Key Tronic Stock Earnings Reports

Key Tronic reported Q3 fiscal 2025 revenue of $112.0M (down from $142.4M Y/Y) and a Q3 net loss of $0.6M ($0.06/share). Year-to-date revenue is $357.4M vs. $440.4M prior year. Gross margin improved to 7.7% in Q3 reflecting cost-cutting and headcount reductions; operating margin remained slightly negative. The quarter included ~ $0.8M of government-mandated severance in Mexico and ~$0.7M of inventory/collection adjustments. Inventory was reduced ~ $16M (14% YoY) and total liabilities fell ~$34.3M (14% YoY). Operating cash flow for the first nine months improved to $10.1M from $6.1M. CapEx to date ~$3M; full-year CapEx expected $6–8M, with significant planned investments for expansions in Arkansas and Vietnam. Management emphasized uncertainty and cost pressure from rapidly changing tariffs (China, potential Mexico/Vietnam tariffs) and therefore did not provide Q4 guidance. They are expanding U.S. (Arkansas flagship; >$28M investment, ~400 jobs over five years) and Vietnam capacity (able to more than double capacity) to capture onshoring/dual-sourcing demand and to mitigate tariff risk. Management highlighted a robust pipeline of new program wins (telecom, pest control, energy, consumer, and a design contract) and expects improved margins as production ramps and recent cost reductions leverage fixed costs, aiming to exceed ~10% gross margin with incremental revenue.