Event to Accelerate Production-Ready Quantum Sensing TechnologiesMITCHEL FIELD, N.Y., Aug. 01, 2025 (GLOBE NEWSWIRE) -- Frequency Electronics, Inc. (“FEI” or the “Company”) (NASDAQ-FEIM), a leading provider of precision timing and frequency control products, today announced it will host the 2025 Quantum Sensing Summit on October 29–30, 2025, in New York City. The event will bring together leaders from government, industry, and research to accelerate the transition of quantum sensing technologies from the la ...

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended April 30, 2025 Commission File No. 1-8061 FREQUENCY ELECTRONICS, INC. (Exact name of registrant as specified in its charter) | Delaware | 11-1986657 | | --- | --- | | (State or o ...

Core Insights - Frequency Electronics, Inc. (FEIM) reported a significant increase in quarterly financial results, yet its stock has declined 10.4% since the earnings report, indicating investor caution despite strong performance [1][2][6] Financial Performance - For Q4 fiscal 2025, net income was $3.3 million or 34 cents per share, up from $2.6 million or 28 cents per share in the prior year [2] - Revenues reached $20 million, a 28.3% increase from $15.6 million in the same quarter last year [2] - Operating income rose to $3.3 million from $2.5 million year-over-year [3] Revenue Breakdown - Satellite payloads generated $12.1 million in Q4, accounting for 60% of total revenues, up from $6.9 million or 44% in the prior-year quarter [4] - Non-space U.S. Government/DoD revenues decreased to $7 million from $7.9 million in the previous year [4] Cash Flow and Backlog - The backlog at fiscal year-end was $70 million, down from $78 million a year earlier [5] - Net cash used in operations was $1.4 million, a reversal from $8.7 million in cash provided in the previous year, partly due to a $9.6 million dividend paid [5] Management Commentary - CEO Thomas McClelland highlighted the quarter as the highest-revenue quarter in 25 years, attributing success to strong execution and accelerated revenue recognition [6] - CFO Steven Bernstein noted a $13.9 million release of deferred tax valuation allowances contributing to the earnings surge [7] Strategic Focus - The company is targeting emerging opportunities in quantum sensing and alternative navigation technologies, with plans to launch a compact rubidium atomic clock branded as TURBO [11] - FEIM is involved in the GPS IIIF program and plans to host the Second Annual Quantum Sensing Summit in New York City [12] Annual Performance Overview - For fiscal 2025, total revenue was $69.8 million, a 26.3% increase from $55.3 million in fiscal 2024 [9] - Net income surged to $23.8 million or $2.48 per share, up from $5.6 million or 59 cents per share in fiscal 2024 [9] - Operating income more than doubled to $11.7 million from $5 million [9]

Core Insights - Frequency Electronics, Inc. (FEI) clarifies revenue expectations for its TURbO compact rubidium atomic clock, stating that the anticipated revenue of $1 million to $2 million for FY2026 refers to orders already received and does not fully capture the market potential for this technology [1] - The TURbO atomic clock is expected to significantly expand FEI's market exposure, particularly in drone applications and traditional aircraft radar, with a potential market growth estimated at $20 million or more in FY2027 [2] Company Overview - Frequency Electronics, Inc. is a leader in precision timing and frequency technology, providing products for various applications including satellite payloads, military systems, and secure communications [4] - The company has received over 100 awards for excellence in high-performance electronic assemblies and invests heavily in research and development to enhance its capabilities and market reach [4] Future Outlook - The company anticipates sharing further developments in the growth market for TURbO and updates on quantum sensing and magnetometers in upcoming quarters [3]

Financial Data and Key Metrics Changes - For the fiscal year ended April 30, 2025, consolidated revenue was $69.8 million, up from $55.3 million in the prior fiscal year, representing a significant increase [8][10] - Gross profit increased due to higher revenue and improved gross margin, with operating income rising to $11.7 million from $5 million in the previous fiscal year [13][14] - Consolidated net income for the year was $23.7 million or $2.46 per share, compared to $5.6 million or $0.59 per share in the previous fiscal year [14] - The company's balance sheet reflects a strong working capital position of approximately $30 million and a current ratio of about 2.3:1, with no debt [15] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. Government satellite programs was approximately $40.9 million, accounting for 59% of total revenue, compared to $23.2 million or 42% in the prior fiscal year [9] - Revenue from non-space U.S. Government and DoD customers decreased to $26.5 million from $29 million, representing 38% of consolidated revenue compared to 52% previously [9] Market Data and Key Metrics Changes - The company is expanding its customer base beyond traditional prime contractors and is actively submitting bids alongside next-generation defense companies [5] - The company anticipates meaningful growth with traditional primes and is well-positioned to benefit from industry trends over the next five to ten years [5] Company Strategy and Development Direction - The company is focusing on several growth opportunities, including quantum sensing and alternative navigation technologies, which are expected to drive future growth [6][10] - The company is committed to maintaining technical excellence through increased R&D spending, which rose to $6.1 million from $3.4 million [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth driven by new legislation supporting space and defense programs, although they cautioned about variability in contract timing due to changes in administration [4][30] - The company expects to see additional revenue from contract awards flowing in over the coming quarters and years [4] Other Important Information - The company recorded a decrease in valuation allowance of approximately $13.9 million, primarily related to deferred tax assets [14] - Cash decreased by approximately $13.6 million, with dividends accounting for about $9.6 million of this decrease [15] Q&A Session Summary Question: Allocation of resources to growth opportunities - Management is actively pursuing proposals in various growth areas, with quantum sensors appearing particularly promising due to the vulnerability of GPS [21][22] Question: Adequacy of cash for increased R&D spending - Management is confident in their ability to fund increased R&D through internal funds and is exploring external funding options [24][25] Question: Short-term uncertainty and backlog variability - Management clarified that while there may be variability in future contracts, the current backlog of $70 million is solid [33][34] Question: Gross margin outlook - Management aims to maintain gross margins in the low to mid-40% range for the upcoming fiscal year [68] Question: Revenue opportunities from quantum sensing - Quantum sensing is expected to contribute less than 1% of overall revenue in the next fiscal year, with product revenue anticipated in about five years [70] Question: SG&A and R&D targets for 2026 - SG&A is expected to remain around 18% of revenue, while R&D is projected to be in the 6% to 9% range [79]

Financial Data and Key Metrics Changes - For the fiscal year ended April 30, 2025, consolidated revenue was $69.8 million, up from $55.3 million in the prior fiscal year, representing a significant increase [8] - Gross profit increased due to higher revenue and improved gross margin, with operating income rising to $11.7 million from $5 million in the previous year [13][14] - Consolidated net income for the year was $23.7 million or $2.46 per share, compared to $5.6 million or $0.59 per share in the previous fiscal year [14] - The company's fully funded backlog at April 2025 was approximately $70 million, down from $78 million in the previous fiscal year [14] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. Government satellite programs was approximately $40.9 million, accounting for 59% of total revenue, compared to $23.2 million or 42% in the prior fiscal year [8] - Revenue from non-space U.S. Government and DoD customers decreased to $26.5 million from $29 million, representing 38% of consolidated revenue compared to 52% in the prior year [9] Market Data and Key Metrics Changes - The company is expanding its customer base beyond traditional prime contractors and is actively submitting bids alongside next-generation defense companies [5] - The company anticipates meaningful growth with traditional prime contractors and is well-positioned to benefit from industry trends over the next five to ten years [5] Company Strategy and Development Direction - The company is focusing on several growth opportunities, including quantum sensing and alternative navigation technologies, which are expected to drive future growth [6][24] - The company is committed to maintaining technical excellence through increased R&D spending, which rose to $6.1 million from $3.4 million [12] - The company aims to maintain a gross margin of 40% or more in the upcoming fiscal year [72] Management's Comments on Operating Environment and Future Outlook - Management noted that while the recent quarter was strong, future quarters may not replicate this performance due to the lumpiness of contract awards [4] - There is variability in the timing of contracts due to changes in administration priorities, but the overall spending outlook remains positive [30][31] - Management expressed confidence in the company's ability to fund increased R&D spending through internal funds and external funding opportunities [25][26] Other Important Information - The company is debt-free and maintains a strong working capital position of approximately $30 million [15] - Cash decreased by approximately $13.6 million since the prior fiscal year end, primarily due to dividend payments and timing of billing [15][16] Q&A Session Summary Question: Allocation of resources to growth opportunities - Management is actively pursuing proposals in various growth areas and is in discussions with prime customers about capabilities [22][24] Question: Potential for growth in specific areas - Quantum sensor technology appears promising, with significant market potential, while Golden Dome also shows potential but with uncertain funding [24] Question: Adequacy of cash for increased R&D spending - Management is confident in having adequate cash to fund increased R&D, with a cautious approach to resource allocation [25] Question: Short-term uncertainty and backlog variability - Management clarified that the $70 million backlog is solid, with variability mainly concerning future contracts [34][35] Question: Revenue opportunities from quantum sensing - Quantum sensing is expected to contribute less than 1% of overall revenue in the next fiscal year, with product revenue anticipated five years out [73] Question: SG&A and R&D targets for future years - SG&A is expected to remain around 18% of revenue, while R&D is projected to be in the 6% to 9% range [83] Question: SDA bids and investment expenses - The SDA process is currently being rethought by the new administration, with potential developments expected within the next 9 to 12 months [86][87]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Fiscal Year 2025 and Q4 Financial Highlights](index=1&type=section&id=Fiscal%20Year%202025%20and%20Q4%20Financial%20Highlights) The company reported significant revenue and net income growth for Q4 and the full fiscal year 2025 | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change | Full Year FY2025 | Full Year FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $20.0M | $15.6M | +28.2% | $69.8M | $55.3M | +26.2% | | **Operating Income** | $3.3M | $2.5M | +32.0% | $11.7M | $5.0M | +134.0% | | **Net Income** | $3.3M | $2.6M | +26.9% | $23.8M | $5.6M | +325.0% | | **Diluted EPS** | $0.34 | $0.28 | +21.4% | $2.48 | $0.59 | +320.3% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted a record Q4, affirmed long-term confidence, and detailed strategic R&D investments - Q4 FY2025 was the highest revenue quarter for the company in the past twenty-five years, with **historically high margins and operating income**[3](index=3&type=chunk) - The strong quarterly performance was partly due to **accelerating revenue and profit** from programs originally scheduled for FY26 and beyond, a pace the CEO noted is not sustainable every quarter[3](index=3&type=chunk) - FEI is making targeted internal R&D investments, supplemented by external funding, to develop products for space and defense with minimal customization, focusing on **quantum sensor applications**[3](index=3&type=chunk) - The company is actively hiring scientists and engineers with expertise in quantum sensing to enhance its capabilities in this key growth area[3](index=3&type=chunk) [Detailed Financial Analysis](index=1&type=section&id=Detailed%20Financial%20Analysis) [Selected Financial Metrics (FY2025)](index=1&type=section&id=Selected%20Financial%20Metrics%20%28FY2025%29) Satellite payload revenue grew to 59% of total as operating cash flow turned negative and backlog decreased | Revenue Source | FY2025 Revenue | % of Total | FY2024 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | Satellite Payloads | $40.9M | 59% | $23.2M | 42% | | Non-space U.S. Gov/DOD | $26.5M | 38% | $29.0M | 52% | | Other Commercial/Industrial | $2.4M | 3% | $3.1M | 6% | - Net cash used in operating activities was approximately **$1.4 million** in FY2025, compared to net cash provided by operations of **$8.7 million** in FY2024[4](index=4&type=chunk) - Backlog at April 30, 2025, was approximately **$70 million**, a decrease from **$78 million** at April 30, 2024[4](index=4&type=chunk) [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue grew 26.3% and gross margin improved, with net income surging due to a large income tax benefit | (in thousands) | Twelve Months Ended April 30, 2025 | Twelve Months Ended April 30, 2024 | | :--- | :--- | :--- | | **Revenues** | $69,811 | $55,274 | | **Gross margin** | $30,097 | $18,583 | | **Operating income** | $11,732 | $5,019 | | **Benefit provision for Income Taxes** | $(11,658) | $(130) | | **Net income** | $23,802 | $5,594 | - Research and development expenses **increased by 79.8%** from $3.4 million in FY2024 to $6.1 million in FY2025, reflecting the company's strategic investments[12](index=12&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew as cash decreased significantly, offset by increases in contract and deferred tax assets | (in thousands) | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $4,720 | $18,320 | | **Contract assets** | $17,914 | $10,523 | | **Deferred taxes** | $12,159 | $- | | **Total Assets** | $93,851 | $83,253 | | **Contract liabilities** | $13,454 | $21,639 | | **Stockholders' equity** | $55,736 | $39,816 | - The significant drop in cash was coupled with a large decrease in contract liabilities (deferred revenue) from **$21.6 million to $13.5 million**, suggesting revenue recognition from prior advance payments[14](index=14&type=chunk) [Corporate Information and Outlook](index=2&type=section&id=Corporate%20Information%20and%20Outlook) [Investor Conference Call Information](index=2&type=section&id=Investor%20Conference%20Call%20Information) The company will host an investor conference call on July 10, 2025, to discuss its financial results - A conference call to discuss the results is scheduled for **Thursday, July 10, 2025, at 4:30 PM Eastern Time**[5](index=5&type=chunk) - A replay of the call will be available for one week by phone and archived on the company's website through **October 10, 2025**[6](index=6&type=chunk) [Company Profile and Forward-Looking Statements](index=2&type=section&id=Company%20Profile%20and%20Forward-Looking%20Statements) FEI is a leader in high-precision timing products, and the report includes a standard risk disclaimer - FEI is a world leader in high-precision timing, frequency generation, and RF control products for **space and terrestrial applications**, including satellite payloads, C4ISR, electronic warfare, and GPS[7](index=7&type=chunk) - The company's mission is to **commercialize research discoveries into practical products**, aiming to create value for customers, employees, and stockholders[8](index=8&type=chunk) - The press release includes a **"safe harbor" provision** under the Private Securities Litigation Reform Act of 1995, warning that forward-looking statements are subject to various risks and uncertainties[9](index=9&type=chunk)

Core Insights - Frequency Electronics, Inc. reported significant revenue growth for the fiscal year 2025, with revenues of approximately $20.0 million for Q4 and $69.8 million for the full year, compared to $15.6 million and $55.3 million in the previous fiscal year [1] - The company achieved an operating income of $3.3 million for Q4 and $11.7 million for the full year, up from $2.5 million and $5.0 million in the prior year [1] - Net income from operations for Q4 was $3.3 million ($0.34 per diluted share) and $23.8 million ($2.48 per diluted share) for the full year, compared to $2.6 million ($0.28 per diluted share) and $5.6 million ($0.59 per diluted share) in FY2024 [1] Financial Performance - Q4 revenues from satellite payloads were approximately $12.1 million, representing 60% of consolidated revenues, compared to $6.9 million (44%) in the same period of FY2024 [6] - Revenues from non-space U.S. Government/DOD customers were approximately $7.0 million (35%) for Q4, down from $7.9 million (51%) in FY2024 [6] - Total revenues from other commercial and industrial sales accounted for approximately $0.9 million (4%) for Q4, slightly up from $0.8 million (5%) in the previous year [7] Strategic Outlook - The company is well-positioned to capitalize on the growing quantum sensor market, leveraging its expertise in atomic clocks and actively hiring skilled professionals in this field [5] - FEI is investing in targeted internal R&D to develop products for space and defense applications, aiming for faster execution and reduced customization needs [4] - The recent U.S. budget legislation indicates strong government commitment to space and defense, which FEI anticipates will positively impact its business in the medium to long term [3] Operational Metrics - Net cash used in operating activities was approximately $1.4 million for FY2025, a decline from $8.7 million in FY2024 [12] - The backlog at April 30, 2025, was approximately $70 million, down from $78 million at the same time in the previous year [12]

Company Overview - Frequency Electronics, Inc. (FEI) is a leader in the design, development, and manufacture of high precision timing, frequency generation, and RF control products for both space and terrestrial applications [4] - The company's products are utilized in satellite payloads and various commercial, government, and military systems, including C4ISR, electronic warfare, missiles, UAVs, aircraft, GPS, secure communications, and energy exploration [4] - FEI has received over 100 awards for excellence in providing high-performance electronic assemblies for more than 150 space and Department of Defense (DOD) programs [4] Upcoming Events - Frequency Electronics will hold a conference call to discuss its fiscal year 2025 results on July 10, 2025, at 4:30 PM Eastern Time [1] - The call will be accessible via webcast on the company's Investor Relations website and through a dedicated phone line for both domestic and international callers [2] Financial Information - A telephone replay of the archived call will be available for one week following the call, with specific domestic and international numbers provided for access [3] - The call can also be accessed via a link on the company's website until September 10, 2025 [3] Mission Statement - The company's mission is to transform research discoveries into practical products, emphasizing excellence and creating value for customers, employees, and stockholders [4]

Core Viewpoint - Frequency Electronics, Inc. has been added to the Russell 3000 and Russell 2000 indexes, marking a significant milestone for the company and enhancing its visibility among institutional investors [1][2]. Company Overview - Frequency Electronics, Inc. is a leader in precision timing and frequency control products, serving both space and terrestrial applications [4]. - The company’s products are utilized in various sectors, including satellite payloads, military systems, and secure communications [4]. - Frequency Electronics has received over 100 awards for excellence in high-performance electronic assemblies for more than 150 space and Department of Defense programs [4]. Market Impact - The inclusion in the Russell indexes is expected to provide expanded access to capital markets and increased liquidity for shareholders [2]. - Approximately $10.6 trillion in assets are benchmarked against Russell's US indexes, indicating the significance of this inclusion for the company [3]. Index Membership Details - Membership in the Russell 3000 Index is determined by market capitalization rankings and style attributes, and it remains in place for one year [2]. - Automatic inclusion in either the large-cap Russell 1000 or small-cap Russell 2000 indexes is a direct result of being part of the Russell 3000 [2].