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    KOPN
    Earnings call· Jun 2026(Q2 FY26)

    KOPIN Q2 FY26 earnings call KOPN

    Aug 10, 2026 Source

    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

    5

    • 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

    3

    • 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

    8
    CategoryTargetConfidence
    Full-year 2026 Revenue
    Exceeding prior guidance
    high materiality
    High
    GAAP Profitability
    Begin generating GAAP profitability
    high materiality
    High
    Positive Free Cash Flow
    Begin generating positive free cash flow
    high materiality
    High
    Sentinel FPV Revenue
    Tens of millions of dollars
    high materiality
    Medium
    IBAS/SBMC Main Production
    Main production slated for 2028
    high materiality
    High
    Neural I/o Development Revenue
    $20M-$30M
    medium materiality
    Medium
    Revenue Target
    $100M
    high materiality
    High
    OLED Gross Margin Improvement
    At least 15 points
    medium materiality
    High

    Operational metrics

    13
    Cash and cash equivalents balance
    $24.3M
    Q2 FY26

    Cash and cash equivalents at the end of the second quarter.

    Total cash, restricted cash, and marketable securities
    $50.3M
    Q2 FY26

    Total liquidity position, including restricted cash.

    Restricted cash collateral
    $24.2M
    Q2 FY26

    Portion of restricted cash used as collateral for a litigation appeal.

    Total Revenue Growth
    51%YoY
    Q2 FY26

    Year-over-year increase in total revenue for the second quarter.

    Product Revenue Growth
    slight increaseYoY
    Q2 FY26

    Product revenue saw a slight increase year-over-year.

    Nonproduct Revenue Growth
    410%YoY
    Q2 FY26

    Nonproduct revenue increased significantly from $1 million in Q2 FY25 to $5.1 million in Q2 FY26.

    Other Income Net Increase
    $1.9MYoY
    Q2 FY26

    Increase in other income net, contributing to net income improvement.

    Annual Operating Expense Savings
    $1M
    Annual

    Expected annual savings from the optical automation program.

    Orders Year-to-Date
    $45M
    YTD FY26

    Total orders received for the core defense business in 2026 so far.

    Fabric.AI Initial Development Order
    $15M
    FY26

    Initial development order for the Neural I/o project with Fabric.AI.

    MicroLED Density
    16M
    Current

    Kopin has a device in production with 16 million individual LEDs in a 0.5-inch display, showcasing high-density microLED capability.

    Neural I/o Transceiver Speed Target
    1.6
    Target

    Target speed for the Neural I/o transceiver solution, with a clear path to production.

    DarkWAVE Connector Order
    $1M
    Q2 FY26

    Order received from Theon for DarkWAVE connector adaptation, now completed and undergoing testing.

    Industry KPIs

    5
    MetricValueDetails
    Fab capacity utilizationFlexible
    Bookings net order intake$45MUSD
    Design wins socket pipelineMultipleorders
    Node platform ramp scheduleMid-2027
    End market segment revenue mix—

    Deals & partnerships

    7
    U.S. ArmyIndustrial 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.AIDevelopment 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 PartnerDevelopment of a next-generation clip-on with augmented reality and thermal integration capabilities

    Partnership focused on advanced AR thermal clip-on technology.

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

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

    TheonDarkWAVE 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 IntegratorsInitial 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 partnersInterest 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

    3
    Dallas Optics and Photonics Design Centerannounced

    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 LineunderwayUnder $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 Programoperational 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

    5

    IBAS MicroLED Milestones

    Q4 2026
    Current3 major milestones achieved
    TargetCompletion 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.

    Q&A highlights

    10

    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 read5 chapters

    Detailed Narrative

    01

    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).

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.