KOPIN CORP Q1 FY2025 earnings call

• Kopin is a leading provider of advanced micro displays and optical solutions for VR/AR. Focus on defense industry with unique micro display offerings and neural display technology. Global defense budgets increasing, driving quote requests, bids, and R&D projects. - CR3 medical headset entering full production. - Engaging with consumer companies for higher brightness/refresh rate displays. - Fab-light strategy provides supply continuity and flexibility. - Implemented One Kopin strategy to unify teams and reduce redundancies. - Focus on AI-assisted factory and process automation for growth.

Total revenues for Q1 2025 were $10.5 million versus $10 million for the prior year, a 5% increase year-over-year. Product revenues for the first quarter ended March 29th, 2025 were $9.2 million compared to $9 million for the first quarter ended March 30th, 2024, essentially flat. Funded research and development revenues increased 37% to $1.2 million from $900,000 in Q1 of 2024. Cost of product revenues for the first quarter of 2025 was $7.6 million or 83% of net product revenues, compared with $8.5 million or 95% of net product revenues for the first quarter of 2024. R&D expenses for the first quarter of 2025 were $2.1 million, an increase of $15,000 from a year ago. SG&A expenses were $4.7 million in the first quarter of 2025 compared to $7.2 million in the first quarter of 2024. The net loss for the first quarter 2025 was $3.1 million or $0.02 per share compared with net loss attributable to Kopin of $32.5 million or $0.27 per share for the first quarter of '24.

• Expected 2025 revenue between $52 million and $55 million. - Aim to reach at least $75 million of revenue in 2027. - Being conservative in first half of 2025 due to geopolitical and tariff uncertainties, but expect stronger second half.

• Potential risks include demand for products, operating results of subsidiaries, market conditions. - Geopolitical, trade, and tariff issues can impact business.

Q: Can you give more color on international opportunities and timeframe to convert pipeline to revenue?

A: Europe is a critical area with Scotland facility supporting defense apps; Korea and Japan also have near-term opportunities for R&D and production contracts.

Q: Thoughts on automation impact on gross margin?

A: New camera-based automation system to come online in June, expected to improve gross margin through better quality control and OpEx reduction.

Q: Reiteration of revenue guidance and progress on neural display?

A: Took revenue guidance down slightly due to geopolitical/trade issues but expects double-digit growth; neural display aims to have a demonstrable version in a headset soon with potential press and road show in next quarter.

Q: Quoting activity and R&D awards momentum?

A: Order flow improved in Q2; R&D contracts in several million dollar ranges unlock significant opportunities even if amounts are modest, like off-the visor award and color microLED research