Espey Mfg Electronics Corp posted QQ3 2025 results that reflect a solid year-over-year revenue expansion and strong cash-generation, even as quarterly revenue declined meaningfully versus the immediately preceding quarter. Revenue for QQ3 2025 was $10.30 million, up 24.8% from the QQ3 2024 period, underpinned by a robust gross margin of 28.6% (gross profit of $2.95 million). Operating income reached $1.75 million with an EBITDAR of $1.75 million and net income of $1.70 million, translating to an EPS of $0.66 (GAAP) and $0.63 for diluted EPS. The company generated substantial operating cash flow of $11.45 million in the quarter, driving free cash flow to ~$10.49 million and lifting cash at period-end to about $13.86 million. These figures contributed to a healthy liquidity profile (current ratio 2.54; quick ratio ~1.92) and a balance sheet characterized by meaningful cash and short-term investments (~$38.5 million) against total assets of ~$72.8 million, with stockholders’ equity of ~$46.3 million.
However, QoQ performance was softer, with revenue down ~24.3% vs. Q2 2025 and net income down modestly from the prior quarter. The QQ3 2025 results benefited from favorable mix and volume versus the prior year and improved operating efficiency, but the quarter’s revenue volatility underscores ongoing exposure to project timing and defense-related procurement cycles. The company also reports a meaningful current portion of deferred revenue (~$21.0 million), indicating revenue recognition timing that may influence near-term top-line cadence. The combination of solid YoY growth, strong cash generation, modest leverage, and a conservative balance sheet supports a constructive long-term view, particularly given defense and industrial demand tailwinds, though investors should monitor order cadence, government budget cycles, and the sustainability of quarterly revenue volatility.