Kopin (KOPN) Q2 2026 earnings summary

Executive summary

• Achieved major technical and manufacturing milestones in the U.S. Army Color MicroLED program, including record-setting brightness and installation of U.S. bonding capability, advancing domestic production for mid-2027.

• Secured multiple new prototype orders for Sentinel FPV goggles as part of the U.S. government's Drone Dominance Program, with significant volume opportunities expected in late August 2026 and 2027.

• Opened a new optics and photonics design center in Dallas, Texas, to accelerate Neural I/O platform development for AI infrastructure, signing new NDAs and generating strong OEM interest.

• Maintained strong engagement and order momentum in core defense and international markets, including over $45 million in orders year-to-date.

• Growth was driven by higher defense product sales, increased R&D and grant revenues, and gains on investments.

Financial highlights

• Total revenue for Q2 2026 was $12.7 million, up 51% year-over-year from $8.5 million, driven by government grants, collaboration revenue, and higher R&D revenue.

• Product revenue was $7.6 million, nearly flat year-over-year, with higher defense offset by lower industrial sales.

• Non-product revenue rose to $5.1 million from $1 million, mainly from grant and collaboration income.

• Net income attributable to common stockholders was $0.9 million, compared to a net loss of $5.2 million a year ago, reflecting higher revenues, investment gains, and a $2.1 million tax benefit.

• Gross margin improved as cost of product revenues fell to 86% of net product revenues in Q2 2026 from 94% in Q2 2025.

Outlook and guidance

• Expecting a solid second half of 2026, exceeding prior guidance of $52–$60 million in annual revenue, with optimism for continued growth into 2027.

• Anticipates GAAP profitability and positive free cash flow in Q4 2026.

• Management expects sufficient liquidity to fund operations into Q4 2027, with $24.9 million in unrestricted cash as of June 27, 2026.

• Main production for Color MicroLED slated for 2028, with initial low-rate production in 2027.

• Remaining performance obligations total $40.3 million, expected to be recognized over the next 12 months.