10-Q · June 8, 2026
Optical Cable Corporation (OCC) reported significant improvements in its financial performance for Q2 FY2026, with revenue increasing 26.6% year-over-year to $22.2 million. The company achieved a net income of $1.1…
Earnings analysis · 10-Q
OCC earnings analysis
Filed September 9, 2026 · Our reading of the company's report
The latest report
OCC delivered a strong Q3, with revenue up 22.0% year over year, gross margin expanding to 37.4%, operating margin reaching approximately 8.7%, and diluted EPS increasing to $0.21 from $0.04. Enterprise, data center,…
Read full summary
OCC delivered a strong Q3, with revenue up 22.0% year over year, gross margin expanding to 37.4%, operating margin reaching approximately 8.7%, and diluted EPS increasing to $0.21 from $0.04. Enterprise, data center, and specialty markets supported growth, while backlog increased to $13.5 million. However, cash conversion remains weak as nine-month operating cash flow fell to $147,635 amid higher inventory and receivables, and liquidity depends materially on a $6.3 million Revolver with a July 24, 2027 maturity.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.21
- Segment
- Single reportable segment: fiber optic and copper data communication cabling and connectivity solutions; Q3 net sales $24,297,022, including United States $19,187,791 and outside the United States $5,109,231.
What stood out
-
Revenue Accelerated
Q3 net sales increased 22.0% year over year to $24,297,022 from $19,916,919 and rose 9.4% sequentially from $22.2 million. Management cited increased sales in enterprise, data center, and specialty markets.
-
Gross Margin Expanded
Gross profit rose 43.9% year over year to $9,094,708, while gross margin expanded to 37.4% from 31.7% a year ago and 34.2% in Q2. Management attributed the improvement primarily to higher volumes and manufacturing operating leverage.
-
Operating Leverage Improved
Operating income increased to $2,111,632 from $562,474, lifting operating margin to approximately 8.7% from 2.8% in the prior-year quarter and 5.9% in Q2. The $2.8 million gross-profit increase more than offset the $1.2 million increase in SG&A.
-
EPS More Than Doubled
Net income increased to $1,858,117, or $0.21 per diluted share, from $301,886, or $0.04 per share, in Q3 2025 and $0.12 per share in Q2 2026.
-
Backlog Remains Elevated
Sales order backlog/forward load reached $13.5 million at July 31, 2026, up from $13.3 million at April 30, 2026 and $7.3 million at October 31, 2025.
-
Year-to-Date Profitability Turned
Nine-month revenue increased 18.3% to $62,941,623, while operating income improved to $3,207,203 from an operating loss of $719,080. Nine-month gross margin rose to 35.0% from 30.6%.
What to watch
-
Working Capital Absorbs Cash
Operating cash flow weakened to $147,635 for the first nine months from $616,745 a year earlier despite $2,515,405 of net income. Inventory increased to $22,938,467 from $19,801,754 and trade receivables increased to $11,842,621 from $10,280,616, consuming working capital.
-
Refinancing and Liquidity Risk
The Company had $6.3 million outstanding on its Revolver and $6.6 million of available credit at July 31, 2026, with the facility maturing July 24, 2027. The Revolver contains a subjective acceleration clause allowing the lender to declare a default upon a material adverse change, and cash balances were only $297,193.
-
Redeemable Stock Obligation
The redemption value of 642,199 redeemable restricted shares increased to $9.5 million from $5.1 million at October 31, 2025, reducing retained earnings by $4.5 million. Lightera's Put Option becomes exercisable on July 7, 2027, subject to specified conditions, and the Company may be required to repurchase shares or assist with their disposition.
-
Customer Concentration
Customer concentration remains material: one distributor represented 12.3% of Q3 sales and 14.8% of nine-month sales, while another distributor represented 10.7% of Q3 sales. Results also remain exposed to timing of large orders and purchases by key customers.
-
Debt and Interest Expense
Interest-bearing borrowings remained significant, including $6,329,173 on the Revolver and $2,639,815 on the Term Loan at July 31, 2026. The Revolver rate was 8.25%, while the Term Loan carries a fixed 6.5% rate for 60 months.
-
Cost and Supply-Chain Exposure
Management identified ongoing exposure to raw-material and labor costs, supply-chain constraints, tariffs, transportation costs, higher interest rates, and technology or competitive changes. The filing states that fiscal-year 2026 capital expenditures were budgeted at $1.0 million, with expenditures funded through working capital, operating cash flow, or Revolver borrowings.
Management's outlook
No explicit numeric revenue or EPS guidance was provided. Management said it continues to see market growth opportunities, particularly in enterprise, data center, and specialty markets; sales order backlog/forward load was $13.5 million at July 31, 2026. Management expects future operating cash flow, cash on hand, and the Revolver or refinanced Revolver to fund operations for at least the next twelve months. Fiscal 2026 capital expenditure budgeting included $1.0 million.
Earlier filings 4
10-Q · March 10, 2026
OCC reported revenue of $16.43M in Q1 FY2026, up $0.69M (4.4%) versus Q1 FY2025, with gross margin expanding to 32.7% and operating loss narrowing to $0.21M. GAAP diluted loss per share improved to $(0.05) from $(0.14)…
10-K · December 18, 2025
Optical Cable Corporation (OCC) positions itself as a vertically integrated supplier of fiber optic and copper cabling and connectivity solutions for enterprise, data center and harsh-environment markets, and on July 7,…
10-K · December 23, 2024
OCC positions itself as a diversified, U.S.-based manufacturer of fiber optic and copper cabling and connectivity solutions for enterprise, harsh-environment/specialty and wireless carrier markets, with ISO-certified…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.