LightPath Technologies — Fiscal 2027 Q1 Earnings Summary

Financial Performance:

• Revenue increased 37.9% year-over-year to $20.8 million for the three months ended September 30, 2026, compared to $15.1 million in the prior year period.
• Gross profit increased 91.9% to $8.6 million, representing a gross margin of 41.4%, up from 29.8% in the prior year period.
• Operating expenses rose 54.1% to $10.8 million, driven by a $3.7 million increase in SG&A (including $1.4 million in higher non-cash stock-based compensation, AML acquisition costs, and IT investments) and a $1.2 million increase in new product development costs.
• Net loss narrowed to $1.7 million ($0.02 per share) from $2.9 million ($0.07 per share) in the prior year period.
• Adjusted EBITDA (non-GAAP) increased 252.1% to $1.3 million (6% of revenue), marking the fifth consecutive quarter of positive adjusted EBITDA.
• Cash and cash equivalents decreased to $82.9 million as of September 30, 2026, from $93.2 million as of June 30, 2026, primarily due to a $10.1 million investment in working capital and $2.5 million in capital expenditures.
• Inventories increased to $31.5 million from $18.0 million as of June 30, 2026.
• Accounts payable increased to $11.0 million from $7.7 million as of June 30, 2026.

Guidance and Future Outlook:

• Management's focus for the balance of fiscal 2027 is converting the record backlog of $132.9 million into revenue on schedule.
• The company is investing ahead of scheduled deliveries by building inventory of critical materials and work-in-process and adding manufacturing capacity, including glass fabrication.
• Forward-looking statements indicate expectations regarding demand for germanium alternatives, C-UAS, drone applications, and the ability to scale as a vertically integrated supplier.

Business Segments and Product Lines:

• Assemblies & Modules revenue grew 76% to $10.5 million, accounting for 51% of total revenue (up from 40% a year ago), driven by G5 Infrared's camera and module sales for surveillance and C-UAS programs.
• Infrared ("IR") Components revenue increased 15% to $4.7 million, primarily driven by the addition of $1.1 million from the Amorphous Materials (AML) acquisition in January 2026, partially offset by decreased sales to European defense customers.
• Visible Components revenue increased 19% to $4.6 million, reflecting higher sales to industrial customers in Europe and U.S. defense customers.
• Engineering Services revenue decreased 18% to $0.9 million due to the timing of certain customer programs.

Market and Competitive Landscape:

• Order backlog reached a record $132.9 million as of September 30, 2026, up 20% from $110.9 million at June 30, 2026, and up 54% from $86.0 million at September 30, 2025.
• Approximately $110.8 million of the backlog is requested for delivery within the next twelve months.
• The company secured over $30 million in follow-on C-UAS orders between July and October 2026, including over $19 million in optical assembly orders from a leading defense supplier (double that customer's total for fiscal 2026) and an $11 million infrared camera order from a global technology customer.
• Received an order in October 2026 for over 50,000 optical assemblies for drone camera systems as U.S. and allied drone procurement scales up.
• Awarded a funded prototype agreement under the Department of War's CLEAR program to develop BlackDiamond™ chalcogenide glass as a germanium alternative.

Risks and Challenges:

• Risks include the ability to convert backlog into revenue on schedule, expand manufacturing capacity, and hire qualified personnel in a timely manner.
• Potential risks involve the inability to sustain profitable sales growth, convert inventory to cash, or reduce costs to maintain competitive prices.
• Risks include reliance on a few key customers, potential non-performance by the purchaser of the divested China subsidiary, and the ability to obtain raw materials from suppliers.
• External factors such as international tariffs, geopolitical tensions, and varying demand for products pose risks to operations.

Management Commentary and Tone:

• CEO Sam Rubin stated fiscal 2027 is off to a strong start, led by a record backlog where new orders significantly outpaced shipments.
• Management highlighted a favorable revenue mix shift toward higher-value assemblies and modules, which lifted gross margins.
• Rubin expressed confidence in the company's position to scale as a trusted, vertically integrated supplier, citing a strong balance sheet, strengthened leadership team, and completed China divestiture.
• The tone indicates confidence in the demand for optical assemblies and infrared cameras as key growth pillars.

Other Key Points:

• Completed the sale of its China subsidiary, LightPath Optical Instrumentation (Zhenjiang) Co., Ltd., as of October 30, 2026, resulting in no longer having facilities or operations in China.
• Promoted Michael Amorelli to VP Engineering, Imaging Systems, and appointed Scott Payette (former Anduril Industries production leader) as Vice President and General Manager of G5 Infrared LLC.
• Acquired Amorphous Materials (AML) in January 2026, contributing $1.1 million to IR Components revenue in the quarter.
• Issued common stock for the acquisition of AML, including earnouts, valued at $1.6 million.
• Proceeds from the sale-leaseback of equipment totaled $591,974 during the quarter.
• The company hosts an investor conference call on November 10, 2026, to discuss results.