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OPXS' Q2 Earnings Down Y/Y Amid Delayed Contract Awards
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Shares of Optex Systems Holdings, Inc. (OPXS - Free Report) have gained 5.6% since the company reported results for the quarter ended March 29, 2026, outperforming the S&P 500 Index’s 0.1% move during the same period. However, over the past month, the stock has declined 5.1%, lagging the S&P 500’s 5% gain.
Optex reported second-quarter fiscal 2026 net income of 19 cents per share, which declined from 26 cents per share in the prior-year period.
Revenues of $9.6 million denoted a 10.3% decrease from $10.7 million in the year-ago quarter.
Quarterly net income fell 24.2% year over year to $1.3 million compared with $1.8 million in the prior-year period. Operating income declined 25.6% to $1.7 million, while adjusted EBITDA decreased 16.4% to $2 million. Despite the revenue pressure, gross profit edged up 0.9% to $3.4 million, and gross margin expanded to 35.2% from 31.3% a year earlier.
Optex Systems Holdings, Inc. Price, Consensus and EPS Surprise
The company attributed the softer first-half revenue performance 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. Management indicated that these delays affected order timing rather than underlying demand.
Even with lower sales, Optex improved profitability at the gross margin level. The company said that the margin expansion reflected the completion of legacy loss-making contracts, improved pricing on newer programs and operational efficiencies across both operating segments. The quarterly cost of sales fell to $6.2 million from $7.4 million a year ago, helping offset the decline in revenues.
OPXS: Operating Expenses and Investments
General and administrative expenses rose sharply during the quarter to $1.7 million from $1.1 million in the year-ago period. Optex said that the increase was driven primarily by leadership transition costs, higher stock compensation expense, increased research and development spending and investments tied to Cybersecurity Maturity Model Certification compliance and internal systems upgrades.
CEO Chad George said that the company remains positioned to deliver one of its strongest revenue years while continuing to improve gross margins through operational efficiencies and disciplined cost management. He added that increased investment in research and development is intended to support long-term growth and profitability.
Orders, Liquidity and Balance Sheet Position of OPXS
Optex reported that new orders increased 3.8% year over year to $16.3 million during the first six months of fiscal 2026, signaling stable demand trends despite delays in government contract timing. Working capital rose to $22.6 million.
The company ended the quarter with cash and cash equivalents of $4.2 million, down from $6.4 million at the end of fiscal 2025. Inventory increased to $15.6 million from $14.3 million, while accounts receivable rose to $5.7 million from $4.6 million. Total liabilities declined to $4.6 million from $5.8 million at the end of fiscal 2025. Optex also noted that it had no outstanding debt under its revolving credit facility.
OPXS’ Fiscal 2026 Outlook
Management expects stronger revenue performance in the second half of fiscal 2026 based on its funded backlog and anticipated contract awards. The company projected full-year fiscal 2026 revenues in the range of $43-$45 million compared with $41.3 million in fiscal 2025.
Optex also forecast full-year adjusted EBITDA between $7.5 million and $8.5 million versus $8 million in fiscal 2025. During the first six months of fiscal 2026, the company invested approximately $0.8 million in capital equipment and disclosed an additional $1.1 million in committed capital expenditures aimed at expanding manufacturing capacity, supporting new product lines and enhancing rapid prototyping and research capabilities.
Other Developments at OPXS
Management highlighted ongoing investments in manufacturing expansion, cybersecurity compliance and research capabilities as part of its broader operational and growth strategy.
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OPXS' Q2 Earnings Down Y/Y Amid Delayed Contract Awards
Shares of Optex Systems Holdings, Inc. (OPXS - Free Report) have gained 5.6% since the company reported results for the quarter ended March 29, 2026, outperforming the S&P 500 Index’s 0.1% move during the same period. However, over the past month, the stock has declined 5.1%, lagging the S&P 500’s 5% gain.
Optex reported second-quarter fiscal 2026 net income of 19 cents per share, which declined from 26 cents per share in the prior-year period.
Revenues of $9.6 million denoted a 10.3% decrease from $10.7 million in the year-ago quarter.
Quarterly net income fell 24.2% year over year to $1.3 million compared with $1.8 million in the prior-year period. Operating income declined 25.6% to $1.7 million, while adjusted EBITDA decreased 16.4% to $2 million. Despite the revenue pressure, gross profit edged up 0.9% to $3.4 million, and gross margin expanded to 35.2% from 31.3% a year earlier.
Optex Systems Holdings, Inc. Price, Consensus and EPS Surprise
Optex Systems Holdings, Inc. price-consensus-eps-surprise-chart | Optex Systems Holdings, Inc. Quote
OPXS’ Margin Expansion Amid Revenue Pressure
The company attributed the softer first-half revenue performance 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. Management indicated that these delays affected order timing rather than underlying demand.
Even with lower sales, Optex improved profitability at the gross margin level. The company said that the margin expansion reflected the completion of legacy loss-making contracts, improved pricing on newer programs and operational efficiencies across both operating segments. The quarterly cost of sales fell to $6.2 million from $7.4 million a year ago, helping offset the decline in revenues.
OPXS: Operating Expenses and Investments
General and administrative expenses rose sharply during the quarter to $1.7 million from $1.1 million in the year-ago period. Optex said that the increase was driven primarily by leadership transition costs, higher stock compensation expense, increased research and development spending and investments tied to Cybersecurity Maturity Model Certification compliance and internal systems upgrades.
CEO Chad George said that the company remains positioned to deliver one of its strongest revenue years while continuing to improve gross margins through operational efficiencies and disciplined cost management. He added that increased investment in research and development is intended to support long-term growth and profitability.
Orders, Liquidity and Balance Sheet Position of OPXS
Optex reported that new orders increased 3.8% year over year to $16.3 million during the first six months of fiscal 2026, signaling stable demand trends despite delays in government contract timing. Working capital rose to $22.6 million.
The company ended the quarter with cash and cash equivalents of $4.2 million, down from $6.4 million at the end of fiscal 2025. Inventory increased to $15.6 million from $14.3 million, while accounts receivable rose to $5.7 million from $4.6 million. Total liabilities declined to $4.6 million from $5.8 million at the end of fiscal 2025. Optex also noted that it had no outstanding debt under its revolving credit facility.
OPXS’ Fiscal 2026 Outlook
Management expects stronger revenue performance in the second half of fiscal 2026 based on its funded backlog and anticipated contract awards. The company projected full-year fiscal 2026 revenues in the range of $43-$45 million compared with $41.3 million in fiscal 2025.
Optex also forecast full-year adjusted EBITDA between $7.5 million and $8.5 million versus $8 million in fiscal 2025. During the first six months of fiscal 2026, the company invested approximately $0.8 million in capital equipment and disclosed an additional $1.1 million in committed capital expenditures aimed at expanding manufacturing capacity, supporting new product lines and enhancing rapid prototyping and research capabilities.
Other Developments at OPXS
Management highlighted ongoing investments in manufacturing expansion, cybersecurity compliance and research capabilities as part of its broader operational and growth strategy.