IPGP - NASDAQ

Good morning and welcome to IPG Photonics' 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 Fedotoff, IPG Senior Director, Investor Relations for introductions. Please go ahead with your conference.

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 discuss management's or the company's intentions, expectations or predictions of the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause the company's actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties are defined in our Form 10-K for the period ended December 31st, 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 reconciliation 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 posted on our Investor 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.

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 midpoint 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-bill was the strongest we've seen in more than two years. Welding revenue continued to show signs of stabilization with share gains in e-mobility. While cutting revenue remained challenged, orders increased as business in Japan, Europe, and the U.S. started to normalize. We also saw strong results in some other materials processing applications, including cleaning, which benefited from the cleanLASER acquisition and solid growth in additive manufacturing. I'm very encouraged to see the momentum that we're starting to build in our medical, micromachining, 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 multibillion-dollar market where our superior solutions are well-positioned to replace legacy systems. We're currently developing the next generation of our thulium 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 micromachining 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're 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 are 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-bill 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 us 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 and enhance our market position, expand our technology portfolio, and accelerate our entry into high-growth markets. A great example is our acquisition of cleanLASER 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.

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 in 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 cleanLASER 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 in 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 margin 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 continue 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 were 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 expect medical 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 cleanLASER 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 in additive manufacturing, micromachining, advanced applications, and medical. As I mentioned, we also saw some recovery in e-mobility 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, 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 lower in the first quarter due to the payment 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 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 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 minus $0.05 to $0.25 with approximately 43 million diluted common shares outstanding. Our adjusted EBITDA is expected to be between $16 million and $31 million. In closing, we are pleased to see signs of demand improvement 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.

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Ruben Roy with Stifel. Please proceed with your question.

Thank you. Hi Mark. Great to hear about the signs of stabilization in the bookings trends. I wonder if you could maybe dig into that just a little bit more and talk about end markets where you're seeing strength in geographies. And I guess maybe touch on China. Tim mentioned the recovery in e-mobility in China but China obviously had a pretty good Q1. 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?

Yes. 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 -- 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 e-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 were able to drive good growth and e-mobility there in China as well as areas like micromachining areas, also in additive manufacturing, good strength there. We also saw strength other places in Asia with -- in 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, in the U.S. We picked up a new customer in medical. So, very, very key growth area along our urology platform and then also saw some stabilization in Europe. It was weaker but we saw some stabilization. So what's really great to see is that the key areas that we've talked about last quarter, the key areas of our strategy, investments. So, in that area of medical, in the area of micromachining, 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 -- it's a very key area 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 we're showing up in that growth.

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 cost and not have to raise cost for your customers and maybe that's causing the delays? Or is it just 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, I was just going to finish by asking on the gross margin side of it, if it's a cost-related thing, does this extend into the second half? Thank you.

Yes, sure. So, let me first start with delay. 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, we have the capability both inside of the U.S. as well as outside of the U.S. 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'll -- we expect to ship most of that actually in Q3.

Okay. Thanks. And then just on the margin side, Tim, would this spill into Q3?

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. As we said, we expect to be delivering this product as we get into Q3 and then pricing. So, substantially, I don't think all of it will be done by Q3, but we expect to be significantly reducing the impact into Q3 and then probably have eliminated by the time we get to Q4, that would be the target on it. Just to add a little bit of color on some 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.

Right. Okay, that’s great. Thank you guys.

Our next question is from Jim Ricchiuti with Needham & Company. Please proceed with your question.

Hi thanks. Good morning.

Jim, you cut out.

Yes. Hopefully, you can hear me okay?

Yes. We missed the beginning.

We missed the beginning. Yes.

Okay. Thank you. 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 U.S.?

Yes. 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 diode 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 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.

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 will 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?

Yes. So, thanks. Yes, we're very excited with bringing on 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 multibillion-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 roadmap for growth in urology 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.

Got it. And then just a quick one on the micromachining. 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.

Yes. 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 micromachining initiative addresses a wide range of applications, some of them in microelectronics and other areas. And 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 micromachining revenue from a year ago. And it's just the first of a product roadmap for growth in that area.

Got it. Thanks very much.

Our next question comes from Michael Feniger with Bank of America. Please proceed with your question.

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 anything we should know about in terms of the -- 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.

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, 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, very high tariff rate on metal parts and components coming into the U.S. from China. The biggest impact in the near-term related 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, 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 suppliers in different parts of the world and even suppliers much more locally, for example, in the U.S. That's about it, I think on that.

Helpful. And just a follow-up. I remember it was last quarter, 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 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.

Yes. So, I'm happy to take that. The -- 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 micromachining, the areas like battery welding, the additive manufacturing, these are areas where we have very strong competitive positions. And we believe 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 or all of what we -- what gets delivered in North America is manufactured in the U.S. and the other pieces are manufactured outside of the U.S. So, 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.

And the only thing I'd add to that is, don't forget, Mike, that any of the low-cost suppliers trying to bring product into the U.S. is subject to 145% tariff on that product, right? So, their costs are doubling on their inbound but that positions us pretty well given that we make everything for the U.S. here, have our diode and other manufacturing locally.

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 U.S. and we have a very good position in automated manufacturing. Our lasers are used widely in those applications.

Helpful. Thank you everyone.

Our next question comes from Scott Graham with Seaport Research Partners. Please proceed with your question.

Hey good morning. Thanks for taking the questions. Can you -- you touched on it a little bit but I was hoping you can 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?

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 and moving things around, first and foremost, is the manufacturing footprint. So, we actually, Scott, have the ability to manufacture -- to move the 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 in tariffs. And then we're also able to optimize the supply chain and we've already moved some of that around so that we can -- not 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, we would be shipping most of that already in Q3 that we would move from Q2.

Okay. I think I might want to come back to you on that later. Nevertheless, so the 150 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?

Correct. Yes. Just to, I mean, frame it in an example. So let's say you've got $3 million of product that you're 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 in-source some of that to our own machine shops in the U.S., 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 U.S., 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 U.S. That's how you have to think about it, Scott.

I appreciate you're saying that--

Just on reconfiguring the manufacturing, about 80% of what we make, for example, for China is already made outside of the U.S. There are some very specific products that we still make in the U.S. and those are the ones that Mark is talking about will be moved outside of the U.S. 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 U.S. related to China supply.

Yes, I was saying, I appreciate you're 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 seem to have 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 CEOs are -- 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?

Yes. So, 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-bill 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-plus quarters, our revenue 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 medical, we talked about picking up a new customer in medical. We talked about micromachining and the new product launch there and the fact that we're growing in micromachining, 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.

Hey, thanks a lot.

Our next question comes from Keith Housum with Northcoast Research. Please proceed with your question.

Thank you. Good morning guys. I guess I was hoping you might be able to provide a little bit more detail on that book-to-bill. I understand you're saying solidly above 1. I guess, first off, is it -- perhaps 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?

Sure. Let me try to give a little bit more color. Again, the book-to-bill, 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 key areas there. We 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 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 in additive manufacturing and micromachining. 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 had asked 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, micromachining 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 LightWELD.

Question was on the -- Keith, you have a question on the turns.

Yes.

So, a lot of the product actually is still quite short turn. So, the micromachining 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 one area where the turn on the backlog is -- extends out is on the medical business. So the positive on that is that we have 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 and April that are going to be for delivery throughout the year, right? It is -- medical is probably the biggest one that had a slower turn on and out of all of the order flow we've received.

Yes. I guess what I'm trying to understand is, you say solidly above 1. Are we talking like 1.05 or are we talking 1.3? Just trying to understand a little bit and how that plays into the guide because the guide is essentially through 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 into the guide from the book-to-bill ratio?

Yes. No, it was solidly above 1. I mean I think 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 a -- the overall bookings were a bit stronger even than the adjusted midpoint because of the turns, particularly on the medical side of it.

Okay. Thank you.

[Operator Instructions] Our next question comes from Mark Miller with The Benchmark Company. Please proceed with your question.

You indicated you were gaining share in EVs. Is that in China? Or is that globally?

Yes. 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 in EV but also stationary storage is a key area that's been growing now and is contributing there. And of course, we have gained share across the world in different places but the place that I was talking about was in China.

What about North America? Ford pulled its yearly guidance. And so are you starting to see some uncertainty there?

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.

Okay. Thank you and congrats on your bookings.

Thanks.

Thanks Mark.

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.

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