Surge Components Swings to $34,275 Net Loss in Q1 FY2026 as Expenses Outpace Revenue Growth

Surge Components, Inc., a supplier of electronic components, posted a net loss of $34,275 for the quarter ending February 28, 2026, reversing from a net income of $57,356 in the same quarter a year earlier. The company reported revenue of $8.19 million for the three months ending February 28, up 13% from $7.23 million in the prior-year period. Read more earnings reports.

The shift to a loss came as operating expenses rose faster than gross profit. Operating expenses totaled $2.57 million, up 25% from $2.05 million a year earlier. Gross profit for the quarter reached $2.41 million, up 18% from $2.05 million in the prior-year period, but fell short of covering the higher expense load.

Cost of goods sold climbed to $5.79 million from $5.19 million in the year-earlier quarter. The company recorded an operating loss of $157,840 for the quarter, compared to a minimal operating loss of $2,544 in the prior-year period.

Cash Position Strengthens

Surge Components ended the quarter with cash and cash equivalents of $6.45 million, up from $5.33 million at the end of the prior fiscal quarter on November 30, 2025. Cash from operations for the three months totaled $1.09 million, a sharp reversal from a negative $124,278 in the prior-year quarter.

Accounts receivable declined to $5.81 million from $6.46 million at the end of November, while inventory fell slightly to $4.97 million from $5.09 million. Total assets stood at $27.28 million as of February 28, up marginally from $27.12 million at November 30, 2025.

Balance Sheet and Equity

Total liabilities increased to $5.95 million from $5.72 million at the prior quarter-end, with current liabilities rising to $5.17 million from $5.01 million. Accounts payable climbed to $3.48 million from $3.23 million.

Stockholders' equity declined to $21.33 million as of February 28, 2026, from $21.40 million at November 30, 2025, reflecting the quarterly net loss. The company had 5.72 million common shares outstanding as of the end of the quarter.

Basic and diluted earnings per share for the quarter were negative $0.01, compared to positive $0.01 in the prior-year quarter. The weighted average shares outstanding for basic EPS totaled 5.72 million.

Financial Summary