LightPath Technologies at Canaccord Genuity’s Growth Conference: Infrared Innovation

On Wednesday, 13 August 2025, LightPath Technologies (NASDAQ:LPTH) showcased its strategic shift towards infrared imaging at Canaccord Genuity’s 45th Annual Growth Conference. The company highlighted its move from supplying components to providing integrated imaging systems, emphasizing its focus on defense applications. While the transition promises increased revenues and market positioning, LightPath faces challenges in scaling production and managing geopolitical risks.

Key Takeaways

• LightPath is transitioning to infrared imaging systems, reducing reliance on germanium.
• Defense revenue now constitutes over 60% of total revenue, with China revenue dropping to less than 5%.
• The company expects $10 million to $20 million in annual recurring revenue from the SPEAR program.
• Exclusive licensing of Black Diamond glass from the U.S. Navy positions LightPath as a key supplier.
• The G5 Infrared acquisition is projected to nearly double company size within the first year.

Financial Results

• Revenue from China decreased from 35% to less than 5% over five years.
• U.S. revenue now exceeds 70% of the total revenue.
• Defense revenue surged from 8% to over 60%.
• LightPath anticipates doubling its size post-G5 acquisition.
• Plans to invest $2 million to $3 million to double glass production capacity.

Operational Updates

• Transitioned from optical components to assemblies and camera systems.
• Developed Black Diamond materials as a germanium alternative.
• Redesigned G5 cameras to use Black Diamond glass.
• Received substantial funding and equipment support from the U.S. Department of Defense.

Future Outlook

• Aims to fully transition to Black Diamond glass-based optics.
• Plans to scale glass production to meet increasing demand.
• Focused on expanding in the counter-UAS market.
• Low CapEx requirements for scaling camera production.

Q&A Highlights

• Scaling production requires minimal equipment investment of $250,000 to $500,000.
• Glass production expansion estimated at $2 million to $3 million.
• Strong position to secure prepayments due to geopolitical circumstances.

Readers are encouraged to refer to the full transcript for a detailed account of the conference call.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Okay. Hello, everyone. My name is Austin Moore. I’m the aerospace and defense analyst here at Canaccord Genuity. And today, we are joined by Sam Rubin, the CEO of LightPath Technologies.

So I guess just to start off, Sam, if you just want to give everyone a brief overview of LightPath and your business model and your product lines.

Sam Rubin, CEO, LightPath Technologies: Yeah. So LightPath is a technology company in the field of photonics, optics, photonics depends how you want to call it. Specifically, we focused on infrared imaging or thermal imaging. We’re a company in transition. So up until five years ago, we really were completely on the left side of this map, making individual optical components and that was the history of the company for thirty five years before that.

For the last five years, we’ve been moving to the right side of the map starting from doing optical assemblies all the way to complete camera systems. With that transition in the end markets moving away from telecom and less commercial and far more into defense. And today we’re positioning ourselves as one of the prime leaders in the area of infrared imaging and with a very heavy focus on defense applications.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Can you discuss the company’s evolution from being primarily a component supplier into becoming more of an imaging systems designer and producer like the Mantis and what the expected margin accretion might be from that transition?

Sam Rubin, CEO, LightPath Technologies: Yes, absolutely. So when trying to do such a transition, I mean this isn’t we’re not the only ones trying to do this or doing it. Many companies have always wanted to move from the component up the value chain. What you need really is a value proposition, a reason for the customer to answer the phone when we call him and say, hey, instead of buying lenses, we want to sell you the complete solution. And in our world that comes from technologies, from technological differentiators.

More specifically, Lightbuff has some very significant strengths in material science, in fabrication and in overall system design. And so we leverage those, we expanded quite a bit on the material science with our Black Diamond materials that not only replaced germanium, but also provide significant technical advantages in system designs. And using that, we started stepping into that market through some differentiating capabilities, through some unique product offering. Our first camera solution called the Mantis was combining mid wave imaging with long wave imaging, some things that typically requires two different cameras to do it, two separate cameras. And with that slowly made our way into the market to this point where now the camera solutions and assembly solutions are well more than 50% of the business.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Can you also discuss Lightpass level vertical integration and how that’s changed over time relative to other manufacturers in this market space?

Sam Rubin, CEO, LightPath Technologies: Absolutely. So when it comes to vertical integration, we own a very unique value proposition and that is in the actual optical materials, the glass. Typically in infrared imaging, the number one material used to make the actual lenses is germanium. Germanium mostly comes from China. China has stopped selling germanium to The U.

S. Altogether. And so having this vertical integration, having those materials in house and being the main supplier in The U. S. At this point of optical materials for infrared is an amazing positioning at this point.

In addition to just being able to secure our supply chains, which is becoming a big issue today for everyone, but having secure supply chains, we also have materials that are very, very unique and allow us to build cameras that differentiate compared to competitor cameras from FLIR and others. One example for that was last week when G5 Infrared, our subsidiary announced that they redesigned two of their cameras to completely remove germanium and use our materials instead. So G5 is now in a position being as far as we know, the only company making high end long range zoom cameras that does not require any germanium whatsoever and it’s something that gives them a supply chain security and being a first to market there we anticipate that that will win us quite a few new design wins.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: I think that makes for a good transition into discussing Black Diamond Glass. So can you talk a little bit about your Black Diamond Glass product and how it differs from using your germanium based camera optics?

Sam Rubin, CEO, LightPath Technologies: Absolutely. The two things to consider. First of all, germanium is a natural occurring material that needs to get mined and refined and processed to reach with to reach the germanium crystal or germanium metal at the end. Therefore, the supply of it is driven by the mining and refining of it. The glass we make is glass, which means it is not one material.

It is actually a combination of multiple materials, multiple raw ingredients in it. And it also means that scaling up production of it means just adding more furnaces and melting more glass. So that by itself is already one big difference. But the main differences between this material and germanium are the properties. Because these materials are produced in production, not grown out of a crystal coming out of nature, one can alter their properties.

And with it, we have materials that were designed originally at Naval Research Laboratories, which properties were optimized to achieve better performance than anything else out there. You see that where, for example, a system on the bottom right corner that used to include 21 individual lenses in it when one could only use germanium and silicon and other materials, using our new materials, the number of elements goes down to 12. Going down from 21 to 12 means half the weight, it means lower size, lower cost, it means more optical performance, so very significant advantages. The second part there is what is called multispectral imaging. Today, when you look at a payload like this on a drone, you will see multiple cameras inside one payload.

Those cameras are different types of infrared cameras that do different functions. One of them is thermal imaging, one of them sees through clouds for example and others. The different cameras because the glass is different. So the glass that is used for a thermal imaging camera cannot be used for shortwave infrared camera which sees through clouds as an example. These materials can do all of it.

So we can now combine what used to be until now multiple cameras into possibly just one or two cameras. So another massive reduction in size, weight, power, everything anyone ever wants really in the defense world. So leveraging those capabilities to become a camera supplier, it was a very natural step at that point because we can now make cameras that are better than what’s available elsewhere and with a secured supply chain.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: And can you detail how you expect the revenue to shift towards defense from industrial applications in the near term versus the light path model in the past?

Sam Rubin, CEO, LightPath Technologies: Yes. So five years ago when I took over the company, defense was 8% of the business. The majority of the business was telecom, 35% of the business was China and this was telecom companies or other industrial manufacturing companies in China integrating the individual lenses that we make into their systems. Today, China is less than 5% of our revenue. We replaced all of that revenue with defense revenue in The U.

S. Defense is now more than 50%.

Al, CFO, LightPath Technologies: With G5 and 60%.

Sam Rubin, CEO, LightPath Technologies: 60% of our revenue, thank you. And The U. S. By far is 70% plus of the revenue. So a very significant shift.

If you look at our top line numbers, you don’t see it because during those five years, what you see is what looks like a flat growth. But in reality, it is going away or saying goodbye to 20%, 30% of the revenues that was coming from China and replacing it with new revenue from The US and from the defense. And this is far better revenue, it’s revenues that is driven by units that have ASPs and thousands or tens or hundreds of thousands of dollars. It’s driven by defense business, which gives us much better long term security and stickiness and is far less sensitive to pricing. So we’re far less commoditized than we were before.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: How might your systems fit within the counter UAS integrated payload market?

Sam Rubin, CEO, LightPath Technologies: Yes. So this is probably our number one growing market at this point. We’re at this the last few months we’ve seen probably around $10,000,000 slightly short of $10,000,000 of new orders of cameras just for counter UAS. The ability of a long range zoom camera to I’m not sure which side it is in here, but I think we have it somewhere, to zoom in and see a here, a drone, in this case, a pocket sized drone from a mile away where at first when the before the camera zooms, you can’t even see it there. It could be, yeah, if you’re in New Jersey.

Yeah. The ability to detect drones like that from a distance passively without admitting any signal is really what everyone is after right now. So lessons from Ukraine to everyone is you can’t turn on the radar to detect a drone, you become a target within seconds of turning on the radar. So you have to have a passive system that can not emit any radio signal, any infrared, any signal whatsoever and detect the drones and this is infrared cameras. And long range infrared cameras such as the ones that G5, our recent acquisition does is the way to do.

G5 has a whole range of cameras. Now some of them are without germanium completely with it have won some major contracts in the Navy, in Border Patrol and now some significant work being done in County UAS.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Can you discuss the exclusive licensing of your Black Diamond glass to the U. S. Navy?

Sam Rubin, CEO, LightPath Technologies: Yes, so the glass was developed at the U. S. Navy at the Naval Research Laboratories and we received an exclusive license for it. The cost of the license was a joke like $10,000 and the royalties we need to pay are very, very small because this was really something that was developed years ago in the Navy for uses of the Navy for doing multispectral imaging, for reducing dependence on germanium, everything I described, but it doesn’t help them if it’s not commercialized. And so the Navy came to us to commercialize it because we were pretty well known already for making the glass and for our shift towards infrared.

It fits very nicely with what we needed. It just so happens that it fits perfectly with the geopolitics and lack of supply of germanium now. And I wish I could take credit and say I really knew this will happen this way, but it happened and it’s ours now. The license is completely exclusive. With it comes a right of first refusal on any new materials coming out of NRL.

The license renews automatically into perpetuity and yeah, it’s just incredible tool for us right now.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: I think when I visited your facility and we walked the production floor, you had two pieces of equipment there on the production line that you had said that essentially you have some of the only ones in the country. Do you know what I’m referring to?

Sam Rubin, CEO, LightPath Technologies: Yes, the refractor meter for measuring refractive index purchased by federal government with tax dollar money to support us and this is part of the beauty of this because these materials are so critical to the supply chain and to future capabilities of the U. S. Department of Defense, we get some significant support from them, including millions of dollars in funding and equipment to help us commercialize those materials to put them through the testing. We have a partnership with Defense Logistics Agency, Strategic Materials, those are the guys in charge of stockpiles of key materials and they work with us hand in hand to accelerate the adoption of those materials.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Could you discuss your contract on the SPEAR program?

Sam Rubin, CEO, LightPath Technologies: Yes, definitely. One of the two most exciting contracts we have I think, if I can find it, here we are. This contract which is fully awarded program of record exclusive to us is to install infrared cameras on every naval surface vessel, two cameras per vessel. We expect this to start low rate initial production in the next six months or so. We got already awarded it.

We announced it, I think, in March or so. And we expect this to bring us about 10,000,000 to $20,000,000 a year of repeating revenue for the lifetime of the program. So programs like this usually are ten, eleven years followed by supplies and repairs and refurbishing.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: If we think about your entire product portfolio, when do you expect Black Diamond glass based optics to be able to fully replace or offset the germanium based optics?

Sam Rubin, CEO, LightPath Technologies: So I think we’re starting to see that. I mean last week’s announcement where we ourselves designed two of the G5 cameras to replace germanium or prime example for that. We have another contract with a Defense Prime, which we can’t provide too many details on, but in which the Black Diamond plays such a critical role that that Defense Prime has actually funded equipment for us to scale up production and to have production capacity dedicated just for them. That one is a pretty accelerated program because that the material is replacing germanium and others in an existing design, but is improving the performance of that airborne system significantly. So this is on a very accelerated timeline.

It’s actually going to do flight tests I think soon and is going to scale up pretty nicely for us.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: And I would assume if there’s a U. S.-China trade deal that resolves the export restrictions on germanium that it’s still your intent to fully transition to Black Diamond glass over time?

Sam Rubin, CEO, LightPath Technologies: Yes. I mean, I think there are two things at play here. One is, you know, got bitten by this and understands now the dependence on China for those materials and wants to resolve that and they want to be in that situation again and it’s going to take years for The U. S. To set up germanium manufacturing, so it’s not something that can be done overnight.

But secondly, as we’ve seen in some of the examples I’ve shown, once you redesign with those new materials that simply were not available before, you can get far better performance, lower weight, smaller systems, better range altogether. So as we see it, anyone that started to redesign and is already seeing the benefits and went down that path doesn’t have a reason really to go back to depend on germanium so much. Now don’t get me wrong, there is room for that. I mean in an ideal world, supply of germanium was available unlimited, both Black Diamond and germanium would coexist because you can then get the best of both worlds. But with lack of germanium, 25% of the germaniums The U.

Imports goes to the optics industry. We can solve that 25% of our Black Diamond. The other 75%, I don’t have a solution for, but at least whatever germanium is available would be available for those industries.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: And are there any significant performance differences in imaging between Black Diamond germanium based optics?

Sam Rubin, CEO, LightPath Technologies: Yes. So one of the biggest advantages of Black Diamond is optomechanical performance or mechanical performance altogether in varying temperature changes. So when the temperature change, any material changes its properties. I mean, we see that on bridges and so on expanding, shrinking and such. It’s not different in optics.

So when the temperature goes up, what’s called the refractive index, the optical power of the lens changes. Geomanium is extremely sensitive to temperature changes. So when the temperature goes up, a camera that is using germanium loses focus so to speak and it needs to be retuned or refocused. Now, if this is a handheld unit held by a soldier, that’s not a big deal. Soldier just goes and refocuses the cameras, binoculars or whatever he’s using, and that’s not a big deal.

But if it’s on a drone and said drone is sitting on the tarmac now and it’s a 100 degrees Fahrenheit there in the desert and it goes up to 30,000 feet and all of a sudden it is zero degrees there, that temperature change gets the camera out of focus and now all of a sudden to compensate for it, you have to add another motor on the camera to be able to remotely refocus it and adjust for that. These materials don’t have that. Not only don’t they have that, some of them have the opposite effect, meaning when the temperature goes up, their index goes down instead of up, so they can suddenly completely compensate passively. This is part of the beauty of what makes these materials so attractive to so many airborne systems. So anything that flies needs to withstand significant temperature changes and if you need to refocus everything all the time, every time the temperature changes, that’s not only a pain and the behind, but that’s actually a pretty significant cost that you add to the system.

You add more equipment that you need to have a motor, you take more power consumption, more weight, everything a drone is sensitive for. So being able to design optical systems now that do not need to worry about temperature changes like that is a very significant advantage and why I’m so confident that even if germanium comes back fully, once people now are starting to see the real benefit here, we’re going to be in there.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Can you discuss Lightpath’s existing cash balance today and the expected capital needs over the next twelve months to support operations?

Sam Rubin, CEO, LightPath Technologies: Yes. Well, one can never have enough cash to be honest. And a growth company even more so. We’re going through tremendous growth. We’re going to be reporting numbers next month.

So I can’t talk about too much about them, but we’ve very publicly said that after the G5 acquisition we expect to nearly double in size in the first year. And so that takes cash and Al, my CFO here is actually a master at managing our cash amongst the different entities and the different locations and we managed to do pretty well with that. So right as of now or the last 10 numbers we published, we definitely were fine. We have short term debt, but we can convert that debt into equity if we want and we have enough cash and we’re back to generating cash soon. So we should be fine.

That said, there are some significant opportunities ahead. In some of them, like the one primes that I mentioned, we get funded by the customer and the customer writes a check for equipment to make sure that we have whatever we need. In some of them, we need to put equipment, a lot of it we’ve already done. So two and a half years ago, we raised $10,000,000 which we invested in our headquarters in Orlando. We pretty much doubled the capacities there, increased the location, it’s a beautiful place, anyone that wants to visit is welcome.

So short of an acquisitions that might require it or any major contract that would require us to put in cash, I don’t see a need to raise cash in the near future.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Okay. I guess could you go into a little bit more detail on what ultimately led to your acquisition of G5 and what is the timing that you expect for integration of that business fully into the existing product lines and related expenses?

Sam Rubin, CEO, LightPath Technologies: Yes. So G5 acquisition came well, first of all, we direction where we wanted to vertically integrate and become more of a system company. We saw that we could do part of that internally. We developed our first camera as a Mantis camera alone internally. We developed some others after an acquisition of a small company called Visumid Technologies two years ago.

But ultimately to make a very big leap in that direction, we needed to buy our way in to some degree. G5 team and Lightpath team have known each other for a very, very long time and in many different scenarios even before they were G5 in their previous company and have worked together as far back as thirty years ago. And so we knew each other very well. It was a very good culture fit and that is extremely important because cultures are what make or break acquisitions many time. It was a very good culture fit, the founders were most of them in the 70s or so and so wanted an exit.

They loved the direction we’re going. They understood exactly the benefits they get from being part of the companies that has Black Diamond exclusively. And so it was really a great, great thing all overall. Integration wise, we’re doing really well already. We’re developing products together, sales team is cross selling each other already quite a bit, but G5 also has an earn out and they need to meet certain criterias in profitability and revenue to meet that earn out.

So we can’t do a complete full integration yet because of that. But we’re very much along the way. We got a really good we got very lucky in a sense that G5 uses the exact same ERP systems that LightPath uses. So one part that anyone that has done operational integration knows one part that could be very painful was avoided.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Do I have any questions from the audience at all?

Unidentified speaker: Thanks for being in Boston today. You have an ambitious plan over the next five years to grow the company organically. Can you just kind of explain what capital needs the business does need as it grows? Businesses, when one goes from pick up a number, add $50,000,000 of revenue, you need a certain amount of working capital in order to facilitate that. I’m just trying to understand

Sam Rubin, CEO, LightPath Technologies: what

Unidentified speaker: are the work do you have a rule of thumb for the working capital, CapEx, other sorts of needs you have when you incrementally increase revenues by, call it, dollars 50,000,000?

Sam Rubin, CEO, LightPath Technologies: Yes. That’s a great question to put Al on the spot here.

Unidentified speaker: Can I ask the question again? Because it wasn’t the answer I was looking for. Pretend you were at full capacity today, right? So you need to add capacity in order to grow revenues, 50,000,000. I’m trying to understand how expensive CapEx is for you the revenue you generate.

Even at Primes, they don’t pay tomorrow, they wait their time to pay. I’m trying to understand what sort of working capital you

Sam Rubin, CEO, LightPath Technologies: need to

Unidentified speaker: build up inventory, take account receivables and all that sort of stuff. So we’re actually getting most of our

Sam Rubin, CEO, LightPath Technologies: what

Al, CFO, LightPath Technologies: lot we’re getting money money getting So You don’t really see that number from so easily on the balance sheet. Certainly that’s a way. It also helps us in terms of locking into pricing on raw materials that might fluctuate. Fluctuate. So that’s something that the customer wants.

As Sam said, we we happen to be in a good position, which two years ago is not the case, but it is now. We’re taking full advantage of it by asking for 20% prepays or funding the raw materials,

Sam Rubin, CEO, LightPath Technologies: Yes. I mean, we’re at a very strong position right now, so we can afford to dictate that we’re taking prepayments.

Unidentified speaker: Given all the factors you mentioned, some companies have negative working capital, right? They collect money first. You don’t exactly. But given all the parameters you mentioned, again, you grew revenues $50,000,000 and you already were at full capacity, how much cash would you need? Or is the business really positive cash flow generative?

I don’t

Sam Rubin, CEO, LightPath Technologies: think the

Unidentified speaker: answer is yes.

Al, CFO, LightPath Technologies: So I don’t want to give out too much information.

Sam Rubin, CEO, LightPath Technologies: Well, we can say when comes to cameras, okay, scaling up production of cameras is mostly labor. So the amount of equipment needed to now double the amount of cameras we do is very, very small. So for $250,000 $500,000 I pretty much can get all the equipment, test and measurement equipment I need to double camera production or build another station. When it comes to more traditional light path that used to be very capital intensive. So making lenses is pretty much gated by how many spindles you have or how many diamond turning and such.

But this is another part of why we’re moving away from that, why we’re going elsewhere. The only place left in terms of, you know, an area we expect significant growth that is CapEx intensive is the glass. So making the glass requires more furnaces, requires more equipment, but it’s not massive. I can double the amount of glass I make with a $2.3000000 dollars investment. So we’re not talking about enormous numbers.

The really big numbers would come if we would have stayed in a model where we’re making infrared optics and every diamond turning machine costs $250,000 and can only make X number of lenses, but we’re not there.

Austin Moore, Aerospace and Defense Analyst, Canaccord Genuity: Well, great. I think we’re at the end of our time here, but thank you again so much Sam for coming to join us today and give us the latest on WhitePath.

Sam Rubin, CEO, LightPath Technologies: Thanks for having me. I appreciate it.

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