Good day, and welcome to the Syntec Optics Holdings, Inc. fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. Please note that today's call is being recorded and will be available for download later from the company's website, www.syntecoptics.com.
Before we begin, please note that today's discussion will include forward-looking statements within the meaning of the federal securities laws. These statements are based on current expectations and involve risk and uncertainties that may cause actual results to differ materially.
For a discussion of these risks, please refer to our filings with the Securities and Exchange Commission, including our Form 10-K and Form 10-Q filings. Syntec Optics undertakes no obligation to update any forward-looking statements. Joining us today are Dean Rudy, Chief Financial Officer, and Al Kapoor, Chief Executive Officer of Syntec Optics. I will now turn the call over to Dean Rudy. Dean, please go ahead.
Thank you, operator, and good day everybody as well. We appreciate you joining us today to discuss Syntec's fourth quarter and full year 2025 results. Before we begin, I would like to remind everyone that today's discussion contains forward-looking statements subject to risk and uncertainties, which are described in our SEC filings.
Financial overview of Q4 of 2025. Revenue for the quarter of $7.5 million was up $0.2 million or 2.5% over prior year same quarter and was up $0.6 million over the same year previous quarter. Sales were up over both comparative periods for our low Earth orbiting satellite-related production, our defense-related precision glass molding, and our biomedical-related products.
Gross margin for the quarter of $1.8 million saw significant expansion, more than doubling compared to the same year previous quarter and increasing 80% over the prior year quarter. Reductions in materials and labor costs reflected improved production yields.
SG&A expense also saw significant improvement, decreasing 30% sequentially and decreasing by 40% compared to the prior year. SG&A expense for Q4 2024 was $2.4 million, Q3 2025 was $2.1 million, and Q4 2025 was $1.5 million.
As a result of the above improvements, Adjusted EBITDA of $0.9 million increased by nearly $1 million versus both same quarter prior year and same year previous quarter. Results for the year-end followed a similar path, reflecting enhanced yields, cost discipline, and operational execution. Full year 2025 highlights.
Gross margin increased by 3.3 percentage points from 20.0% to 23.3%, driven by continuous improvement and efficiency projects. These improvements drove a 13% increase in gross profit from $5.7 million to $6.5 million. SG&A expense of $7.0 million decreased by $1.2 million as compared to the prior year.
Improvements included reductions in insurance expenses, outside services and consultants, as well as cost economizing across all categories. Adjusted EBITDA also saw significant improvement. It increased by 37% versus the prior year. These improvements for the full year were achieved even with net sales of $28.1 million, which was down $0.4 million from full year 2024.
As a result of the improvements above, earnings per share of -0.05 in 2025 improved from -0.07 in 2024. Cash provided by operations increased to $0.7 million for the year and was used for facility improvements and equipment. Cash, including available line of credit, was $1.1 million. Near-term guidance.
Compared to Q4 2025 net sales of $7.5 million, Q1 2026 net sales are expected to be below $7.5 million, and Q2 2026 net sales are expected to be above $7.5 million. 2026 started with space optics production increases to a record level, the beginning of the production stage for an artificial intelligence data center product line, and the previously announced addition of a new product in defense tech.
Additionally, product lines for defense tech are anticipated to add net sales in Q2 and beyond. Overall, we believe the fourth quarter reflects a clear inflection point in both execution and profitability, and we are entering 2026 with improved momentum with space optics, launch of new product lines in defense tech, and going into initial production runs on AI data center optics. With that, I'll turn the call over to our CEO, Al Kapoor.
Thank you, Dean. Good day, everyone. As Dean mentioned, while 2024 and parts of 2025 reflected some operational inconsistencies, the fourth quarter marked a clear turning point for the company. We are now seeing the results of improved manufacturing execution, better cost structure alignment, and growing pipeline of programs transitioning into production. Let me provide you a few comments about defense tailwinds.
We are seeing positive momentum in defense tech. Recent developments, including the four-year 2026 Defense Authorization Act, are driving a structural shift towards domestic sourcing of optical systems specifically. This legislation effectively requires defense contractors to map supply chains, eliminate reliance on adversary nations, and transition to U.S.-based suppliers by 2030.
Let me switch to talking about operational execution that has been mentioned. Yields and throughput improvements across key programs, including LEO satellite optics, night vision optics, integrated optical systems, all continue.
Night shift staffing expanded to support scalable production capacity. Multiple programs advanced from design to pilot to initial production. Ongoing cost reduction initiatives contributed to margin expansion. Let me describe to you our value creation methodologies we are using in execution.
Syntec has developed a methodology called Work Center Focused Effort, which delivers higher profitability from organic growth. Also another methodology called Macro Societal View or MSV, which is effective in our selection criteria for potential business combinations for inorganic growth. The company intends to use these methodologies to continue build the business organically as well as inorganically going forward.
WCFE, which was the Work Center Focused Effort, involves execution of factors including Gemba walk charts for daily batch sizes and inventory buffers for product flow monitoring by the work center, daily technician allocations and effort assessments by work center, daily cost of poor quality and in-process inspection measurements, daily cost savings mapping for cost containment, and alignment of daily goals to meet monthly goals.
This has created significant improvement. The MSV methodology for inorganic growth that I mentioned involves assessment of business combination possibilities based on the following factors, like science being used, chosen technology concept, business models deployed, regulatory environment, positive social transformation. Finally, let me provide you a few comments on 2026 outlook that Dean mentioned.
Syntec expects growth in 2026, which is supported by ramp-up of next generation space and AI data center optics products, expansion in defense tech programs driven by onshoring tailwinds, steady growth across biomedical and consumer end markets, and conversion of design stage programs into production revenue.
In summary, the fourth quarter demonstrated a clear improvement in execution and profitability, and our positioning across defense, AI, and space optics gives us opportunity to serve the society and puts us on a growth trajectory. We are encouraged by the progress we've made and excited about the opportunities ahead. With that, I will hand it back to the operator.
Thank you, Al and Dean, for your comments today. Should you have any questions regarding our earnings or initiatives, please email our investor relations at investorrelations@syntecoptics.com. That's investorrelations, one word, @syntecoptics.com. Thank you for joining us, and have a great day.