RF Industries (NASDAQ:RFIL) reported first quarter fiscal 2026 results that management characterized as a strong start to the year, highlighting improved profitability, expanded gross margin, and a materially higher backlog amid a broader mix of products and end markets.
Quarterly results: flat sales, higher profitability
Net sales for the quarter were $19 million, down slightly from $19.2 million in the prior-year period. Chief Executive Officer Robert Dawson noted that last year’s first quarter benefited from a large project that boosted what is typically a seasonally softer period, while this year’s results reflected “far greater diversity of products, customers, and end markets.”
Operating income rose to $177,000 from $56,000 a year ago. The company posted a consolidated net loss of $50,000, or $0.00 per diluted share, while non-GAAP net income was $659,000, or $0.06 per diluted share, compared with non-GAAP net income of $397,000, or $0.04 per diluted share, in the prior-year quarter.
Adjusted EBITDA increased to $1.1 million, or 5.6% of net sales, up from $867,000, or 4.5% of sales, in the first quarter of fiscal 2025. Chief Financial Officer Peter Yin said the company remains focused on reaching adjusted EBITDA of 10% or greater as a percentage of net sales.
Backlog rises sharply; management cautions it is a “snapshot”
Management emphasized a significant increase in backlog. Dawson said backlog stood at $18.6 million at the time of the call, up more than $6 million from the $12.4 million reported in mid-January. Yin added that backlog at quarter-end (January 31, 2026) was $14.4 million on bookings of $17.9 million, before increasing to the $18.6 million level subsequently.
Yin reiterated that backlog can fluctuate based on the timing of order receipts and fulfillment and should be viewed as a general gauge of business health rather than a precise indicator of near-term sales.
In response to an analyst question on backlog composition, Dawson said the increase reflects a “healthy mix” spanning multiple product lines and customers. He cited contributions including:
- Integrated systems
- Custom cabling (including aerospace and industrial markets)
- Small cell
- Direct Air Cooling (DAC)
Dawson also noted that integrated systems and custom cabling are areas where the company expects a larger percentage of growth relative to interconnect products, which he described as more distribution-friendly and less likely to appear as large project-based backlog changes.
Diversification and product traction across multiple end markets
Dawson and President/COO Ray Bibisi repeatedly pointed to diversification as a key theme of the quarter. Bibisi said the company is serving and winning business across aerospace, telecommunications, industrial, medical, data centers, and government and military markets, among others. He noted that strong performance in custom cable helped offset timing delays in integrated systems during the quarter.
Dawson described a strategic shift in how RF Industries engages with large communications customers, saying the company is “no longer just a vendor, but a solutions provider.” He said the expanded portfolio has opened opportunities that in some cases align with operating budgets rather than capital spending, reducing reliance on cyclical tier-one wireless CapEx and increasing exposure to maintenance and replacement activity.
He also highlighted traction in “state-of-the-art systems like Direct Air Cooling and small cell,” and said DAC systems are adaptable to multiple applications in new end markets. Dawson said DAC can lower energy costs “by up to 75%,” describing the products as rugged and easy to maintain. He said the company is reinforcing its presence in verticals such as wireline, cable, and edge data centers, and that it sees an unmet need for cooling solutions at the “edges of networks,” including smaller facilities and enclosures.
Bibisi added that thermal cooling solutions are gaining traction in edge data center and industrial applications, and said work on small cell configurations produced “meaningful bookings” during the quarter. He also said the company continued to advance its product roadmap through development and qualification stages.
On a question about progress for DAC and the NEMA 4 product, Dawson said customer interest remains strong and the company is seeing installations and trials, particularly in edge data center applications. He said the systems are performing as expected, delivering savings and allowing equipment to run without relying on air conditioning “all the time,” and added that newer applications in cable and edge data centers represent new markets and customers for the company.
Margins, operating leverage, and supply chain actions
On gross margin sustainability, Dawson said the company feels “pretty good” about maintaining margins above 30%, pointing to pricing for value, product mix, and efficiency. He also emphasized operating leverage, saying higher sales levels tend to support margin performance given the company’s cost structure.
Bibisi said operations remain a key differentiator, with efforts focused on improving process efficiency, visibility, and execution discipline to scale while maintaining quality and protecting margins. He also addressed the evolving tariff environment, saying the company is monitoring impacts and taking proactive steps to mitigate risk, including qualifying alternative suppliers in different regions and reducing single-source dependencies.
Balance sheet and liquidity
Yin said the company ended the quarter with $5.1 million in cash and cash equivalents and $14.6 million of working capital. The current ratio was approximately 1.8 to 1, with current assets of $33 million and current liabilities of $18.4 million.
As of January 31, 2026, RF Industries had borrowed $7.1 million from its revolving credit facility. Yin said net debt was reduced by $4.8 million versus the year-ago quarter and by $744,000 compared with fiscal fourth quarter 2025. Inventory was $13.8 million, roughly in line with $13.7 million a year earlier, which Yin described as a disciplined approach balanced with customer demand.
Looking ahead, management said it expects revenue growth to accelerate in the back half of fiscal 2026, supported by increased backlog and what Dawson described as improving consistency from a more diversified sales base. During the Q&A, Dawson said the company expects sequential acceleration in the second quarter versus the first and continued growth thereafter, resembling the pattern seen last year, though he noted fiscal first quarter dynamics are often seasonal.
About RF Industries (NASDAQ:RFIL)
RF Industries, Inc (NASDAQ: RFIL) is a manufacturer and supplier of connectivity products and solutions for the wireless, broadcast, cable television, data networking, defense and aerospace markets. The company specializes in both standard and custom coaxial and fiber-optic cable assemblies, connectors, adapters and test accessories designed to withstand demanding environmental conditions. Through its product portfolio, RF Industries supports applications ranging from RF signal transmission and satellite communications to industrial automation and instrumentation.
The company’s offerings include premade and build-to-print coaxial cables and assemblies, field-installable connectors, power distribution components and calibration-grade test equipment.
