Rf Industries Revenue Jumps 18% in Q3

Key Points

• Revenue reached $19.8 million, up 17.5% compared to the prior year quarter.

• Gross profit margin increased to 34.0%, exceeding management's target.

• Adjusted EBITDA rose to $1.6 million, reflecting significant progress toward profitability goals.

• These 10 stocks could mint the next wave of millionaires ›

Rf Industries (NASDAQ:RFIL), a designer and manufacturer of connectivity products for wireless and other communication markets, released its fiscal third quarter 2025 results on September 11, 2025. The key news was a sharp turnaround in profitability, with higher revenue, improved margins, and operating income, after a year-ago loss in the same period. These results mark continued operational improvement and margin expansion as the company delivered its fourth consecutive quarter of operating profit.

Business overview and strategic focus

Rf Industries operates in the communications connectivity sector, supplying cabling, connectors, and network infrastructure products for applications from wireless communication towers to stadium venues and data centers. Its product line includes passive components such as coaxial cables and connectors, as well as custom solutions tailored to telecommunications, transportation, and industrial applications.

In recent years, the company has focused on competitive pricing, cost management, and rapid customization of its products. It emphasizes efficient manufacturing and innovative product development, including proprietary offerings like the CompPro and OptiFlex cabling solutions. Growth through strategic acquisitions has played a key role, bringing in complementary product families such as Microlab’s radio frequency and hybrid components. Building long-term relationships with major customers and expanding into new sectors remain critical for the company's progress.

Quarterly highlights and financial developments

For the quarter ended July 31, 2025, the company saw a 17.5% increase in revenue compared to the prior year period. This sales growth was slightly higher than the company’s forecast for a flat-to-modest gain compared to the prior quarter, posting $19.8 million in revenue, compared to $18.9 million in the prior quarter. CEO Robert Dawson highlighted, “Our team continued to execute very well in our fiscal third quarter. Net sales increased 17.5% to $19.8 million year-over-year, and our gross profit was 34%, well above our target goal of 30%. For four consecutive quarters, we have delivered an operating profit, which was $720,000 versus a loss of $419,000 in the fiscal third quarter of 2024, and adjusted EBITDA was $1.6 million (non-GAAP).”

Gross profit margin increased to 34.0%, up from 29.5% in the same period last year and above the company’s long-term target of 30%. Management attributed the improved profitability to ongoing cost controls and increased traction of higher-value solutions. Operating income rose to $720,000, reversing a loss of $419,000 reported a year ago. Adjusted EBITDA, a measure of earnings before interest, taxes, depreciation, and amortization, improved to $1.6 million, up from $460,000 during the prior year period. The company achieved non-GAAP earnings per share of $0.10, compared to a loss in the previous year.

The quarter marked notable progress in high-value product categories. Its small cell solutions, which are products that boost wireless capacity in dense venues, increasingly appealed to both established "Tier 1" telecom customers and new customers in aerospace and data centers. Expanding into these markets aligns with the company’s strategy to diversify sales and stabilize growth, with management noting contributions from “aerospace, transportation, and data center markets” according to Robert Dawson as a growing part of its sales pipeline. The company also highlighted its readiness for large venue build-outs related to upcoming global events such as the Olympics and World Cup, suggesting recurring opportunities ahead.

Bookings, which reflect new orders received, totaled $24.5 million. The quarter-end backlog -- or orders yet to be delivered -- was $19.7 million, up from $15.0 million in the prior quarter. However, this backlog figure declined to $16.1 million as of September 11, 2025. Management notes that “adjusted EBITDA as a percentage of net sales may vary from quarter to quarter depending on product mix and shipments,” according to Robert Dawson, emphasizing that while margins are improving, quarterly fluctuations remain a possibility.

The quarter did not feature material one-time events or restructuring costs.

Looking ahead

Management expressed confidence that its goal of reaching an adjusted EBITDA margin of at least 10% is within reach. The adjusted EBITDA margin reached 8%, up from 6% in the prior quarter, but not yet hitting the targeted level. The company stated that further margin improvement will depend on continued cost management, efficiency gains, and the mix of higher-value product shipments.

The company did not provide specific sales or earnings forecasts for the next quarter or full year. Management underscored the intent to manage costs, watch for changes in order backlog, and focus on executing in growing end markets. In the absence of formal guidance, investors may wish to monitor sustainability in bookings and backlog as well as the balance between growth from new markets and the risk of slowing order inflow.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,066%* — a market-crushing outperformance compared to 186% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of September 8, 2025

Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.