Optical Cable Corporation(NASDAQ:OCC) reported third quarter fiscal 2025 results on September 10, 2025, delivering net sales growth of 22.8% year-over-year to $19.9 million and swinging to $302,000 net income from a prior-year net loss. The quarter featured expanded gross profit, a new strategic collaboration with Lytera (which also acquired a 7.24% OCC stake), and continued strong demand in both enterprise, and specialty market segments.
Net sales surge 22.8% and gross margin expands
Third-quarter gross profit jumped 61.2% year-over-year, reaching $6.3 million, due to higher sales volumes and improved operating leverage. Gross profit margin rose to 31.7%, up from 24.2% in the prior year, while net income turned positive after several loss-making quarters.
“Net sales increased 22.8% during 2025, compared to the same period last fiscal year, and increased 12.8% during the nine months ended July 31, 2025, compared to the same period last year. These results reflect”
— Neil Wilkin, President and CEO
This combination of accelerating revenue and disproportionately higher gross profit signals robust operating leverage and validates OCC’s ability to capitalize efficiently on volume-driven margin improvement.
Lytera collaboration marks strategic inflection for OCC
The recently announced partnership with Lytera aims to expand product offerings and market reach in both data center and enterprise sectors. As part of the agreement, Lytera acquired a 7.24% shareholding in OCC and will enable select Lytera products to be marketed and sold by OCC.
“As previously announced, OCC and Lytera entered into a strategic collaboration agreement in early July to expand product offerings and solutions to the enterprise sector, the data center sector, as well as expanded presence in certain other sectors. As part of this strategic collaboration, OCC and Lytera have combined portions of the product portfolios of both companies to deliver additional integrated cabling and connectivity solution offerings. This will include certain Lytera products being offered and sold by OCC. In connection with this strategic collaboration, Lytera made an investment in OCC with Lytera holding 7.24% of the company’s outstanding common shares.”
— Neil Wilkin, President and CEO
The combination of a capital investment and technology/product portfolio integration with a global leader such as Lytera introduces both new growth vectors and external validation, potentially accelerating OCC’s long-term sales trajectory.
OCC leverages flexible capacity amid evolving demand
OCC’s manufacturing operations currently have significant adjustable capacity, with production utilization calculated at approximately 50%. Staffing levels, rather than equipment limitations, determine OCC’s ability to meet incremental demand, mitigating the need for near-term capital investment.
“typically and Tracy had talked about this, I think, earlier in a question, a little bit is typically what affects us most is the personnel standpoint from a manufacturing side. We tend to have more capacity in equipment than we completely utilize. Part of that’s because our product line is diverse enough that we have to be prepared for different types of flows of products through the plant, particularly on the cable side. And so we tend to flex on personnel with overtime and then by new hires as demands increase. And that typically does not require significant additional investment in new equipment. And, and that also explains the operating leverage. What we’ve disclosed in our form 10-Q, typically when we do our calculations, is a capacity running at about 50%. Now that seems low, but that’s not the personnel we have staffed. That’s really the machinery and also recognition. Of how we calculate or how we’re utilizing shifts.”
— Neil Wilkin, President and CEO
This operational flexibility supports rapid scaling for growth opportunities—including those from the Lytera partnership—without meaningful capex increases or margin risk from underutilized assets.
Looking Ahead
Management declined to provide specific quantitative guidance but reaffirmed optimism about sustained strong demand into fiscal 2026, highlighting both broad market recovery and anticipated contribution from the Lytera collaboration. OCC stated no plans for material capacity expansion, viewing existing production capabilities and operating expenses as sufficient for foreseeable growth. No explicit quarterly or annual revenue or earnings forecast was issued during the call.
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