Episode Details

Kopin Corporation (KOPN) Q2 2026 — Q2 2026 (ended June 27; 8-K accepted 4:05pm ET Aug 10, after the close, so Aug 11 is the reaction): revenue $12.7M up 50.6%, loss from operations $3.5M, GAAP EPS $0.00 vs $(0.03), net income $0.83M. The stock rose 23.5% to $5.20 and closed the week at $5.50. Kopin reported revenue up 51% and its first net income in years. The operating line still lost $3.5M: the profit is a $2.3M investment gain plus a $2.1M tax benefit from a statute of limitations expiring on Korean operations closed in 2018. THE CALL: SELL (3/5, REAL TECHNOLOGY, ALL OF IT IN THE PRICE) — base-case value ~$2.66 vs ~$5.50 today. KEY METRICS: - CALL: SELL, 3/5. Fair value about $2.66 vs the $5.50 close on Aug 14, roughly 52% lower. Bear $0.67, base $2.41, bull $5.53 (30/45/25) on 2029 revenue of $70M/$130M/$220M at 2.5x/5.0x/7.0x EV-to-sales plus net cash. Our BULL case is 0.5% ABOVE the current price. Street: 5 buy, 2 hold, 0 sell, target $7.83. A valuation call, not a solvency call. - THE QUARTER (ended Jun 27, 2026): revenue $12.7M vs $8.5M, up 50.6%. Loss from operations $3.50M vs $5.46M. Cost of product revenue 86% of product revenue vs 94%. R and D $4.52M vs $1.95M, but $3.33M of that is FUNDED and billed back out as revenue. GAAP EPS $0.00 vs $(0.03), and Kopin publishes no non-GAAP measure at all. - WHERE THE GROWTH CAME FROM: revenue grew $4.28M, and $2.87M of that is NON-ASC-606 revenue that did not exist a year ago - $2.60M of government grant income and $0.27M of Fabric.AI collaboration income, 67% of the increase. ASC 606 growth is 16.7%, not 50.6%. PRODUCT revenue grew 1.9%, $7.50M to $7.64M. - WHERE THE PROFIT CAME FROM: below the operating line. A $2.34M gain on investments took the pre-tax loss to $1.26M, then a $2.09M tax BENEFIT - a statute of limitations expiring on Korean operations liquidated in 2018 - made it $0.83M of net income. Ex both items EPS is $(0.0191) vs a $(0.0125) bar: a 53% MISS. - THE PATTERN, NOT THE QUARTER: over the last four reported quarters Kopin booked $7.91M of cumulative GAAP net income on $15.08M of cumulative OPERATING LOSSES. The rescue item differed each time - litigation accrual, deconsolidation gain, investment marks, now a tax expiry. Trailing revenue $43.6M. - THE CASH THAT IS NOT SPENDABLE: of $50.3M of cash and restricted cash, $24.2M collateralises the supersedeas bond posted Oct 2, 2025 for the appeal of the $19.7M BlueRadios judgment. 48% of balance-sheet cash is pledged to a court, and management's own 12-month liquidity assertion uses only the $24.9M unrestricted. - VALUATION AND THE POSITIVES: 185,872,614 shares off the 10-Q cover at $5.50 is a $1.02B market cap, $997M EV, 22.9x trailing revenue - and 8.6x the $119.5M of 2030 revenue the SELL SIDE'S OWN model reaches. POSITIVES: H1 financing cash flow was NEGATIVE $1.10M, contract liabilities rose to $6.96M, no debt. What to watch: UP: Drone Dominance volume orders that land in PRODUCT revenue, not grant income, plus a successful BlueRadios appeal releasing $24.2M. DOWN: another quarter where total revenue rises but product revenue stays near $7.6M. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.