10-Q · May 13, 2026
Precision Optics Corporation reported a strong performance for Q3 2026, with revenues soaring to $8.7 million, reflecting an impressive 108% increase year-over-year. Despite increased revenues, the company faced mixed…
Earnings analysis · 10-K
POCI earnings analysis
Filed September 28, 2026 · Our reading of the company's report
The latest report
Precision Optics delivered strong fiscal 2026 growth, with revenue up 65.2% to $31.5 million and Systems Manufacturing becoming the dominant business at $22.6 million. Operating losses and cash burn improved, but the…
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Precision Optics delivered strong fiscal 2026 growth, with revenue up 65.2% to $31.5 million and Systems Manufacturing becoming the dominant business at $22.6 million. Operating losses and cash burn improved, but the company remains unprofitable, with a $3.63 million net loss and negative operating cash flow of $1.55 million. The outlook is balanced by sharply higher customer concentration, a debt-covenant waiver replaced by a $2.0 million liquidity covenant, tariff exposure, and reliance on the March 2026 equity raise.
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.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
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
- $-0.43
What stood out
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Revenue growth accelerated sharply
Fiscal 2026 revenue increased 65.2% to $31,531,765 from $19,091,269, driven primarily by Systems Manufacturing revenue growth of 172.9% to $22,628,047 as the company scaled manufacturing capabilities and customer demand increased.
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Cystoscope program reached production
The single-use cystoscope program transitioned from Engineering Design Services to Systems Manufacturing, contributing to a 29.7% decline in engineering revenue to $3,473,640 but supporting a 172.9% increase in Systems Manufacturing revenue.
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Operating losses narrowed materially
Gross profit increased to $5,431,220 from $3,404,433, while operating loss narrowed to $3,508,608 from $5,551,291 and diluted loss per share improved to $0.43 from $0.85.
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Liquidity improved after equity raise
Operating cash use improved to $1,550,219 from $3,395,702, although the company still used cash in operations. Cash and equivalents increased to $9,841,142 from $1,773,735 after financing proceeds.
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Capital raised to fund expansion
The March 2026 public offering generated $10,630,678 of net proceeds from the issuance of 3,194,444 shares, supporting working capital and general corporate purposes; no equity securities were repurchased during fiscal 2026.
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Mix shifted toward manufacturing
Systems Manufacturing represented 71.8% of fiscal 2026 revenue, compared with 43.4% in fiscal 2025, while Ross Optical increased to 15.6% from 19.5% despite year-over-year growth of 31.7%.
What to watch
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Customer concentration intensified
Customer concentration increased materially: one customer represented approximately 41% of fiscal 2026 revenue and another 27%, versus 22% and 20% in fiscal 2025. Losing either customer could materially reduce revenue.
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Debt covenant waiver and liquidity test
The company did not meet its 1.20x debt-service-coverage-ratio covenant as of June 30, 2026. The lender waived compliance but replaced the covenant with a minimum liquidity requirement of $2.0 million and initially limited revolving availability to $750,000, subject to borrowing-base requirements.
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Tariffs threaten costs and supply chain
The filing newly emphasizes U.S. tariff and trade-policy risk: tariffs could increase cost of goods sold and disrupt overseas sourcing of specialized optical components. Fiscal 2026 results also included an $880,598 tariff refund receivable and a $558,266 liability for customer refunds, demonstrating material exposure to tariff-related accounting and cash flows.
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Continuing losses require funding
The company remains loss-making and may need additional capital: fiscal 2026 net loss was $3,629,891, operating cash use was $1,550,219, and management states that inability to secure capital could require curtailing R&D and reducing costs.
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Two businesses experienced sharp declines
MicroOptics Lab revenue declined 75.7% to $519,540 because of delays in new production orders from its primary defense-contractor customer, while Engineering Design Services declined 29.7% to $3,473,640 due partly to insufficient product-development engagements.
Management's outlook
No quantitative annual outlook was provided in the 10-K; outlook appears deferred to the earnings press release or call.
Earlier filings 4
10-Q · February 17, 2026
Precision Optics Corporation reported a substantial revenue increase of 62.8% year-over-year in Q2 2026, totaling $7.37 million; however, EPS declined to -0.23, reflecting ongoing operational challenges. The firm…
10-Q · November 13, 2025
Precision Optics Corporation reported a significant increase in revenue for Q4 2025, totaling $6.68 million, up 59.2% year-over-year from $4.20 million. However, the company continues to face profitability challenges,…
10-K · September 29, 2025
Precision Optics Corporation (POCI) reported a slight year-over-year revenue drop to $19.09 million for FY 2025, down 0.1% from FY 2024 while grappling with a substantial net loss of $5.78 million. The company…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.