Executive Summary / Key Takeaways

• Aeluma, Inc. ($ALMU) is a transformative semiconductor company leveraging proprietary heterogeneous integration of high-performance compound semiconductors on large-diameter silicon wafers to unlock mass-market applications in AI, defense, mobile, and quantum computing.
• The company achieved remarkable revenue growth of 407% year-over-year in fiscal year 2025, reaching $4.7 million, primarily driven by significant government R&D contracts with agencies like NASA, DARPA, and the U.S. Navy.
• Aeluma's strong financial position, bolstered by $15.7 million in cash and no debt as of June 30, 2025, following a successful $13.8 million public offering, has alleviated prior going concern doubts and provides a substantial cash runway for future growth.
• The company projects fiscal year 2026 revenue between $4.0 million and $6.0 million, with a strategic focus on securing additional development contracts and expanding its go-to-market capabilities, targeting a serviceable addressable market of $4.9 billion by 2030.
• Despite its early-stage profile and ongoing net losses, Aeluma's unique technological advantages, robust intellectual property portfolio, and strategic partnerships position it for long-term value creation in rapidly expanding, high-performance semiconductor markets.

A New Era of Semiconductor Performance and Scale

Aeluma, Inc. ($ALMU) stands at the forefront of a semiconductor revolution, pioneering a disruptive approach to high-performance sensing, communication, and computing applications. The company's core strategy centers on its unique ability to integrate advanced compound semiconductor materials onto large-diameter silicon substrates. This technological breakthrough aims to bridge the gap between the superior performance of compound semiconductors and the cost-effectiveness and scalability of mass-market silicon manufacturing.

The semiconductor industry is experiencing unprecedented demand for higher-performance components, driven by megatrends such as artificial intelligence (AI), augmented and virtual reality (AR/VR), autonomous systems, and quantum computing. Aeluma's technology is designed to meet these escalating requirements across diverse verticals, including mobile devices, automotive, defense and aerospace, and high-performance computing.

Aeluma's journey began in 2019 as Biond Photonics, later incorporating as Parc Investments, Inc. in 2020 and rebranding to Aeluma, Inc. in June 2021. The company established its principal executive offices and a state-of-the-art R&D and manufacturing cleanroom in Goleta, California, in April 2021. Its common stock began trading on the OTCQB in August 2022, culminating in an uplisting to the Nasdaq Capital Market in March 2025. This progression underscores Aeluma's strategic intent to mature its manufacturing processes and expand its commercial footprint.

Technological Edge: Compound Semiconductors on Silicon

Aeluma's core technological differentiation lies in its heterogeneous integration technique, which enables the manufacturing of high-performance compound semiconductor devices on large-diameter silicon wafers, up to 12-inch. This contrasts sharply with traditional InGaAs sensors, typically manufactured on smaller 2- to 4-inch indium phosphide (InP) substrates. The ability to leverage larger silicon wafers translates into significantly more sensor chips per wafer, offering a substantial cost advantage.

The tangible benefits of Aeluma's technology are compelling. Compound semiconductors like Indium Gallium Arsenide (InGaAs) offer superior detection sensitivity and a broader wavelength absorption spectrum compared to silicon. While silicon detects light primarily in the visible and near-infrared (NIR) up to 940 nm, InGaAs extends well into the shortwave infrared (SWIR) spectrum (900-1700 nm), with the potential to reach 2500 nm. Crucially, many SWIR wavelengths are considered eye-safe, opening doors for applications where silicon falls short, such as advanced lidar and 3D imaging. Aeluma believes this platform can achieve a manufacturing cost potentially ten times lower for mass-market applications and enable faster production scaling than incumbent technologies.

The company's R&D initiatives are directly aligned with these technological advantages. In August 2024, NASA contracted Aeluma to develop quantum dot photonic integrated circuits (PICs) on silicon for next-generation space and aerospace applications, including free-space laser communication and precision sensing. A September 2024 DARPA contract, valued at $11.70 million, focuses on heterogeneous integration for nano-scale semiconductors compatible with advanced-node semiconductors, targeting AI, mobile, and 5G/6G wireless networking. Further contracts in April and June 2025 from the U.S. Department of Energy and the U.S. Navy, respectively, are accelerating the commercialization of low-cost SWIR photodetectors and high-speed photodetectors for quantum computing and sensing systems. These contracts not only provide non-dilutive funding but also validate Aeluma's technological prowess and its strategic importance in critical growth sectors.

For investors, Aeluma's technological differentiation forms a robust competitive moat. The ability to deliver high-performance components at a significantly lower cost and greater scale positions the company to disrupt existing markets and unlock entirely new ones. This technological edge is expected to drive higher average selling prices (ASPs) and better margins as the company transitions to volume production, underpinning its long-term growth strategy in a rapidly expanding serviceable addressable market.

Competitive Landscape and Strategic Positioning

The semiconductor industry is intensely competitive, segmented into areas like low-cost silicon CMOS image sensors and high-performance compound semiconductor sensors. Major players in silicon CMOS include Sony (SONY), Samsung (SSNLF), and Omnivision, while InGaAs sensor leaders include Hamamatsu (HMTUY) and TeledyneFLIR (TDY). Aeluma's strategy is not to compete head-on as an end-to-end system provider but rather to be a foundational technology enabler, supplying critical high-performance components.

Aeluma's unique value proposition lies in its ability to outperform silicon CMOS sensors while achieving lower manufacturing costs than traditional InGaAs sensors. This is primarily due to its large-diameter silicon substrate integration, which allows for greater chip density and leverages existing silicon manufacturing infrastructure for economies of scale. This capability is a tangible competitive differentiator, protected by approximately 30 issued and pending patents and trade secrets.

Despite these advantages, Aeluma faces formidable competitors with greater name recognition, longer operating histories, broader product portfolios, and substantially larger financial resources. For instance, in the mobile market, Apple (AAPL) currently utilizes VCSEL emitters with SPAD photodetectors, not Aeluma's technology. However, Aeluma's focus on specialized, high-performance components for emerging applications like quantum computing and advanced sensing allows it to carve out a distinct market niche. The company is actively engaging with approximately 20 prospective customers, including Tier-1 suppliers, to establish direct sales relationships and strategic partnerships.

Financial Momentum and Future Outlook

Aeluma's financial performance in fiscal year 2025 demonstrates significant progress, reflecting the early stages of its commercialization efforts. Total revenue surged by 407.90% to $4.7 million for the fiscal year ended June 30, 2025, up from $919 thousand in the prior year. This growth was predominantly fueled by government contracts, which accounted for $4.4 million of the revenue, alongside $266 thousand from commercial product and service contracts. The company's fourth-quarter 2025 revenue alone reached $1.3 million, marking a 367% year-over-year increase.

While operating expenses increased by 24.20% to $6.8 million in fiscal year 2025, primarily due to higher material purchases and compensation costs, the company's net loss narrowed by 33.80% to $3.02 million, compared to $4.56 million in fiscal year 2024. Notably, Aeluma achieved positive Adjusted EBITDA of $186 thousand in fiscal year 2025, a significant improvement from a $3.5 million loss in the prior year. This indicates improving operational efficiency as revenue scales.

Aeluma's liquidity position has dramatically strengthened. As of June 30, 2025, cash, cash equivalents, and a certificate of deposit totaled $15.7 million, a substantial increase from $1.3 million in June 2024. This was largely driven by $12.6 million in net proceeds from an oversubscribed public offering in March 2025, which also saw the company uplist to Nasdaq. This capital infusion has alleviated previous concerns about the company's ability to continue as a going concern, providing a cash runway of over three years based on current operating expenses.

Looking ahead, Aeluma projects fiscal year 2026 revenue to be in the range of $4.0 million to $6.0 million. The company's strategic priorities for 2026 include securing three to seven new development contracts, expanding its business development and go-to-market teams, and enhancing manufacturing readiness. Aeluma estimates its serviceable addressable market could reach $4.9 billion by 2030, growing at a 47% compound annual rate from $1 billion in 2026. This ambitious outlook is underpinned by the increasing demand in AI infrastructure, defense, and quantum computing, where Aeluma's technology is highly relevant.

Risks and Challenges

Investing in Aeluma, an early-stage enterprise, carries inherent risks. The company is not yet in volume production for its product offerings, and its lack of extensive operating history makes future performance difficult to evaluate. Aeluma anticipates continued net losses and negative cash flows, with the timing and sustainability of profitability remaining uncertain.

A significant portion of Aeluma's revenue is derived from U.S. federal government contracts, which are subject to competitive bidding, re-competition, and potential termination for convenience due to budgetary cycles or policy changes. The adoption timelines for Aeluma's component technologies, which customers integrate into their end-products, may also be longer than anticipated, potentially delaying revenue growth. Furthermore, the company identified a material weakness in its internal control over financial reporting as of June 30, 2025, though the recent appointment of a new Chief Financial Officer is intended to address this. [cite: 10-K]

The semiconductor industry is highly competitive, characterized by rapid innovation and short product life cycles. While Aeluma possesses unique technological advantages, larger competitors with greater resources could pose a challenge. The company's reliance on limited sources for wafer fabrication and raw materials, including rare earths and minerals, exposes it to supply chain disruptions and geopolitical risks that could impact costs and production.

Conclusion

Aeluma, Inc. presents a compelling investment narrative centered on its disruptive semiconductor technology and its potential to unlock high-performance applications for mass markets. The company's proprietary heterogeneous integration of compound semiconductors on large-diameter silicon wafers offers a distinct advantage in cost, performance, and scalability, positioning it favorably in burgeoning sectors like AI, defense, and quantum computing. Recent financial results, marked by a 407% surge in fiscal year 2025 revenue and a strengthened balance sheet, underscore significant operational momentum and a clear path toward commercialization.

While Aeluma remains an early-stage company with inherent risks, including profitability challenges and dependence on government contracts, its robust intellectual property, strategic R&D partnerships, and clear vision for market penetration provide a solid foundation. The company's estimated $4.9 billion serviceable addressable market by 2030, coupled with its ability to deliver innovative, cost-effective solutions, suggests substantial long-term value creation. For discerning investors, Aeluma represents an opportunity to participate in the next wave of semiconductor innovation, driven by technological leadership and strategic execution in high-growth verticals.