Kimball Electronics, Inc. (KE) Q1 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 06 2025
0mins
Source: SeekingAlpha
Net Sales $366 million, a 2% decline compared to Q1 fiscal '25. The decline was due to strong results in Medical being offset by declines in Automotive and Industrial.
Medical Sales $102 million, up 13% compared to the same period last year. Growth was driven by robust sales growth in Asia and Europe, while North America was up mid-single digits.
Automotive Sales $164 million, down 10% compared to the first quarter of last year. The decline was due to lower sales in North America (resulting from the electronic braking program transfer) and a decline in Asia, partially offset by strong sales growth in Europe.
Industrial Sales $100 million, a 1% decrease compared to Q1 last year. The decline was due to softening demand for HVAC driven by the slowing housing market in North America and a significant decline in Europe, partially offset by strong sales growth in Asia.
Gross Margin Rate 7.9%, a 160 basis point increase compared to 6.3% in the same period of fiscal 2025. The improvement was driven by favorable product mix, the closure of the Tampa facility, and global restructuring efforts.
Adjusted Selling and Administrative Expenses $11.3 million, nearly flat year-over-year. As a percentage of sales, the rate was 3.1% this year compared to 2.9% last year. A $2 million recovery was recorded due to a customer termination of a program.
Adjusted Income $17.5 million or 4.8% of net sales, compared to $12.6 million or 3.4% of net sales last year. The increase was due to efforts to rightsize expenses, reduce debt, and take advantage of tax opportunities.
Adjusted Net Income $12.3 million or $0.49 per diluted share, up 2x from last year's adjusted results of $5.5 million or $0.22 per diluted share. The increase was attributed to expense management, debt reduction, and tax opportunities.
Cash and Cash Equivalents $75.7 million as of September 30, 2025. Cash generated by operating activities in the quarter was $8.1 million, marking the seventh consecutive quarter of positive cash flow.
Inventory $272.7 million, roughly flat versus Q4 but down $62.6 million or 19% from a year ago.
Borrowings $138 million, a $9.5 million reduction from the fourth quarter and down $108 million or 44% from a year ago.
Capital Expenditures $10.6 million in the first quarter, primarily for leasehold improvements in the new facility in Indianapolis.
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Analyst Views on KE
Wall Street analysts forecast KE stock price to rise
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 25.400
Low
32.00
Averages
32.00
High
32.00
Current: 25.400
Low
32.00
Averages
32.00
High
32.00
About KE
Kimball Electronics, Inc. is a global, multifaceted manufacturer offering electronics manufacturing services (EMS) and contract manufacturing organization (CMO) solutions. It provides electronics manufacturing services, including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. Its CMO solutions include operations such as precision molded plastics, complete device assembly, and cold chain management, which support the production of medical disposables and selected drug delivery devices such as auto-injectors. Its electronics manufacturing services include assembly, sub-assembly, soldering, and reflow. It offers full medical manufacturing solutions, such as precision plastics injection molding, sterilization services, drug delivery device manufacturing, flexible supply solutions, and regulatory compliance. Its engineering and design services include industrial design, analog circuit design, and digital circuit design.
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.
Kimball Electronics Q1 2026 Earnings Report Analysis
- Revenue Decline: Kimball Electronics reported Q1 2026 revenue of $352.9 million, reflecting a 5.8% year-on-year decline and missing analyst expectations of $356.3 million, indicating potential investor concerns due to weakness in automotive and industrial markets.
- Medical Segment Growth: Despite the overall revenue drop, the Medical segment showed sequential growth, with CEO Ric Phillips emphasizing its critical role in stabilizing results, suggesting strong demand in the medical market may provide a buffer for the company.
- Profitability Metrics: Adjusted EPS was $0.33, in line with expectations, while adjusted EBITDA stood at $22.83 million with a 6.5% margin, slightly below forecasts, reflecting challenges in cost management that could impact future profitability.
- Future Outlook: Management reaffirmed full-year revenue guidance of $1.43 billion, and despite market challenges, the company is actively ramping up production at the new Indianapolis facility, which is expected to enhance capacity and margins, demonstrating confidence in future growth.
See More
Kimball Electronics Q3 FY 2026 Earnings Call Insights
- Sales Growth: Kimball Electronics reported net sales of $353 million in Q3, reflecting a 3.4% increase from the previous quarter, with the medical segment growing by 10%, indicating strong demand that is expected to drive future revenue growth.
- Stable Margins: The gross margin rate for Q3 was 7.9%, with adjusted operating income at $14.8 million or 4.2% of net sales; despite facing gross margin pressure in FY '27, the company is making strategic investments to enhance operational efficiency.
- Future Outlook: The company reaffirmed its revenue guidance for FY 2026 in the range of $1.4 billion to $1.46 billion, expecting adjusted operating income margins to be between 4.2% and 4.5%, demonstrating management's confidence in future performance.
- Investment and Buyback: In Q3, Kimball Electronics repurchased 165,000 shares for $4 million, leaving $6.5 million remaining in its buyback program, indicating a proactive approach to capital allocation aimed at enhancing shareholder value.
See More
Kimball Electronics Q3 Earnings Miss Expectations
- Disappointing Performance: Kimball Electronics reported a Q3 non-GAAP EPS of $0.33, missing expectations by $0.01, indicating pressure on profitability that may affect investor confidence.
- Revenue Decline: The company’s revenue for Q3 was $352.9 million, down 5.8% year-over-year and falling short of expectations, reflecting weak market demand and increased competition that could pressure future performance.
- Fiscal Year 2026 Guidance: Kimball Electronics projects net sales for FY 2026 to be between $1.4 billion and $1.46 billion, with adjusted operating income estimated at 4.2% to 4.5% of net sales, indicating cautious optimism for future growth.
- Capital Expenditure Plans: The company plans to invest $50 million to $60 million in capital expenditures for FY 2026, aimed at enhancing production capacity and technological capabilities to support future business growth.
See More
Kimball Electronics Q3 Earnings Announcement Scheduled
- Earnings Release Date: Kimball Electronics is set to announce its Q3 earnings on May 5th after market close, with a consensus EPS estimate of $0.34, reflecting a 25.9% year-over-year increase, indicating ongoing improvement in profitability.
- Revenue Outlook Analysis: Despite the optimistic EPS forecast, the revenue estimate stands at $356.27 million, representing a 4.9% year-over-year decline, which suggests challenges in revenue growth that could impact overall market confidence.
- Historical Performance Review: Over the past two years, Kimball Electronics has beaten EPS estimates 63% of the time and revenue estimates 50% of the time, demonstrating relative stability in managing market expectations, which may bolster investor confidence.
- Expectation Revision Dynamics: In the last three months, EPS estimates have seen three upward revisions and one downward revision, while revenue estimates have also experienced three upward revisions and one downward revision, indicating some divergence in analysts' views on the company's future performance.
See More
Kimball Electronics to Report Q3 FY2026 Financial Results on May 5, 2026
- Earnings Release Schedule: Kimball Electronics has announced that it will report its third quarter fiscal year 2026 financial results on May 5, 2026, after market close, reflecting the company's commitment to transparency and investor communication.
- Conference Call Details: The company will host a conference call on May 6, 2026, at 10:00 a.m. Eastern Time to provide a detailed review of the financial results, aiming to enhance investor understanding and confidence in the company's performance.
- Webcast Access: Investors can access the live webcast of the conference call through the company’s website, ensuring that all stakeholders can receive timely key information, thereby improving interaction between the company and its investors.
- Global Manufacturing Capability: Kimball Electronics operates in the United States, China, Mexico, Poland, Romania, and Thailand, offering Electronics Manufacturing Services and Contract Manufacturing Organization solutions, showcasing its global business footprint and capability to serve multiple industries.
See More
Kimball Electronics Releases 2025 Sustainability Report
- Climate Action Progress: Kimball Electronics achieved a 9.3% year-over-year reduction in Scope 1 and 2 emissions, advancing towards its 42% reduction target by 2030 and supporting its long-term net-zero goal by 2050, demonstrating leadership in climate change initiatives.
- Renewable Energy Increase: The company reached 37% renewable electricity, a 12% year-over-year increase, supported by expanded on-site solar and renewable energy credit procurement, aligning with its 2030 target for 100% renewable electricity.
- Zero Waste Target: Kimball Electronics achieved 92% beneficial use of waste, supporting its zero waste goal, while hazardous waste intensity was reduced by 13% from the 2024 baseline, showcasing ongoing efforts in waste management.
- Community Investment Achievement: The company achieved 115% of its annual giving target, totaling $325,000 in donations supported by over 3,050 volunteer hours, reflecting its commitment to social responsibility.
See More
Kimball Electronics Q1 2026 Earnings Report Analysis
- Revenue Decline: Kimball Electronics reported Q1 2026 revenue of $352.9 million, reflecting a 5.8% year-on-year decline and missing analyst expectations of $356.3 million, indicating potential investor concerns due to weakness in automotive and industrial markets.
- Medical Segment Growth: Despite the overall revenue drop, the Medical segment showed sequential growth, with CEO Ric Phillips emphasizing its critical role in stabilizing results, suggesting strong demand in the medical market may provide a buffer for the company.
- Profitability Metrics: Adjusted EPS was $0.33, in line with expectations, while adjusted EBITDA stood at $22.83 million with a 6.5% margin, slightly below forecasts, reflecting challenges in cost management that could impact future profitability.
- Future Outlook: Management reaffirmed full-year revenue guidance of $1.43 billion, and despite market challenges, the company is actively ramping up production at the new Indianapolis facility, which is expected to enhance capacity and margins, demonstrating confidence in future growth.
See More
Kimball Electronics Q3 FY 2026 Earnings Call Insights
- Sales Growth: Kimball Electronics reported net sales of $353 million in Q3, reflecting a 3.4% increase from the previous quarter, with the medical segment growing by 10%, indicating strong demand that is expected to drive future revenue growth.
- Stable Margins: The gross margin rate for Q3 was 7.9%, with adjusted operating income at $14.8 million or 4.2% of net sales; despite facing gross margin pressure in FY '27, the company is making strategic investments to enhance operational efficiency.
- Future Outlook: The company reaffirmed its revenue guidance for FY 2026 in the range of $1.4 billion to $1.46 billion, expecting adjusted operating income margins to be between 4.2% and 4.5%, demonstrating management's confidence in future performance.
- Investment and Buyback: In Q3, Kimball Electronics repurchased 165,000 shares for $4 million, leaving $6.5 million remaining in its buyback program, indicating a proactive approach to capital allocation aimed at enhancing shareholder value.
See More
Kimball Electronics Q3 Earnings Miss Expectations
- Disappointing Performance: Kimball Electronics reported a Q3 non-GAAP EPS of $0.33, missing expectations by $0.01, indicating pressure on profitability that may affect investor confidence.
- Revenue Decline: The company’s revenue for Q3 was $352.9 million, down 5.8% year-over-year and falling short of expectations, reflecting weak market demand and increased competition that could pressure future performance.
- Fiscal Year 2026 Guidance: Kimball Electronics projects net sales for FY 2026 to be between $1.4 billion and $1.46 billion, with adjusted operating income estimated at 4.2% to 4.5% of net sales, indicating cautious optimism for future growth.
- Capital Expenditure Plans: The company plans to invest $50 million to $60 million in capital expenditures for FY 2026, aimed at enhancing production capacity and technological capabilities to support future business growth.
See More
Kimball Electronics Q3 Earnings Announcement Scheduled
- Earnings Release Date: Kimball Electronics is set to announce its Q3 earnings on May 5th after market close, with a consensus EPS estimate of $0.34, reflecting a 25.9% year-over-year increase, indicating ongoing improvement in profitability.
- Revenue Outlook Analysis: Despite the optimistic EPS forecast, the revenue estimate stands at $356.27 million, representing a 4.9% year-over-year decline, which suggests challenges in revenue growth that could impact overall market confidence.
- Historical Performance Review: Over the past two years, Kimball Electronics has beaten EPS estimates 63% of the time and revenue estimates 50% of the time, demonstrating relative stability in managing market expectations, which may bolster investor confidence.
- Expectation Revision Dynamics: In the last three months, EPS estimates have seen three upward revisions and one downward revision, while revenue estimates have also experienced three upward revisions and one downward revision, indicating some divergence in analysts' views on the company's future performance.
See More
Kimball Electronics to Report Q3 FY2026 Financial Results on May 5, 2026
- Earnings Release Schedule: Kimball Electronics has announced that it will report its third quarter fiscal year 2026 financial results on May 5, 2026, after market close, reflecting the company's commitment to transparency and investor communication.
- Conference Call Details: The company will host a conference call on May 6, 2026, at 10:00 a.m. Eastern Time to provide a detailed review of the financial results, aiming to enhance investor understanding and confidence in the company's performance.
- Webcast Access: Investors can access the live webcast of the conference call through the company’s website, ensuring that all stakeholders can receive timely key information, thereby improving interaction between the company and its investors.
- Global Manufacturing Capability: Kimball Electronics operates in the United States, China, Mexico, Poland, Romania, and Thailand, offering Electronics Manufacturing Services and Contract Manufacturing Organization solutions, showcasing its global business footprint and capability to serve multiple industries.
See More
Kimball Electronics Releases 2025 Sustainability Report
- Climate Action Progress: Kimball Electronics achieved a 9.3% year-over-year reduction in Scope 1 and 2 emissions, advancing towards its 42% reduction target by 2030 and supporting its long-term net-zero goal by 2050, demonstrating leadership in climate change initiatives.
- Renewable Energy Increase: The company reached 37% renewable electricity, a 12% year-over-year increase, supported by expanded on-site solar and renewable energy credit procurement, aligning with its 2030 target for 100% renewable electricity.
- Zero Waste Target: Kimball Electronics achieved 92% beneficial use of waste, supporting its zero waste goal, while hazardous waste intensity was reduced by 13% from the 2024 baseline, showcasing ongoing efforts in waste management.
- Community Investment Achievement: The company achieved 115% of its annual giving target, totaling $325,000 in donations supported by over 3,050 volunteer hours, reflecting its commitment to social responsibility.
See More
