Frequency Electronics (FEIM) quarter:Q1 year:2027 Financial Results Summary
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Frequency Electronics, Inc. (FEIM) Q1 2027: Record Revenue Growth — Strongly Positive
Frequency Electronics, Inc. (FEIM) reported a remarkable first quarter for fiscal year 2027, showcasing a record revenue of $23.5 million, which represents an increase of $9.7 million or 70% year-over-year compared to $13.8 million in the same quarter last year. Additionally, this figure reflects a 52% sequential growth from the previous quarter.
This quarter's performance is undoubtedly a positive outcome for shareholders. The substantial revenue growth not only exceeds expectations but also demonstrates the company's effective execution of its growth strategy. The increase in revenue is supported by a record $129 million funded backlog, which is up 82% year-over-year and 16% sequentially, indicating strong demand and a robust pipeline for future sales.
Key Financial Metrics:
- Revenue: $23.5 million (up $9.7 million or +70% YoY)
- Operating Income: $5.2 million (up $4.8 million from $0.4 million YoY)
- Net Income: $4.2 million or $0.41 per diluted share (up from $0.6 million or $0.07 per diluted share YoY)
- Gross Margin: Approximately 46%
- Operating Margin: Exceeding 22%
- Net Cash Provided by Operating Activities: Approximately $3.0 million (compared to net cash used of $1.2 million YoY)
- Funded Backlog: $129 million (up $58 million or +82% YoY)
The significant operating leverage demonstrated this quarter, with operating margins exceeding 22%, highlights the company's ability to convert revenue growth into profitability effectively. The gross margin of approximately 46% further underscores the efficiency of operations and cost management.
Moreover, the company remains in a strong financial position, being debt-free and bolstered by a secondary offering that added approximately $73 million in cash, with about $14 million received after the quarter ended. This financial strength provides Frequency Electronics with the flexibility to invest in growth opportunities and enhance shareholder value.
Dividend and Share Buyback:
There were no announcements regarding dividends or share buybacks in this quarter's report. However, the focus on growth and the strong cash position may lead to future considerations in these areas.
Forward Guidance:
Looking ahead, investors should monitor the company's ability to sustain this growth trajectory. The management has expressed confidence in meeting or exceeding the previously guided target of $150 million in annual revenue by fiscal 2029. The upcoming earnings call will likely provide further insights into the company's strategic initiatives and developments in its end-markets, particularly in space and defense applications, which are critical for future growth.
In conclusion, Frequency Electronics' first quarter results for fiscal year 2027 reflect a robust performance, characterized by record revenue and significant profitability improvements. This quarter not only sets a positive tone for the remainder of the fiscal year but also positions the company favorably for long-term growth. Investors should remain attentive to the developments in the company's backlog and market opportunities as they unfold in the coming quarters.
Note: The following tables present amounts in thousands.
| Three Months Ended July 31, | ||
|---|---|---|
| Revenues | 23,451 | 13,812 |
| Cost of revenues | 12,701 | 8,730 |
| Gross margin | 10,750 | 5,082 |
| Selling, general, and administrative | 4,105 | 3,585 |
| Research and development | 1,445 | 1,133 |
| Operating income | 5,200 | 364 |
| (Benefit) provision for Income Taxes | 42 | 193 |
| Net income | 5,242 | 557 |
| Net income (unaudited) | 4,216 | 634 |
| Basic and diluted income per share | $0.41 | $0.07 |
| Weighted average shares outstanding | 10,232 | 9,723 |
| July 31, 2026 (unaudited) | April 30, 2026 | |
|---|---|---|
| ASSETS | ||
| Cash and cash equivalents | $ 61,407 | $ 1,603 |
| Accounts receivable, net | 6,224 | 4,637 |
| Contract assets | 19,637 | 17,277 |
| Inventories, net | 22,206 | 22,618 |
| Other current assets | 1,578 | 1,841 |
| Property, plant & equipment, net | 7,661 | 7,105 |
| Other assets | 13,354 | 12,801 |
| Deferred taxes | 13,219 | 14,084 |
| Right-of-use assets – operating leases | 6,953 | 7,409 |
| Restricted cash | 1,338 | 1,331 |
| $ 153,577 | $ 90,706 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Lease liability - current | $ 1,679 | $ 2,002 |
| Contract liabilities | 11,519 | 9,418 |
| Other current liabilities | 7,612 | 9,564 |
| Other long-term obligations | 7,647 | 7,671 |
| Operating lease liability – non-current | 5,283 | 5,648 |
| Stockholders’ equity | 119,837 | 56,403 |
| $ 153,577 | $ 90,706 |
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