Optex fiscal second-quarter revenue drops 10.3% to $9.6 million

Optex Systems (NASDAQ:OPXS) posted fiscal second-quarter revenue of $9.6 million, a 10.3% decrease compared to the $10.7 million reported in the prior-year period.

Management attributed the decline to the federal government shutdown and subsequent delays in the fiscal 2026 appropriations bill, which postponed several key contract awards into the second half of the year.

Despite the top-line contraction, quarterly net income reached $1.3 million, or $0.19 per diluted share, while gross margins jumped to 35.2%, up from 31.3% a year ago.

The company demonstrated significant operational leverage during the quarter, with six-month adjusted EBITDA reaching $2.8 million.

The margin improvement was primarily driven by the conclusion of legacy loss-making contracts and the ramp-up of newer sighting programs featuring improved pricing structures.

To date, new orders have surged to $16.3 million, a 3.8% year-over-year increase, bringing the company's total funded backlog to near-record levels.

Following the clearing of federal funding bottlenecks, Optex has raised its full-year 2026 guidance.

The company now anticipates annual revenue between $43 million and $45 million—surpassing the $41.3 million achieved in fiscal 2025—and adjusted EBITDA in the range of $7.5 million to $8.5 million.

To support this growth, the firm invested $0.8 million in capital equipment during the first half of the year, with an additional $1.1 million committed to expanding manufacturing capacity for its Applied Optics Center (AOC) segment.

Meanwhile, Optex maintains a lean financial position, ending the quarter with $4.2 million in cash and zero debt on its revolving credit facility.

Working capital increased to $22.6 million, providing the liquidity necessary to fund the anticipated production ramp-up in the third and fourth quarters.