Frequency Electronics Stock Earnings Reports

Frequency Electronics delivered a strong Q3 FY2025, recording its highest revenue quarter in 10 years and significant year-to-date improvements in revenue, gross margin and operating income. Nine-month consolidated revenue was $49.8M (up from $39.7M prior year), driven largely by increased sales on commercial and U.S. government satellite programs (58% of revenue). Operating income for the nine months rose to $8.5M (vs. $2.5M prior year) and consolidated net income was $20.5M, or $2.18 per share (vs. $3M, $0.32 prior year). A material discrete tax benefit (release of a valuation allowance) contributed to an $11.6M income tax benefit in the period. The company’s fully-funded backlog was approximately $73M at January 31, 2025 (vs. $78M at prior fiscal year end). Cash decreased about $12.8M since year-end, largely due to a $9.6M dividend; working capital was approximately $27M, current ratio ~2.2, and the company is debt-free. SG&A remained ~19% of revenue (higher payroll, stock comp and one-time event costs); R&D increased to $4.5M (≈9% of revenues) as Frequency invests in product modernization. Management highlighted continued strategic emphasis on proliferated satellites and emerging quantum sensing (magnetometers and Rydberg sensors) — no commercial quantum products yet, but development contracts and near-term revenue opportunities are expected. Management remains cautiously optimistic about medium- to long-term growth despite potential near-term variability from U.S. government budget/decision timing; company plans measured investments, active teaming with national labs/partners, and efforts to harden and adapt products for space/radiation environments. Investors should note the sizable one-time tax-related benefit and that some revenue uplift was driven by a specific space program completing major milestones; future quarters may vary.