RF Industries Q4 Earnings Call Highlights
by Scott Moore · The Cerbat GemRF Industries (NASDAQ:RFIL) executives highlighted what they described as a “breakout year” in fiscal 2025, pointing to strong fourth-quarter sales growth, margin expansion, and significantly higher profitability as the company continued its shift from a component supplier to what leadership called a technology solutions provider.
Fourth-quarter performance showed operating leverage
Chief Executive Officer Rob Dawson said the company “kept building on the momentum” delivered through the year, with fourth-quarter net sales up 23% year-over-year to $22.7 million. Dawson emphasized the impact of operating leverage in the quarter, noting gross margin reached 37%, well above a 30% target, while adjusted EBITDA was 11.5% of net sales, exceeding a stated goal of 10%.
CFO Peter Yin said fourth-quarter gross margin rose to 37% from 31% a year earlier, driven by higher sales and a more favorable product mix. Operating income was $903,000 versus $96,000 in the prior-year period. Net income was $174,000, or $0.02 per diluted share, while non-GAAP net income was $2.1 million, or $0.20 per diluted share. Adjusted EBITDA was $2.6 million, compared with $908,000 in the year-ago quarter.
In the Q&A, Dawson said a key takeaway was what happens when quarterly sales rise above roughly $19 million to $20 million, as fixed overhead and labor are absorbed and incremental revenue contributes more meaningfully to the bottom line. He also said the quarter benefited from some orders being requested to move up.
Fiscal 2025 results: higher revenue, improved profitability
For the full fiscal year, management reported net sales of $80.6 million, up 24% compared to fiscal 2024. Gross margin improved to 33% from 29%, and adjusted EBITDA increased to $6.1 million from $838,000 a year earlier.
Yin said full-year operating income was $1.8 million, reversing an operating loss of $2.8 million in fiscal 2024. Consolidated net income for fiscal 2025 was $75,000, or $0.01 per diluted share, while non-GAAP net income was $4.4 million, or $0.40 per diluted share. Yin added that the company finished the year strong with shipments from its custom cabling offering to a leading aerospace company.
End-market diversification and go-to-market execution
Dawson and President and COO Ray Bibisi repeatedly returned to diversification as a theme, positioning it as both a growth driver and a way to reduce customer concentration risk. Dawson said the company has been focused on expanding into new applications and end markets and partnering more closely with customers.
In response to a question about the revenue mix, Dawson said wireless and telecom historically represented about 70% of total sales during prior growth periods, but is now closer to 50%. He said the remaining portion comes from areas such as transportation, aerospace and defense, industrial and other OEM markets, and public safety.
Bibisi said demand across targeted markets remains supported by long-term infrastructure and connectivity investments. He cited strong activity in large infrastructure categories including stadiums, venues, and transportation, adding the company supported more than 130 projects across these categories during the year. Bibisi also pointed to future multi-year opportunities tied to major global events such as the LA Olympics and the U.S. World Cup, and continued airport modernization programs.
Bibisi said aerospace and defense remains solid and is being driven by close collaboration between engineering, operations, and customers to meet performance, quality, and compliance requirements. In telecommunications and broadband, he said investment remains focused on densification, coverage expansion, and network reliability, with “small cell, direct air cooling, and RF passive solutions” seeing consistent traction across OEM and carrier-driven programs.
Dawson also discussed channel strategy, noting that distribution partners provide recurring sales and help open doors with contractors and integrators. He added that the company chose to partner with certain manufacturers as another route to new customers and markets, describing a collaboration with a manufacturer of electronic cabinets and enclosures that identified RF Industries’ thermal cooling systems for edge data center installations. Dawson said the effort is early-stage but is showing traction and “can result in a significant new opportunity.”
Operational discipline, balance sheet, and backlog
Bibisi said the fourth quarter reflected continued progress toward more predictable execution and tighter operational controls across inventory, cost, and delivery. He said inventory actions were focused on aligning supply with demand while managing tariff and supply chain uncertainty, and that cost reduction initiatives delivered “tangible benefits.” He also cited process and IT improvements aimed at strengthening forecast accuracy, visibility, and scalability, as well as a more disciplined stage-gate engineering process.
Yin said liquidity remained “very strong,” and improved results enabled a $4.6 million reduction in net debt compared with last year. As of October 31, 2025, the company reported $5.1 million in cash and cash equivalents, working capital of $14.1 million, and a current ratio of approximately 1.7 to 1, with current assets of $35.0 million and current liabilities of $20.9 million. Inventory was $13.7 million, down from $14.7 million last year.
Yin said the company negotiated more favorable terms and flexibility for its revolving credit facility, including a reduced minimum outstanding loan balance, lower interest rates, and reduced reporting requirements. As of October 31, 2025, borrowings on the revolver were $7.8 million. During Q&A, Yin said the company expects at least $250,000 in interest savings over the next year from the revised facility.
On backlog, Yin said backlog was $15.5 million on bookings of $18.5 million as of October 31, 2025, and he noted that as of the call date backlog stood at $12.4 million. Management cautioned that backlog is a “snapshot in time” that can swing based on order timing and fulfillment. Dawson added that the company typically expects backlog to reach a low point in the first fiscal quarter due to seasonality and then rebuild as project-based work picks up, while also aiming to move backlog out the door faster to keep it “fresher.”
Outlook: expecting growth in fiscal 2026, with seasonality in Q1
While declining to provide specific guidance, Dawson said the company anticipates another year of sales growth in fiscal 2026 and expects the trajectory to resemble fiscal 2025, with the first quarter likely the lowest due to seasonality. He said a key indicator is maintaining a strong, diversified pipeline to support top-line growth and operating leverage.
When asked about margin drivers and future profitability targets, Dawson emphasized a combination of product and solution mix and the benefits of higher volume, while noting ongoing cost pressures such as wage and benefits increases and broader uncertainty in logistics and product costs. He said the company’s focus is to keep profitability as high as possible and to sustain adjusted EBITDA above the 10% level over time, even as costs rise.
Management also addressed capital allocation, saying its current priority remains paying down debt, while noting the board continues to discuss other shareholder value options, including acquisitions and other actions, during regular meetings.
About RF Industries (NASDAQ:RFIL)
RF Industries, Inc (NASDAQ: RFIL) is a manufacturer and supplier of connectivity products and solutions for the wireless, broadcast, cable television, data networking, defense and aerospace markets. The company specializes in both standard and custom coaxial and fiber-optic cable assemblies, connectors, adapters and test accessories designed to withstand demanding environmental conditions. Through its product portfolio, RF Industries supports applications ranging from RF signal transmission and satellite communications to industrial automation and instrumentation.
The company’s offerings include premade and build-to-print coaxial cables and assemblies, field-installable connectors, power distribution components and calibration-grade test equipment.