Yahoo Finance

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 at the top of our guidance in the fourth quarter at $234 million, up slightly on a sequential basis despite the full quarter impact from the disposal of Russian operations and only a modest revenue contribution from cleanLASER. Revenue was down 22% year over year and down 18%, excluding divested operations. Foreign currency reduced revenue by approximately 1% this quarter.
Revenue from materials processing applications decreased 24% year over year primarily due to lower sales in welding, cutting and marking applications, while sales increased in additive manufacturing and micromachining applications. Revenue from other applications decreased 6% due to lower sales in medical, partially offset by increased sales in advanced applications.
Gross margin was 38.6%, an increase of 40 basis points year over year and above our guidance, driven by lower product costs and a decrease in import duty and shipping costs, partially offset by lower absorption of manufacturing expenses as a result of lower revenue. Continued effort to rightsize inventory resulted in a more moderate impact from inventory provisions.
Operating expenses were below our guidance range because of a onetime benefit from stock-based compensation expense, and we were down both year over year and sequentially due to the disposition of our Russian operations and controlled spending.
Currency translation had a minor impact on revenue and gross profit in the quarter of approximately $2 million and $1 million, respectively. Foreign currency transaction gains had a positive impact on operating income of $1 million. GAAP operating income was $14 million and reported net income was $8 million or $0.18 per diluted share.
The effective tax rate was 64% in the quarter due to certain unusual tax items primarily related to repatriation of cash, which impacted the quarter by $3.4 million and earnings by $0.08 per share. In addition to this item, the effective tax rate was impacted by no tax benefits from losses in certain regions, other discrete items and the geographic spread of income in the quarter.
Now let's look at our revenue by application, which we provide an update on annually. Welding was 37% of total sales in 2024 and was down year over year due to weakness in general industrial manufacturing and automotive, including EV battery manufacturing compared to a strong 2023.
Cutting revenue continued to decline and represented 21% of total revenue in 2024. We saw soft demand in general manufacturing and e-mobility markets across all regions and our OEM customers went through inventory destocking due to a lack of market recovery in the second half of the year.
Competition continued to impact cutting sales in China, although these represent less than 5% of our consolidated revenue. Our OEM customers are seeing some increased competition from low-cost Chinese laser cutting system suppliers, selling outside of China, and we are working closely with customers to help them maintain their market share.
Medical bounced back significantly in the fourth quarter but was down slightly for the year, adjusting for the divestiture of Russia. We expect Medical to grow in 2025 with more significant revenue increases in 2026 and beyond. Medical is one of the attractive areas with strong growth opportunities that Mark detailed.
Moving to the revenue performance by region on slide 6. Sales in North America increased 6% sequentially, but were down 31% year over year due to lower sales in welding applications as a result of a large e-mobility purchase in the prior year that did not repeat this year.
Our medical orders from a large customer improved significantly from the prior quarter, but were still down year over year. Excluding divested revenue, sales in Europe increased 5% sequentially driven by growth in additive manufacturing and advanced applications. European sales declined 22% year over year due to lower sales and cutting applications as the industrial demand environment remained weak.
Revenue in China decreased 10% sequentially and 22% year over year due to lower sales in cutting and welding applications to general industrial and e-mobility customers, which was partially offset by growth in additive manufacturing.
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 $930 million and no debt. Cash provided by operations was $74 million, and capital expenditures were $23 million during the fourth quarter. Despite revenue being down this year, we continued to generate strong cash flow from operations and positive cash flow from inventory as we manage our investments in working capital.
We sold two buildings earlier this year, realizing $25 million in proceeds and our capital expenditures for the full year came in at approximately $99 million, which was well below our earlier expectations. However, some projects were delayed and will drive higher capital spending in 2025. We spent $57 million on share repurchases in the fourth quarter and $344 million for the full year.
Moving to our outlook on slide 9. For the first quarter of 2025, we expect revenue of $210 million to $240 million. We expect the first quarter gross margin to be between 36% and 39%. As Mark alluded to, we are increasing investments in the growth of our business.
As a result, our operating expenses are expected to be between $82 million and $84 million in the first quarter. We expect these expenses to increase further in the second quarter and remain elevated over the course of the year.
We anticipate delivering adjusted earnings per diluted share in the range of $0.05 to $0.35 with approximately 43 million diluted common shares outstanding. The adjusted EPS excludes amortization, acquisition-related charges and any other nonrecurring items.
First quarter adjusted EBITDA, which excludes stock-based compensation, is expected to be between $19 million and $35 million. We are planning on providing these non-GAAP financial metrics starting in the first quarter of 2025 to help you keep track of our underlying financial performance.
We expect our 2025 CapEx to be between $105 million and $115 million. The increase is primarily related to investment in manufacturing capacity in Germany in order to replace fiber and other critical production that we lost access to in Russia.
As mentioned earlier, a significant part of the 2025 expenditure relates to this project that was deferred from 2024. We continue to expect our normal maintenance CapEx to return to less than 5% of revenue once these critical investments are completed in the next 12 to 15 months.
In closing, I would like to highlight that our team remains focused and continues to execute well through the current environment. As we prioritize near-term investment in our future opportunities, we believe that these initiatives strengthen our foundation and position us well to deliver healthy operating leverage as the company returns to growth. We will also be able to improve free cash flow even further as we complete our near-term CapEx commitments.
With that, we will be happy to take your questions.

Question and Answer Session

Operator

(Operator Instructions) Ruben Roy, Stifel.

Ruben Roy

I wanted to start, Mark, if I could, on maybe drilling into some of the details around your review of the business a bit. And specifically, as you look at some of these new opportunities and then balance that against what's going on in cutting, I'd love to maybe get some thoughts on how you're thinking about cutting, investments in cutting? And how you see cutting play out over the next several years as you invest in some of these other growth areas?

Mark Gitin

Great. Well, thanks a lot for the question, Ruben, it's good to talk to you. So yes, I've now spent six months doing a deep dive into all of our technology capabilities, execution and really all of the R&D programs and entering the new year, then we've really aligned on a three-year strategic plan now to drive differentiation and profitable growth. And we'll talk about that with respect to cutting as well.
So -- we're launching new high-power fiber lasers that I talked about on lower-cost platforms with smaller form factors, and these are really competitive in today's market. And these provide a competitive edge now for our OEMs to compete in the market because just to speak about cutting for a minute, remember that cutting in China has really been the biggest issue from a competitive aspect, and that's less than 5% of the business now.
As we go to other markets, we're starting to see, as Tim mentioned, some of our -- some of our cutting OEMs seeing Chinese systems play into some of their markets. And we are providing now these new higher power, smaller form factor lasers at lower costs could allow them to compete. So that's the -- that's where we're playing on the cutting side.
And then we're driving now to really move towards towards differentiation in the marketplace with -- and launch profitable growth in some other key areas that I talked about. And the key areas that I'm talking about there are urology, micromachining, advanced applications, and these are programs that the target market that are -- markets exceeding $5 billion in TAM and offer IPG really hundreds of millions of dollars in revenue opportunities over the next several years.
And it's important to also mention that we're -- in these areas, we're working collaboratively with key customers and we already have purchase orders in place for some of these programs. We expect to see benefits from these later this year and really kicking in, in '26 and '27.
So now just to bring back to that. So these are differentiated areas that we're driving. That's what's really going to drive the growth of the company, cutting will continue to provide differentiation where we can, but the -- again, the real growth from the company is going to be from these key areas that I mentioned.
And we've got key programs in place now to drive these, and we've got customers engaged, and that's where the growth is going to come. We'll see some of that later in 2025, but the real growth from those differentiated programs is going to be in '26 and '27.

Ruben Roy

Okay. Mark, I guess just to make sure I'm understanding correctly on Tim's comments about competition starting to boil up here and there outside of China. Are you saying that the -- Tim mentioned that you're working with customers to maintain their market share.
I assume what you're talking about there is more on competitive differentiation rather than price. Is that the way to think about that? Or is it something else that you --

Mark Gitin

So the way that I would -- yes. So the way that I would talk about it here is, again, we're launching -- and we already launched at the Photonics West show so people saw this very high power. So 40 kilowatts based upon our newest higher power diode platform.
So that gives the the OEM, a smaller form factor with higher power at lower cost. So now think about that from them competing in the marketplace that allows them to put a higher power laser into their system in that same form factor.
So the form factor to give you an idea our 40-kilowatt laser is now in a form factor that years ago was a 4 kilowatt laser. And again, at a better dollars per watt level so they can then put those in their systems and compete with Chinese players that may be approaching in some of their markets with their systems.

Ruben Roy

Okay. Okay. And then just one last question. You mentioned, Mark, a lot of these areas of focus and investment and expectations for return to growth in 2026. With this mindset of bouncing along the bottom, book-to-bill a little bit under one, can you give us a little bit of detail about how you're thinking about visibility or the second half of the year?
Do you think revenues are steady state here, can get things get worse, maybe a little bit better? What are the puts and takes as you think about the rest of '25?

Mark Gitin

Yes. I mean we're not guiding to the full year. What I can say, again, we're seeing book-to-bill is around 1 or a little bit below 1. It's -- the industrial markets have still been under pressure. And you can see varied forecast of what's going to happen to the industrial markets.
There's a little bit of uptick in some of the PMIs that gives a little bit of good indication. We're seeing some of our customers are coming to more normalized inventories. But again, it's really going to depend on what happens later in the year in those industrial markets and how that plays out.

Timothy Mammen

We are expecting some -- we are expecting some contribution from some of the investments we're making towards the end of the year. I think positively, cutting picked up a little bit in Q4. That reflects some of the sentiment that we're hearing from our OEMs that their inventory levels are back down to a much more normal basis and the demand environment is definitely stable.
On the book-to-bill, one thing I would point out, the reason why it was just a little bit below 1 was because of all the geopolitical uncertainty in Korea, and our Korean bookings came in very weak versus expectations. Those orders are not canceled, and they have -- they're expecting to book a lot of those orders in Q1. But just given the uncertainty there that impacted total bookings had it not been for that Korean impact book-to-bill would have been at or slightly above 1.

Operator

Jim Ricchiuti, Needham & Company.

Jim Ricchiuti

I just wanted to talk a little bit about the step-up you're anticipating in OpEx in Q1 from Q4. And I wonder if you can give us a sense as to how that plays out between sales and marketing and R&D. It sounds like you've got a fair amount of investment going on, on the new product front. But I assume there's also market development.
And maybe just to clarify, you're anticipating, Tim, I think you said further increase in Q2. And then are you expecting that OpEx level to somewhat level off in the back half? I may have misinterpreted what you said.

Timothy Mammen

So let's do with those in stages, Jim. First of all, yes, Q1 OpEx increases. First of all, Q4 benefited from about $3 million of stock-based compensation related to PSUs that we're not going to invest. So you layer that back in to get to a more normalized level for stock-based comp.
The second thing that really impacts it is that bonus levels do end up being accrued at more of a target level where they've been below target because we've been underperforming relative to our budget, and you then start to see some of the investments in the business start to ramp up.
So yes, in Q2, we expect OpEx will increase further and then stabilize for the remainder of the year. I haven't got a split on SG&A and R&D for the first quarter, but a lot of the PSU and Stockholm stuff would be mainly in G&A and selling SG&A, and then the increase in some of the bonuses is really spread across all SG&A and R&D as well.

Mark Gitin

And Jim, you're right, some of that is focused on the go-to-market, right? So the business development aspects of this, some more focused OEM sales as well as our service infrastructure. And these programs, as I mentioned, that we're doubling down on these are programs that will really drive us into the future.

Jim Ricchiuti

Got it. And then two quick ones, if I may. It sounds like you're anticipating growth in the medical business in '25. Is that -- are you seeing, Mark, some broadening out of the customer base? I know you've had concentration in this area of the business?
And then the other follow-up question just relates -- I was struck by the increase you saw in Japan. And Tim, maybe you can give a little color on that, whether that's sustainable.

Mark Gitin

Yes. Thanks, Jim. It was great to see you. So following up on that, the yes, we are expecting some uptick at the -- towards the end of the year because on the medical, we're launching a new product in our line of thulium lasers for lithotripsy, that's kidney stones.
So that's where we're going to see the first part of the uptick, but we have a very significant road map that we're continuing to invest in that will drive further growth in '26 and '27. And the other piece of your question, yes, we have picked up another key OEM in urology, and that will also start to turn on this year and give us some update.

Timothy Mammen

I think Japan, they had a good quarter. So overall, they actually had quite a reasonable year. Japan revenue can be a bit volatile from quarter to quarter and uneven just in the way that they run their businesses. So Q1 actually is got a reasonable guidance, not particularly strong, but they've got a reasonable budget out there for the year.
It's actually a good business because it's fairly diverse. Some of the feedback we've heard on an improvement in the cutting business comes from Japanese OEM customers. And I think there's a bit more of a positive turn around the Japanese economy as a whole.

Operator

Keith Housum, Northcoast Research.

Keith Housum

Tim, I just want to make sure I understand in terms of the manufacturing process for the high-powered lasers, are you guys already implementing your cost-cutting measures there in terms of reducing cost console for those? Or is that still ongoing here?

Timothy Mammen

You talked about the low cost -- the new low-cost high-power lasers?

Keith Housum

Correct.

Timothy Mammen

So they are we're rolling the there's new cost high-power lasers when are they being rolled out or they've only reflected in the business model already.

Mark Gitin

Yes. Thanks for the question. So we're just launching those. We announced this actually at Photonics West this last couple of weeks ago, where we showed our high-power 40-kilowatt laser in a very small form factor. Again, this is all based upon our new high-powered diodes that then -- can give us higher power fiber lasers in a smaller form factor and yes, at a lower cost and that we're rolling those out in Q1 and Q2 of this year.

Keith Housum

Got you. Appreciate it. And part of the question that's tough to answer, but I've got to ask that question. Obviously, a lot of moving parts with tariffs going on these days. You guys sold to OEMs around the world. How are you guys thinking about tariffs as we stand today?

Timothy Mammen

So first of all, I mean, in the worst case tariffs would probably have a 150 to 200 basis point impact if we did nothing like continue to source and supply lasers, but we actually have quite a lot of flexibility in what we can do. So we can move manufacturing from one location to another and supply customers in different regions from different areas.
So that does provide us with a lot of flexibility in relation to potential tariffs. I mean it's not possible to say they'll have no impact, but we think that the impact, at least from a cost side can be managed and will be relatively small.
I think it's more difficult to identify how much uncertainty this drives into the near-term environment from a demand perspective in the longer term. I mean in the US, for example, tariffs are designed to drive reshoring of manufacturing and that would largely come from automation and using flexible efficient tools like lasers, so there'd be a longer-term potential medium- to longer-term benefit from that. But -- from the cost side, we've got a relatively manageable situation and some flexibility in what we can do.

Keith Housum

Okay. I appreciate that. And I guess last question for you here. We continue to hear a question on volume versus price. And obviously, I understand the different parts of the business, have a different impact.
But maybe you can perhaps provide a little color in terms of where are you seeing the biggest pressure on volume versus price these days?

Mark Gitin

Yes. I think the place to talk about that is really in cutting, as I mentioned earlier. So again, just to review, the biggest issue in competition and volume and price has really been in China with cutting. That's now less than 5% of the business.
If you go outside of China, our OEMs, we have very good position with those OEMs, because they know the performance and the reliability and the support and service that we provide. Now they're starting to see some pressures from cutting systems coming from China into their marketplace, and that's where that's driving some of that.
And from now bringing out the higher power, lower cost, lower dollars per watt, you can say, in the smaller form factor, now those customers will be in positions to win against the Chinese players using higher power systems, higher-power lasers within their systems at similar cost and/or, in some cases, driving some lower cost within their system from the lasers.
And we would expect that from a volume standpoint, today, it's been -- the cutting market has been depressed for some time. We're starting to see some of that destocking subside. And so as industrial markets come back and the volumes come back, we should see those things start to normalize.

Operator

(Operator Instructions) Michael Feniger, Bank of America.

Michael Feniger

Just can you remind us just on the auto side and e-mobility, just how big of that is as a percent of the business right now and what you're seeing currently with that? Is that -- is there any expectation that we could see some of that come back in the second half? Just curious how you guys are looking at that side of the business?

Timothy Mammen

Yes. I mean, we haven't given an EV number on that this year. EVs basically it's gone down over the years. So it's less than 20% of total revenue was above 20%. And then you have other automotive business and actually got that number on hand, Michael, but you add that to the EV was probably still in the range of 25%-plus for total automotive sales.
The EV environment, I think, remains uncertain and unclear. I mean, capacity utilization is picking up. There are a number of projects that we know that are out there that we're very closely working with the end customers on. So it's -- the business is -- we're expecting it to stabilize and potentially improve a little bit this year, but no significant massive momentum behind it yet.

Mark Gitin

And the only thing I would add to that, just to remind you, we've got very strong position in EV batteries, even with it being down because, again, we have a combination of our adjustable mode laser plus the what's called the LDD or laser diode -- laser depth dynamics that actually will measure the weld in situ and provide quality control plus some of this scanning and system. So we have a very big moat around that area. So as the EV comes back, we will get our fair share of that business.
And the other thing just to point out on because EV is often equated to batteries, there are other areas of batteries that are continuing to grow. For example, stationary storage is becoming a big area that's grown 100% year over year and continues to grow. And there are other areas of electrification where we play in the batteries because of these unique capabilities that we bring in the laser and the process.

Michael Feniger

And Mark, just to double-click on that. your -- the competition intensifying, it sounds like that's still more that your customers are seeing that's still cutting side. Is that correct? It's not showing up on welding or on the EV side?

Mark Gitin

That's right. The biggest issues in competition are in that cutting side. The other areas like welding, like EV welding and some of the areas that I talked about where we're investing in, these are areas where we have key differentiation.
Remember, as a company, we have tremendous technologies in fibers and diodes and optics and scanning and the whole host plus there's tremendous process and applications knowledge within the company. So you put those pieces together and then that really creates a moat.
And so if we talk about that and even shift to where we're investing, we're investing for growth in areas where we have these key differentiation in medical, in micromachining, in some of these advanced areas where we can bring those pieces and really drive the growth and have real moats around the business.

Michael Feniger

Fair enough, Mark. And I think Tim addressed this in an earlier question, but I'm just curious with some of the tariffs, I mean, how much of the US revenue do you guys import from Europe. I know you guys have had the CapEx that you're set to invest in the capacity increase in Germany.
I'm just curious with tariffs, do you have to think a little bit differently on -- you guys have moved a lot of your production footprint, obviously, out of Russia, and you guys have expanded in certain areas.
I'm just curious if we err in a more tariff-driven world. Do you have to think a little bit more about maybe your footprint? Is that more smaller or bigger changes to think about?

Mark Gitin

Yes. Again, there's a lot of uncertainty in the tariff side. What I would tell you and Tim mentioned this, we have a lot of flexibility in our manufacturing platform. We have a lot of capability in the US and in Europe.
So there's the ability to decide where we should build, and we have some of that flexibility as we look at potential future tariffs and how that works. So I think we have a lot of capability to mitigate depending on what's happening. I'll let Tim.

Timothy Mammen

Yes, Mike, maybe question, we do not expect tariffs to suddenly turn around -- we don't expect a turnaround and say, we're going to have to increase CapEx by another $50 million, right? We actually have a significant facility in the US that's just about to be completed. So that would enable us to ramp production in the US. If we don't want to import stuff from our German facility.
That would, in turn, free up capacity in Germany to supply other countries around the world. And then when the German investment in fiber and the optical component manufacturing is completed this year that replaces Russia, that actually provides a lot of capacity within Germany as well.
So -- the 1 thing I'm pretty -- I'll say with some very good degree of certainty, we're not going to turn around and say we have to build another $50 million building somewhere because of tariffs. We really -- we expect free cash flow to improve significantly in '26 once we're over this investment cycle.

Operator

Scott Graham, Seaport Research.

Scott Graham

I wanted to explore cutting a little bit more. I know you ended the year with about 21% of sales from cutting and if we, let's just say, take out the China piece call that 4%, 5%. We're looking at in the upper teens percent of sales basis.
I know you're launching new products to help defend your market positions, but maybe help us understand what percentage of that mid-teens cutting away from China is under this competitive pressure you're talking about? And how much of that, are you going to go out and try to really defend with new products?

Mark Gitin

So again, from this side, it's -- the cutting percentage is a bit less than that, again, outside of China, and we will be defending that business with these new lasers. Again, the new lasers provide a significant benefit in size, performance and cost. So we believe that these will provide our OEMs a very good position to compete.

Timothy Mammen

So just to clarify -- just on the 15% that remains includes foil cutting, which is another specialized cutting. So we haven't given a specific number on the flat sheet metal, I think that it's less than the 15%. And that's where our customers are on a global basis, and we intend to defend that business vigorously over the coming year and beyond.

Mark Gitin

And again, just realize too that we have very close relationships with these OEMs. We've been supporting them for years. And it's the lasers, it's the performance, it's the reliability, and it's also the support and infrastructure that we provide to service our customers and their customers.
So that's a key piece of this. It's -- when it comes to these OEMs that are outside of China, it's a bigger piece than just power in dollars per watt.

Scott Graham

Got it. I appreciate it. The other question I wanted to ask actually, I have one more after this, if you don't mind. But within the first quarter guide for adjusted EPS, could you tell us what the add back is for amortization that you're changing your adjusted to an adjusted EPS (inaudible) so what is that going to be in cents per share and in full dollars so we can see the tax rate, too?

Timothy Mammen

Yes. The amortization is about $2.3 million per quarter. And then on a EPS basis, it would be just over $0.03 on an EPS basis after tax. That's the only add back that we're incorporating in guidance on adjusted EPS. And then adjusted EBITDA, we said includes the add back of stock comp as well as all of the depreciation and amortization.

Scott Graham

Yes. Last question, I don't know if you can answer it or if you will, but it sounded a little bit, Mark, like setting the stage for '26, '27 sales growth was your comment. I mean, for '25, is it really just hoping to get back to flat in the second half of the year at this point?

Mark Gitin

So we're not guiding for the full year. What I would tell you is that we've mentioned the fact that some of our new products we'll be launching in -- towards the end of the year. So we -- I mentioned that we have a new medical product that will be coming out late in the year.
I also mentioned that we have a new customer coming online there. And some of the other programs that I talked about, where we're making the significant -- where we're making these investments in the micromachining, in the medical, in these advanced markets, we'll start to see some early sales in that area.
And those -- these are programs that we've -- we're engaged with customers, and we even have some purchase orders for some of the initial products that will start to come out. So combine that. And then --

Timothy Mammen

Maybe some pick up during the course of the year on the welding --

Mark Gitin

On welding and some of the other --

Timothy Mammen

Cleaning. And then I mean the tone we heard from the cutting OEMs is a little bit more positive, but obviously, we're going in there with lower cost lasers and defending that business pretty vigorously, so.

Operator

Mark Miller, The Benchmark Company.

Mark Miller

Besides your aforementioned lower-cost, high-power lasers, what other measures are you taking to try to improve margins?

Timothy Mammen

What are the measures we're taking to improve margins. I think first of all, on like, I'll talk about a little bit on the gross margin side, Mark can talk about things like LDD where we're taking some cost out and other parts. But on the gross margin side, having got inventory much more under control, the impact of inventory provisions this year will decrease.
We expect to see some benefit from the low-cost product as it's rolled out. We're definitely working on looking at how to improve operational efficiency even at these lower revenue levels to try and reduce further some of the underabsorption. We had a little bit of a benefit from that in Q4, but we're still under absorbed relative to an optimal level by about 600 basis points.
So we need to sometimes preserve the investment in the manufacturing capacity. We've had a rebound in demand, for example, for a product that was running at very, very low levels last year and had we dismantled that manufacturing, we would have been able to respond to the customer demand. But we certainly want to try and take out a few hundred basis points on underabsorption this year, that would be thing.
And then if the investments -- the product from the investment starts to gain some traction, there'll probably be a bit of a mix benefit on gross margin. Mark --

Mark Gitin

Yes, I mean, exactly as I talked about, the investments that we're making are in areas with quite differentiated products where we can maintain and gain margin. So in each of these areas in medical and advanced and also in areas like micromachining, where we're bringing out new products, the gross margins, the differentiation is very high, the moats are high, and we'll be able to expand higher margin with mix.
And as Tim said, we're also continuing to work on gross margin benefits across the portfolio. We are working on also reducing costs on some other products. And as Tim said, we're working on operational efficiencies that will continue to help margins. So overall, we're working on a number of areas that, over time, will drive the margins up.

Mark Miller

Your laser and non-laser system sales were down sequentially year over year. I'm just wondering what's going on there.

Timothy Mammen

On laser and non-laser sales. Most of that is just timing of orders with customers, some of the larger automation systems, they've got a very strong pipeline of orders they're working on, but I think customers have been sitting on their hands even post the election, we didn't see a big pickup in orders, but they've got still a strong pipeline that they're working through on that. We should see a pickup in that during the course of this year.

Operator

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

Eugene Fedotoff

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