Optical Cable Corporation

Consolidated net sales for Q2 fiscal 2026 increased 26.6% to $22.2 million from $17.5 million a year ago, and rose 35.2% sequentially from $16.4 million in Q1. First-half net sales were $38.6 million, up 16.1% from $33.3 million last year. Gross profit increased 42.4% to $7.6 million from $5.3 million, with gross margin improving to 34.2% from 30.4%; first-half gross profit rose 30.1% to $13 million, with gross margin at 33.5% versus 29.9%. SG&A was $6.3 million, or 28.2% of sales, in Q2, and net income was $1.1 million, or $0.12 per share, versus a net loss of $698,000, or $0.09 per share, in Q2 last year. For the first half, net income was $657,000, or $0.07 per share, versus a net loss of $1.8 million, or $0.23 per share, last year. Management did not provide formal next-quarter or full-year financial guidance, but said revenue should continue to be positively impacted in the second half of fiscal 2026 by data center sales, and noted backlog/forward load ended Q2 at $13.3 million.

Neil Wilkin framed the quarter as a continuation of OCC’s growth momentum, highlighting strength in enterprise, data center, and severe-duty markets. He said Tier 1 hyperscale buildouts are benefiting OCC’s focus areas in multi-tenant and enterprise data centers, and he sounded confident that revenue growth can continue in the second half. His tone was constructive but measured, repeatedly emphasizing disciplined execution, diversification, and the company’s ability to capitalize on current demand without overstating certainty.

Tracy Smith walked through the stronger top line and margin expansion, pointing to Q2 net sales of $22.2 million, gross profit of $7.6 million, and gross margin of 34.2%. She said higher volumes and manufacturing operating leverage boosted margins, while SG&A rose to $6.3 million due mainly to shipping costs and employee/contract sales personnel costs, but fell to 28.2% of sales because of operating leverage. She also noted backlog and forward load of $13.3 million and said OCC still has room for additional revenue growth at current manufacturing and staffing levels, while evaluating more staffing and machine capacity.

Analysts focused on whether Tier 1 hyperscale spending is spilling into Tier 2/multi-tenant and enterprise data centers, and management said it is seeing significant opportunities in those markets, though sales cycles can be longer. Questions also centered on capacity, fiber and copper pricing, and supply constraints; management said raw material inflation can pressure margins, but price increases and product mix can offset it, and it is not seeing major labor or supply issues at present. Management also said it does not offer installation-type services as part of its strategy and does not sell power cables for grid use, though some products are suitable for grid applications.