0001493152-25-011854
SEC filingKopin Corporation's Q2 FY2025 revenue declined 31% YoY to $8.5M, driven by lower defense product sales, while net loss narrowed to $5.2M from $5.9M, with ongoing litigation and going concern uncertainty.
Kopin Corporation's second quarter of fiscal 2025 (ended June 28, 2025) showed a significant decline in revenue compared to the same period last year. Total revenue was $8.5 million, down 31% from $12.3 million in Q2 FY2024. This decline was primarily driven by a 40% decrease in defense product revenues, which fell to $6.2 million from $10.4 million, due to lower sales of products used in thermal weapon sights and pilot helmets. Industrial revenue increased 68% to $1.0 million, driven by a public safety application, while medical revenue of $0.2 million represented initial shipments of a head-mounted medical product. Research and development revenue decreased 22% to $0.9 million, and license and royalty revenue fell 57% to $0.05 million.
Gross profit was $0.4 million, down 88% from $2.4 million in Q2 FY2024, with gross margin contracting to 5.1% from 21.4%. The decline was attributed to lower unit volume leading to under-absorption of overhead, partially offset by decreases in excess and obsolete reserves and warranty reserves. Operating loss was $5.5 million, essentially flat compared to $5.5 million in Q2 FY2024, as lower revenue was offset by a significant reduction in selling, general and administrative expenses (down 33% to $4.9 million) primarily due to lower legal fees. Net loss improved to $5.2 million from $5.9 million, with basic and diluted EPS of -$0.03 compared to -$0.05 in the prior year.
As of June 28, 2025, Kopin had cash, cash equivalents, restricted cash, and marketable securities of $27.8 million, down from $36.6 million at December 28, 2024. Working capital decreased to $11.2 million from $18.9 million. Total assets were $61.2 million, down from $70.8 million, primarily due to a $19.0 million decrease in marketable securities. Total liabilities were $45.1 million, down from $47.5 million, with current liabilities of $41.4 million. Stockholders' equity decreased to $16.0 million from $23.3 million, driven by the net loss and other comprehensive loss.
The company's liquidity position is under significant pressure. Management has concluded there is substantial doubt about the company's ability to continue as a going concern for twelve months from the issuance of these financial statements, citing net losses, negative cash flows from operations, and the pending BlueRadios litigation.
For the six months ended June 28, 2025, Kopin used $7.6 million in operating activities, compared to $6.2 million in the same period last year. The net loss of $8.3 million was partially offset by non-cash charges of $2.5 million (including $1.5 million in stock-based compensation, $0.4 million in depreciation, and $0.8 million in inventory provisions) and a $1.8 million net cash outflow from changes in operating assets and liabilities. Investing activities provided $17.9 million, primarily from net sales of marketable securities ($18.8 million) and proceeds from the sale of an equity investment ($0.3 million), partially offset by capital expenditures of $1.2 million. Financing activities used $0.1 million for tax withholding obligations related to restricted stock. Free cash flow (operating cash flow minus capex) was -$8.8 million.
Management's discussion focuses on the decline in defense revenue, the impact of semiconductor component shortages, and the ongoing BlueRadios litigation. The company is implementing plans to reduce cash outflows, including operational improvements and curtailment of certain development programs. Management is also considering raising additional capital through equity offerings, collaborations, licensing arrangements, or debt issuances. A subsequent event on August 8, 2025, involved a $15 million strategic investment from Theon International Plc, which includes $8 million for a 49% interest in Kopin Europe Ltd. and $7 million for Series A Convertible Preferred Stock. The company expects capital expenditures of $1.0 million to $2.0 million in 2025.
Kopin operates as a single reportable segment. Revenue is disaggregated by geographic location and display application. The United States accounted for 97% of total revenue in Q2 FY2025. The company's products are used in defense, industrial, medical, and consumer applications. The company has a significant amount of contract assets ($6.8 million) and contract liabilities ($0.3 million) related to its contracts with the U.S. government. Stock-based compensation expense was $0.7 million in Q2 FY2025. The company has $24.8 million in accrued litigation damages related to the BlueRadios case. The company has $2.0 million in accrued warranty liabilities. The company has $2.2 million in operating lease liabilities. The company has $1.6 million in accumulated other comprehensive income. The company has $410.3 million in accumulated deficit.