LightPath Technologies, Inc. Q2 FY2026 earnings call

• Transitioned from precision optical component company to vertically integrated provider of high-value infrared optics and camera systems. - Acquired G5 Infrared and Amorphous Materials; G5 has booked over $80,000,000 in new orders since acquisition. - Amorphous acquisition enables production of larger-diameter Black Diamond lenses, opening opportunities in defense, aerospace, and space. - Completed secondary raise of $65,000,000 for strategic investments. - Achieved record revenue, margin improvement, and positive adjusted EBITDA and operating cash flow.

Revenue for Q2 2026 increased 120% to $16,400,000. Infrared components contributed $5,000,000 (31% of revenue), visible components $3,400,000 (21%), assemblies and modules $7,200,000 (44%), and engineering services $700,000 (4%). Gross profit increased 212% to $6,000,000, or 37% of total revenues, driven by higher margins from assemblies and modules and favorable engineering services margin.

• Internally planned gross margin at or above 35% by Q4, EBITDA positive by Q2, and operating cash flow positive by Q3, achieved earlier than planned. - Detailed operating growth plan with three components: support existing business, invest in known growth opportunities, invest in new business; resources allocated to substantial growth opportunities.

• Differentiators may be surpassed by competitors within approximately 3-4 years. - Satellite development takes time, with government working in two-year trenches, so opportunities in space are not immediate. - Potential for competitors to develop alternatives to germanium-based solutions.

Q: Talk about the 3-year window for capturing market share.

A: Differentiators won't last forever, so there's a window of ~3 years to capture significant market share while defense programs lock in suppliers.

Q: Details on Amorphous acquisition programs.

A: Amorphous had a main defense prime customer with ~80% of revenue, and LightPath can expand their offerings by fabricating, molding, and assembling components from Amorphous materials.

Q: Thoughts on March quarter gross margin?

A: Year-to-date gross margin is 33%, with 35% being the goal, and the engineering contract was a high-margin, unusual event.