RF Industries — Third Quarter Fiscal 2026 Earnings Summary

Financial Performance

• Net sales reached a record $23.96 million, representing a 21% year-over-year increase from $19.8 million in the prior year period and a 16% increase from $20.7 million in the second quarter of fiscal 2026.
• Gross profit margin improved to 35.6%, a 160-basis point increase from 34% in the prior year period.
• Operating income was $1.8 million, an improvement of $1.1 million from $720,000 in the prior year period.
• Consolidated net income was $1.44 million ($0.12 per diluted share), a 267% increase from $392,000 ($0.04 per diluted share) in the prior year period.
• Non-GAAP net income was $2.2 million ($0.19 per diluted share), compared to $1.1 million ($0.10 per diluted share) in the third quarter of fiscal 2025.
• Adjusted EBITDA was $2.7 million, up from $1.6 million in the prior year period.
• Cash and cash equivalents were $4.454 million as of July 31, 2026, down from $5.079 million as of October 31, 2025.
• Total debt (Line of credit) was $5.718 million as of July 31, 2026, down from $7.836 million as of October 31, 2025.
• Total liabilities decreased to $33.552 million from $37.842 million in the prior fiscal year end.

Business Segments and Product Lines

• The company executed a multi-year mix shift toward higher-value solutions, specifically custom cabling and integrated systems offerings, which feature more engineering content and larger project scopes than traditional component sales.
• End markets have diversified to include aerospace, edge data centers, AI infrastructure, transportation, and public safety.
• The company has materially reduced its historical reliance on the cyclical wireless carrier capex spending through product innovation and strategic diversification.

Market and Competitive Landscape

• RFI serves fast-growing markets including aerospace, edge data centers, AI infrastructure, transportation, and public safety.
• The wireless carrier ecosystem remains important but is no longer the sole driver of revenue due to diversification efforts.

Risks and Challenges

• Potential risks include changes in the telecommunications industry, timing of network buildouts, and the materialization of new product launches.
• Risks involve reliance on certain distributors and customers for a significant portion of anticipated revenues.
• External factors such as tariffs imposed by U.S. and foreign nations could impact the business.
• Challenges include the ability to execute go-to-market strategies, expand OEM relationships, and maintain strong margins while diversifying the customer base.
• Risks also include non-compliance with credit facility covenants and the ability to continue as a going concern.

Management Commentary and Tone

• CEO Robert Dawson stated the team delivered "another quarter of accelerating topline growth" by converting demand into expanding margins and higher profitability.
• Management highlighted the realization of an "operating leverage story" yielding growth at every level of the income statement as revenue scales above the $20 million quarterly run rate.
• Dawson noted that revenue grew 21% to a record $24 million while margins improved 160 basis points to 35.6%, operating income increased over 150% to $1.8 million, and Adjusted EBITDA expanded 69% year-over-year.

Other Key Points

• Bookings for the quarter were $22.5 million.
• Backlog stood at $18.6 million at the end of the third quarter and increased to $19.8 million as of the date of the release.
• The company hosted a conference call and live webcast on September 14, 2026, to discuss results.
• Stock-based compensation expense for the quarter was $283,000.
• Amortization expense for the quarter was $411,000.
• Depreciation expense for the quarter was $201,000.
• The company has operations in San Diego, New York, Connecticut, and New Jersey.