FEIM reported Q1 FY2026 revenue of $13.812 million, with gross profit of $5.082 million and a gross margin of 36.79%. Net income was $0.634 million, or $0.0652 per share, while EBITDA stood at $0.557 million. Management framed the quarter as a temporary step down from a peak revenue quarter driven by lumpiness in government program awards, noting that the delays are not cancellations and will be recognized in future quarters. The funded backlog remained historically high at approximately $71 million, and FEIM disclosed ongoing investments in growth initiatives, including the Boulder, Colorado facility and quantum sensing programs, supported by external government funding. FEIM’s leadership asserted a transformed, higher-margin, cash-generative profile with a debt-free balance sheet, while cautioning investors about the inherent volatility of contract-based revenue and the dependence on defense and space program awards.
Looking ahead, management indicated that delayed programs seen in Q1 FY2026 should contribute in subsequent quarters and that the Boulder facility is expected to positively impact earnings by the third quarter of the fiscal year. The company is pursuing additional government funding for R&D in quantum sensing and plans to host a Quantum Sensing Summit to accelerate awareness and adoption of its technology. The longer-term thesis hinges on FEIM’s ability to convert backlog into revenue, win larger multi-domain defense contracts, and scale its quantum-enabled timing solutions, all while maintaining a favorable liquidity position and shareholder-friendly capital allocation (including a $20 million share repurchase authorization).