BK Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased 3.6% year-over-year to $25.3 million for the third quarter of 2026, compared to $24.4 million in the same period in 2025.
• Gross margin expanded to 50.7% from 49.9% in the prior year quarter, driven by favorable product mix and adoption of BKR 9000 and BKR 5000 radios.
• Net income rose 9% to $3.7 million ($0.93 diluted EPS) from $3.4 million ($0.87 diluted EPS) in the third quarter of 2025.
• Non-GAAP adjusted earnings were $4.7 million ($1.16 diluted EPS), down from $4.9 million ($1.24 diluted EPS) in the prior year quarter.
• Non-GAAP adjusted EBITDA was $5.2 million (20.5% margin), compared to $5.3 million (21.5% margin) in the prior year quarter.
• Trailing twelve-month (TTM) Free Cash Flow After-tax reached $18.9 million, a 25% increase year-over-year.
• Cash and cash equivalents grew to $29.2 million as of September 30, 2026, from $22.8 million as of December 31, 2025.
• Working capital totaled $48.8 million as of September 30, 2026, an increase of $11.4 million from $37.3 million at year-end 2025.
• The company reported no debt as of September 30, 2026.
• For the nine months ended September 30, 2026, revenue was $70.0 million (up 8.3% from $64.6 million), and net income was $9.7 million ($2.39 diluted EPS).

Guidance and Future Outlook:

• Full-year 2026 revenue guidance updated to approximately $85 million, reflecting anticipated deferral of BKR 9000 shipments.
• Full-year 2026 GAAP diluted EPS guidance set at $2.40, and non-GAAP adjusted diluted EPS at $3.15.
• Gross margin target reaffirmed at a minimum of 50%.
• Updated guidance excludes potential recoveries under business interruption insurance and potential refunds of previously paid tariffs.
• BKR 9500 in-vehicle multiband radio FCC certification is expected by year-end, with mass production targeted for March 2027.
• Production of BKR 9000 radios is expected to return to normal levels during the first quarter of 2027, with affected shipments anticipated to move into 2027.

Business Segments and Product Lines:

• Federal demand, specifically from the U.S. Forest Service, was a key growth driver; the service took delivery of 3,000 BKR 5000 Orange radios, which have been adopted as their new standard radio.
• The BKR 9000 multiband radio continues to see customer adoption.
• A new El Paso distribution center, operated with East West Manufacturing, commenced customer shipments during the quarter, reducing factory-to-customer lead times.
• Selling, General & Administrative expenses increased to $8.4 million in Q3 2026 from $7.3 million in the prior year quarter, driven by hardware investments in the BKR 9500 platform and BK ONE software ecosystem.
• Operating income was $4.4 million in Q3 2026, down from $4.8 million in the prior year quarter, impacted by higher engineering expenses.

Market and Competitive Landscape:

• The company is evolving from a radio manufacturer to a public safety technology company.
• Strategic investment in Tango Tango expands exposure to mission-critical software and creates a commercial channel for BK radios, broadening the interoperability ecosystem around InteropONE.
• The BKR 5000 was developed exclusively for the U.S. Forest Service to solve real-world operational challenges in wildland fire.

Risks and Challenges:

• A partial roof collapse at the West Melbourne headquarters on October 8, 2026, temporarily disrupted BKR 9000 radio production.
• The incident caused shipment delays, though management expects these to be timing issues rather than lost business.
• Forward-looking statements note risks related to government budget deficits, supply chain disruptions, tariffs, and the success of new product introductions.

Management Commentary and Tone:

• CEO John Suzuki stated results underscore the durability of the business model and the ability to deliver profitable growth.
• Management expressed confidence in restoring normal operations and executing the Vision 2030 strategy despite the October 8 incident.
• Suzuki highlighted that underlying business fundamentals, including the strong balance sheet and gross margins above 50%, remain unchanged.
• Management emphasized a customer-focused approach and continued investment in product roadmaps and software.

Other Key Points:

• The Board of Directors doubled the share repurchase authorization to $10 million, with $8.4 million currently available.
• The company invested $3.0 million in a convertible note in Tango Tango.
• Deferred revenue totaled $2.75 million (current) and $7.235 million (long-term) as of September 30, 2026.
• Trade accounts receivable increased to $17.3 million as of September 30, 2026, from $7.2 million as of December 31, 2025.
• The company hosts a conference call on November 12, 2026, at 8:30 a.m. Eastern Time.