The company, which sells prescription glasses and contact lenses through its digital platform, reported net income of $672,000 for the three months ended Sept. 30, down from $1.9 million in the same period last year. Adjusted EBITDA was $2.9 million, representing 4.6 per cent of revenue, marking the company’s 16th consecutive quarter of positive adjusted EBITDA.
The results reflect continued growth across both major product categories, with glasses gaining a larger share of overall sales. Kits Eyecare also reported higher gross profit, increased operating cash flow and a quarter-end cash balance of $30.6 million, with no debt.
Glasses sales drive growth
Glasses revenue increased 59.3 per cent year over year to $11.3 million, representing 17.7 per cent of total revenue, compared with 13.5 per cent a year earlier. The company delivered approximately 144,700 glasses units during the quarter, an increase of 55.6 per cent.
Premium lens upgrades accounted for 44.8 per cent of glasses revenue, while 80,850 units were delivered to repeat customers, up 61.7 per cent from the third quarter of 2025.
Kits Eyecare said customers acquired during the quarter generated first-order glasses revenue 63 per cent higher than the comparable group acquired in the same period last year, based on identical entry pricing. The company attributed part of that performance to OpticianAI, its artificial intelligence-powered fitting technology.
The company also reported that glasses customers acquired in 2026 are generating first-order revenue per customer that exceeds the cumulative revenue generated over multiple years by customer groups acquired in earlier years.
Contact lens revenue increased 15.7 per cent to a record $52.4 million. Sales in the category rose $5.1 million, or 10.7 per cent, from the second quarter, with the company attributing the growth to repeat purchases from its existing customer base.
Repeat revenue across the business increased 27.8 per cent to $41.8 million, accounting for 65.6 per cent of total revenue, compared with 62.4 per cent in the third quarter of 2025.
Kits Eyecare’s two-year active customer base grew 14.1 per cent to a record 1.175 million, while its Autoship subscription program reached $29.6 million in annualized revenue, which the company described as requiring minimal maintenance costs.
Profitability and cash flow
Gross profit increased 31.1 per cent to $23.8 million, compared with $18.1 million a year earlier. Gross margin expanded to 37.4 per cent from 34.6 per cent, an increase of 280 basis points.
The company attributed the improvement to a higher proportion of glasses sales, increased adoption of premium lens upgrades and its pricing and promotional management.
Adjusted EBITDA was $2.9 million, compared with approximately $2.9 million in the third quarter of 2025. However, adjusted EBITDA margin declined to 4.6 per cent from 5.5 per cent.
Net income was $672,000, or two cents per basic share, compared with $1.9 million, or six cents per share, in the prior-year quarter.
Operating cash flow totalled $4.8 million, representing 7.5 per cent of revenue. Kits Eyecare ended September with $30.6 million in cash and no outstanding debt.
Roger Hardy, co-founder, chairman and CEO of Kits Eyecare, said the company’s strategy is focused on building a customer base that purchases both contact lenses and glasses through the business.
“The most valuable business in eyecare will be the one customers come back to for both their contacts and their glasses, and this quarter Kits showed it is that business,” said Hardy. “Revenue grew 21.6% to a record $63.7 million, glasses revenue grew 59.3% to $11.3 million, and contact lens revenue reached a record $52.4 million. Nearly two-thirds of our revenue came from returning customers. Most importantly, gross profit grew 31.1%, nearly one and a half times as fast as revenue. Margins come first, cash flow follows, and earnings follow cash flow. We are delivering the first two. We generated $4.8 million in operating cash flow, funded a meaningful step-up in customer acquisition from our own gross profit, and closed the quarter with $30.6 million in cash, no debt, and our sixteenth consecutive quarter of positive Adjusted EBITDA. Earnings are the next step, and we intend to be measured on it.”
Nine-month results and fourth-quarter outlook
For the first nine months of 2026, Kits Eyecare reported revenue of $179.6 million, up 20.9 per cent from $148.6 million in the same period last year. On a constant-currency basis, revenue increased 21.6 per cent.
Glasses revenue for the nine-month period reached $33.1 million, an increase of 57.9 per cent year over year. Gross profit rose to $69.5 million, or 38.7 per cent of revenue, compared with $53.3 million, or 35.8 per cent, in the first nine months of 2025.
Adjusted EBITDA increased to $10 million from $8.9 million, while net income rose to $4.1 million from $2.8 million.
For the fourth quarter of 2026, Kits Eyecare management expects revenue between $64 million and $66 million, with adjusted EBITDA projected to represent between four and six per cent of revenue.
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