Financial Data WorkbookFirst Quarter 2017May 2, 2017

Contact:James HillierVice President of Investor Relationsjhillier@ipgphotonics.com508-373-1467

The financial data in this workbook should be read in conjunction with, and is qualified by reference to, IPG’s consolidated financial statements and related notes thereto, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operation” included in the Forms 10-Kand Forms 10-Q corresponding to the financial data in this workbook. The Forms 10-K and Forms 10-Q can be found at sec.gov or on the investorrelations section of the company's website at investors.ipgphotonics.com.

IPG Photonics Corporation FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17Condensed Consolidated Statements of Income(unaudited; in thousands, except per share data) Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Quarter Ended Yr Ended Quarter Ended Yr Ended

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-DecNET SALES $ 143,225 $ 188,677 $ 229,076 $ 185,894 $ 299,256 $ 474,482 $ 562,528 $ 648,034 $ 769,832 $ 901,265 $ 207,248 $ 252,787 $ 266,017 $ 280,121 $ 1,006,173 $ 285,846 COST OF SALES 79,931 103,695 121,776 121,626 152,798 217,227 257,801 308,136 353,314 409,388 92,838 115,083 121,226 124,785 453,932 128,579 GROSS PROFIT 63,294 84,982 107,300 64,268 146,458 257,255 304,727 339,898 416,518 491,877 114,410 137,704 144,791 155,336 552,241 157,267

OPERATING EXPENSES: Sales and marketing 6,222 10,103 13,900 15,157 19,100 21,731 23,845 26,692 30,637 31,868 8,034 9,689 10,460 10,210 38,393 10,827 Research and development 6,544 9,527 15,804 18,543 19,160 25,422 31,401 41,660 53,403 63,334 17,489 18,412 20,543 22,108 78,552 22,780 General and administrative 14,522 19,028 23,198 20,489 28,645 37,442 39,231 50,863 55,338 57,192 13,901 16,151 16,797 19,637 66,486 17,726 Loss (gain) on foreign exchange - - (2,798) 1,022 (848) (2,862) 1,362 2,536 (6,618) (2,560) 4,967 (1,556) 2,905 (1,820) 4,496 4,453

Total operating expenses 27,288 38,658 50,104 55,211 66,057 81,733 95,839 121,751 132,760 149,834 44,391 42,696 50,705 50,135 187,927 55,786

OPERATING INCOME (LOSS) 36,006 46,324 57,196 9,057 80,401 175,522 208,888 218,147 283,758 342,043 70,019 95,008 94,086 105,201 364,314 101,481

OTHER INCOME (EXPENSE), NET: Interest income (expense), net (1,493) 674 (777) (1,252) (1,188) (681) 319 (1) (77) (302) 192 270 373 469 1,304 308 Other income (expense), net: (6,394) 612 145 (36) 39 (257) 8 155 793 (125) 7 141 194 606 948 (529)

Total other income (expense) (7,887) 1,286 (632) (1,288) (1,149) (938) 327 154 716 (427) 199 411 567 1,075 2,252 (221)

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 28,119 47,610 56,564 7,769 79,252 174,584 209,215 218,301 284,474 341,616 70,218 95,419 94,653 106,276 366,566 101,260 PROVISION FOR INCOME TAXES 2,995 (15,522) (18,111) (2,485) (24,900) (53,575) (61,471) (62,521) (84,029) (99,591) (20,890) (28,387) (25,426) (31,146) (105,849) (26,328)

NET INCOME (LOSS) 31,114 32,088 38,453 5,284 54,352 121,009 147,744 155,780 200,445 242,025 49,328 67,032 69,227 75,130 260,717 74,932 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1,881 2,193 1,799 (135) 361 3,250 2,740 - - (128) 2 (27) (8) (3) (36) (13)PREFERRED STOCK ACCRETION & BENEFICIAL CONVERSION FEATURE 20,261 - - - - - - - - - - - - - - - NET INCOME (LOSS) ATTRIBUTABLE TO IPG PHOTONICS CORPORATION $ 8,972 $ 29,895 $ 36,654 $ 5,419 $ 53,991 $ 117,759 $ 145,004 $ 155,780 $ 200,445 $ 242,153 $ 49,326 $ 67,059 $ 69,235 $ 75,133 $ 260,753 $ 74,945

NET INCOME (LOSS) ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE:Basic $ 0.24 $ 0.69 $ 0.82 $ 0.12 $ 1.16 $ 2.49 $ 2.87 $ 3.02 $ 3.85 $ 4.60 $ 0.93 $ 1.26 $ 1.30 $ 1.42 $ 4.91 $ 1.40 Diluted $ 0.23 $ 0.65 $ 0.79 $ 0.12 $ 1.13 $ 2.42 $ 2.81 $ 2.97 $ 3.79 $ 4.53 $ 0.92 $ 1.25 $ 1.29 $ 1.39 $ 4.85 $ 1.38

WEIGHTED AVERAGE SHARES OUTSTANDING:Basic 36,734 43,269 44,507 45,489 46,424 47,365 50,477 51,548 52,104 52,676 52,898 53,065 53,071 53,097 53,068 53,368 Diluted 39,091 45,749 46,223 46,595 47,594 48,685 51,536 52,375 52,824 53,427 53,621 53,788 53,761 53,873 53,797 54,370

Gross margin 44.2% 45.0% 46.8% 34.6% 48.9% 54.2% 54.2% 52.5% 54.1% 54.6% 55.2% 54.5% 54.4% 55.5% 54.9% 55.0%Operating margin 25.1% 24.6% 25.0% 4.9% 26.9% 37.0% 37.1% 33.7% 36.9% 38.0% 33.8% 37.6% 35.4% 37.6% 36.2% 35.5%

S&M % of total revenue 4.3% 5.4% 6.1% 8.2% 6.4% 4.6% 4.2% 4.1% 4.0% 3.5% 3.9% 3.8% 3.9% 3.6% 3.8% 3.8%R&D % of total revenue 4.6% 5.0% 6.9% 10.0% 6.4% 5.4% 5.6% 6.4% 6.9% 7.0% 8.4% 7.3% 7.7% 7.9% 7.8% 8.0%G&A % of total revenue 10.1% 10.1% 10.1% 11.0% 9.6% 7.9% 7.0% 7.8% 7.2% 6.3% 6.7% 6.4% 6.3% 7.0% 6.6% 6.2%

Tax rate -10.7% 32.6% 32.0% 32.0% 31.4% 30.7% 29.4% 28.6% 29.5% 29.2% 29.8% 29.7% 26.9% 29.3% 28.9% 26.0%Net margin 6.3% 15.8% 16.0% 2.9% 18.0% 24.8% 25.8% 24.0% 26.0% 26.9% 23.8% 26.5% 26.0% 26.8% 25.9% 26.2%

NOPATOPERATING INCOME (LOSS) 36,006 46,324 57,196 9,057 80,401 175,522 208,888 218,147 283,758 342,043 70,019 95,008 94,086 105,201 364,314 101,481 PROVISION FOR INCOME TAXES 2,995 (15,522) (18,111) (2,485) (24,900) (53,575) (61,471) (62,521) (84,029) (99,591) (20,890) (28,387) (25,426) (31,146) (105,849) (26,328)

TOTAL 39,001 30,802 39,085 6,572 55,501 121,947 147,417 155,626 199,729 242,452 49,129 66,621 68,660 74,055 258,465 75,153

Return on equity 16.3% 16.4% 2.2% 18.8% 31.0% 24.4% 18.6% 20.3% 21.0% 18.5%Return on invested capital 13.1% 13.8% 2.3% 15.2% 23.7% 19.3% 16.5% 18.5% 18.9% 16.2%Return on invested capital, excluding cash 16.1% 16.9% 3.3% 25.4% 39.4% 38.8% 31.4% 35.7% 41.0% 33.7%

IPG Photonics Corporation FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17Stock-Based Compensation, Acquisition Costs, and Other Charges(unaudited; in thousands, except share and per share data) Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Quarter Ended Yr Ended Quarter Ended Yr Ended

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-DecSTOCK-BASED COMPENSATION EXPENSE:

Cost of sales $ - $ - $ - $ - $ 727 $ 1,731 $ 2,184 $ 3,187 $ 4,153 $ 5,316 $ 1,419 $ 1,545 $ 1,615 $ 1,439 $ 6,018 $ 1,391 Sales and marketing - - - - 801 1,503 1,052 1,195 1,567 1,998 415 497 385 523 1,820 452 Research and development - - - - 446 1,036 1,327 1,928 3,033 4,049 1,093 1,220 1,268 1,324 4,905 1,205 General and administrative - - - - 1,222 3,778 4,002 5,409 6,419 7,626 2,032 2,215 2,395 2,349 8,991 2,303

Total stock based compensation expense 533 1,324 2,074 2,767 3,196 8,048 8,565 11,719 15,172 18,989 4,959 5,477 5,663 5,635 21,734 5,351 Tax benefit recognized - - - - (973) (2,551) (2,629) (3,784) (4,093) (6,141) (1,584) (1,765) (1,817) (1,805) (6,971) (1,720)

Net stock based compensation expense $ 533 $ 1,324 $ 2,074 $ 2,767 $ 2,223 $ 5,497 $ 5,936 $ 7,935 $ 11,079 $ 12,848 $ 3,375 $ 3,712 $ 3,846 $ 3,830 $ 14,763 $ 3,631

$ - $ - $ - $ - $ - $ 4,130 Increase in weighted average diluted shares outstanding - - - - - 184,161

ACQUISITION-RELATED COSTS AND OTHER CHARGESStep-up of inventory

Cost of sales $ - $ - $ - $ - $ - $ - $ 460 $ 1,318 $ - $ - $ - $ 374 $ 1,012 $ 715 $ 2,100 $ - Amortization of intangible assets

Cost of sales - - - - - - 1,228 721 716 1,403 345 703 1,053 866 2,966 745 Sales and marketing - - - - - - - 635 550 231 38 38 38 37 153 160 Research and development - - - - - - - 811 935 640 160 160 160 160 640 160 General and administrative - - - - - - - 143 9 - - - - - - -

Impairment charge related to long-lived assetGeneral and administrative - - - - - - - - - - - - - 2,857 2,857 162

Total acquisition-related costs and other charges $ - $ - $ - $ - $ - $ - $ 1,688 $ 3,628 $ 2,210 $ 2,274 $ 543 $ 1,275 $ 2,264 $ 4,635 $ 8,716 $ 1,227

Excess tax benefit on exercise of stock options included in net income

IPG Photonics Corporation FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17Condensed Consolidated Balance Sheets(unaudited, in thousands) Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Quarter Ended Yr Ended Quarter Ended Yr Ended

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-DecASSETSCURRENT ASSETS:

Cash and cash equivalents $ 75,667 $ 37,972 $ 51,283 $ 82,920 $ 147,860 $ 180,234 $ 384,053 $ 448,776 $ 522,150 $ 582,532 $ 613,692 $ 587,286 $ 645,558 $ 623,855 $ 623,855 $ 697,778 Short-term investments - 6,950 - - - 25,451 - - - 106,584 126,273 126,794 126,970 206,779 206,779 165,025 Accounts receivable, net 22,353 33,946 41,842 30,356 55,399 75,755 96,630 103,803 143,109 150,479 146,505 151,476 162,725 155,901 155,901 180,226 Inventories 42,162 60,412 72,555 52,869 72,470 116,978 139,618 172,700 171,009 203,738 226,907 241,282 242,370 239,010 239,010 261,893

Components and raw materials 19,244 25,363 27,482 17,801 25,126 41,107 53,436 54,539 54,925 70,394 81,922 89,686 99,251 93,284 93,284 106,829 Work in-process 12,886 25,831 28,653 21,375 24,392 40,380 46,240 64,927 58,603 43,259 39,648 35,353 29,316 44,723 44,723 24,666 Finished goods 10,032 9,218 16,420 13,693 22,952 35,491 39,942 53,234 57,481 90,085 105,337 116,243 113,803 101,003 101,003 130,398

Prepaid income taxes 80 3,145 1,968 2,558 2,663 13,285 13,071 15,996 20,967 33,692 37,159 32,890 35,342 34,128 34,128 41,959 Prepaid expenses and other current assets 6,586 7,071 7,200 4,653 13,816 11,855 18,639 30,836 21,295 25,564 24,577 33,042 38,913 41,289 41,289 44,133

Total Current Assets 146,848 149,496 174,848 173,356 292,208 423,558 652,011 772,111 878,530 1,102,589 1,175,113 1,172,770 1,251,878 1,300,962 1,300,962 1,391,014

DEFERRED INCOME TAXES, NET 13,392 8,990 8,575 11,871 13,082 15,729 15,055 19,031 29,732 34,415 37,915 39,991 42,442 42,442 47,048 GOODWILL - - - - - - 2,898 455 455 505 502 20,461 20,142 19,828 19,828 19,831 INTANGIBLE ASSETS, NET - - - - 7,131 6,157 7,510 9,564 9,227 11,904 11,066 29,396 28,372 28,789 28,789 27,892 PROPERTY, PLANT AND EQUIPMENT, NET 67,153 96,369 114,492 111,453 120,683 155,202 210,563 252,245 275,082 288,604 309,206 350,432 367,474 379,375 379,375 395,858 OTHER ASSETS 5,099 8,466 15,303 15,956 8,751 7,486 7,461 7,810 26,847 20,095 19,798 18,333 19,441 18,603 18,603 20,930 TOTAL 232,492 263,321 313,218 312,636 441,855 608,132 895,498 1,061,216 1,210,887 1,453,429 1,550,100 1,629,307 1,727,298 1,789,999 1,789,999 1,902,573

LIABILITIES AND EQUITYCURRENT LIABILITIES:

Revolving line-of-credit facilities 2,603 11,218 19,769 6,007 6,841 7,057 2,442 3,296 2,631 - - - - - - - Current portion of long-term debt 8,299 - 1,333 1,333 1,333 1,613 1,505 1,333 13,333 2,000 2,000 3,188 3,188 3,188 3,188 3,188 Accounts payable 7,640 9,444 7,739 5,620 9,510 11,122 17,783 18,787 17,141 26,314 20,277 20,414 17,899 28,048 28,048 25,388 Accrued expenses and other liabilities 13,940 13,724 17,988 21,189 50,105 47,285 51,451 59,336 64,057 75,667 70,987 80,534 96,376 102,485 102,485 105,737 Income taxes payable 8,289 96 507 2,179 11,594 21,230 42,443 15,218 21,672 37,809 53,656 26,688 34,117 24,554 24,554 23,423

Total Current Liabilities 40,771 34,482 47,336 36,328 79,383 88,307 115,624 97,970 118,834 141,790 146,920 130,824 151,580 158,275 158,275 157,736

DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES 232 4,204 4,586 3,070 5,122 14,366 22,933 23,944 25,825 33,307 39,015 36,091 34,270 36,365 36,365 41,726 LONG-TERM DEBT, NET OF CURRENT PORTION 30,068 20,000 17,997 16,667 15,644 15,726 14,014 11,333 19,667 17,667 17,167 39,229 38,432 37,635 37,635 36,839

Total Liabilities 71,071 58,686 69,919 56,065 100,149 118,399 152,571 133,247 164,326 192,764 203,102 206,144 224,282 232,275 232,275 236,301

REDEEMABLE NONCONTROLLING INTERESTS - - - - 24,903 46,123 - - - - - - - - - -

IPG PHOTONICS CORPORATION STOCKHOLDERS' EQUITYCommon stock 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 Treasury stock, at cost - - - - - - - - - - - - (3,483) (8,946) (8,946) (21,485)Additional paid-in capital 271,122 275,506 283,217 293,743 310,218 332,585 511,039 538,908 567,617 607,649 616,156 629,694 635,778 650,974 650,974 668,003 Notes receivable from stockholders (23) - - - - - - - - - - - - - - - Retained earnings (120,392) (90,497) (53,843) (48,424) 5,567 122,833 234,977 390,757 591,202 833,356 882,682 949,741 1,018,976 1,094,108 1,094,108 1,171,198 Accumulated other comprehensive loss 7,883 15,167 8,794 11,106 810 (12,100) (3,094) (1,701) (112,263) (181,482) (152,987) (156,451) (148,430) (178,583) (178,583) (151,626)

Total IPG Photonics Corporation stockholders' equity 158,594 200,180 238,172 256,430 316,600 443,323 742,927 927,969 1,046,561 1,259,528 1,345,856 1,422,989 1,502,846 1,557,558 1,557,558 1,666,095

NONCONTROLLING INTERESTS 2,827 4,455 5,127 141 203 287 - - - 1,137 1,142 174 170 166 166 177 Total equity 161,421 204,635 243,299 256,571 316,803 443,610 742,927 927,969 1,046,561 1,260,665 1,346,998 1,423,163 1,503,016 1,557,724 1,557,724 1,666,272

TOTAL $ 232,492 $ 263,321 $ 313,218 $ 312,636 $ 441,855 $ 608,132 $ 895,498 $ 1,061,216 $ 1,210,887 $ 1,453,429 $ 1,550,100 $ 1,629,307 $ 1,727,298 $ 1,789,999 $ 1,789,999 $ 1,902,573 - - - - - - - - - - - - - - - -

AVERAGE EQUITY 183,028 223,967 249,935 286,687 380,207 593,269 835,448 987,265 1,153,613 1,213,759 1,293,459 1,359,451 1,409,195 1,409,195 1,506,635

INVESTED CAPITALContingent purchase consideration - - - - 685 999 3,023 375 98 20 21 20 21 - - - Revolving line-of-credit facilities 2,603 11,218 19,769 6,007 6,841 7,057 2,442 3,296 2,631 - - - - - - - Current portion of long-term debt 8,299 - 1,333 1,333 1,333 1,613 1,505 1,333 13,333 2,000 2,000 3,188 3,188 3,188 3,188 3,188 LONG-TERM DEBT, NET OF CURRENT PORTION 30,068 20,000 17,997 16,667 15,644 15,726 14,014 11,333 19,667 17,667 17,167 39,229 38,432 37,635 37,635 36,839 REDEEMABLE NONCONTROLLING INTERESTS - - - - 24,903 46,123 - - - - - - - - - - Total equity 161,421 204,635 243,299 256,571 316,803 443,610 742,927 927,969 1,046,561 1,260,665 1,346,998 1,423,163 1,503,016 1,557,724 1,557,724 1,666,272

TOTAL 202,391 235,853 282,398 280,578 366,209 515,128 763,911 944,306 1,082,290 1,280,352 1,366,186 1,465,600 1,544,657 1,598,547 1,598,547 1,706,299 TOTAL, excluding cash, cash equivalents and short-term investments 126,724 190,931 231,115 197,658 218,349 309,443 379,858 495,530 560,140 591,236 626,221 751,520 772,129 767,913 767,913 843,496

DAYS SALES OUTSTANDING 64 55 56 51 57 DAYS INVENTORY OUTSTANDING 222 191 184 176 183 DAYS PAYABLE OUTSTANDING 20 16 14 21 18 CASH CONVERSION CYCLE 267 229 227 207 222

IPG Photonics Corporation FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17Condensed Consolidated Statements of Cash Flows (Cumulative)(unaudited, in thousands) Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Cumulative Quarter Ended Yr Ended Cumulative Quarter Ended Yr Ended

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-DecCASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 8,972 $ 32,088 $ 38,453 $ 5,284 $ 54,352 $ 121,009 $ 147,744 $ 155,780 $ 200,445 $ 242,027 $ 49,328 $ 116,360 $ 185,587 $ 260,716 $ 260,716 $ 74,932 Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 9,105 12,304 15,834 19,172 21,845 23,962 26,144 31,524 35,612 42,415 11,394 23,653 37,646 51,475 51,475 14,504 Deferred income taxes (10,159) 8,116 2,445 (4,087) 401 (288) 5,546 (6,168) (1,486) (7,153) (2,741) (9,268) (12,054) (12,908) (12,908) 4,208 Stock-based compensation 533 1,324 2,074 2,767 3,196 8,048 8,565 11,720 15,172 18,989 4,959 10,436 16,099 21,734 21,734 5,351 Unrealized losses (gains) on foreign currency transactions 1,115 (1,050) (3,776) 1,023 (888) (764) 1,250 (235) (3,497) (5,491) 4,802 2,240 6,044 2,298 2,298 3,462 Other 29,799 (42) (251) (36) 1,184 565 (19) 62 459 510 175 294 193 2,724 2,724 842 Provisions for inventory, warranty & bad debt 1,037 4,077 7,902 11,353 11,377 15,346 19,967 29,975 28,036 39,985 8,927 20,459 33,506 46,469 46,469 9,002 Changes in assets and liabilities that (used) provided cash:

Accounts receivable (6,022) (11,292) (8,466) 9,269 (27,308) (23,688) (22,706) (9,991) (48,518) (19,036) 8,140 2,885 (10,853) (11,444) (11,444) (22,801)Inventories (19,884) (15,305) (21,661) 5,600 (27,018) (56,139) (22,975) (50,355) (42,246) (70,565) (19,365) (34,668) (42,814) (53,626) (53,626) (22,408)Prepaid expenses and other current assets (1,148) (6,756) 6,810 679 (4,707) (770) (899) (3,980) (5,351) 1,853 (178) (652) (4,102) (4,069) (4,069) (3,972)Accounts payable 342 1,086 (2,267) (498) 3,411 1,985 4,375 974 3,262 9,806 (6,749) (8,441) (9,816) (407) (407) (1,560)Accrued expenses and other liabilities (1,653) (2,889) (304) (72) 22,119 (6,811) (8,155) (281) (1,567) 613 (8,378) (4,341) 3,848 5,480 5,480 (659)Income and other taxes payable 7,165 (11,004) (2,122) 3,951 12,911 12,929 21,118 (30,784) 5,763 9,529 14,583 (10,653) (7,439) (10,746) (10,746) (10,081)

Net cash (used in) provided by operating activities 19,202 10,657 34,671 54,405 70,875 95,384 179,955 128,241 186,084 263,482 64,897 108,304 195,845 297,696 297,696 50,820 -

CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment (20,442) (34,341) (37,111) (10,498) (28,374) (53,007) (68,184) (70,919) (88,601) (70,119) (24,960) (70,863) (101,668) (127,042) (127,042) (21,875)Purchase of intangible assets - - - - - - - - (2,000) - - - - - - - Proceeds from sales of property, plant and equipment 90 78 - - - - - 236 434 164 129 184 1,841 658 658 99 Purchases of short-term investments - (6,950) - - - - - - - (106,747) (29,899) (62,211) (179,374) (299,508) (299,508) (28,173)Proceeds from short-term investments - - 5,450 - - (25,451) 25,451 495 - - 10,000 41,720 158,808 198,808 198,808 70,370 Acquisition of businesses, net of cash acquired - - - - (4,108) (750) (11,596) (5,555) - (4,958) - (46,527) (46,527) (47,792) (47,792) - Other 1,225 (69) 43 (141) (77) 109 (928) (143) 87 93 46 72 16 468 468 (47)

Net cash (used in) provided by investing activities (19,127) (41,282) (31,618) (10,639) (32,559) (79,099) (55,257) (75,886) (90,080) (181,567) (44,684) (137,625) (166,904) (274,408) (274,408) 20,374

CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from line-of-credit facilities 16,695 36,542 29,693 19,056 13,828 10,673 12,760 16,843 33,282 12,887 2,214 4,002 6,030 7,992 7,992 1,934 Payments on line-of-credit facilities (18,282) (28,269) (21,936) (32,851) (13,086) (10,630) (17,190) (15,990) (33,623) (15,227) (2,223) (4,002) (6,030) (7,992) (7,992) (1,934)(Purchase) sale of noncontrolling interests - (596) (1,897) (508) 24,714 19,972 (56,100) - - - - (950) (950) (950) (950) - Proceeds on long-term borrowings 6,384 - 20,041 - - - - - - - - 23,750 23,750 23,750 23,750 - Principal payments on long-term borrowings (10,684) (18,177) (20,196) (1,344) (1,333) (1,432) (2,117) (2,853) (1,667) (13,333) (500) (1,000) (1,797) (2,594) (2,594) (797)Exercise of employee stock options and issuances under employee stock purchase plan 1,274 3,060 4,959 3,417 6,298 5,268 5,480 7,275 7,558 14,132 2,644 8,579 9,186 16,183 16,183 9,600 Purchase of treasury stock, at cost - - - - - - - - - - - - (3,483) (8,946) (8,946) (12,539)Proceeds from public offering, net of offering expenses 93,169 - - - - - 167,928 - - - - - - - - - Distributions to shareholders - - - - - - (33,353) - - - - - - - - - Other (21,647) 57 (212) (50) (100) 1 - - - - - - - - - -

Net cash (used in) provided by financing activities 66,909 (7,383) 10,452 (12,280) 30,321 23,852 77,408 5,275 5,550 (1,541) 2,135 30,379 26,706 27,443 27,443 (3,736)

EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS 322 313 (194) 151 (3,697) (7,763) 1,713 7,093 (28,180) (19,992) 8,812 3,696 7,379 (9,408) (9,408) 6,465

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 67,306 (37,695) 13,311 31,637 64,940 32,374 203,819 64,723 73,374 60,382 31,160 4,754 63,026 41,323 41,323 73,923 CASH AND CASH EQUIVALENTS—Beginning of period 8,361 75,667 37,972 51,283 82,920 147,860 180,234 384,053 448,776 522,150 582,532 582,532 582,532 582,532 582,532 623,855 CASH AND CASH EQUIVALENTS—End of period $ 75,667 $ 37,972 $ 51,283 $ 82,920 $ 147,860 $ 180,234 $ 384,053 $ 448,776 $ 522,150 $ 582,532 $ 613,692 $ 587,286 $ 645,558 $ 623,855 $ 623,855 $ 697,778

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest $ 1,449 $ 741 $ 1,778 $ 1,461 $ 998 $ 1,089 $ 864 $ 208 $ 253 $ 873 $ 171 $ 349 $ 623 $ 942 $ 942 $ 447 Cash paid for income taxes $ 2,010 $ 16,788 $ 11,751 $ 4,929 $ 7,417 $ 39,199 $ 25,980 $ 89,611 $ 73,544 $ 91,329 $ 11,955 $ 66,478 $ 92,539 $ 126,964 $ 126,964 $ 31,371

IPG Photonics Corporation FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17Condensed Consolidated Statements of Cash Flows (Quarterly)(unaudited, in thousands) Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Quarter Ended Yr Ended Quarter Ended Yr Ended

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-DecCASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 8,972 $ 32,088 $ 38,453 $ 5,284 $ 54,352 $ 121,009 $ 147,744 $ 155,780 $ 200,445 $ 242,027 $ 49,328 $ 67,032 $ 69,227 $ 75,129 $ 260,716 $ 74,932 Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 9,105 12,304 15,834 19,172 21,845 23,962 26,144 31,524 35,612 42,415 11,394 12,259 13,993 13,829 51,475 14,504 Deferred income taxes (10,159) 8,116 2,445 (4,087) 401 (288) 5,546 (6,168) (1,486) (7,153) (2,741) (6,527) (2,786) (854) (12,908) 4,208 Stock-based compensation 533 1,324 2,074 2,767 3,196 8,048 8,565 11,720 15,172 18,989 4,959 5,477 5,663 5,635 21,734 5,351 Unrealized losses (gains) on foreign currency transactions 1,115 (1,050) (3,776) 1,023 (888) (764) 1,250 (235) (3,497) (5,491) 4,802 (2,562) 3,804 (3,746) 2,298 3,462 Other 29,799 (42) (251) (36) 1,184 565 (19) 62 459 510 175 119 (101) 2,531 2,724 842 Provisions for inventory, warranty & bad debt 1,037 4,077 7,902 11,353 11,377 15,346 19,967 29,975 28,036 39,985 8,927 11,532 13,047 12,963 46,469 9,002 Changes in assets and liabilities that (used) provided cash: - - - - - - - - - - - - -

Accounts receivable (6,022) (11,292) (8,466) 9,269 (27,308) (23,688) (22,706) (9,991) (48,518) (19,036) 8,140 (5,255) (13,738) (591) (11,444) (22,801)Inventories (19,884) (15,305) (21,661) 5,600 (27,018) (56,139) (22,975) (50,355) (42,246) (70,565) (19,365) (15,303) (8,146) (10,812) (53,626) (22,408)Prepaid expenses and other current assets (1,148) (6,756) 6,810 679 (4,707) (770) (899) (3,980) (5,351) 1,853 (178) (474) (3,450) 33 (4,069) (3,972)Accounts payable 342 1,086 (2,267) (498) 3,411 1,985 4,375 974 3,262 9,806 (6,749) (1,692) (1,375) 9,409 (407) (1,560)Accrued expenses and other liabilities (1,653) (2,889) (304) (72) 22,119 (6,811) (8,155) (281) (1,567) 613 (8,378) 4,037 8,189 1,632 5,480 (659)Income and other taxes payable 7,165 (11,004) (2,122) 3,951 12,911 12,929 21,118 (30,784) 5,763 9,529 14,583 (25,236) 3,214 (3,307) (10,746) (10,081)

Net cash (used in) provided by operating activities 19,202 10,657 34,671 54,405 70,875 95,384 179,955 128,241 186,084 263,482 64,897 43,407 87,541 101,851 297,696 50,820

CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment (20,442) (34,341) (37,111) (10,498) (28,374) (53,007) (68,184) (70,919) (88,601) (70,119) (24,960) (45,903) (30,805) (25,374) (127,042) (21,875)Purchase of intangible assets - - - - - - - - (2,000) - - - - - - - Proceeds from sales of property, plant and equipment 90 78 - - - - - 236 434 164 129 55 1,657 (1,183) 658 99 Purchases of short-term investments - (6,950) - - - - - - - (106,747) (29,899) (32,312) (117,163) (120,134) (299,508) (28,173)Proceeds from short-term investments - - 5,450 - - (25,451) 25,451 495 - - 10,000 31,720 117,088 40,000 198,808 70,370 Acquisition of businesses, net of cash acquired - - - - (4,108) (750) (11,596) (5,555) - (4,958) - (46,527) - (1,265) (47,792) - Other 1,225 (69) 43 (141) (77) 109 (928) (143) 87 93 46 26 (56) 452 468 (47)

Net cash (used in) provided by investing activities (19,127) (41,282) (31,618) (10,639) (32,559) (79,099) (55,257) (75,886) (90,080) (181,567) (44,684) (92,941) (29,279) (107,504) (274,408) 20,374

CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from line-of-credit facilities 16,695 36,542 29,693 19,056 13,828 10,673 12,760 16,843 33,282 12,887 2,214 1,788 2,028 1,962 7,992 1,934 Payments on line-of-credit facilities (18,282) (28,269) (21,936) (32,851) (13,086) (10,630) (17,190) (15,990) (33,623) (15,227) (2,223) (1,779) (2,028) (1,962) (7,992) (1,934)(Purchase) sale of noncontrolling interests - (596) (1,897) (508) 24,714 19,972 (56,100) - - - - (950) - - (950) - Proceeds on long-term borrowings 6,384 - 20,041 - - - - - - - - 23,750 - - 23,750 - Principal payments on long-term borrowings (10,684) (18,177) (20,196) (1,344) (1,333) (1,432) (2,117) (2,853) (1,667) (13,333) (500) (500) (797) (797) (2,594) (797)Exercise of employee stock options and issuances under employee stock purchase plan 1,274 3,060 4,959 3,417 6,298 5,268 5,480 7,275 7,558 14,132 2,644 5,935 607 6,997 16,183 9,600 Purchase of treasury stock, at cost - - - - - - - - - - - - (3,483) (5,463) (8,946) (12,539)Proceeds from public offering, net of offering expenses 93,169 - - - - - 167,928 - - - - - - - - - Distributions to shareholders - - - - - - (33,353) - - - - - - - - - Other (21,647) 57 (212) (50) (100) 1 - - - - - - - - - -

Net cash (used in) provided by financing activities 66,909 (7,383) 10,452 (12,280) 30,321 23,852 77,408 5,275 5,550 (1,541) 2,135 28,244 (3,673) 737 27,443 (3,736)

EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS 322 313 (194) 151 (3,697) (7,763) 1,713 7,093 (28,180) (19,992) 8,812 (5,116) 3,683 (16,787) (9,408) 6,465

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 67,306 (37,695) 13,311 31,637 64,940 32,374 203,819 64,723 73,374 60,382 31,160 (26,406) 58,272 (21,703) 41,323 73,923 CASH AND CASH EQUIVALENTS—Beginning of period 8,361 75,667 37,972 51,283 82,920 147,860 180,234 384,053 448,776 522,150 582,532 613,692 587,286 645,558 582,532 623,855 CASH AND CASH EQUIVALENTS—End of period $ 75,667 $ 37,972 $ 51,283 $ 82,920 $ 147,860 $ 180,234 $ 384,053 $ 448,776 $ 522,150 $ 582,532 $ 613,692 $ 587,286 $ 645,558 $ 623,855 $ 623,855 $ 697,778

- - - - - - - - - - - - - - - - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest $ 733 $ 741 $ 1,778 $ 1,461 $ 998 $ 1,089 $ 864 $ 208 $ 253 $ 873 $ 171 $ 178 $ 274 $ 319 $ 942 $ 447 Cash paid for income taxes $ 1,229 $ 16,788 $ 11,751 $ 4,929 $ 7,417 $ 39,199 $ 25,980 $ 89,611 $ 73,544 $ 91,329 $ 11,955 $ 54,523 $ 26,061 $ 34,425 $ 126,964 $ 31,371

IPG Photonics Corporation FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17Key Metrics(unaudited, in thousands) Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Yr Ended Quarter Ended Yr Ended Quarter Ended Yr Ended

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-DecRevenue by region:

United States and other North America $ 45,519 $ 53,272 $ 52,018 $ 45,668 $ 61,706 $ 86,181 $ 108,316 $ 116,935 $ 113,233 $ 131,525 $ 31,727 $ 32,341 $ 36,738 $ 40,378 $ 141,184 $ 37,905 Germany 24,454 33,450 44,771 28,242 46,282 76,279 89,848 65,147 77,404 93,802 22,875 23,656 22,130 22,232 90,893 23,362 Other including Eastern Europe/CIS 24,037 39,345 49,306 42,171 66,174 103,305 110,860 140,279 173,018 189,123 45,420 53,319 56,655 69,442 224,836 62,584 China 14,781 29,937 57,762 104,560 138,782 192,134 245,102 311,946 61,634 96,355 102,062 98,425 358,476 116,674 Japan 35,585 32,894 41,310 20,942 35,878 63,261 69,576 67,981 72,573 76,033 19,843 20,340 23,359 25,050 88,592 14,156 Other Asia and Australia 13,184 29,670 21,491 15,221 30,614 36,937 43,445 64,346 85,426 95,494 25,097 26,366 24,629 23,960 100,052 29,369 Rest of World 446 46 5,399 3,713 840 3,959 1,701 1,212 3,076 3,342 652 410 444 634 2,140 1,796

Total revenue $ 143,225 $ 188,677 $ 229,076 $ 185,894 $ 299,256 $ 474,482 $ 562,528 $ 648,034 $ 769,832 $ 901,265 $ 207,248 $ 252,787 $ 266,017 $ 280,121 $ 1,006,173 $ 285,846 - - - - - - - - - - - - - - - -

Revenue by region (% of total):United States and other North America 31.8% 28.2% 22.7% 24.6% 20.6% 18.2% 19.3% 18.0% 14.7% 14.6% 15.3% 12.8% 13.8% 14.4% 14.0% 13.3%Germany 17.1% 17.7% 19.5% 15.2% 15.5% 16.1% 16.0% 10.1% 10.1% 10.4% 11.0% 9.4% 8.3% 7.9% 9.0% 8.2%Other including Eastern Europe/CIS 16.8% 20.9% 21.5% 22.7% 22.1% 21.8% 19.7% 21.6% 22.5% 21.0% 21.9% 21.1% 21.3% 24.8% 22.3% 21.9%China 6.5% 16.1% 19.3% 22.0% 24.7% 29.6% 31.8% 34.6% 29.7% 38.1% 38.4% 35.1% 35.6% 40.8%Japan 24.8% 17.4% 18.0% 11.3% 12.0% 13.3% 12.4% 10.5% 9.4% 8.4% 9.6% 8.0% 8.8% 8.9% 8.8% 5.0%Other Asia and Australia 9.2% 15.7% 9.4% 8.2% 10.2% 7.8% 7.7% 9.9% 11.1% 10.6% 12.1% 10.4% 9.3% 8.6% 9.9% 10.3%Rest of World 0.3% 0.0% 2.4% 2.0% 0.3% 0.8% 0.3% 0.2% 0.4% 0.4% 0.3% 0.2% 0.2% 0.2% 0.2% 0.6%

Total revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Revenue by application:Materials processing $ 97,600 $ 140,044 $ 187,720 $ 140,864 $ 252,014 $ 419,443 $ 492,013 $ 608,702 $ 731,274 $ 849,335 $ 198,207 $ 239,056 $ 246,299 $ 258,557 $ 942,119 $ 264,131 Other applications 45,625 48,633 41,356 45,030 47,242 55,039 70,515 39,332 38,558 51,930 9,041 13,731 19,718 21,564 64,054 21,715

Advanced applications 19,224 25,047 24,670 26,557 25,196 25,918 43,052 26,190 25,704 28,866 28,166 Communications 15,222 13,062 12,904 10,867 14,020 20,368 21,706 9,135 8,523 14,399 28,823 Medical 11,179 10,524 3,782 7,606 8,026 8,753 5,757 4,007 4,331 8,665 7,065

Total revenue $ 143,225 $ 188,677 $ 229,076 $ 185,894 $ 299,256 $ 474,482 $ 562,528 $ 648,034 $ 769,832 $ 901,265 $ 207,248 $ 252,787 $ 266,017 $ 280,121 $ 1,006,173 $ 285,846 - - - - - - - - - - - - - - - -

Revenue by application (% of total):Materials processing 68.1% 74.2% 81.9% 75.8% 84.2% 88.4% 87.5% 93.9% 95.0% 94.2% 95.6% 94.6% 92.6% 92.3% 93.6% 92.4%Other applications 31.9% 25.8% 18.1% 24.2% 15.8% 11.6% 12.5% 6.1% 5.0% 5.8% 4.4% 5.4% 7.4% 7.7% 6.4% 7.6%

Advanced applications 13.4% 13.3% 10.8% 14.3% 8.4% 5.5% 7.7% 4.0% 3.3% 3.2% 2.8%Communications 10.6% 6.9% 5.6% 5.8% 4.7% 4.3% 3.9% 1.4% 1.1% 1.6% 2.9%Medical 7.8% 5.6% 1.7% 4.1% 2.7% 1.8% 1.0% 0.6% 0.6% 1.0% 0.7%

Total revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Revenue by product:High-power CW lasers $ 344,126 $ 426,074 $ 499,643 $ 118,220 $ 141,406 $ 153,002 $ 166,040 $ 578,668 $ 167,944 Medium-power CW lasers 53,795 80,971 99,452 22,608 27,121 25,011 24,115 98,855 19,742 Low-power CW lasers 13,283 13,174 13,761 3,003 3,057 2,992 3,736 12,788 3,394 Pulsed lasers 135,339 131,593 124,824 28,625 36,632 34,429 29,285 128,971 32,456 QCW lasers 21,511 34,881 56,506 8,600 16,225 11,660 12,127 48,612 21,368 Other revenue (amplifiers, systems, service, parts, accessories and change in deferred) 79,980 83,139 107,079 26,192 28,346 38,923 44,818 138,279 40,942

Total revenue $ 648,034 $ 769,832 $ 901,265 $ 207,248 $ 252,787 $ 266,017 $ 280,121 $ 1,006,173 $ 285,846

Revenue by product:High-power CW lasers 53.1% 55.3% 55.4% 57.0% 55.9% 57.5% 59.3% 57.5% 58.8%Medium-power CW lasers 8.3% 10.5% 11.0% 10.9% 10.7% 9.4% 8.6% 9.8% 6.9%Low-power CW lasers 2.0% 1.7% 1.5% 1.4% 1.2% 1.1% 1.3% 1.3% 1.2%Pulsed lasers 20.9% 17.1% 13.8% 13.8% 14.5% 12.9% 10.5% 12.8% 11.4%QCW lasers 3.3% 4.5% 6.3% 4.1% 6.4% 4.4% 4.3% 4.8% 7.5%Other revenue (amplifiers, systems, service, parts, accessories and change in deferred) 12.3% 10.8% 11.9% 12.6% 11.2% 14.6% 16.0% 13.7% 14.3%

Total revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Total backlog of ordersOrders with firm shipment dates $ 47,000 $ 47,800 $ 98,600 $ 124,100 $ 102,000 $ 132,600 $ 174,500 $ 185,100 $ 226,700 Frame agreements 22,300 20,300 73,000 82,900 101,000 132,400 146,500 257,400 187,200

Total backlog of orders $ 51,800 $ 72,600 $ 69,300 $ 68,100 $ 171,600 $ 207,000 $ 203,000 $ 265,000 $ 321,000 $ 442,500 $ 413,900

% revenue from largest customer 10% 7% 7% 3% 7% 8% 7% 11% 11% 13% 9%% revenue from five largest customers 29% 20% 17% 12% 19% 17% 16% 21% 23% 25% 22%

EmployeesResearch and development 60 80 147 140 140 184 260 270 330 410 470 Manufacturing operations 840 1,020 1,054 1,090 1,370 1,646 1,840 2,200 2,330 2,930 3,300 Sales, service and marketing 50 70 90 70 100 122 110 120 140 150 190 General and administrative 90 130 131 130 150 185 190 210 230 250 270

Total employees 1,040 1,300 1,422 1,430 1,760 2,137 2,400 2,800 3,030 3,740 4,230