RF Industries, Ltd.

Second-quarter sales increased 9% year over year and sequentially to $20.7 million. Gross profit margin was 35.1%, up 360 basis points from 31.5% a year ago. Operating income was $1.1 million versus $106 thousand last year; net income was $879 thousand, or $0.08 per diluted share, versus a net loss of $245 thousand, or $0.02 per diluted share, in Q2 fiscal 25. Non-GAAP net income was $1.6 million, or $0.14 per diluted share, and adjusted EBITDA was $2.0 million versus $1.1 million in Q2 25. Bookings were $26.3 million, up $8.4 million from the prior quarter, and backlog was $20.0 million at April 30 and $20.1 million today. Cash and cash equivalents were $3.4 million, working capital was $16.5 million, current ratio was approximately 1.9-to-1, and $6.1 million was outstanding on the revolver. For Q3, management expects sales to increase sequentially over Q2; no full-year revenue or EPS guidance was provided.

CEO Robert D. Dawson said the quarter reflected “solid execution” and continued progress on profitability, diversification, and disciplined scaling. He highlighted stronger customer engagement in wireless, aerospace, data center infrastructure, venues, and transportation, and said the company is increasingly positioned as a solutions provider rather than a component supplier. He also said the small-cell slowdown was timing-related, not structural, and reiterated confidence that operating leverage, integrated systems, and the second half of the year should improve further.

CFO Peter Yin emphasized the financial leverage becoming visible above $20 million in quarterly revenue, noting Q2 sales of $20.7 million, gross margin of 35.1%, operating income of $1.1 million, and adjusted EBITDA of $2.0 million. He also pointed to $3.4 million of cash, $16.5 million of working capital, and $6.1 million drawn on the revolver, saying the company is actively managing working capital and expects to reduce net debt to a level it views as immaterial. Inventory was $14.4 million, up from $12.6 million last year, and he said cash use in the first half was tied partly to paying down the line and improving interest expense.

Analysts focused on whether custom cabling is becoming the new business mix, the durability of a larger aerospace and defense customer, DAC’s opportunity in data centers and AI infrastructure, and working-capital/free-cash-flow conversion. Management said custom cabling is performing strongly, but integrated systems should continue growing and some Q2 shipments were pushed into later periods. On DAC, they said the opportunity is concentrated at the edge rather than hyperscale, and Robert D. Dawson said their solution can be up to 75% more cost effective than traditional HVAC in those environments. On working capital, Peter Yin said cash had been used to pay down the line and that cash should begin to build as the revolver approaches a minimum balance.