Shares of Optex Systems Holdings, Inc. (OPXS Quick QuoteOPXS - Free Report) have declined 1.4% since the company reported its earnings for the fiscal year ended Sept. 28, 2025. This compares to the S&P 500 index’s 0.5% growth over the same time frame. Over the past month, the stock has gained 4% compared with the S&P 500’s 1.7% increase.

Optex Systems posted earnings per share of 74 cents for the fiscal year, which rose from 55 cents in the prior fiscal year. 

Revenues rose to $41.3 million from $34 million, highlighting a 21.6% year-over-year increase.

The company’s gross profit improved by 26.5%, climbing to $12.1 million from $9.5 million, while gross margin also expanded from 28% to 29.2%.

Operating income surged 47.9% to $7.1 million compared to $4.8 million a year earlier, reflecting improved operational efficiency and product mix. Net income applicable to common shareholders grew 36.6% year over year, reaching $5.1 million, up from $3.8 million in fiscal 2024.

Optex Systems Holdings, Inc. Price, Consensus and EPS Surprise

Optex Systems Holdings, Inc. price-consensus-eps-surprise-chart | Optex Systems Holdings, Inc. Quote

Other Key Business Metrics

The company's adjusted EBITDA, a non-GAAP metric, increased 40.1% to $8 million from $5.7 million in the prior year. This improvement was primarily attributed to higher revenues and gross profits. Operating cash flow was strong at $6.9 million, driven by higher net income and non-cash adjustments.

Optex Systems' order intake during the year was slightly down at $36.2 million, a 0.5% decline compared to $36.4 million in the previous fiscal period. Management cited delays in the award of key defense contracts — specifically the ARC III Abrams replenishment and BNVG Night Vision Goggle programs — as contributing factors. These delays, alongside the U.S. federal government shutdown from Oct. 1 to Nov. 12, 2025, and subsequent continuing resolution (CR) through Jan. 30, 2026, caused a slowdown in new contract awards.

The company's working capital improved significantly to $21.1 million as of the fiscal year-end, up from $15.1 million the previous year. Cash and cash equivalents grew to $6.4 million, while the company cleared its outstanding balance on a $3 million revolving credit line, showing a stronger liquidity position.

Management Commentary

CEO Danny Schoening characterized fiscal 2025 as an “exciting year” for Optex Systems, emphasizing the 21.6% revenue growth and operational gains. He credited increased production throughput, especially a 56% boost in periscope line production at the Richardson segment, and elevated demand for military products at the Applied Optics Center (AOC). Schoening also highlighted progress in reducing net inventory, aligning with earlier strategic commitments.

Factors Influencing the Headline Numbers

Revenue growth was broad-based, with the Optex Richardson segment experiencing a 30.8% jump in sales, and the AOC segment seeing an 11.1% increase. The production gains at Richardson stemmed from higher throughput, while AOC benefited from military demand, albeit slightly tempered by weaker demand for optical assemblies.

Gross margin expansion was aided by better absorption of fixed overheads due to higher revenues, alongside a favorable product mix. However, net income gains were partially offset by a $0.8 million impairment on the Speedtracker product line and a $0.2 million rise in federal income tax expense.

Forward View

Management cautioned that continued funding delays and uncertainty surrounding U.S. government appropriations may affect revenue performance from the second quarter onward. These macro uncertainties could impact both order flow and revenue recognition in upcoming quarters.

However, Optex Systems also indicated plans to invest $2.4 million in capital expenditures over the next 12 months to upgrade equipment and develop new capabilities, particularly to support new product lines at AOC and enhance R&D and prototyping at Richardson. This suggests a long-term growth mindset despite near-term headwinds.

Other Developments

On the leadership front, Optex Systems announced that CEO Danny Schoening will resign effective Dec. 20, 2025. He will remain chairman of the board and serve as the company’s facilities security officer. President Chad George will take over as CEO on the effective date. George brings two decades of experience in defense operations and supply chain management, with prior roles at Leonardo DRS and Raytheon.

The transition marks a notable leadership shift as the company continues its strategic expansion and seeks to capitalize on its strengthened operational footing.