LightPath Technologies released fourth-quarter and full-year results on September 10 that demonstrated the financial impact of a multiyear strategic shift toward defense applications. The company achieved annual revenue growth of 92.7%, reaching $71.7 million compared to $37.2 million in the prior year, while fourth-quarter revenue alone hit a record $21.2 million, representing 73.8% year-over-year growth.
Margin expansion accompanied the revenue increase, with full-year gross margin reaching 36% from 27.2% previously. Fourth-quarter gross margin climbed to 39.4%, driven by a shift in the product mix where assemblies, modules, and cameras now represent 44% of annual sales rather than raw components. CEO Sam Rubin attributed the margin improvement to both changing sales composition and enhanced manufacturing execution across all four product groups. The company’s order backlog grew significantly to $110.9 million, up 197% from $37.4 million a year earlier, with $85.6 million scheduled for delivery within 12 months. An additional $24 million in counter-UAS orders booked following fiscal year-end, with some programs already operating on monthly delivery schedules of tens of units.
A notable component of the strategic pivot involved completing an exit from China, with the company selling its Chinese subsidiary for $4.5 million payable over five years. This development aligns with upcoming defense industry compliance requirements to source optics from non-covered nations, as qualification cycles typically span two to three years and will determine contract awards for 2029 and 2030.
Operational challenges remain present despite strong headline results. Net losses narrowed to $4.1 million in the fourth quarter from $7.1 million year-over-year, though full-year operating expenses increased to $45.5 million from $22 million, including a $15.6 million noncash charge related to G5 Infrared acquisition earnout performance. Rubin noted that certain defense programs face delays, including the Army’s postponement of the Next Generation Short Range Interceptor timeline by several months. Additionally, detector lead times have extended from approximately six months to ten months or longer, potentially constraining backlog conversion rates.
Looking ahead, capital expenditures are expected to increase in fiscal 2027 beyond the $6.3 million spent in fiscal 2026 as the company expands melting and assembly capacity across U.S. and Latvian facilities. The company maintains a strong financial position with $93.2 million in cash and no meaningful debt, though management characterizes the upcoming year as an execution test rather than a continuation of recent momentum.
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