Executive Summary
Virco Mfg Corporation reported a solid QQ3 2025 with a revenue figure of $82.62 million, delivering a gross margin of 44.39% and an operating margin of 13.45%. Net income was $8.40 million and earnings per share stood at $0.52. EBITDA reached $12.46 million. Operating cash flow was $33.46 million, while free cash flow amounted to $30.98 million, underscoring meaningful cash-generation strength despite seasonal demand patterns.
The quarter benefited from disciplined cost management and a favorable cash conversion cycle, resulting in a net debt position of $3.58 million and a cash balance of $38.86 million at quarter end. Virco’s balance sheet exhibits liquidity and low leverage, with a current ratio of 2.88, a quick ratio of 1.70, and a debt-to-capitalization ratio of 0.268. Relative to peers within the sector, Virco trades at a defensible multiple (P/E ~6.8x; P/B ~1.97x) and demonstrates a robust FCF profile, positioning the company to weather near-term volume headwinds and pursue selective opportunistic investments or shareholder-friendly actions.
However, year-over-year (YoY) and quarter-over-quarter (QoQ) comparisons show revenue, gross profit, and profitability metrics all declined versus the prior-year period and the immediate prior quarter, driven largely by seasonality in education-related orders and a higher SG&A burden in the quarter. Management commentary (when available) would typically address mix shifts, program wins, and cost-control initiatives shaping the trajectory into the key back-to-school cycle. Given the absence of formal forward guidance in the dataset, investors should monitor demand signals in K-12 and higher-education segments, product mix optimization, and any changes in public funding that could influence orders in upcoming quarters.
Key Performance Indicators
QoQ: -23.80% | YoY:-1.94%
QoQ: -26.96% | YoY:-4.01%
QoQ: -49.24% | YoY:-24.43%
QoQ: -50.09% | YoY:-17.31%
QoQ: -50.00% | YoY:-16.13%
Key Insights
Revenue: $82.62M; YoY change: -1.94%; QoQ change: -23.80%. Gross Profit: $36.678M; YoY: -4.01%; QoQ: -26.96%; Gross Margin: 44.39%. Operating Income: $11.113M; YoY: -24.43%; QoQ: -49.24%; Operating Margin: 13.45%. Net Income: $8.401M; YoY: -17.31%; QoQ: -50.09%; Net Margin: 10.17%. EBITDA: $12.456M; EBITDA Margin: ~15.08%. EPS: $0.52; Diluted EPS: $0.52; Weighted Avg Shares: 16.289M (outstanding). Cash Flow: Net cash from operating activities $33.457M; CapEx $2.479M; Free Cash Flow $30.978M; FCF...
Financial Highlights
Revenue: $82.62M; YoY change: -1.94%; QoQ change: -23.80%. Gross Profit: $36.678M; YoY: -4.01%; QoQ: -26.96%; Gross Margin: 44.39%. Operating Income: $11.113M; YoY: -24.43%; QoQ: -49.24%; Operating Margin: 13.45%. Net Income: $8.401M; YoY: -17.31%; QoQ: -50.09%; Net Margin: 10.17%. EBITDA: $12.456M; EBITDA Margin: ~15.08%. EPS: $0.52; Diluted EPS: $0.52; Weighted Avg Shares: 16.289M (outstanding). Cash Flow: Net cash from operating activities $33.457M; CapEx $2.479M; Free Cash Flow $30.978M; FCF Margin ~37.5%. Balance Sheet: Cash $38.858M; Total Assets $210.145M; Total Liabilities $94.286M; Total Equity $115.859M; Net Debt $3.584M. Liquidity: Current Ratio 2.88; Quick Ratio 1.70; Cash Ratio 0.94. Leverage: Debt to Capitalization 0.268; Long-Term Debt $41.323M; Total Debt $42.442M; ROA ~4.0%; ROE ~7.25%; ROCE ~6.59%. Valuation/Capital Allocation: P/E ~6.80x; P/B ~1.97x; Dividend Payout ~4.84%; Dividend Yield ~0.18%; Free Cash Flow per Share $1.902; Operating Cash Flow per Share $2.05.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
82.62M |
-1.94% |
-23.80% |
| Gross Profit |
36.68M |
-4.01% |
-26.96% |
| Operating Income |
11.11M |
-24.43% |
-49.24% |
| Net Income |
8.40M |
-17.31% |
-50.09% |
| EPS |
0.52 |
-16.13% |
-50.00% |
Key Financial Ratios
operatingProfitMargin
13.5%
operatingCashFlowPerShare
$2.05
freeCashFlowPerShare
$1.9
dividendPayoutRatio
4.84%
Management Commentary
Notes: The earnings transcript for QQ3 2025 is not provided in the dataset. Consequently, there are no management quotes or theme-based transcripts to extract. The analysis below relies on the disclosed financials and peer benchmarks. Investors should seek the formal earnings call transcript for verbatim management guidance, strategic commentary, and Q&A insights that would enrich the forward-looking assessment.
Forward Guidance
No formal forward guidance was provided in the dataset for QQ3 2025. Given Virco’s strong free cash flow generation and a conservative balance sheet, the company appears well-positioned to navigate near-term macro headwinds and school funding cycles. Scenario-based view:
- Base case: Revenue stabilizes near current run-rate with gross margin in the low-to-mid 40s and EBITDA in the low-to-mid teens as SG&A remains controlled. FCF remains robust (around 35% of revenue) with debt lowest-risk profile intact.
- Upside scenario: If education budgets rebound or product mix shifts toward higher-margin offerings, Virco could see margin expansion and higher EPS, supported by ample FCF for selective share repurchases or strategic investments.
- downside scenario: Demand softness or delayed school capital cycles could pressure revenue and gross margins, magnifying the impact of SG&A on profits. A sustained decline in demand would risk a more pronounced EBITDA/operating margin compression absent cost discipline.
Key monitoring factors: order backlog visibility, public education funding cycles, new product introductions and adoption rates, changes in input costs, and the ability to convert FCF into value-enhancing uses (buybacks, acquisitions, capex).