0001437749-26-015594
SEC filingRevenue surged 109% YoY to $19.1M, driven by G5 Infrared and AML acquisitions, with gross margin expanding 700 bps to 36%.
For the third quarter of fiscal 2026, LightPath Technologies reported revenue of $19.1 million, a 109% increase compared to $9.2 million in the same quarter of the prior fiscal year. The growth was primarily driven by the acquisitions of G5 Infrared (February 2025) and Amorphous Materials (January 2026), which contributed significantly to infrared components and assemblies and modules revenue. Gross profit rose 161% to $7.0 million, with gross margin expanding to 36% from 29% in the prior year quarter. The margin improvement was attributed to a higher mix of assemblies and modules revenue, which generally carries higher margins, and improved infrared product margins due to favorable customer mix and resolution of prior manufacturing yield issues. Net loss increased to $4.1 million from $3.6 million, largely due to a $3.4 million non-cash charge from the change in fair value of acquisition earnout liabilities related to G5 Infrared. Adjusted EBITDA turned positive at $1.1 million, compared to a loss of $1.6 million in the prior year quarter, reflecting the strong gross profit growth partially offset by higher SG&A and new product development costs.
All four product groups showed notable trends. Infrared components revenue grew 69% to $6.1 million, with G5 Infrared coating services contributing $0.9 million and AML adding $1.0 million. Visible components revenue increased 40% to $4.0 million, driven by industrial customer demand across the U.S., Europe, and Asia. Assemblies and modules revenue surged 355% to $8.4 million, with G5 Infrared cameras and modules accounting for $6.4 million of the increase, including a large program with a global technology customer. Engineering services revenue declined 29% to $0.6 million, primarily due to lower revenue from the Lockheed Martin development contract and the absence of non-recurring space-related research contracts. The mix shift toward higher-value assemblies and modules is a key strategic driver, as management expects this to continue favorably impacting financial results.
Management's outlook is positive, supported by a record backlog of $110.6 million as of March 31, 2026, up 196% from June 30, 2025. The backlog includes $80.6 million from G5 Infrared products, with approximately $58 million in orders from a leading global technology customer for advanced infrared camera systems expected to ship in calendar 2026 and 2027. The company continues to execute its strategy of moving up the value chain from components to subsystems and systems (LightPath 2.0 and 3.0), with higher average selling prices. Management expects continued revenue growth in assemblies and modules based on the backlog. The company also highlighted growing demand for infrared products and interest in its proprietary BlackDiamond materials as alternatives to germanium, given supply constraints. No specific quantitative guidance for future periods was provided.
Cash and cash equivalents surged to $55.2 million as of March 31, 2026, from $4.9 million at June 30, 2025, driven by net proceeds of $65.2 million from a public equity offering in December 2025 and $7.9 million from a private placement in September 2025. Total assets increased to $144.3 million from $81.5 million. Total debt (loans payable and finance leases) fell to $0.9 million from $5.6 million, reflecting the redemption of Acquisition Notes and repayment of equipment loans. Shareholders' equity improved to $89.1 million from $15.6 million, boosted by the equity issuances and the conversion of Series G preferred stock. Inventory rose modestly to $13.3 million from $12.9 million, while deferred revenue more than doubled to $1.2 million, indicating growing customer prepayments.
The company's primary contractual commitments are operating and finance leases. As of March 31, 2026, total operating lease liabilities (current and noncurrent) were $10.4 million, with future minimum payments of $11.9 million through fiscal 2034. Finance lease liabilities totaled $731,331. No explicit purchase commitments for raw materials or capacity were disclosed in the notes, though the company notes supply chain risks related to Germanium and Gallium export restrictions from China. The acquisition of Amorphous Materials includes contingent consideration of up to $3.0 million in stock, of which $1.8 million had been accrued.
LightPath did not repurchase any common shares during the period. No cash dividends were paid on common stock; the Series G preferred stock carries a 6.5% dividend, but dividends are cumulative and not currently paid in cash. The company raised $73.1 million in gross equity proceeds, net of fees. Debt reduction was a key use of cash: $5.4 million in loan repayments and $0.2 million in finance lease repayments. Capital expenditures totaled $1.8 million (3.65% of revenue), primarily for manufacturing equipment. The company also used $7.0 million in cash for the AML acquisition and $3.8 million for the G5 earnout payment (net of financing).
The company operates as a single reportable segment (Optics). Revenue for the nine months ended March 31, 2026 was $50.6 million, up 102% from $25.0 million a year ago, primarily due to the G5 Infrared and AML acquisitions. Geographic breakdown: United States $24.4 million (48%), Europe $20.8 million (41%), China $3.2 million (6%), other Asia $1.5 million (3%), and rest of world $0.7 million (1%). The growth in Europe reflects the addition of G5 Infrared's revenue. The optics segment recorded a net loss of $16.4 million, including $12.2 million in fair value changes of acquisition earnout liabilities.
For the nine months ended March 31, 2026, LightPath reported a net loss of $(16.4M), while net cash used in operating activities was $(5.1M). The gap between net loss and operating cash flow is primarily due to non-cash charges: depreciation and amortization ($3.7M), change in fair value of acquisition earnout liabilities ($12.2M), stock-based compensation ($1.3M), and loss on extinguishment of debt ($0.5M). Working capital changes consumed cash, notably an increase in prepaid expenses and deposits ($2.2M) and trade accounts receivable ($1.2M).
Capital expenditures (capex) rose to $1.8M from $0.6M in the prior period, reflecting increased investment in property and equipment. The company did not report free cash flow, but with negative operating cash flow and elevated capex, free cash flow was deeply negative.
Financing activities provided $64.0M, driven by proceeds from public equity placement ($65.2M) and private equity placement ($7.9M), partially offset by loan repayments ($5.4M) and earnout payments for G5 acquisition ($3.5M). No share repurchases or dividends were reported.
Anomalies include a significant non-cash adjustment for the change in fair value of acquisition earnout liabilities ($12.2M) and the earnout payment for G5 acquisition ($3.8M) classified within operating activities. The company also had a large increase in prepaid expenses and deposits, which may warrant further investigation.