Franklin Wireless Corp (FKWL) Q2 2025 Earnings Report

Franklin Wireless Corp delivered QQ2 2025 revenue of $17.83 million, up 33.8% quarter-over-quarter and 101.5% year-over-year, driven by a favorable product mix and continued demand for IoT/M2M devices leveraging 5G-enabled connectivity. Gross profit rose to $3.242 million, producing a gross margin of 18.2%, while operating income reached $0.795 million (margin ~4.46%), and EBITDA stood at $1.065 million (margin ~5.97%). Net income of $0.229 million translated into an EPS of $0.0194 (diluted $0.0193). These results reflect meaningful top-line progression and improved operating leverage despite a modest absolute scale. Free cash flow for the quarter was $2.74 million, with cash flow from operations at $2.74 million and capital expenditure of only about $3.2 thousand, highlighting strong cash-generating capability.

The liquidity profile remains exceptional for a small-cap hardware player: cash and short-term investments total $42.16 million, cash and cash equivalents of $20.26 million, and an enterprise structure showing negative net debt of approximately $18.72 million. The company maintains a current ratio of 2.98 and a quick ratio of 2.73, underscoring solid short-term resilience. The cash conversion cycle is notably negative at about -49.5 days, driven by favorable payables dynamics that help fund working capital without pressuring operating cash flow.

Looking forward, the QQ2 2025 results point to a constructive trajectory in Franklin’s core IoT/M2M hardware franchise, supported by large-scale liquidity and a path toward higher-margin sales. However, the quarter lacks explicit forward guidance in the filing and there is no earnings call transcript available to extract management nuances or cadence around near-term targets. Investors should monitor continued demand for embedded modules and gateways in 5G/M2M deployments, potential monetization of software/value-added services, and any shifts in component costs or supplier relationships that could impact margins and working capital.