RF Industries reports Q3 revenue, profit gains

On Monday, RF Industries (NASDAQ: RFIL ) discussed third-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit The full earnings call is available at Summary RF Industries reported record high quarterly revenue of $24 million, up 21% year-over-year, with strong operating income and adjusted EBITDA exceeding targets.

The company emphasized its successful diversification strategy, expanding into markets like aerospace, AI infrastructure, and data centers, and expected continued growth in these sectors. Future guidance remains optimistic, with Q4 sales expected to match or exceed Q3 results, supported by a strong backlog and continued demand. Operational and strategic initiatives include unifying engineering and product management teams, leveraging AI for business efficiency, and focusing on high-value solutions. Management highlighted the significant contributions of all segments and the strengthening of customer relationships, particularly in custom cabling and integrated systems.

Full Transcript OPERATOR Greetings. Welcome to the RF Industries 3rd Quarter Fiscal 2026 Financial Results Conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

If anyone should require operator assistance during the conference, please press Star-0 on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to your host, Donny Case, Investor Relations for RF Industries. You may begin.

Donny Case, Investor Relations Thank you, Holly, and good morning everyone. Joining me today are Rob Dawson, Chief Executive Officer, Ray Babidi, President and Chief Operating Officer, and Peter Yen, Senior Vice President and Chief Financial Officer. Before we begin, please note that today's discussion contains forward-looking statements under federal securities laws. Forward-looking statements are identified by words such as will be, intend, believe, expect, anticipate, or other comparable words and phrases.

Actual results may differ materially due to risks and uncertainties described in RF Industries' filings with the SEC, including reports on Form 10-K and 10-Q. The Company undertakes no obligation to update forward-looking statements except as required by law. During the call, management will also discuss certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per share. Reconciliations to the most directly comparable GAAP measures are included in today's earnings release as well as the company's SEC filings.

And with that, I'll turn the call over to Rob. Robert Dawson — CEO, President and Member of the Board of Directors Thank you, Donny. Good morning everyone. I'm on the East Coast today, so I appreciate you tuning in for something a little different with us this morning.

So good morning. As I said several times over the years, we like to communicate exactly what we're going to do as part of our launch strategy and then we execute. Fiscal year 2026 is unfolding as we anticipated and communicated to you. Our third quarter has continued to demonstrate the earnings power we've been building across RF Industries.

We delivered record high quarterly revenue of $24 million, up 21% year over year and 16% sequentially. We don't spend a lot of time talking about records while we're working hard on the business, but I think this deserves some acknowledgment. $24 million in sales is a new high watermark for RFI and of course our goal now is that record. Great work by the team.

With quarterly revenue above $20 million and increasing, our results are benefiting from the operating leverage we have long discussed, driving increased margins and allowing more dollars to flow through to the bottom line and producing significantly stronger profitability across the income statement. In Q3 we delivered profits that in many cases set a new standard for RFI performance. 1% of sales, above our 10% goal. 6%, exceeding our 30% gross margin objective in six of the last seven quarters, we believe these results reinforce that our transition toward higher-value solutions is creating a stronger, more profitable business.

This is especially evident as our higher-value integrated systems and custom cabling solutions continue to gain traction. These offerings carry more engineering content, address larger project scopes, and deepen our customer relationships. And in the third quarter they made a significant contribution to our results. While our business mix can vary each quarter based on shipments and pipeline conversion, we believe the underlying strength and growing diversity in our business will carry forward as customers increasingly seek fewer, more capable partners.

We have expanded our offering to deliver turnkey solutions that span design, product fulfillment, and site installation management. Ray will discuss this in more detail and share some of the behind-the-scenes execution that continues to strengthen our value proposition and business opportunities. Our strategy to diversify RFI's end markets and customer base is working today. Our solutions support applications across aerospace, edge data centers, AI infrastructure, industrial manufacturing, medical imaging, transportation, and public safety, many of which are rapidly growing markets.

Our business platform is now broader, more resilient, and has multiple avenues for growth. In closing, we're very excited about the future going forward. We remain focused on disciplined execution, serving our customers, and building durable long-term value for shareholders. As I mentioned on our Q2 call, we expected a strong second half and with a quarter to go we're on target to achieve exactly that.

With what we know today, we expect sales in our current fiscal fourth quarter to be roughly the same or above our Q3 sales level. I want to thank the entire RF Industries team for their continued hard work and commitment and, as always, we appreciate the trust and partnership of our customers and the support of our shareholders. Now I'll turn the call over to Ray to expand on our operational and go-to-market progress. Raymond Bibisi — President & COO Thank you, Rob, and good morning everyone.

I want to take a few minutes to walk you through how we are actively managing the key levers across our business to drive growth, reduce vulnerability, and create lasting shareholder value. I will take you through sales, product management, engineering, and operations and the levers driving our strategy forward. Let me begin with our commercial results and this quarter I am pleased to say the results speak for themselves. As Rob highlighted, we delivered and delivered big.

Q3 revenue came in at $24 million, exceeding expectations. But what I'm most proud of is not just the number, it's how we got there. May, June, July—three consistent months. No slow start, no late-quarter heroics, just steady, disciplined execution from day one to the last.

That is what we have been building toward and in Q3 we delivered it. If Q1 and Q2 showed you the direction we were headed, Q3 showed you what this team is capable of. Our year-to-date revenue was solid and I feel the momentum behind our team's determination to win. Regarding bookings, Q3 was another strong quarter following the record-setting Q2 bookings.

Importantly, our year-to-date bookings are ahead of our year-to-date sales, reflecting continued strong demand across our end markets, and our backlog heading into Q4 gives us line of sight for the balance of the year. We've been saying diversification would be our strength and Q3 reinforced it. This quarter every segment contributed meaningfully to our results and the contribution balance across the portfolio was improving. Custom cabling continued to lead and deliver, Interconnect stepped up from Q2, and Integrated Systems continued to gain traction, demonstrating that the work that we have been doing across that segment is showing up in the results.

This balance matters. We are a company where every segment contributes, every function executes, and the whole is greater than the sum of its parts, and our team's performance in Q3 is evidence of that. Our customer base continues to broaden as well. This quarter we saw meaningful contributions from customers across aerospace and defense, telecommunications, industrial, and distribution channels, with several new contributors emerging across our end markets.

That breadth is what a healthy diversified business looks like and I believe we are just getting started. Turning to engineering and product management, this quarter we made a significant and deliberate organizational move that I believe will be a meaningful driver of performance in quarters ahead. We unified our engineering and product line management teams under a single integrated structure within our Interconnect and Integrated Systems segments.

When the people who design our products and the people accountable for the commercial success sit on the same team, decisions get made faster, trade-offs get resolved sooner, and there is clear ownership behind every product line. This is not just an organizational change, it's a direct commitment to our innovation trajectory and our ability to compete and win—built to deliver faster product launches, clearer accountability, stronger execution on complex programs, and better solutions for our customers, all designed to ensure our engineering efforts translate into measurable revenue impact.

Our product roadmap is not developed in isolation; it is directly linked to our market diversification strategy. When engineering, product management, and sales are aligned around the same growth priorities, product development becomes a direct driver of market expansion. That alignment is what we believe will make RF Industries the trusted partner of choice across the markets that we serve. We believe that our operations team and processes are also key differentiators for us.

This quarter there were no dramatic changes—and that is exactly the point. They are now firing on all cylinders. Our teams continue to execute against the same operational priorities we have outlined and the results continue to show up. -based manufacturing footprint combined with a deliberate diversified supply chain gives us the flexibility to respond quickly to changing demand as well as managing our ever-shifting tariff and geopolitical landscape.

Built to scale, built to deliver. That remains the operational foundation of this business. Before I turn to our strategic levers, I want to highlight an area of growing focus for us: artificial intelligence. This quarter we continue to make meaningful strides in developing AI as a business enablement tool—not simply for administrative efficiencies, but at the front lines of our business.

Our initial focus has been on sales and customer-facing functions where AI is helping our teams work smarter, respond faster, and engage more effectively with customers and prospects. This is just the beginning. Our roadmap will extend AI into engineering, operations, and supply chain in quarters ahead. We believe this will be a meaningful competitive differentiator and we are committed to this initiative as we work faster and smarter to win.

When I step back and look at what we're building—diversified revenue streams, disciplined operations, and a culture of innovation—it all connects. These aren't independent efforts. They work together to reduce vulnerability, create opportunity, and convert our pipeline and backlog into real performance gains. And importantly, we are doing it without compromising our margins or operational integrity.

I will categorize Q3 as a quarter where it all came together and we did it with consistency. The revenue growth is real, the bookings strong, the backlog gives us visibility, and perhaps most importantly, every segment, every function, every person showed up. I'll take a moment to recognize the RF Industries team—you delivered. This quarter belongs to all of you, and to our customers, thank you for your continued trust.

I will now turn the call over to Peter to walk through our financial results. Peter? Peter Y. — Chief Financial Officer Thank you, Ray.

And good morning, everyone. As you heard from Rob, we hit some historic highs in our fiscal third quarter. Sales increased 21% year over year and 16% sequentially to a record $24 million. 6% from 34% in the prior year period.

This improvement reflected our team's strong execution in driving this, realizing the best of our higher value offerings, and maintaining disciplined cost control. We have long believed our business carries significant operating leverage, and our Q3 results provided further evidence of that leverage. 8 million compared to $720,000 in the prior year. 6% last year.

12 per diluted share. 19 per diluted share. 10 per diluted share. 6 million in the prior year quarter, representing an increase of approximately 71%.

9% last year, exceeding our long-stated long-term goal of 10%. 6 million. 8% in the prior year period. 5 million.

1 million. 1 million at the end of the second quarter. 1 million during the quarter while revolver borrowings declined by approximately $400,000, resulting in a meaningful improvement in our net debt position. We continue to actively manage working capital to strengthen our liquidity and overall capital position.

As we continue to generate positive cash flow, we expect to reduce our net debt to a level we view as immaterial. 7 million at the beginning of the fiscal year. We continue to monitor inventory levels closely and maintain a prudent approach to inventory management that balances discipline with customer demand. Inventory levels may fluctuate from quarter to quarter based on the timing of inventory receipts, expected shipments, and potential customer or supply chain delays.

Demand remained healthy during the quarter. 6 million. 8 million. As always, backlog can fluctuate based on order timing and fulfillment, but we believe our current backlog and opportunity pipeline provide a solid foundation as we enter the final quarter of our fiscal year.

Overall, our third quarter results reinforce the confidence we have in our business model and demonstrate the operating leverage we are realizing at higher revenue levels. With quarterly sales reaching approximately $24 million, gross profit margin remaining above 35%, and adjusted EBITDA as a percentage of sales exceeding 11%, we delivered another quarter of meaningful improvement in profitability and cash generation. We remain focused on converting our backlog and pipeline into revenue, maintaining disciplined cost management, and delivering continued growth and shareholder value. With that, I'll open the call for your questions.

OPERATOR Certainly. At this time we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Your first question for today is from Tyler Burmeister with Lake Street.

Tyler Burmeister, Analyst at Lake Street Hey guys, can you hear me all right? Robert Dawson — CEO, President and Member of the Board of Directors Hey Tyler, good morning. Tyler Burmeister, Analyst at Lake Street Hey, good morning. Congrats on the quarter and continued strong momentum here.

Maybe first I want to ask about the integrated system, the small cell business in particular. Did that improve as you expect? And I guess just looking forward, is some of the disruptions in the first half completely behind you guys now? Robert Dawson — CEO, President and Member of the Board of Directors Yeah, good question.