Shares of Optex Systems Holdings (NASDAQ:OPXS) moved higher in pre-market trading on Tuesday after the defense optics manufacturer reported second-quarter fiscal 2026 earnings that came in ahead of analyst forecasts.
The stock gained 4.6% following the release of the results.
Adjusted earnings per share reached $0.19, surpassing market expectations, while quarterly revenue totaled $9.6 million. Revenue missed analyst estimates and declined 10.3% from the $10.7 million reported in the same quarter last year.
Margins Improve Despite Revenue Decline
Optex reported a notable improvement in profitability, with gross margin rising to 35.2% from 31.3% a year earlier.
The company said the margin expansion was driven by the completion of older low-margin contracts, stronger pricing on newer programs and continued operational efficiency improvements.
For the full fiscal 2026 year, Optex expects revenue to range between $43 million and $45 million. The midpoint of the guidance, $44 million, would represent growth compared with fiscal 2025 revenue of $41.3 million.
The company also forecast full-year adjusted EBITDA between $7.5 million and $8.5 million, versus $8.0 million recorded in fiscal 2025.
“Optex remains on track to deliver one of the strongest revenue years in the Company’s history, while continuing to improve gross margins through operational efficiencies and disciplined cost management,” said Chad George, CEO of Optex Systems Holdings, Inc.
Government Delays Weighed on First-Half Performance
Net income for the quarter came in at $1.3 million, or $0.19 per diluted share, compared with $1.6 million, or $0.23 per diluted share, in the prior-year period.
Adjusted EBITDA declined to $2.0 million from $2.4 million a year earlier, while revenue for the first six months of the fiscal year totaled $18.8 million, broadly unchanged from the previous year.
The company said first-half revenue was negatively impacted by the federal government shutdown and delays tied to approval of the fiscal 2026 appropriations bill, which pushed several contract awards into the second half of the year.
New orders for the first six months increased 3.8% year-on-year to $16.3 million, while working capital rose to $22.6 million.
Optex ended the quarter with $4.2 million in cash and no outstanding borrowings under its revolving credit facility.