RF Industries (RFIL) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 reached $19.2 million, up 42.7% year-over-year and 4% sequentially, exceeding prior guidance and driven by strong Custom Cabling growth, while RF Connector segment saw a slight decline.

• Gross profit margin improved to 29.8% from 24.5% in the prior year, with gross profit rising to $5.7 million, supported by higher value product mix and cost efficiencies.

• Operating income was $56,000, reversing a $2.1 million loss from the prior year; adjusted EBITDA was $867,000, a $2 million positive swing year-over-year.

• Net loss narrowed to $245,000 ($0.02 per share), with non-GAAP net income of $397,000 ($0.04 per share), compared to a non-GAAP loss of $0.14 per share in Q1 2024.

• Backlog stood at $15.2 million at quarter-end, with bookings of $14.9 million.

Financial highlights

• Custom Cabling segment sales surged 123.4% to $10.5 million, while RF Connector segment sales decreased 1.1% to $8.7 million year-over-year.

• Gross profit increased by $2.4 million, and gross margin improved by 5.3 percentage points year-over-year.

• Cash and cash equivalents totaled $1.3 million at quarter-end, up from $0.8 million at the prior fiscal year-end.

• Working capital was $11.7 million, with a current ratio of approximately 1.7 as of January 31, 2025.

• Adjusted EBITDA margin was 4.5% (Adjusted EBITDA of $867,000 on $19.2 million sales).

Outlook and guidance

• Fiscal 2025 revenue is anticipated to be significantly higher than fiscal 2024, with management targeting continued year-over-year sales growth and 10% Adjusted EBITDA margins.

• Gross margin is expected to remain around 30%, with potential for further improvement as new product lines mature.

• Management expects to continue cost reduction and operational efficiency initiatives, focusing on organic growth and potential acquisitions.

• Improved customer diversification and expansion into new market segments are expected to support sustainable growth.

• Management is monitoring tariff impacts but does not currently expect significant effects.