LightPath Technologies (NASDAQ:LPTH) reported fiscal first-quarter revenue growth of 38% and a record backlog, as demand for optical assemblies and infrared cameras helped lift gross margins. The company also said supply chain delays caused revenue to fall slightly short of its own expectations.
Revenue for the quarter ended Sept. 30 rose to $20.8 million from $15.1 million a year earlier. Gross margin expanded to 41.4% from 29.8%, while the net loss narrowed to $1.7 million, or $0.02 per share, from $2.9 million, or $0.07 per share.
President and CEO Sam Rubin said a greater share of revenue came from assemblies and modules, including cameras and optical assemblies, which incorporate more of the company’s proprietary technology. Those products represented 51% of quarterly revenue, up from 40% a year earlier.
Adjusted EBITDA, a non-GAAP measure, increased to $1.3 million from $0.4 million, marking the fifth consecutive quarter of positive adjusted EBITDA, CFO Al Miranda said.
Backlog and orders grow
LightPath ended September with a record $132.9 million in backlog, up 20% from the previous quarter and 54% from a year earlier. Customers requested delivery of approximately $110.8 million of that backlog within the following 12 months, a 30% increase from the prior quarter.
Rubin said all orders in the backlog were firm and funded, with signed delivery dates. He expressed confidence in the company’s ability to deliver the orders requested over the next 12 months, while acknowledging the operational challenge of expanding capacity and managing suppliers.
Since July 1, a counter-drone and defense systems supplier has placed more than $19 million in follow-on assembly orders, including a $6.3 million order in October, after the quarter ended. Rubin said the total was twice what the customer ordered during all of fiscal 2026.
A global technology company also placed an $11 million follow-on order for infrared cameras used in counter-drone applications. Rubin said the program includes a planned transition over its life from germanium-based optics to LightPath’s BlackDiamond material.
After the quarter closed, LightPath announced an order for more than 50,000 optical assemblies for drone camera systems. Current capacity for those assemblies is just under 10,000 units a month, and the company is working to increase it to several tens of thousands a month over the next 12 months, Rubin said. He added that potential demand could eventually require capacity of 100,000 assemblies a month.
Margins and supply chain in focus
Assemblies and modules generated $10.5 million in quarterly revenue, up 76% year over year. Infrared components contributed $4.7 million, visible components $4.6 million and engineering services $0.9 million.
Asked about the margin outlook, Miranda said the company expects gross margins to “start with the number four.” He said the product mix in the first quarter, with assemblies, modules and cameras accounting for more than half of revenue, helped push the margin above 40%.
Rubin attributed the revenue shortfall against internal expectations mainly to supply chain delays. He cited motors, externally sourced optics for G5 cameras, electronics and detectors among the constraints. The company has added a supply chain director, sought alternative suppliers and built inventory, he said.
“I cannot guarantee it will not be a problem,” Rubin said, adding that the company was better positioned to manage the issue in the current quarter.
Spending and product development
Operating expenses increased to $10.8 million from $7 million a year earlier. New product development spending rose to $2 million from $0.9 million as LightPath added engineering staff for cameras, infrared assemblies and BlackDiamond glass. Stock-based compensation increased to $1.8 million from $0.4 million.
Miranda said first-quarter operating expenses were more indicative of the company’s spending plan than the $12.6 million reported in the preceding quarter.
LightPath is developing compact cooled Kestrel cameras for space- and weight-constrained payloads, along with long-wave infrared zoom lenses and cameras. Rubin said some long-wave products were ready, although they accounted for only about $1 million to $2 million of backlog.
Rubin also discussed the Navy CLEAR program, which he said combines material technology development with prototype deliveries tied to existing defense programs. The prototypes are expected to be delivered over the next two years for evaluation and could potentially lead to program awards, he said.
Cash position and China exit
LightPath ended the quarter with $82.9 million in cash and cash equivalents, down from $93.2 million at June 30. Cash used in operations was $8.3 million, including investment in working capital as inventory rose by $13.5 million to $31.5 million.
Miranda said the final $9 million G5 earnout payment, comprising $6.3 million in cash and $2.7 million in shares, is scheduled for the first half of January 2027. He said LightPath was comfortable with its liquidity and could pursue acquisitions.
Rubin said the company completed the divestiture of all operations in China, including sales and manufacturing. The buyer will remain a supplier for commercial products, and LightPath does not expect disruption for commercial customers, he said. Rubin added that exiting China was a requirement for participation in certain U.S. government programs.
About LightPath Technologies (NASDAQ:LPTH)
LightPath Technologies, Inc. is a photonics and optics manufacturer that develops, manufactures, and distributes precision optical components, assemblies, and imaging systems. The company’s products are designed for applications that require the control, transmission, or detection of light across visible, near-infrared, and infrared wavelengths. Its product portfolio includes precision-molded glass aspheric lenses, infrared optics, coated optical components, custom optical assemblies, and thermal imaging solutions.
