We use cookies to improve your experience, analyze site usage, and show relevant ads. Go to our Privacy Policy for details.
The call conveyed strong operational and financial progress: double-digit improvements in key profit metrics, robust bookings ($26.3M) and backlog ($20.0M), margin expansion (35.1%, +360 bps) and clear execution on product and cost initiatives. Management acknowledged near‑term timing pressures in integrated systems/small cells, a rise in inventory due to shipment timing, tariff uncertainty and some customer concentration. Overall, the positives (revenue growth, profitability turnaround, record bookings/backlog, product momentum and operational discipline) notably outweigh the manageable near-term headwinds.
Management guided that Q3 sales should rise sequentially off Q2 revenue of $20.7M (up 9% YoY and sequentially), with continued margin expansion driven by operating leverage above the ~$20M quarterly revenue level; Q2 metrics included a 35.1% gross margin (up 360 bps YoY from 31.5%), operating income of $1.1M (vs $106K prior year), adjusted EBITDA of $2.0M (nearly double FY25’s $1.1M), GAAP net income of $879K ($0.08/diluted) and non‑GAAP net income of $1.6M ($0.14/diluted). Bookings were $26.3M (a multi‑year high), backlog rose to $20.0M at quarter end (now $20.1M), cash was $3.4M, working capital $16.5M, current ratio ~1.9x (current assets $35.1M; current liabilities $18.6M), revolver borrowings $6.1M, and inventory $14.4M (from $12.6M a year ago). Management reaffirmed that integrated systems activity should accelerate in H2, they expect to reduce net debt as cash flow improves, highlighted DAC cost benefits (up to ~75% more cost‑effective than traditional HVAC in target use cases), and noted RFI’s inclusion in the Russell 3000 effective June 26.
Q2 sales of $20.7M, up 9% year-over-year and up 9% sequentially (prior-year Q2: $18.8M; prior quarter: $19.1M). Management expects Q3 sales to increase sequentially over Q2, reflecting continued revenue momentum.
Gross profit margin expanded to 35.1% (up 360 basis points YoY from 31.5%). Management highlighted operating leverage above $20M in quarterly revenue as a driver of margin expansion.
GAAP consolidated net income of $879k in Q2 versus a GAAP loss of $245k in Q2 FY25. GAAP diluted EPS $0.08. Non-GAAP net income was $1.6M ($0.14/sh) vs $701k ($0.07/sh) a year earlier (non-GAAP increase ~128%).
Adjusted EBITDA rose to $2.0M in Q2 from $1.1M in Q2 FY25 (increase ~82%). Operating income improved to $1.1M from $106k a year ago (a very large improvement, roughly +938%).
Bookings in Q2 were $26.3M (management called it the strongest bookings quarter in many years), up $8.4M versus the previous quarter (≈+47%). Backlog reached $20.0M as of April 30 ($20.1M as of the call), up $5.6M quarter-over-quarter, providing visibility into the second half of the fiscal year.
Custom cabling performed strongly and is a leading product line; newly engineered products across thermal cooling and RF passives launched in H1 and generated bookings. Direct Air Cooling (DAC) adoption is expanding into edge data-center use cases; company claims DAC can be up to ~75% more cost-effective versus traditional HVAC in those environments.
Cost reduction program delivering results (supplier negotiation, source relocation, tariff management). US-based manufacturing footprint and diversified supply chain seen as scalable advantages. Inclusion in the Russell 3000 (effective June 26) expected to broaden investor visibility and liquidity.
Greetings. Welcome to the RF Industries Second Quarter Fiscal 26 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Donni Case. Investor Relations. Please begin.
Thank you, John, and good afternoon, everyone, and welcome to RF Industries second quarter fiscal 26 earnings conference call. With me today are RFI's Chief Executive Officer, Robert D. Dawson President and COO, Ray Bibisi and CFO, Peter Yin. We issued our press release after market today, and that release is available on our site at rfindustries.com. I want to remind everyone that during today's call, management will be making forward looking statements that involve risks and uncertainties. Please note that information on this call today may constitute forward looking statements under the Securities Exchange laws. When used, the words anticipate, believe, expect, intend, future and other similar expressions identify forward looking statements. These forward looking statements reflect management's current views with respect to future events and financial performance and are subject to risks and uncertainties.
Actual results may differ materially from the outcomes contained in any forward looking statements Factors that could cause these forward looking statements to differ from results include the risks and uncertainties discussed in the company's reports on Forms 10-K and 10-Q other filings with the SEC. RF Ind...