OCC 2026 회계연도 3분기 실적 발표회: 매출 22% 증가, 마진 확대

핵심 요약

• 옵티컬 케이블 코퍼레이션(OCC)은 2026 회계연도 3분기 순매출이 엔터프라이즈, 데이터 센터 및 특수 시장의 호조에 힘입어 전년 동기 대비 22% 증가한 2,430만 달러를 기록했다고 발표했습니다.
• 매출총이익은 910만 달러로 43.9% 증가했습니다. 매출총이익률은 생산량 증가, 제조 효율성 개선 및 영업 레버리지 효과를 반영해 31.7%에서 37.4%로 확대되었습니다.
• 당기순이익은 2025 회계연도 3분기 30만 2,000달러(주당순이익 $0.04)에서 증가한 190만 달러(기본 및 희석 주당순이익 $0.21)를 기록했습니다.
• 수주잔고 및 향후 납품 물량은 2025년 10월 31일 기준 730만 달러, 2026년 4월 30일 기준 1,330만 달러에서 2026년 7월 31일 기준 1,350만 달러로 증가했습니다. 대부분은 2~3분기 내에 출하될 것으로 예상됩니다.
• 경영진은 2026 회계연도 하반기가 호조를 보일 것이라는 기존 견해를 유지했으며, 8월에도 매출과 수요가 견조하게 지속되었다고 발표했습니다. 회사는 2027 회계연도 이익률 가이던스를 제공하지 않았습니다.
• 광섬유 부족 현상은 여전히 생산 확대의 주요 제약 요인으로 남아 있으나, 경영진은 이것이 2026 회계연도 잔여 기간 동안 견조한 매출 성장이 지속되는 것을 막지는 못할 것이라고 밝혔습니다.

주요 재무 데이터

사업 및 영업 실적

국내외 시장 모두에서 OCC의 엔터프라이즈, 데이터 센터 및 특수 시장 전반의 수요 호조가 성장을 뒷받침했습니다. 특수 시장에는 방산 분야가 포함됩니다. 회사는 또한 전력망 및 에너지 수직 시장에서 기회를 포착했습니다.

생산량 증가로 고정 제조 비용이 더 넓은 매출 기반에 분산되었으며 제조 효율성이 향상되었습니다. 다만 경영진은 매출총이익률이 분기별 제품 믹스 변화에 여전히 민감하다고 당부했습니다.

OCC는 여러 사업장에서 인력을 확충하고 있으며, 특히 로어노크의 광섬유 케이블 공장과 달라스 인근의 커넥티비티 및 터미네이션 시설에 가장 많은 인력을 추가하고 있습니다. 검토 중인 생산능력 확장 방안에는 특정 제품군 및 시설을 위한 신규 채용과 추가 설비 도입이 모두 포함되어 있습니다.

회사는 라이테라(Lightera) 제품을 통해 일부 매출을 일으키기 시작했습니다. 라이테라는 OCC의 전략적 협력 파트너이자 주요 공급업체입니다.

분기 말 기준 운전자본은 2025 회계연도 말의 1,390만 달러에서 증가한 1,920만 달러를 기록했습니다. 경영진은 운전자본, 회전한도대출 가용액 및 영업 현금 창출력이 단기적 필요를 충당하기에 충분하다고 밝혔습니다.

경영진 전망

경영진은 3분기 실적이 2026 회계연도 하반기 강세를 나타낼 것이라는 기존 기대를 뒷받침한다고 밝혔습니다. 9월 실적을 논하기에는 아직 이르지만, OCC는 8월에도 강력한 매출과 수요를 계속 확인했습니다.

회사는 업계 수요가 높은 수준을 유지하고 있으며 단기적인 둔화 징후는 없다고 밝혔습니다. 그러나 경영진은 현재의 수요 주기나 높은 수주잔고 수준이 얼마나 오랫동안 지속될지는 추정할 수 없다고 전했습니다. 또한 회계연도 1분기는 연휴 관련 계절성의 영향을 받을 수 있다고 덧붙였습니다.

OCC는 2027 회계연도에 대한 구체적인 이익률 가이던스를 제공하지 않았습니다. 경영진은 생산량 증가가 매출총이익률 실적을 계속해서 뒷받침할 수 있는 반면, 판매 수수료 및 운송 비용은 일반적으로 매출에 연동해 변동한다고 언급했습니다.

리스크 및 주시해야 할 점

• 특히 데이터 센터 및 기타 애플리케이션에 대한 높은 수요로 인한 광섬유 부족 현상은 여전히 주요 제조 병목 요인으로 남아 있습니다.
• 일부 원자재의 리드 타임이 길어지고 있으며, 이는 제품 출하를 제약할 수 있습니다.
• 매출총이익률은 제품 믹스, 생산량 및 제조 효율성에 따라 변동될 수 있습니다.
• 데이터 센터 영업 주기는 공급업체 및 제품 적격성 평가(qualification) 요건으로 인해 더 길어질 수 있습니다. 적격성 평가가 진행 중인 잠재 사업은 수주잔고에 포함되지 않습니다.
• 수주잔고 납품 시점은 고객별로 다르며 일부 주문에는 단계별 배송이 포함됩니다. 따라서 경영진은 수주잔고를 정확한 분기 매출 예측 수치로 다루지 않습니다.
• 판매비와관리비는 인건비 상승, 계약직 영업 인력 비용, 영업 인센티브 및 운송비 증가로 인해 상승했습니다.

애널리스트 Q&A 주요 내용

3분기 매출총이익률 개선이 일회성 요인을 반영한 것인지 묻는 질문에 경영진은 생산 영업 레버리지, 운영 효율성 및 제품 믹스 덕분이라고 답했습니다. OCC는 현재 생산 수준에서 높은 이익률을 유지하기를 기대한다고 밝혔으나 공식적인 전망치를 제시하지는 않았습니다.

경영진은 또한 수주잔고의 전분기 대비 소폭 증가가 수요 정상화를 의미하는 것은 아니라고 설명했습니다. 수주잔고 및 향후 납품 물량은 분기말 이후에도 계속 증가했으며, 잔여 주문의 대부분은 2~3분기 이내에 출하될 것으로 예상됩니다.

자금 조달과 관련해 OCC는 회전한도대출 잔액을 줄이기 위해 현금이 매일 스위프(상환)되므로 보고되는 현금 잔액이 전반적으로 낮게 나타난다고 설명했습니다. 경영진은 현재의 리볼버 가용액과 영업 현금 창출력으로 단기 필요 자금을 충당할 수 있을 것이라고 밝혔습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, everyone. My name is Bo, and I will be your conference operator today. At this time, I would like to welcome you to Optical Cable Corporation's Third Quarter of Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] With that, Ms. Felix, you may begin your conference.

Caroline Felix

Good morning, and thank you for joining us for Optical Cable Corporation's Third Quarter of Fiscal Year 2026 Conference Call. By this time, everyone should have a copy of the earnings press release issued earlier today. You can also visit www.occfiber.com for a copy. On the call with us today are Neil Wilkin, President and Chief Executive Officer of OCC; and Tracy Smith, Executive Vice President and Chief Financial Officer.

Before we begin, I'd like to remind everyone that this call may contain forward-looking statements that involve risks and uncertainties. The actual future results of Optical Cable Corporation may differ materially due to a number of factors and risks, including, but not limited to, those factors referenced in the forward-looking statements section of this morning's press release. These cautionary statements apply to the contents of the Internet webcast on www.occfiber.com, as well as today's call.

With that, I'll turn the call over to Neil Wilkin. Neil, please begin.

Neil Wilkin

Thank you, Caroline, and good morning, everyone. I will begin the call today with a few opening remarks. Tracy will then review the third quarter results for the 3-month and 9-month periods ended July 31, 2026, in some additional detail. After Tracy's remarks, we will answer as many of your questions as we can.

As is our normal practice, we will only take questions from analysts -- take live questions from analysts and institutional investors during the Q&A session. However, we also offer other shareholders the opportunity to submit questions in advance of our earnings call. Instructions regarding such submissions are included in our press release announcing the date and time of our call.

I will say that today, we got more questions than we typically would get on a quarter from individual investors. We'll answer as many of those as we can. And then when we get to the Q&A for institutional investors, please limit your questions to things that were not addressed by the questions from the individual shareholders, and we'll be limiting the questions we'll take from institutional investors to 1 question per person. With that, we'll begin.

Following a solid start to the year, we continued to build on OCC's strong growth and momentum during the third quarter of fiscal year 2026, delivering year-over-year increases of net sales, gross profit and net income. Net sales increased 22% to $24.3 million and gross profit increased 43.9% to $9.1 million during the third quarter. Our net sales increase was largely driven by strong demand in OCC's enterprise, data center and specialty markets.

Our strong gross profit results during the third quarter and also fiscal year-to-date continue to demonstrate the benefit of OCC's manufacturing operating leverage. As our production volumes increase, our fixed manufacturing costs are spread over higher sales volumes and manufacturing efficiencies also tend to increase.

As of the end of the third quarter, our sales order backlog and forward load stood at $13.5 million. We are now in the last quarter of our fiscal year, and we are confident in OCC's ability to build on our momentum and capitalize on the opportunities ahead. At the same time, we continue to explore opportunities to further strengthen OCC's capabilities and support long-term growth.

As always, we remain focused on delivering exceptional service to our customers and end users and driving sustainable value creation for our shareholders.

And with that, I'll turn the call over to Tracy, who will review in additional detail our third quarter of fiscal year 2026 financial results.

Tracy Smith

Thank you, Neil. Consolidated net sales for the third quarter of fiscal 2026 increased 22% to $24.3 million compared to $19.9 million for the same period last year. Consolidated net sales for the first 9 months of fiscal 2026 were $62.9 million, an increase of 18.3% compared to net sales of $53.2 million for the same period last year.

During the third quarter and first 9 months of fiscal 2026, we experienced an increase in net sales in our enterprise, data center and specialty markets compared to the same periods last year as we continued to see general market growth opportunities in our industry, both domestically and internationally, with strength specifically in our enterprise, data center and specialty markets.

As Neil mentioned, our sales order backlog and forward load increased to $13.5 million at the end of the third quarter of fiscal 2026 as compared to $13.3 million as of April 30, 2026, $10.4 million as of January 31, 2026, and $7.3 million as of October 31, 2025.

Turning to gross profit. Our gross profit increased 43.9% to $9.1 million in the third quarter of fiscal 2026 compared to $6.3 million in the third quarter of fiscal 2025. Gross profit margin, our gross profit as a percentage of net sales, increased to 37.4% in the third quarter of fiscal 2026, compared to 31.7% in the third quarter of the prior year.

Gross profit increased 35.5% to $22.1 million in the first 9 months of fiscal 2026, compared to $16.3 million in the first 9 months of fiscal 2025. Gross profit margin increased to 35% in the first 9 months of fiscal 2026, compared to 30.6% for the same period last year.

Gross profit margin for the third quarter and first 9 months of fiscal 2026 was positively impacted by higher volumes and the resulting positive impact of our strong operating leverage. Additionally, our gross profit margin percentages are heavily dependent upon product mix on a quarterly basis and may vary based on changes in product mix.

SG&A expenses increased to $7 million in the third quarter of fiscal year 2026 compared to $5.7 million for the same period last year. SG&A expenses as a percentage of net sales were 28.7% in the third quarter of fiscal 2026 compared to 28.8% in the third quarter of fiscal 2025.

SG&A expenses increased to $18.8 million in the first 9 months of fiscal year 2026 compared to $16.9 million for the same period last year. SG&A expenses as a percentage of net sales were 29.9% in the first 9 months of fiscal 2026 compared to 31.8% in the first 9 months of fiscal 2025.

The increase in SG&A expenses during the third quarter and first 9 months of fiscal 2026 compared to the same periods last year was primarily the result of increases in employee costs, contracted sales personnel-related costs and shipping costs. Included in employee costs and contracted sales personnel-related costs are compensation costs and sales incentives.

OCC recorded net income of $1.9 million, or $0.21 per basic and diluted share for the third quarter of fiscal 2026 compared to net income of $302,000, or $0.04 per basic and diluted share for the third quarter of fiscal 2025. OCC recorded net income of $2.5 million, or $0.28 per basic and diluted share for the first 9 months of fiscal 2026 compared to a net loss of $1.5 million, or $0.19 per basic and diluted share for the first 9 months of fiscal 2025.

With that, I'll turn the call back over to you, Neil.

Neil Wilkin

Thank you, Tracy. As I previously mentioned, we received a large number of questions in advance of today's call, some of which came in just before the call. We believe that some of these questions that have been submitted will be of interest to most participants. So we're going to go through those questions first, and then we will address any remaining questions live from analysts or institutional investors.

As we've stated before, we'd like to take 1 question from each institutional investor because I think we're going to be covering a lot of the questions you may have through the previously submitted questions. Caroline, if you'd please begin by reading the questions we've received that we were provided in advance of the call, and we'll proceed to respond.

Caroline Felix

Thanks, Neil. The first question is, can you please go into more detail about how backlog and quarterly revenue have been changing in this new demand cycle and how it is different from prior instances where backlog has bumped to above $10 million? You had said in prior calls that you expected the second half of 2026 to be very strong. Is this reflected in current and future expected backlog? Is that assumption still valid? Or is the second half of 2026 looking different at all, positive or negative? How long do you expect this higher backlog to sustain?

Neil Wilkin

So there's a lot of questions in that first statement. As you can see from our press release earlier this morning, our results during the third quarter of fiscal year 2026 support our previous expectation that the second half of 2026 would be very strong. We continue to believe that, that's going to be the case. We continue to have a robust backlog and forward load that are increasing. At the same time, sales are increasing.

We can't specifically comment on how long we expect our higher backlog to continue. However, as we've seen in the past, the backlog when it increases to a certain level, certainly is indicative of what we believe we're going to see in the following quarter or so. But a lower backlog doesn't necessarily mean that, that's going to generate a lower sales number, and we've talked about that previously. It's not a data point we've always described, but we've only been disclosing it to folks through our press releases and 10-Qs when we believe that, that number has some significant value.

I think I can also say that even though we don't know what the backlog will do, we still do believe that the industry in general is seeing high levels of demand, and there does not appear to be any indication that demand is weakening, at least as far as we can see at the moment. This does not necessarily mean that we will not see any seasonality. Our first quarter has many holidays in it, including Thanksgiving, Christmas, other December holidays, as well as New Year's. So, at this point, we're not really sure what we'll see in the first quarter, but we are seeing a significant amount of demand across the board in all of our markets.

Caroline Felix

Thanks, Neil. Next question is, can you touch on performance of OCC traditional markets, including defense?

Neil Wilkin

Yes. I mean, as we noted in our press release this morning, our enterprise, data center and specialty market sectors are all increasing during this quarter and during our year-to-date periods for -- through the third quarter of 2026. Our specialty markets include market sectors such as the military market sector.

Caroline Felix

Thanks, Neil. Next question. Can you comment on OCC's working capital position and if you feel you have enough working capital to sustain the planned growth?

Neil Wilkin

Tracy, you will take this one.

Tracy Smith

Yes, sure. Our working capital is strong at $19.2 million at the end of the third quarter and improved compared to $13.9 million at the end of fiscal year 2025. We do believe that our working capital and credit revolver are sufficient to support and sustain our working capital needs.

Caroline Felix

Thanks, Tracy. The next question is, can you provide some color on the growth rates for new versus existing customers?

Tracy Smith

I'll take that one as well. As we have noted previously, most of our sales are made through distributor channels. So we do not always have a clear picture of the customer purchasing our products through distribution or the end users of our products. However, we believe that our growth is being driven by both our existing customers and new customers and end users.

Caroline Felix

Thanks, Tracy. Next question. On the last earnings call, Neil, you had said that the sales cycle is longer for data center. Could you elaborate on that? Is the pre-backlog sales process/pipeline longer because of customer qualifications?

Neil Wilkin

So yes, I'll take that one. Yes, the sales cycle for certain portions of the data center market sector do tend to be longer. That can include qualification requirements as a new supplier for certain new products being supplied. However, as we're going through those qualification processes where they exist or indications or periods where the sales cycle is longer, that those hopefully potential sales do not show up in our backlog. Our forward load and backlog is really items where we've either received an order -- we received an order or where we expect that, that order is noncancelable and that we will be delivering it at some point in the future. Sometimes that's a short time period. Sometimes that's a longer time period because we do have some customers that stage the deliveries over time.

Caroline Felix

Next question. Does the flattish backlog versus the last quarter reflect a potential normalization in demand? Should we expect backlog to normalize further in Q4, given that Q1 is the softest quarter in terms of seasonality?

Neil Wilkin

I don't think that this -- the backlog increasing a slight amount indicates that demand is flattening in any way. We continue to see significant growth opportunities, and we have seen our backlog and sales forward load continue to grow this past month. This does not mean we may not experience some typical seasonality, as I mentioned before, in the first quarter. But for now, we continue to see continued strength in demand for our products, even if it's not reflected in a small change in the backlog forward load as of the end of the quarter.

Caroline Felix

Thanks, Neil. The next question is, SG&A rose to $7 million, above where the operating leverage story would predict. Was the Q2 to Q3 increase in employee and contracted sales personnel a onetime capacity step that now levels off? Or should we model continued SG&A growth as revenue scales? Put differently, where does SG&A settle as a percentage of sales at a $100 million-plus run rate?

Tracy Smith

I'll take that one. We don't generally provide guidance related to future or theoretical sales levels. However, certain sales compensation costs included in SG&A, as well as other costs such as shipping costs, generally tend to fluctuate with sales levels. However, this does not mean we will not see future benefits of SG&A operating leverage as sales continue to grow.

Caroline Felix

Thanks, Tracy. Next question is on funding and dilution, with working capital rising alongside growth and cash still thin, how are you funding the ramp? And at what revenue level would you need to raise equity or expand the credit facility? Should shareholders anticipate a capital raise to support fiscal year 2027 growth?

Tracy Smith

As we believe we've described previously, our cash is swept daily to repay the balance on our credit revolver. So our cash balance at any point in time will generally not be very high. At the current time, we believe we have sufficient availability on our credit revolver and from cash generated from operations to meet our needs for the near term.

Caroline Felix

Thanks, Tracy. Next question. Can you give some color on deliveries expected in Q4 and how you see margins progressing throughout fiscal year 2027?

Tracy Smith

Again, we don't provide forward guidance, so I won't comment on how we expect margins to progress throughout fiscal year 2027. I will say that we have continued to see strong sales and demand in August, but it is too early to comment on September.

Caroline Felix

The next question is, can you comment on the increased demand cycle you were experiencing and how long it could last?

Tracy Smith

Sure. As previously noted, we can't forecast specifically on how long we expect the increased demand cycle to continue. However, I can say that the industry, in general, is seeing high levels of demand, and there doesn't appear to be an indication of demand weakening in the near term.

Caroline Felix

Thanks, Tracy. Next question. Can you provide any sort of future outlook regarding customer demand signals?

Neil Wilkin

Caroline, so that you know we're having a little bit of trouble hearing you. If Bo could confirm that he's able to hear you okay, we're hearing your question, and we'll continue to answer them, but your signal is breaking up just a little bit.

Operator

Mr. Wilkin, are you having any problem hearing Caroline? Mr. Wilkin, I can hear her loud and clear at this time, sir.

Neil Wilkin

Okay. Okay. Maybe on our end then. So hopefully, you can hear us. Please flag -- let us know if you're having any trouble hearing us.

Caroline Felix

Yes, we can hear you okay.

Tracy Smith

Okay. So other than what we have already disclosed, we cannot really provide any additional future customer demand outlook.

Caroline Felix

Thanks, Tracy. The next question is, are you seeing any new or emerging risks?

Neil Wilkin

We are not seeing any new or unusual market risk at this time. As we've described during our second quarter earnings call, we have been seeing some industry-wide delays as a result of high product demand and certain fiber optic -- optical fiber shortages. Additionally, we've seen some longer lead times for certain raw materials, as one would expect given the current high demand for products. We expect these challenges will continue, but we also believe we're taking appropriate action to navigate those challenges.

Caroline Felix

Thanks, Neil. The next question is, can you provide an update on OCC's plans to increase capacity? What level of capacity expansion are we talking about? And what is the plan?

Neil Wilkin

We are regularly considering the need for investment in machinery and equipment and/or human resources to expand our capacity in general and also for specific opportunities. We are seeing some opportunities to increase our capacity currently. We do not generally comment publicly on the specific capacity expansion plans for various reasons, including for competitive reasons. And I think that answers the question.

Caroline Felix

Thanks, Neil. The next question is, can you provide an update on fiber shortages and potential challenges of higher fiber pricing on OCC's margins?

Neil Wilkin

Yes. Currently, the industry continues to experience optical fiber shortages due to excessive product demand for data centers as well as certain other product applications. We believe OCC is successfully managing these industry dynamics as we've demonstrated during the first 9 months of this fiscal year. We do not believe these industry challenges will prevent us from continuing to report strong top line revenue growth during the remainder of fiscal year 2026. Notably, we work to limit potential impacts on our customers and our gross profits that these industry factors may have. Of course, as we've noted in the past, OCC's profit margins can also be impacted by product mix and other factors, which can be difficult to predict.

Caroline Felix

Thanks, Neil. Next question. Can you share an update on any potential bottlenecks at ramping up manufacturing, including labor availability and cost?

Neil Wilkin

We are able to -- we are seeing various different effects that are limiting our product shipments at some level, and so those are bottlenecks. Those are primarily impediments to ramping up manufacturing. The primary impediments to ramping up manufacturing at the current time is really optical fiber shortages, as we previously described. But as you can also see in our results, we've been able to generate increased sales despite those impediments.

Caroline Felix

Thanks, Neil. Next question. Can you provide some color on inventory levels at OCC customers and dealers and if this is above or below average?

Tracy Smith

As you might expect, we're not able to specifically comment on inventory levels of our products at our customers. That said, given current market conditions, we believe it would be unusual for companies to be carrying inventory in excess of current expected demand.

Caroline Felix

Thanks, Tracy. Next question. What is the typical duration of your backlog? And is this currently changing? Or does the data center-related business have different characteristics?

Tracy Smith

Various factors determine the duration of our sales order backlog and forward load, which are specific to each customer. Our backlog and forward load generally represents what we consider to be noncancelable orders. However, in some cases, customers may schedule out future deliveries, while others are expected to ship as soon as we can complete manufacturing. As a result, I would not say there is a typical duration. However, I would say that most of our sales order backlog and forward load is expected to be shipped within 2 to 3 quarters.

Caroline Felix

Thanks, Tracy. Next question is, can you help us understand what level of capacity OCC is currently operating at? On the last earnings call, Tracy, you had mentioned that OCC is looking into expanding capacity. Could you provide some additional color on which products or end markets you may focus on?

Tracy Smith

OCC has different levels of capacity for different product families at each of our manufacturing facilities. And so yes, we are looking into expanding capacity for certain products at certain facilities, and this includes additional hires as well as additional equipment.

Caroline Felix

Thanks, Tracy. Next question. Does OCC have opportunities in the grid, battery, energy and storage systems verticals?

Neil Wilkin

Yes. OCC has some fiber optic cable and connectivity opportunities in grid and energy vertical market sectors.

Caroline Felix

Thanks, Neil. The next question is, Google Data is projected to build a large campus of data centers very close to OCC's site in Roanoke. Does this present an opportunity for you?

Neil Wilkin

OCC's primary focus in the data center market sector is multi-tenant data centers and enterprise data centers. However, we are following the Google data center project near us. And as you'd expect, we will explore potential opportunities on that project. And of course, we're very excited that they're going to be setting this data center up so close to our Roanoke facility.

Caroline Felix

The next question is, this summer, Furukawa announced a significant capacity expansion through Lightera. Is this an opportunity for OCC?

Neil Wilkin

Well, as you'd expect, we don't speak for Furukawa or Lightera. However, from OCC's perspective, Lightera is not only a strategic collaboration partner with OCC, but they are also an important supplier to OCC. The strategic collaboration with Lightera does add certain products to OCC's product offering.

Caroline Felix

Thanks, Neil. The next question is, in June, the company significantly stepped up its manufacturing-related hiring in Plano. Is this in relation to the Lightera partnership? And am I correctly recalling that OCC does a lot of its data center-related connectivity work in Plano?

Neil Wilkin

Well, we're actually currently increasing staffing at each of our facilities with the largest increases at our fiber optic cable manufacturing facility in Roanoke and our connectivity and termination facility near Dallas. OCC has capabilities related to our targeted data center market sectors in each of our manufacturing facilities, including Roanoke, Dallas as well as some in Asheville as well.

Caroline Felix

Thanks, Neil. The last question for today is, your last 10-Q changed its language around the Lightera partnership related to Lightera products being offered and sold by the company. Does this mean that OCC has started to realize the first sales related to the Lightera partnership in Q2? And could you give us an update for Q3?

Tracy Smith

As you would expect, we are beginning to see some sales of some Lightera products, thus the change in the language in the 10-Q.

Caroline Felix

Thanks, Tracy and Neil. We have no other questions that were provided in advance of the call today at this time.

Neil Wilkin

Well, thank you, Caroline. And now we will answer any additional questions that analysts or institutional investors may have. We ask that you please limit yourself to one question. Bo, if you could please indicate the instructions to our participants to call in any questions they have. I'd appreciate it. Additionally, if you'd please mute individuals following their 1 question so that we can take as many of the questions from analysts and institutional investors that wish to ask.

Operator

[Operator Instructions] We'll go first this morning to Sergi Mascaro with Eden Discovery.

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Sergi Mascaro

So the gross margin was very impressive this quarter, and I'm wondering if this improvement is just related to higher volumes or there are other factors or other one-offs impacting the gross margin?

Neil Wilkin

Well, our gross margin can vary based on manufacturing operating leverage, but also -- and other efficiencies, also product mix. And so we're pleased that we've been able to show an increase in our gross profit margins over the last couple of -- gross profit margin percentage over the last couple of quarters, and we're hoping that we'll continue to maintain higher margins at the production levels we're currently at.

Operator

[Operator Instructions] And Mr. Wilkin, it appears we have no further questions over the phone at this time. Sir, I'd like to turn the conference back to you for any closing comments.

Neil Wilkin

Okay. Well, thank you. I would like to thank everyone for listening to our third quarter of fiscal year 2026 conference call today. As always, we appreciate your time and your investment in Optical Cable Corporation.

Additionally, I would like to note that this Friday marks the 25th anniversary of the terrible attack on the United States on September 11, 2001. We are so grateful for our company's first responders and those that serve and support the U.S. military for protecting us, protecting our freedom and protecting our way of life. Thank you all. Have a good day.

Operator

Thank you very much, Mr. Wilkin, and thank you, Ms. Smith. Again, ladies and gentlemen, this brings us to the end of today's meeting. We do appreciate your time and participation. You may now disconnect.