LightPath Technologies(LPTH) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q4 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues in Q4 2025, down from 29.2% in the same quarter of the prior fiscal year [30] - Net loss for Q4 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share in the same quarter of the previous year [31] - Adjusted EBITDA loss for Q4 2025 was $1.9 million compared to a loss of $1.1 million for the same period of the prior fiscal year [32] Business Line Data and Key Metrics Changes - Sales of infrared components were $4.9 million, accounting for 40% of consolidated revenue [28] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a record backlog of $90 million, with more than two-thirds attributed to systems and subsystems [10] - The backlog includes significant orders for infrared cameras, particularly for border surveillance and counter-UAS applications [11][14] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems enabled by its technologies, particularly in infrared imaging [7][10] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and address supply chain challenges [9][10] - The company aims to capture more value by moving up the supply chain and focusing on engineered solutions [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a 41% quarter-over-quarter growth and a substantial backlog as indicators of success [26] - The ongoing geopolitical issues and supply chain constraints are driving interest in the company's proprietary BlackDiamond glass as a substitute for germanium [18] - Management anticipates significant growth opportunities in defense contracts and other markets, with expectations for margin expansion in the coming quarters [33][34] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25][34] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: Contribution of G5 to revenue in the June quarter - G5 contributed $4.2 million to revenue in the quarter [39] Question: Breakdown of the $90 million backlog - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Expectations for sole sourcing in border security contracts - The company is in a unique position and may end up providing all the towers along the border [41] Question: Expansion of capacity in Visimid - The facility will support various projects beyond the NGSRI, including uncooled cameras and drone cameras [48] Question: Gross margin dynamics - Adjusted gross margin is close to 30%, with expectations to reach 35% quickly [64] Question: Timeline for Lockheed contract decision - The formal decision is expected by next fall, but indications may come sooner [67] Question: Revenue expectations from a leading global technology customer - The customer was initially expected to contribute around $9 million annually, but the current run rate is more than double that [75]