All right. Hello everyone, and thank you for continuing to join us throughout the day here at the Lytham Partners Spring 2026 Investor Conference. Again, my name is Robert Blum, Managing Pa rtner here at Lytham. Up next, Dr. Joe Forkey, Precision Optics Corporation, trades under ticker symbol POCI on the NASDAQ, is our next presenter. Joe, thanks so much for joining us. The floor is all yours.
Great. Thanks, Robert, and thanks everyone for joining us today. I'm pleased to be here to talk about Precision Optics Corporation. Our company has been in business for over 40 years. We've updated the business model about 10 years ago, and we're seeing some great success in that new business model. We're really at an inflection point now, and I'll explain why as we go through these slides. The starting point here is really that we are a technology company. Everything we do has something to do with optics technology. We focus on three very specific areas that I'll talk about, but we're a technology company that works with our customers, bringing into their product line products that are enabled by our core unique proprietary technologies. The business model is relatively straightforward.
We develop this new technology so that we can own it, and then we take that technology and we show it to our customers in places where we think they could be enabling technologies. If we and our customers agree that their next generation product could be enabled by our technology, then we work together with them through a product development phase. We require that they pay us on a time and materials basis, but we maintain ownership and control of the underlying core technology. We go through that product development process, and once we get through the product development process, we're the ideal partner for manufacturing. The company grows by bringing on more programs into this product development pipeline, which I'll show you before we get to the end. Really it grows when products start to move out of that product development pipeline and get into production.
We support mainly programs in medical device. That's been our core for a long time. We're doing more and more in defense aerospace because we see that there are applications in those areas as well. Both of those markets tend to be very sticky. Once a product gets into production, tends to stay for a long time. We have some medical device products that we've been making for 20 years, in one case over 30 years. These are with big, well-known names in the industry whose names you'd recognize. The products tend to be very sticky. Once they get into manufacturing, they continue for a long time. As we continue to put more and more programs from the product development phase into production, we expect and we're starting to see now that the overall size and revenue growth of the company will continue to accelerate. Okay.
Speaking of revenue growth, this is a plot of course of our last nine years or so, and you can see that there is a pretty steady increase in our revenue. Most of this is organic, some of it's through acquisitions. You can also see that the bottom section here in gray is the product development part of the business, and you can see that that was increasing nicely. Total revenue was increasing nicely, and then it turned over a little bit here, flattened out. This is because a couple of programs went end of life. Really the main reason was because two of our major programs that were in product development transitioned and went into production. You can see production increased here, product development decreased.
What was happening this past year and the beginning of this fiscal year, our fiscal year runs from July 1st through June 30th, is we were building up and investing in the production side of the business because we had these two programs that rolled from product development into production. Really where we are today is in a place where we have built out that manufacturing part of the business. Now we're starting to see the revenue continue to recover and increase. You can see in the first nine months of our fiscal year, which we just reported a couple of weeks ago, we've already well surpassed the total revenue from last year. That's because these two programs that were going into production are now running at a pretty high rate, and we continue to see that grow.
You can see our guidance here is as high as about $30 million for the full fiscal year. Okay, let me talk a little bit about the technologies. There are really three focus areas within micro-optics, which is a broad discipline that we focus on. The first is micro-optics, and technologies associated with micro-optics. We make some of the smallest optics in the world. The smallest one we've made is about 50 microns. That's 50 microns, which is about the width of a human hair. We can then take those individual optics and we can align them very carefully and use them to make full cameras and full endoscopes, which I'll talk about in just a minute.
Turns out some of the technology we use to align these micro-optics can be used for very precision laser guidance systems. There are some great applications in inter-satellite communication. I'll talk about that a little bit as well. The second area is in the area of ultra-high precision imaging systems. This really grew out of the 3D imaging that we did for Intuitive Surgical, a robotic surgery company way back 20 years ago. The very high resolution, very high alignment precision that you need for the 3D endoscopes can be used now more broadly for other kinds of ultra-high precision systems. Finally, the third area that we focus on is digital imaging.
This is where we take the technology that's been developed for electronic imagers in cell phones and laptops, and we use that for other applications, predominantly in the medical device space. I've already alluded to this, the key markets that we work on. For many years, we've been working in medical device. The technologies that we have allow us to make imaging systems, in particular, in most cases, endoscopic systems that are much smaller than things we've had before. This allows us to go places in the body that you couldn't go previously. Think of the brain or cardiac or ENT, urology, cystoscopy, those kinds of things. The ultra-high resolution still has some applications in 3D endoscopes, which are used for robotic surgery.
More and more, we're seeing this technology being used for things like 4K imaging, next generation high resolution, AR, VR, fluorescence imaging, where you take a fluorescence image and overlay it on a visible image as well. The digital imaging side of things allows us, in particular, to get the price point for the endoscopes low enough that we can now begin to talk about and actually begin to deliver on single-use endoscopes or disposable endoscopes. This virtually eliminates the possibility of cross-contamination from one patient to another, which is an issue that has been high on the FDA's list and the industry's list of challenges. Having single-use endoscopes allows us to resolve that challenge, and we're seeing significant growth in this area now that we can accomplish single-use endoscope economics. You'll see that one of our two big programs is in this area.
The second area that we're working on more and more is in the area of defense and aerospace. These customers initially found us some four, five, six years ago. They saw the things that we were doing. Our micro-optics, in particular, fit squarely in the area of reduced size, weight, and power, which has become an acronym for the defense and aerospace industry. Anything that you lift off the ground is going to be easier to manage, easier to build into the entire system if the size, the weight of those things are smaller. Our technologies that allow us to build, fabricate individual components and build systems that are smaller, it fits squarely into the needs of the defense and aerospace area. Within defense and aerospace, there are three areas we focused on. Drones, of course, are finding more and more applications and are growing very significantly.
They get lifted off the ground, so smaller size is better for them. directed energy weapons, in particular laser weapons, which are the counters to the drones, have, for various reasons, some requirements to support that technology, requires very, very small lenses, and so we're doing some things there. Finally, one of our big programs that's transitioned into production is in the area of inter-satellite communication. This is very high-precision alignment of some elements that go onto satellites that are used to direct the laser beams that go from one satellite to the next satellite. This is an area that's growing quite dramatically, and this is the second area that we have in terms of major programs that have transferred into production.
Just to give a little more detail on that, these two programs really have been driving the investments we've been making in the production part of the business. One is a single-use cystoscopy program. This started into production about two years ago now. You can see it's been ramping quite dramatically, and the current production rate is about $8 million a year. This production line has grown 50-fold, 50-fold, over the last two years. It's taken a lot of investment in the infrastructure, in the personnel, but we've got it at a place now where it's running quite efficiently. As you'll see, I'll talk about this in a minute, we've now turned the corner on making this profitable as we do the production. That just happened in the third quarter. The second big production program is a satellite communication program supporting a satellite network.
This program has grown about 12-fold over the last about 18 months, 18-24 months, and is now running at an annual run rate of about $12 million. This is our engineering pipeline. I've talked about these two programs, which are in production. We have a number of other programs that are in production. This is a very robust pipeline that shows other programs that are in the product development phase. We expect anywhere from two to four of these to go into production every year. We've talked publicly about this year. There are actually five, this one, along with these four, that we expect will go into production in the next 12 months. That will continue to increase the production revenue, and our sales team is working continuously to bring more programs into the product development pipeline.
We see all of this as a good indicator that we'll be able to continue the revenue growth that we've been seeing in the last few quarters. Okay, the go-forward strategy is pretty straightforward. We need to continue the expansion of the production lines as we see more and more programs going into production, continue to support these two big ones, but also the four or five that we expect to go into production in the next 12 months. Continue to advance the pipeline projects to commercialization. That's what I was just referring to, these five programs in the next 12 months will go into production. Now that we have the infrastructure in place, we expect those will roll into production, contributing profitably both to the top line and to the bottom line. We're continuing to expand the product development pipeline.
We have a new product offering called the Unity Platform, where we take the technologies that we have and we put it into a baseline prototype model. This accelerates the rate at which we can move programs through the pipeline, accelerates time to market, reduces risk because we're using design elements that we've already used. Our customers really like the Unity Platform. It's starting to get some traction, and it's helping us to refill the front end of the product development pipeline faster and faster. That's the next piece. We continue to make investments in sales and marketing as well as our technical capabilities, both from the profitable revenue that we're generating now. This is supported through financing that we put in place back in March to raise some dollars, which you'll see on the balance sheet in just a minute. We've been updating our facilities.
We updated our headquarters, our engineering facilities. We're in the process now of putting together plans to update the production facilities to be prepared for the growth that's coming in the next few years. We're fine with our production facilities where we are now and for the next 12-18 months, we can see that we are going to have to update these as we continue to grow. Finally, we've made a couple of acquisitions over the last four or five years. We're not a roll-up strategy, we are mindful of the fact that the optics industry is fairly fragmented and that there are likely opportunities out there. We'll continue to look for strategic acquisitions on an opportunistic basis. Real quickly, running through the financials.
We already looked at the revenue, and you see that there's a big jump here year-over-year this year. That's really because we've got these production programs now running quite smoothly and at very high rates in production. You can see on the flip side, our gross margins over the last couple of years as we were investing in the build-out, if you like, of our production capabilities, that our margins dropped down. You'll see in the next slide that we're starting to recover on that. Same thing with EBITDA. We see this as investment over the last couple of years in the production side of the business. You see our guidance for this fiscal year was to -2.5 to -2.7, but our actuals for the first half of the year were around -2.7.
This means that the last half of the year will actually be breakeven or positive. You can see that in the quarterly numbers that are here. You can see that our revenue has continued to increase nicely quarter over quarter in the fiscal year, which again runs from July 1st through June 30th, so we're in the fourth quarter now. You can see our gross margins were dropping as low as 3%, but in the last quarter they've started to recover, again, because we've got the production lines running much more smoothly. Again, you see a big inflection point here from negative adjusted EBITDA to just over breakeven in the last quarter. Finally, on the balance sheet, the one thing I'll point out here is that we ended our third quarter with about $10 million in cash and cash equivalents.
This is because of the financing that we did just at the end of March. We were really thrilled to have most of our existing investors take part in this financing, as well as a number of new, really great investors, investment groups to add to our group of supporters. I'll also point out that our bank debt is very low, given where we are. With that, I will wrap up. The conclusion is we have the capital that we need. We have the production lines running smoothly. We have the opportunities from our sales orders and our customers. We're going through an inflection point, and we see the growth of the company being very substantial over the next few quarters and the next few years.
Fantastic. Joe, thank you very much for the participation today. Great overview there. If anyone would like to schedule a meeting with management here, either today, throughout the conference, or in the future, shoot me an email, Blum, B-L-U-M, @lythampartners.com. All right, Joe, thanks so much for the presentation.
Thanks, Robert. Thanks, everyone.