Executive Summary

Revenue was $7.4M, up 1.5% YoY but down sequentially from $8.4M; gross margin fell to 26% on mix and yield, driving a wider net loss of $2.6M ($0.07) and EBITDA loss of $1.5M; management cited China export restrictions (incl. germanium) that pushed ~$0.75M of shipments into Q3 as a key headwind .
Strategic highlight: acquisition of G5 Infrared adds high-ASP, higher-margin cooled IR cameras; management expects combined revenue of at least $55M in the 12 months post-close; G5’s earn-out implies $21–$27M revenue in the next 12 months for G5 alone, and camera-mix to lift margins over time .
Defense momentum: sustained deliveries to a European FPV drone program, initial European defense development contract for BlackDiamond optics, and subsequent $4.8M G5 order for 2025 delivery; backlog stood at $19.8M at 12/31/24 .
Estimates context: S&P Global consensus could not be retrieved during this session; no formal numeric guidance issued—management reiterated a long-term 15% EBITDA margin target and indicated the combined company should be EBITDA positive in the June quarter seasonally, despite G5’s Q3–Q4 seasonal dip (S&P Global consensus unavailable this session).
Stock reaction catalysts: integration updates and order flow from naval/Border Patrol/C-UAS programs of record, progress on Lockheed missile program flight tests, OGI quantification milestone/ramp, and supply chain normalization from China headwinds .

What Went Well and What Went Wrong

What Went Well

Accretive G5 Infrared acquisition expands into cooled IR cameras with ASPs of $50K–$500K and historically ~20%+ EBITDA margins; management expects combined revenue ≥$55M in the next 12 months and long-run 15% EBITDA margins. “Transformative step” toward a vertically integrated IR platform .
Defense traction: began sustained deliveries of IR assemblies for European FPV drones; secured an initial BlackDiamond development contract in Europe; subsequent to quarter, G5 received a $4.8M qualification order for 2025 deliveries .
Mix shift opportunity: camera-heavy portfolio (uncooled + cooled) should blend margins up; CFO affirmed cameras carry higher margins than visible/IR components and expects positive EBITDA for the combined company in the June quarter .

What Went Wrong

Sequential slowdown: revenue fell q/q ($7.4M vs $8.4M), gross margin dropped to 26% (from 34%), and net loss widened; non-GAAP EBITDA loss increased to $1.5M .
Supply chain disruption: China’s germanium/export restrictions stalled broader optics shipments (including non-germanium ZnSe/ZnS), pushing >$0.75M revenue out of Q2; management is sourcing locally for U.S. germanium and migrating customers to BlackDiamond to mitigate .
OGI ramp slower than expected pending quantification testing (ppm detection); furnace camera variant progressing, but OGI commercialization timing is extending pending test results in Salt Lake City .

Financial Results

Summary P&L (oldest → newest)

Metric	Q4 FY2024	Q1 FY2025	Q2 FY2025
Revenue ($M)	$8.63	$8.40	$7.40
Gross Profit ($M)	$2.53	$2.84	$1.93
Gross Margin (%)	29%	34%	26%
Operating Expenses ($M)	$4.73	$4.22	$4.42
Net Income (Loss) ($M)	($2.35)	($1.62)	($2.61)
Diluted EPS ($)	($0.06)	($0.04)	($0.07)
EBITDA (non-GAAP) ($M)	($1.30)	($0.47)	($1.49)
EBITDA Margin (%)	(15%)	(6%)	(20%)

Segment/Product Group Revenue ($M)

Product Group	Q4 FY2024	Q1 FY2025	Q2 FY2025
Infrared (IR) Components	$3.0	$2.6	$3.1
Visible Components	$3.2	$3.3	$2.8
Assemblies & Modules	$1.4	$1.1	$0.9
Engineering Services	$1.0	$1.4	$0.7

Notes: Q2 YoY changes per press release: IR components -13%, Visible +3%, Assemblies -13%, Engineering +797% .

KPIs and Balance Sheet Snapshots

KPI	Q4 FY2024	Q1 FY2025	Q2 FY2025
Backlog ($M)	$19.3 (as of 6/30/24)	$21.0 (as of 9/30/24)	$19.8 (as of 12/31/24)
Cash & Equivalents ($M)	$3.48	$4.28	$3.20
Loans Payable (Total, $M)	$0.54	$3.25	$3.24

Estimates vs. Actuals: S&P Global consensus was not retrievable during this session; therefore, estimate comparisons are omitted (S&P Global consensus unavailable).

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Combined Revenue (LPTH + G5)	Next 12 months post-close	n/a	At least $55M (management expectation)	New commentary
EBITDA Margin (Long-term)	Long term	15% target reiterated	15% target reiterated	Maintained
EBITDA (Combined)	June quarter (seasonal low for G5)	n/a	“Should be positive” (EBITDA)	New commentary
G5 Revenue (Earn-out indicator)	Next 12 months	n/a	$21–$27M implied earn-out target (G5 alone)	New commentary

Note: Company did not issue formal numeric quarterly guidance; these are management outlook statements from press release/call.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY2024, Q1 FY2025)	Current Period (Q2 FY2025)	Trend
Supply chain / China restrictions (germanium, exports)	Strategic transition away from germanium; YOY revenue held despite shift; backlog commentary	China restrictions pushed >$0.75M out of Q2; broader export slowdowns (ZnSe/ZnS); local sourcing for U.S. germanium; accelerating BlackDiamond conversions	Near-term headwind; medium-term tailwind as customers convert
Defense programs (Lockheed missile, FPV drones)	Achieved LM qualification; plan to deliver flightworthy units; European FPV order	Start delivering flightworthy units; sustained FPV deliveries; European defense development contract	Execution progressing; increasing revenue visibility
G5 acquisition / Cooled camera strategy	n/a	Transformative acquisition; ASP $50K–$500K; programs of record (naval, Border Patrol/C-UAS); 12M revenue ≥$55M for combined	Step-change in scale/margins; pipeline robust
Product portfolio (MANTIS, OGI)	Launched new variants; AI-ready cameras	Furnace camera orders ramping; OGI slower pending quantification tests	Mixed: furnace positive; OGI timing extended
Margins / Mix	FY24 gross margin 27%; Q4 improved to 29%	Q2 gross margin 26% on mix/yields; camera mix expected to lift margins; positive EBITDA expected in June quarter	Near-term pressure; outlook improving with mix

Management Commentary

“The acquisition of G5 Infrared is a key and transformative event… a logical next step… G5… delivering strong margins and EBITDAs of around or higher than 20% consistently.” — Sam Rubin, CEO .
“We expect our combined revenue in the next 12 months to exceed $55 million… earn-out for the first year includes projections of revenue between $21 million to $27 million from G5 alone.” — Sam Rubin .
“Gross margin… was primarily driven by differences in the product mix coupled with… yield issues… exasperated by a slowdown in supply chain… mostly attributable to China exports.” — Albert Miranda, CFO .
“In the European market… began sustained delivery of infrared lens assemblies… for active duty use in FPV drone applications… launched OGI cameras… built with a non-germanium lens.” — Q2 release .

Q&A Highlights

Supply chain and yields: Yield issues were “minor/normal,” but lack of quick material access (China) magnified delays; most pushed shipments shipped in first 6 weeks of Q3, but releases remain “too small” and day-by-day .
G5 synergies and margins: Significant cross-selling expected (cooled + uncooled systems; OGI use-cases); not embedded in earn-out; camera business carries higher margins, expected to blend portfolio margins up .
Programs of record / timing: Border Patrol order started shipping; naval prototypes expected “any day,” LRIP toward year-end; LRIP/prototypes in multimillion-dollar ranges .
Profitability and seasonality: Despite G5’s Q3–Q4 seasonal dip, CFO expects combined EBITDA positive in June quarter; G5 seasonality skews to Q1–Q2 .
Product ramps: Furnace camera orders ramping; OGI commercialization pacing behind until ppm quantification completes at customer site .

Estimates Context

S&P Global consensus estimates (revenue/EPS) were not retrievable during this session, and the company did not provide formal numeric quarterly guidance. As a result, we cannot quantify beats/misses vs consensus for Q2 FY2025 (S&P Global consensus unavailable).

Key Takeaways for Investors

Near-term: Expect noisy quarters while China export constraints persist; shipment timing already pushed ~$0.75M into Q3, but management indicates most pushed units shipped early in Q3; watch for continued release normalization .
Structural mix upgrade: G5’s cooled cameras plus uncooled portfolio should lift margins; CFO explicitly indicated blended margins move higher with cameras, and EBITDA should be positive in June quarter despite seasonal patterns .
Defense pipeline as catalyst: Naval C-UAS and Border Patrol programs (programs of record) and the Lockheed missile program flight tests offer multi-year revenue visibility and stock catalysts as orders convert to LRIP/full-rate .
OGI watch item: Commercial ramp tied to quantification testing; success could open oil & gas and industrial emissions monitoring TAM; delay extends timing but doesn’t negate opportunity .
BlackDiamond substitution tailwind: Germanium export bans create conversion opportunities; LightPath’s materials and DLA qualification position it to benefit as customers redesign systems .
Balance sheet and financing: Transaction financed via preferred equity and notes; bridge note converted; monitor integration execution, cash usage, and any incremental financing needs as programs ramp .
Subsequent momentum: G5’s $4.8M qualification order post-quarter underpins pipeline-to-orders conversion; look for additional follow-on orders to validate ≥$55M 12-month revenue target .

LIGHTPATH TECHNOLOGIES INC (LPTH)·Q2 2025 Earnings Summary