Vuzix Third-Quarter Sales Drop Accelerates

The Tip Desk · November 13, 2026 · 2 min read

Total sales fell 38% to $714,449 as M400 unit sales and discontinued products weighed on product revenue.

Vuzix Corporation (VUZI), a designer of wearable AI smart glasses and imaging waveguides, reported total sales of $714,449 for the three months ended September 30, 2026, down 38% from a year earlier. The decline was steeper than the 14% drop to $1,113,498 in the three months ended June 30, 2026.

Sales of products fell 45% to $494,141, versus a 15% decline to $884,296 in the immediately preceding quarter. The company said reduced smart glasses revenue was the primary driver, citing lower unit sales of its M400 product and of products discontinued in 2025. Engineering services and OEM products were $220,308, down 17%, which the company attributed to the timing of progress on customer projects.

Gross loss widened to $867,577, or 121% of sales, from a $645,411 gross loss, or 58% of sales, in the three months ended June 30, 2026. Unapplied manufacturing overhead rose 54% to $790,220, or 111% of sales. The company said the increase reflected lower product revenue, reworking of older product versions into upgraded current versions that did not add overhead absorption, and lower production of new product because finished goods were sufficient for currently expected demand for current smart glasses models. Depreciation and amortization in cost of sales fell 54% to $84,063 after certain leasehold improvements became fully depreciated in November 2025.

Net loss increased 14% to $8,386,188. Loss from operations was $8,477,374.

Research and development expense rose 13% to $3,317,509. The company said the increase included a $450,000 rise in external consulting related to waveguide-based optical interconnect components for CPO data-center applications and a $221,533 rise in cash salary and benefits from headcount, partly offset by lower rent, product development and recruiting costs. Selling and marketing expense increased 43% to $1,640,931, reversing an 11% decline in the prior quarter. The company cited a $350,000 increase in external consulting for the same CPO waveguide work and a $244,154 increase in bad debt expense, net of a $199,323 recovery in the year-ago period. General and administrative expense decreased 3% to $2,487,899. Depreciation and amortization outside cost of sales and research and development fell 61% to $163,458.

The company said it is developing waveguide-based optical interconnect components for CPO used for data transmission in data center server racks. That work accounted for the $450,000 of additional R&D consulting, $350,000 of additional selling and marketing consulting, and $200,000 of additional general and administrative consulting in the quarter.