RF Industries Q2 2026 Earnings Results & Report

RF Industries EPS Results

• Actual EPS: $0.14
• Consensus EPS: $0.09
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A
• EPS Beat Rate: 4 of last 8 quarters

RF Industries Revenue Results

• Actual Revenue: $20.69 million
• Expected Revenue: $19.67 million
• Beat/Miss: Beat by +$1.03 million
• YoY Revenue Growth: N/A

RF Industries (NASDAQ:RFIL) Ltd. (NASDAQ: RFIL) designs, manufactures and distributes products used to build and maintain wireless communications and other electronic infrastructure. The company serves wireless carriers, original equipment manufacturers, system integrators, distributors and government customers, with applications spanning cellular communications, public safety, data communications and private wireless networks.

Its product portfolio includes radio-frequency connectors, coaxial cable assemblies, antennas, combiners, filters, power distribution equipment and other passive RF components. RF Industries also provides custom cable assemblies, engineered interconnect solutions and equipment used in distributed antenna systems, small-cell deployments and in-building wireless networks.

Founded in 1979, the company operates through its RF and communications product businesses and serves customers in North America as well as selected international markets. Its offerings are sold through direct relationships, distributors and other channel partners, supporting telecommunications infrastructure deployments and ongoing network maintenance.

RF Industries Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue rose 9% year over year and sequentially to $20.7 million, while gross margin expanded to 35.1%, showing continued operating leverage above the $20 million quarterly revenue level.
• Positive Sentiment: Bookings were $26.3 million, the company’s strongest quarter in years, pushing backlog to about $20.1 million and improving visibility into the second half of fiscal 2026.
• Positive Sentiment: Adjusted EBITDA nearly doubled to $2.0 million, and the company reported positive net income of $879,000 versus a loss a year ago, reflecting better mix, pricing, and cost control.
• Neutral Sentiment: Management said custom cabling remained a major growth driver, while integrated systems was temporarily slower due to small-cell timing issues that they expect to improve later in the year.
• Positive Sentiment: The company highlighted expanding momentum in DAC direct air cooling and edge data center applications, and noted it expects Q3 sales to increase sequentially with margin expansion continuing.

Presentation

[Operator]

Please note this conference is being recorded. I will now turn the conference over to your host, Donni Case, Investor Relations. You can begin.

[Donni Case, Investor Relations at Financial Profiles]

Thank you, John. Good afternoon, everyone, and welcome to RF Industries' second quarter fiscal 2026 earnings conference call. With me today are RFI's Chief Executive Officer, Rob Dawson, President and COO, Ray Bibisi, and CFO, Peter Yin. We issued our press release after market today, and that release is available on our website at rfindustries.com. I want to remind everyone that during today's call, management will be making forward-looking statements that involve risks and uncertainties. Please note that information on this call today may constitute forward-looking statements under the securities exchange laws. When used, the words anticipate, believe, expect, intend, future, and other similar expressions identify forward-looking statements. These forward-looking statements reflect management's current views with respect to future events and financial performance and are subject to risks and uncertainties. Actual results may differ materially from the outcomes contained in any forward-looking statements.

[Donni Case, Investor Relations at Financial Profiles]

Factors that could cause these forward-looking statements to differ from actual results include the risks and uncertainties discussed in the company's reports on Form 10-K and 10-Q and other filings with the SEC. RF Industries undertakes no obligation to update or revise any forward-looking statements. Additionally, throughout this call, we will be discussing certain non-GAAP financial measures. Today's earnings release and related current report on Form 8-K describe the differences between our GAAP and non-GAAP reporting. With that, I'll turn the conference over to Rob Dawson, Chief Executive Officer. Go ahead, Rob.

[Rob Dawson, CEO at RF Industries]

Thanks, Donni. Good afternoon, everyone. Thanks for joining us. The RFI team delivered another quarter of solid execution in Q2, continuing the steady progression we've outlined over the last several quarters. As we've consistently communicated, our focus has been on improving profitability, diversifying our end markets, and scaling the business in a disciplined way. We're now delivering tangible results across each of those priorities that are converting into meaningful year-over-year improvement in both revenue and profitability. As a quick summary, second quarter revenue of nearly $21 million increased both year-over-year and sequentially, gross profit margin expanded to 35.1%, a 360-basis point gain over the same period last year. Adjusted EBITDA nearly doubled year-over-year to $2 million. We also delivered positive consolidated net income of $879,000 versus a loss of $245,000 in the second quarter of fiscal 2025.

[Rob Dawson, CEO at RF Industries]

Our team continued to generate robust bookings, driving backlog to $20 million at quarter end. As of today, it sits at $20.1 million, which helps provide better visibility into the second half of the fiscal year and supports our expectation of continued growth. Most notably, we're seeing the power in our operating leverage, with incremental revenue contributing disproportionately to the bottom line. These results reflect both the improved mix and operational discipline we've implemented across the business. From a momentum perspective, we're seeing clear validation of our strategy to position RFI as a solutions provider versus a component supplier. Customer engagement has increased meaningfully, especially in the wireless carrier ecosystem and with the related infrastructure providers. We're receiving more targeted inbound interest with customers approaching us around specific use cases and deployments rather than general inquiries.

[Rob Dawson, CEO at RF Industries]

I think this indicates that we're gaining visibility in our target end markets, which are among the most dynamic sectors in the U.S. economy. These are markets like aerospace, data center infrastructure, venues, and transportation, which includes airport settings, rail, and other mass transit, for example. Our longstanding reputation for quality and service, our talented technical engineering teams, and our commitment to the American workforce have created a strong value proposition to current and prospective customers. Importantly, this is translating into increased demand. We continue to see steady activity across our pipeline, recurring order flow from key customers, including our largest accounts, and continued strength in our distribution channels. Our pipeline remains a key source of confidence. We're actively engaged in several large potential opportunities, including multi-site deployments of our integrated systems that could represent meaningful incremental revenue if awarded.

[Rob Dawson, CEO at RF Industries]

These opportunities are driven by large-scale network deployments and upgrades, and they include turnkey solutions that combine our products and technical know-how with installation and logistics support. Of course, with each new solution or application, we fine-tune and expand our product and services roadmap. Across our end markets, we're seeing visibility improve going forward. Regarding small cells, deployments were slower in the quarter based on timing from some key customers as they work through restructuring or other M&A-related details. We view this as a temporary timing issue, not a structural change in underlying demand, and we expect activity to resume and increase through the balance of the year. In early May, RFI participated in Connect (X), which is widely considered to be a premier U.S. event for communication infrastructure and connectivity. It brings the entire wireless ecosystem together, carriers, tower companies, integrators, distributors, and manufacturers in a single venue.

[Rob Dawson, CEO at RF Industries]

Our booth was extremely active. Our customer discussions were specific and actionable. If customer engagement and booth traffic are real-time demand indicators, our telecom pipeline should continue to grow. Custom cabling solutions continue to be a big contributor in the second quarter. To be clear, these are engineered builds rather than commodity items and are typically designed to meet exact specs for performance, durability, or regulatory requirements. RFI's reputation in this business is second to none and a big reason that major Aerospace and industrial manufacturing companies are repeat customers for mission-critical cabling systems, which is driving overall demand to near-peak levels historically. As you've heard from me before, we believe our DAC or Direct Air Cooling systems are a game changer. We're seeing adoption expand across a broader set of use cases, many of which have been identified by our customers and partners.

[Rob Dawson, CEO at RF Industries]

DAC is uniquely efficient and cost-effective for both small and large deployments. We're finding new ways to add incremental value, such as remote monitoring and installation services. I've been asked about our DAC's competitive position. While traditional HVAC is still an obvious competitive solution, we believe we have an edge on adaptability, functionality, and cost efficiency. Technologies like liquid cooling, which is often used in hyperscale data centers, is more likely to complement our offering rather than economically replace it. This is why we are leaning into edge data center market versus the massive hyperscale data centers. We believe our product portfolio is better understood and more visible in the market. Hats off to our marketing and technical teams who are making this happen. From an operational perspective, we continue to believe in the scalability of our manufacturing footprint and our capacity to meet growing demand.

[Rob Dawson, CEO at RF Industries]

Ray will go into more detail on some of the areas that I've discussed. Let me give a quick summary before I hand the call off to Ray. Looking ahead, we're feeling confident in our trajectory. With what we know today, we expect fiscal third-quarter sales to increase sequentially over Q2. Integrated systems activity should accelerate in the back half of the year. Our diversified end-market exposure provides durability. Operating leverage should continue to drive margin expansion. Most importantly, we're executing against the same strategic priorities we've outlined and delivering measurable results. On a final note, we were pleased to learn that RFI is set to be included in the Russell 3000 beginning on June 26th. Being included in this index should help to expand our visibility with institutional investors, enhance our liquidity, and lead to a broader shareholder base.

[Rob Dawson, CEO at RF Industries]

Now let me turn the call over to Ray.

[Ray Bibisi, President and COO at RF Industries]

Thank you, Rob, and good afternoon, everyone. As Rob highlighted, the RFI team is executing very well. I want to take the next several minutes to walk you through how we are actively managing key levers of our business to drive growth, reduce vulnerability, and create lasting shareholder value. I'll take you through sales, product management, engineering and operations, and the levers driving our strategy forward. Let me begin with our commercial results. The growth trajectory we have been building is showing up in our numbers. When you look at where we've come from, $18.8 million in Q2 of last year, $19.1 million last quarter, and $20.7 million this quarter, the direction is clear. That's not a coincidence. It's our strategy working exactly as designed. The number I want you to focus on is our bookings.

[Ray Bibisi, President and COO at RF Industries]

In Q2, we achieved over $26 million in bookings, our strongest bookings quarter in many years. Let that sink in. That performance drove our backlog to over $20 million, giving us the visibility and the confidence that the back half of 2026 is set up well. We've been saying diversification would be our strength, and in Q2 proved it again. When one area faces timing pressures, others step up. That's not luck. That's a portfolio working exactly as it was designed. Custom cabling once again led the way, delivering strong results driven by contributions from both our Connecticut and Long Island teams. Interconnect put up solid combined numbers and continues to build a healthy backlog. In Integrated systems, these product areas continue to build momentum. The team delivered strong bookings during Q2, bolstering the backlog headed into the second half of the year.

[Ray Bibisi, President and COO at RF Industries]

Turning to engineering and product management, this remains an area of significant focus, and I am pleased to report that the work we have been doing is translating directly into results. Our engineering roadmap continues to grow, spanning strategic initiatives, tactical developments, and cost reduction efforts, representing meaningful revenue potential over the next few years. What excites me is the innovation is already showing up in our numbers. Newly engineered products and solutions released in the first half have generated strong bookings and shipments, and we expect that momentum to continue to build as we move through the year. In Q2 specifically, we launched new products across thermal cooling and RF passives, proof that our roadmap is executing on schedule and delivering customer value. On the strategic side, we are advancing DAC trials with new customers, markets, and application, exciting developments that continue to validate our thermal cooling solutions.

[Ray Bibisi, President and COO at RF Industries]

Our product roadmap is focused on developing and enhancing solutions that anticipate customer needs and expand the value we deliver across our end markets. Our engineering teams are building solutions designed not just for today's requirements, but for where our customers are headed. That forward-looking mindset is what we believe will make RF Industries the trusted partner of choice across the markets that we serve. Operations continues to be a key differentiator for us. Our U.S.-based manufacturing footprint spanning both East and West Coast facilities, combined with our deliberately diversified supply chain, gives us the flexibility to respond quickly to changing demand while avoiding disruptions. Built to scale, built to deliver. That is the operational foundation we have put in place. Two other areas worth highlighting.

[Ray Bibisi, President and COO at RF Industries]

First, our cost reduction program is delivering strong results in the first half, driven by supplier negotiation, transformation initiatives, and tariff management through source relocation. That said, we are not naive about the tariff environment. With key decisions still ahead in July, we are monitoring the situation closely and are prepared to adapt as needed. The diversification of our supply chain and our ongoing strategic sourcing efforts position us well to manage whatever comes next. Second, on inventory. It was slightly up this quarter due to timing. We had products built and ready to ship in Q2, but customer releases moved into Q3. As those releases come through, we expect inventory turns and working capital to improve. Across all areas of our business, we are enhancing process efficiency, improving visibility, and reinforcing execution discipline.

[Ray Bibisi, President and COO at RF Industries]

Our teams are aligned, our tools are improving, and our real-time visibility across all business units is giving us the insight to make faster, smarter decisions. This is the operational foundation that allows us to scale quickly, maintain consistent quality, and margins as demand grows. We are building an organization that is not just executing for today, but is structured to perform as we grow. When I step back and look at what we are 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 opportunities, and convert our pipeline and backlog into real performance gains. Importantly, we are doing it while maintaining our operational integrity. I would categorize Q2 as a quarter that reinforced the growth trajectory of our business.

[Ray Bibisi, President and COO at RF Industries]

Quite frankly, it has us excited as we move into the second half. The revenue growth is consistent, the bookings are at levels we haven't seen in many years, the backlog gives us real visibility, and the team is executing. That combination doesn't happen by accident. It happens when strategy, people, and execution align, and right now they are aligned. I want to take a moment to recognize the RF Industries team across every segment and every function whose commitment and hard work made this quarter possible. They are the reason we are having this conversation today. To our customers, your trust and partnership mean everything to us. We are confident in our ability to deliver results and unlock the full potential of our business. I can't wait to share what the second half looks like.

[Ray Bibisi, President and COO at RF Industries]

I will now turn the call over to Peter to walk through the financial results. Peter?

[Peter Yin, CFO at RF Industries]

Thank you, Ray, and good afternoon, everyone. As you just heard from Rob and Ray, our team continued to deliver strong results in our fiscal second quarter. Sales increased 9% on both a year-over-year and sequential basis to $20.7 million. Gross profit margin increased 360 basis points to 35.1% from 31.5% year-over-year. The improvement reflected our team's strong execution to drive new business with price realization, along with operational efficiencies focusing on cost control. We have long believed our business carries significant operating leverage above $20 million in quarterly revenue, and our Q2 results reflected exactly that. Second quarter operating income was $1.1 million, a significant improvement from the $106,000 we reported last year. Consolidated net income was $879,000, or $0.08 per diluted share. On a non-GAAP basis, net income was $1.6 million, or $0.14 per diluted share.

[Peter Yin, CFO at RF Industries]

This compares to a consolidated net loss of $245,000, or $0.02 per diluted share, and non-GAAP net income of $701,000, or $0.07 per diluted share in Q2 fiscal 2025. Second quarter adjusted EBITDA was $2 million, compared to adjusted EBITDA of $1.1 million in Q2 2025. Moving to the balance sheet. As of April 30th, we had a total of $3.4 million of cash and cash equivalents, and we have working capital of $16.5 million and a current ratio of approximately 1.9:1, with current assets of $35.1 million and current liabilities of $18.6 million. At our second quarter end, we had $6.1 million outstanding on our revolving credit facility.

[Peter Yin, CFO at RF Industries]

We continue to actively manage working capital to strengthen our liquidity and overall capital position. We continue to generate positive cash flow, we expect to reduce net debt to a level we view as immaterial relative to our balance sheet. Our inventory was $14.4 million, up from $12.6 million last year. We continue to monitor inventory levels closely, and we have a prudent approach to inventory management that balances discipline with customer demand. Inventory levels may fluctuate quarter-to-quarter based on timing of inventory received relative to expected shipments and any delays. Moving on to our backlog. Bookings for the second quarter were $26.3 million, up $8.4 million versus the previous quarter, driving backlog to $20 million as of April 30th, a $5.6 million increase quarter-over-quarter. As of today, our backlog currently stands at $20.1 million.

[Peter Yin, CFO at RF Industries]

As always, backlog can fluctuate based on order timing and fulfillment. We view the increase as a strong indicator of second half momentum. Overall, our first half results reinforce the confidence we have in our business model and the operating leverage we are now realizing above $20 million in sales. With bookings accelerating and backlog building as we enter the second half of our fiscal year, we believe the margin and earnings trajectory we demonstrated in Q2 is sustainable. We are committed to delivering continued growth and shareholder value going forward. With that, I'll open up the call for your questions.

[Operator]

Thank you. 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. Once again, please press star one if you have a question or a comment. The first question comes from Josh Nichols with B. Riley. Please proceed.

[Analyst at B. Riley]

Hi, this is Matthew on for Josh. Thanks for taking my questions. I guess just to start off on the custom cabling side, it's basically now your largest product line. I'm wondering, is this the new shape of the business, or do you expect integrated systems to come back and rebalance the mix?

[Rob Dawson, CEO at RF Industries]

Yeah. Hey, Matthew, thanks for the question. Look, we're really happy with the way custom cabling is performing. The team's doing amazing work, both with existing long-term customers and with new that we've acquired. I think when you look at the sort of the breakdown of the quarter from a product set, integrated systems underperformed sort of our expectations in Q2, largely to my comments, just based on, in the small cell world, we had some things that we expected would have had more shipments in the quarter, and some of those got pushed out to later in the year. I think we expect integrated systems is going to continue to grow for us and be a nice growth part of the business. That's not taking anything away from how great the custom cabling business is and can also be a growth engine.

[Rob Dawson, CEO at RF Industries]

I think that's kind of all along is, to Ray's comments, we've tried to diversify in such a way that not every quarter is going to look exactly the same from a largest customer or two perspective, nor from a sort of a product makeup. We're enjoying the fact that the pistons are kind of firing in all different places and we're seeing that diversity hit.

[Analyst at B. Riley]

Got it. On that significant customer side, you have a large A&D customer that's been making up 10% of revenue since last quarter, around 14% now. I'm just wondering, how do you expect that ramp continuing through, I guess, the fiscal third quarter, and where does that run rate land realistically from here?

[Rob Dawson, CEO at RF Industries]

I think it's still somewhat newly acquired customer. That was last year we started doing material levels of business with the aerospace customer in particular, and we're pleased with that relationship. We seem to be performing really well for them. We've been working on unique designs specifically with them. That's the kind of business we do in our custom cabling product areas. Our expectation is that we're going to continue performing at solid levels there. It's not something we spend a lot of time trying to predict because it is really based on their schedule of need. As long as we keep performing, we feel like it'll be a consistent part of our business.

[Analyst at B. Riley]

Got it. Thanks. I guess just shifting over, DAC seems like a long-term strong growth driver, and I guess maybe you can. You mentioned this a bit in the call, but I'm wondering if you can expand more on liquid cooling and thermal cooling, and how the DAC solution kind of factors into data centers and the AI infrastructure play in general. I guess just kind of following on that is just in terms of how the data center and AI infrastructure opportunity looks today and how that can change over the next 12 months to 4 months for you guys.

[Rob Dawson, CEO at RF Industries]

Yeah, sure. Look, we think our specific DAC solution is a really, really strong entrant to the market in the last few years for edge data center applications. To my comments, this is not the hyperscale 100,000 foot or larger, huge data centers that are a big topic at the moment. As more of those continue to get installed, they're also finding the people installing that equipment and those networks are finding that they need to push equipment closer to the users. That's the play we've been involved in for some period of time.

[Rob Dawson, CEO at RF Industries]

Starting with the wireless carrier ecosystem where we're entrenched, we know the people, we have agreements. That's sort of where we started getting our first wins, and that's now starting to expand into folks that I would call more traditional data center players, both wireline and really the data center names that we talk about all the time in the news. For us, it's focusing on those edge deployments. There's been a lot of chatter lately of certain municipalities and states coming out with rulings saying, "Hey, you can't build a data center here." As those large data centers get deferred or pushed maybe to a location that wasn't in the plan, we think the edge of the network is a great place to be. When you look at those buildings, cabinets, and enclosures that exist currently or that are being installed, they're less obtrusive.

[Rob Dawson, CEO at RF Industries]

They may not have equipment in them today, but they're going to need to. That's a place that our DAC systems really can benefit, both from a functionality perspective, but also just from a cost efficiency perspective. We have the data that shows we're up to 75% more cost-effective than traditional HVAC deployments in those kinds of environments. We feel good about it. We think there's a nice growth trajectory ahead of us in that one to two years and beyond. We also see opportunities to reinvent what we're putting out there in the market today, related products and then upgrades to the things that we have today. It's really becoming a workhorse, and it's nice growth trajectory from a few years ago where we were seeing minimal, if any, contribution from those product lines to what we're now seeing today.

[Analyst at B. Riley]

Got it. Really insightful. Just final question from me, mainly on working capital and free cash flow. Looks like working capital absorbed some cash in the first half. I'm just wondering how we should think about those drivers changing in the second half and free cash flow conversion in general.

[Peter Yin, CFO at RF Industries]

Yeah. Thanks for the question. As you saw there, cash came down a bit. That was to pay the line down, right? Helping us with the interest expense line there. As we continue, if you kind of exclude that, it's positive cash flow, but we plan on utilizing the cash to pay down the line closer to that minimum balance, and from there, we should start seeing kind of cash build.

[Analyst at B. Riley]

Got it. That was all for me. Thanks for taking my questions.

[Rob Dawson, CEO at RF Industries]

Thanks, Matthew.

[Operator]

If there are any remaining questions, please indicate so by pressing star one on your touchtone phone. Okay, we currently have no further questions in the queue. I'd like to turn the floor back over to Robert Dawson for closing remarks.

[Rob Dawson, CEO at RF Industries]

Thank you, John, and thanks everyone for joining us today. We appreciate your continued interest and support of RF Industries, and we look forward to sharing our third quarter results in September. Have a great day.

[Operator]

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Rob Dawson, CEO
• Ray Bibisi, President and COO
• Peter Yin, CFO

Analysts

• Donni Case, Investor Relations at Financial Profiles
• Analyst at B. Riley