LIGHTPATH TECHNOLOGIES INC

Results of Operations

Revenue

Three Months ended December 31, 2025, compared to three months ended December 31, 2024

Revenue for the second quarter of fiscal 2026 was approximately $16.4 million, an increase of approximately $8.9 million, or 120%, as compared to approximately $7.4 million in the same quarter of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules resulting from the addition of G5 Infrared revenue since acquisition.

Revenue from infrared components was approximately $5.0 million in the second quarter of fiscal 2026, an increase of $1.9 million, or 61%, as compared to the same quarter of the prior fiscal year. The second quarter of fiscal 2026 includes $1.2 million of G5 Infrared sales of coating services and components. The remaining $0.7 million increase in revenue is primarily due to an increase in sales to defense and industrial customers.

Revenue from the visible components product group for the second quarter of fiscal 2026 was $3.4 million, an increase of approximately $0.7 million, or 25%, as compared to the same quarter of the prior fiscal year. The increase was primarily driven by an increase in sales to industrial customers in the U.S. and Asia.

Revenue from assemblies and modules was approximately $7.2 million in the second quarter of fiscal 2026, an increase of approximately $6.4 million, or 741%, as compared to the same quarter of the prior fiscal year. The increase was primarily driven by the inclusion of $6.4 million of G5 Infrared sales of cameras and modules.

Revenue from engineering services decreased by approximately $0.01 million, or 2%, for the second quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year. This decrease was primarily driven by Visimid’s development contract with Lockheed Martin, where the timing and dollar value of deliverables is not always consistent, which causes revenue for this product group to fluctuate from period to period. For the second quarter of fiscal 2026, the revenue recognized against this contract was less than in the second quarter of fiscal 2025, which was partially offset by a non-recurring engineering project for another defense customer during the second quarter of fiscal 2026.

Six months ended December 31, 2025, compared to six months ended December 31, 2024

Revenue for the first half of fiscal 2026 was approximately $31.4 million, an increase of approximately $15.6 million, or 98%, as compared to approximately $15.8 million in the same period of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules resulting from the addition of G5 Infrared revenue since acquisition.

Revenue from infrared components was approximately $9.3 million in the first half of fiscal 2026, an increase of $3.6 million, or 62%, as compared to the same period of the prior fiscal year. The first half of fiscal 2026 includes $1.9 million of G5 Infrared sales of coating services and components. The remaining $1.7 million increase in revenue is primarily due to increases in sales to industrial customers.

Revenue from the visible components product group for the first half of fiscal 2026 was $7.3 million, an increase of approximately $1.2 million, or 20%, as compared to the same period of the prior fiscal year. The increase was primarily driven by increases in sales to industrial customers in Asia, as well as in the U.S. and Europe.

Revenue from assemblies and modules was approximately $13.1 million in the first half of fiscal 2026, an increase of approximately $11.1 million, or 570%, as compared to the same period of the prior fiscal year. The first half of fiscal 2026 includes $11.1 million of G5 Infrared sales of cameras and modules.

Revenue from engineering services decreased by approximately $0.3 million, or 15%, for the first half of fiscal 2026, as compared to the same period of the prior fiscal year. This decrease was primarily driven by Visimid’s development contract with Lockheed Martin, where the timing and dollar value of deliverables is not always consistent, which causes revenue for this product group to fluctuate from period to period. For the first half of fiscal 2026, the revenue recognized against this contract was less than in the same period of fiscal 2025.

Gross Profit

In the second quarter of fiscal 2026, gross profit was approximately $6.0 million, an increase of $4.1 million, or 212%, as compared to the same quarter of the prior fiscal year. Total cost of sales was approximately $10.3 million for the second quarter of fiscal 2026, compared to approximately $5.5 million for the same quarter of the prior fiscal year. Gross margin as a percentage of revenue was 37% for the second quarter of fiscal 2026, compared to 26% for the same quarter of the prior fiscal year. The increase in gross margin as a percentage of revenue is primarily driven by the increase in revenue from assemblies and modules, which generally have higher margins. Gross margin on engineering services was also more favorable in the second quarter of fiscal 2026 due to a non-recurring engineering project for a defense customer. In addition, gross margins for infrared components have improved due to a more favorable mix, and the resolution of certain manufacturing yield issues that negatively impacted the second quarter of fiscal 2025.

In the first half of fiscal 2026, gross profit was approximately $10.5 million, an increase of $5.7 million, or 120%, as compared to the same period of the prior fiscal year. Total cost of sales was approximately $20.9 million for the first half of fiscal 2026, compared to approximately $11.0 million for the same period of the prior fiscal year. Gross margin as a percentage of revenue was 33% for the first half of fiscal 2026, compared to 30% for the same period of the prior fiscal year. The increase in gross margin as a percentage of revenue is primarily driven by the increase in revenue from assemblies and modules, which generally have higher margins.

Selling, General and Administrative

In the second quarter of fiscal 2026, SG&A costs were approximately $5.9 million, an increase of approximately $2.5 million, or 75%, as compared to approximately $3.4 million in the same quarter of the prior fiscal year. In the first half of fiscal 2026, SG&A costs were approximately $10.2 million, an increase of approximately $3.6 million, or 55%, as compared to approximately $6.6 million in the same period of the prior fiscal year. The increase in SG&A costs is primarily due to the addition of G5 Infrared SG&A costs of $0.8 million and $1.6 million for the second quarter and first half of fiscal 2026, respectively. In addition, we have increased our sales and marketing spend to promote new products, including personnel costs, travel, advertising and tradeshows. Our SG&A personnel costs have also increased due to filling certain vacant executive roles and accruing for incentive compensation plans for employees.

New Product Development

In the second quarter of fiscal 2026, new product development costs were approximately $0.7 million, or nearly flat, as compared to the same quarter of the prior fiscal year. New product development costs increased with the addition of G5 Infrared, and other additional engineering personnel; however, these increases were offset by a decrease in materials and outside services utilized for development projects, due to timing of such projects.

In the first half of fiscal 2026, new product development costs were approximately $1.6 million, an increase of approximately $0.4 million, or 30%, as compared to the same period of the prior fiscal year. This increase includes the addition of G5 Infrared product development costs, and other additional engineering personnel, as well as an increase in materials utilized for development projects, primarily for infrared cores and camera systems.

Amortization of Intangibles

Amortization of intangibles increased by $0.2 million for the second quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year, and increased by $0.2 million for the first half of fiscal 2026, as compared to the same period of the prior fiscal year. The increases are driven by the amortization of identifiable intangible assets associated with the acquisition of G5 Infrared, partially offset by decreases in amortization of intangible assets associated with prior acquisitions.

Other Income (Expense)

Interest expense, net, was approximately $0.3 million for the second quarter of fiscal 2026, as compared to $0.2 million for the same quarter of the prior fiscal year. For the first half of fiscal 2026, interest expense, net, was $0.6 million, as compared to $0.3 million for the same period of the prior fiscal year. The increase in interest expense is due to the interest and amortization of loan issuance costs associated with the Acquisition Notes, executed in February 2025, which replaced the Bridge Note, executed in August 2024. The Acquisition Notes were paid in full on December 31, 2025.

Other expense, net, was approximately $0.01 million for the second quarter of fiscal 2026, as compared to $0.1 million for the same quarter of the prior fiscal year. Other expense, net was approximately $0.02 million for the first half of fiscal 2026, as compared to other income, net of $0.01 million for the same period of the prior fiscal year. Other expense or income, net, includes net gains and losses on foreign exchange transactions. We execute all foreign sales from our U.S. facilities and inter-company transactions in U.S. dollars, partially mitigating the impact of foreign currency fluctuations. Assets and liabilities denominated in non-U.S. currencies, primarily the Chinese Yuan and Euro, are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the year.

Income Taxes

Income tax expense was approximately $0.03 million for the second quarter of fiscal 2026, as compared to $0.04 million for the same quarter of the prior fiscal year, and $0.1 million for both the first half of fiscal 2026 and 2025. Income tax expense for these periods is primarily related to income taxes from our operations in China, including withholding taxes on payments from LPOIZ to LightPath for administrative services rendered.

Net Loss

Net loss for the second quarter of fiscal 2026 was approximately $9.4 million, or $0.20 basic and diluted loss per share, compared to $2.6 million, or $0.07 basic and diluted loss per share, for the same quarter of the prior fiscal year. The increase in net loss of approximately $6.8 million for the second quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year, was primarily attributable to the change in fair value of acquisition liabilities for the earnout related to the acquisition of G5 Infrared.

Net loss for the first half of fiscal 2026 was approximately $12.3 million, or $0.27 basic and diluted loss per share, compared to $4.2 million, or $0.11 basic and diluted loss per share, for the same quarter of the prior fiscal year. The increase in net loss of approximately $8.1 million for the first half of fiscal 2026, as compared to the same period of the prior fiscal year, was primarily attributable to the loss in extinguishment of debt coupled with the change in fair value of acquisition liabilities for the earnout related to the acquisition of G5 Infrared.

Weighted-average common shares outstanding for the second quarter of fiscal 2026 were 46,998,804, basic and diluted, compared to 39,728,933, basic and diluted, in the same quarter of fiscal 2025. Weighted-average common shares outstanding for the first half of fiscal 2026 were 45,143,367, basic and diluted, compared to 39,645,206, basic and diluted, in the first half of fiscal 2025. The increase in weighted-average basic common shares was due to: (i) the Class A Common Stock issued in conjunction with the financing of the acquisition of G5 Infrared (refer to Note 3,Acquisition of G5 Infrared, in the Notes to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional information); (ii) the Private Placement (as defined below) of 1,600,000 shares of Class A Common Stock which closed in September 2025; (iii) the Offering (as defined below) of 8,912,500 million shares of Class A Common Stock which closed in December 2025; (iv) the shares of Class A Common Stock issued in conjunction with the acquisition of Visimid; and (v) the issuance of shares of Class A Common Stock underlying vested RSUs and RSAs. Potential dilutive common stock equivalents were excluded from the calculation of diluted shares for all periods presented, as their effects would have been anti-dilutive due to net losses in those periods.