LIGHTPATH TECHNOLOGIES INC

We have continuing sales of two basic types: sales of standard product configurations and sales of customized products or products developed specifically for a certain customer. In this latter type of business, we work with customers to help them determine optical specifications and then create certain optical designs for them, including complex multi-component, optical system or sub-system designs that we call “engineered solutions.” This is followed by “sampling” or prototyping small numbers of the product for the customers’ test and evaluation. Thereafter, should a customer conclude that our specification or design is the best solution to their product need; we negotiate and “win” a contract (sometimes called a “design win”) – whether of a “blanket purchase order” type or a supply agreement. The strategy is to create an annuity revenue stream that makes the best use of our production capacity and longer-term revenue planning, as compared to the turns business, which is unpredictable and uneven. A key business objective is to convert as much of our business to the design win and annuity model as is possible. We face several challenges in doing so:

Despite these challenges to winning more “annuity” business, we nevertheless believe we can be successful in procuring this business because of our unique capabilities in optical design engineering that we make available on the market to our current and potential customers looking for specific solutions to their needs. Additionally, we believe that we offer value to some customers as a source of supply in the U.S. should they be unwilling to commit to purchase their supply of critical component(s) from foreign sources. For information regarding revenue recognition related to our various revenue streams, refer toCritical Accounting Policies and Estimates in our Annual Report on Form 10-K dated June 30, 2025.

Our Key Performance Indicators:

Typically, on a weekly basis, management reviews a number of performance indicators, both qualitative and quantitative. These indicators change from time to time as the opportunities and challenges in the business change. These indicators are used to determine tactical operating actions and changes. We believe that our non-financial production indicators, such as those noted, are proprietary information.

Financial indicators that are considered key and reviewed regularly are as follows:

These indicators are also used to determine tactical operating actions and changes and are discussed in more detail below. Management continues to evaluate these key indicators as we refine our strategic plan to determine whether any changes or updates to our key indicators are warranted.

Sales Backlog

We believe sales growth has been and continues to be a key indicator of success. Our best view into the efficacy of our sales efforts is in our “order book.” Our order book equates to sales “backlog.” It has a quantitative and a qualitative aspect: quantitatively, our backlog’s prospective dollar value and qualitatively, what percent of the backlog is scheduled by the customer for date-certain delivery. We monitor and evaluate our total backlog, which includes all firm orders requested by a customer that are reasonably believed to remain in the backlog and be converted into revenues. This includes customer purchase orders and may include amounts under supply contracts if they meet the aforementioned criteria.

Our total backlog at March 31, 2026 was approximately $110.6 million, an increase of 196%, as compared to $37.4 million as of June 30, 2025. Backlog change rates for the last five fiscal quarters are:

The acquisition of G5 Infrared added $5.6 million of backlog, as of the Acquisition Date, during the third quarter of fiscal 2025. As of March 31, 2026, backlog for G5 Infrared products was $80.6 million, compared to $16.6 million as of June 30, 2025. Included in the increase from June 30, 2025 to March 31, 2026 are approximately $58.0 million in orders from a leading global technology customer for advanced infrared camera systems expected to ship in calendar year 2026 and 2027, as well as several other multi-million dollar orders from other customers. In addition to these G5 Infrared orders, LightPath orders contributed approximately $8.1 million to the increase in backlog during the first nine months of fiscal 2026, primarily for infrared components. The acquisition of AML also added backlog of $1.1 million as of March 31, 2026. During the first nine months of fiscal 2026, we received a significant contract renewal for advanced infrared optics for a critical international military program. The timing of multi-year contract renewals are not always consistent and, thus, backlog levels may increase substantially when annual and multi-year orders are received, and decrease as shipments are made against these orders. We anticipate that our existing annual and multi-year contracts will be renewed in future quarters.

Markets continue to experience growing demand for infrared products used in the industrial, defense, security and first responder sectors. Demand for infrared products continues to be fueled by interest in lenses made with our BD6 glass and our new BDNL materials. With the global supply of germanium concentrated in Russia and China, recent global events and increases in restrictions on the sourcing of these materials are generating renewed interest in germanium alternatives such as our proprietary BlackDiamond materials, and other materials we are currently developing under an exclusive license with the Naval Research Lab. The acquisition of AML further expands our infrared glass portfolio.

As we have outlined in our strategic direction, we do not expect to see significant growth in our visible components product group in the near future. Competition in that product line has grown substantially over the last few years, and some of our new molding capabilities and technologies such as free-form molded optics, might take longer than anticipated to reach full commercialization, depending on economic conditions and technology trends in the area of AR\VR.

In addition, order bookings for both visible and infrared components and assemblies continue to be slow in China. Domestic sales in China have also been adversely impacted by the economic downturn in China, which continues to negatively impact revenue and bookings in that region.

Revenue by Product Group

The following table sets forth revenue for our four product groups for the three and nine-month periods ended March 31, 2026 and 2025:

Three months ended March 31, 2026

Our revenue increased by 109% in the third quarter of fiscal 2026 compared to the same quarter of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules. While the addition of G5 Infrared revenue since acquisition was a significant contributor to these product groups, other revenue from these product groups also grew, as well as revenue from visible components. Note that G5 Infrared revenue was included for approximately half of the third quarter of the prior fiscal year.

Revenue generated by the infrared components product group for the third quarter of fiscal year 2026 was $6.1 million, an increase of 69%, as compared to the same quarter of the prior fiscal year. Of this increase, approximately $0.9 million is due to an increase in G5 Infrared sales of coating services and components. AML, which was acquired during the third quarter of fiscal 2026, contributed approximately $1.0 million to the increase in sales of infrared components. The remaining $0.6 million increase in revenue is primarily due to an increase in sales to defense and industrial customers in Europe.

Revenue from the visible components product group for the third quarter of fiscal year 2026 was $4.0 million, an increase of 40%, as compared to the same quarter of the prior fiscal year. The increase was primarily driven by increases in sales to industrial customers in the U.S., Europe and Asia. Although we do not expect significant growth in visible components revenue over the long term, demand has trended up in fiscal 2026 to date.

Revenue from assemblies and modules increased by $6.6 million, or 355%, for the third quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year. Of this increase, approximately $6.4 million is due to an increase in G5 Infrared sales of cameras and modules, including the previously announced program with a large global technology customer. Based on our backlog, we expect continued revenue growth for this product group.

Revenue from engineering services decreased by $0.2 million for the third quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year. The third quarter of fiscal 2025 included non-recurring revenue from a space-related funded research contracts. Visimid’s development contract with Lockheed Martin also contributed to the decrease, as 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 third quarter of fiscal 2026, the revenue recognized against this contract was less than in the third quarter of fiscal 2025.

Nine months ended March 31, 2026

Our revenue increased by 102% in the first nine months of fiscal 2026 compared to the same period of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules. While the addition of G5 Infrared revenue since acquisition was a significant contributor to these product groups, other revenue from these product groups also grew, as well as revenue from visible components.

Revenue generated by the infrared components product group for the first nine months of fiscal year 2026 was $15.4 million, an increase of 65%, as compared to the same period of the prior fiscal year. Of this increase, approximately $2.7 million is due to an increase in G5 Infrared sales of coating services and components. AML, which was acquired during the third quarter of fiscal 2026, contributed approximately $1.0 million to the increase in sales of infrared components. The remaining $2.3 million increase in revenue from infrared components is primarily due to increases in sales to defense and industrial customers in the U.S. and in Europe, which has been a consistent trend for fiscal 2026 to date.

Revenue from the visible components product group for the first nine months of fiscal year 2026 was $11.3 million, an increase of 26%, 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. Although we do not expect significant growth in visible components revenue over the long term, demand has trended up in fiscal 2026 to date.

Revenue from assemblies and modules increased by $17.7 million, or 465%, for the first nine months of fiscal 2026, as compared to the same period of the prior fiscal year, driven by G5 Infrared sales of cameras and modules. Based on our backlog, we expect continued revenue growth for this product group.

Revenue from engineering services decreased $0.5 million, for the first nine months 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 nine months of fiscal 2026, the revenue recognized against this contract was less than in the first nine months of fiscal 2026. The third quarter of fiscal 2025 included non-recurring revenue from a space-related funded research contracts. These decreases were partially offset by non-recurring engineering revenue from another defense customer.

Other Key Indicators

Other key indicators include various qualitative and quantitative operating metrics. These indicators change from time to time as the opportunities and challenges in the business change. They are mostly non-financial indicators, such as evaluating the pipeline of sales opportunities, on time delivery trends, production yield rates by major product line, and the output and yield data from significant intermediary manufacturing processes that support the production of the finished shippable product. The data from these reports is used to determine tactical operating actions and changes. Management also assesses business performance and makes business decisions regarding our operations using certain non-GAAP measures. These non-GAAP measures are described in more detail below under the heading “Non-GAAP Financial Measures.”