RF Industries (RFIL) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2026 were $19.0 million, down 1.1% year-over-year and 16% sequentially, mainly due to lower integrated systems sales, but with growth in custom cabling and interconnect products.

• Gross profit margin improved by 250 basis points to 32.3%, with gross profit at $6.1 million, driven by favorable product mix, pricing, and operational efficiencies.

• Operating income rose to $177,000, more than tripling year-over-year, reflecting cost-cutting and operational improvements.

• Adjusted EBITDA increased 22% to $1.1 million year-over-year.

• Net loss narrowed to $50,000 (EPS: $0.00), down from $245,000 (EPS: $0.02) in the prior year.

Financial highlights

• Backlog at quarter-end was $14.4 million, with bookings of $17.9 million; current backlog stands at $18.6 million, up over $6 million since mid-January.

• Non-GAAP net income was $659,000 ($0.06/share), up from $397,000 ($0.04/share) last year; GAAP net loss was $50,000 ($0.00/share).

• Gross profit margin rose to 32.3% from 29.8% year-over-year, driven by pricing, product mix, and operational efficiencies.

• Operating expenses increased to $5.9 million from $5.7 million year-over-year.

• Cash and cash equivalents stood at $5.1 million as of January 31, 2026, unchanged from October 31, 2025.

Outlook and guidance

• Revenue growth is expected to accelerate in the back half of FY2026, supported by a strong and diversified backlog and expansion into new verticals.

• Management anticipates sequential growth through the year, with backlog composition supporting predictability and resilience.

• Gross margins above 30% are expected to be sustainable due to pricing discipline, product mix, and operating leverage.

• Cost reduction and operational improvement initiatives are expected to continue, aiming for organic revenue and profitability growth.

• Cash on hand and available credit are expected to be sufficient for liquidity needs for at least the next 12 months.