Universal Electronics — Third Quarter 2026 Earnings Summary

Financial Performance

• GAAP net sales for the three months ended September 30, 2026, were $89.4 million, a decrease from $90.6 million in the same period in 2025.
• GAAP net sales for the nine months ended September 30, 2026, were $241.7 million, a decrease from $280.5 million in the same period in 2025.
• GAAP gross margin was 26.3% for the three months ended September 30, 2026, compared to 27.7% in the prior year period; Adjusted non-GAAP gross margin was 26.3% compared to 29.1%.
• GAAP operating income was $2.9 million for the quarter, a turnaround from a GAAP operating loss of $4.5 million in the prior year; Adjusted non-GAAP operating income was $3.7 million compared to $1.6 million in the prior year.
• GAAP net loss was $(0.3) million, or $(0.03) per diluted share, compared to a net loss of $(8.3) million, or $(0.62) per diluted share, in the prior year; Adjusted non-GAAP net income was $2.3 million, or $0.17 per diluted share, compared to $1.1 million, or $0.08 per diluted share, in the prior year.
• Operating cash flow through the first nine months of 2026 was $16.6 million.
• Cash and cash equivalents increased by $9.1 million to $41.4 million at September 30, 2026, from $32.3 million at December 31, 2025.
• Shareholders' equity was $139.6 million at September 30, 2026.
• Inventory decreased by $8.2 million during the period due to a focus on working capital.
• GAAP operating expenses decreased by $8.9 million in the quarter; Adjusted non-GAAP operating expenses decreased by $4.9 million.

Guidance and Future Outlook

• The company reiterates guidance for fiscal 2026, expecting adjusted non-GAAP diluted earnings per share to be in the range of $0.45 to $0.65, compared to $0.31 per share in fiscal 2025.
• The company has not provided guidance for GAAP diluted earnings (loss) per share or a reconciliation of forward-looking adjusted non-GAAP diluted earnings per share to GAAP due to the inability to reasonably estimate excluded items such as severance, litigation settlements, and foreign currency gains/losses without unreasonable effort.

Business Segments and Product Lines

• GAAP net sales in the connected home segment were $33.8 million for the quarter, an increase from $29.8 million in the prior year period.
• GAAP net sales in the home entertainment segment were $55.6 million for the quarter, a decrease from $60.8 million in the prior year period.

Other Key Points

• The company held a conference call on November 5, 2026, to discuss results and answer questions.
• Litigation settlement costs of $195,000 were included in the quarter's Adjusted non-GAAP operating expenses.
• A loss on assets held for sale of $592,000 was recorded in the quarter related to manufacturing equipment previously sold by the Mexico facility.
• The company continues to manage through worldwide inflationary pressures and macroeconomic conditions.
• The company maintains ongoing litigation against Roku and Amazon regarding patented technology enforcement.