Frequency Electronics Posts $1.6M Profit in Q3 FY2026 as Revenue Slips 11%
Frequency Electronics Inc. reported net income of $1.57 million for the three months ending January 31, 2026, down sharply from $15.4 million in the same period a year earlier when the company recorded a large tax benefit.
Frequency Electronics Inc. (Nasdaq: FEIM), a designer and manufacturer of precision time and frequency control products, reported net income of $1.57 million for the three months ending January 31, 2026, compared to net income of $15.4 million in the same quarter last year. The year-earlier result included an $11.8 million tax benefit that inflated the prior-year figure. Read more earnings reports.
Revenue for the quarter fell 11% to $16.9 million from $18.9 million a year earlier. For the nine-month period ending January 31, 2026, total revenue declined 4% to $47.8 million from $49.8 million in the prior-year period.
Operating income dropped to $1.3 million in the third quarter from $3.5 million a year earlier. For the nine-month period, operating income fell to $3.3 million from $8.5 million.
The company's gross profit margin compressed during the quarter. Gross profit was $6.6 million, down from $8.3 million in the year-earlier quarter. Cost of revenue rose to $10.3 million from $10.6 million, while revenue declined.
Balance Sheet and Cash Position
Frequency Electronics held $86,000 in cash and cash equivalents as of January 31, 2026, down sharply from $4.7 million at the end of the fiscal year on April 30, 2025. Including restricted cash, total cash stood at $1.5 million compared to $6.1 million nine months earlier.
Total assets edged up to $94.2 million from $93.7 million at fiscal year-end. Stockholders' equity increased to $60.2 million from $55.6 million.
Accounts receivable surged to $10.7 million from $5.9 million at the end of April 2025. Inventory rose to $25.8 million from $23.5 million over the same period.
Cash Flow
Operating activities consumed $779,000 in cash during the nine months ending January 31, 2026, compared to a cash outflow of $1.3 million in the prior-year period. Investing activities used $2.3 million, up from $1.2 million a year earlier. Financing activities absorbed $1.6 million, down from $9.9 million in the year-earlier period.
Per Share Results
Diluted earnings per share were $0.16 for the third quarter on 9.8 million weighted average shares outstanding, compared to $1.60 per share on 9.6 million shares in the year-earlier quarter. For the nine-month period, diluted EPS was $0.41 versus $2.14 a year earlier.
Key Financial Data
| Metric | Q3 FY2026 | Q3 FY2025 | 9M FY2026 | 9M FY2025 |
|---|---|---|---|---|
| Total Revenue | $16.9M | $18.9M | $47.8M | $49.8M |
| Cost of Revenue | $10.3M | $10.6M | $29.6M | $27.2M |
| Gross Profit | $6.6M | $8.3M | $18.2M | $22.6M |
| Operating Income | $1.3M | $3.5M | $3.3M | $8.5M |
| Net Income | $1.6M | $15.4M | $4.0M | $20.5M |
| Diluted EPS | $0.16 | $1.60 | $0.41 | $2.14 |
The company reported R&D expenses of $1.8 million for the quarter, up from $1.4 million a year earlier. Selling, general and administrative expenses rose to $3.6 million from $3.4 million.