LightPath Technologies reports Q4 and full-year 2026 results

On Thursday, LightPath Technologies (NASDAQ: LPTH ) discussed fourth-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

7 million, with a significant improvement in gross margin from 27% to 36%. 9 million, with strategic shifts focusing on high-margin products like assemblies and modules. LightPath is divesting its China operations, focusing on Western-aligned facilities, and enhancing its capacity to meet increased demand, particularly for Black Diamond glass. The company secured two large orders worth $24 million and anticipates continued backlog growth as defense programs move from qualification to production.

2 million in cash and no debt. Full Transcript OPERATOR Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LightPath Technologies' fiscal fourth quarter and full year 2026 earnings conference call.

During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, September 10, 2026, and the earnings press release accompanying this conference call was issued after the market closed today. I'd like to remind you that during the course of this conference call, the company will be making a number of forward-looking statements that are based on current expectations, involve various risks and uncertainties, and are discussed in its periodic SEC filings.

Although the company believes that the assumptions underlying these statements are reasonable, any of them could be proven to be inaccurate, and there can be no assurances that the projected results will be realized. In addition, references may be made to certain financial measures that are not in accordance with Generally Accepted Accounting Principles, or GAAP. We refer to these as non-GAAP financial measures. Please refer to our SEC reports and certain areas of our press releases, which include reconciliations of non-GAAP financial measures and associated disclaimers.

CEO Sam Rubin will begin today's call with a strategic overview of the business and recent developments for the company, while CFO Al Miranda will then review financial results for the quarter and the fiscal year. Following the prepared remarks, there will be a formal question-and-answer session. I'd like to now turn the conference over to CEO Sam Rubin. Sam, the floor is yours.

Sam Rubin, Chief Executive Officer Thank you, operator. Good afternoon to everyone and welcome to LightPath Technologies Fiscal Fourth Quarter and Full Year 2026 Financial Results Conference Call. The last few calls I typically opened by talking about the strategy and how the strategy is working and where it's taking us. Tonight, instead, I let the numbers talk and let the fiscal year results do the talking.

Fiscal 2026 is a first year in which the transformation we have been describing shows up cleanly in every line of the financial statements, not just the backlog. Four numbers frame the year. Revenue grew 93% from $37 million to nearly $72 million, gross margin expanded from 27% to 36%. 9 million, up 197% from where we started the year.

The fourth quarter was our best quarter in every one of those categories. 2 million was a company record and our fourth consecutive quarter of sequential growth. 4%. 1 million or 10% of revenue, which was our fourth straight profitable quarter on that measurement.

All great results which we expect will continue to grow and improve. Now I'd like to spend a moment on the quality of that margin because it is the part that I am most pleased with. 4% margin did not come from a one-time favorable contract or from raising prices. It did come from two things we did.

First is the mix of products. Assemblies, modules, and cameras were 43% of the fourth quarter revenue and 44% of the full year compared to 23% of the revenue in fiscal 2025. These products, which our strategy has really took us towards, have both higher prices and higher margins as a result of the significant value add compared to our legacy component business. Second is execution.

The yield and throughput problems that dragged our component margins in the past are well in the past, and every one of our four product groups improved its margin year over year. The mix improvement is a result of strategy. The margin improvement is the result of operation. We needed both and this year we got both.

And while the backlog has not grown sequentially, shortly after we closed the quarter we reported two large orders totaling $24 million and have been continuing to book and grow our backlog. So the backlog you will see for the quarter ending in about three weeks’ time will show already some more growth while we continue securing new customers, both by converting them to Black Diamond and by providing them with assemblies and systems. Much of the orders coming now, like the two large orders I just mentioned from July, are for production, as many of the programs we have been working on move from qualification to production.

We have said in the past that a design and qualification of a new program, whether it's a redesign to use Black Diamond or a new program altogether, can take up to two years. Much of the growth in our backlog and bookings recently that we are seeing is the result of such new programs beginning to move into production two years ago. In late 2024, China imposed the first restrictions on export of germanium and gallium and we began to see a growth in demand for Black Diamond and systems using Black Diamond glass.

Now we are beginning to see the transition of some of those into production, a trend I expect will intensify as most customers did not start their redesign and substitution effort until much after the initial export ban on germanium. To that end, I will provide now an update on some of our key programs we have in the pipeline and their status. As mentioned in recent calls, due to the good problem of experiencing exponential growth in all our sales fronts, I can't really cover all the large programs, so instead I will focus on ones where we had some changes or recent developments.

NGSRI, our 3-year-old interceptor program with Lockheed Martin: as many have heard, the Army has pushed out the timeline by a few months in an effort to potentially explore other options. We do not see this as a risk to us, only a delay. We have seen this happen in multiple other programs where the Army wants to foster a truly competitive environment. Our confidence continues to be very high and, given that our seeker is being designed and evaluated into multiple platforms now, we have little concern here.

In the last few months we have relocated the group that works on that seeker into a new building and have begun investing in increasing capacity for building seekers, knowing that any program that moves into production will need to scale very quickly. More broadly about seekers and munitions, our camera systems are now being designed into or actively evaluated in seven different platforms, three of which are with Lockheed Martin, the remainder are with primes or, as they're sometimes referred to recently, neo-primes—newer companies entering the defense market.

The full qualification of our low-cost seeker that was completed as a result of the NGSRI flight test, as expected, opened the door to many other opportunities. The same manufacturing facility in Texas will support all of those opportunities. In Border Patrol or border tower, we have seen funding being released from DHS to the primes; however, that has not yet translated into orders for cameras. , primarily in the Middle East.

A few other programs: we have an unnamed airborne program which has completed qualification and we await the production order for elep. The Apache program is looking like it might make a comeback soon with a renewed interest in that system. Drones, and in particular drone dominance programs, are generating significant demand which we are addressing by starting to add automation to some of our processes for high-volume assemblies. And counter-UAS programs continue to move along well, with two of the programs now transitioning to a cadence of deliveries of tens of systems a month, in parallel to more design wins of our existing products.

The teams have been working on designs and redesigns of additional products, all of which leverage our Black Diamond glass and make use of our supply chain resilience and having alternative materials instead of depending on germanium. On the camera front, we have been redesigning the last of the G5-cooled cameras we use—Black Diamond instead of germanium. That program is progressing well technically, though behind schedule. However, all the results we have seen so far indicated the cameras will work at least as well as the germanium-based cameras.

We have also been working on zoom lenses and zoom cameras in what is called long-wave infrared, often referred to as uncooled cameras. Here too we identified an area of the market in which we can leverage our position to provide products without supply chain constraints. An effort that has been ongoing for the last year is now coming to fruition with our first orders for zoom lenses and complete uncooled zoom cameras to be delivered soon. Once those are fully production ready, we expect to see the need in the market translate into orders fairly quickly.

Let me now turn to the structural changes we have completed after year end, which is the divestiture of our China operation. 5 million, payable in installments over five years, and that transaction is expected to close later this month. Financially it is a modest event. S.

and Europe, so there is no disruption to those customers. Strategically it is not modest at all. Six years ago most of our manufacturing footprint was in China and more than a third of our revenue came from China. As of this fall, LightPath now does everything—melts glass, coats optics, builds cameras and assemblies—exclusively outside of China in Orlando, in Plano, Texas, in Hudson, New Hampshire, and in Riga, Latvia.

We have no ownership, no facility, and no commercial activity in China. For a customer base that is now dominated by the defense primes and public safety agencies, that is no longer a nice-to-have talking point, but something that will now open up significant bid opportunities where that is a condition for participation. That connects directly to our regulatory backdrop. Defense programs are required to move off optical glass and optical components sourced from covered nations before the end of the decade.

What has changed over the last year is not the rule, it is the timing. Qualification cycles for an optical system run two to three years, so the sourcing decisions that determine who supplies those programs in 2029, 2030 are being made now in this fiscal year and in the next one. However, several executive orders around waivers for germanium and classification of material as critical and specific tariffs applied will likely pull that timeline even closer. Now to address that, let me talk about capacity a bit, because capacity is our single biggest operational theme going into fiscal 2027.

When we acquired Amorphous Materials in January, we increased our Black Diamond melting capacity and, just as importantly, we unlocked large-diameter melting up to 10 inches and beyond versus the 5 inches we could produce before. In optics, the further you need to see, the larger the optics need to be. Large diameter is what opens up long-range camera systems, large assemblies, and space-based missile detection and tracking. I told you in May that doubling the glass capacity was nowhere near enough.

That is still true. Demand for glass is running ahead of supply even after the acquisition, so we are adding melting capacity in Orlando and Texas. S. and Latvian sites, including adding shifts in all locations.

Al will talk about what that means for capital spending. The short version is that fiscal 2027 capex will be higher than fiscal 2026, and that is a deliberate choice made against a visible order book and pipeline. Before I hand it to Al, I'd like to discuss the balance sheet. In June we raised $50 million in a primary offering alongside a secondary sale by North Fund Capital, who funded our acquisition of G5.

2 million of cash and effectively no debt. Some of that capital will be used to fund the capacity and working capital required to convert our growing backlog that has now grown over five consecutive quarters and continues to grow. And some will be to pursue accretive capability-adding acquisitions such as the ones similar to G5 and AML that have proven we can execute and integrate. With that, now I will turn the call over to Al Miranda, CFO, to walk through the fourth quarter and full fiscal year 2026 financial results.

Go ahead. Albert Miranda, Chief Financial Officer Thank you, Sam. As always, I'll keep my review to a succinct highlight of the financials. Much of what we're discussing was also included in our press release issued earlier today and will be included in the 10-K for the period.

I encourage you to visit our Investor Relations webpage to access both documents. 2 million in the same year-ago quarter. 1 million, or 34% of consolidated revenue. 2 million, or 20% of consolidated revenue.

1 million, or 43% of consolidated revenue. 8 million, or 4% of consolidated revenue. 7 million, or 22% of revenue in the same year-ago quarter. Sam mentioned the reasons for our gross margin increase.

In addition to better absorption on higher production volume, we also had a quarter carry-through of a half-million-dollar inventory reserve charge last year that didn't recur this year. 2 million in the prior-year period. 4 million increase, 2 million relates to non-cash fair value adjustment to the acquisition earnout liabilities, which are remeasured through operating expenses until fully settled. The increase is primarily related to G5 Infrared, reflecting its strong performance against the earnout targets.

The final earnout amount was agreed to and accrued in the fourth quarter of fiscal 2026 to be paid in January 2027. 4 million is primarily comprised of increased selling, general and administrative expenses, where the fourth quarter of fiscal 2026 included the addition of AML operations, incentive compensation accruals, additions to the senior leadership team, higher sales and marketing investments, and continued information technology spend to meet customer security requirements. 16 per share in the same year-ago quarter. 1 million, or 10% of revenue, compared to an adjusted EBITDA loss of 2 million in the year-ago quarter.

This is our fourth consecutive quarter of positive adjusted EBITDA. As I've said before, adjusted EBITDA is non-GAAP and not a perfect measure, but it is the better indicator of core operating performance because it strips out the non-cash acquisition accounting that otherwise dominates our reported results. 2 million in fiscal 2025. 2 million, or 30%, an increase of 52% year over year.

5 million, or 22% of consolidated revenue, an increase of 32%. 9 million, or 44% of consolidated revenue, an increase of 281%. 1 million, or 4% of consolidated revenue, roughly flat with the prior year. 5 million as compared to 22 million in the prior year.

1 million relates to the non-cash fair value adjustment to acquisition earnout liabilities, which I will discuss further in a minute.