mark M. Gitin
Yeah, so thanks. Yeah, we're very excited with bringing on this with this new customer. It's a large customer in the urology space and over the next years we expect that to be a key piece of our strategy going forward. If you remember that urology is a multi-billion dollar market that we're making key investments in and this is just one piece of the roadmap we talked about a new product coming out later this year. That's one piece we'll see some contribution on that later this year, but then larger contribution in 2026.
And that's just a piece of the of the roadmap for growth in neurology going forward. And we've talked about the customer that we have named in the past, Olympus, and this is another key customer that we see growing with us over the next years.
James Ricchiuti
Got it. And just a quick one on the micro machining. It's again, it looks like you're seeing some nice momentum. What application was is driving that? I think you highlighted a newer application.
Mark M. Gitin
Yeah, so there are a number of applications in that area. We have not named the particular application that I was referring to, and we won't, but what I will tell you is that our micro machining initiative addresses a wide range of applications, some of them in microelectronics and other areas and you know, we see a strong roadmap for growth there and what we -- what I did say is we brought out a first new product in that area and that's what's giving us the take up already, doubling the micro machining revenue from a year ago and it's just the first of a product roadmap for growth in that area.
James Ricchiuti
Got it. Thanks very much.
Operator
Michael Feniger with Bank of America.
Michael Feniger
Hey guys, thanks for taking my question just so I understand the tariff impact, there's the impact of a delay in shipments to the top line that you guys helped quantify. I understand it's delay, not a cancellation, and then there's a gross margin impact from cost. Is there any we should know about in terms of your COGS exposure, in terms of the footprint. What tariffs are the impact? I know that we feel like every few weeks there's a new headline on tariffs. I'm just wondering, is the assumption based on that April 4, Liberation Day with those rates? Is it -- are we expecting those to be lower? Just any context of that would be helpful.
Timothy Mammen
No, at the moment, the impact that we've articulated for this quarter, Mike, relates to the current rates of tariffs that are in effect. So you know, if Liberation Day is enacted in full, I think we're going to be dealing with a more uncertain position thereafter. A lot of the stuff on the cost side is some product because you've got a very high tariff rate on metal parts and components coming into the US from China. The biggest impact in the near term relates to that. The 10% rates on other countries is less of an impact. And that's the part of the supply chain that we're really working on.
I know our teams have already got up and running, qualifying other suppliers that would be, would not be susceptible or subject to that very high tariff rate. So most of the impact on the gross margin is near term on the expense side related to tariff that will come down as we use supplies in different parts of the world and even supplies much more locally, for example, in the US. That's about it.
Michael Feniger
Helpful. And just to follow up, I remember it was last quarter we there was kind of some commentary around competition, in certain areas from low cost suppliers. Is that still out there and I just, I'm curious, Tim, when you think of mitigation efforts you kind of listed it seems like you guys are doing a lot of things working with suppliers, moving some manufacturing around to mitigate this by Q4. You also mentioned price. I'm just curious on the competitive dynamic out there, how you feel like that those price increases would stick? Is it very competitive? Are you seeing the other competitors have to raise pricing as well? Just kind of any commentary on the pricing relative to what we heard last quarter. Thanks, guys.
Mark M. Gitin
Yeah, so I'm happy to take that. As I mentioned last quarter, the real issue in price competition has been in China and it's been the cutting market in China, that's less than 5% of our business.
The key, the other key areas, we have strong differentiation, across the world, across the applications when we talk about areas like micro machining, the areas like battery welding, the additive manufacturing, these are areas where we have very strong, competitive positions, and we leave there if we need to make strategic price, adjustments, we would be in a position to be able to do that if needed.
But again, the first thing that we're going to be able to do is to address the tariffs because of the fact that we have -- we're manufacturing most of what we're manufacturing for all of what we -- what gets delivered in North America is manufactured in the US and the other pieces are manufactured outside of the US. So you know our tariff exposure is also, something that we can manage with moving manufacturing around as we've talked about. So that's the primary thing that we'll do. And then, again if we have to, we believe we would have a position to adjust in other areas as needed.
Timothy Mammen
And that don't forget, Mike, that any of the low-cost suppliers trying to bring product into the US are subject to a 145% tariff on their product, right. So their costs are doubling on their inbound, but that positions us pretty well given that we make everything for the US here and have other manufacturing locally.
Mark M. Gitin
That's right. And just to add to that for a second, also if any of that actually drives some of the onshoring, that's likely to be in automated lines because labor costs in the in the US, and we have a very good position in automated manufacturing, lasers are used widely in those applications.
Michael Feniger
Helpful, thank you.
Operator
Scott Graham with Seaport Research Partners.
Graham Scott
Hey, good morning. Thanks for taking the questions. Can you touched on a little bit, but I was hoping you could maybe put a finer point on the whole optimizing manufacturing thing as one of your mitigating strategies and qualifying suppliers, what have you -- so is this essentially going to be changing how, where you import these parts from away from China? Is that the big part of that?
Mark M. Gitin
So first of all, we don't do. We're not manufacturing in China. We have very low amount of materials that come from China. So what we were talking about in moving things around first and foremost is the manufacturing footprint. So we actually got have the ability to manufacture to move manufacturing across and optimize it in regions. So we've already started that process.
We already have people that have that are transferring production in some of the areas to optimize position and tariffs, and then we're also able to optimize the supply chain and we've already moved some of that around so that we cannot have tariffs, incoming and even in some places, we have some vertical capability that we've already started it up. So this is already in process and as we talked about the shifts that we're talking about with, we would be shipping most of that already, in Q3, that we would move from Q2.
Graham Scott
Okay. I think I said that I might want to come back to you on that later. Nevertheless, so the 150 basis points to 200 basis points, that's a grossed-up number for the second quarter and it will decline from there? Is that what you're thinking?
Timothy Mammen
Yes, okay. I mean frame it in an example, so let's say you got $3 million of product that you were sourcing from China, right, for whatever part of our component base that is at the moment you're paying at 145%, you're paying $4 million of tariff on that. If we move that source and we've got other suppliers, say, in Malaysia, or even if we insource some of that to our own machine shops in the US, you immediately and very quickly either reduce that tariff to 10%, which would be $300,000 versus the $4 million, or if we actually are utilizing our own capacity internally. In the US you'd eliminate the tariff, probably having a slightly higher cost on a fully loaded basis but on a direct basis probably not much of an impact even doing it internally in the US. That's how you have to think about it, Scott.
I appreciate you saying during the manufacturing, on reconfiguring the manufacturing, about 80% of what we make, for example, for China is already made outside of the US. There are some very specific products that we still make in the US and those are the ones that Mark is talking about will be moved outside of the US. So now they will not have an inbound tariff into China, and they'll have a normalized cost to the end customer. So but relatively speaking, it's a small amount of the volume that we have. There's a couple of product lines that we were making in the US related to China's supply.
Graham Scott
I was saying, I appreciate you saying that. I think a lot of companies gloss over the fact that if they're moving production around, they might be saving on tariffs, but the cost in that country is a little bit higher. So thanks for saying that. I think one of the things I just want to understand a little bit more is about you see them, had a little bit of a little bit more optimism around bookings with the book to bill. And I was hoping you could kind of give us, maybe a little bit more on, you serve a lot of general manufacturing markets where lasers are in place instead of machine tools and other forms of grinding and otherwise.
I'm just hoping you can give us those customers perspectives, because a lot has gone on a lot of the CEOs are, yeah, they're fairly cautious out there. Are you seeing that caution in your markets where it's just sort of general manufacturing laser trade up markets?
Mark M. Gitin
Yeah, I can take that, Scott. So yes, as we've talked about the last couple of years, the overall industrial markets and the macro have been tough. They have been slow, and that's affected a lot of the general manufacturing. So areas like cutting and general welding and such have been affected. The book to build and the things that we're seeing are a couple of things. First of all, we're seeing some stabilization in that, you can see that over the last three quarters our revenue is now has now been stable. And then the other piece that you can see as we look at these new bookings, these are in new areas that we're getting growth.
These are the key areas that we're driving investment for growth. In fact, the strategic areas. So we talked about picking up a new customer in medical. We talked about micro machining and the new product launched there and the fact that we're growing in micro machining some of the advanced markets where we've seen the bookings growth. So I would say that overall we're starting, we're seeing maybe some stabilization. Of course, there's uncertainty in the industrial market still, but we're seeing that some stabilization there and then, pick up in some of these other areas that are exciting us.
Operator
Hey, thanks a lot.
Keith Hasam with North Coast Research.
Keith Hasam
Thank you. Good morning, guys. Hey, guys, I was hoping you might be able to provide a little bit more detail and then book the bill. I understand you're saying so the above one. I guess first off is if we're able to give us a little bit more context there. And then is with the emerging growth lasers that you're experiencing there, is there a longer, I guess cycle there so not necessarily a quick turn as the traditional business might be?
Mark M. Gitin
Sure, let me try to give a little bit more color. Again, the book to build, we're seeing strength in a number of areas, and again, I can talk about some of the regions. So first of all, we saw strength in Asia in the bookings, and I talked about some of the care. Key areas there talked about how in Japan, we're seeing the normalization of inventories, one of our key cutting OEMs and bookings turning on there talked about in China that we're seeing actually some return in the EV markets and it's, I would say, batteries in general where we're getting, we're gaining market share and we're also seeing some change in the factory capacities are starting to hit capacity in some of the factories in China as well.
And so we're seeing, bookings increase in EV again, that's because of the core technology that we provide with our AMB lasers, our laser depth dynamics that does the in-situ monitoring plus, scanning.
So we're actually providing subsystems that have key differentiation. We're seeing booking growth there. We're seeing an additive manufacturing micro machining and, again as part of the growth in Asia we saw strong growth in bookings. In North America, part of that is the strength that we're seeing in medical and we saw the Europe has been weak. It's -- we saw some stabilization, I would say there in bookings.
Then you would, I think you would ask something specifically about emerging products. I think I covered some of that there, again, and if you look at it from the emerging products piece, again, that was up 51% there.
And that's talking about areas in our AMB lasers, micro machining is in that bucket. Also, we saw some growth quarter to quarter in handheld welding. So another area that's exciting for us with our light well.
Timothy Mammen
I was on the -- you got a question on the turns. So a lot of the product actually is still quite short term. So the micro machining product we've been pushed to deliver it as quickly as possible. A lot of the uptick on the EV side was being pushed to deliver as quickly as possible. I'd say the 11 area where the turn on the backlog is extends out is on the medical business. So the positive on that is that we've got good visibility into it, given the order flow not only in Q1 but in April, but that does cover a lot of orders through the end of the year for the medical side.
But the rest of it, it's not as though we received a ton of orders in Q1 in April that are going to be but delivery throughout the year, right? It is medical is probably the biggest one that has a slower turn on and out of the flow.
Keith Hasam
Yeah, hey guys, but I guess I'm trying to understand is the above one. Are we talking like [1.05] or we talking [1.3], just trying to understand a little bit and how that plays into the guide because the guide is essentially that $15 million you're still roughly around the midpoint of where you are this quarter. So I was trying to understand how it turns out to the guide from the book to build ratio.
Timothy Mammen
Yeah, I know, it was solidly above one. I mean, if you take the $15 million that we reduced our guidance by, right, you get then an adjusted midpoint and relative to that, you'll come up with the overall bookings were a bit stronger even than the adjusted midpoint because of the turns, particularly on the medical side of it.
Keith Hasam
Okay, thank you.
Operator
(Operator Instructions) Mark Miller with The Benchmark Company.
Mark Miller
You indicated you were getting share in EVs is that in China or is that globally?
Mark M. Gitin
Yeah, thanks. So I was specifically talking about China in that piece there again. We have a really unique position when you combine our adjustable mode beam laser together with the laser depth dynamics, that's the OCT system that is measuring the depth of the weld in situ together with scanning. So we can provide a very differentiated subsystem, and that's been an area that's gaining a share and it's not just an EV but also stationary storage is a key area that's been growing now and is contributing there. And of course, we have gain share, across the world in different pieces, but the place that I was talking about was in China.
Mark Miller
What about North America? Ford pulled its yearly dying, so you're starting to see some uncertainty there?
Mark M. Gitin
So there's been uncertainty in EV now for some time, specifically in EV as it's economic plus political hotbed, right? So that's moving around and hard, quite hard to predict, I would say.
Mark Miller
Okay. Thank you and again congrats on your bookings.
Timothy Mammen
Thanks, Mark.
Operator
We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Eugene Federoff for closing comments.
Eugene Fedotoff
Thank you for joining us this morning and your continuing interest in IPG. We will be participating in several industrial events this quarter and looking forward to speaking with you again soon. Have a great day, everyone.
Operator
This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
