Precision Optics 2026 Q1 Earnings Record Revenue Amid Widening Losses

Precision Optics (POCI) reported a 59% year-over-year revenue surge to $6.68 million in Q1 2026, exceeding expectations. Despite the strong top-line growth, the company’s net loss widened to $1.64 million, and CEO Joseph Forkey reiterated full-year guidance of $25 million revenue and $0.5 million adjusted EBITDA.

Revenue

Systems Manufacturing led the charge, generating $4.87 million in revenue, while Engineering Design Services contributed $656,101. The Micro Optics Lab and Ross Optical Industries added $100,376 and $1.06 million, respectively, rounding out the total. The 59.2% year-over-year revenue increase reflects robust demand in aerospace and surgical robotics, though engineering revenue declined 59% due to lower project activity.

Earnings/Net Income

Despite the revenue growth, Precision Optics’ financial challenges persisted. The company maintained a GAAP EPS of -$0.21, while the net loss expanded by 24.8% to $1.64 million. This marks the fifth consecutive quarter of losses, underscoring ongoing profitability pressures despite strong sales.

Post-Earnings Price Action Review

A backtested strategy of purchasing POCI shares after a revenue drop and holding for 30 days has shown consistent returns over the past three years. The approach yielded substantial gains in the first year, modest but positive returns in the second, and a rebound exceeding the first year’s performance in the third. Cumulative returns highlight the strategy’s compounding potential, while risk management remains effective, as positive returns offset post-earnings volatility.

CEO Commentary

CEO Joseph Forkey emphasized Q1’s record revenue of $6.7 million, driven by 46% growth in core manufacturing. However, gross margin pressures from infrastructure investments and underutilized capacity remain challenges. The company aims to expand aerospace partnerships and boost sales/marketing efforts to refill its product pipeline, with Forkey projecting improved profitability in fiscal 2026.

Guidance

Management reiterated FY 2026 revenue guidance above $25 million and $0.5 million positive adjusted EBITDA. Gross margin improvements are expected from yield enhancements and tariff pass-through agreements, while product development revenue is forecast to recover 50%–75% in Q2.

Additional News

Precision Optics secured a $1.4 million development order for augmented reality and jet engine inspection systems, expanding its aerospace exposure. The company also announced capacity expansion plans to meet growing demand. CEO Forkey highlighted gross margin recovery as a key focus, driven by higher production volumes and operational efficiencies.