LightPath Technologies, Inc. Q3 FY2025 earnings call

• Transformation: LightPath has transitioned from a pure component supplier to a vertically integrated global solution provider for infrared imaging technologies. • Acquisitions: Closed acquisition of G5 Infrared, added cooled infrared cameras; acquired Visimid Technologies in 2023 for advanced capabilities. • Defense Contracts: Progress on NGSRI program with Lockheed, SPEIR program for L3Harris, and large programs using BlackDiamond materials. • BlackDiamond Materials: Strong demand for BDNL materials, supported by DoD to expand manufacturing capacity. • Manufacturing: 45% headcount and 56% footprint in the U.S., reduced exposure to China, with manufacturing capabilities in at least two locations.

Revenue for the third quarter of fiscal 2025 increased to $9.2 million, up 19.1% from $7.7 million in the prior year quarter. Infrared components generated $3.6 million, accounting for 40% of consolidated revenue. Visible components brought in $2.8 million (31% of consolidated revenue). Revenue from assemblies and modules was $1.9 million (20%), and engineering services contributed $0.8 million (9%). Gross profit increased 66% to $2.7 million, or 29.1% of total revenues, driven by a more favorable product mix with higher margin assemblies, modules, and engineering services.

• Expected $51 million in revenue in the 12 months following the G5 acquisition. • G5 had $13 million in new bookings since acquisition in February, with financial impact starting in Q4 and prominent in Q1/Q2. • Focus on EBITDA and adjusted EBITDA for transparency, aiming for 15% EBITDA margins long-term. • Fiscal 2025 seen as an inflection point towards sustainability, growth, and profitability.

• Geopolitical impacts on supply chains, though reduced exposure to China. • Potential changes in germanium supply, though redesigns using BlackDiamond materials aim to secure continued use. • Delays in Apache program due to capacity and material challenges, and challenges with optical gas imaging qualification process.

Q: Glenn Mattson asked about delays in the Apache program.

A: Delays due to taking on a complex project, unexpected demand for BDNL-8 material, and capacity balancing; not permanent, team is working to catch up.

Q: Jaeson Schmidt asked about the $51 million revenue guidance.

A: $51 million is for the 12 months following February 18, aligning with different time frames than prior discussions.

Q: Richard Shannon asked about the missile program with Lockheed.

A: Expect customer testing in summer/fall 2025, with potential early decision on system performance.

Q: Scott Buck asked about G5 capacity and sales integration.

A: G5 has assembly capacity, detector supply secured, and sales team working closely with LightPath; sales cycle is long but reactions are positive.

Q: Brian Kinstlinger asked about OpEx and supply chain.

A: Substantial ongoing legal and audit fees, supply chain issues with germanium resolved, and progress on backlog items.