LightPath Technologies (NASDAQ:LPTH) reported fiscal second-quarter 2026 results that management said reflect a completed “first step” in its shift from a component supplier to a vertically integrated provider of infrared optics and camera systems. CEO Sam Rubin said the quarter showed “measurable commercial success,” including record revenue, record orders, margin improvement, and improved cash flow, alongside a growing systems backlog and increasing customer adoption.
Strategic shift centers on Black Diamond and defense supply chain alignment
Rubin framed the company’s multi-year transformation around its proprietary “Black Diamond” chalcogenide glass, licensed exclusively from the U.S. Naval Research Laboratory and positioned as a domestic alternative to germanium for infrared imaging. He linked the strategy to the fiscal 2026 National Defense Authorization Act (NDAA), which mandates elimination of U.S. defense reliance on optical glass components and systems sourced from Russia, China, and other covered nations by Jan. 1, 2030. Rubin said LightPath’s optical assemblies, infrared cameras, and thermal imaging systems are designed and manufactured in alignment with those requirements.
G5 integration and AMI acquisition broaden camera and large-diameter lens capabilities
Rubin said it has been about a year since LightPath acquired G5 Infrared, which produces long-range infrared cameras for surveillance and counter-UAS applications. Since the acquisition, he said G5 has booked more than $80 million of new orders, compared with $15 million of revenue in the prior year period he referenced. Rubin attributed momentum to market demand areas including border patrol spending and counter-UAS solutions, as well as what he described as LightPath’s ability to enable a secured vertically integrated supply chain through Black Diamond materials.
To extend that advantage, Rubin discussed the acquisition of Amorphous Materials (AMI), a chalcogenide glass manufacturer with large-diameter melting capabilities. He said the AMI technology can be adapted for Black Diamond glass to melt at 10-inch sizes and, with additional processing, reach up to 17 inches. Rubin emphasized that large-diameter optics are required for longer-range detection, citing that some of G5’s highest-end cameras use lenses up to 250 millimeters (10 inches), and that larger optics are important for space-based infrared detection systems.
Rubin said that prior to the acquisition, LightPath’s in-house glass melting was limited to a 5-inch cylinder (and up to about 6 inches of optics using additional techniques), which restricted redesigns of larger G5 cameras. With AMI, he said the company is “full steam ahead” on redesigning the remaining cameras and expects by autumn to have all G5 cameras using Black Diamond instead of germanium.
Beyond product capability, Rubin cited operational benefits: a second manufacturing location (Texas) to reduce disruption risk from having a single production site in Orlando, a roughly 50% boost to capacity, and a stronger competitive posture by bringing in AMI’s glass technology team. He noted AMI may appear as “only” about $3 million in annual revenue as a standalone business, but argued the strategic value is larger.
Large market opportunities discussed, with caution on timing
Rubin said large-diameter Black Diamond optics open opportunities across long-range imaging applications, including airborne gimbals and pods, ground-based systems, and “most importantly, space.” He pointed to U.S. government plans to launch many satellites for missile tracking and detection, referencing public information about Space Development Agency (SDA) awards. Rubin cited SDA’s December award of $3.5 billion to build 72 tracking layer satellites, and described how, in his view, the infrared camera system is typically about one-third of total satellite cost. He also referenced SDA’s more recent announcement regarding a constellation of 300 to 500 satellites in low Earth orbit.
At the same time, Rubin cautioned that satellite development timelines are long and that government work is often organized in two-year tranches, meaning the next relevant designs may not go out for at least two years.
In the Q&A, Rubin also said LightPath already has a meaningful business in free-space optical communications between satellites, describing the company as having a strong position in that market and noting discussions with a customer about increasing capacity.
Fiscal Q2 financial results: record revenue, higher margin, and EBITDA improvement
CFO Al Miranda reported revenue for the quarter rose 120% year over year to $16.4 million, compared with $7.4 million in the year-ago quarter. Revenue mix was:
- Infrared components: $5.0 million (31%)
- Visible components: $3.4 million (21%)
- Assemblies and modules: $7.2 million (44%)
- Engineering services: $0.7 million (4%)
Miranda said G5 was the largest contributor to the revenue increase, while legacy LightPath revenue also grew substantially quarter over quarter.
Gross profit increased 212% to $6.0 million, and gross margin improved to 37% from 26% in the year-ago quarter. Miranda attributed the margin improvement primarily to a higher proportion of assemblies and modules (including cameras), which he said generally carry higher margins. He also cited a more favorable engineering services margin due to a non-recurring engineering project for a defense contractor, and improved infrared component margins driven by mix and resolution of manufacturing issues that affected the prior-year quarter.
Operating expenses were $14.6 million, up from $4.4 million a year earlier. Miranda said $7.6 million of the increase was tied to a quarterly fair value adjustment of the G5 earnout liability, which will continue through fiscal Q3 2027 when the earnout period ends. Excluding that revaluation, operating expenses were $7.1 million versus $4.4 million in the prior-year quarter, with the increase attributed to G5 integration costs, M&A costs related to AMI, higher sales and marketing spending, additional corporate expenses, and increased personnel costs as executive vacancies are filled.
Net loss totaled $9.4 million, or $0.20 per basic and diluted share, compared with a $2.6 million net loss in the year-ago quarter. Miranda said the year-over-year change was primarily due to the $7.6 million earnout fair value adjustment; excluding that, he said net loss would have been $1.8 million, an improvement from the prior-year period.
Adjusted EBITDA was positive $0.6 million, compared with an adjusted EBITDA loss of $1.3 million in the same quarter last year. Miranda noted the company expects to continue reporting adjusted EBITDA in fiscal 2026 and 2027 due to acquisition-related accounting items.
Liquidity, backlog, and management’s internal targets
LightPath ended the quarter (Dec. 31, 2025) with $73.6 million in cash and cash equivalents, up from $4.9 million at June 30, 2025. Management attributed the increase to a secondary equity raise completed during the quarter. Rubin said the company initially sought to raise $40 million, increased the deal size to $60 million due to demand, and with the banks’ exercised green shoe option, generated approximately $65 million in net proceeds. He emphasized the capital was intended to fund growth investments and potential M&A rather than to fund operating losses, noting the quarter marked the company’s second consecutive quarter of positive adjusted EBITDA and positive operating cash flow.
Miranda said the company paid $5.4 million of acquisition notes in full during Q2, leaving total debt of $0.8 million as of quarter end. He reported backlog of $97.8 million, and Rubin added that roughly two-thirds of backlog is in higher-margin systems and subsystems.
While the company does not provide formal guidance, Miranda shared internal targets and said the company achieved them earlier than planned: gross margin at or above 35% by fiscal Q4, EBITDA positive by fiscal Q2, and operating cash flow positive by fiscal Q3.
In closing remarks, Rubin said the near-term focus is execution: shipping on schedule with quality, converting backlog to revenue, expanding margin, and improving bottom-line results. He also reiterated that management views the current environment as a time-limited opportunity to capture market share while competitors work to resolve germanium supply constraints, describing what he called a roughly three-year window to establish durable positions in defense programs.
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.
