Kopin's Preliminary Revenue Rises 52% — But Its Product Sales Fall To $8.8 Million
Development funding and MicroLED grants lifted revenue as the operating loss narrowed from the second quarter.
Kopin, which makes miniature displays and optical systems for weapon sights, pilot helmets and other equipment, reported preliminary unaudited third-quarter revenue of $18.2 million, up 52% from a year earlier, while product sales fell to $8.8 million from $10.7 million. In results released with Tuesday's SEC filing, the company attributed the growth primarily to its Fabric.AI development program and government funding for color MicroLED technology.
Development Dollars Outpace Display Sales
Research-and-development revenue reached $5.7 million, compared with $1.2 million a year earlier, according to Kopin's earnings release. Grant income contributed $3.1 million, and licensing and other revenue added $605,900 versus $68,754 a year earlier.
Total revenue also rose 43% from the second quarter's $12.7 million. Defense display revenue fell to $8.5 million from $9.9 million a year earlier, while industrial revenue dropped to $52,155 from $749,400. Medical revenue increased to $279,664 from $1,000.
Defense product sales, excluding development contracts, accounted for 74% of revenue in fiscal 2025. Kopin also supplies industrial inspection and surgical equipment, earning money through products, customer-funded development and licensing.
The development-to-production transition is central to management's plan. Michael Murray, Kopin's chief executive officer, described funded programs as “setting the stage for future product revenue as they move from R&D into production.”
A Smaller Operating Loss
Kopin's operating loss narrowed to $0.5 million from $3.5 million in the second quarter. Operating expenses increased 28% to $12.3 million, but revenue grew faster; expenses represented 68% of revenue, down 8 percentage points from the prior quarter.
Product costs were $6.4 million, consuming 73% of product revenue versus 79% a year earlier and 86% in the second quarter.
The year-earlier operating profit of $4.5 million benefited from litigation accounting: a $5.1 million gain and approximately $3.3 million in reduced accrued legal fees. This quarter's net loss was $3.4 million, or $0.02 per share, including approximately $2.7 million in investment losses largely tied to non-cash valuation changes. A year earlier, net income was $4.1 million, or $0.02 per share.
Cash and cash equivalents ended the quarter at $25.8 million, versus $24.9 million at the second-quarter end. The broader $51.3 million cash, restricted-cash and securities balance included $25.5 million of restricted cash; $24.2 million secured a bond for a litigation appeal. Operations generated approximately $2.4 million during the quarter, leaving nine-month operating cash use at $2.7 million. Quarterly capital spending was $1.4 million.
Westborough Prepares For MicroLED Production
An additional $18.6 million U.S. Army Industrial Base Analysis and Sustainment award brought cumulative funding for Kopin's color MicroLED technology to $34 million. An $800,000 Massachusetts Manufacturing Innovation Initiative grant will help install equipment in Westborough for MicroLED displays and Neural I/o optical connections.
Kopin plans to invest $80 million in Westborough, largely in manufacturing upgrades, with the expansion expected to create 80 jobs. The plan includes relocating 35 employees to a new headquarters and converting existing offices into a defense clean room.
Neural I/o, co-developed with Fabric.AI for AI data centers, has entered initial transmission-link testing. The companies' white paper models up to 1.6 times as much useful data throughput using the same number of GPUs; that is a modeled result, not a reported production outcome.
Kopin Europe received a $2.4 million OLED microdisplay order from a new international thermal weapon sight customer whose program entered low-rate initial production. Deliveries are scheduled to begin in the fourth quarter of 2026. Kopin also introduced expanded first-person-viewer evaluation kits at AUSA 2026 and received prototype Sentinel FPV headset orders from more than a dozen new customers for the Drone Dominance Program and other Department of War and government law-enforcement uses.
Kopin expects Neural I/o's first public demonstration at CES in January 2027, followed by SPIE Photonics West. Murray said MicroLED product manufacturing remains on track for mid-2027.
Sources
- 8-K Filing — KOPIN CORP (KOPN) — SEC EDGAR
- Exhibit ex99-1.htm — KOPIN CORP 8-K exhibit — SEC EDGAR
- Kopin to build new HQ as part of $80 million Westborough expansion - Boston Business Journal — bizjournals.com
