Richardson Electronics (RELL) Q2 2025 earnings summary

Executive summary

• Q2 FY25 consolidated net sales rose 12.1% year-over-year to $49.5 million, marking the second consecutive quarterly increase, driven by strong growth in Green Energy Solutions (GES) and Power & Microwave Technology (PMT), partially offset by declines in Healthcare and Canvys.

• GES net sales surged 129% year-over-year to $6.0 million, fueled by wind turbine battery modules and new energy storage applications.

• Gross margin improved to 31.0% from 28.4% year-over-year, with margin expansion in PMT, GES, and Healthcare.

• Operating cash flow was positive for the third straight quarter, with cash and equivalents reaching $26.6 million and no debt.

• Net loss for Q2 FY25 narrowed to $0.8 million ($0.05/share), improved from $1.8 million ($0.13/share) in Q2 FY24.

Financial highlights

• Q2 FY25 net sales: $49.5 million, up from $44.1 million in Q2 FY24.

• Gross margin: 31.0% in Q2 FY25, up from 28.4% in Q2 FY24.

• Operating loss reduced to $0.7 million from $2.0 million; net loss narrowed to $0.8 million ($0.05/share) from $1.8 million ($0.13/share) year-over-year.

• EBITDA improved to break-even from negative $1.2 million in Q2 FY24.

• Cash and equivalents at Q2 end: $26.6 million, up from $23.0 million in Q1.

Outlook and guidance

• Management expects higher year-over-year sales and profitability for FY25, supported by sequential backlog growth.

• Backlog increased to $142.6 million at Q2 end, up from $137.4 million in Q1 FY25.

• GES targets high double-digit revenue growth and 30-40% average gross margin.

• PMT expects continued growth in semiconductor wafer fab and RF/microwave components.

• Canvys and Healthcare anticipate improved demand in the remainder of FY25.