Frequency Electronics, Inc. (FEIM) Q1 2025 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 11 2024
0mins
Source: SeekingAlpha
Revenue $15.1 million (up 22% year-over-year from $12.4 million); increase attributed to higher sales from U.S. Government satellite programs.
Operating Income $2.4 million (up 15% year-over-year from $2.1 million); increase due to higher revenue and gross margin percent, offset by higher R&D spend.
Gross Margin 44% (highest in 24 years, up from 31% year-over-year); increase due to resolution of technical challenges and completion of smaller jobs at higher margins.
SG&A Expenses Approximately 19% of consolidated revenues; increase attributed to higher payroll-related expenses.
R&D Expenses $1.5 million (up from $506,000 year-over-year); increase due to focus on modernization of products, with expectations of quarterly variability.
Net Income $2.4 million or $0.25 per share (up from $2 million or $0.22 per share year-over-year); increase attributed to higher revenue and gross margin.
Backlog $70 million (down from $78 million at the end of the previous fiscal year); still represents a historically high value for the company.
Working Capital Position Approximately $21 million; current ratio of approximately 1.5 to 1, indicating a strong liquidity position.
Tax Provision $133,000 (up from $7,000 year-over-year); increase due to California's different rules on NOLs.
Pre-tax Income Approximately $2.5 million (up from $2.1 million year-over-year); increase attributed to various sources including investment income.
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Analyst Views on FEIM
About FEIM
Frequency Electronics, Inc. is engaged in the design, development and manufacture of precision timing, frequency generation and radio frequency control products for space and terrestrial applications. The Company operates through two segments: FEI-NY and FEI-Zyfer. The FEI-NY segment provides precision time, frequency generation and synchronization products and subsystems that are found on-board satellites, in ground-based communication systems and imbedded in mobile platforms operated by the United States military. FEI-Zyfer segments operate out of California, and its products incorporate Global Positioning System (GPS) technologies into systems and subsystems for secure communications, both government and commercial, and other locator applications. This segment also provides sales and support for the Company's wireline telecommunications family of products, including US5G, which are sold in the United States market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Frequency Electronics Secures $16M in New Government Contracts
- New Contract Approval: Frequency Electronics announced it has secured approximately $16 million in new U.S. government contracts supporting both space and non-space programs, marking the company's expansion into the space defense sector by leveraging its expertise in secure terrestrial communications for space applications.
- Record Backlog: As of April 30, 2026, Frequency Electronics reported a backlog exceeding $100 million for the first time, indicating strong growth potential amid robust market demand, which is expected to provide substantial support for future revenue growth.
- Earnings Call Outlook: The company plans to provide additional details during its fourth-quarter earnings call this summer, demonstrating its commitment to transparency and setting expectations for investors regarding future performance.
- Revenue Target Setting: Frequency Electronics has set a target to achieve $150 million in revenue by FY29, reflecting its proactive approach to market opportunities and confidence in long-term growth prospects.
See More
FEIM Q4 2025 Earnings Transcript
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FREQUENCY ELECTRONICS INC AIMS FOR $150 MILLION MINIMUM REVENUE BY APRIL 30, 2029
Revenue Target: Frequency Electronics aims to achieve a minimum revenue target of $150 million by April 30, 2029.
Business Focus: The company is focusing on its electronic products and services to meet this financial goal.
See More
Merion Road Capital's Small-Cap Fund Outperforms in Q1 2026
- Strong Fund Performance: Merion Road Capital's Small-Cap Fund achieved a 3.1% gain in Q1 2026, significantly outperforming the Russell 2000 Index's return of 0.9% and the Barclay Hedge Fund Index's decline of 0.1%, demonstrating the effectiveness of its investment strategy.
- Portfolio Challenges: Despite the overall strong performance of the Small-Cap Fund, its long-only portfolio fell by 3.7% during the same quarter, lagging behind the broader S&P 500 Index, reflecting the impact of market volatility on specific assets.
- New Investment Positions: In Q1 2026, the fund initiated new positions in Honeywell and Frequency Electronics, indicating a positive outlook on the growth potential of these companies and aiming to enhance returns through diversified investments.
- Market Environment Impact: The ongoing conflict in the Middle East has put pressure on Honeywell's financials, potentially clouding its future performance outlook, prompting the fund to closely monitor external environmental changes that could affect its investment portfolio.
See More
Frequency Electronics Chair Honored with Lifetime Achievement Award
- Honor Award: Frequency Electronics' Board Chair, General Lance W. Lord, will receive the General James E. Hill Lifetime Space Achievement Award at the 41st Space Symposium in April 2026, recognizing his contributions to the global space community and enhancing the company's reputation in the aerospace sector.
- Leadership Impact: General Lord's extensive experience in commanding ICBM wings and leading space launch and missile testing operations positions him as a steadfast advocate for the company's innovation in precision time and frequency technologies, ensuring the security of the nation and its allies.
- Technological Innovation: Frequency Electronics focuses on the design and manufacture of high-precision timing, frequency generation, and RF control products, which are widely used in satellite payloads and other commercial, government, and military systems, helping the company maintain a competitive edge in a rapidly evolving market.
- R&D Investment: The company invests significantly in research and development to expand its capabilities and markets, having received over 100 awards for excellence, which underscores its strong performance in aerospace and defense projects and further solidifies its industry leadership.
See More
Frequency Electronics Secures $7 Million Lunar Contract
- Significant Contract Value: Frequency Electronics has secured a contract worth approximately $7 million to provide highly precise atomic clocks for position, navigation, and timing (PNT) in lunar missions, marking a significant expansion into the space market.
- Future Growth Potential: The company anticipates additional larger contracts to support similar space programs, which will not only drive revenue growth but also solidify its leadership position in the high-precision timing product market.
- Broad Technology Applications: FEI's atomic clock technology is applicable not only for lunar missions but also demonstrates diverse application capabilities across multiple domains, indicating the company's market potential and technological advantages in various sectors.
- Strategic Development Direction: The CEO of FEI stated that this contract represents a first step toward deep space missions, with plans to achieve greater business expansion through emerging space missions, thereby enhancing the company's competitive edge in the market.
See More
Frequency Electronics Secures $16M in New Government Contracts
- New Contract Approval: Frequency Electronics announced it has secured approximately $16 million in new U.S. government contracts supporting both space and non-space programs, marking the company's expansion into the space defense sector by leveraging its expertise in secure terrestrial communications for space applications.
- Record Backlog: As of April 30, 2026, Frequency Electronics reported a backlog exceeding $100 million for the first time, indicating strong growth potential amid robust market demand, which is expected to provide substantial support for future revenue growth.
- Earnings Call Outlook: The company plans to provide additional details during its fourth-quarter earnings call this summer, demonstrating its commitment to transparency and setting expectations for investors regarding future performance.
- Revenue Target Setting: Frequency Electronics has set a target to achieve $150 million in revenue by FY29, reflecting its proactive approach to market opportunities and confidence in long-term growth prospects.
See More
FEIM Q4 2025 Earnings Transcript
See More
FREQUENCY ELECTRONICS INC AIMS FOR $150 MILLION MINIMUM REVENUE BY APRIL 30, 2029
Revenue Target: Frequency Electronics aims to achieve a minimum revenue target of $150 million by April 30, 2029.
Business Focus: The company is focusing on its electronic products and services to meet this financial goal.
See More
Merion Road Capital's Small-Cap Fund Outperforms in Q1 2026
- Strong Fund Performance: Merion Road Capital's Small-Cap Fund achieved a 3.1% gain in Q1 2026, significantly outperforming the Russell 2000 Index's return of 0.9% and the Barclay Hedge Fund Index's decline of 0.1%, demonstrating the effectiveness of its investment strategy.
- Portfolio Challenges: Despite the overall strong performance of the Small-Cap Fund, its long-only portfolio fell by 3.7% during the same quarter, lagging behind the broader S&P 500 Index, reflecting the impact of market volatility on specific assets.
- New Investment Positions: In Q1 2026, the fund initiated new positions in Honeywell and Frequency Electronics, indicating a positive outlook on the growth potential of these companies and aiming to enhance returns through diversified investments.
- Market Environment Impact: The ongoing conflict in the Middle East has put pressure on Honeywell's financials, potentially clouding its future performance outlook, prompting the fund to closely monitor external environmental changes that could affect its investment portfolio.
See More
Frequency Electronics Chair Honored with Lifetime Achievement Award
- Honor Award: Frequency Electronics' Board Chair, General Lance W. Lord, will receive the General James E. Hill Lifetime Space Achievement Award at the 41st Space Symposium in April 2026, recognizing his contributions to the global space community and enhancing the company's reputation in the aerospace sector.
- Leadership Impact: General Lord's extensive experience in commanding ICBM wings and leading space launch and missile testing operations positions him as a steadfast advocate for the company's innovation in precision time and frequency technologies, ensuring the security of the nation and its allies.
- Technological Innovation: Frequency Electronics focuses on the design and manufacture of high-precision timing, frequency generation, and RF control products, which are widely used in satellite payloads and other commercial, government, and military systems, helping the company maintain a competitive edge in a rapidly evolving market.
- R&D Investment: The company invests significantly in research and development to expand its capabilities and markets, having received over 100 awards for excellence, which underscores its strong performance in aerospace and defense projects and further solidifies its industry leadership.
See More
Frequency Electronics Secures $7 Million Lunar Contract
- Significant Contract Value: Frequency Electronics has secured a contract worth approximately $7 million to provide highly precise atomic clocks for position, navigation, and timing (PNT) in lunar missions, marking a significant expansion into the space market.
- Future Growth Potential: The company anticipates additional larger contracts to support similar space programs, which will not only drive revenue growth but also solidify its leadership position in the high-precision timing product market.
- Broad Technology Applications: FEI's atomic clock technology is applicable not only for lunar missions but also demonstrates diverse application capabilities across multiple domains, indicating the company's market potential and technological advantages in various sectors.
- Strategic Development Direction: The CEO of FEI stated that this contract represents a first step toward deep space missions, with plans to achieve greater business expansion through emerging space missions, thereby enhancing the company's competitive edge in the market.
See More
