Espey Mfg & Electronics (ESP) Q3 2026 earnings summary

Executive summary

• Q3 net sales rose to $11.42M from $10.30M YoY; 9M sales were $32.65M vs. $34.35M, while 9M net income increased to $7.84M from $5.21M.

• Gross margin improved in both periods, supported by product mix, labor efficiencies and process improvements; management expects FY26 revenue and net income to exceed FY25.

Financial highlights

• Q3 net sales $11.42M vs. $10.30M; gross profit $4.23M vs. $2.95M; operating income $2.98M vs. $1.75M.

• 9M net sales $32.65M vs. $34.35M; gross profit $11.66M vs. $8.91M; operating income $8.12M vs. $5.49M.

• Q3 net income $2.86M, basic/diluted EPS $1.03/$0.99 vs. $1.70M and $0.66/$0.63; 9M net income $7.84M, EPS $2.85/$2.74 vs. $5.21M and $2.03/$1.95.

• 9M operating cash flow $6.30M vs. $18.22M; lower cash generation reflected increased inventory and prepaid expenses, partly offset by higher customer advances.

Outlook and guidance

• FY26 revenue and net income expected to exceed FY25; Q4 sales volume expected to align with the prior two quarters and Q4 results to exceed the prior-year quarter.

• FY26 new orders expected below FY25; orders totaled $30M in 9M FY26 vs. $75.1M in 9M FY25, which included two awards totaling $49.4M.

• Backlog was $137.1M at March 31, 2026; scheduled recognition: 11% in FY26, 38% in FY27, 22% in FY28 and 29% thereafter.

• Management anticipated filling ~$15.1M of March 31 backlog by FY-end; outstanding opportunities totaled ~$152.5M as of May 7, subject to award and funding uncertainties.