Precision Optics Sets New Revenue Records and Improves Margins in Q3 2026: Growth Outlook Raised

Record Quarterly Revenues and Robust Production Performance Signal Momentum

Precision Optics Corporation (NASDAQ: POCI) delivered its strongest financial quarter in company history for the fiscal third quarter of 2026, reporting unaudited revenue of $8.71 million—up 108% from the same period a year ago and topping the previous quarter’s $7.4 million. Most notably, production revenue grew even faster, climbing 131% year-over-year to $7.6 million. Engineering revenue made a smaller but significant gain, rising 22% to $1.1 million.

Key verticals drove the outperformance. Aerospace production revenues reached $3.6 million (a company record for that customer), while revenue from cystoscopy surgery systems hit $2.2 million in the quarter. Additionally, the Ross Optical division surged 65% year-over-year in revenues, extending the company’s multi-segment growth trend.

Strong Gross Margin Improvement Shows Manufacturing Efficiency Gains

A standout in the report is Precision Optics’ gross margin surge: up to 23.6% from just 10.0% the year prior, and a sizeable improvement from last quarter’s 2.8%. CEO Joe Forkey credits enhanced manufacturing leadership and execution—improvements which have allowed the company to achieve higher output at significantly better efficiency.

This margin progress enabled the bottom line to improve notably, with quarterly net loss shrinking dramatically to $0.1 million versus $2.1 million in Q3 2025, and adjusted EBITDA flipping to a positive $0.3 million after a $1.3 million loss a year ago. These results mark a positive inflection in operational performance.

Liquidity, Capital Raise, and Upgraded Guidance Point to Accelerating Growth Strategy

A successful oversubscribed $10 million public offering in March has further bolstered Precision Optics’ balance sheet, lifting cash and equivalents to $10.68 million at quarter end—up from $1.77 million nine months ago. Total assets now stand at $33.69 million, giving the company more flexibility to invest in production capabilities and innovation.

On the back of broad-based growth and improved profitability trends, management has upgraded full-year fiscal 2026 guidance. Revenue is now expected in the range of $29–$31 million (up from prior $26–$28 million), implying 52%–62% growth year-over-year. Adjusted EBITDA guidance has also improved, with losses now forecast between $2.5 and $2.7 million, tightening the range and reflecting better operating leverage.

Looking Ahead: Strong Order Flow and R&D Support Continued Expansion

Precision Optics’ business pipeline remains active. Notably, the company received a $3.5 million follow-on production order for its single-use ophthalmic program, with deliveries set to start in Q4. Industry trends remain favorable, fueled by ongoing demand for advanced imaging in both healthcare and defense, and the recent capital raise positions the company to capitalize on these sector tailwinds.

CEO Forkey summed up the outlook: "Revenue growth was driven primarily by increased volumes in our aerospace and single-use cystoscope programs, both of which continue to perform at strong levels, as well as our Ross Optical segment. Our new manufacturing leadership and production team have done an outstanding job improving execution while supporting higher production volumes."

Key Takeaway: Margin Turnaround and Guidance Raise Illustrate Strong Execution

For investors and industry observers, Precision Optics’ third-quarter results point to a company executing effectively on both revenue growth and cost improvements. With upgraded guidance, cash reserves to fund expansion, and operational efficiency gains, Precision Optics appears positioned for continuing momentum through the remainder of 2026. The next major update will come with Q4 results, and those following the story may want to dial into the company’s upcoming conference call for more color on strategy and pipeline developments.

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