Overview

• The U.S. optical sighting systems maker's fiscal Q2 revenue fell 10% yr/yr

• Gross margin improved to 35.2% from 31.3% due to operational efficiencies and better pricing

• Company expects stronger revenue in second half after delays from government shutdown

Outlook

• Optex expects full-year 2026 revenue between $43 mln and $45 mln, up from $41.3 mln in 2025

• Company forecasts full-year 2026 adjusted EBITDA of $7.5 mln to $8.5 mln versus $8.0 mln in 2025

• Optex anticipates stronger revenue in H2 2026 due to backlog and expected contract awards

Result Drivers

• GOVERNMENT CONTRACT DELAYS - Co said Q2 revenue was impacted by federal government shutdown and delayed appropriations, which postponed contract awards

• MARGIN IMPROVEMENT - Gross margin rose due to completion of legacy loss-making contracts, improved pricing on newer programs, and operational efficiencies

• HIGHER OPERATING EXPENSES - Operating expenses increased due to leadership transition costs, stock compensation, higher R&D spending, and investments in compliance and systems upgrades

Company press release: ID:nACSGGLxxa

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The average consensus recommendation for the aerospace & defense peer group is "buy"

• Wall Street's median 12-month price target for Optex Systems Holdings Inc is $16.10, about 54.5% above its May 11 closing price of $10.42

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