Precision Optics Corporation Reports 59.2% Revenue Growth in Q1 Fiscal 2026

Precision Optics Corporation, Inc. reported a significant increase in revenue for the first quarter of fiscal year 2026, with total revenues reaching $6.68 million, up 59.2% from $4.20 million in the same period last year. This growth was primarily driven by a nearly 300% increase in revenue from Systems Manufacturing, which accounted for approximately 72.9% of total sales. However, the company experienced a decline in revenues from Engineering Design Services, which fell by 59.3%, attributed to decreased demand and the transfer of its single-use cystoscope program to Systems Manufacturing. Gross profit for the quarter decreased to $946,358, resulting in a gross margin of 14.2%, down from 26.6% in the prior year, largely due to lower utilization of engineering resources and manufacturing challenges.

In terms of expenses, Precision Optics reported a 13.6% increase in Selling, General and Administrative (SG&A) expenses, totaling $2.23 million, driven by higher stock compensation and consulting costs. Research and Development (R&D) expenses decreased to $311,840, reflecting a focus on product improvements and new technology development. The company reported a net loss of $1.64 million for the quarter, compared to a loss of $1.31 million in the same period last year, with a loss per share of $0.21, consistent with the previous year.

The company's balance sheet as of September 30, 2025, showed total assets of $22.38 million, an increase from $19.79 million at the end of the previous fiscal year. Current liabilities rose to $7.62 million, up from $6.15 million, primarily due to increased accounts payable and contract liabilities. Stockholders' equity decreased to $10.92 million from $12.26 million, reflecting the net loss incurred during the quarter. The company’s cash and cash equivalents also declined to $1.39 million from $1.77 million, indicating a need for careful cash management moving forward.

Operationally, Precision Optics has been focusing on expanding its manufacturing capabilities and enhancing its product offerings in both the medical and defense/aerospace sectors. The company has integrated its operations following the acquisitions of Ross Optical Industries and Lighthouse Imaging, which have bolstered its engineering and manufacturing capabilities. The company anticipates that these strategic developments will support future growth, although it acknowledges the potential need for external financing to meet working capital requirements in the near term.

Looking ahead, Precision Optics remains optimistic about its growth trajectory, driven by increased customer demand and the scaling of its manufacturing capabilities. However, the company also recognizes the challenges posed by market conditions and operational delays, particularly in its MicroOptics Lab segment. Management believes that the combination of available cash, operational cash flow, and potential access to credit will be sufficient to support its business needs for at least the next 12 months, although it may need to explore additional financing options to ensure liquidity.