Optical Cable returns to profitability as Q2 revenue rises
Optical Cable Corporation returned to profitability in Q2 2026 with a net income of $1.1 million, reversing a prior-year loss. Revenue increased 26.6% to $22.2 million, supported by strong demand in enterprise data centers and Severe Duty markets. Gross profit margins expanded to 34.2% due to manufacturing leverage, while the sales order backlog grew 82% year-over-year to $13.3 million.
*this image is generated using AI for illustrative purposes only.
Optical Cable Corporation returned to profitability in the second quarter of fiscal year 2026, reporting net income of $1.1 million, or 12 cents per share. This result reversed a net loss of $698,000, or 9 cents per share, recorded in the same period last year. The turnaround was driven by a 26.6% year-over-year increase in net sales, which reached $22.2 million, fueled by strength in enterprise data center and Severe Duty markets.
Gross profit increased 42.4% to $7.6 million, with the gross profit margin expanding to 34.2% from 30.4% in the prior year. Management attributed the margin expansion to higher volumes and positive manufacturing operating leverage. While SG&A expenses rose to $6.3 million from $5.7 million, they decreased as a percentage of net sales to 28.2% from 32.7%, indicating improved operating efficiency.
Q2 Financial Performance
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Net Sales | $22.2 million | $17.5 million | 26.6% Increase |
| Gross Profit | $7.6 million | $5.3 million | 42.4% Increase |
| Gross Profit Margin | 34.2% | 30.4% | Expansion |
| SG&A Expenses | $6.3 million | $5.7 million | Increase |
| Net Income | $1.1 million | $(698,000) | Turned Profitable |
| Earnings Per Share | 12 cents | (9) cents | Turned Profitable |
Operational Outlook
The sales order backlog reached $13.3 million at the end of the quarter, an increase of more than 27% from $10.4 million as of January 31, 2026, and up more than 82% from $7.3 million as of October 31, 2025. Neil Wilkin, Chairman, President, and CEO, expressed confidence in the company's momentum, citing growth opportunities in multi-tenant and enterprise data center markets. The company is evaluating capacity expansion, including adding manufacturing staff and machine capacity, to support long-term growth despite industry-wide optical fiber shortages.
How will the company navigate industry-wide optical fiber shortages while executing planned capacity expansions?
What is the expected timeline for capital expenditures related to adding manufacturing staff and machine capacity?
Can the current gross profit margin expansion be sustained as the company scales operations to meet the growing backlog?
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