LightPath Technologies(LPTH) - 2025 Q3 - Quarterly Results

LightPath Technologies Q3 Fiscal 2025 Earnings Release Financial and Operational Highlights Revenue grew 19.1% driven by the G5 Infrared acquisition, though net loss widened due to increased operating expenses Q3 FY2025 Financial Summary (YoY) | $ in millions | Q3 2025 | Q3 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $9.2 | $7.7 | 19.1% | | Gross Profit | $2.7 | $1.6 | 65.9% | | Operating Expenses | $6.0 | $4.2 | 44.3% | | Net Income (Loss) | ($3.6) | ($2.6) | 37.1% | | Adj. EBITDA (non-GAAP)* | ($2.0) | ($1.5) | 31.3% | - The acquisition of G5 Infrared is a key part of the strategy to become a leading provider in the $9 billion infrared imaging market[4][5] - Significant new orders following the G5 acquisition validate the strategic move, including a $4.8 million initial order, a $4.9 million follow-on order, and a $2.2 million order from L3Harris[5][7] - The company is emphasizing its Germanium-free BlackDiamond™ infrared solutions due to China's export ban on Germanium, which impacts competing products[6] - LightPath is advancing with key defense programs, including delivering flightworthy hardware to Lockheed Martin for a major U.S. Army missile program[8] Detailed Financial Results (Q3 FY2025) Revenue grew 19.1% and gross margin improved to 29.1%, but higher operating expenses led to a wider net loss of $3.6 million Revenue by Product Group (Q3 FY2025 vs Q3 FY2024) | Product Group Revenue ($ in millions) | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Infrared Components | $3.6 | $3.6 | 0% | | Visible Components | $2.8 | $2.7 | 6% | | Assemblies & Modules | $1.9 | $0.8 | 123% | | Engineering Services | $0.8 | $0.5 | 54% | | Total Revenue | $9.2 | $7.7 | 19.1% | - Gross profit increased 65.9% to $2.7 million, and gross margin improved to 29.1% of revenue from 20.9% in the prior year due to a more favorable product mix[9] - Operating expenses rose 42.9% to $6.0 million, primarily due to higher legal and consulting fees related to the G5 acquisition and increased product development spending[10] - Net loss for the quarter was $3.6 million ($0.09 per share), an increase from the $2.6 million loss ($0.07 per share) in the prior year's quarter[11] - Adjusted EBITDA loss was $2.0 million, compared to a loss of $1.5 million for the same period of the prior fiscal year[11] Non-GAAP Financial Measures The company uses Adjusted EBITDA to clarify core performance, reconciling a Q3 net loss of $3.6 million to an Adjusted EBITDA loss of $2.0 million - The company uses EBITDA and Adjusted EBITDA to help investors understand period-over-period operating results by excluding items that could have a disproportionate impact[16][17] Reconciliation of Net Loss to Adjusted EBITDA (unaudited) | | Three Months Ended March 31, | Nine Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Net loss | $ (3,560,349) | $ (2,597,534) | $ (7,795,091) | $ (5,653,573) | | Depreciation and amortization | 1,463,150 | 1,042,850 | 3,356,752 | 2,985,850 | | Income tax provision | 100,031 | 5,798 | 160,192 | 121,402 | | Interest expense | 498,862 | 37,649 | 817,275 | 149,048 | | EBITDA | $ (1,498,306) | $ (1,511,237) | $ (3,460,872) | $ (2,397,273) | | Loss on extinguishment of debt | 418,502 | - | 418,502 | - | | Change in fair value of warrant liability | (904,694) | - | (904,694) | - | | Adjusted EBITDA | $ (1,984,498) | $ (1,511,237) | $ (3,947,064) | $ (2,397,273) | Consolidated Financial Statements This section presents the condensed consolidated balance sheets, statements of income, changes in equity, and cash flows Condensed Consolidated Balance Sheets Total assets grew to $81.4 million and liabilities to $31.5 million due to the G5 acquisition, while stockholders' equity decreased Balance Sheet Comparison | Assets & Liabilities ($) | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total current assets | 28,081,126 | 15,537,335 | | Total assets | 81,420,816 | 48,086,964 | | Total current liabilities | 12,230,541 | 8,036,348 | | Total liabilities | 31,452,128 | 17,887,299 | | Total stockholders equity | 15,569,066 | 30,199,665 | - The G5 acquisition significantly impacted the balance sheet, with Intangible assets increasing to $21.5 million and Goodwill increasing to $9.7 million[24] - A new warrant liability of $4.1 million was recorded on the balance sheet as of March 31, 2025[24] Condensed Consolidated Statements of Comprehensive Income (Loss) Q3 FY2025 revenue was $9.2 million with a net loss of $3.6 million, while the nine-month net loss reached $7.8 million Statement of Comprehensive Income (Loss) - Three Months Ended March 31 | ($) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue, net | 9,167,627 | 7,699,175 | | Gross profit | 2,664,101 | 1,606,187 | | Operating loss | (3,323,289) | (2,583,196) | | Net loss | (3,560,349) | (2,597,534) | | Loss per common share (basic & diluted) | (0.09) | (0.07) | Statement of Comprehensive Income (Loss) - Nine Months Ended March 31 | ($) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue, net | 24,992,837 | 23,092,060 | | Gross profit | 7,439,361 | 6,106,214 | | Operating loss | (7,184,436) | (5,617,147) | | Net loss | (7,795,091) | (5,653,573) | | Loss per common share (basic & diluted) | (0.19) | (0.15) | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity declined to $15.6 million, impacted by a net loss and the issuance of $34.4 million in temporary equity - Total stockholders' equity decreased from $30,199,665 at June 30, 2024, to $15,569,066 at March 31, 2025[29][30] - The company issued Series G Convertible Preferred Stock valued at $34,399,622, which is classified as temporary equity[25][30] - Common stock shares issued and outstanding increased from 39,254,643 to 42,893,563, partly due to issuances for the acquisition of G5[29][30] Condensed Consolidated Statements of Cash Flows Net cash from operations was negative $5.4 million, but financing activities provided $29.3 million, increasing total cash by $3.0 million Cash Flow Summary (Nine Months Ended March 31) | ($) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | (5,374,699) | 456,343 | | Net cash used in investing activities | (20,820,089) | (2,375,091) | | Net cash provided by (used in) financing activities | 29,265,538 | (2,069,670) | | Change in cash and cash equivalents | 2,998,617 | (3,985,538) | | Cash and cash equivalents, end of period | 6,478,885 | 3,158,952 | - The acquisition of G5 was the primary use of cash in investing activities, costing $20,250,011[35] - Financing activities were a major source of cash, driven by proceeds from the issuance of preferred stock ($18.8M), warrants ($4.3M), and new loans ($6.7M)[35] Other Information This section contains investor call details and the safe harbor statement regarding forward-looking projections and associated risks - Management hosted an investor conference call and webcast on May 15, 2025, to discuss the Q3 FY2025 financial results[12] - The press release contains forward-looking statements concerning future events, which are subject to risks and uncertainties detailed in SEC filings[20][21] - LightPath Technologies is a vertically integrated provider of optics and imaging systems, with manufacturing in Florida, Texas, New Hampshire, Latvia, and China[14][15]