RF Industries Posts Record Q3 Revenue and Margin Expansion

RF Industries reported record fiscal third-quarter revenue of $24 million, marking a 21% year-over-year increase and a 16% sequential gain. According to data from GN markets/earnings (en-US), this performance was driven by higher-value integrated systems and custom cabling offerings. Chief Executive Officer Rob Dawson noted that crossing the $20 million revenue threshold has unlocked the operating leverage management has previously targeted, allowing a greater proportion of sales to flow directly into profitability.

Profitability metrics improved sharply across the board. Gross profit rose 27% to $8.5 million, lifting the gross margin by 160 basis points to 35.6% from 34.0% in the prior year. Operating income more than doubled to $1.8 million, up from $720,000 a year earlier, resulting in an operating margin expansion to 7.3%. GAAP net income reached $1.4 million, or $0.12 per diluted share, while non-GAAP net income increased to $2.2 million, or $0.19 per diluted share, compared to $1.1 million or $0.10 per share in the same period last year.

Adjusted EBITDA Exceeds Long-Term Targets

Adjusted EBITDA grew approximately 71% to $2.7 million, representing an 11.1% margin that surpasses the company’s long-stated 10% target. In the prior-year quarter, adjusted EBITDA was $1.6 million with a 7.9% margin. For the first nine months of fiscal 2026, sales increased 10% to $63.6 million. During this period, gross profit climbed 19% to $21.9 million, and the gross margin rose to 34.5% from 31.8%. Operating income reached $3 million, a significant jump from $882,000, while adjusted EBITDA rose 61% to $5.7 million.

Backlog Grows Amid Strong Bookings

Third-quarter bookings totaled $22.5 million, yielding a book-to-bill ratio of approximately 0.94x. President and Chief Operating Officer Ray Bibisi stated that year-to-date bookings have exceeded year-to-date sales, indicating sustained demand across the company’s end markets. The company’s backlog stood at $18.6 million as of July 31 and increased to $19.8 million by the time of the earnings call. Management noted that while backlog figures can fluctuate based on order timing and fulfillment, the current pipeline provides a solid foundation for the fiscal fourth quarter.

Balance Sheet Strengthens With Lower Debt

RF Industries ended the quarter with $4.5 million in cash and cash equivalents and working capital of $18.3 million, maintaining a current ratio of approximately 2.0-to-1. Borrowings under the revolving credit facility declined to $5.7 million from $6.1 million at the end of the second quarter. Inventory levels also decreased to $13.2 million from $14.4 million. Chief Financial Officer Peter Yin reported that cash increased by roughly $1.1 million during the quarter while revolver borrowings dropped by approximately $400,000. Management expects to continue reducing net debt to an immaterial level relative to the balance sheet as positive cash flow generation continues.

The company attributed its performance to contributions across custom cabling, interconnect, and integrated systems. Custom cabling remained the primary driver of results, while interconnect improved from the previous quarter and integrated systems gained market traction. RF Industries serves a diversified customer base including aerospace and defense, telecommunications, and industrial sectors. The company also highlighted its expansion into edge data centers, artificial intelligence infrastructure, and medical imaging applications.