Executive Summary

Q3 FY2025 revenue was $9.17M (+19.1% YoY) with gross margin at 29.1%; revenue beat consensus ($8.67M*) while EPS of -$0.09 missed consensus (-$0.048*) as higher OpEx (G5 acquisition-related costs, added SG&A, amortization) outweighed mix-driven margin gains .
Mix shift to higher-margin assemblies/modules and engineering services drove margin expansion; management highlighted multiple defense camera orders across SPEIR and border security and a 90-day bookings tally of ~$19M following the G5 acquisition .
Backlog rose to $27.4M exiting Q3; cash increased to $6.48M, with total debt at $5.5M; management expects gross margin to trend higher in Q4 with a full quarter of camera shipments, and EBITDA breakeven to be “close” in Q4 .
Near-term catalysts include continued SPEIR deliveries, potential Lockheed NGSRI selection later in CY2025/early CY2026, and accelerating Germanium substitution with DoD-supported capacity expansion for BlackDiamond materials .

What Went Well and What Went Wrong

What Went Well

Margin expansion: gross margin rose to 29.1% from 20.9% YoY, driven by higher assemblies/modules and engineering services mix; assemblies/modules grew 123% YoY to $1.9M .
Strategic execution: “The closing of our acquisition of G5 Infrared… helped to accelerate execution of our strategic vision to become a leading vertically-integrated infrared imaging solutions provider” — Sam Rubin .
Defense momentum: Initial $2.2M SPEIR EMD camera order from L3Harris, $4.8M qualification order (new defense customer), and $4.9M follow-on order (existing defense customer) build pipeline visibility .

What Went Wrong

EPS miss vs consensus: -$0.09 actual vs -$0.048* estimate as OpEx increased to $6.0M (+42.9% YoY) reflecting ~$0.7M G5 acquisition expenses, ~$0.4M added SG&A from G5, and ~$0.3M higher amortization .
Program slippage: “Apache program… encountered some delays… completely on us… biting off something big and not chewing it fast enough,” tied to BDNL-8 capacity constraints and scheduling .
Supply chain volatility: China-related material export issues (including non-Germanium optics) caused lingering timing risks; management mitigated via multi-location manufacturing and customer acceptance of tariff pass-throughs .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD)	$7,699,175	$8,400,381	$7,424,829	$9,167,627
Gross Profit ($USD)	$1,606,187	$2,844,429	$1,930,831	$2,664,101
Gross Margin %	20.9%	34.0%	26.0%	29.1%
Operating Expenses ($USD)	$4,189,383	$4,221,237	$4,415,170	$5,987,390
Operating Income (Loss) ($USD)	$(2,583,196)	$(1,376,808)	$(2,484,339)	$(3,323,289)
Net Income (Loss) ($USD)	$(2,597,534)	$(1,622,745)	$(2,611,997)	$(3,560,349)
Diluted EPS ($USD)	$(0.07)	$(0.04)	$(0.07)	$(0.09)

Segment revenue breakdown (product mix shift supportive of margins):

Product Group ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
Infrared Components	$2.6	$3.1	$3.6
Visible Components	$3.3	$2.8	$2.8
Assemblies & Modules	$1.1	$0.9	$1.9
Engineering Services	$1.4	$0.7	$0.8

Key KPIs and non-GAAP:

KPI / Non-GAAP	Q1 2025	Q2 2025	Q3 2025
Backlog ($USD Millions)	$21.0	$19.8	$27.4
Cash & Equivalents ($USD)	$4,280,637	$3,201,066	$6,478,885
Total Debt ($USD)	$3.9M	$3.9M	$5.5M
EBITDA ($USD)	$(468,187)	$(1,494,379)	$(1,498,306)
Adjusted EBITDA ($USD)	—	—	$(1,984,498)
EBITDA Margin %	-6%	-20%	-22%

Guidance Changes

Metric	Period	Previous Guidance/Comment	Current Guidance/Comment	Change
Combined revenue (LPTH + G5)	Next 12 months	~$55M (post-close outlook discussed Feb 13)	~$51M (Feb 18, 2025 to Feb 18, 2026)	Maintained trajectory; clarified timeframe
Gross margin outlook	Q4 FY2025	Not previously quantified	Expected to increase with full quarter of cameras	Raised qualitative outlook
OpEx run-rate	Post M&A normalization	Not specified	~$5M per quarter (ex amortization and extraordinary M&A), with Q4 still carrying some trailing costs	New quantified commentary
EBITDA	Q4 FY2025	“Should be positive” (Feb call)	“It’ll be close” given timing of camera shipments	Lowered vs prior expectation

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
G5 acquisition integration	Announced; strategic fit; $15M CY2024 revenue; earn-outs target $21–$27M revenue and ~20% EBITDA; synergies with uncooled cameras and coatings	Cultural fit strong; $13M bookings post-close; full-quarter camera revenue to lift gross margins; combined next-12-month revenue ~$51M	Strengthening integration; bookings accelerating
Defense programs (SPEIR, Border Security)	LRIP expected late CY2025; first CBP orders starting; Motorola relationship highlighted	$2.2M SPEIR EMD order; $4.8M qualification order; $4.9M follow-on order; capacity and detector procurement to support shipments	Converting pipeline to orders
Lockheed NGSRI (Stinger replacement)	Flightworthy units to begin; potential $50–$100M annual revenue opportunity	Flightworthy hardware deliveries have begun; possible contractor decision late CY2025/early CY2026, with early testing this summer/fall	Milestones achieved; decision window approaching
BlackDiamond vs Germanium	Growing interest post China ban; DoD Phase 2 funding; redesigns in progress	DoD-supported capacity expansion; BDNL-4/BDNL-8 demand rising; Germanium supply clamps persist; customers redesign for BD	Substitution tailwind; capacity scaling
Supply chain/tariffs	December-quarter delays from China exports; tariff pass-through	Multi-location manufacturing resiliency; volatility easing; non-Germanium optics supply recovering	Improvement with ongoing monitoring
Camera products (Mantis, OGI)	Mantis furnace camera ramp; OGI awaiting quantification tests	Furnace camera progressing; OGI qualification expected soon to unlock sales	Furnace strong; OGI pending certification

Management Commentary

“The closing of our acquisition of G5 Infrared… helped to accelerate execution of our strategic vision to become a leading vertically-integrated infrared imaging solutions provider in the $9 billion infrared imaging market.” — Sam Rubin .
“We expect continued momentum… with our Germanium-free BlackDiamond… With supply chain issues plaguing competing Germanium-based solutions… our BlackDiamond products are becoming increasingly important to customers.” — Sam Rubin .
“We are now starting to deliver flightworthy hardware… and believe the U.S. Army could potentially make a contractor selection decision late this year or early next year.” — Sam Rubin (Lockheed NGSRI) .
“We expect the gross margin from this quarter to next quarter to go up because we’ll have a full quarter of assemblies and modules and cameras in.” — CFO Albert Miranda .
“The expectation is for the combined companies to generate $51,000,000 in the twelve months following the acquisition.” — CFO Albert Miranda .

Q&A Highlights

Backlog and margin trajectory: Backlog ended March at $27.4M; gross margin expected to increase in Q4 with full-quarter camera shipments .
OpEx normalization: Excluding amortization and extraordinary M&A, combined OpEx run-rate targeted at ~$5M per quarter post-Q4 .
EBITDA outlook: Q4 EBITDA breakeven “close” given timing of large camera systems shipments starting mid-June .
Program delays & capacity: Apache delay attributed to BDNL-8 capacity allocation; DoD supporting expansion of BlackDiamond capacity .
Earn-out economics: G5 earn-out requires ≥$21M revenue and 20% standalone EBITDA; tracking to plan with ~5 weeks of integrated data; bookings at ~$19M through Q4 window .

Estimates Context

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue Consensus Mean ($USD)	$7,979,900*	$8,364,900*	$8,667,520*
Actual Revenue ($USD)	$7,699,175	$7,424,829	$9,167,627
Primary EPS Consensus Mean ($USD)	-$0.0375*	-$0.0425*	-$0.0475*
Actual EPS ($USD)	-$0.07	-$0.07	-$0.09

Values retrieved from S&P Global.*

Implications: Q3 revenue beat consensus (~~+$0.50M) on stronger mix and camera-related momentum, while EPS missed (~~-$0.05) due to elevated OpEx (M&A, amortization, interest). Prior quarters showed revenue shortfalls vs consensus amid December supply chain issues; estimates likely need upward revision for near-term revenue (cameras) and continued caution on EPS until OpEx normalizes .

Key Takeaways for Investors

Mix-led margin expansion continues as assemblies/modules and engineering services scale; expect further margin improvement in Q4 with a full quarter of cameras — constructive for gross profit trajectory .
Revenue visibility improving: SPEIR ($2.2M EMD), border security ($4.8M qualification), and defense follow-on ($4.9M) underpin backlog and support near-term shipments; watch conversion timing into Q4/Q1 .
EPS pressure near term reflects integration and amortization costs; management targets ~$5M quarterly OpEx run-rate post-Q4, supporting eventual EBITDA leverage as camera mix scales .
NGSRI decision window (late CY2025/early CY2026) remains a asymmetric upside catalyst; flightworthy deliveries underway — track test outcomes this summer/fall .
BlackDiamond substitution is accelerating, with DoD-supported capacity expansion and customer redesigns; structural moat against Germanium supply constraints strengthens multi-year thesis .
OGI camera commercialization hinges on near-term quantification testing; furnace cameras ramping provide incremental industrial tailwinds in the interim .
Trading lens: Expect estimate revisions higher for revenue near term (cameras/backlog conversion) while EPS normalization lags; beat/miss volatility likely driven by shipment timing and non-operating items until integration costs roll off .

LIGHTPATH TECHNOLOGIES INC (LPTH)·Q3 2025 Earnings Summary