プレシジョン・オプティクス（POCI）2026年度第4四半期決算説明会：過去最高の売上高、2027年度ガイダンス

プレシジョン・オプティクス（Precision Optics Corporation、POCI）が発表した2026年会計年度第4四半期および通期の売上高は、生産量の増加と製造効率の向上に支えられ、過去最高を記録しました。しかし経営陣は、既存の衛星通信顧客からの需要の一時的な減速により、2027年会計年度の成長が抑制されると予想しています。

主なポイント

• 2026年会計年度第4四半期の売上高は過去最高の880万ドルに達し、前年同期比で約42%増加しました。また、通期売上高は65%増の3,150万ドルに拡大しました。
• 第4四半期の売上総利益率は前年同期の13.0%から25.3%へと改善しました。関税関連の項目が、当四半期の利益率に約3ポイント寄与しました。
• 第4四半期の調整後EBITDAは35万5,000ドルの黒字となり、同ベースで2四半期連続の黒字を記録しました。通期の調整後EBITDAは、前年の370万ドルの赤字から210万ドルの赤字へと改善しました。
• 経営陣は、2027年会計年度の売上高見通しを3,000万ドル〜3,300万ドル、調整後EBITDAを120万ドル〜170万ドルの赤字と設定しました。
• 同社は、既存の衛星顧客からの売上高が2027年会計年度第1四半期に約40%減少し、第2四半期にもさらに減少した後、年度末までに回復に転じる可能性があると予想しています。
• 新規の衛星通信顧客から、それぞれ約5万ドルのエンジニアリング注文2件を獲得しました。経営陣によると、6〜12か月以内に量産が開始される可能性があり、2027年会計年度第4四半期に寄与する可能性があるとしています。

主要業績・財務ハイライト

2026年6月30日時点の現金及び現金同等物は計980万ドルとなり、前年同期の180万ドルおよび3月31日時点の1,070万ドルから変動しました。銀行借入金は約130万ドルで、リボルビング融資の利用はありませんでした。

関税の純請求額および顧客への返金額により、報告された第4四半期の売上高は約55万8,000ドル減少しました。これとは別に、プレシジョン・オプティクスが保持した関税返還金により、売上原価が約70万7,000ドル削減されました。

事業・操業業績

生産量の増加と製造効率の向上により、第4四半期の業績が推進されました。同社は既存の衛星通信プログラムにおける第4四半期の全体的な製造歩留まりが99%に達したと報告しており、同プログラムは四半期として過去最高の売上高も記録しました。

単回使用（使い捨て）膀胱鏡プログラムでは、複数のシフトで2つの生産ラインを稼働させました。プレシジョン・オプティクスは、現在の注文を完了しつつあり、生産を中断することなく追加注文を受注できる見込みであると述べました。

以前発表された単回使用眼科製品ライン向けの350万ドルの追加注文に基づく生産は立ち上げを継続しました。同ラインは第4四半期に41万3,000ドルの売上高を生み出し、四半期歩留まりは90%、現在の歩留まりは94%となっています。

ロス・オプティカルの四半期売上高は約150万ドルと前年同期比で55%増加しました。通期売上高は約32%増の490万ドルとなりました。経営陣は、ロス・オプティカルは固定費を比例的に増加させることなく追加の生産規模に対応できると述べています。

プレシジョン・オプティクスはまた、大手防衛関連顧客から130万ドルの追加注文を獲得しました。経営陣によると、この顧客のプログラムは複数年更新され、継続的な受注とより安定した生産体制を支援する可能性があるとのことです。

衛星通信は引き続き戦略的成長分野です。新規顧客の初期エンジニアリング業務には、衛星コンステレーションの設計および製造計画が含まれています。最終的な範囲、価格設定、時期は依然として不透明ですが、経営陣はこの商機が最終的に、第4四半期末近くに年換算売上高ランレート約1,200万ドル〜1,300万ドルに達した既存の衛星プログラムを上回る可能性があると述べています。

業績見通し（ガイダンス）

2027年会計年度について、経営陣は以下を予想しています。

• 売上高は3,000万ドル〜3,300万ドル（2026年会計年度とおおむね同水準）。
• 調整後EBITDAは120万ドルの赤字〜170万ドルの赤字。
• 会計年度前半は四半期赤字となり、年度末までに四半期黒字へ復帰。
• 単回使用医療機器、防衛生産の再開、新たなエンジニアリング案件、および量産へと移行する追加プログラムに支えられた、より堅調な下期。

経営陣は売上高の横ばい見通しについて、既存の衛星顧客からの需要の一時的な落ち込みに起因するとしています。2027年会計年度第1四半期において同顧客からの売上高が前期比で約40%減少し、第2四半期にもさらに減少すると予想しています。最近の顧客との協議では2027年会計年度末までの回復の可能性が示唆されたものの、経営陣はその時期と規模は依然として不透明であるとしています。

リスクと注視点

• 衛星打ち上げ能力の制約により既存の衛星顧客が過剰在庫を抱えており、プレシジョン・オプティクスのアセンブリに対する短期的な発注が減少しています。
• 既存の衛星プログラムは粗利率が高いため、その売上高を他の事業で補ったとしても、同等の利益寄与が得られない可能性があります。
• サプライチェーンのリードタイムがあるため、新規受注後に衛星生産を再開するには2〜4か月を要する可能性があります。
• 新しい衛星プログラムは依然としてエンジニアリングおよび設計段階にあります。その商用規模、価格設定、および生産時期は確定していません。
• 製造歩留まりと稼働率は改善したものの、経営陣は新しい生産プログラムが依然として立ち上げ時の課題に直面する可能性があることを認めています。

アナリスト・投資家向け質疑応答のハイライト

経営陣は、新規顧客が目標とする6〜12か月以内に生産を開始した場合、より高付加価値な衛星通信アセンブリが2027年会計年度後半から売上高と利益率に貢献し始めると予想しています。同社は、自社の既存の製造インフラが顧客の要求する生産量に対応して拡張可能であると考えています。

既存の衛星プログラムに関する重要なマイルストーンは、新たな量産受注と、その2〜4か月後の生産再開です。新規顧客については、経営陣は今後数か月間に追加のエンジニアリング受注があり、それに続いて初期の量産受注と、同様のサプライチェーン立ち上げ期間が見込まれると考えています。

経営陣は、極めて厳しい光学公差を実現する独自の設計・製造技術を、同社の主な競争上の優位性として挙げています。実証された生産能力と歩留まりも、追加の優位性として説明されました。

異例の事態が発生しない限り、同社は現在、2027年会計年度中にエクイティ資金調達を行う計画はありません。また、顧客前受金は衛星通信事業に関連するものではないことも確認されました。

単回使用内視鏡分野において、経営陣は同市場が引き続き新規開発プログラムのターゲットであると述べました。同社のUnityプラットフォームは、以前のプログラムでより長い期間を要していた開発から生産までのタイムラインを約1〜2年に短縮すると期待されています。

決算説明会（電話会議）全文文字起こし

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, and welcome to the Precision Optics Reports Fourth Quarter and Fiscal Year 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

Robert Blum

All right. Thank you, Nick, and to everyone joining the call today. As the operator mentioned, on today's call, we will discuss Precision Optics' fourth quarter and fiscal year 2026 financial results and is for the period ended June 30, 2026. With us on the call representing the company today are Dr. Joe Forkey, Precision Optics' Chief Executive Officer; and Wayne Coll, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we'll open the call for a question-and-answer session. [Operator Instructions]

Before we begin with prepared remarks, we submit for the record the following statement. Statements made by the management team of Precision Optics during the course of this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements describe future expectations, plans, results or strategies and are generally preceded by words such as may, future, plan or planned, will or should, expected, anticipates, draft, eventually or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those projected in the forward-looking statements, including the risk that actual results may differ materially from those projected in the forward-looking statements as a result of various factors and other risks identified in the company's filings with the Securities and Exchange Commission.

All forward-looking statements contained during this conference call speak only as of the date on which they are made and are based on management's assumptions and estimates as of such date. The company does not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.

With that said, let me turn the call over to Dr. Joe Forkey, Chief Executive Officer of Precision Optics. Joe, please proceed.

Joseph Forkey

Thank you, Robert, and thank you all for joining the call today. Fiscal 2026 was a year of transformation for Precision Optics. We began the year with strong production demand and considerable work to prepare for higher volume production with improved manufacturing efficiency. We ended the year with record revenue and 2 consecutive quarters of positive adjusted EBITDA. The second half demonstrated what the business can accomplish as the investments we have made over the past 2 years begin to deliver results.

The foundations are in place for long-term revenue growth, and we are very excited about recent developments in our growing satellite communications vertical. Much of that progress is directly attributable to Joe Traut and his team. Since Joe joined as Chief Operating Officer in October, we have strengthened operations and engineering leadership, improved execution, addressed production bottlenecks and helped our people deliver substantially higher volumes more efficiently.

Last month's addition of Peter Thier as Senior Vice President of Sales and Marketing adds urgency to increasing our pipeline to drive higher sales and optimize utilization of the improved operational infrastructure. We entered fiscal 2027 with a stronger organization and a manufacturing business operating at a very different scale compared to just a year ago. The anticipated slowdown we discussed last quarter for our existing satellite customer will affect our results, but we are confident that this is temporary.

As a reminder, this reduction in the rate of orders resulted from constrained satellite launch capacity unrelated to the solutions that we provide. At the same time, new orders are coming into the development pipeline, programs are transferring from the pipeline to production, and we now have a stronger team to pursue new opportunities.

On our call today, I'll focus my comments primarily on 4 topics: First, our fourth quarter performance; second, updates to our sales and marketing approach; third, our growing understanding of the satellite communications market; and finally, our outlook for fiscal 2027. Fourth quarter of fiscal 2026 revenue reached a record $8.8 million, up approximately 42% from a year ago.

Gross margin improved to 25.3% and adjusted EBITDA was positive $355,000. For the full year, revenue increased approximately 65% to $31.5 million, exceeding our most recent guidance. We also finished the year with a smaller adjusted EBITDA loss than we had projected due to the strong fourth quarter performance. The strong Q4 numbers resulted from much higher production volumes, along with improved efficiency, demonstrating that we can manufacture profitably at high volume.

We have spent considerable time discussing the cost of expanding manufacturing capacity. We are now seeing the benefits of that work, benefits that not only improve the profitability of existing production lines, but also other lines starting production now and in the future. Our single-use cystoscope program continued to improve in terms of yield and throughput with 2 production lines now operating multiple shifts.

We are completing the existing order and expect a follow-on order with no interruption in production. Our existing satellite communications program delivered record quarterly revenue in Q4. The manufacturing processes and alignment capabilities we developed for this customer have allowed us to support a significant increase in volume even while achieving record yield of 99% for Q4 overall.

This program has also given us practical experience that we can bring to other satellite customers from understanding the optical requirements to establishing repeatable production processes for these types of assemblies. More on that in just a minute. We're now leveraging the improvements made to our single-use cystoscope line to improve the efficiencies of our single-use ophthalmic line, where production continues to ramp under the previously announced $3.5 million follow-on order.

Fourth quarter revenue for this line was $413,000 with overall yield at 90%. Currently, this line is running consistently at 94% yield. Ross Optical also had a strong quarter with revenue of approximately $1.5 million, up 55% from a year ago. Full year revenue increased approximately 32% to $4.9 million. As we've discussed before, Ross can support additional volume without a proportional increase in fixed costs, making growth in that part of the business a meaningful contributor to our overall profitability.

Looking beyond the quarter, the $1.3 million follow-on order from our large defense customer is another encouraging development. The order took longer to arrive than originally expected, but our customer has told us that their program has received a multiyear renewal, and we should expect ongoing orders for many years. They have also agreed to work together to establish a manufacturing agreement that supports more continuous production.

With the manufacturing organization on a stronger footing, we are putting greater emphasis on the front end of the business. Peter Thier's appointment as SVP of Sales and Marketing is an important part of that effort. He brings more than 30 years of experience in sales, business development and commercial leadership, and his experience selling engineering services that lead to manufacturing fits our business model very well.

Peter is joining a commercial organization we have been building over the past year. We added a sales development representative in January to research markets and identify prospective customers. We also expanded our outbound marketing through webinars, a blog, updated websites and LinkedIn activity. Charlie Metzger, a sales rep focusing on Ross Optical and our micro-optics products, has also returned to the organization, bringing optics experience and relationships in aerospace and defense from his prior work at Ross Optical and elsewhere.

The purpose of these investments is straightforward. Our product development pipeline has focused too heavily on a few engagements, leaving engineering resources underutilized when those engagements move to production. While we have utilized some of our engineering capacity to support manufacturing improvements, going forward, we will be more focused on new programs. We will focus our attention and investments on opportunities in the fastest-growing, highest-value markets aligned with our current capabilities.

We have already begun to target the satellite communications market, building on the success we've had with our first program in this area. I'll talk more about the market in general in just a minute. But first, let me comment on the new order in this area that we announced just a couple weeks ago. The $50,000 order was an initial engineering order from a U.S. space technology development company developing a new satellite constellation.

It was structured on a time and materials basis so that work could begin promptly. Since our announcement, we have received a second order for approximately $50,000 for additional engineering work. The scope of both orders supports design and manufacturing planning and is expected to take a few months. We anticipate follow-on engineering and prototype work to finalize designs and establish production lines.

The customer's stated goal is to begin production within approximately 6 to 12 months with a potential significant impact to our fourth fiscal quarter in fiscal 2027. This new customer came to us in part because of our reputation in supplying very precise opto-mechanical assemblies required for satellite communication systems. While our discussion with this customer started with subassemblies similar to what we manufacture for our existing customer, it quickly progressed to include additional higher-level assemblies, some including electro-optics and electronic circuits along with optics and mechanics.

These higher-level assemblies could allow us to provide more content per unit and take on a broader role in this new customer system as compared to our existing customers. Based on those discussions, we believe the eventual opportunity could be larger than our existing satellite program, although it is too early to quantify.

Let me spend a few minutes now explaining why we are so excited about satellite communications. Everyone has heard of SpaceX's Starlink system, which was the first to provide internet access through the use of a satellite constellation. Since starlight -- Starlink service was launched 6 years ago, the potential for commercial and military applications has become widely recognized with multiple private and government networks now in orbit and many more being deployed.

Virtually all of these low Earth orbit systems utilize laser communications between satellites, which require very precise design and assembly of electro-opto-mechanical systems embedded in so-called laser or optical communication terminals. These systems are ideally suited to Precision Optics' proprietary design and manufacturing techniques. As these communication protocols become more standardized and as applications become more widespread, the market for laser communication terminals will expand beyond satellite constellation builders to include many systems that link to these constellations.

This is anticipated to initially include other satellites and eventually commercial and military aircraft, ships and potentially ground-based users as well. Today, POC's business in this area is supported by 2 large constellation programs, each with plans for thousands of satellites with 4 to 5 communication terminals in each satellite. Because low Earth orbit satellites have a limited lifetime of 3 to 5 years, the work we are doing now to support constellation build-out will continue indefinitely as 1/3 to 1/5 of each steady-state constellation is replaced each year.

Sending a narrow laser beam between moving satellites hundreds or thousands of miles apart requires exceptional optical precision. Some of our assemblies in this area require alignment precision as tight as 5 microns. That's 1/10 the width of a human hair. And the assembly needs to survive the stresses and vibrations associated with rocket launch as well as the complex thermal and vacuum environments in space. We believe the subassemblies we build, which are part of the communication terminals, are critical and challenging to source.

When Rocket Lab acquired Mynaric in April of this year, Peter Beck, Rocket Lab's CEO, commented, "Laser communication is a key enabler for satellite constellations, but it has long been a supply chain pain point for commercial and government constellation operators. High-performing and cost-effective products simply have not been available in high volumes."

Industry research firm Novaspace projects that the number of laser communication terminals in orbit will reach approximately 118,000 by 2035 with cumulative global terminal revenue of $12.9 billion through that period. That's the market for complete terminals and likely does not include the ongoing revenue for replacement systems required due to limited satellite lifetime. Today, our subassembly products address a few percent of the overall terminal market.

But as we begin to supply higher-level subassemblies, our addressable market will grow quickly. With the market for these systems expanding, with the shortage of suppliers and with POC's demonstrated capability to design and manufacture critical subsystems, it's an ideal time for us to continue and expand our presence in this market. Turning to fiscal 2027, our outlook reflects both progress across the business and the anticipated temporary reduction in production for our existing satellite customer.

We continued to believe in the long-term opportunity with this customer despite an anticipated 40% reduction in revenue in the first quarter of fiscal 2027 and an additional reduction in the second quarter. While the timing and extent of the recovery remains uncertain, the most recent communications indicate a recovery by the end of fiscal 2027. We expect the impact of this to be most pronounced in the first half of the fiscal year with a stronger second half supported by growth in single-use medical devices, renewed defense production, additional programs moving into production, and new engineering engagements.

The product mix also matters. The existing satellite program is a higher-margin contributor, so replacing its revenue with other business does not immediately replace the same amount of profit. For fiscal 2027, we expect revenue of $30 million to $33 million, similar to fiscal 2026. We expect adjusted EBITDA to range from negative $1.2 million to negative $1.7 million, an improvement from fiscal 2026 with quarterly losses early in the year before a return to quarterly profitability by the end of the year.

We expect the new satellite relationship will contribute near-term product development revenues and a long-term production opportunity. We are encouraged by the broader set of opportunities taking shape, and our focus is on converting them into orders and executing them successfully. Over the long term, our opportunities for growth and profitability are as great as ever.

With that, let me turn the call over to Wayne to review the financial results.

Wayne Coll

Thank you, Joe. Let me expand on the financial results, covering both the fourth quarter and full year. Fourth quarter revenue was $8.8 million compared to $6.2 million a year ago, an increase of approximately 42% and up slightly from $8.7 million in the sequential third quarter. Full year revenue was $31.5 million compared to $19.1 million last year, an increase of approximately 65%.

As Joe mentioned, full year revenue surpassed the increased guidance we provided earlier. Production revenue, which includes systems manufacturing, our micro-optics lab and Ross Optical, was $8.0 million for the quarter, up approximately 57%. For the year, production revenue doubled to $28.1 million from $14.2 million. Engineering revenue was approximately $800,000 for the quarter compared to $1.1 million, while full year engineering revenue was $3.5 million compared to $4.9 million in the prior year.

Fourth quarter gross margin was 25.3% compared to 13.0% a year ago and 23.6% in the third quarter. Gross profit was $2.2 million compared to approximately $800,000 a year ago. For the full year, gross profit increased to $5.4 million from $3.4 million, while gross margin was 17.2% compared to 17.8%. The annual margin reflects the cost of ramping production in the first half, followed by substantial improvement in the second half.

IEEPA tariff refunds impacted the quarterly results. Net tariff billings and customer refunds reduced our reported revenue by approximately $558,000. Separately, tariff refunds retained by the company reduced COGS by approximately $707,000, together equating to a roughly 3 percentage point increase of quarterly margin. These benefits should be distinguished from the ongoing manufacturing improvements Joe discussed.

Total operating expenses were approximately $2.3 million in the fourth quarter compared to approximately $2.2 million a year ago. Full year operating expenses were approximately $8.9 million, essentially unchanged from $9.0 million in the prior year. For the year, SG&A was approximately $7.9 million compared to $7.8 million, while R&D was approximately $1.0 million compared to $1.2 million.

The broader point is that we supported a significant increase in annual revenue while keeping total operating expenses at the prior year's level. Our R&D investment supports product improvements, new technologies and approaches we can apply across customer programs. We continue to manage operating expenses while supporting the engineering capabilities and commercial initiatives that are important to future growth.

The fourth quarter net loss was approximately $100,000 compared to a net loss of $1.4 million a year ago and a net loss of approximately $108,000 in the third quarter. For the year, our net loss narrowed to $3.6 million or $0.43 per share from $5.8 million or 85% -- or $0.85 per share. Adjusted EBITDA was positive $355,000 in the fourth quarter compared to negative $857,000 a year ago. Together with the positive third quarter, this produced over $600,000 of positive adjusted EBITDA for the second half of our fiscal year.

Full year adjusted EBITDA improved to negative $2.1 million from negative $3.7 million, outperforming our most recent guidance of negative $2.5 million to negative $2.7 million. Cash and cash equivalents were $9.8 million at June 30 compared to $1.8 million a year earlier and $10.7 million at March 31. Our March public offering [indiscernible] substantially strengthened the balance sheet.

Bank debt was approximately $1.3 million at year-end with no borrowings under the line -- revolving line of credit. As Joe outlined, fiscal 2027 reflects a lower contribution from our existing satellite customer with other programs expected to support a stronger second half. Our focus is on managing working capital and expenses while supporting those opportunities.

I will now turn the call back over to Joe for some final comments.

Joseph Forkey

Thank you, Wayne. Before we take questions, I wanted to come back to what changed in fiscal 2026. We demonstrated that Precision Optics can support substantially higher production volumes and improve profitability as our manufacturing revenue grows and operations become more efficient. Our next priority is to build more business to leverage the value of this operational foundation. We have strengthened sales and marketing.

We are pursuing larger medical device opportunities, and we are expanding our reach in adjacent markets, particularly in laser-based satellite communications. While we have work ahead of us to capitalize on this potential, we believe the team and capabilities now in place position Precision Optics well for the significant opportunities before us. I want to thank you all for your continued support. And we'd be happy to take questions now.

Operator

[Operator Instructions] The first question will come from Milo Date, private investor.

Unknown Attendee

As you shift into higher-value assemblies, when should we expect that higher margin program to actually start flowing to the bottom line?

Joseph Forkey

So I think you're referring to the higher-level subassemblies for the laser comms. Is that right?

Unknown Attendee

Yes.

Joseph Forkey

Yes. Okay. So that program just started with the order that we announced a couple of weeks ago. The customer is looking to have us start production in 6 to 12 months. So I would expect towards the latter half of fiscal '27, we ought to be able to see the beginnings of the higher margins and the higher dollar content of those higher-level assemblies.

Unknown Attendee

And just to follow-up on that. How scalable do you see these tighter -- larger assemblies, and do you think your manufacturing floor can handle that at scale?

Joseph Forkey

So this is where we can use everything that we learned over the last 2 years about how to scale these kinds of production lines in order to be able to scale this one very quickly. So I don't foresee any challenges in being able to scale those lines. I think we'll be able to scale them as quickly as the customer would like us to.

Operator

[Operator Instructions]

Robert Blum

Nick, this is Robert here. While we wait to see if anyone else comes into the live question queue, we do have questions coming in through the webcast portal.

[Operator Instructions]

So Joe and Wayne, the first question here is, you mentioned directed energy weapons at a recent conference. Can you talk about any updates on that?

Joseph Forkey

Yes, sure. The simple answer there is we don't have any updates. So I think we said before that we've made prototypes for some companies for those -- for some optics that we make that can be used in directed energy weapons. And we haven't heard anything further about whether they will ask us for more prototypes or if they'll give us an order. So it's really no news on that front right now.

Robert Blum

Okay. The next question here is, could you elaborate a little more on the potential size of the recently announced satellite order?

Joseph Forkey

So it's a little difficult to get very specific there because we haven't finalized all of the design work in order to fully understand the size of the subassemblies and the cost and pricing that we would use for that. I guess the one thing I could say is that the size of the constellations that we're talking about with this customer are similar or even higher, even larger than the customer that we've been working with. In the end of Q4, we were running at a run rate of, I think, $13 million a year for our existing satellite customer, somewhere around there, $12 million, $13 million or so.

In this other customer, this new customer, we expect the product that we make will be higher on the value chain. So I would expect it to be higher from that standpoint, especially since the size of their satellite constellation will be similar or larger than the others. So I would -- all we can really say right now is it will be north of that $13 million we expect, but it's difficult to say just how much higher it will be.

Robert Blum

All right. Staying on the satellite communication order topic here. Another question regarding the new satellite optical communications customer and the broader optical terminal opportunity, can you help investors understand the expected path from the current engineering orders to commercial production? Specifically, what milestones should we look for over the next 12 to 18 months that would indicate these programs are becoming meaningful revenue contributors?

Joseph Forkey

Yes, sure. So for the first customer that we already have that has pulled back a little bit, we're anticipating that they will give us new production orders when they're ready to restart, and we'll announce those. So the investment community should expect that once we have an order from that existing customer that we would announce it, and that will give lots of information about when that order will restart and how quickly it will get going again. There's a supply chain limitation there, which would likely require us to have somewhere between 2 and 4 months to be able to restart production. So the milestones there would be an order from the customer, which we would announce and then restarted production in 2 to 4 months after that.

For the new satellite customer, this customer is very anxious to get things moving as quickly as possible. I expect there will be a series of orders from them as we continue to do the engineering development work. And I would expect that over the next few months. And then I would expect that we would receive initial production orders with a similar 2- to 4-month supply chain start-up on the new orders from them. So those are the milestones that I would be looking for in terms of public announcements.

Robert Blum

Okay. Another topic -- another question on this topic here. With your current optical terminal components, would you say the primary advantage is in capacity and yield or IP and process knowledge?

Joseph Forkey

Our major competitive advantage is in IP around the way that we design and manufacture the subassemblies to be able to hold the super tight tolerances that are required in order to achieve the communication of these satellites, which are hundreds of thousands of miles apart. What I would add to that is that the capacity and yields that we've demonstrated, particularly over the last couple of quarters, I would say, are sort of secondary competitive advantage.

It still is a competitive advantage, but the strongest part of our competitive advantage is in the IP. There are very few companies that can build these kinds of subassemblies at all. And then once you take the number of companies who can build the subassemblies, there are even fewer that can do it at capacity and yield that we've demonstrated over the last couple of quarters. So it's really both, but the IP around the design and techniques for manufacturing are the primary competitive advantage that we have.

Robert Blum

All right. [Operator Instructions] Next question here is, do all satellite systems utilize laser-based comms? And what about radio or microwave communications?

Joseph Forkey

Yes. So traditionally, with older satellites, especially satellites that are higher, that are not in low Earth orbit, most of the communication was RF or microwave. For these low Earth orbit constellations, virtually all of the communication satellite to satellite has now become laser-based, and that's because the laser is more directed, and so it's more energy efficient. But also more importantly, you can support much faster communication speeds or higher bandwidth that are reported to be hundreds or even 1,000x faster than you can with RF or microwaves. The communication from the satellite systems, the constellation systems to and from the ground continues to be dominated by RF and microwave. And the reason for that is because the lasers interfere with the atmosphere.

And so that makes laser comms from the ground to the satellite or satellite to ground more challenging. There are -- there's technology that's being developed now that would make communications to and from the ground also laser-based. And when that becomes mature, the size of the laser-based comms market will grow even larger because at that point, you'll end up with the ground to satellite, satellite to ground comms as well. So the short answer is today, virtually all of the low Earth orbit satellite constellations use laser comms to communicate between the satellites. There's still some RF and microwave going to and from the ground. But I think eventually, all of that will turn to laser comms and expand the market even further.

Robert Blum

All right. Series of questions here, I guess, again, coming back to the satellite order here that says, which is it? Are they sitting on inventory of your assembly, the next-gen design changed or their launches slipped? And as a follow-up, it says, is any of the $2.5 million in customer advances theirs? And finally, under your own EBITDA guidance, do you anticipate raising equity in fiscal year 2027?

Joseph Forkey

So I'll take the first and last of those questions. I'm going to let Wayne comment on the customer advances. So the answer is sort of a combination of the answers that were given as the choices. Our customer has excess inventory of the subassemblies that we build -- that we've built for them. And our belief is that the reason they have excess inventory is because their launch schedules have been restricted by restricted launch capacity sort of worldwide. So we believe that, that's the downstream bottleneck. And once that bottleneck is resolved, we expect that the number of units that they need is going to resume back up to where it was before.

Let's see -- I'm going to let Wayne answer the question about customer advances.

Wayne Coll

Yes. We don't require customer advances from all of our customers. It's always based on the risk profile. And based on -- the satellite communications doesn't fit that profile. So we don't have deposits related to that business.

Joseph Forkey

And then, Robert, remind me of the third part of that question.

Robert Blum

Under your own EBITDA guidance, do you anticipate having to raise equity in fiscal year 2027?

Joseph Forkey

Yes, that's right. No, we don't have any particular plans unless we have some unusual events, but we don't have any plans for that now.

Robert Blum

Okay. Next question here is a little bit of maybe a follow-up here. Was the pause in orders from the existing contract the primary reason for the somewhat flat guidance? Or are there additional variables at play?

Joseph Forkey

No, that's a great question. It is -- I would say it's fair to say it was entirely because of the pause in that program. The reason why it's flat is because that program is pulling back, but a number of other programs are coming online. So if it weren't for that pullback, we would have substantial growth year-over-year. And as we think about the potential for the company, we believe once this customer comes back online and we see the second satellite communication customer come online with production, and we see a number of programs going into production from the engineering pipeline that we didn't even talk about today, we think the potential for growth is quite substantial.

On top of that, we firmly believe that we have the right team in place now, and that was a lot of what we had to get through over the last couple of years. So the question is -- it's a great question. It's right on. The short answer is the flat guidance is entirely caused by the pullback on this one customer, which we fully believe is temporary because there's no chance they're not going to continue building out their constellation.

Robert Blum

All right. [Operator Instructions]

Next question here. Are you pursuing any opportunities in the AI data center market?

Joseph Forkey

There are no specific -- let's see, there is nothing that is well enough developed for us to say that we're pursuing things in that area. We look at all adjacent markets that use optics. And certainly, there are some systems in AI data centers that use optics. And so we're taking a look at them, but none of them are at a level that I would call programs that we're specifically pursuing at this point. I will add sort of parenthetically that there are -- as everyone I suspect is aware, there's talk about AI data centers in space, and there are even some companies who have put together proposals and talked about proposals for AI data centers in space, which would be made up of multiple satellites.

And as you can imagine, those satellites, again, would communicate with laser comms. Those would be very similar to the things that we're doing now for the Internet communication satellite comms. So if that ever came to pass, that would be another place where the market size for laser comms would grow dramatically and the things we're doing now for the constellations, I believe, could also be used for AI data centers in space.

Robert Blum

All right. Our next question here is, can you give investors a sense of the long-term growth potential of your single-use endoscopy business and what milestones we should watch for over the next 12 to 24 months?

Joseph Forkey

Yes. So we talked a lot today about satellite communications. We see lots of opportunity there, of course, and this is a somewhat new area for us, which is why we spent a lot of time talking about it. We're still very excited about single-use endoscopes. And we talked briefly about our initial single-use endoscope line continuing to grow in terms of volume and in terms of yield, that's the cystoscope line. We also talked about the ophthalmic line ramping and learning everything that we use from the cystoscope line to be able to ramp the ophthalmic line more quickly than we did the cystoscope line and also to improve yields more quickly.

So everything we've learned there is applicable to future programs. We do still see the single-use endoscope market as growing quickly. The estimates are still 10% to 20% per year. We do have new customers that we're talking to about those kinds of programs. And so again, what I would expect the investment community to be watching for would be new development programs that we announced that are in the single-use endoscope area and with an expectation that it would take a couple of years to get those programs from development into production.

We haven't talked about it on this call, but our Unity platform is still a part of our marketing approach to the single-use endoscope market. And that, of course, continues to reduce the times to market. So where our first single-use endoscope program took 4 or 5 years and then our second one took 2 or 3 years, we expect that the Unity platform will bring that down to 1 to 2 years. So the milestones, again, would be to see new announcements about engagement on the development program and then a year or so after that, rolling those into production.

Robert Blum

Follow-up on medical here is medical is, "trucking along." Will that continue to be viewed as baseline revenue? Or are there new opportunities in play?

Joseph Forkey

So the nice thing about the programs we've been talking about, again, those 2 single-use programs that are in production is that we expect those to continue for a long, long time, which again is part of our business model. We're also seeing some of the older products, in particular, we have a reusable product that's used for otolaryngology. It's been -- we've been running that program for a couple of decades, and that one is seeing some growth even over the next 6 to 12 months. So consistent with our business model, the programs that are in production, I would say, we see as a nice base that it's a good way that the questioner phrased it. They're just trucking along. And some of the newer ones, the single-use programs are continuing to grow.

But as I just answered on the last one, we still see single-use market growing at 10% to 20% year-over-year. And so we still see that as absolutely as an opportunity to bring more programs into the pipeline. We're talking with a number of customers now, some big names. And so we absolutely see that as the things in production as a solid base with the potential for continued growth, but then new programs coming into production as an absolute area that we're going to continue to target to bring new programs on and continue to grow the product development pipeline.

Robert Blum

All right. Very good. Operator, let me turn it back over to you for any questions for the traditional teleconference line at this point.

Operator

We do have a question from [ Chris Machovsky ], private investor.

Unknown Attendee

Congratulations on the progress you've been making on your efficiency and the yields. And about that, your guidance is for about flattish or slightly decreasing revenue, but for a better EBITDA. Is that because of improving yields?

Joseph Forkey

Yes. It's improving yields and improving utilization, both. So if you remember, I know you've been on the calls for a while. So if you remember the challenges that we had in the beginning of fiscal '26 had substantial impact on the EBITDA for the first and second quarter of fiscal '26. The latter half of the year, of course, was a much better performance. It's all about having the infrastructure in place, having the right people and the right tools to be able to run those operations efficiently. So yield is certainly part of it. As the lines get more mature, they get better in terms of efficiency and yield. We've done some engineering work to improve the yields, but it's also just generally running that part of the operation more efficiently with the right people, with the right experience running those lines.

So it's both of those things creating greater efficiency. And you're absolutely right, even though the guidance is about flat on revenue, the EBITDA, while it's still a loss is better than this fiscal year that we're just reporting for fiscal '26 because the lines are running much better than they were before. And this is all about the investments that we've made over the last few years. We often talked about this being sort of like building a start-up manufacturing capability inside of the company to manufacture at these higher volumes with the efficiencies we need.

Unknown Attendee

Yes, I -- through those 2 quarters. And would that mean that in the new medical programs, such as the ophthalmic program that we're talking about, when that one ramps, we won't have that kind of -- those kind of problems?

Joseph Forkey

Yes. So there's always going to be some start-up challenges. But if you -- I think we had it embedded in some of our comments for the last couple of quarters. The ophthalmic program ramped, it had about a quarter's worth of what I would say, sort of excessive challenges in rolling from engineering to production. But once it started ramping, it got -- very quickly it got to profitable margins for that product. And as we continue to ramp, the rate at which the efficiency goes up and the yields go up is much faster than with the first couple of quarters for the cystoscopy program. So the short answer to your question is yes. As that one ramps, you should expect to see the contribution to profitability come in much faster than the cystoscope program did a year or 2 years ago.

Unknown Attendee

Should we be looking at satellite launch window availability as kind of like a very early sign of recovery of your business? Or is that kind of unrelated?

Joseph Forkey

It is related, and we do watch that, yes. We believe it's related to the recovery of the -- our primary satellite communication program, yes.

Unknown Attendee

All right. Well, hopefully, they will recover quickly.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Joseph Forkey

Thank you, operator, and thank you, everyone, for joining us today. I look forward to speaking with everyone again in just a few weeks. Have a good evening.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.