What has been the inbound interest from partners since the AI interconnect white paper release, and what questions are being raised?

Over 200 downloads were recorded, including from unexpected OEMs (e.g., rack and backplane builders). There's significant interest in Kopin's transmit side (microLEDs) as many companies struggle with this, while they possess receiver technologies. More white papers are planned. “What was striking about it, Josh, is the number of companies that I didn't expect to see there. I can't mention them, but they're the belts and suspenders of the AI infrastructure, folks that build the racks, folks that build the back planes, companies that are not necessarily semiconductor companies, but are full OEMs of racks and back planes that go in those racks.”

What are the remaining catalysts for the IBAS microLED program this year, and is follow-on funding for capacity still on track?

Kopin expects to complete three more milestones in Q4 2026, which will position them to provide color microLED samples next year. Active conversations are ongoing for further IBAS funding for other Army devices, beyond the current SBMC focus. “We do expect and hope that we'll see further IBAS funding for potentially other devices as well. We're now thinking that microLED will have its home in other applications, not just Soldier Borne Mission Command type of vision systems or thermal weapon sites or night vision goggles.”

What investments are needed to scale Sentinel FPV production, how long will they take, and when will the company know the unit volume associated with the Drone Dominance Program?

The primary investment, the OLED deposition tool, has already been purchased (under $10 million, spread payments). Other manufacturing is within current CapEx/OpEx. More orders for Sentinel FPV are expected by the end of Q4 2026, following DDP Phase 2 evaluations. “So the major investment was actually purchasing the OLED deposition tool, which we did this year. We've talked about that, that's under a $10 million number, and those payments are spread out over a number of quarters. That's the major investment in capital and volume capacity.”

KOPN

Kopin (KOPN) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 10, 2026

Source: earnings call transcript

Executive summary

Kopin Q2 FY26 — MicroLED, FPV Drone Momentum, and AI Infrastructure Progress

Kopin Corporation demonstrated strong execution in Q2 FY26, advancing its microLED program with the U.S. Army and securing new FPV drone prototype orders. Strategic investments in AI infrastructure and a new Dallas design center are on track, positioning the company for future growth. Management anticipates GAAP profitability and positive free cash flow by Q4 FY26, with substantial revenue growth expected in FY27 and FY28.

Highlights

Total revenue increased 51% year-over-year to $12.7 million in Q2 FY26, driven by grant revenue, Fabric.AI collaboration, and R&D.
Achieved 3 major milestones in the U.S. Army color microLED program, including over 150,000 nits brightness, exceeding targets.
Secured multiple new prototype orders for Sentinel FPV drones, positioning for significant volume production in late Q4 FY26.
Net income attributable to common stockholders improved to $0.9 million ($0.00 per share) in Q2 FY26 from a $5.2 million loss ($0.03 per share) YoY.
Secured over $45 million in orders year-to-date FY26 for core defense business, including a $21.5 million thermal imaging contract.

Concerns

Product revenue saw only a slight increase to $7.6 million, with higher defense revenues offset by lower industrial application revenues.
Research and development expenses increased to $4.5 million from $1.9 million YoY, primarily due to higher funded R&D costs.
Selling and general administrative expenses increased to $5.1 million from $4.9 million YoY, driven by higher professional fees and performance-based compensation.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	Exceeding prior guidance high materiality	FY26 · 2026	High
GAAP Profitability	Begin generating GAAP profitability high materiality	Q4 · 2026	High
Positive Free Cash Flow	Begin generating positive free cash flow high materiality	Q4 · 2026	High
Sentinel FPV Revenue	Tens of millions of dollars high materiality	FY27 · 2027	Medium
IBAS/SBMC Main Production	Main production slated for 2028 high materiality	FY28 · 2028	High
Neural I/o Development Revenue	$20M-$30M medium materiality	FY27 · 2027	Medium
Revenue Target	$100M high materiality	FY28 · 2028	High
OLED Gross Margin Improvement	At least 15 points medium materiality	FY27 · 2027	High

Deals & partnerships

U.S. Army Industrial Base Analysis and Sustainment (IBAS) award for color microLED development $15.4M

Award received in September 2025 to establish U.S.-based microLED display manufacturing capability for next-generation soldier vision systems.

Fabric.AI Development program for GPU-to-GPU connectivity technologies (Neural I/o) $15M

Initial development order funding a demonstrable chiplet expected by end of 2026, with a clear path to production for a 1.6 Tbps transceiver solution.

Strategic Partner Development of a next-generation clip-on with augmented reality and thermal integration capabilities

Partnership focused on advanced AR thermal clip-on technology.

U.S. Army Follow-on thermal imaging product and production contract $21.5M

Contract for thermal imaging products, contributing to the core defense business.

Theon DarkWAVE development order to adapt connector for night vision goggle $1M

Collaboration to integrate DarkWAVE with Theon's night vision goggles, opening new opportunities in NATO.

Multiple Drone Manufacturers/System Integrators Initial Sentinel FPV production orders

Orders for Sentinel FPV solutions, with volume orders expected to begin in late Q4 2026 following Drone Dominance Program evaluations.

Current NVIDIA NVLink partners Interest in Kopin and Fabric.AI's current chipset and future roadmap of devices

Several new nondisclosure agreements signed with NVIDIA NVLink partners, indicating growing interest in Neural I/o technology.

Capital programs

Dallas Optics and Photonics Design Center announced

Benefit:New optics and photonics lab space, dedicated design and engineering center, advanced R&D capabilities for Neural I/o, and manufacturing capacity for Neural I/o and application-specific optical solutions.

Planned new facility to strengthen domestic engineering, deepen expertise, and accelerate delivery of next-generation Neural I/o systems for AI infrastructure.

In-house OLED Deposition Line underway Under $10M

Start: FY26

Benefit:Increased OLED production capacity, expected at least 15 points of gross margin improvement.

The major investment for Sentinel FPV scaling, with payments spread over quarters. It will allow Kopin to produce OLEDs more profitably internally.

Optical Automation Program operational and on track

Benefit:Approximately $1 million in annual operating expense savings and added overall production capacity.

Both phases of the program are operational and on track to deliver cost savings and increased capacity.

What to watch in Q3 FY26

IBAS MicroLED Milestones

Q4 2026

Current 3 major milestones achieved

Target Completion of 3 additional milestones

Why it matters

Continued execution on the IBAS program is crucial for securing future U.S. Army programs of record and establishing domestic microLED manufacturing.

We're still working very hard to meet further milestones, which we expect to in Q4 of this year. So I think we have another 3 milestones to finish off this year, and that will put us in great position to provide the industry and the government with samples next year of the color microLED.

Find out whether KOPN delivers this. Inve re-checks your case every morning.

Q&A highlights

What should be expected from the Neural I/o demo at CES in 2027, specifically regarding proof points?

The demo will showcase real-time bit transmission and reception, demonstrating the speed and capability of the full transceiver tile. It will also illustrate how the technology scales to semiconductor sizes to achieve 1.6 terabits per second, with initial optical data already impressing potential customers.

“We will be sending bits, receiving bits, and I will not go into all the details because I do not want to ruin the surprise. But we'll be performing that demonstration for a number of potential customers, and it will be a full transceiver tile.”

asked by Joshua Sullivan · answered by Michael Murray

2 min read 5 chapters

Detailed narrative

MicroLED Program Milestones

Kopin achieved three major milestones in its U.S. Army IBAS color microLED program, including exceeding 150,000 nits of single-panel full-color brightness and successful early integration into ground soldier vision applications. The company also received and is installing custom microLED bonding equipment, positioning for domestic manufacturing product transition by mid-2027.

This program is seen as a building block for hundreds of millions in future revenues from programs like Soldier Borne Mission Command (SBMC).

Neural I/o and AI Infrastructure

Kopin is applying its microLED expertise to build microLEDs that transmit data for AI infrastructure, addressing critical technology issues like yields, light collimation, and longevity. The collaboration with Fabric.AI is on track, with a $15 million initial development order funding a demonstrable chiplet expected by end of 2026.

A 1.6 terabit per second transceiver solution is targeted for production, with a demonstration planned at CES in January 2027.

Sentinel FPV Drone Momentum

The Sentinel FPV (First-Person View) solution is gaining traction with multiple new prototype orders from contenders in the Pentagon's Drone Dominance Program (DDP). Sentinel's dual situational awareness, low weight, and U.S.-based production are key differentiators. Volume orders are expected to begin in late Q4 2026, with significant growth anticipated in 2027.

Strategic Investments & Operational Discipline

Kopin is making disciplined strategic investments, including a new optics and photonics design center in Dallas, Texas, to accelerate Neural I/o development. The company is also bringing OLED deposition in-house, with the line expected online in early 2027, aiming for significant gross margin improvement. Operational automation programs are on track to deliver $1 million in annual operating expense savings.

Core Defense Business & Financial Outlook

The core defense business remains active, with over $45 million in orders year-to-date 2026. Many defense programs have Congressional budget demands through 2030, providing recurring revenue. The company reported net income of $0.9 million in Q2 FY26, a significant improvement from a loss in the prior year, and expects to achieve GAAP profitability and positive free cash flow by Q4 FY26.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.