This article first appeared on GuruFocus .
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Revenue:$20.7 million, a 9% increase year-over-year and sequentially.
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Gross Profit Margin:35.1%, up 360 basis points from the previous year.
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Adjusted EBITDA:$2 million, nearly doubled from the previous year.
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Net Income:$879,000, compared to a loss of $245,000 in the previous year.
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Non-GAAP Net Income:$1.6 million or $0.14 per diluted share.
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Bookings:$26.3 million, the strongest in many years.
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Backlog:$20 million at quarter end, providing visibility into the second half of the fiscal year.
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Cash and Cash Equivalents:$3.4 million as of April 30.
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Working Capital:$16.5 million with a current ratio of approximately 1.9 to 1.
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Inventory:$14.4 million, up from $12.6 million last year.
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Outstanding Credit Facility:$6.1 million.
Release Date: June 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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RF Industries Ltd ( NASDAQ:RFIL ) reported a significant year-over-year revenue increase to nearly $21 million, with a gross profit margin expansion to 35.1%.
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The company achieved a positive consolidated net income of $879,000, a substantial improvement from a loss of $245,000 in the same quarter of the previous year.
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RF Industries Ltd ( NASDAQ:RFIL ) experienced robust bookings, driving their backlog to $20 million, providing better visibility into the second half of the fiscal year.
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The company is seeing increased customer engagement, particularly in the wireless carrier ecosystem, indicating growing visibility in target end markets.
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RF Industries Ltd ( NASDAQ:RFIL ) is set to be included in the Russell 3000 index, which is expected to enhance visibility with institutional investors and expand the shareholder base.
Negative Points
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Small cell deployments were slower in the quarter due to timing issues from key customers, which is viewed as a temporary issue.
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Inventory levels increased slightly due to timing, with products built and ready to ship in Q2 but customer releases moved into Q3.
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The company is facing potential challenges with the tariff environment, with key decisions expected in July that could impact operations.
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Integrated systems underperformed expectations in Q2, largely due to shipment delays in the small cell world.
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Working capital absorbed some cash in the first half, impacting free cash flow, although the company plans to manage this by paying down the line closer to a minimum balance.
Q & A Highlights
Q: On the custom cabling side, is this the new shape of the business, or do you expect integrated systems to come back and rebalance the mix? A: Robert Dawson, CEO: We're pleased with the performance of custom cabling, but integrated systems underperformed in Q2 due to timing issues. We expect integrated systems to grow and contribute significantly in the future, maintaining a diversified product mix.
Q: How do you expect the large aerospace and defense customer to impact revenue in the coming quarters? A: Robert Dawson, CEO: The relationship with the aerospace customer is strong, and we expect to continue performing well. While we don't predict exact figures, we anticipate it will remain a consistent part of our business.
Q: Can you expand on how the DAC solution factors into data centers and AI infrastructure? A: Robert Dawson, CEO: Our DAC solution is well-suited for edge data center applications, offering cost efficiency and functionality. As large data centers face location challenges, edge deployments become crucial, and our DAC systems are positioned to benefit from this trend.
Q: How should we think about working capital and free cash flow in the second half? A: Peter Yin, CFO: We plan to use cash to pay down our credit line, which will help with interest expenses. We expect to see cash build as we manage working capital efficiently.
Q: What is the outlook for the DAC solution in terms of growth and market opportunities? A: Robert Dawson, CEO: We see a strong growth trajectory for DAC in the next one to two years, with opportunities to innovate and expand our product offerings. The DAC solution is becoming a key growth driver for us.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
