Frequency Electronics Posts Record $23.5 Million Revenue
The precision time-and-frequency maker booked $5.2 million of operating income and a record $129 million funded backlog.
Frequency Electronics, Inc. (FEIM) reported first-quarter fiscal 2027 revenue of $23.5 million, an all-time high that reversed a sequential dip and marked the start of the growth the company had said it expected in the new fiscal year.
The precision time-and-frequency maker said sales rose 70% from $13.8 million a year earlier and 52% from $15.4 million in the immediately preceding quarter. That prior quarter had been down 9% from $16.9 million in the one before it. President and Chief Executive Officer Tom McClelland said the result was a “strong proof point” of the return to growth the company had flagged on its July earnings call.
Funded backlog reached a record $129 million at July 31, 2026, up 82% from a year earlier and 16% from $111 million at April 30, 2026. Sequential backlog growth continued after a 34% increase in the prior quarter. McClelland said further growth is supported by the funded backlog, a growing order book, and larger end markets built on the company’s space and defense technology.
Profitability moved with the revenue. Gross margin expanded to approximately 46%, or $10.75 million of gross profit on $23.45 million of sales, from 41% in the prior quarter and 37% a year earlier. Operating income was $5.2 million, an operating margin exceeding 22%, compared with $1.9 million, or a 12% margin, in the prior quarter and $0.4 million, or a 3% margin, a year earlier. Net income from operations was $4.2 million, or $0.41 a share, versus $1.4 million, or $0.14 a share, in the prior quarter and $0.6 million, or $0.07 a share, a year earlier.
The company swung to cash generation. Net cash provided by operating activities was approximately $3.0 million in the three months ended July 31, 2026, after net cash used in operations of $1.2 million in the prior quarter and $1.2 million a year earlier. McClelland said FEI was cash-generative and expects to be so on an annual basis going forward.
Cash and cash equivalents were $61.4 million at July 31, 2026, compared with $1.6 million at April 30, 2026. A secondary offering completed during the quarter added approximately $73 million in cash, of which about $14 million arrived after the quarter ended. The company remains debt-free.
Selling, general and administrative expense was $4.1 million, and research and development expense was $1.4 million in the three months ended July 31, 2026. Accounts receivable were $6.2 million, contract assets $19.6 million, inventories $22.2 million, and contract liabilities $11.5 million at quarter-end. Stockholders’ equity was $119.8 million.
In the prior quarter, Frequency had established a three-year minimum gross margin target of 50% and an operating margin target of 30% by Fiscal 2029, and reaffirmed a minimum revenue target of at least $150 million, representing a 34% compound annual growth rate from Fiscal 2026 revenue. McClelland said the first quarter gives the company increasing confidence in meeting or exceeding that $150 million or more in annual revenue by Fiscal 2029, which ends April 30, 2029.
The company will hold a conference call on September 10, 2026, to discuss the results and provide additional color on end markets.