lasr-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38462

________________________________________________________

NLIGHT, INC.

(Exact name of Registrant as specified in its charter)

________________________________________________________

Delaware

91-2066376

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

4637 NW 18th Avenue

Camas, Washington 98607

(Address of principal executive office, including zip code)

(360) 566-4460

(Registrant's telephone number, including area code)

__________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Exchange on which Registered
Common Stock, par value $0.0001 per share	LASR	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☒

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2025, the Registrant had 49,439,471 shares of common stock outstanding.


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			Page

Part I. Financial Information			2
Item 1. Unaudited Interim Financial Statements			2
Consolidated Balance Sheets: March 3 1 , 202 5 and December 31, 202 4 (unaudited)			2
Consolidated Statements of Operations: Three Months Ended March 3 1 , 202 5 and 202 4 (unaudited)			1
Consolidated Statements of Comprehensive Loss: Three Months Ended March 31, 2025 and 2024 (unaudited)			2
Consolidated Statements of Stockholders' Equity: Three Months Ended March 31, 2025 and 2024 (unaudited)			3
Consolidated Statements of Cash Flows: Three Months Ended March 31, 2025 and 2024 (unaudited)			4
Notes to Consolidated Financial Statements (unaudited)			5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			15
Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
Item 4. Controls and Procedures			23
Part II. Other Information			23
Item 1. Legal Proceedings			24
Item 1A. Risk Factors			24
Item 5. Other Information			25
Item 6. Exhibits			26
Signatures			27

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

nLIGHT, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)


	As of
	March 31, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	82,196	$	65,829
Marketable securities	34,522		34,868
Accounts receivable, net of allowances of $1,333 and $1,800	36,582		34,895
Inventory	43,793		40,800
Prepaid expenses and other current assets	18,679		17,697
Total current assets	215,772		194,089
Restricted cash	260		259
Lease right-of-use assets	11,334		10,822
Property, plant and equipment, net	45,453		46,937
Intangible assets, net	684		833
Goodwill	12,384		12,354
Other assets, net	4,109		4,947
Total assets	$	289,996	$	270,241

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	16,922	$	15,076
Accrued liabilities	14,855		13,268
Deferred revenues	2,853		3,577
Current portion of lease liabilities	2,533		2,314

Total current liabilities	37,163		34,235
Line of credit	20,000		—
Non-current income taxes payable	5,612		5,541
Long-term lease liabilities	10,089		9,819
Other long-term liabilities	4,373		4,216
Total liabilities	77,237		53,811
Stockholders' equity:

Common stock - $0.0001 par value; 190,000 shares authorized, 49,435 and 48,948 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively	16		16
Additional paid-in capital	549,663		544,842
Accumulated other comprehensive loss	(3,731)		(3,332)
Accumulated deficit	(333,189)		(325,096)
Total stockholders’ equity	212,759		216,430
Total liabilities and stockholders’ equity	$	289,996	$	270,241

See accompanying notes to consolidated financial statements.

nLIGHT, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Revenue:
Products	$	35,678	$	29,370
Development	15,990		15,157
Total revenue	51,668		44,527
Cost of revenue:
Products	23,724		23,231
Development	14,145		13,808
Total cost of revenue	37,869		37,039
Gross profit	13,799		7,488
Operating expenses:
Research and development	11,374		10,659
Sales, general, and administrative	12,035		11,547

Total operating expenses	23,409		22,206
Loss from operations	(9,610)		(14,718)
Other income:
Interest income, net	1,640		455
Other income, net	14		641
Loss before income taxes	(7,956)		(13,622)
Income tax expense	137		144
Net loss	$	(8,093)	$	(13,766)


Net loss per share, basic and diluted	$	(0.16)	$	(0.29)


Shares used in per share calculations, basic and diluted	49,093		47,242

See accompanying notes to consolidated financial statements.

nLIGHT, Inc.

Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Net loss	$	(8,093)	$	(13,766)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	326		(223)
Change in unrealized gains on available-for-sale securities	(725)		111
Comprehensive loss	$	(8,492)	$	(13,878)

See accompanying notes to consolidated financial statements.

nLIGHT, Inc.

Consolidated Statements of Stockholders' Equity

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2025
	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance, December 31, 2024	48,948	$	16	$	544,842	$	(3,332)	$	(325,096)	$	216,430
Net loss	—	—		—		—		(8,093)		(8,093)
Issuance of common stock pursuant to exercise of stock options	148	—		121		—		—		121
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax	339	—		(1,356)		—		—		(1,356)

Stock-based compensation	—	—		6,056		—		—		6,056
Change in unrealized gains on available-for-sale securities	—	—		—		(725)		—		(725)
Cumulative translation adjustment, net of tax	—	—		—		326		—		326
Balance, March 31, 2025	49,435	$	16	$	549,663	$	(3,731)	$	(333,189)	$	212,759


		Three Months Ended March 31, 2024
	Common stock	Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit			Total stockholders' equity
			Shares					Amount
Balance, December 31, 2023		47,266		$	16	$	521,184		$	(2,477)	$	(264,304)	$	254,419
Net loss		—		—		—			—		(13,766)		(13,766)

Issuance of common stock pursuant to exercise of stock options		11		—		10			—		—		10
Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax		275		—		(1,625)			—		—		(1,625)



Stock-based compensation		—		—		5,431			—		—		5,431
Unrealized gains on available-for-sale securities		—		—		—			111		—		111
Cumulative translation adjustment, net of tax		—		—		—			(223)		—		(223)
Balance, March 31, 2024		47,552		$	16	$	525,000		$	(2,589)	$	(278,070)	$	244,357

See accompanying notes to consolidated financial statements.

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nLIGHT, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net loss	$	(8,093)	$	(13,766)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation	3,172		3,135
Amortization	498		1,258
Reduction in carrying amount of right-of-use assets	(473)		(70)
Provision for losses on (recoveries of) accounts receivable	(466)		95
Stock-based compensation	6,056		5,431
Deferred income taxes	(3)		—
Loss on disposal of property, plant and equipment	62		35
Interest earned on marketable securities not yet received	(227)		—
Changes in operating assets and liabilities:
Accounts receivable, net	(768)		11,892
Inventory	(2,811)		(888)
Prepaid expenses and other current assets	(959)		(1,646)
Other assets, net	502		(616)
Accounts payable	2,018		2,099
Accrued and other long-term liabilities	1,693		1,555
Deferred revenues	(736)		2,745
Lease liabilities	450		15
Non-current income taxes payable	65		101
Net cash (used in) provided by operating activities	(20)		11,375
Cash flows from investing activities:

Purchases of property, plant and equipment	(2,281)		(1,556)

Purchase of marketable securities	(34,288)		(24,357)
Proceeds from maturities and sales of marketable securities	34,136		24,365
Net cash used in investing activities	(2,433)		(1,548)
Cash flows from financing activities:

Proceeds from line of credit	20,000		—





Proceeds from stock option exercises	121		10
Tax payments related to stock award issuances	(1,356)		(1,625)
Net cash provided by (used in) financing activities	18,765		(1,615)
Effect of exchange rate changes on cash	56		(115)
Net increase in cash, cash equivalents, and restricted cash	16,368		8,097
Cash, cash equivalents, and restricted cash, beginning of period	66,088		53,466
Cash, cash equivalents, and restricted cash, end of period	$	82,456	$	61,563
Supplemental disclosures:
Cash paid for interest, net	$	12	$	—
Cash paid for income taxes	47		210
Operating cash outflows from operating leases	855		1,034
Right-of-use assets obtained in exchange for lease liabilities	1,188		831
Accrued purchases of property, equipment and patents	337		422
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	82,196	$	61,306
Restricted cash	260		257
Total cash, cash equivalents, and restricted cash	$	82,456	$	61,563

See accompanying notes to consolidated financial statements.

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nLIGHT, Inc.

Notes to Consolidated Financial Statements

Note 1 - Basis of Presentation and New Accounting Pronouncements

Basis of Presentation

The accompanying unaudited consolidated financial statements of nLIGHT, Inc. and our wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The unaudited financial information reflects, in the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Policies

Our critical accounting policies have not materially changed during the three months ended March 31, 2025, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

New Accounting Pronouncements

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. This ASU requires enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid and is effective for fiscal years beginning after December 15, 2024. This ASU requires additional disclosures and, accordingly, we do not expect the adoption of ASU 2023-09 to have a material effect on our financial position, results of operations or cash flows.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03 related to the disaggregation of certain income statement expenses. The amendments in this update require public entities to disclose incremental information related to purchases of inventory, team member compensation and depreciation, which will provide investors the ability to better understand entity expenses and make their own judgements about entity performance. The amendments in this update are effective for fiscal years beginning after December 15, 2026. We plan to adopt this pronouncement and make the necessary updates to our disclosures for the year ending December 31, 2027, and, aside from these disclosure changes, we do not expect the amendments to have a material effect on our financial position, results of operations or cash flows.

Note 2 - Revenue

We recognize revenue upon transferring control of products and services and the amounts recognized reflect the consideration we expect to be entitled to receive in exchange for these products and services. We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of our consideration of the contract, we evaluate certain factors, including the customer's ability to pay (or credit risk). For each contract, we consider the promise to transfer products, each of which is distinct, as the identified performance obligations.

We allocate the transaction price to each distinct product based on its relative standalone selling price. Master sales agreements or purchase orders from customers could include a single product or multiple products. Regardless, the contracted price with the customer is agreed to at the individual product level outlined in the customer contract or purchase order. We do not bundle prices; however, we do negotiate with customers on pricing for the same products based on a variety of factors (e.g., level of contractual volume). We have concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product.

We often receive orders with multiple delivery dates that may extend across several reporting periods. We allocate the transaction price of the contract to each delivery based on the product standalone selling price and invoice for each scheduled delivery upon shipment or delivery and recognize revenues for such delivery at that point, when transfer of control has occurred. As scheduled delivery dates are generally within one year, under the optional exemption provided by ASC 606-10-50-14a, revenues allocated to future shipments of partially completed contracts

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are not disclosed as performance obligations for point in time revenue. Further, we recognize, over time, revenue as per ASC 606-10-55-18 (invoice practical expedient) for our cost plus contracts and, accordingly, elect not to disclose information related to those performance obligations under ASC 606-10-50-14b. As of March 31, 2025, we did not have any performance obligations relating to firm fixed price contracts that did not qualify for the aforementioned

disclosure exemptions.

Rights of return generally are not included in customer contracts. Accordingly, product revenue is recognized upon transfer of control at shipment or delivery, as applicable. Rights of return are evaluated as they occur.

Revenues recognized at a point in time consist of sales of semiconductor lasers, fiber lasers and other related products. Revenues recognized over time generally consist of development arrangements that are structured based on our costs incurred. For long-term contracts, we estimate the total expected costs to complete the contract and recognize revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors costs, other direct costs, and indirect costs applicable on government and commercial contracts.

Contract estimates are based on various assumptions to project the outcome of future events that may span several

years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. Billing under these arrangements generally occurs within one month of the costs being incurred or as milestones are reached.

The following tables represent a disaggregation of revenue from contracts with customers for the periods presented (in thousands):

Sales by End Market


	Three Months Ended March 31,
	2025		2024
Industrial	$	8,856	$	11,985
Microfabrication	10,106		10,797
Aerospace and Defense	32,706		21,745
	$	51,668	$	44,527

Sales by Geography


	Three Months Ended March 31,
	2025		2024
North America	$	36,085	$	28,724
Asia Pacific	9,128		10,034
EMEA(1)	6,455		5,769
	$	51,668	$	44,527

(1) EMEA consists of Europe, the Middle East, and Africa.

Sales by Timing of Revenue


	Three Months Ended March 31,
	2025		2024
Point in time	$	35,680	$	29,356
Over time	15,988		15,171
	$	51,668	$	44,527

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Our contract assets and liabilities were as follows (in thousands):


	Balance Sheet Classification	As of
		March 31, 2025		December 31, 2024
Contract assets	Prepaid expenses and other current assets	$	9,596	$	14,510
Contract liabilities	Deferred revenues and other long-term liabilities	6,396		6,845

Contract assets generally consist of revenue recognized on an over-time basis where revenue recognition has been met, but the amounts are billed and collected in a subsequent period. In our services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities recorded in deferred revenues on the Consolidated Balance Sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. For our product revenue, we generally receive cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. For our contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

During the three months ended March 31, 2025, we recognized revenue of $1.5 million that was included in the deferred revenues balance at the beginning of the period as the performance obligations under the associated agreements were satisfied.

Note 3 - Concentrations of Credit and Other Risks

The following customers accounted for 10% or more of our revenues for the periods presented:


	Three Months Ended March 31,
	2025	2024
U.S. Government*	35%	19%
Raytheon Technologies	(1)	11%
KORD Technologies	(1)	10%

*Excludes sales to customers who sell our products and services exclusively to the U.S. Government

(1) Represents less than 10% of total revenues.

Financial instruments that potentially expose us to concentrations of credit risk consist principally of receivables from customers. As of March 31, 2025 and December 31, 2024, two customers accounted for a total of 35% and 24%, respectively, of net customer receivables. No other customers accounted for 10% or more of net customer receivables at either date.

Note 4 - Fair Value of Financial Instruments

The carrying amounts of certain of our financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities are shown at cost which approximates fair value due to the short-term nature of these instruments. The fair value of our term and revolving loans approximates the carrying value due to the variable market rate used to calculate interest payments.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

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•Level 1 Inputs: Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

•Level 2 Inputs: Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 Inputs: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our financial instruments that are carried at fair value consist of Level 1 assets which include highly liquid investments and bank drafts classified as cash equivalents and marketable securities.

Our fair value hierarchy for our financial instruments was as follows (in thousands):


	March 31, 2025
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	21,413	$	—	$	—	$	21,413
Commercial paper	1,312		—		—		1,312
	22,725		—		—		22,725
Marketable Securities:
U.S. treasuries	34,522		—		—		34,522
Total	$	57,247	$	—	$	—	$	57,247


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Cash Equivalents:
Money market securities	$	20,488	$	—	$	—	$	20,488
Commercial paper	1,773		—		—		1,773
	22,261		—		—		22,261
Marketable Securities:
U.S. treasuries	34,868		—		—		34,868
Total	$	57,129	$	—	$	—	$	57,129

Cash Equivalents

The fair value of cash equivalents is determined based on quoted market prices for similar or identical securities.

Marketable Securities

Marketable securities consist primarily of highly liquid investments with original maturities of greater than 90 days when purchased. We classify our marketable securities as available-for-sale, as they represent investments that are available to be sold for current operations, and value them utilizing a market approach that uses observable inputs without applying significant judgment.

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Note 5 - Inventory

Inventory is stated at the lower of average cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory includes raw materials and components that may be specialized in nature and subject to obsolescence. On a quarterly basis, we review inventory quantities on hand in comparison to our past consumption, recent purchases, and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we write down the affected inventory value for estimated excess and obsolescence charges. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Inventory consisted of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Raw materials	$	21,253	$	19,165
Work in process and semi-finished goods	18,610		17,390
Finished goods	3,930		4,245
	$	43,793	$	40,800

Note 6 - Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):


	Useful life	As of
	(years)	March 31, 2025		December 31, 2024
Automobiles	3	$	64	$	64
Computer hardware and software	3 - 5	9,643		9,672
Manufacturing and lab equipment	2 - 7	97,263		95,106
Office equipment and furniture	5 - 7	2,110		2,542
Leasehold and building improvements	2 - 12	33,257		33,104
Buildings	30	9,392		9,392
Land	N/A	3,399		3,399
		155,128		153,279
Accumulated depreciation		(109,675)		(106,342)
		$	45,453	$	46,937

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Note 7 - Intangible Assets and Goodwill

Intangible Assets

The details of definite lived intangible assets were as follows (in thousands):


	Estimated useful life (in years)	As of
		March 31, 2025		December 31, 2024

Development programs	2 - 4	7,200		7,200
Developed technology	5	2,959		2,959
		10,159		10,159
Accumulated amortization		(9,475)		(9,326)
		$	684	$	833

Amortization related to intangible assets was as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Amortization expense	$	149	$	373

Estimated amortization expense for future years is as follows (in thousands):


2025	$	336
2026	348


	$	684

Goodwill

The carrying amount of goodwill by segment was as follows (in thousands):


	Laser Products		Advanced Development		Totals


Balance, December 31, 2024	$	2,106	$	10,248	$	12,354
Currency exchange rate adjustment	30		—		30
Balance, March 31, 2025	$	2,136	$	10,248	$	12,384

Note 8 - Line of Credit

We have a $40.0 million revolving line of credit (LOC) with Banc of California dated September 24, 2018, which is secured by our assets and matures on September 24, 2027. The LOC agreement contains restrictive and financial covenants and bears an unused credit fee of 0.25% on an annualized basis. The interest rate of 7.0% on the LOC at March 31, 2025 is based on the Prime Rate, minus a margin based on our liquidity levels.

During the three months ended March 31, 2025, we drew $20.0 million under the LOC to support working capital and general corporate purposes. As of March 31, 2025, $20.0 million was outstanding on the LOC and we were in compliance with all covenants. The remaining $20.0 million unused portion of the LOC is available for borrowing.

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Note 9 - Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Accrued payroll and benefits	$	11,351	$	9,751
Product warranty, current	2,714		2,454



Other accrued expenses	790		1,063
	$	14,855	$	13,268

Note 10 - Product Warranties

We provide warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based on historical experience, any specifically identified failures, and our estimate of future costs. The current portion of our product warranty liability is included in the accrued liabilities and the long-term portion is included in Other long-term liabilities in our Consolidated Balance Sheets.

Product warranty liability activity was as follows for the periods presented (in thousands):


	Three Months Ended March 31,
		2025		2024
Product warranty liability, beginning		$	3,473	$	4,469
Warranty charges incurred, net		(712)		(760)
Provision for warranty charges, net of adjustments		1,049		203

Product warranty liability, ending		3,810		3,912
Less: current portion of product warranty liability		(2,714)		(2,868)
Non-current portion of product warranty liability		$	1,096	$	1,044

Note 11 - Stockholders' Equity and Stock-Based Compensation

Restricted Stock Awards and Units

Restricted stock unit ("RSU") and restricted stock award ("RSA") activity under our equity incentive plan was as follows:


		Number of Restricted Stock Units (Thousands)	Weighted-Average Grant Date Fair Value
Balance, December 31, 2024		1,904	$	12.99
	Granted	23	10.40
	Vested	(500)	12.06
	Forfeited	(12)	13.90
Balance, March 31, 2025		1,415	13.27


	Number of Restricted Stock Awards (Thousands)	Weighted-Average Grant Date Fair Value
Balance, December 31, 2024	37	$	33.66

Balance, March 31, 2025	37	33.66

The total fair value of RSUs vested during the three months ended March 31, 2025, was $6.0 million.

Table of Contents

Market-Based Performance Restricted Stock Units

Performance restricted stock units (PRSUs) were granted in 2024, 2023, and 2022 and will vest upon meeting certain performance criteria. No PRSUs were granted, forfeited, or vested during the three months ended March 31, 2025.

Stock Options

The following table summarizes our stock option activity during the three months ended March 31, 2025:


	Number of Options (Thousands)	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Thousands)
Outstanding, December 31, 2024	859	$1.43	2.0	$7,783

Options exercised	(148)	0.82

Outstanding, March 31, 2025	711	1.56	2.0	4,444
Options exercisable at March 31, 2025	711	1.56	2.0	4,444
Options vested as of March 31, 2025, and expected to vest after March 31, 2025	711	1.56	2.0	4,444

Total intrinsic value of options exercised for the three months ended March 31, 2025 and 2024, was $1.3 million and $0.1 million, respectively. We received proceeds of $0.1 million and $10 thousand from the exercise of options for the three months ended March 31, 2025 and 2024, respectively.

Stock-Based Compensation

Total stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Cost of revenues	$	570	$	541
Research and development	1,784		1,613
Sales, general and administrative	3,702<

SEC Form 10-Q filed by nLIGHT Inc.