Optex Systems Holdings, Inc

Q2 revenue was $600 thousand, down from $10.7 million in the prior-year period. For the first half, revenue was $18.8 million versus $18.9 million last year, essentially flat year over year. Gross profit was $3.4 million in the quarter and $5.5 million for the first 6 months; gross margin was 35.2% versus 31.3% in the quarter and 29.2% versus 29.0% for the first half. Net income was $1.3 million, or $0.19 per diluted share, versus $1.8 million last year; first-half net income was $1.6 million, or $0.23 per diluted share, versus $2.6 million. Adjusted EBITDA was $2.0 million for the quarter versus $2.4 million last year and $2.8 million for the first 6 months versus $3.6 million. Full-year guidance remains revenue of $43 million to $45 million and adjusted EBITDA of $7.5 million to $8.5 million. Management expects a stronger second half as delayed awards move forward. Cash and cash equivalents were $4.2 million with no outstanding debt on the revolving credit facility; working capital was $22.6 million. Full-year capital expenditures are expected to be $2 million to $2.5 million.

Chad George said Q2 was affected by delays in government funding and timing, but he remains encouraged by the company’s backlog, improving gross margins, and continued demand across core defense programs. He emphasized recent investments in R&D, manufacturing capabilities, and organizational structure as positioning Optex for long-term growth and expanded market opportunity. His tone was constructive and confident, with the key message that government procurement normalizing and new programs ramping should drive a better second half.

Karen L. Hawkins said the first half was hurt by the federal government shutdown and delays in approval of the fifth fiscal year 26 appropriations bill, which pushed several awards into the second half. She highlighted gross margin improvement to 35.2% in the quarter and 29.2% for the first half, driven by completion of legacy loss-making periscope contracts, improved pricing, and operational efficiencies. She also noted elevated operating expenses of $1.7 million in the quarter and $3.7 million in the first half due to leadership transition costs, stock-based compensation, R&D, compliance, and systems upgrades, plus cash of $4.2 million, no revolver debt, $1.3 million of operating cash use, and capex of $800 thousand in the first half with $1.1 million more committed.

There were no analyst questions on the call, and the operator noted no one was in the queue. As a result, there was no additional Q&A detail on customer demand, funding timing, or margin outlook beyond management’s prepared remarks.