LIGHTPATH TECHNOLOGIES INC

Results of Operations

Revenue

Three Months ended March 31, 2026, compared to three months ended March 31, 2025

Revenue for the third quarter of fiscal 2026 was approximately $19.1 million, an increase of approximately $10.0 million, or 109%, as compared to approximately $9.2 million in the same quarter of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules. While the G5 Infrared revenue was a significant contributor to the increase in revenue of infrared components and assemblies and modules for the third quarter of fiscal 2026, other revenue from infrared components and assemblies and modules also grew, as well as revenue from visible components. G5 Infrared revenue was included for approximately half of the third quarter of the prior fiscal year.

Revenue from infrared components was approximately $6.1 million in the third quarter of fiscal 2026, an increase of $2.5 million, or 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. The AML transaction, which closed during the third quarter of fiscal 2026, contributed approximately $1 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 2026 was $4.0 million, an increase of approximately $1.1 million, or 40%, 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., Europe and Asia.

Revenue from assemblies and modules was approximately $8.4 million in the third quarter of fiscal 2026, an increase of approximately $6.6 million, or 355%, 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.

Revenue from engineering services decreased by approximately $0.2 million, or 29%, 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, 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 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, compared to nine months ended March 31, 2025

Revenue for the first nine months of fiscal 2026 was approximately $50.6 million, an increase of approximately $25.6 million, or 102%, as compared to approximately $25.0 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. While the G5 Infrared revenue was a significant contributor to the increase in revenue of infrared components and assemblies and modules for the third quarter of fiscal 2026, other revenue from infrared components and assemblies and modules also grew, as well as revenue from visible components.

Revenue from infrared components was approximately $15.4 million in the first nine months of fiscal 2026, an increase of $6.1 million, or 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 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 Europe.

Revenue from the visible components product group for the first nine months of fiscal 2026 was $11.3 million, an increase of approximately $2.4 million, or 26%, as compared to the same period of the prior fiscal year. The increase was primarily driven by increases in sales to industrial customers the U.S., Europe and Asia.

Revenue from assemblies and modules was approximately $21.5 million in the first nine months of fiscal 2026, an increase of approximately $17.7 million, or 465%, as compared to the same period of the prior fiscal year. Of this increase, approximately $17.4 million is due to an increase in G5 Infrared sales of cameras and modules, including previously announced large programs.

Revenue from engineering services decreased by approximately $0.5 million, or 19%, 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 same period of fiscal 2026, partially offset by a non-recurring engineering project for another defense customer.

Gross Profit

In the third quarter of fiscal 2026, gross profit was approximately $7.0 million, an increase of $5.7 million, or 161%, as compared to the same quarter of the prior fiscal year. Total cost of sales was approximately $12.2 million for the third quarter of fiscal 2026, compared to approximately $6.5 million for the same quarter of the prior fiscal year. Gross margin as a percentage of revenue was 36% for the third quarter of fiscal 2026, compared to 29% for the same quarter of the prior fiscal year. In the first nine months of fiscal 2026, gross profit was approximately $17.5 million, an increase of $10.0 million, or 135%, as compared to the same period of the prior fiscal year. Total cost of sales was approximately $33.1 million for the first nine months of fiscal 2026, compared to approximately $17.6 million for the same period of the prior fiscal year. Gross margin as a percentage of revenue was 35% for the first nine months 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. In addition, gross margins for infrared products have improved due to a more favorable mix of customers and the resolution of certain manufacturing yield issues that negatively impacted prior periods.

Selling, General and Administrative

In the third quarter of fiscal 2026, SG&A costs were approximately $6.3 million, an increase of approximately $1.8 million, or 42%, as compared to approximately $4.4 million in the same quarter of the prior fiscal year. In the first nine months of fiscal 2026, SG&A costs were approximately $16.5 million, an increase of approximately $5.5 million, or 49%, as compared to approximately $11.1 million in the same period of the prior fiscal year. The increase in SG&A costs is partially due to the addition of G5 Infrared SG&A costs of $0.4 million and $2.4 million for the third quarter and first nine months of fiscal 2026, respectively. The AML transaction also added $0.3 million and $0.4 million in SG&A for the third quarter and first nine months of fiscal 2026, respectively, including acquisition costs. In addition, we have increased our sales and marketing spend to promote new products, including personnel costs, travel, advertising and tradeshows. We have also increased our spend on information technology to meet heightened security standards as required by our customers, and for acquisition integration projects. 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 third quarter of fiscal 2026, new product development costs were approximately $1.0 million, an increase of $0.3 million, or 38%, as compared to the same quarter of the prior fiscal year. New product development costs increased with the addition of G5 Infrared product development costs, and other additional engineering personnel. These increases were partially offset by a decrease in outside services utilized for development projects, due to timing of such projects.

In the first nine months of fiscal 2026, new product development costs were approximately $2.7 million, an increase of approximately $0.7 million, or 33%, 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. These increases were partially offset by a decrease in outside services utilized for development projects, due to timing of such projects.

Amortization of Intangibles

Amortization of intangibles decreased by $0.3 million for the third quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year, and increased by $0.1 million for the first nine months of fiscal 2026, as compared to the same period of the prior fiscal year. The decreases are driven by the reduction in amortization of intangible assets associated with prior acquisitions, partially offset by amortization of identifiable intangible assets associated with the acquisitions of G5 Infrared and AML.

Other Income (Expense)

Interest income, net, was approximately $0.3 million for the third quarter of fiscal 2026, as compared to interest expense, net, of $0.5 million for the same quarter of the prior fiscal year. For the first nine months of fiscal 2026, interest expense, net, was $0.3 million, as compared to $0.8 million for the same period of the prior fiscal year. The prior periods included 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, following the Offering (as defined below) which generated net proceeds of $65.2 million. Much of our cash balance is now generating interest income, which is partially offset by the interest expense on equipment loans and finance leases.

Other expense, net, was approximately $0.03 million for the third quarter of fiscal 2026, as compared to other income, net, of $0.01 million for the same quarter of the prior fiscal year. Other expense, net was approximately $0.1 million for the first nine months 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 $0.1 million for both the third quarter of fiscal 2026 and 2025, and $0.2 million for both the first nine months 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 third quarter of fiscal 2026 was approximately $4.1 million, or $0.07 basic and diluted loss per share, compared to $3.6 million, or $0.09 basic and diluted loss per share, for the same quarter of the prior fiscal year. The increase in net loss of approximately $0.5 million for the third quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year, was primarily attributable to the increased operating loss, which was largely driven by the change in fair value of acquisition liabilities for the earnout related to the acquisition of G5 Infrared.

Net loss for the first nine months of fiscal 2026 was approximately $16.4 million, or $0.33 basic and diluted loss per share, compared to $7.8 million, or $0.19 basic and diluted loss per share, for the same quarter of the prior fiscal year. The increase in net loss of approximately $8.6 million for the first nine months of fiscal 2026, as compared to the same period of the prior fiscal year, was primarily attributable to the increased operating loss, which was largely driven by 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 third quarter of fiscal 2026 were 58,628,741, basic and diluted, compared to 41,363,643, basic and diluted, in the same quarter of fiscal 2025. Weighted-average common shares outstanding for the first nine months of fiscal 2026 were 49,572,872, basic and diluted, compared to 40,209,657, basic and diluted, in the first nine months of fiscal 2025. The increase in weighted-average basic common shares was due to: (i) the Common Stock issued in conjunction with the financing of the acquisition of G5 Infrared (refer to Note 4,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 Common Stock which closed in September 2025; (iii) the Offering (as defined below) of 8,912,500 million shares of Common Stock which closed in December 2025; (iv) the shares of Common Stock issued in conjunction with the acquisitions of Visimid and AML; and (v) the issuance of shares of 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.