What is the expected timeline for delivery and when will the revenue be recognized on the books?

Expected delivery timeline & revenue recognition

Kopin’s $9 million follow‑on production contract is a “production‑type” defense contract that typically follows a “firm‑price, cost‑plus‑incentive” structure under ASC 606. The press release does not give a specific calendar date, but similar Kop­in defense programs – especially custom thermal‑imaging assemblies for a prime‑contractor – are normally built and shipped within 12‑18 months from award, with most of the work completed in the next fiscal year (2025‑2026). Under current revenue‑recognition rules, the $9 M will be recognized incrementally as the assembly is delivered and accepted, rather than being booked up‑front. In practice that means a quarterly‑by‑quarter recognition schedule: a small portion (engineering & tooling) in Q4 2025, the bulk of the hardware in Q1‑Q2 2026, and final acceptance‑related revenue (testing, warranty) in Q3 2026.

Trading implications

The timing of the revenue stream is important for earnings expectations. Because the contract is a “follow‑on” to an existing program, the incremental cash‑flow will be spread across several quarters, smoothing any single‑quarter earnings shock. Traders should therefore price‑in a modest incremental boost to EPS beginning in Q1 2026 (when the first units are shipped) rather than expecting a one‑time boost in Q4 2025. The market has already priced a positive sentiment (+70) into the stock; however, any delay beyond the 12‑18‑month window or a shift in recognition (e.g., a larger portion deferred until final acceptance) could pressure the share price. Short‑term traders might look for a buy‑on‑dip if the stock pulls back on the announcement, while longer‑term investors can expect a steady earnings uplift as the contract revenue is recognized over the next 2‑3 quarters.