Precision Optics (NASDAQ:POCI) is at an “inflection point” as production revenue ramps from recently commercialized programs, Dr. Joe Forkey said during a presentation at the Lytham Partners Spring 2026 Investor Conference.
Forkey said the company, which has been in business for more than 40 years, updated its business model about a decade ago and is now seeing stronger results as programs move from product development into manufacturing. He described Precision Optics as a technology company focused on proprietary optics technologies that it develops, owns and then applies to customer products.
Forkey said the company primarily serves medical device customers, while expanding further into defense and aerospace applications. He said both markets tend to be “very sticky,” with some medical device products remaining in production for decades.
Production Programs Driving Revenue Growth
Forkey said Precision Optics’ recent growth has been driven by two major programs that moved from product development into production. He said the company’s fiscal year runs from July 1 through June 30, and that revenue for the first nine months of the current fiscal year has already surpassed total revenue from the prior year.
He said full-year revenue guidance is “as high as about $30 million,” supported by the ramp of the two large production programs.
The first is a single-use cystoscopy program that entered production about two years ago. Forkey said that production line has grown 50-fold over the last two years and is currently running at an annual rate of about $8 million. He said the company has invested in infrastructure and personnel to support the ramp and that the program turned profitable in the third quarter.
The second major production program supports satellite communications for a satellite network. Forkey said that program has grown about 12-fold over the last 18 to 24 months and is now running at an annual rate of about $12 million.
Medical Device and Aerospace Applications
Forkey said Precision Optics focuses on three technology areas: micro-optics, ultra-high precision imaging systems and digital imaging. He said the company makes optics as small as about 50 microns, roughly the width of a human hair, and uses those components in cameras and endoscopes.
In medical devices, Forkey said the company’s technologies enable smaller endoscopic systems that can access areas of the body that were previously difficult to reach, including applications in brain, cardiac, ENT, urology and cystoscopy procedures. He also cited applications in 3D endoscopes for robotic surgery, 4K imaging, augmented and virtual reality, and fluorescence imaging.
Forkey said digital imaging technology has helped lower the cost of endoscopes enough to support single-use or disposable products, which he said can address concerns about cross-contamination between patients.
In defense and aerospace, Forkey said Precision Optics’ micro-optics align with industry demand for reduced size, weight and power. He identified drones, directed energy weapons and inter-satellite communications as focus areas, with the satellite communications program already in production.
Pipeline and Strategy
Forkey said Precision Optics expects two to four programs to move into production each year. He said the company has publicly discussed five programs that it expects will enter production over the next 12 months.
The company’s go-forward strategy includes expanding production lines, advancing pipeline projects toward commercialization and continuing to add new projects to the front end of the product development pipeline.
Forkey also highlighted the company’s Unity Platform, which uses existing Precision Optics technologies in a baseline prototype model. He said the platform is intended to accelerate development timelines, reduce risk and help refill the product development pipeline.
Precision Optics is also investing in sales, marketing and technical capabilities, Forkey said. He added that the company has updated its headquarters and engineering facilities and is planning future updates to production facilities to prepare for growth beyond the next 12 to 18 months.
Margins, EBITDA and Balance Sheet
Forkey said gross margins declined in recent years as the company invested in production capabilities, with quarterly gross margins dropping as low as 3%. He said margins began to recover in the most recent quarter as production lines ran more smoothly.
He also said adjusted EBITDA moved from negative territory to just over breakeven in the latest quarter. Forkey noted that the company’s fiscal-year adjusted EBITDA guidance was negative $2.5 million to negative $2.7 million, while first-half actual results were around negative $2.7 million, implying that the second half would be breakeven or positive.
On the balance sheet, Forkey said Precision Optics ended its third quarter with about $10 million in cash and cash equivalents, following financing completed at the end of March. He said most existing investors participated, along with new investment groups, and added that bank debt remains “very low.”
Forkey said the company has the capital, production infrastructure and customer opportunities needed to support growth over the coming quarters and years.
About Precision Optics (NASDAQ:POCI)
Precision Optics Corporation, Inc designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians.
