LIGHTPATH TECHNOLOGIES INC Q1 FY2025 earnings call

• LightPath has transformed from a pure component supplier to a system provider, with 30% of revenue now from new activities. - Growth pillars include proprietary cameras/optics, government/defense solutions, and new commercial applications. - In defense, received Phase 2 funding from DoD for BlackDiamond chalcogenide glass qualification, initial development contract from European defense customer, and follow-on order for infrared assemblies. - Lockheed Martin missile program has accelerated timeline, with potential for significant revenue if Lockheed wins. - Working with automotive OEMs for ADAS thermal imaging, and hired Steve Garcia as General Manager of Orlando facility.

Revenue for the first quarter of fiscal 2025 increased 4% to $8.4 million. Infrared components contributed $2.6 million (31% of consolidated revenue), visible components contributed $3.3 million (39%), assemblies and modules contributed $1.1 million (13%), and engineering services contributed $1.4 million (17%). Gross profit increased 22% to $2.8 million (34% of total revenues) compared to $2.3 million (29%) in the same year-ago quarter.

• Expect European defense market growth, with potential for customers to reach 10% revenue. - Camera business expected to see order pickup from January to June 2025 due to new budgets. - Confident in continued transformation and sustainable value creation for shareholders.

• Uncertainty in defense program timelines and competition. - Dependence on defense contracts with long cycles and potential program losses. - Geopolitical factors could impact germanium supply, though proactive steps taken to reduce exposure.

Q: Jaeson Schmidt asks about European market timeline for customers eclipsing 10% threshold.

A: Sam Rubin says EU defense timelines similar to US, FPV drone orders faster.

Q: Jaeson Schmidt asks about sales team in European market.

A: Sam Rubin says strong sales team, may need local partners in some countries.

Q: Jaeson Schmidt asks about Lockheed decision timeline.

A: Sam Rubin says timeline fluid, hoping for indications in September-October.

Q: Glenn Mattson asks about camera business growth.

A: Sam Rubin says camera business can translate to revenue faster, industrial commercial space budgets starting January 2025.

Q: Glenn Mattson asks about Apache helicopter program update.

A: Sam Rubin says initial prototypes with small delays.

Q: Glenn Mattson asks about Lockheed's two additional programs.

A: Sam Rubin says earlier stage, not high volume but moving along.

Q: Glenn Mattson asks about politics and germanium.

A: Sam Rubin says no significant impact, proactive steps taken to reduce germanium exposure.

Q: Brian Kinstlinger asks about camera adoption timeline.

A: Sam Rubin says January 2025 budgets will lead to pickup in next 7-8 months, assemblies/engineering services could go to 50% of revenue.

Q: Brian Kinstlinger asks about large customer and BlackDiamond materials.

A: Sam Rubin says working closely, hopeful to win back, significant potential.

Q: Brian Kinstlinger asks about Phase 2 testing with DLA.

A: Sam Rubin says project up to 24 months, BDNL6 and 8 already in programs.

Q: Brian Kinstlinger asks about backlog and growth.

A: Sam Rubin says camera business is book and turn, backlog flat due to previous customer order falling off.

Q: Orin Hirschman asks about go-to-market for industrial cameras.

A: Sam Rubin says new go-to-market strategy with Jason Messerschmidt, traction faster due to validated products.

Q: Gene Inger asks about Lockheed and Apache program.

A: Sam Rubin says involved in modernization, but can't comment specifically.

Q: Gene Inger asks about laser countermeasures and space involvement.

A: Sam Rubin says can't comment on laser countermeasures, not directly involved in space LiDAR management.