Frequency Electronics, Inc. (FEIM) Q1 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 11 2025
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Should l Buy FEIM?
Source: SeekingAlpha
Consolidated Revenue $13.8 million for the 3 months ending July 31, 2025, compared to $15.1 million for the same period of the prior fiscal year, a decrease due to externally imposed program delays.
Revenue from Commercial and U.S. Government Satellite Programs $6.5 million (47% of total revenue) compared to $8.3 million (55% of total revenue) in the prior fiscal year, a decrease due to program delays.
Revenue from Non-Space U.S. Government and DOD Customers $6.9 million compared to $6.3 million in the prior fiscal year, an increase attributed to higher activity in this segment.
Other Commercial and Industrial Revenues $439,000 compared to $544,000 in the prior fiscal year, a decrease without specific reasons mentioned.
Gross Margin and Gross Margin Rate Both decreased compared to the prior fiscal year due to lower revenue and a shift in the mix of business activity between higher-margin and lower-margin programs.
Selling, General and Administrative (SG&A) Expenses 26% of consolidated revenue compared to 19% in the prior fiscal year, an increase due to one-time expenses related to expansion into Colorado, quantum sensing, and increased payroll-related expenses.
Research and Development (R&D) Expenses $1.1 million (8% of revenue) compared to $1.5 million (10% of revenue) in the prior fiscal year, a decrease of $400,000 due to operational needs.
Operating Income $364,000 compared to $2.4 million in the prior fiscal year, a decrease due to lower revenue and gross margin.
Pretax Income $556,000 compared to $2.6 million in the prior fiscal year, a decrease due to lower operating income.
Net Income $634,000 ($0.07 per share) compared to $2.4 million ($0.25 per share) in the prior fiscal year, a decrease due to lower revenue and gross margin.
Fully Funded Backlog $71 million at the end of July 2025 compared to $70 million at the end of April 2025, a slight increase.
Working Capital Approximately $30 million at July 31, 2025, with a current ratio of approximately 2.3:1, reflecting a strong position.
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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. 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 designs, develops, and manufactures products which provide Precision Navigation and Timing (PNT), primarily incorporating Global Navigation Satellite System(s) technology. FEI-Zyfers products make use of both in-the-clear civil and crypto-secured military signals for global positioning systems (GPS). FEI-Zyfers products are integrated into radar systems, information networks, test equipment, military command and control terminals, and satellite ground stations.
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 $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 Reports Weak Earnings Amidst Strong Backlog
- Earnings Performance: Frequency Electronics reported a net income of 16 cents per share for Q3 FY2026, a significant drop from $1.60 in the prior year, with revenues around $16.9 million, reflecting a 10.8% decline and indicating substantial profitability pressures.
- Record Backlog: As of January 31, 2026, the company's backlog reached a record $83 million, up from $70 million at the fiscal year's start, indicating strong demand visibility despite the near-term financial softness.
- Government Project Reliance: Approximately 74% of quarterly revenues came from U.S. government and satellite programs, totaling about $12.5 million compared to $7.4 million in the prior year, highlighting an increased reliance on government-related business.
- Future Growth Potential: Despite a cash balance dropping to $0.1 million, management emphasized that recent contract wins totaling approximately $45 million are expected to support future revenue expansion, particularly in the strong momentum of satellite and defense sectors, which are projected to drive growth over the next three to five years.
See More
Frequency Electronics Reports Q3 Earnings with Mixed Results
- Revenue Decline: Frequency Electronics reported third-quarter revenue of $16.9 million, down from $18.9 million year-over-year, indicating pressure in market competition and challenges in diversifying revenue sources.
- Gross Margin Decline: The gross margin decreased due to a shift in the mix of high-margin satellite production versus lower-margin programs, resulting in operating income dropping from $3.5 million to approximately $1.3 million, highlighting the urgency for cost control measures.
- Contract Awards: The company secured two significant contracts valued at approximately $45 million, indicating strong business momentum, while backlog reached a new high of $83 million, with expectations to surpass $100 million, boosting market confidence.
- Increased R&D Investment: Research and development expenses rose to approximately $1.8 million, accounting for 10% of total revenue, reflecting the company's commitment to investing in emerging technologies, although short-term margins may be impacted, the long-term growth potential remains promising.
See More
Frequency Electronics Reports $45M Contracts and Record Backlog in Q3 2026
- Contract Achievements: Frequency Electronics secured two contracts valued at approximately $45 million in both traditional satellite and emerging satellite markets, demonstrating the company's dual success in traditional and new business areas, thereby strengthening its market position.
- Record Backlog: As of January 2026, the company's backlog reached approximately $83 million, a new record that is expected to drive future revenue growth and support the company's goal of reaching $100 million.
- Financial Performance Analysis: Although quarterly revenue was $16.9 million, down from $18.9 million year-over-year, the company remains debt-free with adequate liquidity to meet operational needs for the next 12 months.
- Optimistic Future Outlook: Management anticipates continued awards of similar magnitude contracts and expresses optimism about future order inflow, believing that backlog could exceed $100 million in the near future, driving sustained growth.
See More
Frequency Electronics Reports Disappointing Q4 Earnings
- Disappointing Earnings: Frequency Electronics (FEIM) reported a Q4 GAAP EPS of $0.16, missing expectations by $0.12, indicating pressure on the company's profitability.
- Revenue Decline: The company's Q4 revenue of $16.9 million represents a 10.7% year-over-year decline and fell short of expectations by $2.16 million, reflecting weak market demand and increased competition.
- Contract Wins: Frequency Electronics announced satellite contracts worth approximately $45 million, demonstrating potential growth in the defense and aerospace sectors despite overall poor performance.
- Future Outlook: The company has set a backlog target of over $100 million, indicating an acceleration in growth within the defense and aerospace markets, even as current financial results remain disappointing.
See More
Frequency Electronics Secures $45 Million in Satellite Contracts
- Significant Contract Value: Frequency Electronics announced the award of two satellite program contracts with a combined value of approximately $45 million, which will notably enhance the company's financial position and strengthen its competitive edge in the aerospace market.
- Diverse Project Types: One contract pertains to traditional space satellite programs while the other is linked to proliferated satellite systems, indicating the company's strategic diversification in product lines to capture varying market demands.
- Funding Backlog Expectations: Frequency Electronics expects the new business to start entering its funded backlog in the fourth quarter of fiscal 2026, which will support future revenue growth and enhance its financial stability.
- Future Contract Outlook: The company also anticipates additional contract awards of similar magnitude later this year, which will not only further expand its market share but also potentially boost investor confidence in the company.
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 Reports Weak Earnings Amidst Strong Backlog
- Earnings Performance: Frequency Electronics reported a net income of 16 cents per share for Q3 FY2026, a significant drop from $1.60 in the prior year, with revenues around $16.9 million, reflecting a 10.8% decline and indicating substantial profitability pressures.
- Record Backlog: As of January 31, 2026, the company's backlog reached a record $83 million, up from $70 million at the fiscal year's start, indicating strong demand visibility despite the near-term financial softness.
- Government Project Reliance: Approximately 74% of quarterly revenues came from U.S. government and satellite programs, totaling about $12.5 million compared to $7.4 million in the prior year, highlighting an increased reliance on government-related business.
- Future Growth Potential: Despite a cash balance dropping to $0.1 million, management emphasized that recent contract wins totaling approximately $45 million are expected to support future revenue expansion, particularly in the strong momentum of satellite and defense sectors, which are projected to drive growth over the next three to five years.
See More
Frequency Electronics Reports Q3 Earnings with Mixed Results
- Revenue Decline: Frequency Electronics reported third-quarter revenue of $16.9 million, down from $18.9 million year-over-year, indicating pressure in market competition and challenges in diversifying revenue sources.
- Gross Margin Decline: The gross margin decreased due to a shift in the mix of high-margin satellite production versus lower-margin programs, resulting in operating income dropping from $3.5 million to approximately $1.3 million, highlighting the urgency for cost control measures.
- Contract Awards: The company secured two significant contracts valued at approximately $45 million, indicating strong business momentum, while backlog reached a new high of $83 million, with expectations to surpass $100 million, boosting market confidence.
- Increased R&D Investment: Research and development expenses rose to approximately $1.8 million, accounting for 10% of total revenue, reflecting the company's commitment to investing in emerging technologies, although short-term margins may be impacted, the long-term growth potential remains promising.
See More
Frequency Electronics Reports $45M Contracts and Record Backlog in Q3 2026
- Contract Achievements: Frequency Electronics secured two contracts valued at approximately $45 million in both traditional satellite and emerging satellite markets, demonstrating the company's dual success in traditional and new business areas, thereby strengthening its market position.
- Record Backlog: As of January 2026, the company's backlog reached approximately $83 million, a new record that is expected to drive future revenue growth and support the company's goal of reaching $100 million.
- Financial Performance Analysis: Although quarterly revenue was $16.9 million, down from $18.9 million year-over-year, the company remains debt-free with adequate liquidity to meet operational needs for the next 12 months.
- Optimistic Future Outlook: Management anticipates continued awards of similar magnitude contracts and expresses optimism about future order inflow, believing that backlog could exceed $100 million in the near future, driving sustained growth.
See More
Frequency Electronics Reports Disappointing Q4 Earnings
- Disappointing Earnings: Frequency Electronics (FEIM) reported a Q4 GAAP EPS of $0.16, missing expectations by $0.12, indicating pressure on the company's profitability.
- Revenue Decline: The company's Q4 revenue of $16.9 million represents a 10.7% year-over-year decline and fell short of expectations by $2.16 million, reflecting weak market demand and increased competition.
- Contract Wins: Frequency Electronics announced satellite contracts worth approximately $45 million, demonstrating potential growth in the defense and aerospace sectors despite overall poor performance.
- Future Outlook: The company has set a backlog target of over $100 million, indicating an acceleration in growth within the defense and aerospace markets, even as current financial results remain disappointing.
See More
Frequency Electronics Secures $45 Million in Satellite Contracts
- Significant Contract Value: Frequency Electronics announced the award of two satellite program contracts with a combined value of approximately $45 million, which will notably enhance the company's financial position and strengthen its competitive edge in the aerospace market.
- Diverse Project Types: One contract pertains to traditional space satellite programs while the other is linked to proliferated satellite systems, indicating the company's strategic diversification in product lines to capture varying market demands.
- Funding Backlog Expectations: Frequency Electronics expects the new business to start entering its funded backlog in the fourth quarter of fiscal 2026, which will support future revenue growth and enhance its financial stability.
- Future Contract Outlook: The company also anticipates additional contract awards of similar magnitude later this year, which will not only further expand its market share but also potentially boost investor confidence in the company.
See More
