OPXS · Optex Systems Holdings, Inc

Optex Systems Holdings reported fiscal Q2 2026 results for the quarter ended March 29, 2026. Revenue declined 10.3% year-over-year to $9.6 million, primarily due to the federal government shutdown and delayed approval of the fiscal 2026 appropriations bill, which postponed several contract awards into the second half of the fiscal year. Despite lower revenue, gross profit increased slightly to $3.4 million, and gross margin improved significantly to 35.2% from 31.3% in the prior year period. Management attributed the margin expansion to the completion of legacy loss-making contracts, improved pricing on newer programs, and operational efficiencies across both operating segments. Operating income decreased 25.6% to $1.7 million, as general and administrative expenses rose to $1.7 million from $1.1 million, driven by leadership transition costs, stock compensation expense, higher R&D spending, and investments related to CMMC compliance and internal systems upgrades. Net income fell 24.2% to $1.3 million, or $0.19 per diluted share, compared to $1.8 million, or $0.26 per diluted share last year. Adjusted EBITDA declined 16.4% to $2.0 million. On a positive note, new orders increased 3.8% year-over-year to $16.3 million for the first six months, and working capital improved to $22.6 million. The company ended the quarter with $4.2 million in cash and no outstanding debt under its revolving credit facility. Looking ahead, Optex expects stronger revenue performance in the second half of fiscal 2026, with full-year revenue guidance of $43-$45 million (versus $41.3 million in fiscal 2025) and Adjusted EBITDA guidance of $7.5-$8.5 million (versus $8.0 million in fiscal 2025). The company also noted capital expenditures of $0.8 million in the first half, with an additional $1.1 million committed to expanding manufacturing capacity and supporting new product lines.