Executive Summary

Revenue rose 41.4% YoY to $12.21M with Assemblies & Modules up 203%; slight revenue beat vs S&P consensus, but gross margin compressed to 22.0% on ~$0.5M inventory reserve, driving wider net loss and larger EBITDA loss vs expectations . Q4 revenue $12.21M vs S&P $12.20M*; GM 22.0% vs S&P 31.86%; EPS (GAAP) $(0.16); S&P Primary EPS actual −$0.071 vs −$0.043* est. Values retrieved from S&P Global.
Orders accelerated: $18.2M IR camera PO (CY26) and $22.1M follow-on (CY27) lifted total to $40.3M; backlog was $37.4M at June 30 but ~“around $90M” by the call; ~57–60% expected to ship in FY26, remainder into FY27/28 .
G5 integration tracking well; contributed $4.2M to Q4 revenue; two cooled camera lines redesigned to BlackDiamond glass to mitigate Germanium risk and improve supply resiliency .
Margin outlook: CFO targets c.30% “adjusted” gross margin currently, ~35% within 1–2 quarters and ~40% midterm as mix shifts to higher-ASP systems; management expects adjusted EBITDA to turn positive at a higher revenue level and suggested consensus revenue should be raised ~10% based on updated backlog visibility .

What Went Well and What Went Wrong

What Went Well
- Record backlog and large multi-year orders: “orders total over $40 million for deliveries… in 2026 and 2027”; backlog “around $90 million,” with more than two-thirds in systems/subsystems .
- Strategic differentiation: Germanium-free redesigns using proprietary BlackDiamond glass reduce supply-chain risk and resonate with defense/industrial customers; two high-end cooled cameras have been redesigned .
- Product/segment mix: Assemblies & Modules revenue up 203% YoY in Q4; IR components +63% YoY; company moving “up the value chain” into complete camera systems .
What Went Wrong
- Margin compression: Q4 gross margin fell to 22.0% (vs 29.2% LY) due to ~$0.5M inventory reserves (visible components) and mix; below S&P gross margin consensus (31.86%*) . Values retrieved from S&P Global.
- Elevated OpEx and non-cash charges: Q4 OpEx up 52% YoY (integration of G5, marketing, NPD materials, $1.4M increase in acquisition liabilities fair value); non-cash mark-to-market and acquisition-related items widened net loss .
- EBITDA below expectations: Adjusted EBITDA loss $(2.0)M vs S&P EBITDA consensus −$0.17M*; mix and one-time items pressured profitability in the quarter . Values retrieved from S&P Global.

Financial Results

Reported results and trajectory

Metric	Q4 FY2024	Q3 FY2025	Q4 FY2025
Revenue ($M)	$8.63	$9.17	$12.21
Gross Profit ($M)	$2.53	$2.66	$2.69
Gross Margin (%)	29.2%	29.1%	22.0%
Operating Expenses ($M)	$4.73	$5.99	$7.20
Net Loss ($M)	$(2.35)	$(3.56)	$(7.06)
Loss per Share (basic, $)	$(0.06)	$(0.09)	$(0.16)
Adjusted EBITDA ($M)	$(1.12)	$(1.98)	$(1.98)

Reported vs S&P consensus (Q4 FY2025)

Metric	S&P Consensus	Reported
Revenue ($M)	$12.20*	$12.21
Primary EPS ($)	−0.0425*	−0.0707* / GAAP: −0.16
EBITDA ($M)	−0.17*	−1.17* / Adj. EBITDA: −1.98
Gross Margin (%)	31.86%*	22.04%

Values retrieved from S&P Global (asterisked). Note: S&P “Primary EPS” and EBITDA definitions may differ from company GAAP or non-GAAP.

Segment/Product Mix (Q4 FY2025 vs Q4 FY2024)

Product Group ($M)	Q4 FY2024	Q4 FY2025	YoY
Infrared Components	$3.0	$4.9	+63%
Visible Components	$3.2	$2.8	−11%
Assemblies & Modules	$1.4	$4.2	+203%
Engineering Services	$1.0	$0.3	−75%

KPIs and balance sheet

KPI	Current	Prior
Backlog ($M)	~$90 (as of call date)	$37.4 (as of 6/30/25)
Backlog Shipping Mix	~57–60% FY26; balance FY27/28	—
Cash & Cash Equivalents ($M)	$4.88 (6/30/25)	$3.48 (6/30/24)
Total Debt ($M)	~$5.0 (as of 6/30/25)	$0.54 (6/30/24)
G5 Revenue Contribution in Q4	$4.2M	—

Guidance Changes

The company did not provide formal quantitative guidance; management offered qualitative outlook and targets.

Metric	Period	Previous Guidance	Current Guidance/Commentary	Change
Revenue	FY2026+	None	Backlog ~$90M; ~57–60% to ship in FY26; remainder FY27/28	New disclosure
Gross Margin %	Near-term; Midterm	None	“Adjusted” GM near ~30% now; target ~35% within 1–2 quarters; ~40% midterm as mix shifts to camera systems	New targets
Adjusted EBITDA	FY2026 trajectory	None	“Would expect” positive adj. EBITDA at higher rev.; suggested Street revenue consensus should be raised ~10% on updated visibility	New commentary
Major Programs	CY26–27	None	$40.3M IR camera orders (CY26/27); SPEIR moving toward LRIP; Border CTSC IDIQ activity ongoing	New awards/update

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Supply chain & Germanium	China restrictions delayed shipments; push to BlackDiamond redesigns	Inventory reserve (~$0.5M) impacts GM; continued pivot to Germanium-free cameras	Improving resilience; accelerating redesigns
Backlog & Large Orders	Q3 backlog $27.4M; strong pipeline; bookings $19M in 90 days post-G5 close	Backlog ~$90M; $18.2M + $22.1M POs (CY26/27)	Strong acceleration
Defense programs (SPEIR, Border, CUAS)	SPEIR prototypes then LRIP late CY; Border CTSC IDIQ ramp; CUAS expanding	SPEIR toward LRIP; Border: second prime order stream; CUAS backlog >$10M	Conversion underway
G5 Integration & Mix	Acquisition closed; cameras higher margin; cross-sell opportunity	G5 contributed $4.2M in Q4; camera redesigns to BlackDiamond	On plan; synergy building
Gross margin outlook	GM to rise with assemblies/cameras; Q3 GM 29.1%	Adjusted GM ~30% now; 35% in 1–2 quarters; 40% midterm	Positive trajectory
OGI (Optical Gas Imaging)	Awaiting formal quantification test; delays	MWIR OGI launch; certified facility test success; broader OGI portfolio	Progressing; commercialization steps

Management Commentary

“Our backlog today is around $90 million… With more than two thirds of this backlog in systems and subsystems, it is clear that the strategy is working.”
“We are actively redesigning G5’s product line to implement our proprietary BlackDiamond material in place of Germanium… we recently announced the first two camera redesigns that now utilize our materials.”
Gross margin path: “Right now on an adjusted basis… close to 30. I think we can step up to 35 pretty quickly in a quarter or two… in the longer run… 40% midterm.”
Profitability context: “I would expect that we would be [adjusted EBITDA] positive on that higher level of revenue,” and “consensus on revenue would have to be raised by about 10%.”
Strategic positioning: “The path forward is straightforward – continue to convert the market’s Germanium supply chain angst into BlackDiamond-based camera sales – moving up the value chain.”

Q&A Highlights

G5 contribution and backlog mix: G5 contributed $4.2M to Q4 revenue; ~two-thirds of backlog is cameras/assemblies .
Backlog conversion: ~57%–60% of ~$90M backlog expected to ship in FY26; balance in FY27/28 .
Gross margin cadence: Adjusted GM near 30% now; targeted ~35% in 1–2 quarters and ~40% midterm as mix shifts; Q4 GM depressed by ~$0.5M inventory reserve and one-time items .
Expense normalization: Q4 OpEx included several one-time items (M&A, IT/cybersecurity, marketing) and G5 integration costs .
Program updates: SPEIR approaching LRIP; Border CTSC orders broadened to additional prime; CUAS programs expanding .

Estimates Context

Q4 FY2025 vs S&P: Revenue beat by ~$0.01M; Primary EPS actual −$0.071 missed vs −$0.043 est; gross margin 22.0% vs 31.86% est; EBITDA actual −$1.17M below −$0.17M est. Differences reflect mix, inventory reserves, and non-cash acquisition-related items. Values retrieved from S&P Global.
FY2025 vs S&P: Revenue in line ($37.20M actual vs $37.20M est*); Primary EPS −0.254* vs −0.235* est; GM 27.23% vs 30.48%; EBITDA −$4.91M vs −$3.94M*. Values retrieved from S&P Global.

Key Takeaways for Investors

Backlog-driven inflection: ~$90M backlog with multi-year visibility, majority in higher-ASP camera systems; ~57–60% slated for FY26 shipment supports revenue step-up .
Margin recovery catalyst: Mix shift to cooled/uncooled cameras and assemblies underpins GM trajectory toward ~35% near-term and ~40% midterm; watch conversion pace and mix .
Supply-chain advantage: Germanium-free BlackDiamond designs are a durable differentiator amid China export restrictions; two cooled camera lines already redesigned .
Execution focus: Near-term headwinds (inventory reserves, integration, non-cash items) masked underlying mix benefits; normalization plus backlog conversion should tighten the EBITDA bridge .
Program milestones: Monitor SPEIR LRIP, Border CTSC IDIQ pull-through across primes, and CUAS deployments; large orders ($40.3M CY26/27) validate demand .
G5 earn-out discipline: First 12-month earn-out requires ~$21M revenue with 20% EBITDA at G5; management indicates on track, reinforcing profitability focus at subsystem/system tier .
Estimate revisions: Management’s comment to lift revenue consensus ~10% suggests upside to Street top-line; near-term beats will likely hinge on shipment phasing and margin mix .

References: Q4 FY2025 8-K and press release ; Q4 earnings call transcript ; Q3 FY2025 press release/8-K ; Q2 FY2025 press release/8-K ; $18.2M and $22.1M orders press releases .

LIGHTPATH TECHNOLOGIES INC (LPTH)·Q4 2025 Earnings Summary