Optical Cable Corporation (OCC) reported fourth‑quarter and full‑year 2025 results that show modest revenue growth but a continued net loss for the year. Net sales rose 1.8% to $19.8 million in Q4 and 9.5% to $73.0 million for the year, driven by stronger demand in its enterprise and specialty markets. Gross profit increased to $6.3 million in Q4 and $22.6 million for the year, but gross margin slipped to 31.9% in the quarter from 33.5% in Q4 2024, while the full‑year margin expanded to 30.9% from 27.3% in FY 2024.
The decline in Q4 gross margin reflects a shift in product mix toward lower‑margin items and higher raw‑material costs, offset by operating‑leverage gains that lifted the full‑year margin. Management attributed the full‑year improvement to higher volumes that spread fixed manufacturing costs and to incremental efficiencies in the production line. In contrast, the Q4 margin compression was partially due to a heavier mix of specialty cables, which carry lower margins, and to a modest increase in shipping and logistics expenses.
Net income for the quarter was $49,000, a sharp drop from $373,000 in Q4 2024, while the company posted a net loss of $1.5 million for the year versus a $4.2 million loss in FY 2024. The quarterly loss was driven by a $200,000 one‑time restructuring charge and higher SG&A expenses, which rose to $23 million from $21.5 million in FY 2024. The increase in SG&A was largely due to higher employee and contracted sales personnel costs and increased shipping costs, as management noted in its commentary.
OCC reaffirmed its strategic partnership with Lightera, a subsidiary of the Furukawa Electric Group, which was announced in July 2025. The partnership, which granted Lightera a 7.24% stake in OCC, is expected to broaden product offerings in the data‑center and enterprise sectors. CEO Neil Wilkin highlighted that the collaboration “expands our product solutions offering for the data‑center market as demand for cloud computing and artificial intelligence applications continues to accelerate.”
Market reaction to the earnings was mixed. While the company’s revenue and full‑year margin growth were positive, investors focused on the sharp decline in Q4 net income and the persistence of a net loss for the year. The market’s concern was amplified by the fact that the Q4 loss was driven by a one‑time restructuring charge and higher SG&A costs, suggesting that profitability may remain under pressure until the company can fully realize the benefits of its operating‑leverage strategy.
Looking ahead, OCC maintained its guidance for FY 2026, emphasizing confidence in continued demand for its high‑bandwidth solutions. Management reiterated its focus on cost discipline and on leveraging the Lightera partnership to capture additional market share in the data‑center segment. The company’s sales order backlog increased to $7.3 million from $5.7 million at the end of FY 2025, indicating healthy future demand and supporting its outlook for sustained growth.
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