Shares of Syntec Optics Holdings, Inc. OPTX have declined 30.7% since the company reported its earnings for the quarter ended Sept. 30, 2025, significantly underperforming the S&P 500 index, which dropped just 3.1% during the same period. The stock’s losses have been steeper over the past month, sliding 46.6% versus the broader market’s 1.2% decline, reflecting investor disappointment in the company’s latest results and outlook.
Syntec Optics incurred a third-quarter 2025 net loss of 4 cents per share compared with breakeven results in the same quarter last year.
The company reported revenues of $7 million, representing a 11.6% decline from the $7.9 million generated in the third quarter of 2024.
It incurred a net loss of $1.4 million, wider than a loss of $0.01 million in the same quarter a year ago. This steep decline was also evident in gross profit, which fell to $0.9 million from $1.8 million in the prior-year period, a drop of roughly 53%. Adjusted EBITDA for the quarter came at negative $0.01 million compared to $1.1 million in the prior-year quarter.
Syntec Optics Holdings, Inc. Price, Consensus and EPS Surprise
Syntec Optics Holdings, Inc. price-consensus-eps-surprise-chart | Syntec Optics Holdings, Inc. Quote
Other Key Business Metrics
Despite the top-line improvement quarter over quarter, the company saw deterioration in profitability metrics. The gross margin narrowed due to increased labor and overhead investments aimed at enhancing quality and delivery, particularly across key product segments like Low Earth Orbit (LEO) Satellite Optics and Night Vision equipment. General and administrative expenses increased to $2.1 million in the third quarter from $1.7 million a year ago, while interest expense also ticked up slightly.
Operating cash flow for the first nine months of 2025 turned positive at $0.7 million compared to a usage of $1.6 million in the same period of 2024, indicating improved cash management. However, cash reserves remain tight, with only $0.6 million in cash on hand at the end of the third quarter, and total liquidity, including lines of credit, standing at $1.3 million.
Management Commentary
Company leadership remains optimistic, citing strong execution on yield and throughput improvements, which are enabling higher production volumes. Management also highlighted the successful scaling of night shift operations and improvements in key product lines such as Night Vision and Integrated Scope Optics.
They emphasized that several development-stage projects are now advancing from concept to initial production, signaling potential future revenue growth. Management also noted cost-down initiatives that are expected to enhance earnings in the near term.
Factors Influencing the Headline Numbers
The decline in gross profit and EBITDA was mainly driven by increased labor and overhead costs, elevated audit fees, and higher non-cash Board of Directors compensation. These expenses outweighed the cost savings achieved in maintenance, administration, and insurance.
Additionally, lower other income and increased general and administrative expenses contributed to the nearly flat adjusted EBITDA figure compared to a profitable third quarter last year.
Guidance
Syntec Optics provided a revenue forecast for the fourth quarter of 2025 in the range of $7.3 million to $8 million, implying a sequential improvement. This guidance reflects anticipated continued strength in sales to the communications, biomedical and defense sectors, especially in space communications and military optics.
The company stated that its proprietary techniques provide a competitive edge and that macro tailwinds such as the transition to laser-based satellite communications, biomedical automation, and defense modernization are likely to support demand.
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Syntec Optics Holdings, Inc. (OPTX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).