Precision Optics Corporation Reports 10.3% Revenue Decline and Increased Net Loss for Nine Months Ending March 31, 2025

Precision Optics Corporation, Inc. reported a decline in financial performance for the nine months ending March 31, 2025, with total revenues of $12.9 million, down 10.3% from $14.4 million in the same period last year. The company experienced a significant drop in revenue from its Engineering Design Services, which fell by 38.2%, attributed to decreased demand and delays in project milestones. Conversely, revenue from Optical Components increased by 27.3%, driven by new defense and medical device programs. The company's gross profit also decreased, with a gross margin of 20.2% compared to 33.2% in the prior year, reflecting challenges in manufacturing yield and lower utilization of engineering resources.

In terms of profitability, Precision Optics reported a net loss of $4.4 million for the nine-month period, compared to a loss of $1.5 million in the previous year. The increase in losses was primarily due to higher operating expenses, which included a 6.5% rise in selling, general, and administrative expenses, totaling $5.9 million. Research and development expenses also increased significantly, reflecting the company's commitment to product improvements and new technology development. The company’s operating loss for the quarter was $2.0 million, compared to a loss of $258,527 in the same quarter last year.

Operationally, Precision Optics has made strategic moves to bolster its market position, including raising $6.3 million through two registered direct offerings in 2024 and 2025. The company’s total assets increased to $19.6 million as of March 31, 2025, up from $16.9 million a year earlier, largely due to increased cash reserves and inventory. The company’s employee headcount has also grown, reflecting its ongoing investment in talent to support its expanding product lines and operational capabilities.

Looking ahead, Precision Optics remains focused on enhancing its product offerings, particularly in the areas of micro-precision optics and single-use endoscopes, which are expected to grow at a faster rate than the overall market. The company anticipates that its ongoing projects will transition into production orders, contributing to revenue growth. However, management acknowledges the competitive landscape and potential challenges posed by market conditions, including tariff policies that could impact supply chain costs and availability. The company believes that its current cash position, along with its ability to raise funds, will be sufficient to meet its working capital needs for the next 12 months.