Syntec Optics Q4 2025 Earnings Results & Report

Syntec Optics EPS Results

• Actual EPS: -$0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Syntec Optics Revenue Results

• Actual Revenue: $7.51 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Syntec Optics (NASDAQ:OPTX) (NASDAQ: OPTX) is a manufacturer and designer of custom optics and photonics products. The company develops precision optical components, optical systems and related assemblies for customers in the defense and aerospace, medical, industrial and consumer markets.

Its capabilities include the design and production of polymer and glass optics, precision molding, optical coatings, thin-film technologies and systems integration. Syntec Optics’ products are used in applications such as night vision and other defense technologies, medical devices, imaging systems, lidar and communications equipment.

The company is based in Rochester, New York, and serves customers through its U.S.-based manufacturing and engineering operations. Syntec Optics has described itself as a vertically integrated provider, allowing it to support projects from optical design and prototyping through manufacturing, coating and final assembly.

Syntec Optics became a publicly traded company through a business combination with a special purpose acquisition company in 2023. The company is led by Chief Executive Officer Al Kapoor, who has been associated with Syntec Optics’ development and operations.

Syntec Optics Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q4 showed a meaningful profit inflection — gross margin expanded sharply to $1.8 million (more than doubled QoQ) and Adjusted EBITDA rose to $0.9 million, driven by improved yields and lower materials and labor costs.
• Positive Sentiment: SG&A fell materially (Q4 SG&A down to $1.5 million, a 30% sequential and ~40% YoY improvement) and full-year SG&A declined $1.2 million, helping EPS improve from -$0.07 to -$0.05 while cash from operations totaled $0.7 million.
• Negative Sentiment: Top-line growth remains modest — full-year 2025 net sales were $28.1 million, down $0.4 million versus 2024, indicating revenue traction has not yet matched margin and cost improvements.
• Positive Sentiment: Management cites a structural tailwind from the 2026 Defense Authorization Act that favors domestic sourcing for optical systems, potentially creating new onshore defense contract opportunities through 2030.
• Positive Sentiment: Company expects 2026 growth driven by ramping programs — record-level space optics production, initial production for an AI data center optics line, and new defense product introductions, supported by the company’s WCFE and MSV execution frameworks.

Presentation

[Operator]

Good day, and welcome to the Syntec Optics Holdings, Inc. fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. Please note that today's call is being recorded and will be available for download later from the company's website, www.syntecoptics.com.

[Operator]

Before we begin, please note that today's discussion will include forward-looking statements within the meaning of the federal securities laws. These statements are based on current expectations and involve risk and uncertainties that may cause actual results to differ materially.

[Operator]

For a discussion of these risks, please refer to our filings with the Securities and Exchange Commission, including our Form 10-K and Form 10-Q filings. Syntec Optics undertakes no obligation to update any forward-looking statements. Joining us today are Dean Rudy, Chief Financial Officer, and Al Kapoor, Chief Executive Officer of Syntec Optics. I will now turn the call over to Dean Rudy. Dean, please go ahead.

[Dean Rudy, CFO at Syntec Optics]

Thank you, operator, and good day everybody as well. We appreciate you joining us today to discuss Syntec's fourth quarter and full year 2025 results. Before we begin, I would like to remind everyone that today's discussion contains forward-looking statements subject to risk and uncertainties, which are described in our SEC filings.

[Dean Rudy, CFO at Syntec Optics]

Financial overview of Q4 of 2025. Revenue for the quarter of $7.5 million was up $0.2 million or 2.5% over prior year same quarter and was up $0.6 million over the same year previous quarter. Sales were up over both comparative periods for our low Earth orbiting satellite-related production, our defense-related precision glass molding, and our biomedical-related products.

[Dean Rudy, CFO at Syntec Optics]

Gross margin for the quarter of $1.8 million saw significant expansion, more than doubling compared to the same year previous quarter and increasing 80% over the prior year quarter. Reductions in materials and labor costs reflected improved production yields.

[Dean Rudy, CFO at Syntec Optics]

SG&A expense also saw significant improvement, decreasing 30% sequentially and decreasing by 40% compared to the prior year. SG&A expense for Q4 2024 was $2.4 million, Q3 2025 was $2.1 million, and Q4 2025 was $1.5 million.

[Dean Rudy, CFO at Syntec Optics]

As a result of the above improvements, Adjusted EBITDA of $0.9 million increased by nearly $1 million versus both same quarter prior year and same year previous quarter. Results for the year-end followed a similar path, reflecting enhanced yields, cost discipline, and operational execution. Full year 2025 highlights.

[Dean Rudy, CFO at Syntec Optics]

Gross margin increased by 3.3 percentage points from 20.0% to 23.3%, driven by continuous improvement and efficiency projects. These improvements drove a 13% increase in gross profit from $5.7 million to $6.5 million. SG&A expense of $7.0 million decreased by $1.2 million as compared to the prior year.

[Dean Rudy, CFO at Syntec Optics]

Improvements included reductions in insurance expenses, outside services and consultants, as well as cost economizing across all categories. Adjusted EBITDA also saw significant improvement. It increased by 37% versus the prior year. These improvements for the full year were achieved even with net sales of $28.1 million, which was down $0.4 million from full year 2024.

[Dean Rudy, CFO at Syntec Optics]

As a result of the improvements above, earnings per share of -0.05 in 2025 improved from -0.07 in 2024. Cash provided by operations increased to $0.7 million for the year and was used for facility improvements and equipment. Cash, including available line of credit, was $1.1 million. Near-term guidance.

[Dean Rudy, CFO at Syntec Optics]

Compared to Q4 2025 net sales of $7.5 million, Q1 2026 net sales are expected to be below $7.5 million, and Q2 2026 net sales are expected to be above $7.5 million. 2026 started with space optics production increases to a record level, the beginning of the production stage for an artificial intelligence data center product line, and the previously announced addition of a new product in defense tech.

[Dean Rudy, CFO at Syntec Optics]

Additionally, product lines for defense tech are anticipated to add net sales in Q2 and beyond. Overall, we believe the fourth quarter reflects a clear inflection point in both execution and profitability, and we are entering 2026 with improved momentum with space optics, launch of new product lines in defense tech, and going into initial production runs on AI data center optics. With that, I'll turn the call over to our CEO, Al Kapoor.

[Al Kapoor, CEO at Syntec Optics]

Thank you, Dean. Good day, everyone. As Dean mentioned, while 2024 and parts of 2025 reflected some operational inconsistencies, the fourth quarter marked a clear turning point for the company. We are now seeing the results of improved manufacturing execution, better cost structure alignment, and growing pipeline of programs transitioning into production. Let me provide you a few comments about defense tailwinds.

[Al Kapoor, CEO at Syntec Optics]

We are seeing positive momentum in defense tech. Recent developments, including the four-year 2026 Defense Authorization Act, are driving a structural shift towards domestic sourcing of optical systems specifically. This legislation effectively requires defense contractors to map supply chains, eliminate reliance on adversary nations, and transition to U.S.-based suppliers by 2030.

[Al Kapoor, CEO at Syntec Optics]

Let me switch to talking about operational execution that has been mentioned. Yields and throughput improvements across key programs, including LEO satellite optics, night vision optics, integrated optical systems, all continue.

[Al Kapoor, CEO at Syntec Optics]

Night shift staffing expanded to support scalable production capacity. Multiple programs advanced from design to pilot to initial production. Ongoing cost reduction initiatives contributed to margin expansion. Let me describe to you our value creation methodologies we are using in execution.

[Al Kapoor, CEO at Syntec Optics]

Syntec has developed a methodology called Work Center Focused Effort, which delivers higher profitability from organic growth. Also another methodology called Macro Societal View or MSV, which is effective in our selection criteria for potential business combinations for inorganic growth. The company intends to use these methodologies to continue build the business organically as well as inorganically going forward.

[Al Kapoor, CEO at Syntec Optics]

WCFE, which was the Work Center Focused Effort, involves execution of factors including Gemba walk charts for daily batch sizes and inventory buffers for product flow monitoring by the work center, daily technician allocations and effort assessments by work center, daily cost of poor quality and in-process inspection measurements, daily cost savings mapping for cost containment, and alignment of daily goals to meet monthly goals.

[Al Kapoor, CEO at Syntec Optics]

This has created significant improvement. The MSV methodology for inorganic growth that I mentioned involves assessment of business combination possibilities based on the following factors, like science being used, chosen technology concept, business models deployed, regulatory environment, positive social transformation. Finally, let me provide you a few comments on 2026 outlook that Dean mentioned.

[Al Kapoor, CEO at Syntec Optics]

Syntec expects growth in 2026, which is supported by ramp-up of next generation space and AI data center optics products, expansion in defense tech programs driven by onshoring tailwinds, steady growth across biomedical and consumer end markets, and conversion of design stage programs into production revenue.

[Al Kapoor, CEO at Syntec Optics]

In summary, the fourth quarter demonstrated a clear improvement in execution and profitability, and our positioning across defense, AI, and space optics gives us opportunity to serve the society and puts us on a growth trajectory. We are encouraged by the progress we've made and excited about the opportunities ahead. With that, I will hand it back to the operator.

[Operator]

Thank you, Al and Dean, for your comments today. Should you have any questions regarding our earnings or initiatives, please email our investor relations at investorrelations@syntecoptics.com. That's investorrelations, one word, @syntecoptics.com. Thank you for joining us, and have a great day.

Participants

Executives

• Al Kapoor, CEO
• Dean Rudy, CFO