Optex Systems Holdings reported a robust fiscal year ending September 28, 2025, with revenue rising 21.6% to $41.3 million, net income climbing 36.6% to $5.1 million, and basic earnings per share reaching $0.75. Gross profit increased to $12.1 million, lifting the gross margin to 29.2% from 28.0% in 2024, while operating income grew to $7.1 million, reflecting both higher sales and improved cost control. New orders for the year totaled $36.2 million, a modest 0.5% decline from the prior year, and the company ended the period with $6.4 million in cash and $21.1 million in working capital, up from $15.1 million a year earlier.
Despite the full‑year gains, Optex disclosed a starkly negative fourth‑quarter performance. Revenue for Q4 fell to a negative $30.0 million, and diluted EPS dropped to –$0.60, marking a sharp reversal from the positive trajectory seen in the earlier quarters. Management attributed the downturn to a federal government shutdown that delayed contract awards and to supply‑chain disruptions that constrained production. The company’s operating loss in the quarter underscored the severity of the headwinds, even as it maintained a strong balance sheet.
CEO Danny Schoening highlighted the year’s “exciting” growth, noting that a 21.6% revenue increase was driven by new defense contracts and the launch of the Optex Outdoors line, which opened a civilian market. He also announced his resignation effective December 20, 2025, with President Chad George slated to become the next CEO. The leadership transition signals continuity while positioning the company to capitalize on emerging opportunities.
Optex faces headwinds from the ongoing federal shutdown, which is expected to slow revenue in the second through fourth quarters of fiscal 2026. The company’s backlog, exceeding $38 million after a recent $2.33 million contract award, provides a cushion, but the slowdown in government spending could erode the momentum seen in 2025. On the upside, the company’s improved gross margin and operating income suggest effective cost management and a favorable product mix, while the new civilian product line offers diversification beyond its defense‑centric core.
Management issued cautious guidance for fiscal 2026, noting that delays in government contract awards may temper revenue growth. The company emphasized its focus on maintaining profitability through disciplined spending and continued investment in high‑margin segments. Investors will likely weigh the positive full‑year performance against the Q4 decline and the uncertain outlook for government‑driven revenue streams.
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