Precision Optics (POCI) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue was $4.53 million, down 6.2% year-over-year but up 42% sequentially, driven by single-use cystoscope and defense aerospace programs.

• Net loss for the quarter was $969,681, with EPS of $(0.15), and adjusted EBITDA was negative $555,000.

• Unity Imaging Platform launched, expected to accelerate product development and commercialization in endoscopic imaging.

• Largest backlog in recent history, with multi-million-dollar orders and strong customer demand.

• $1.2 million raised in a registered direct offering, with $27,000 from stock option exercises.

Financial highlights

• Q2 revenue was $4.53 million, down from $4.8 million year-over-year, but up 42% sequentially from Q1.

• Gross margin for the quarter was 23.6%, down from 30.1% year-over-year, impacted by product mix and lower sales volume.

• Net loss for Q2 was $969,681, compared to $704,000 last year.

• Adjusted EBITDA for Q2 was negative $555,000, versus negative $269,000 last year.

• Cash and equivalents at December 31, 2024, were $212,441, with $350,000 available on the line of credit.

Outlook and guidance

• Forecasts Q3 revenue of at least $5 million and Q4 revenue of at least $6 million, with Q4 expected to achieve positive adjusted EBITDA.

• Management expects revenue and margin improvements in H2 FY2025, driven by backlog and new product launches.

• Anticipates gross margin recovery as manufacturing scales and revenues increase.

• Engineering revenue expected to recover as resources shift back to revenue-generating projects.

• Available cash, line of credit, and capital market access expected to cover working capital and capex needs for at least 12 months, though external financing may be needed.