Frequency Electronics Inc (FEIM) Q3 2025 Earnings Report

Revenue and profitability snapshot:
- Revenue (quarter): $18.927 million; YoY change +38.01%, QoQ change +19.64% (per reported metrics).
- Gross Profit: $8.285 million; gross margin 43.77% (0.4377).
- Operating Income: $3.469 million; operating margin 18.33% (0.1833).
- EBITDA: $3.607 million; EBITDA margin ~19.06% (0.1906).
- Net Income: $15.405 million; net margin 81.39% (0.8139) for Q3, largely driven by a discrete tax benefit.
- Earnings per Share (EPS): $1.60 (diluted) on 9.632 million weighted average shares.

Nine months ended Jan 31, 2025 highlights:
- Consolidated revenue: $49.8 million vs. $39.7 million prior year period.
- Net income (nine months): $20.5 million or $2.18 per share (prior year: $3.0 million or $0.32 per share).
- Fully funded backlog: approximately $73 million (vs. $78 million prior year end).
- SG&A: approximately 19% of revenue in both nine‑month periods.
- R&D: $4.5 million in the nine months ended Jan 31, 2025 (about 9% of revenue) vs. $2.3 million (6%) prior year; higher spend driven by modernization initiatives and quantum exploration.
- Cash flow: Net cash provided by operating activities negative at $(3.63) million; free cash flow negative $(3.95) million; cash balance end of period $6.87 million; company is debt‑free with a current ratio ~2.2x.

Backlog and revenue quality:
- Revenue growth largely reflects a large space program milestone and backlog conversion; management indicated ongoing expectation of additional units and successor programs contributing in the near term. The quarter was characterized by a favorable mix toward U.S. government satellite programs and high‑margin non‑space DoD/legacy work. Management noted that quarterly results can be variable due to government program timing, but the longer‑term trajectory remains positive given exposure to proliferated satellites and quantum sensing opportunities.