Optex Systems Holdings Reports Revenue Decline in Third Quarter and Nine Months Ended June 28, 2026

Optex Systems Holdings, Inc. reported its financial results for the third quarter and nine months ended June 28, 2026, revealing a decline in revenue and net income compared to the same period in the previous fiscal year. The company generated revenue of $9.7 million for the third quarter, down 12.4% from $11.1 million in the same quarter of 2025. For the nine-month period, revenue totaled $28.5 million, a decrease of 5.1% from $30.0 million in the prior year. Net income for the third quarter was $1.3 million, a decline from $1.5 million in the previous year, while net income for the nine months was $2.9 million, down from $4.1 million.

The decrease in revenue and profitability can be attributed to several factors, including a reduction in sales to U.S. government agencies and defense contractors, which accounted for 69% and 21% of total revenue, respectively. The company also noted increased costs associated with production and supply chain challenges, which contributed to a rise in the cost of sales to $6.4 million for the third quarter, compared to $7.9 million in the same quarter of 2025. General and administrative expenses also increased significantly, rising to $1.9 million for the third quarter from $1.3 million in the prior year.

Operationally, Optex Systems Holdings maintained a workforce of 140 full-time equivalent employees as of June 28, 2026, consistent with the previous year. The company continues to focus on its core business of manufacturing optical sighting systems for military applications, with approximately 95% of its revenue derived from domestic customers. The company operates from facilities in Dallas and Richardson, Texas, totaling nearly 94,000 square feet. Despite the challenges faced, the company reported a gross profit of $3.3 million for the third quarter, reflecting a gross margin of 34.2%, slightly improved from 28.5% in the previous year.

Looking ahead, Optex Systems Holdings remains focused on strategic initiatives to enhance its market position, including potential product launches and improvements in operational efficiency. The company is also exploring opportunities for geographic expansion, particularly in foreign military markets, which currently represent a small portion of its revenue. Management expressed optimism about future growth, citing ongoing contracts and a strong pipeline of orders, although they acknowledged the need to navigate current market conditions and cost pressures effectively.