Optex Systems Holdings, Inc. Announces Financial Highlights for the Three and Six Months Ended March 30, 2025

Rhea-AI Summary

Optex Systems Holdings (NASDAQ:OPXS), a manufacturer of precision optical sighting systems, reported strong financial results for Q2 2025. Revenue increased by 25.9% to $10.7 million for the quarter, while net income grew 66.5% to $1.8 million. The six-month period saw revenue rise 22.2% to $18.9 million, with net income up 74.9% to $2.6 million. The company's backlog stood at $41.1 million as of March 30, 2025, with an additional $5.7 million laser filter unit award received in April 2025. Growth was driven by increased periscope production and higher laser filter demand. The company maintains a strong financial position with $3.5 million in cash, no credit line draws, and working capital of $17.9 million. Gross margins improved to 31.3% for the quarter, up from 30.0% in the prior year.

Positive

• Revenue increased 25.9% to $10.7 million in Q2 2025
• Net income grew 66.5% to $1.8 million in Q2 2025
• Gross margin improved to 31.3% from 30.0% year-over-year
• Strong cash position with $3.5 million and no credit line draws
• New $5.7 million laser filter unit award received in April 2025
• Generated $4.0 million in operating cash during the six-month period

Negative

• Backlog decreased by 7% to $41.1 million compared to prior year
• $4.2 million in accounts receivable pending collection

Insights

Financial Analyst

Optex Systems delivered exceptional Q2 results with 25.9% revenue growth, 66.5% net income growth, and strong cash generation despite backlog decline.

Optex Systems (NASDAQ:OPXS) has delivered remarkable financial performance for Q2 FY2025, with revenue hitting $10.73 million, a 25.9% increase year-over-year. This growth trajectory continues when examining the half-year results, where revenue climbed to $18.93 million, representing a 22.2% increase compared to the prior year period.

The company's profitability metrics show even more impressive momentum. Q2 net income surged to $1.77 million, a 66.5% jump from the prior year's $1.06 million. Similarly, operating income rose 65.0% to $2.24 million. These disproportionate profit gains relative to revenue growth indicate significant operational leverage and improved cost efficiency.

Gross margin expanded to 31.3% in Q2, up from 30.0% in the prior year, demonstrating better production efficiency and fixed cost absorption across higher volumes. The company credited increased periscope production capacity at Optex Richardson and higher customer demand for laser filters at the Applied Optics Center for driving revenue growth.

From a balance sheet perspective, Optex maintains robust financial health. Working capital improved to $17.9 million as of March 30, 2025, compared to $15.1 million at the end of September 2024. The company generated $4.0 million in operating cash during the six-month period, enabling debt reduction of $1.0 million while maintaining $3.5 million in cash with no draws on its revolving credit line.

The only cautionary signal is the 7.0% year-over-year decline in backlog to $41.1 million. However, this is partially offset by a new $5.7 million award for laser filter units announced in April 2025. The company also noted minimal exposure to potential tariff risks, with defense products primarily sourced domestically and commercial optical assemblies covered by existing inventory.

With adjusted EBITDA increasing 49.4% to $2.44 million for the quarter, Optex continues to demonstrate efficient conversion of revenue growth into stronger earnings, positioning the company for continued strong financial performance through the remainder of fiscal 2025.

RICHARDSON, TX / ACCESS Newswire / May 13, 2025 / Optex Systems Holdings, Inc. (NASDAQ:OPXS), a leading manufacturer of precision optical sighting systems for domestic and worldwide military and commercial applications, announced financial results for the three and six months ended March 30, 2025.

Danny Schoening, CEO of Optex Systems Holdings, Inc., commented, "We are proud to announce a record-breaking quarter for revenue, reflecting our unwavering commitment to excellence, reliability, and customer support. This achievement is a direct result of our focus on delivering high-quality products and services that consistently exceed expectations. Our factory performance underscores the strength of our team and the trust placed in us by our valued customers. As we celebrate this milestone, we remain dedicated to upholding the highest standards while driving continued growth. We thank our customers, shareholders, and employees for making this success possible."

Backlog as of March 30, 2025 was $41.1 million, compared to a backlog of $44.2 million as of March 31, 2024 and as of September 29, 2024, representing a decrease of ($3.1) million, or (7.0%). Subsequent to the six-month period ended March 30, 2025, on April 9, 2025, the Company announced a $5.7 million award for laser filter units for the Applied Optics Center to be delivered between August 2025 and December 2026.

For the three months ended March 30, 2025, revenues increased by $2.2 million or 25.9 % compared to the prior year period. For the six months ended March 30, 2025, our total revenues increased by $3.4 million, or 22.2%, compared to the prior year period. The increase in revenue was primarily driven increased periscope production capacity at the Optex Richardson segment and higher customer demand for laser filters at the Applied Optics Center.

Consolidated gross profit for the three months ended March 30, 2025 increased by $0.8 million, or 31.4%, compared to the prior year period. Consolidated gross profit for the six months ended March 30, 2025 increased by $1.2 million, or 29.4%, compared to the prior year period. The increase in the most recent three and six-month period gross margin was primarily attributable to increased revenue and higher absorption of fixed costs across the higher revenue base.

Our operating income for the three months ended March 30, 2025 increased by $0.9 million compared to the prior year period. Our operating income for the six months ended March 30, 2025 increased by $1.2 million compared to the prior year period. The increase in operating income was primarily driven by higher revenue and gross profit across both operating segments.

As of March 30, 2025, Optex Systems Holdings had working capital of $17.9 million, as compared to $15.1 million as of September 29, 2024. During the six months ended March 30, 2025, we generated operating cash of $4.0 million, primarily driven by higher income of $2.6 million, use of inventory of $0.9 million, and other changes in working capital of $0.5 million. During the six months ended March 30, 2025, we paid $1.0 million against the credit facility and purchased capital assets of $0.5 million.

At March 30, 2025, the Company had approximately $3.5 million in cash and no draws against its revolving credit line. As of March 30, 2025, our outstanding accounts receivable balance was $4.2 million to be collected during the third quarter of fiscal 2025.

Our key performance measures for three and six months ended March 30, 2025 and March 31, 2024 are summarized below.

		(Thousands)
		Three months ended												Six months ended
Metric		Mar 30, 2025				Mar 31, 2024				% Change				Mar 30, 2025				Mar 31, 2024				% Change
Revenue		$	10,730			$	8,523				25.9	%		$	18,928			$	15,492				22.2	%
Gross Profit		$	3,361			$	2,557				31.4	%		$	5,489			$	4,242				29.4	%
Gross Margin %			31.3	%			30.0	%			4.3	%			29.0	%			27.4	%			5.8	%
Operating Income		$	2,237			$	1,356				65.0	%		$	3,153			$	1,909				65.2	%
Net Income		$	1,768			$	1,062				66.5	%		$	2,612			$	1,493				74.9	%
Adjusted EBITDA (non-GAAP)		$	2,435			$	1,630				49.4	%		$	3,572			$	2,388				49.6	%

The table below summarizes our three- and six-month operating results for the periods ended March 30, 2025 and March 31, 2024, in terms of both the GAAP net income measure and the non-GAAP Adjusted EBITDA measure. We believe that including both measures allows the reader better to evaluate our overall performance.

		(Thousands)
		Three months ended								Six months ended
		March 30, 2025				March 31, 2024				March 30, 2025				March 31, 2024
Net Income (GAAP)		$	1,768			$	1,062			$	2,612			$	1,493
Add:
Federal Income Tax Expense			470				285				529				400
Depreciation and Amortization			126				117				255				209
Stock Compensation			72				157				164				270
Interest (Income) Expense			(1	)			9				12				16
Adjusted EBITDA - Non GAAP		$	2,435			$	1,630			$	3,572			$	2,388

Adjusted EBITDA has limitations and should not be considered in isolation or a substitute for performance measures calculated under GAAP. This non-GAAP measure excludes certain cash expenses that we are obligated to make. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do or may not calculate it at all, which limits the usefulness of Adjusted EBITDA as a comparative measure.

Our net income increased by $0.7 million to $1.8 million for the three months ended March 30, 2025, as compared to net income of $1.1 million for the prior year period. Our adjusted EBITDA increased by $0.8 million to $2.4 million for the three months ended March 30, 2025, as compared to adjusted EBITDA of $1.6 million for the prior year period.

Our net income increased by $1.1 million to $2.6 million for the six months ended March 30, 2025, as compared to net income of $1.5 million for the prior year period. Our adjusted EBITDA increased by $1.2 million to $3.6 million for the six months ended March 30, 2025, as compared to adjusted EBITDA of $2.4 million for the prior year period.

The increase in net income and adjusted EBITDA for the most recent three- and six-month periods compared to the prior year periods is primarily driven by increased revenue and gross profit.

We currently do not anticipate any significant material risks as a result of the recent tariff uncertainties. Our defense products are primarily sourced domestically, but those which are imported are generally not subject to tariff or duties. We produce some commercial optical assemblies with selective components sourced from Taiwan; however, our current customer backlog is covered with existing material in inventory. We anticipate any future orders for these commercial products will be subject to revised pricing inclusive of any potential tariff impact.

Highlights of the Consolidated and Segment Results of Operations have been prepared in accordance with GAAP. These financial highlights do not include all information and disclosures required in the consolidated financial statements and footnotes and should be read in conjunction with our Quarterly Report on Form 10Q for the three and six months ended March 30, 2025 filed with the SEC on May 13, 2025.

Optex Systems Holdings, Inc.
Condensed Consolidated Balance Sheets

		(Thousands, except share and per share data)
		March 30, 2025				September 29, 2024
		(Unaudited)
ASSETS
Cash and Cash Equivalents		$	3,531			$	1,009
Accounts Receivable, Net			4,238				3,764
Inventory, Net			13,922				14,863
Contract Asset			183				219
Prepaid Expenses			406				217
Current Assets			22,280				20,072
Property and Equipment, Net			1,568				1,292
Other Assets
Deferred Tax Asset			752				947
Intangible Assets, Net			884				951
Right-of-use Asset			1,970				2,233
Security Deposits			23				23
Other Assets			3,629				4,154
Total Assets		$	27,477			$	25,518
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable		$	1,728			$	1,177
Credit Facility			-				1,000
Operating Lease Liability			644				638
Federal Income Taxes Payable			-				74
Accrued Expenses			1,310				1,258
Accrued Selling Expense			224				237
Accrued Warranty Costs			106				52
Contract Loss Reserves			226				259
Customer Advance Deposits			168				255
Current Liabilities			4,406				4,950
Other Liabilities
Operating Lease Liability, net of current portion			1,487				1,760
Other Liabilities			1,487				1,760
Total Liabilities			5,893				6,710
Commitments and Contingencies			-				-
Stockholders' Equity
Common Stock - ($0.001 par, 2,000,000,000 authorized, 6,896,738 and 6,873,938 shares issued and outstanding, respectively)			7				7
Additional Paid in Capital			21,629				21,465
Accumulated Deficit			(52	)			(2,664	)
Stockholders' Equity			21,584				18,808
Total Liabilities and Stockholders' Equity		$	27,477			$	25,518

The accompanying notes in our Quarterly Report on Form 10Q for the three and six months ended March 30, 2025 filed with the SEC on May 13, 2025 are an integral part of these financial statements.

Optex Systems Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

		(Thousands, except share and per share data)
		Three months ended								Six months ended
		March 30, 2025				March 31, 2024				March 30, 2025				March 31, 2024
Revenue		$	10,730			$	8,523			$	18,928			$	15,492
Cost of Sales			7,369				5,966				13,439				11,250
Gross Profit			3,361				2,557				5,489				4,242
General and Administrative Expense			1,124				1,201				2,336				2,333
Operating Income			2,237				1,356				3,153				1,909
Interest Income (Expense)			1				(9	)			(12	)			(16	)
Income Before Taxes			2,238				1,347				3,141				1,893
Income Tax Expense, net			470				285				529				400
Net Income		$	1,768			$	1,062			$	2,612			$	1,493
Basic income per share		$	0.26			$	0.16			$	0.38			$	0.22
Weighted Average Common Shares Outstanding - basic			6,871,960				6,768,236				6,842,949				6,717,592
Diluted income per share		$	0.26			$	0.16			$	0.38			$	0.22
Weighted Average Common Shares Outstanding - diluted			6,893,231				6,823,155				6,902,912				6,774,542

The accompanying notes in our Quarterly Report on Form 10Q for the three and six months ended March 30, 2025 filed with the SEC on May 13, 2025 are an integral part of these financial statements.

ABOUT OPTEX SYSTEMS

Optex, which was founded in 1987, is a Richardson, Texas based ISO 9001:2015 certified concern, which manufactures optical sighting systems and assemblies, primarily for Department of Defense (DOD) applications. Its products are installed on various types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Armored Security Vehicles, and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. For additional information, please visit the Company's website at www.optexsys.com.

Safe Harbor Statement

This press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the products and services described herein. You can identify these statements by the use of the words "may," "will," "could," "should," "would," "plans," "expects," "anticipates," "continue," "estimate," "project," "intend," "likely," "forecast," "probable," and similar expressions.

These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding growth strategy; product and development programs; financial performance and financial condition (including revenue, net income, profit margins and working capital); customer demand; orders and backlog; expected timing of contract deliveries to customers and corresponding revenue recognition; increases in the cost of materials and labor; costs remaining to fulfill contracts; contract loss reserves; labor shortages; follow-on orders; supply chain challenges; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; and the economy in general or the future of the defense industry.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs and military spending, the timing of such funding, general economic and business conditions, including unforeseen weakness in the Company's markets, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in the U.S. Government's interpretation of federal procurement rules and regulations, changes in spending due to policy changes in any new federal presidential administration, market acceptance of the Company's products, shortages in components, production delays due to performance quality issues with outsourced components, inability to fully realize the expected benefits from acquisitions and restructurings or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, changes to export regulations, increases in tax rates, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, unanticipated costs under fixed-price service and system integration engagements, changes in the market for microcap stocks regardless of growth and value and various other factors beyond our control.

You must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. The Company does not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.

Contact:

IR@optexsys.com
1-972-764-5718

SOURCE: Optex Systems Holdings, Inc.

View the original press release on ACCESS Newswire

FAQ

What was Optex Systems (OPXS) revenue growth in Q2 2025?

Optex Systems reported a 25.9% revenue increase to $10.7 million in Q2 2025 compared to the same period last year.

How much did OPXS net income increase in Q2 2025?

Net income increased by 66.5% to $1.8 million in Q2 2025 compared to $1.1 million in Q2 2024.

What is the current backlog for Optex Systems (OPXS)?

The backlog was $41.1 million as of March 30, 2025, with an additional $5.7 million laser filter unit award received in April 2025.

What is Optex Systems' (OPXS) current cash position?

As of March 30, 2025, Optex Systems had $3.5 million in cash, no draws against its revolving credit line, and working capital of $17.9 million.

What drove OPXS revenue growth in Q2 2025?

The revenue growth was primarily driven by increased periscope production capacity at Optex Richardson segment and higher customer demand for laser filters at the Applied Optics Center.