Executive Summary
Franklin Wireless Corp delivered QQ2 2025 revenue of $17.83 million, up 33.8% quarter-over-quarter and 101.5% year-over-year, driven by a favorable product mix and continued demand for IoT/M2M devices leveraging 5G-enabled connectivity. Gross profit rose to $3.242 million, producing a gross margin of 18.2%, while operating income reached $0.795 million (margin ~4.46%), and EBITDA stood at $1.065 million (margin ~5.97%). Net income of $0.229 million translated into an EPS of $0.0194 (diluted $0.0193). These results reflect meaningful top-line progression and improved operating leverage despite a modest absolute scale. Free cash flow for the quarter was $2.74 million, with cash flow from operations at $2.74 million and capital expenditure of only about $3.2 thousand, highlighting strong cash-generating capability.
The liquidity profile remains exceptional for a small-cap hardware player: cash and short-term investments total $42.16 million, cash and cash equivalents of $20.26 million, and an enterprise structure showing negative net debt of approximately $18.72 million. The company maintains a current ratio of 2.98 and a quick ratio of 2.73, underscoring solid short-term resilience. The cash conversion cycle is notably negative at about -49.5 days, driven by favorable payables dynamics that help fund working capital without pressuring operating cash flow.
Looking forward, the QQ2 2025 results point to a constructive trajectory in Franklin’s core IoT/M2M hardware franchise, supported by large-scale liquidity and a path toward higher-margin sales. However, the quarter lacks explicit forward guidance in the filing and there is no earnings call transcript available to extract management nuances or cadence around near-term targets. Investors should monitor continued demand for embedded modules and gateways in 5G/M2M deployments, potential monetization of software/value-added services, and any shifts in component costs or supplier relationships that could impact margins and working capital.
Key Performance Indicators
QoQ: 33.81% | YoY:101.49%
QoQ: 56.51% | YoY:291.57%
QoQ: 313.32% | YoY:151.11%
QoQ: -55.60% | YoY:129.92%
QoQ: -55.61% | YoY:129.89%
Key Insights
Revenue (QQ2 2025): $17,827,098; YoY growth: 101.49%; QoQ growth: 33.81%.
Gross Profit: $3,242,062; Gross Margin: 18.19% (0.1819).
Operating Income: $795,231; Operating Margin: 4.46%.
EBITDA: $1,064,926; EBITDA Margin: 5.97%.
Total Other Income/Expenses: -$710,949; Income Before Tax: $84,282; Tax Effect: $-167,727; Net Income: $228,740; Net Margin: 1.28%.
Earnings Per Share (EPS): $0.0194; Diluted EPS: $0.0193; Weighted Avg Shares: 11,784,280 (basic), 11,838,850 (diluted).
Cash Flow: Net cash fr...
Financial Highlights
Revenue (QQ2 2025): $17,827,098; YoY growth: 101.49%; QoQ growth: 33.81%.
Gross Profit: $3,242,062; Gross Margin: 18.19% (0.1819).
Operating Income: $795,231; Operating Margin: 4.46%.
EBITDA: $1,064,926; EBITDA Margin: 5.97%.
Total Other Income/Expenses: -$710,949; Income Before Tax: $84,282; Tax Effect: $-167,727; Net Income: $228,740; Net Margin: 1.28%.
Earnings Per Share (EPS): $0.0194; Diluted EPS: $0.0193; Weighted Avg Shares: 11,784,280 (basic), 11,838,850 (diluted).
Cash Flow: Net cash from operating activities $2,741,642; Free Cash Flow $2,738,402; CFO per share ~$0.233; Free cash flow per share ~$0.232.
Balance Sheet Highlights: Cash and cash equivalents $20,262,886; Short-term investments $21,897,186; Total cash and short-term investments $42,160,072; Total assets $54,450,368; Total liabilities $17,474,880; Total stockholders’ equity $35,971,136.
Liquidity & Ratios: Current ratio 2.98; Quick ratio 2.73; Cash ratio 1.245; Net debt position approx. -$18.72 million; Cash Conversion Cycle ≈ -49.54 days.
Valuation Context: Price-to-Sales ~3.24x; Price-to-Earnings ~63.11x; Enterprise Value Multiple ≈ 36.65x; Cash Flow Coverage and various efficiency metrics indicate a cash-generative, asset-light profile for a hardware-focused IoT player.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
17.83M |
101.49% |
33.81% |
| Gross Profit |
3.24M |
291.57% |
56.51% |
| Operating Income |
795.23K |
151.11% |
313.32% |
| Net Income |
228.74K |
129.92% |
-55.60% |
| EPS |
0.02 |
129.89% |
-55.61% |
Key Financial Ratios
operatingProfitMargin
4.46%
operatingCashFlowPerShare
$0.23
freeCashFlowPerShare
$0.23
Management Commentary
No earnings call transcript available for QQ2 2025. Management quotes and themes could not be extracted from a transcript at this time.
Forward Guidance
No explicit forward guidance was provided in the QQ2 2025 filing or earnings transcript. Given the quarter’s results and the company’s liquidity position, a cautious near-term outlook would emphasize continued IoT/M2M deployment growth, potential 5G-enabled product adoption, and the importance of maintaining favorable working capital dynamics. Key variables to monitor include: trajectory of IoT/M2M demand, mix of higher-margin software/services with hardware, supplier costs and availability, and any customer concentration or single-quarter one-offs that could affect profitability.