Frequency Electronics(FEIM) - 2025 Q4 - Annual Results

Financial Performance Overview Fiscal Year 2025 and Q4 Financial Highlights 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 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] - 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] - 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] - The company is actively hiring scientists and engineers with expertise in quantum sensing to enhance its capabilities in this key growth area[3] Detailed Financial Analysis Selected Financial Metrics (FY2025) 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] - Backlog at April 30, 2025, was approximately $70 million, a decrease from $78 million at April 30, 2024[4] Condensed Consolidated Statements of Operations 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] Condensed Consolidated Balance Sheets 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] Corporate Information and Outlook Investor Conference Call Information 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] - 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] Company Profile and Forward-Looking Statements 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] - The company's mission is to commercialize research discoveries into practical products, aiming to create value for customers, employees, and stockholders[8] - 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]