Luna Innovations (LUNA) 10-Q 9 May 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2023	May 05, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	000-52008
Entity Registrant Name	LUNA INNOVATIONS INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1560050
Entity Address, Address Line One	301 First Street SW
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Roanoke
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	24011
City Area Code	540
Local Phone Number	769-8400
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	LUNA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		33,404,966
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001239819
Current Fiscal Year End Date	--12-31

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 3,559	$ 6,024
Accounts receivable, net	31,924	33,249
Contract assets	9,001	7,691
Inventory	39,675	36,582
Prepaid expenses and other current assets	5,815	4,328
Total current assets	89,974	87,874
Property and equipment, net	4,691	4,893
Intangible assets, net	18,125	18,750
Goodwill	27,208	26,927
Operating lease right-of-use assets	4,293	4,661
Other non-current assets	3,295	3,255
Deferred tax asset	4,548	4,647
Total assets	152,134	151,007
Current liabilities:
Current portion of long-term debt obligations	2,750	2,500
Accounts payable	5,578	8,109
Accrued and other current liabilities	16,273	16,694
Contract liabilities	5,942	4,089
Current portion of operating lease liabilities	2,116	2,239
Total current liabilities	32,659	33,631
Long-term debt obligations, net of current portion	22,480	20,726
Long-term portion of operating lease liabilities	2,495	2,804
Other long-term liabilities	432	444
Total liabilities	58,066	57,605
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, par value $0.001, 100,000,000 shares authorized, 35,227,817 and 34,901,954 shares issued, 33,396,326 and 33,105,080 shares outstanding at March 31, 2023 and December 31, 2022, respectively	35	35
Treasury stock at cost, 1,831,491 and 1,796,862 shares at March 31, 2023 and December 31, 2022, respectively	(5,949)	(5,607)
Additional paid-in capital	106,624	104,893
Accumulated deficit	(4,138)	(2,296)
Accumulated other comprehensive loss	(2,504)	(3,623)
Total stockholders’ equity	94,068	93,402
Total liabilities and stockholders’ equity	$ 152,134	$ 151,007

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	100,000,000	100,000,000
Common stock issued (in shares)	35,227,817	34,901,954
Common stock outstanding (in shares)	33,396,326	33,105,080
Treasury stock (in shares)	1,831,491	1,796,862

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue	$ 25,045	$ 22,481
Cost of revenue	10,072	8,202
Gross profit	14,973	14,279
Operating expense:
Selling, general and administrative	13,296	13,281
Research, development and engineering	2,817	2,543
Amortization of intangible assets	992	821
Total operating expense	17,105	16,645
Operating loss	(2,132)	(2,366)
Other income/(expense):
Other income	92	21
Interest expense, net	(369)	(113)
Total other expense, net	(277)	(92)
Loss from continuing operations before income taxes	(2,409)	(2,458)
Income tax benefit	(567)	(1,115)
Net loss from continuing operations	(1,842)	(1,343)
Income from discontinued operations, net of income tax expense of $1,022	0	3
Gain on sale of discontinued operations, net of tax of $3,117	0	10,921
Net income from discontinued operations	0	10,924
Net (loss)/income	$ (1,842)	$ 9,581
Net loss per share from continuing operations:
Basic (in dollars per share)	$ (0.06)	$ (0.04)
Diluted (in dollars per share)	(0.06)	(0.04)
Net income per share from discontinued operations:
Basic (in dollars per share)	0	0.34
Diluted (in dollars per share)	0	0.34
Net (loss)/income per share attributable to common stockholders:
Basic (in dollars per share)	(0.06)	0.30
Diluted (in dollars per share)	$ (0.06)	$ 0.30
Weighted average shares:
Basic (in shares)	33,331,745	32,243,082
Diluted (in shares)	33,331,745	32,243,082

Consolidated Statements of Op_2

Consolidated Statements of Operations (Unaudited) (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Income Statement [Abstract]
Discontinued operations tax effect	$ 1,022
Tax effect	$ 3,117

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net (loss)/income	$ (1,842)	$ 9,581
Other comprehensive income/(loss)	1,119	(370)
Total other comprehensive (loss)/income	$ (723)	$ 9,211

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Common stock, beginning balance (in shares) at Dec. 31, 2021		32,116,270
Beginning balance treasury stock (in shares) at Dec. 31, 2021			1,744,026
Beginning balance at Dec. 31, 2021	$ 81,923	$ 34	$ (5,248)	$ 98,745	$ (11,575)	$ (33)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)		143,392
Exercise of stock options	220			220
Share-based compensation (in shares)		139,723
Share-based compensation	941			941
Purchase of treasury stock (in shares)		(38,263)	38,263
Purchase of treasury stock	(278)		$ (278)
Net income (loss)	9,581				9,581
Foreign currency translation adjustment	(370)					(370)
Common stock, ending balance (in shares) at Mar. 31, 2022		32,361,122
Ending balance treasury stock (in shares) at Mar. 31, 2022			1,782,289
Ending balance at Mar. 31, 2022	$ 92,017	$ 34	$ (5,526)	99,906	(1,994)	(403)
Common stock, beginning balance (in shares) at Dec. 31, 2022	33,105,080	33,105,080
Beginning balance treasury stock (in shares) at Dec. 31, 2022	1,796,862		1,796,862
Beginning balance at Dec. 31, 2022	$ 93,402	$ 35	$ (5,607)	104,893	(2,296)	(3,623)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)		252,855
Exercise of stock options	834			834
Share-based compensation (in shares)		73,020
Share-based compensation	897			897
Purchase of treasury stock (in shares)		(34,629)	34,629
Purchase of treasury stock	(342)		$ (342)
Net income (loss)	(1,842)				(1,842)
Foreign currency translation adjustment	$ 1,119					1,119
Common stock, ending balance (in shares) at Mar. 31, 2023	33,396,326	33,396,326
Ending balance treasury stock (in shares) at Mar. 31, 2023	1,831,491		1,831,491
Ending balance at Mar. 31, 2023	$ 94,068	$ 35	$ (5,949)	$ 106,624	$ (4,138)	$ (2,504)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows used in by operating activities
Net (loss)/income	$ (1,842)	$ 9,581
Adjustments to reconcile net (loss)/income to net cash used in operating activities
Depreciation and amortization	1,417	1,179
Share-based compensation	1,054	1,132
Loss on disposal of property and equipment	51	0
Gain on sale of discontinued operations, net of tax	0	(10,921)
Deferred taxes	99	220
Change in assets and liabilities
Accounts receivable	1,596	(1,795)
Contract assets	(1,250)	(1,144)
Inventory	(2,619)	(1,416)
Other current assets	(1,573)	(1,636)
Other long-term assets	(54)	2
Accounts payable and accrued and other current liabilities	(3,173)	2,287
Contract liabilities	1,785	171
Other long-term liabilities	0	(33)
Net cash used in operating activities	(4,509)	(2,373)
Cash flows used in investing activities
Acquisition of property and equipment	(478)	(915)
Acquisition of intangible property	(32)	0
Proceeds from sale of property and equipment	0	25
Proceeds from sale of discontinued operations	0	12,973
Acquisition of Luna Innovations Germany GmbH	0	(22,085)
Other	0	38
Net cash used in investing activities	(510)	(9,964)
Cash flows provided by financing activities
Payments on finance lease obligations	(12)	(12)
Proceeds from borrowings under debt obligations	2,500	7,450
Payments of debt obligations	(496)	(1,036)
Repurchase of common stock	(342)	(278)
Proceeds from ESPP	0	85
Proceeds from the exercise of stock options	834	220
Net cash provided by financing activities	2,484	6,429
Effect of exchange rate changes on cash and cash equivalents	70	(432)
Net decrease in cash and cash equivalents	(2,465)	(6,340)
Cash and cash equivalents—beginning of period	6,024	17,128
Cash and cash equivalents—end of period	3,559	10,788
Supplemental disclosure of cash flow information
Cash paid for interest	399	108
Cash paid for income tax	$ 2	$ 342

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	Basis of Presentation and Significant Accounting Policies Nature of Operations Luna Innovations Incorporated (“we,” “our” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries, and distributed fiber optic sensing solutions that measure, or "sense" the structures for industries ranging from aerospace, automotive, oil and gas, security and infrastructure. Our communications test and control products help customers test their fiber optic networks and assemblies with speed and precision in both lab and production environments. Our test and measurement products accelerate the development of high speed fiber optic components like photonic integrated circuits, coherent receivers and short-run fiber networks. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by measuring stress, strain, and temperature at a high resolution for new designs or manufacturing processes. Our distributed fiber optic sensing products ensure the safety and structural integrity or operational health of critical assets in the field, by monitoring stress, strain, temperature and vibration in large civil and industrial infrastructure such as bridges, roads, pipelines and borders. We manufacture and sell "terahertz" (THz) products for layer thickness measurements for materials like plastics, rubber, and paint. Our THz products are used in the aerospace and automotive/EV sector. We also provide applied research services, primarily under federally funded development programs, that leverage our sensing and instrumentation technologies to meet the specific needs and applications of our customers. Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments considered necessary to present fairly our financial position at March 31, 2023, results of operations, comprehensive income/(loss) and changes in stockholders' equity for the three months ended March 31, 2023 and 2022, and cash flows for the three months ended March 31, 2023 and 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The consolidated balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 16, 2023. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether the carrying value has been impaired. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued and other liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its floating per annum interest rate of the daily simple secured overnight financing rate ("SOFR"), plus an SOFR adjustment, plus a margin ranging from 1.75% to 2.75%, to be at market based upon similar instruments that would be available to us. The Company has certain assets and liabilities that have been recorded at fair value on a non-recurring basis following an acquisition. Reportable Segments We have one reportable segment that develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method. There were no adjustments for common stock equivalents for the diluted per share data for the three months ended March 31, 2023 and 2022. The following shares could potentially dilute basic EPS in the future and have been excluded from the computation of diluted weighted average shares outstanding because the effect would be anti-dilutive: March 31, 2023 March 31, 2022 Stock options 471,000 903,000 Restricted stock units 1,177,000 1,179,000 Foreign Currency For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal period end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings. Recently Issued Pronouncements In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We adopted ASU 2016-13, effective January 1, 2023. The adoption of ASU 2016-13 did not have a significant impact on our consolidated financial statements.

Intangible assets, net

Intangible assets, net	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets, net	Intangible assets, net Intangible assets, net at March 31, 2023 and December 31, 2022 consisted of the following: Estimated Life March 31, 2023 December 31, 2022 (in thousands) Patent costs 1 - 5 years $ 9,279 $ 9,086 Developed technology 5 - 10 years 15,821 15,924 In-process research and development N/A 2,631 2,631 Customer relationships 5 - 15 years 4,149 4,117 Trade names 3 - 5 years 864 880 Backlog 1 - 3 years 418 331 33,162 32,969 Patent costs (4,416) (4,128) Developed technology (7,522) (6,830) In-process research and development (1,519) (1,763) Customer relationships (575) (574) Trade names (587) (586) Backlog (418) (338) Accumulated amortization (15,037) (14,219) $ 18,125 $ 18,750 Amortization expense for the three months ended March 31, 2023 and 2022 was $1.0 million and $0.8 million, respectively. Estimated aggregate amortization, based on the net value of intangible assets at March 31, 2023, for each of the next five years and beyond is as follows (in thousands) : Year Ending December 31, 2023 (remaining 9 months) $ 2,952 2024 3,283 2025 2,954 2026 2,808 2027 2,030 2028 & beyond 4,098 Total $ 18,125

Goodwill

Goodwill	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill The change in the carrying value of goodwill during the three months ended March 31, 2023 was as follows: (in thousands) Balance as of December 31, 2022 $ 26,927 Foreign currency translation 281 Balance as of March 31, 2023 $ 27,208

Inventory

Inventory	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Inventory	Inventory Inventory consists of finished goods, work-in-process and raw materials valued at the lower of cost (determined on the first-in, first-out basis) or net realizable value. Components of inventory were as follows: March 31, December 31, (in thousands) Finished goods $ 9,388 $ 9,930 Work-in-process 5,614 3,113 Raw materials 24,673 23,539 Total inventory $ 39,675 $ 36,582

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2023
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued LiabilitiesAccrued liabilities consisted of the following: March 31, 2023 December 31, 2022 (in thousands) Accrued compensation $ 9,233 $ 8,962 Accrued professional fees 820 720 Accrued income tax 3,205 3,788 Current portion of finance lease liability 50 50 Accrued interest 62 64 Accrued liabilities - other 2,903 3,110 Total accrued and other current liabilities $ 16,273 $ 16,694

Debt

Debt	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Debt	Debt Long-term debt consisted of the following: March 31, 2023 December 31, 2022 (in thousands) Term Loan (net of debt issuance costs of $70 and $74, 7.19% and 6.65% at March 31, 2023 and December 31, 2022, respectively) $ 18,430 $ 18,926 Revolving Loan (7.19% and 6.65% at March 31, 2023 and December 31, 2022) 6,800 4,300 25,230 23,226 Less: Current portion of long-term debt obligations (2,750) (2,500) Long-term debt obligations $ 22,480 $ 20,726 PNC Bank Facility On January 31, 2023, the Company entered into a Loan Modification Agreement (the "Third Amendment") in respect of the Loan Agreement and previous amendments discussed hereafter to slightly modify its net leverage ratio and interest rate applicable margin. On June 21, 2022 (the “Effective Date”), the Company entered into a Loan Modification Agreement (the “Second Amendment”) in respect of its Loan Agreement, dated as of December 1, 2020 (the “Original Loan Agreement” and as amended by that certain First Amendment to Loan Agreement, dated as of March 10, 2022, the Second Amendment, and the Third Amendment the “Loan Agreement”) with PNC Bank, National Association, as lender (the “Lender”) and certain of the Company’s domestic subsidiaries as guarantors, to, among other things, extend the maturity date of the Term Loan and Revolving Line (each as defined below) to June 21, 2027 and increase the total commitments to the Company. The Loan Agreement provides a $15.0 million revolving credit facility (the “Revolving Line”) and a $20 million term loan facility (the “Term Loan”). On the Effective Date, we borrowed the full amount of the Term Loan from the Lender according to a term note (the “Term Note”), a portion of the proceeds of which were used to refinance the remaining principal amount of the $12.5 million in term loans issued under the Original Loan Agreement, and the remainder of which were used to pay down approximately $13.7 million of the $15.0 million in revolving loans outstanding under the Revolving Line (the “Revolving Loan”) according to a revolving line of credit note (the “Revolving Line of Credit Note”). We may repay and reborrow advances under the Revolving Line from time to time according to the Revolving Line of Credit Note. The Term Loan matures on June 21, 2027. The Term Loan amortizes at a rate equal to 10% for the first year, 15% for years two and three, 20% in year four and 15% in year five, in each case payable on a quarterly basis. The remaining balance is due on maturity. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest will be due and payable on June 21, 2027. The Term Loan bears interest at a floating per annum rate equal to the sum of (a) the daily simple secured overnight finance rate ("Daily Simple SOFR"), plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.75% per annum, depending on our Net Leverage Ratio (as defined in the Loan Agreement). We may prepay the Term Loan without penalty or premium. The Revolving Line expires on June 21, 2027. Borrowings under the Revolving Line bear interest at a floating per annum rate equal to the sum of (a) the Daily Simple SOFR, plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.75% per annum, depending on our Net Leverage Ratio. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest is due and payable on June 21, 2027. The unused portion of the Revolving Line accrues a fee equal to 0.20% per annum multiplied by the quarterly average unused amount. The unused Revolving Line totaled $8.2 million at March 31, 2023. The Loan Agreement includes a number of affirmative and restrictive covenants applicable to us and our subsidiaries, including, among others, financial covenants regarding minimum net leverage and fixed charge coverage, affirmative covenants regarding delivery of financial statements, payment of taxes, and maintenance of government compliance, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. We were in compliance with these covenants as of March 31, 2023. Upon the occurrence of certain events, including failure to satisfy our payment obligations under the Loan Agreement, failure to adhere to the financial covenants, the breach of certain of our other covenants under the Loan Agreement, cross defaults to other indebtedness or material agreements, judgment defaults and defaults related to failure to maintain governmental approvals, the Lender will have the right, among other remedies, to declare all principal and interest immediately due and payable, and to exercise secured party remedies. Maturities on debt are as follows ( in thousands) : Year Ending December 31, Amount 2023 (remaining 9 months) $ 2,000 2024 3,000 2025 3,500 2026 4,000 2027 12,800 Total maturities 25,300 Less: deferred issuance costs (70) Total $ 25,230

Capital Stock and Share-Based C

Capital Stock and Share-Based Compensation	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
Capital Stock and Share-Based Compensation	Capital Stock and Share-Based Compensation Stock Options For the three months ended March 31, 2023 and 2022, we recognized $0.1 million and $0.2 million, respectively, in share-based compensation expense related to stock options, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. We expect to recognize $0.2 million in share-based compensation expense over the weighted-average remaining service period of 1.6 years for stock options outstanding as of March 31, 2023. Restricted Stock Units During the three months ended March 31, 2023 and 2022, we granted 280,050 and 255,842 time-based restricted stock units ("RSUs"), respectively. The general terms of the RSUs are similar to awards previously granted by us. The weighted average fair value of the time-based RSUs granted during the three months ended March 31, 2023 was $8.36 per share. The fair value of each RSU was determined based on the market price of our stock on the date of grant. In addition, pursuant to our Deferred Compensation Plan, non-employee directors can elect to defer the receipt of some or all of the equity compensation that they receive for board and committee service. During the three months ended March 31, 2023 and 2022, we granted 7,397 and 8,436 RSUs, respectively, pursuant to the Deferred Compensation Plan. The general terms of these RSUs are similar to awards previously granted by us. The weighted average fair value of these RSUs granted during the three months ended March 31, 2023 and 2022, was $8.99 and $8.46 per share, respectively. The fair value of each RSU was determined based on the market price of our stock on the date of grant. For each of the three months ended March 31, 2023 and 2022, we recognized $0.7 million in share-based compensation expense related to RSUs, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. We expect to recognize $6.7 million in share-based compensation expense over the weighted-average remaining service period of 1.4 years for RSUs outstanding as of March 31, 2023. Employee Stock Purchase Plan ("ESPP")

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic locations, customer type, contract type, timing of recognition, and major categories, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. We disaggregate revenue on the basis of where the physical goods are shipped. We also classify revenue by the customer type of entity for which it does business, which is an indicator of the diversity of our client base. We attribute revenues generated from being a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Disaggregation by contract mix provides insight in terms of the degree of performance risk that we have assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as we are required to deliver a scope of work or level of effort for a negotiated fixed price. Cost-based contracts are considered to provide the lowest amount of performance risk since we are generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements. By classifying revenue by major product and service, we attribute revenue from a client to the major product or service that we believe to be the client's primary market. The details are listed in the table below for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 (in thousands) Total Revenue by Geographic Location United States $ 12,907 $ 10,516 Asia 3,988 4,830 Europe 6,314 4,907 Canada, Central and South America 1,449 2,228 All Others 387 — Total $ 25,045 $ 22,481 Total Revenue by Major Customer Type Sales to the U.S. government $ 1,969 $ 1,635 U.S. direct commercial sales and other 10,938 8,881 Foreign commercial sales & other 12,138 11,965 Total $ 25,045 $ 22,481 Total Revenue by Contract Type Fixed-price contracts $ 24,169 $ 21,853 Cost-type contracts 876 628 Total $ 25,045 $ 22,481 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 22,027 $ 18,609 Goods/services transferred over time 3,018 3,872 Total $ 25,045 $ 22,481 Total Revenue by Major Products/Services Technology development $ 1,776 $ 1,597 Test, measurement and sensing systems 23,037 20,096 Other 232 788 Total $ 25,045 $ 22,481 Contract Balances Our contract assets consist of unbilled amounts for research contracts as well as custom product contracts. Contract liabilities include excess billings, subcontractor accruals, and customer deposits. During the three months ended March 31, 2023, we recognized $0.7 million of revenue that was included in contract liabilities as of December 31, 2022. The following table shows the components of our contract balances as of March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 (in thousands) Contract assets $ 9,001 $ 7,691 Contract liabilities 5,942 4,089 Net contract assets $ 3,059 $ 3,602 Performance Obligations Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our unfulfilled performance obligations was $51.8 million at March 31, 2023. We expect to satisfy 79% of the performance obligations in 2023, 17% in 2024 and the remainder by 2027.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesOur provision for income taxes is based upon the estimated annual effective tax rate for the year applied to the current period income plus the tax effect of any significant or unusual items, discrete events or changes in tax law. Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. We and our subsidiaries file U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions. For the three months ended March 31, 2023, our effective income tax rate was 23.5% compared to 45.4% for the three months ended March 31, 2022. Historically, our tax rate can vary significantly from the federal statutory rate of 21% due to unfavorable impacts from the net Global Intangible Low Taxed Inclusion and losses generated in jurisdictions where the benefit is not expected to be recognized partially offset by favorable impacts from stock award vesting and exercises, foreign-derived intangible income deduction and research and development tax credits.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe are from time to time involved in certain legal proceedings in the ordinary course of conducting our business. While the ultimate liability pursuant to these actions cannot currently be determined, we believe it is not reasonably possible that these legal proceedings will have a material adverse effect on our financial position or results of operations.We executed multiple non-cancelable purchase orders totaling $3.1 million in the second quarter of 2022, a non-cancelable purchase order totaling $4.6 million in the fourth quarter of 2022, and a non-cancelable purchase order totaling $0.6 million in the first quarter of 2023 for multiple shipments of tunable lasers to be delivered over a 12-15 month period. At March 31, 2023, approximately $6.7 million of non-cancelable purchase order commitments remained and are expected to be delivered by December 30, 2024.

Basis of Presentation and Sig_2

Basis of Presentation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Luna Innovations Incorporated (“we,” “our” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments considered necessary to present fairly our financial position at March 31, 2023, results of operations, comprehensive income/(loss) and changes in stockholders' equity for the three months ended March 31, 2023 and 2022, and cash flows for the three months ended March 31, 2023 and 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The consolidated balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 16, 2023.
Goodwill and Intangible Assets	Goodwill and Intangible AssetsGoodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether the carrying value has been impaired.
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued and other liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its floating per annum interest rate of the daily simple secured overnight financing rate ("SOFR"), plus an SOFR adjustment, plus a margin ranging from 1.75% to 2.75%, to be at market based upon similar instruments that would be available to us. The Company has certain assets and liabilities that have been recorded at fair value on a non-recurring basis following an acquisition.
Reportable Segments	Reportable Segments We have one reportable segment that develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products.
Net Income/(Loss) Per Share	Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method. There were no adjustments for common stock equivalents for the diluted per share data for the three months ended March 31, 2023 and 2022.
Foreign Currency	Foreign CurrencyFor our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal period end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings.
Recently Issued Pronouncements	Recently Issued Pronouncements In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We adopted ASU 2016-13, effective January 1, 2023. The adoption of ASU 2016-13 did not have a significant impact on our consolidated financial statements.

Basis of Presentation and Sig_3

Basis of Presentation and Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	The following shares could potentially dilute basic EPS in the future and have been excluded from the computation of diluted weighted average shares outstanding because the effect would be anti-dilutive: March 31, 2023 March 31, 2022 Stock options 471,000 903,000 Restricted stock units 1,177,000 1,179,000

Intangible assets, net (Tables)

Intangible assets, net (Tables)	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Intangible assets, net at March 31, 2023 and December 31, 2022 consisted of the following: Estimated Life March 31, 2023 December 31, 2022 (in thousands) Patent costs 1 - 5 years $ 9,279 $ 9,086 Developed technology 5 - 10 years 15,821 15,924 In-process research and development N/A 2,631 2,631 Customer relationships 5 - 15 years 4,149 4,117 Trade names 3 - 5 years 864 880 Backlog 1 - 3 years 418 331 33,162 32,969 Patent costs (4,416) (4,128) Developed technology (7,522) (6,830) In-process research and development (1,519) (1,763) Customer relationships (575) (574) Trade names (587) (586) Backlog (418) (338) Accumulated amortization (15,037) (14,219) $ 18,125 $ 18,750
Schedule of Estimated Aggregate Amortization Based on Net Value of Intangible Assets	Estimated aggregate amortization, based on the net value of intangible assets at March 31, 2023, for each of the next five years and beyond is as follows (in thousands) : Year Ending December 31, 2023 (remaining 9 months) $ 2,952 2024 3,283 2025 2,954 2026 2,808 2027 2,030 2028 & beyond 4,098 Total $ 18,125

Goodwill (Tables)

Goodwill (Tables)	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	The change in the carrying value of goodwill during the three months ended March 31, 2023 was as follows: (in thousands) Balance as of December 31, 2022 $ 26,927 Foreign currency translation 281 Balance as of March 31, 2023 $ 27,208

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Schedule of Inventory	Components of inventory were as follows: March 31, December 31, (in thousands) Finished goods $ 9,388 $ 9,930 Work-in-process 5,614 3,113 Raw materials 24,673 23,539 Total inventory $ 39,675 $ 36,582

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2023
Payables and Accruals [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consisted of the following: March 31, 2023 December 31, 2022 (in thousands) Accrued compensation $ 9,233 $ 8,962 Accrued professional fees 820 720 Accrued income tax 3,205 3,788 Current portion of finance lease liability 50 50 Accrued interest 62 64 Accrued liabilities - other 2,903 3,110 Total accrued and other current liabilities $ 16,273 $ 16,694

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt consisted of the following: March 31, 2023 December 31, 2022 (in thousands) Term Loan (net of debt issuance costs of $70 and $74, 7.19% and 6.65% at March 31, 2023 and December 31, 2022, respectively) $ 18,430 $ 18,926 Revolving Loan (7.19% and 6.65% at March 31, 2023 and December 31, 2022) 6,800 4,300 25,230 23,226 Less: Current portion of long-term debt obligations (2,750) (2,500) Long-term debt obligations $ 22,480 $ 20,726
Schedule of Maturities of Long-term Debt	Maturities on debt are as follows ( in thousands) : Year Ending December 31, Amount 2023 (remaining 9 months) $ 2,000 2024 3,000 2025 3,500 2026 4,000 2027 12,800 Total maturities 25,300 Less: deferred issuance costs (70) Total $ 25,230

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Disaggregation of Revenue	The details are listed in the table below for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 (in thousands) Total Revenue by Geographic Location United States $ 12,907 $ 10,516 Asia 3,988 4,830 Europe 6,314 4,907 Canada, Central and South America 1,449 2,228 All Others 387 — Total $ 25,045 $ 22,481 Total Revenue by Major Customer Type Sales to the U.S. government $ 1,969 $ 1,635 U.S. direct commercial sales and other 10,938 8,881 Foreign commercial sales & other 12,138 11,965 Total $ 25,045 $ 22,481 Total Revenue by Contract Type Fixed-price contracts $ 24,169 $ 21,853 Cost-type contracts 876 628 Total $ 25,045 $ 22,481 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 22,027 $ 18,609 Goods/services transferred over time 3,018 3,872 Total $ 25,045 $ 22,481 Total Revenue by Major Products/Services Technology development $ 1,776 $ 1,597 Test, measurement and sensing systems 23,037 20,096 Other 232 788 Total $ 25,045 $ 22,481
Schedule of components of contract balances	The following table shows the components of our contract balances as of March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 (in thousands) Contract assets $ 9,001 $ 7,691 Contract liabilities 5,942 4,089 Net contract assets $ 3,059 $ 3,602

Basis of Presentation and Sig_4

Basis of Presentation and Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2023 segment
Debt Instrument [Line Items]
Number of reportable segments	1
SOFR | PNC Bank Facility | Minimum | Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.75%
SOFR | PNC Bank Facility | Maximum | Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	2.75%

Basis of Presentation and Sig_5

Basis of Presentation and Significant Accounting Policies - Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (in shares)	471,000	903,000
Restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (in shares)	1,177,000	1,179,000

Intangible assets, net - Summar

Intangible assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 33,162	$ 32,969
Accumulated amortization	(15,037)	(14,219)
Total	18,125	18,750
Patent costs
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	9,279	9,086
Accumulated amortization	$ (4,416)	(4,128)
Patent costs | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	1 year
Patent costs | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	5 years
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 15,821	15,924
Accumulated amortization	$ (7,522)	(6,830)
Developed technology | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	5 years
Developed technology | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	10 years
In-process research and development
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 2,631	2,631
Accumulated amortization	(1,519)	(1,763)
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	4,149	4,117
Accumulated amortization	$ (575)	(574)
Customer relationships | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	5 years
Customer relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	15 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 864	880
Accumulated amortization	$ (587)	(586)
Trade names | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	3 years
Trade names | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	5 years
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 418	331
Accumulated amortization	$ (418)	$ (338)
Backlog | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	1 year
Backlog | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	3 years

Intangible assets, net - Additi

Intangible assets, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 992	$ 821

Intangible assets, net - Estima

Intangible assets, net - Estimated Aggregate Amortization (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (remaining 9 months)	$ 2,952
2024	3,283
2025	2,954
2026	2,808
2027	2,030
2028 & beyond	4,098
Total	$ 18,125	$ 18,750

Goodwill (Details)

Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 26,927
Foreign currency translation	281
Ending balance	$ 27,208

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Finished goods	$ 9,388	$ 9,930
Work-in-process	5,614	3,113
Raw materials	24,673	23,539
Total inventory	$ 39,675	$ 36,582

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued compensation	$ 9,233	$ 8,962
Accrued professional fees	820	720
Accrued income tax	3,205	3,788
Current portion of finance lease liability	50	50
Accrued interest	62	64
Accrued liabilities - other	2,903	3,110
Total accrued and other current liabilities	$ 16,273	$ 16,694
Finance lease, liability, current, statement of financial position [extensible list]	Total accrued and other current liabilities	Total accrued and other current liabilities

Debt - Long Term Debt (Details)

Debt - Long Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total	$ 25,230	$ 23,226
Less: Current portion of long-term debt obligations	(2,750)	(2,500)
Long-term debt obligations	22,480	20,726
Term Loan
Debt Instrument [Line Items]
Net of debt issuance costs	$ 70	$ 74
Debt instrument, stated percentage	7.19%	6.65%
Total	$ 18,430	$ 18,926
Revolving Loan
Debt Instrument [Line Items]
Debt instrument, stated percentage	7.19%	6.65%
Total	$ 6,800	$ 4,300

Debt - Additional Information (

Debt - Additional Information (Details) - PNC Bank Facility - USD ($)		3 Months Ended
	Jan. 03, 2023	Mar. 31, 2023
Term Loan | SOFR | Minimum
Debt Instrument [Line Items]
Variable basis rate		1.75%
Term Loan | SOFR | Maximum
Debt Instrument [Line Items]
Variable basis rate		2.75%
Loan Modification Agreement | Revolving Loan
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 15,000,000
Line of credit facility, remaining borrowing capacity		$ 8,200,000
Repayments of lines of credit	$ 13,700,000
Commitment fee percentage	0.20%
Loan Modification Agreement | Revolving Loan | SOFR
Debt Instrument [Line Items]
Variable basis rate	0.10%
Loan Modification Agreement | Revolving Loan | SOFR | Minimum
Debt Instrument [Line Items]
Variable basis rate	1.75%
Loan Modification Agreement | Revolving Loan | SOFR | Maximum
Debt Instrument [Line Items]
Variable basis rate	2.75%
Loan Modification Agreement | Term Loan
Debt Instrument [Line Items]
Debt, face amount	$ 20,000,000
Line of credit facility, remaining borrowing capacity	$ 12,500,000
Loan Modification Agreement | Term Loan | SOFR
Debt Instrument [Line Items]
Variable basis rate	0.10%
Loan Modification Agreement | Term Loan | SOFR | Minimum
Debt Instrument [Line Items]
Variable basis rate	1.75%
Loan Modification Agreement | Term Loan | SOFR | Maximum
Debt Instrument [Line Items]
Variable basis rate	2.75%
Loan Modification Agreement | Term Loan | Period 1
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	10%
Loan Modification Agreement | Term Loan | Period 2
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	15%
Loan Modification Agreement | Term Loan | Period 3
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	15%
Loan Modification Agreement | Term Loan | Period 4
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	20%
Loan Modification Agreement | Term Loan | Period 5
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	15%

Debt - Maturities (Details)

Debt - Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023 (remaining 9 months)	$ 2,000
2024	3,000
2025	3,500
2026	4,000
2027	12,800
Total maturities	25,300
Less: deferred issuance costs	(70)
Total	$ 25,230	$ 23,226

Capital Stock and Share-Based_2

Capital Stock and Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 0.1	$ 0.2
Stock-based compensation expense not yet recognized	$ 0.2
Weighted average remaining service period	1 year 7 months 6 days
Restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 0.7	$ 0.7
Stock-based compensation expense not yet recognized	$ 6.7
Weighted average remaining service period	1 year 4 months 24 days
RSUs granted (in shares)	280,050	255,842
RSUs granted (in dollars per share)	$ 8.36
Restricted stock units (RSUs) | Non-Employee Director Deferred Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	7,397	8,436
RSUs granted (in dollars per share)	$ 8.99	$ 8.46
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 0.1	$ 0.1

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 25,045	$ 22,481
Technology development
Disaggregation of Revenue [Line Items]
Revenue	1,776	1,597
Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Revenue	23,037	20,096
Other
Disaggregation of Revenue [Line Items]
Revenue	232	788
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue	22,027	18,609
Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Revenue	3,018	3,872
Fixed-price contracts
Disaggregation of Revenue [Line Items]
Revenue	24,169	21,853
Cost-type contracts
Disaggregation of Revenue [Line Items]
Revenue	876	628
Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Revenue	1,969	1,635
U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Revenue	10,938	8,881
Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Revenue	12,138	11,965
United States
Disaggregation of Revenue [Line Items]
Revenue	12,907	10,516
Asia
Disaggregation of Revenue [Line Items]
Revenue	3,988	4,830
Europe
Disaggregation of Revenue [Line Items]
Revenue	6,314	4,907
Canada, Central and South America
Disaggregation of Revenue [Line Items]
Revenue	1,449	2,228
All Others
Disaggregation of Revenue [Line Items]
Revenue	$ 387	$ 0

Revenue Recognition - Contract

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Revenue recognized	$ 700
Contract assets	9,001	$ 7,691
Contract liabilities	5,942	4,089
Net contract assets	$ 3,059	$ 3,602

Revenue Recognition - Performan

Revenue Recognition - Performance Obligation Amount (Details) $ in Millions	Mar. 31, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 51.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, percentage	79%
Remaining performance obligation, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, percentage	17%
Remaining performance obligation, period	1 year

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	23.50%	45.40%

Commitments and Contingencies (

Commitments and Contingencies (Details) - Tunable lasers - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Loss Contingencies [Line Items]
Non-cancelable purchase order commitment	$ 0.6	$ 4.6	$ 3.1
Non-cancelable purchase order commitment remained	$ 6.7
Minimum
Loss Contingencies [Line Items]
Non-cancelable purchase order delivery period (in months)	12 months
Maximum
Loss Contingencies [Line Items]
Non-cancelable purchase order delivery period (in months)	15 months