• Revenue: $13.3 million, a 26% increase over Q3 2023.
• Defense Product Revenue: $10.4 million, a 109% year-over-year increase.
• Product Revenue: $10.9 million compared to $5.5 million in Q3 2023.
• Funded Research and Development Revenue: $2.3 million, a decrease of $2.7 million from Q3 2023.
• Cost of Product Revenues: $8.3 million or 76% of net product revenues, down from 99% in Q3 2023.
• R&D Expenses: $2.6 million, down from $3.1 million in Q3 2023.
• SG&A Expenses: $5.2 million, up from $4.8 million in Q3 2023.
• Net Loss: $3.5 million or 3 per share, compared to a net loss of $2.5 million or 2 per share in Q3 2023.

• Warning! GuruFocus has detected 4 Warning Signs with KOPN.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kopin Corp (NASDAQ:KOPN) achieved a 26% increase in revenue for Q3 2024 compared to Q3 2023, reaching $13.3 million.
• The company reported a significant 109% year-over-year increase in defense product revenue, totaling $10.4 million.
• Kopin Corp (NASDAQ:KOPN) secured over $75 million in orders for 2024 and beyond, potentially the highest annual order total in its history.
• The company reached a final production qualification milestone for its OLED on silicon display for the F-35 helmet mounted display system.
• Kopin Corp (NASDAQ:KOPN) launched its next-generation SXK FLK Micro display system, positioning itself well in the growing global 3D AOI market.

Negative Points

• The net loss for Q3 2024 was $3.5 million, compared to a net loss of $2.5 million in Q3 2023.
• Funded research and development revenues decreased by $2.7 million compared to Q3 2023.
• SG&A expenses increased to $5.2 million in Q3 2024 from $4.8 million in Q3 2023, primarily due to higher legal fees.
• The book-to-bill ratio for Q3 was slightly below 1 to 1, indicating a potential imbalance between orders received and fulfilled.
• Legal expenses related to ongoing litigation were significant, with $1.5 million incurred in Q3 2024.

Q & A Highlights

Q: Can you elaborate on the traction in the international market and whether your sales infrastructure is fully built out to address it? A: Michael Murray, CEO: International business currently accounts for less than 5% of our revenue, but we expect it to grow due to geopolitical issues and NATO's spending requirements. We are not fully built out for international sales yet but plan to make investments to support this growth.

Q: What was the book-to-bill ratio for Q3, and how might the change in administration impact your business? A: Michael Murray, CEO: The book-to-bill ratio for Q3 was slightly below 1 to 1. We expect the new administration to be positive for Kopin due to continued emphasis on NATO spending and increased defense budgets, which should benefit smaller companies like ours.

Q: Was the better-than-expected revenue in the quarter due to pulling orders from Q4 or ramping new programs? A: Michael Murray, CEO: It was a combination of favorable product mix and efficient production. Our revenues are based on percent completion, and a smooth supply chain allowed us to get ahead in production.

Q: Can you provide more details on the neural display and its potential impact on the consumer and defense markets? A: Michael Murray, CEO: Neural display integrates multiple sensors, reducing the need for costly and heavy cameras in AR/VR devices. It has significant potential in consumer, medical, and defense markets. We are making substantial progress, although some details are under NDA.

Q: How are you addressing potential supply chain issues and tariffs with the change in administration? A: Michael Murray, CEO: We have moved sensitive US DOD applications to a US-approved provider, ensuring dual sourcing for components. This strategy enhances flexibility and quality, and we are also advocating for a larger US manufacturing footprint.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.