Group 1 - The core viewpoint of the report is that the development of AI is expected to drive demand for optical fibers and cables, particularly due to the ongoing iteration of AI large model training and the acceleration of AI application implementation [1] - The report highlights that the demand for high-end single-mode and multi-mode fibers, along with ultra-high-speed optical modules, will facilitate efficient short-distance data transmission and flexible interconnection, promoting the evolution of intelligent computing centers towards higher density and lower power consumption [1] - The report indicates that there is a significant advantage in hollow-core fibers, and both domestic and international markets are actively promoting the development of this new technology, which may gradually increase long-term demand [1] Group 2 - The report suggests that in the short term, there may be a supply shortage of optical fibers and cables, presenting investment opportunities [1] - The global growth of AI is continuously driving the demand for optical fibers and cables for interconnections within data centers and between data centers [1] - Due to limited production capacity among global manufacturers in the short term, a supply-demand imbalance is expected, leading to a steady increase in both demand and prices [1] Group 3 - The recommended stocks include Hengtong Optic-Electric and Zhongtian Technology, while benefiting stocks include Yangtze Optical Fibre and Cable, Yongding Co., Fenghuo Communication, and TeFa Information [1][3]

Financial Data and Key Metrics Changes - Consolidated net sales for fiscal year 2025 increased by 9.5% to $73 million compared to $66.7 million for fiscal year 2024 [14] - Gross profit grew by 24.1% to $22.6 million in fiscal 2025 compared to $18.2 million for fiscal 2024, with gross profit margin increasing to 30.9% from 27.3% [15][16] - SG&A expenses increased to $23 million in fiscal year 2025 compared to $21.5 million in fiscal year 2024, but as a percentage of net sales, it decreased to 31.4% from 32.2% [17] Business Line Data and Key Metrics Changes - Sales increases were noted in both enterprise and specialty markets during fiscal year 2025 [14] - In the fourth quarter of fiscal year 2025, net sales increased by 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year [15] Market Data and Key Metrics Changes - The sales order backlog and forward load at the end of fiscal year 2025 was $7.3 million compared to $5.7 million as of October 31, 2024, indicating growth opportunities [14] Company Strategy and Development Direction - The company entered into a strategic collaboration with Lyttera to expand product offerings, particularly for the data center and enterprise sectors [5][9] - OCC is focusing on expanding its presence in targeted market sectors and enhancing product solutions, especially in response to the growing demand for cloud computing and AI applications [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in fiscal year 2026, driven by the successful execution of growth strategies and strong positioning in target markets [4][12] - The company anticipates that the data center market will provide significant revenue growth opportunities in fiscal year 2026 [21][25] Other Important Information - OCC recorded a net loss of $1.5 million for fiscal year 2025, an improvement from a net loss of $4.2 million in fiscal year 2024 [18] - The company noted that gross profit margin percentages are heavily dependent on product mix and may vary based on changes in product mix [16] Q&A Session Summary Question: Update on the data center opportunity - Management believes the data center markets are strong and will continue to grow, with expectations for impact in fiscal year 2026 [21] Question: Improvements in OCC and markets - OCC continues to see strength in most targeted market sectors, with some project delays but no significant negative impact on growth [22] Question: Potential sales for 2026 and 2027 - Management does not provide forward-looking guidance but is optimistic about potential increases in sales based on expected opportunities [27] Question: Financial metrics behind operational leverage - Management stated that operating leverage results from fixed costs being spread over higher sales, but no specific formula can be provided [29] Question: Seasonality expectations for 2026 - Management confirmed that seasonality impacts are expected in the first and second quarters, although larger orders could alter this [31] Question: Focus on tier 2 data centers - OCC's products are best suited for tier 2 or multi-tenant data centers, with significant growth opportunities anticipated in this segment [32] Question: Capacity constraints - OCC believes it has the capacity to capture expected growth opportunities in fiscal year 2026 [33] Question: Recent hiring and operational expenses - Management noted ongoing hiring efforts, primarily in manufacturing, without significant increases in operating expenses expected [34] Question: Progress of the Lyttera collaboration - The collaboration is progressing well, with expectations for growing opportunities in fiscal year 2026 [36] Question: Lyttera's investment and demand for OCC - OCC cannot comment on Lyttera's specific business plans or announcements [37]

Financial Data and Key Metrics Changes - Consolidated net sales for fiscal year 2025 increased by 9.5% to $73 million compared to $66.7 million in fiscal year 2024 [14] - Gross profit grew by 24.1% to $22.6 million in fiscal year 2025, with gross profit margin increasing to 30.9% from 27.3% in fiscal year 2024 [15][16] - The company recorded a net loss of $1.5 million or $0.18 per share for fiscal year 2025, an improvement from a net loss of $4.2 million or $0.54 per share in fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sales order backlog and forward load at the end of fiscal year 2025 was $7.3 million, up from $5.7 million as of October 31, 2024 [14] - Net sales for the fourth quarter of fiscal year 2025 increased by 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year [14] Market Data and Key Metrics Changes - The company experienced sales increases in both enterprise and specialty markets during the fourth quarter of fiscal year 2025 compared to the same period in fiscal year 2024 [15] - The demand for cloud computing and artificial intelligence applications is expected to drive growth in the data center market, which OCC is targeting [8][20] Company Strategy and Development Direction - OCC entered into a strategic collaboration with Lyttera to expand product offerings and solutions, particularly for the data center and enterprise sectors [9][10] - The company aims to leverage its core strengths and capabilities to drive long-term value for shareholders, focusing on expanding its presence in targeted market sectors [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in fiscal year 2026, driven by the successful execution of growth strategies and strong positioning in target markets [5][12] - The company anticipates that the data center market will provide significant revenue growth opportunities in fiscal year 2026 [20][23] Other Important Information - OCC's FC&A expenses as a percentage of net sales decreased to 31.4% in fiscal year 2025 from 32.2% in fiscal year 2024, indicating improved operational efficiency [17] - The company has a broad geographic footprint, selling into approximately 50 countries annually, which supports its market presence [11] Q&A Session Summary Question: Update on the data center opportunity - Management believes the data center markets are strong and will continue to grow, with expectations for revenue growth in fiscal year 2026 [20] Question: Improvements in OCC and market trends - OCC continues to see strength in most targeted market sectors, with some project delays not expected to negatively impact growth [22] Question: Hyperscale data center opportunities - OCC's product solutions are best suited for multi-tenant and enterprise data centers, with significant growth opportunities anticipated in these segments [23] Question: Financial metrics behind operational leverage - Management indicated that operating leverage results from fixed costs being spread over higher sales, but specific formulas were not provided [27] Question: Seasonality expectations for 2026 - OCC expects to see typical seasonality impacts in the first and second quarters of fiscal year 2026 [28] Question: Capacity constraints - OCC believes it has the capacity to capture expected growth opportunities in fiscal year 2026 [30] Question: Hiring and operational expenses - OCC has open positions primarily in manufacturing, with no significant increase in operating expenses expected [31] Question: Progress of the Lyttera collaboration - The collaboration is progressing well, with expectations for growing opportunities in fiscal year 2026 [32] Question: Lyttera's investment and demand for OCC - OCC refrained from commenting on Lyttera's specific business plans or announcements [34]

Core Insights - Lightera and Optical Cable Corporation (OCC) have entered into a strategic collaboration agreement aimed at expanding product offerings and solutions for the data center and enterprise sectors [1][3] - Lightera has made an investment in OCC, acquiring 7.24% of the company's outstanding shares [4] Company Information - Lightera is recognized as a global leader in optical fiber and connectivity solutions, known for its innovative technologies and high-performance optical fibers [2][6] - OCC is a leading manufacturer of fiber optic and copper cabling solutions, with a strong reputation for innovative technologies and product designs [2][8] - Both companies have a long-standing relationship, having partnered in various capacities over the years, which has now culminated in this strategic collaboration [2][3] Strategic Collaboration Benefits - The collaboration is expected to enhance both companies' ability to offer integrated cabling and connectivity solutions, particularly in the enterprise and data center sectors [3][5] - The partnership aims to leverage the combined product portfolios of OCC and Lightera to meet the growing demands of critical customer segments [3][5] - Management from both companies expressed confidence that this collaboration will accelerate sales growth and create significant value for shareholders [5]