Precision Optics reported QQ3 2025 revenue of $4.20 million, down 20.2% year-over-year and 7.5% quarter-over-quarter, with a gross margin of 10.0% (vs. 35.0% in the year-ago quarter). The quarterly results were heavily affected by production yield challenges on the single-use cystoscope program, which led to a line shutdown and increased non-billable sustaining engineering, contributing to an EBITDA shortfall and a net loss of $2.10 million for the quarter. Management communicated that the root causes have been identified and corrected, and the company remains focused on ramping production and monetizing a robust aerospace and single-use endoscope backlog. A key near-term catalyst is the Unity platform rollout, which Cisco-like modular design is intended to shorten time to market and expand the addressable endoscope market, supported by a backlog that management cites as “greater than $6 million” and a minimum annual aerospace commitment of about $4 million for 2025–2026.
Management signaled confidence in a Q4 inflection point, guiding to approximately $6 million in revenue next quarter as production scales and the Unity-driven pipeline converts to billable revenue. The balance sheet shows liquidity support from a roughly $5 million equity raise in the quarter, ending cash of about $2.55 million, and a net cash position after financing activity of roughly $1.88 million in net debt (net cash figure negative). While near-term profitability remains a work in progress, the company has a clear operational plan: resolve yield issues, expand aerospace output (including a second cystoscope line in H1 FY2026), and accelerate Unity adoption across potential customers. This sets up a multi-quarter path toward revenue growth and potential EBITDA positivity if production efficiency and demand momentum persist.