The following is a summary of the Frequency Electronics, Inc. (FEIM) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Q2 2025 revenue increased to $30.9 million, up from $26 million year-over-year.

• Gross margin rate improved, attributed to successful completion of major milestones in large space programs and nearing completion of older, lower-margin programs.

• Operating income rose to $5 million, reflecting efficient project completion and increased operational efficiency.

• Net income for the six months ending October 31, 2024, was $5.1 million, or $0.53 per share, compared to $2.8 million, or $0.30 per share, for the same period last year.

Business Progress:

• Significant growth driven by U.S. government space business, with more than half of the revenue and operating income in this sector.

• R&D expenditure increased to 10% of revenue to develop targeted products for the proliferated small satellite market.

• Held the Quantum Sensor Summit, strengthening positioning in the quantum technology market.

• Expecting government funding for quantum technology R&D in the coming quarters.

• Engaged in Cooperative Research and Development Agreements (CRADAs) to leverage external expertise.

Opportunities:

• Anticipate continuous revenue growth and potential expansion in the small satellite and quantum technology sectors supported by internal developments and government-funded R&D.

• Backlog reaching a record high of $81 million suggests sustained demand and potential for significant future earnings.

Risks:

• Dependence on government contracts and funding could lead to variability in financial performance and operational delays, particularly evident in non-space U.S. government and DOD business segments which have shown inconsistency.

More details: Frequency Electronics IR

Tips: This article is generated by AI. The accuracy of the content can not be fully guaranteed. For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.