Kopin Q1 Earnings Call Highlights

Key Points

• Kopin reiterated its 2026 revenue guidance of $52 million to $60 million and said the outlook includes an initial Fabric.AI order, while management remains deliberately conservative in its forecasting.
• The company is expanding into AI infrastructure through its Fabric.AI collaboration, which aims to develop Neural I/O chipsets that use MicroLED-based optical interconnects to improve bandwidth, reduce power use, and lower data-center costs.
• Defense orders and product initiatives are building momentum, including new helmet display, FPV drone, and thermal imaging contracts, plus plans to bring OLED microdisplay production in-house in the U.S. for defense customers.

Kopin NASDAQ: KOPN reiterated its full-year 2026 revenue outlook and highlighted a series of defense and AI infrastructure initiatives on its first-quarter earnings call, with Chief Executive Michael Murray describing the period as “one of the most exciting stretches” in the company’s history.

The microdisplay and optical systems company maintained its 2026 revenue guidance range of $52 million to $60 million. In response to an analyst question, Murray said that outlook includes the initial Fabric.AI order tied to Kopin’s new AI interconnect collaboration, adding that management is taking a “very conservative” approach to forecasting.

Fabric.AI Collaboration Opens AI Infrastructure Push

Murray said Kopin’s recently announced strategic collaboration with Fabric.AI is aimed at developing a new product family called Neural I/O, which is designed to improve bandwidth, reduce power consumption and lower operating costs in data centers. The technology is based on Kopin’s proprietary MicroLED platform and its patented bidirectional NeuralDisplay architecture.

According to Murray, Neural I/O repurposes programmable MicroLED pixels as optical transceivers that move data using photons rather than electrons through copper wires. He said the product family is being designed for chip-to-chip, board-to-board and rack-to-rack communications in AI infrastructure.

Under the agreement, Kopin received a $15 million initial purchase order to fund a demonstrable chipset, which Murray said the company expects to complete by the end of 2026. Kopin also owns 19.9% of Fabric.AI and is the exclusive manufacturer of Neural I/O chipsets, according to Murray.

Murray said Kopin’s U.S.-based MicroLED production line, supported by its Industrial Base Analysis and Sustainment Act award, will support Neural I/O chipsets for U.S. government customers, Fabric.AI chipsets and new color MicroLED products for defense programs.

Defense Orders Drive Backlog Momentum

Murray outlined several defense-related wins announced during and after the quarter. In January, Kopin received a $1 million development order through its strategic partnership with Theon International for the DarkWAVE platform. The order is intended to bring the 960p OLED DarkWAVE module to production readiness.

DarkWAVE is designed to upgrade traditional monochrome night vision goggles with full-color augmented reality-enabled symbology and digital interfaces, including drone imagery. Murray said the product targets a large aftermarket opportunity, citing more than 2 million estimated night vision goggles in use globally and a projected global market increase from $8.6 billion in 2025 to $12.9 billion in 2030.

In February, Kopin announced two European helmet-mounted display orders: a $2 million microdisplay production order from a Tier 1 European defense contractor and a $3.6 million purchase order for an advanced avionics helmet-mounted display system for a rotary-wing military aircraft. Murray said those awards brought Kopin’s pilot helmet-mounted display order book above $10 million.

Other defense developments included:

• A Phase 1 SBIR contract from the U.S. government to advance full-color, smaller-format MicroLED display technology for soldier-borne and weapon sight applications.
• The April launch of Sentinel FPV, Kopin’s first-person viewer drone product, supported by an initial $3.2 million order with potential delivery of up to 40,000 goggles by the end of 2028.
• A $21.5 million follow-on production contract, announced after quarter-end, from a major U.S. prime contractor for custom thermal imaging eyepieces and assemblies for a man-portable thermal weapon system.

Murray said Sentinel FPV is designed to provide high-definition drone imagery while preserving a user’s peripheral awareness, a capability Kopin calls Dual Situational Awareness. During the question-and-answer session, he said Kopin is involved in several Drone Dominance-related opportunities through display sales, display-and-optic combinations or full Sentinel devices.

OLED Manufacturing Moving In-House

Kopin also announced plans after quarter-end to purchase an OLED deposition system and related equipment to establish full-scale OLED microdisplay production at its Westborough, Massachusetts, headquarters. Murray said the decision was driven by demand for fully U.S.-built OLED microdisplays for defense applications, including FPV systems, thermal weapon sights and soldier-borne systems.

The company has used a fabless OLED production model in recent years. Murray said Kopin will continue using Asian manufacturing partners for consumer and medical applications without domestic production requirements and European OLED deposition partners for NATO-aligned defense programs. He said the U.S. OLED capability is additive and targeted at the U.S. defense market.

Asked about capital spending, Murray said Kopin expects to spend roughly $5 million in capital expenditures this year and about the same amount next year. He said the planned OLED deposition line can use back-end processing machinery already in place or being installed as part of the company’s IBAS award.

First-Quarter Results

Chief Financial Officer Erich Manz said first-quarter revenue was $10.6 million for the period ended March 28, 2026, compared with $10.5 million in the prior-year quarter. He said new award and collaboration revenue tied to Kopin’s $15.4 million government MicroLED award and a strategic AI, AR and thermal clip-on partnership offset lower product revenue.

Product revenue fell to $5.4 million from $9.2 million a year earlier, which Manz attributed primarily to lower shipments for thermal weapon sight applications and liquid crystal displays. Non-product revenue rose to $5.1 million from $1.3 million, driven by government award revenue for ultra-bright, full-color MicroLED displays and collaboration revenue from the clip-on partnership.

Cost of product revenue was $5.6 million, or 103% of net product revenue, compared with $7.6 million, or 83%, in the year-ago quarter. Manz said the increase as a percentage of product revenue was due mainly to reduced production efficiency on a lower revenue base.

Research and development expense increased to $4.9 million from $2.1 million, while selling, general and administrative expense rose to $6 million from $4.7 million. Manz attributed the SG&A increase primarily to professional fees and accrued performance-based compensation.

As of March 28, Kopin had $34 million in cash and cash equivalents. Total cash, restricted cash and marketable securities were $59.5 million, including $25.3 million of restricted cash bonded against the BlueRadios litigation appeal. Manz said the company’s liquidity is sufficient to fund operations through at least the end of the second quarter of 2027 and beyond.

Outlook

Murray said the company sees 2026 as a key year in its strategic transformation, citing MicroLED expansion into AI infrastructure, defense order growth in the U.S. and Europe, entry into the FPV drone market and the planned U.S. OLED manufacturing investment.

In the Q&A session, Murray said management does not see pullbacks or delays embedded in the guidance, but is being cautious after government shutdown-related disruptions in the prior year. He said Kopin expects to provide more updates as programs convert into shippable orders and newer initiatives ramp.

About Kopin NASDAQ: KOPN

Kopin Corporation NASDAQ: KOPN is a technology company specializing in the development and manufacture of high-resolution microdisplays and optical components for wearable electronics. Headquartered in Westborough, Massachusetts, Kopin designs both liquid crystal on silicon (LCOS) and organic light-emitting diode (OLED) microdisplays, as well as complete display engines and optical modules tailored for use in augmented reality (AR), virtual reality (VR), industrial, medical, and defense applications.

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