All right. Hello everyone, and thank you for continuing to join us throughout the day here at the Lytham Partners Fall 2026 Investor Conference. Again, my name is Robert Blum, managing partner here at Lytham Partners. Up next, Joe Forkey, Chief Executive Officer of Precision Optics, will take us through the company's slide presentation. Joe, thanks so much for your participation today. The floor is all yours.
Great. Thanks very much, Robert. Thank you all for joining us today. I am really happy to be here to tell you about Precision Optics Corporation. This is a great time for us to be talking about POC. We just announced our fiscal year-end results yesterday. This is for our fiscal 2026. We have a fiscal year that runs from July 1st to June 30th. The big takeaways here were that our revenue has grown quite dramatically year-over-year, up by 65%, from about $19 million-$20 million up to $31.5 million. This is driven by a couple of big programs that we will talk about in some of the later slides. We broke through adjusted EBITDA positive. We have two quarters in a row now with the third quarter and the fourth quarter, at adjusted EBITDA positive.
We are really pleased with the results we reported yesterday. I will tell you more about what led to those great results. First, let us start with who POC is, what POC is, and what we do. POC, as the name implies, Precision Optics, is an optics company. We are a technology company. Everything that we do has something to do with optics one way or another. We do a lot with imaging. We do a lot with laser comms. Any place where you have to have an optical system in order to support the application, we can bring our technology to bear on those kinds of systems. We are a technology company that has our own proprietary technology. Our business model is one where we show that to our customers. We look at customer requirements.
If they and we agree that our technology can enable their next generation product, we go through a design, feasibility, prototype, validation process. That is all the product development process. We get paid for that, but we maintain ownership of the IP. What we are really after is getting to the volume production, because the markets that we work in are very risk-averse. The programs tend to be very sticky. The production tends to last for a long time. Ultimately, we want to get to more and more volume production programs. There are two that have gone into production in the last couple of years, which I will talk about, which have really made a difference. We have a number of additional ones that are in our product development pipeline that we see coming into production in the near term.
The business model, again, is proprietary technology, product development that we get paid for, and then roll things into production. As more and more production programs come online, the company grows. We have really been through an inflection point in the last 12 months in fiscal 2026. As you can see here, our quarterly revenues have grown quite dramatically. Our gross margin is still lower than we anticipate it will be. It should be in the 35%-40% range when you blend all the different kinds of programs we work on. But this is a nice recovery from some of the growing pains we had in order to stand up the production team in order to support the significant growth that we have seen over the last fiscal year. This was driven by two very large programs, which I will talk about in a later slide.
But also, the inflection point occurred because we got those two big orders. We had to sort of stand up a new production capability within our company. It was almost like standing up a startup production company, and so that took a bit of time. We had some EBITDA losses if you go back and look at earlier quarters. But we also found that we needed to update our leadership team, and so we hired a new COO back in October of last year. We also since then have brought in a new senior director of operations, a new VP of engineering. Our old VP of engineering has stayed on in a new consulting role. And so we built out both the team as well as the facilities in order to be able to support these bigger production programs, and we expect additional growth going forward.
Let me tell you a little bit about the specific technology that we work on. Optics is a very broad discipline. We as a small company focus on some very specific areas within the general discipline of optics. The first area is micro-optics. We make some of the smallest optics in the world. We make individual optics in our optics shop that are as small as 50 microns. That is about the width of a human hair. And then we can build entire imaging systems in a sub-millimeter size using some of these very small optics. The second area that we focus on is multichannel or ultra-high precision systems. These are systems where we are looking at multiple images. We might look at a white light image and a fluorescence image and then overlay those.
The process of overlaying those requires very high precision in terms of how you align all of the optics that are in the system. 3D endoscopes is another area here. Ultra-high precision, like 4K imaging. Those sorts of things are the things that we do in our multichannel and ultra-high precision technology. The third area is digital imaging more broadly. In this area, we are taking advantage of the CMOS sensor technology that has been developed mainly for cell phones and laptops, and we bring these to bear on other imaging systems, mainly in the medical device space. We are very unique in the space that we work in that we are vertically integrated. We take programs, as I already said, from the design phase all the way through to mass manufacture.
That means that we have to have a very broad set of disciplines represented in our engineering team, and we need a team that can transfer programs from design into manufacture. It means that we work on design for manufacturing right from the beginning of the program. It means we have our own machine shop that can turn prototypes very quickly. It means we have our own optics lab, which can fabricate individual components from raw blocks of glass. We have all of these different disciplines in one company so that we can properly support a customer from the design phase all the way through to the mass manufacture. That's very unique, and it's a big competitive advantage for us. There are three markets that we work in. The first one is the space market, and by that, I mean satellite communications.
Until recently, we included this market as a sub-market, as a segment of defense aerospace, but we're seeing enough opportunity here that we're starting to work in this area more and more. So we've identified it separately now as a space market or satellite communications. The idea here is that with all these satellites that are going up into low Earth orbit, all of the constellations, all of those satellites are communicating to each other through laser-based communications. Those laser-based communications require very high-precision optical and optomechanical and electro-optomechanical systems, and our technology is ideally suited for this kind of application. The second area we focus on is in the defense aerospace side of things. There are some systems that we work on today. We don't know what the end use is. In many cases, they're confidential or even classified.
But we make some very precise and complex with ultra-precision optomechanical assemblies. There's one program we've been working on with one of the biggest primes in the country for over five years now. I think we're going on year eight or nine, and this is a critical component for what they need, and they've told us we're their sole source. We have a number of programs in other areas, one in a jet engine inspection, so this is a very high-precision borescope. Directed energy systems is another area where we've worked on prototypes. These are laser weapons that rely on some of our very small optics in the micro-optics segment of our technology. Medical device is an area that we've worked on for our entire history, since we were founded in 1982.
Sometimes this is a large portion of our business. Sometimes it's balanced with some of the other markets that we work in. As a technology company, we're really application agnostic, and this gives us a benefit in that we can be very diversified in terms of the areas that we work in. If you go back and look at the history of the company over the last couple of quarters, you'll see that we've been moving from a place where we were very heavily focused on medical device, and now we have a fair bit more in the space side of things on the satellite communications.
Again, diversification is great. This is all happening, I want to be clear, not because the medical device work is shrinking. It's because the space work is growing very quickly. So on the medical device side of things, we work mainly in minimally invasive surgery. This means endoscopes. We make some of these smallest endoscopes in the world that allow us to get to places in the body that you just couldn't get to otherwise. That relies on our micro-optics.
Single-use endoscopes are displacing reusable endoscopes wherever they can. There are some scopes that still have to be reusable because of the complexity, but we do an awful lot now with single use, and that is a place where we make use of our digital imaging capability, and it's a place that we really like because the hospitals use it once, and then they need a new one. So you have much larger volumes. This is part of the higher volume manufacturing that we've been working on putting in place over the last couple of years.
Finally, in the medical device space, robotics and other next-generation surgical procedures are really driving this market forward, and a lot of these systems need custom endoscopes. They need custom ultra-high-resolution or custom digital-based endoscopes, and we're ideally suited to help our customers with those kinds of programs. There are two big programs that have really driven the growth over the last 12 months, really over the last couple of years. One is in the satellite market. In this case, what we're building for our customer is a very precise optomechanical assembly. We actually align elements here to within 5 microns in all three dimensions, so that's one-tenth the width of a human hair. This program has been growing quite substantially.
You see at the end of Q4, we were running at a $15 million a year run rate, and we've been working very hard to drive our production yields higher and higher. We're up to 97% continuously here, which is great. Our customer here has told us that they have some downstream bottlenecks, and so we expect the revenue from this program to drop back for the next couple of quarters, but we are very confident that this is an intermittent pullback. Our customer is quite clear they need to finish out their satellite system, their constellation, and they're burning down their inventory quickly, and they will be back to us at volumes at least as high as we've seen before. So there will be a little pullback, but we'll come back quite strong by the end of the year. The second big program is in single-use cystoscopy.
This is a program that supports a robotic system that was launched a couple of years ago. This one has been growing quite dramatically. Two years ago, we were running at a run rate of about 1,000 units a year we were building. Today, we're building at a run rate of about 50,000 units a year. So we have grown our capability here. We're running three shifts on two lines, and our customer's very happy with what we're doing. We also stood up a production line in our customer's facility. We get paid royalties from that line, which is a nice part of this business model. As I mentioned before, our programs generally start on the product development side of things, but we're pushing to get these into production. That's where we really want to go.
If you want a sort of leading indicator of where the company's going, we always like to look at our product development pipeline. Today, we have over nine programs that are in the product development pipeline, and 3-4 of those we expect to go into production in the fiscal year that we're in now, fiscal 2027. You can see on this slide, we have many lines here, many arrows that are over on the right-hand side. The two green ones are those two big, large programs. Then you can see a whole series of programs here that have shorter lines. These are the lines representing the programs that are in product development. I should point out this bottom line is one that we just added in the last month or so, and this is our second satellite communication laser comms program.
One of the nice things about this program is that it's very similar to the program that we already have in production, and our customer is very anxious. They're pushing very hard to get this into production in the next 6-12 months, and we believe we can do that given the experience we have with the other program. This program in particular, this line, we expect is going to grow pretty quickly as we go through the next couple of quarters. Let's run through the financials very quickly here. Again, revenue growth over the last couple of years, in particular in fiscal 2026, we saw a real inflection point getting from that $20 million range up to $30 million and even higher. Our growth year-over-year was quite substantial. Our EBITDA for the year was $-2 million.
If you go back and you look quarter by quarter, you will see that that $-2 million was really incurred in the first half of the fiscal year, and the last 2 quarters were a positive EBITDA. This is really the inflection point I keep talking about. We have our production capability, we have our leadership team in place, and so we're seeing much stronger results in the latter half of the year. Gross margins, as I mentioned, have been recovering over the last couple of quarters, and you can see that here. That leads to, along with the higher revenues, positive adjusted EBITDA in Q3 and Q4. Our balance sheet is quite strong. We did a financing that was oversubscribed back in March, and so we put about $10 million on the balance sheet as of June 30th.
Our debt is quite low, and we're paying that off very quickly. The balance sheet is in very good shape. Finally, why Precision Optics now? I keep talking about this inflection point. It really is something that we have been working towards for a long time, and we really see us as the company being in a new position now with higher revenue and lots of opportunity going forward. With the team that we have in place now, as we continue to grow our revenue, we'll be able to leverage the existing infrastructure, and so we expect our revenue, as it increases, we expect our margins to continue to increase and those to drop to the bottom line. The satellite market is growing in leaps and bounds, and we're right in the middle of it.
As I just mentioned, we have our second program that just started in the past month. We have a number of other programs that are going from the pipeline into production, which helps with diversification as well as revenue increase. We have plenty of cash in the balance sheet in order to invest in the infrastructure and the things we need in order to continue growing. On top of all of that, our executive management team believes strongly in this company. We are all investors alongside all of you who are shareholders. With that, I will finish up and turn this back over to Robert.
Joe, thank you so much for the presentation, participation in the conference, as always, and thank you to everybody for watching, of course. If you would like to schedule a meeting with Precision Optics, either here at the conference or in the days or weeks to come, shoot me an email. That is blum@lythampartners.com. To learn more about Lytham Partners, make sure you visit our website, follow us on LinkedIn, and subscribe to us on YouTube to stay connected on future events such as the presentation here from Joe. We hope you all enjoy the rest of the conference. Have a great day. Joe, again, thank you so much for your participation.
Thanks, Robert. Thanks, everyone, for logging in.