Earnings call transcript: RF Industries posts record q3 2026 revenue as shares fall

RF Industries announced record third-quarter fiscal 2026 revenue of $24 million, a 21% increase from the previous year and surpassing the forecasted $23.39 million. Adjusted EBITDA climbed to $2.7 million, and gross margin rose to 35.6%. Net income reached $1.4 million, or $0.12 per diluted share. Despite the positive operating results, shares fell 6.2% in premarket trading to $9.68.

Revenue of $24 million was driven by increased demand across several product lines and end markets. Gross profit margin improved by 160 basis points from the prior year. Adjusted EBITDA margin exceeded the company's 10% goal. Bookings totaled $22.5 million, and the backlog ended the quarter at $18.6 million, standing at $19.8 million at the call date.

Management expects fourth-quarter sales to be roughly equal to or above the third-quarter level. Revenue growth translated into faster profit growth, with sales increasing 21% year-over-year and 16% sequentially. The company highlighted a diversified customer base across aerospace and defense, edge data centers, AI infrastructure, industrial manufacturing, medical imaging, transportation, and public safety.

RF Industries aims to reduce reliance on traditional wireless carrier spending and has seen profitability improvement with gross profit rising 27% and operating income doubling. The company attributes the strong results to better execution and a more profitable revenue mix. Shares fell despite the record revenue and margin improvement, indicating cautious investor sentiment.