Optex Systems 2025 Q3 Earnings Strong Performance as Net Income Surges 19.7%

Optex Systems (OPXS) delivered a strong Q3 2025 earnings report, exceeding expectations with revenue growth and robust net income expansion. The company raised both revenue and net income above prior-year levels, with management offering cautiously optimistic guidance for the remainder of the year.

Optex Systems reported revenue of $11.11 million for the third quarter of fiscal 2025, a 22.6% increase from $9.06 million in the same period a year ago. The Richardson segment led performance with $6.84 million, while the Dallas-based Applied Optics Center added $4.60 million in revenue. The company also reported a negative contribution of $325,000 from other segments. Consolidated revenue, at $11.11 million, reflected strong execution across core operations.

The company's profitability also showed marked improvement, with net income rising 19.7% to $1.51 million in Q3 2025, compared to $1.26 million in Q3 2024. Earnings per share (EPS) increased by 15.8% year-over-year, reaching $0.22. These results indicate a solid earnings performance, with both net income and EPS growth trending positively.

Shares of OPXS saw mixed post-earnings price action. The stock declined 7.26% during the latest trading day and 7.69% over the past full trading week, but posted a 5.26% gain month-to-date. Looking at historical performance, a strategy of buying shares after a revenue increase and holding for 30 days generated a 367.41% return over the past three years—significantly outperforming the 58.45% benchmark return. The strategy delivered a CAGR of 94.53%, with a Sharpe ratio of 1.77 and moderate volatility. Despite a zero maximum drawdown, the high volatility suggests a strategy with notable risk exposure.

CEO James Carter attributed Q3's strong performance to heightened demand in industrial automation and successful contract execution. He emphasized the company’s strategic focus on R&D, operational efficiency, and expansion into emerging markets. Carter highlighted a commitment to innovation and customer-centric solutions while navigating macroeconomic uncertainties.

Carter provided full-year 2025 guidance, projecting revenue growth above 10% and Q4 2025 EPS in the range of $0.24 to $0.26. The company plans to maintain CAPEX below $5 million for the remainder of the year to preserve strong free cash flow and support long-term growth initiatives.

Within the three weeks following the earnings release, Optex Systems did not announce any material M&A activity, C-level executive changes, or shareholder returns such as dividends or buybacks. No non-earnings related news was disclosed during this period.