Kopin Corp 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Kopin Corporation reported second quarter 2026 revenue of $12.7 million, a 51% increase from $8.5 million in the second quarter of 2025, driven primarily by grant revenue from the U.S. government micro LED award, development revenue with fabric AI, and higher R&D revenue from the U.S. Army heads-up display program.
- Product revenues were $7.6 million, slightly up from $7.5 million year over year, with higher defense revenues offset by lower industrial application revenues.
- Non-product revenues increased to $5.1 million from $1 million, mainly due to grant revenue and collaboration revenue from government and fabric AI programs.
- Cost of product revenues improved to 86% of net product revenues from 94% the prior year, primarily due to product mix.
- R&D expenses rose to $4.5 million from $1.9 million, driven by higher funded R&D costs related to the micro LED government award.
- SG&A expenses increased slightly to $5.1 million from $4.9 million, due to higher professional fees and performance-based compensation.
- Loss from operations narrowed to $3.5 million from $5.5 million, and net income attributable to common stockholders was $0.9 million compared to a net loss of $5.2 million in the prior year quarter.
- Cash and cash equivalents were $24.3 million as of June 2026, with total cash, restricted cash, and marketable securities of $50.3 million.
- Kopin achieved three major milestones in its U.S. Army color micro LED program, including exceeding 150,000 nits brightness, successful integration into soldier vision applications, and installation of advanced bonding equipment for domestic manufacturing.
- The company expects to begin manufacturing micro LED products by mid-2027, with potential revenues in the hundreds of millions over the program's life.
- Sentinel FPV goggles received multiple prototype orders tied to the U.S. government's Drone Dominance Program, with volume orders expected to begin in late Q4 2026.
- Kopin announced plans to open an optics and photonics design center in Dallas, Texas, by the end of 2026 to support neural I/O and AI infrastructure growth.
- The company continues to expand its OLED deposition capabilities, expecting its own line to come online early in 2027, supporting FPV drone programs and international orders.
- Management emphasized disciplined capital deployment aligned with quantifiable customer demand across micro LED, FPV, OLED, and AI infrastructure platforms.
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Transcript
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Evening, everyone, and welcome to the Kopin Corporation Second Quarter 2026 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, and the earnings press release accompanying this conference call was issued earlier today. Before we get started, I'd like to remind everyone that during today's call, we will be making forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the company's current expectations, projections, beliefs, and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those forward-looking statements.
Potential risks include, but are not limited to, demand for our products, operating results of our subsidiaries, market conditions, and other factors discussed in our most recent annual report on Form 10-K and other documents filed with the Securities and Exchange Commission. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven inaccurate, and there can be no assurance that the results will be realized. The company undertakes no obligation to update the forward-looking statements made during today's call. Kopin Corporation's Chief Executive Officer, Michael Murray, will begin today's call with an overview of Kopin's strategic progress and business development during the second quarter and the period that has followed. Following Michael, Kopin's CFO, Erich Manz, will review the company's second quarter 2026 financial results. I would now like to turn the conference over to Michael Murray. Michael, the floor is yours.
Well, thank you very much, operator, and good afternoon to everyone, and welcome to our second quarter 2026 earnings call. The second quarter and the weeks that followed showed Kopin executing on every one of the priorities we laid out at the beginning of this year. We delivered major technical and manufacturing milestones in our U.S. Army Color MicroLED program. We converted our entry into FPV drone markets into multiple new prototype orders tied to the U.S. government's Drone Dominance Program. We continued to make disciplined strategic investments in our U.S. engineering and manufacturing footprint, including a new optics and photonics design center in Dallas, Texas. Today, I will walk you through three areas. First, the three major milestones in our Color MicroLED program under the IBAS initiative and what they mean for domestic manufacturing of MicroLED displays and MicroLED-based transceivers and co-packaged optics.
Second, the accelerating momentum for Sentinel FPV as the Drone Dominance Program moves toward Gauntlet II awards. Third, our strategic investments, the Dallas Design Center, our continued onshoring of OLED manufacturing, and our Neural I/O roadmap with Fabric.AI, and how they position Kopin for long-term, sustainable, and most importantly, profitable growth. First, let me start with our MicroLED program. In July, we announced three major milestone achievements: our Color MicroLED development program under the U.S. Government Industrial Base Analysis and Sustainment, or IBAS program. These accomplishments represent significant progress towards establishing a fully U.S.-based MicroLED display manufacturing capability that advances towards next-generation soldier vision systems. First, let's discuss some performance. We achieved over 150,000 nits of single-panel full-color brightness, exceeding the program's threshold target. This is the level of brightness required for daytime readable, full-color augmented reality in the field, and it's an early result.
Planned improvements are expected to push this brightness even higher. Second, integration. We made successful early integration progress translating our Color MicroLED technology into U.S. Army ground soldier vision applications. This brings Kopin closer to enabling full soldier-borne systems, such as Soldier Borne Mission Command, or SBMC, where lightweight, high-brightness, full-color MicroLED displays are essential for real-time situational awareness, digital overlays, and mission execution. Third, manufacturing. We received several custom-made tools which we are in the process of installation, like our new MicroLED bonding equipment at our Westborough headquarters. This advanced system enables the precise attachment of the MicroLED array to the digital backplane, an essential step in MicroLED production and a foundational requirement for scaling domestic manufacturing. With these milestones achieved, we expect to transition to manufacturing product in mid-2027, positioning Kopin as a key U.S. supplier of next-generation MicroLED display technology.
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