Frequency Electronics Reports 16.5% Revenue Growth in Q2 Fiscal 2025

Frequency Electronics, Inc. reported a significant increase in financial performance for the second quarter of fiscal 2025, ending October 31, 2024. The company achieved revenues of $15.8 million for the quarter, a 16.5% increase from $13.6 million in the same period last year. For the six months ended October 31, 2024, revenues reached $30.9 million, up 18.9% from $26.0 million in the prior year. The net income for the quarter was $2.7 million, translating to earnings per share of $0.28, compared to $0.08 in the previous year. For the six-month period, net income was $5.1 million, or $0.53 per share, compared to $2.8 million, or $0.30 per share, in the same period last year.

The company noted several strategic developments contributing to this growth, particularly in its FEI-NY segment, which focuses on precision time and frequency control products. Revenues from commercial and U.S. Government communication satellite programs accounted for approximately 59% of consolidated revenues for the quarter, a notable increase from 34% in the prior year. This growth was attributed to increased sales to U.S. Government space customers, which rose by approximately $3.8 million. The FEI-Zyfer segment, however, experienced a slight decline in revenues, reflecting a 4.1% decrease compared to the previous year.

Operationally, Frequency Electronics reported a total backlog of approximately $81 million as of October 31, 2024, compared to $78 million at the end of April 2024. About 65% of this backlog is expected to be realized within the next twelve months. The company also reported a decrease in cash and cash equivalents, which fell to $9.7 million from $18.3 million at the end of the previous fiscal year. The total employee headcount remained stable, with no significant changes reported.

The company’s selling and administrative expenses increased to $3.4 million for the quarter, up from $2.6 million in the prior year, primarily due to higher payroll costs and expenses related to the company's first Quantum Summit. Research and development expenses also rose significantly, reflecting the company's commitment to advancing its product offerings. The gross margin for the quarter improved to 48.2%, up from 31.9% in the same period last year, driven by higher revenues and successful project completions.

Looking ahead, Frequency Electronics anticipates continued growth driven by its focus on research and development, particularly in space applications and communication systems. The company plans to secure additional customer funding for R&D activities and may pursue acquisitions to expand its product range. Management believes that its liquidity is adequate to meet short-term operating and investment needs through at least December 2025, with expectations for sustained profitability and operational improvements in the coming quarters.