Precision Optics Corporation Inc (POCI) reported first quarter of fiscal 2025 (period ended September 30, 2024) with revenue of $4.20 million, down 13% year over year and 11% quarter over quarter, and a net loss of $1.31 million. The quarter was characterized by underutilization and a manufacturing pause tied to a defense aerospace customer’s specification change, which pressured gross margins to 27% and driven an EBITDA shortfall of approximately $1.20 million. Management attributed the weakness to near-term production delays that have since been largely resolved, with guidance calling for a significantly stronger revenue and a dramatically improved bottom line in Q2 and the remainder of the year. The company reaffirmed a multi-year strategy focused on single-use endoscopes, supported by an integrated platform of optics, sensors, and electronics from Lighthouse Imaging and OmniVision, with early production orders already transitioning from development to manufacturing.
Looking ahead, POCI disclosed two notable single-use orders that underscore the strategic shift toward recurring revenue and higher image quality endoscopes. The first order, a $9 million cystoscope imaging assembly tied to a next-generation AI-powered robotic platform for BPH, is expected to deliver about $3.6 million in the current fiscal year and ramp in subsequent years. The second order, a smaller ophthalmic endoscope for glaucoma, initially worth $340k, is designed to launch in January 2025 with potential first-year follow-ons around $1.5 million. Management highlighted that the platform solution and a robust product development pipeline will sustain growth into fiscal 2025 and beyond, with production revenue expected to rise from roughly $6.6 million in 2024 to over $10 million in 2025 and annual production growth projected in the 25%–30% range in the coming years. However, the company remains in a cash-light position, entering the quarter with about $0.64 million of cash and a $750k line of credit, following a net $1.2 million equity raise in August 2024.
Overall, the near-term risk-reward is centered on execution: resolving production delays, scaling manufacturing to meet new single-use programs, and converting development opportunities into durable, recurring revenue. If the two confirmed programs scale as expected and the pipeline of additional single-use opportunities transitions to production on a timely basis, POCI could move toward EBITDA breakeven in the second half of fiscal 2025 and generate meaningful long-term growth tied to the expanding single-use endoscopy market.