Mark M. Gitin
Chief Executive Officer at IPG Photonics
Good morning, everyone. I'm excited to be here with you on my first earnings call as CEO of IPG Photonics. I look forward to meeting many of you and to talking more about our story and our plans at IPG. Before diving into our second quarter performance, I'd like to spend a moment on my background, why I took this role and what I've been focusing on since I joined just over seven weeks ago. For the past 35 years, have been actively involved with lasers and laser applications, leading different functions at coherent and the Photonics Solutions Division at MKS Instruments.
I joined MKS to integrate the Newport acquisition and significantly improve the performance of the business over five years. During my career, I've always admired IPG, its industry leadership, culture of innovation and ability to drive fiber lasers into new use cases. I'm thrilled to have joined such an innovative and dynamic organization and see a lot of great opportunities ahead of us. Since joining in June, I focused on diving deep into key aspects of the business.
The dedication, creativity and passion of IPG's team is truly inspiring and conversations with employees have given me an even deeper appreciation of the team's knowledge and expertise. I'm especially excited about IPG's R&D pipeline. I believe we have a number of projects in process that will put us in a strong position to extend our industry leadership, provide further differentiation and reduce product costs.
I know that in the current macroeconomic cycle, we've seen competitors get more aggressive, particularly in cutting. Competition is expected and as a leader, it's important to keep driving innovation. Our team has been focusing on multiple initiatives to increase technological moats around laser products and provide complete solutions and world-class support to customers, which cannot be easily replicated.
We're clearly seeing these efforts bear fruit in the areas such as EV battery welding and 3D printing. We're also expanding into new applications and used cases for new fiber lasers in areas where we offer significant advantages relative to other laser and non-laser solutions, including efficiency, speed and environmentally friendly solutions.
In the coming months, I will be working with my management team to enhance existing strategies and develop new goals and objectives that provide a foundation for IPG's success in the coming years. On the operational side, we will be investing in our business where we can generate attractive returns, while managing our discretionary costs. I strongly believe that by providing our customers with the highest quality solutions, the best service and optimizing our operational efficiencies, we will be best positioned to drive shareholder value in the long-term.
Internally, we will prioritize continued focus on collaboration, growth and continuous improvement. I look forward to being able to share more details about these strategies with you in the future. Moving on to the second quarter results; we continued to generate strong operating cash flow in a challenging demand environment as we executed on inventory reduction initiatives. Second quarter sales and earnings per share were above the midpoint of our revenue guidance with overall demand conditions stabilizing at a low level, particularly in general manufacturing and EV markets.
Revenue was relatively stable in Asia sequentially and improved in North America, helped by stronger sales in the emerging growth products such as light weld and medical. Trends in Europe continued to moderate with industrial markets facing persistent headwinds and macroeconomic uncertainty. Turning to the key applications that we serve. In welding, revenue decreased year-over-year, primarily due to lower demand in e-mobility and partially offset by growth in handheld welding. However, I'm pleased to see that welding revenue was stable sequentially, and we were able to gain market share in Europe, winning EV customer accounts even in a challenging operating environment.
IPG's strength is our unique knowledge of laser material interaction and process know-how that significantly increases speed and quality of welding. Putting this together with our real-time process monitoring enables meaningful yield improvements for our customers. Our laser welding processes and real-time weld monitoring have been widely adopted in EV battery manufacturing, where faulty wells can have catastrophic results.
We feel very good about our competitive position on investment spending in EV battery capacity resumes. And furthermore, we saw a strong pickup in sales of our handheld welding solutions, driven by our new partnership with Miller Electric, a leader in welding solutions, continuous innovations, driving improved efficiency, smaller form factor and lower cost enabled the commercial viability of laser welding for middle fabricators and shop shops, opening up a huge new market opportunity for IPG.
Moving on to our second largest application, cutting which is where we've seen the greatest impact to our business over the past several years from Chinese competition. The good news is that our China cutting OEM business now accounts for less than 5% of our total revenue. In our European, US and Japanese businesses, we have a stronger competitive position and customers who value productivity and uptime. This business was impacted by our customers working down inventory as they manage through significantly lower end market demand.
Now we're starting to see those customers' inventories normalizing, but the overall demand conditions in general industrial markets remain weak, primarily in Europe. We have strong relationships with all of the major global cutting OEM customers and are confident the decline is macro-driven. We're working closely with our customers to understand their needs, enhance our service capabilities and reduce product costs. This approach ensures that our products not only standout from the competition, but also deliver higher value to our customers.
We're excited to announce the launch of a series of innovative products over the next two quarters, which are designed to foster win-win relationships and solidify our market position. I'm particularly excited about the new growth opportunities for IPG where fiber lasers can replace incumbent technologies. There are areas where we can innovate to provide solutions to specific problems in a way that is much better for the environment as we are replacing processes that are typically done with harmful chemicals or significant use of electricity.
A perfect example would be cleaning and heating applications. IPG is extremely proud to provide the most energy-efficient and environmentally friendly solutions in these areas. Medical is another exciting area for the company with significant barriers to entry. We have a strong growth pipeline in urology applications and are seeing robust demand in lasers for skin rejuvenation and lesion removal. We believe that new product launches in 2024 and 2025 will result in strong revenue growth opportunities for this business.
Moving to the outlook; our second quarter book-to-bill was below one. We're seeing more stable demand sequentially in China, but macroeconomic uncertainty is still negatively impacting demand across general industrial markets and applications in Europe and North America. While we believe strongly in the future of EVs, the well-publicized slowdown in EV adoption in Europe and US has prompted several customers to delay further investment in battery capacity around the world.
Our prior expectation for a rebound in demand in the second half seems less likely to materialize, and we currently are not expecting to see a meaningful recovery in our laser sales until sometime in 2025. Before I turn to the call to Tim to discuss financial results, I would like to thank Dr. Scherbakov for his significant contributions to IPG in the laser community over the last 30 years. I would also like to thank the Board for their trust in me. I look forward to leading this company, pushing the boundaries of innovation and transforming the world around us by applying light in ways that improve life.
With that, I would like to now turn the call over to Tim.