Frequency Electronics Reports 38% Revenue Growth and Significant Net Income Increase in Q3 2025

Frequency Electronics, Inc. reported significant financial improvements in its latest 10-Q filing for the third quarter of fiscal year 2025, ending January 31, 2025. The company achieved revenues of $18.9 million for the quarter, a 38% increase from $13.7 million in the same period last year. For the nine months ending January 31, 2025, revenues reached $49.8 million, up 25.5% from $39.7 million in the prior year. The company also reported a net income of $15.4 million for the quarter, compared to a mere $130,000 in the same quarter of the previous year, resulting in a basic earnings per share of $1.60, a substantial increase from $0.01.

The financial performance reflects a notable turnaround from the previous fiscal period, where the company reported an operating loss of $473,000 in Q3 2024. The operating income for Q3 2025 was $3.5 million, driven by increased revenues from both the FEI-NY and FEI-Zyfer segments, particularly in U.S. Government communication satellite programs. The gross margin also improved significantly, reaching $8.3 million, or 43.8% of revenues, compared to $3.1 million, or 22.6%, in the same quarter last year.

Operationally, Frequency Electronics has seen a positive shift in its customer base and product adoption. The company reported a backlog of approximately $73 million as of January 31, 2025, down from $78 million at the end of April 2024, with about 65% expected to be realized within the next twelve months. The company has also been actively managing its inventory, which increased to $25.4 million from $23.4 million, indicating a strategic buildup to meet anticipated demand.

In terms of strategic developments, Frequency Electronics declared a special cash dividend of $1.00 per share, totaling approximately $9.6 million, which was paid on August 29, 2024. The company has also been authorized to repurchase up to $5 million of its common stock, with approximately $3.9 million repurchased to date. The company continues to invest in research and development to enhance its product offerings, particularly in space applications and communication systems, which management believes will drive future growth.

Looking ahead, Frequency Electronics remains optimistic about its financial trajectory, citing a strong working capital position of approximately $27.3 million and a current ratio of 2.2 to 1 as of January 31, 2025. The company plans to continue its focus on R&D and may pursue acquisitions to expand its product range. However, it acknowledges potential risks, including market conditions and reliance on key customers, which could impact future performance.