LightPath Technologies (NASDAQ:LPTH) reported record fiscal 2026 results, with revenue nearly doubling, gross margin expanding and adjusted EBITDA turning positive as the company shifted toward higher-value assemblies, modules and camera products.
For the fiscal year ended June 30, revenue rose 93% to $71.7 million from $37.2 million a year earlier. Gross margin increased to 36% from 27%, while adjusted EBITDA improved to a $4.2 million profit from a $5.1 million loss in fiscal 2025. The company ended the year with backlog of $110.9 million, up 197% from $37.4 million a year earlier.
Higher-Value Product Mix Supports Margins
President and CEO Sam Rubin said the fourth-quarter margin expansion reflected product mix and operating execution rather than a one-time contract benefit or price increases. Assemblies, modules and cameras accounted for 43% of fourth-quarter revenue and 44% of full-year revenue, compared with 23% of revenue in fiscal 2025.
“These products … have both higher prices and higher margins as a result of the significant value add compared to our legacy component business,” Rubin said.
During the fourth quarter, infrared components generated $7.1 million in sales, or 34% of consolidated revenue. Visible components contributed $4.2 million, or 20%, while assemblies and modules accounted for $9.1 million, or 43%. Engineering services produced $800,000.
For the full year, assemblies and modules revenue climbed 281% to $31.9 million. Infrared component sales rose 52% to $21.2 million, while visible component revenue increased 32% to $15.5 million. Engineering services revenue was roughly unchanged at $3.1 million.
CFO Albert Miranda said higher production volume improved cost absorption, while the year-ago quarter included a $500,000 inventory reserve charge that did not recur in fiscal 2026’s fourth quarter.
Reported Loss Reflects Acquisition Earnout Accounting
LightPath reported a fourth-quarter net loss of $4.1 million, or $0.06 per basic and diluted share, compared with a $7.1 million loss, or $0.16 per share, a year earlier. Fourth-quarter operating expenses rose to $12.6 million from $7.2 million.
Miranda said $2 million of the quarterly operating-expense increase related to a non-cash fair-value adjustment for acquisition earnout liabilities, primarily tied to G5 Infrared’s performance against earnout targets. The final G5 earnout amount was agreed to and accrued during the fourth quarter and is scheduled for payment in January 2027.
For the year, operating expenses rose to $45.5 million from $22 million. Of the $23.5 million increase, $14.1 million was associated with non-cash fair-value adjustments to acquisition earnout liabilities. Miranda said the $15.6 million charge recorded during fiscal 2026 reflected G5 outperforming estimates used at the time of acquisition and was not an ongoing operating cost. Smaller future adjustments related to AML and Visimid may still occur.
The remaining expense growth included a full year of G5 operating costs, the addition of Amorphous Materials Inc., investments in sales and marketing, information technology and customer security requirements, leadership hires, incentive compensation and new product development.
Backlog, Defense Programs and Capacity Expansion
Approximately $85.6 million of the $110.9 million year-end backlog was requested for delivery within 12 months, Miranda said. Rubin added that LightPath received two large orders totaling $24 million shortly after the fiscal year ended, both for fiscal 2027 delivery and production programs with deliveries expected over multiple months.
Rubin said counter-unmanned aerial systems, or Counter-UAS, remain a major backlog driver, alongside optics and assemblies for drone-related programs. He said border-patrol-camera funding released to prime contractors by the Department of Homeland Security had not yet translated into camera orders for LightPath. The company has, however, seen demand for similar tower and camera systems in the Middle East and North Africa, primarily through foreign military sales to allied countries.
The company’s camera systems are being designed into or evaluated for seven platforms, including three with Lockheed Martin, according to Rubin. LightPath is also awaiting a low-rate initial production order for an unnamed airborne program that has completed qualification. Two Counter-UAS programs have transitioned to deliveries of tens of systems per month, Rubin said.
Regarding the NG-SFI interceptor program involving Lockheed Martin, Rubin said an Army timeline shift of several months represented a delay rather than a risk to LightPath. He said the Army’s move appeared intended to examine potential alternatives amid a changing defense supplier landscape, while Lockheed and Raytheon have been working on the program for roughly three years.
China Divestiture and Black Diamond Capacity
In July, LightPath signed a definitive agreement to sell its China subsidiary to an entity owned by the facility’s local management team for $4.5 million payable over five years. The transaction is expected to close later in September.
Rubin said about $4.5 million of annual third-party revenue will leave LightPath’s consolidated results, though the buyer will continue supplying the company as a third-party vendor for commercial customers in the United States and Europe. He said the divestiture means LightPath will have no owned facilities, commercial activity or manufacturing operations in China.
The company now produces glass, coats optics and builds cameras and assemblies in Orlando; Plano, Texas; Hudson, New Hampshire; and Riga, Latvia. Rubin said the manufacturing footprint could increase bidding opportunities with defense primes and public-safety agencies where non-China sourcing is required.
LightPath is expanding production capacity for its Black Diamond glass, which the company markets as an alternative material for infrared applications historically reliant on germanium. The January acquisition of Amorphous Materials increased Black Diamond melting capacity and enabled larger-diameter glass production of up to 10 inches and beyond, Rubin said.
However, he said demand remains ahead of available glass supply. The company is adding melting capacity in Orlando and Texas, relocating the Amorphous Materials operation to a larger building near its Visimid camera business in the Dallas area, and expanding fabrication, coating and assembly capacity across U.S. and Latvian sites. It is also adding shifts at all locations.
Miranda said LightPath spent $6.3 million on capital expenditures in fiscal 2026, including $4.4 million in the fourth quarter, and expects fiscal 2027 capital spending to be higher as it expands capacity to support backlog and anticipated demand.
LightPath ended fiscal 2026 with $93.2 million in cash and effectively no debt after raising $50 million in a June primary offering alongside a secondary sale by Norfund Capital. Rubin said the funds will support capacity additions, working capital and potential capability-adding acquisitions.
About LightPath Technologies (NASDAQ:LPTH)
LightPath Technologies, Inc designs, manufactures and distributes precision optical components and assemblies for a variety of commercial, industrial, defense and scientific applications. The company’s portfolio includes molded glass aspheric lenses, precision glass optics, infrared lenses and assemblies, diamond-turned optics and molded polymer optics. These components are engineered to support imaging, illumination, laser delivery, detection and sensing systems across visible, ultraviolet and infrared wavelengths.
Among its core offerings, LightPath develops infrared optical solutions using materials such as germanium, zinc selenide and chalcogenide glasses for thermal imaging, night-vision devices and spectroscopy.
