RF Industries, Ltd.

What they do

RF Industries designs and manufactures interconnect components and systems: RF connectors and adapters, dividers, directional couplers and filters, coaxial and data cables, wire harnesses, fiber optic cables, custom cabling, energy-efficient cooling systems and integrated small cell enclosures. It sells primarily to telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers, and OEMs across several markets. The company is headquartered in San Diego, California with additional operations in New York, Connecticut, and New Jersey. During the fourth quarter of fiscal 2025, it combined its former RF Connector and Custom Cabling reporting segments into one consolidated segment.

Revenue drivers

• Custom cabling and integrated systems — Management cites custom cabling and integrated systems offerings as the higher-value solutions driving its multi-year mix shift, noting they carry more engineering content and larger project scope than traditional component sales, though no separate revenue figure is disclosed.
• RF connectors, adapters, passives and coaxial cable — The traditional component business (connectors, adapters, dividers, couplers, filters, coaxial cable) remains part of the single reportable segment; the filings do not break out its revenue share.
• Energy-efficient cooling and small cell enclosures — The company designs, engineers, manufactures and sells energy-efficient cooling systems and integrated small cell solutions and related components; no discrete revenue amount is given.
• End-market diversification (aerospace, edge data centers, AI infrastructure, transportation, public safety) — Management states these markets are now served alongside the wireless carrier ecosystem and that reliance on cyclical carrier capex has been materially reduced, but per-market revenue is not disclosed.

Recent performance

For the third quarter of fiscal 2026 ended July 31, 2026, net sales were a record $23.96 million, up 21% from $19.8 million a year earlier and 16% from $20.7 million in the second quarter of fiscal 2026. Gross margin was 35.6%, a 160-basis-point improvement from 34% in the prior-year period, and operating income was $1.8 million versus $720,000 a year earlier. Consolidated net income was $1.44 million, or $0.12 per diluted share, up 267% from $392,000, or $0.04 per diluted share; non-GAAP net income was $2.2 million, or $0.19 per diluted share, and Adjusted EBITDA was $2.7 million, up from $1.6 million. Backlog was $18.6 million at quarter end on bookings of $22.5 million, and stood at $19.8 million as of the September 14, 2026 release date.

Strategy

Management describes a multi-year mix shift toward higher-value, differentiated solutions such as custom cabling and integrated systems that carry more engineering content and larger project scope than component sales. The company completed restructuring in the fourth quarter of fiscal 2025, consolidating manufacturing operations, reducing headcount, and moving sales to a unified, customer-centric model, which also merged the RF Connector and Custom Cabling segments into one reportable unit. It has diversified end markets toward aerospace, edge data centers, AI infrastructure, transportation, and public safety while retaining the wireless carrier business. Financing is provided by the March 15, 2024 EBC Credit Agreement with Eclipse Business Capital: a $15.0 million revolver plus a $1.0 million additional line, secured by certain assets and subject to a borrowing-base formula and financial covenants including minimum Excess Availability.

Risks

• Borrowing-base and covenant dependence — The EBC Credit Facilities are secured by accounts receivable and inventory under a borrowing-base formula and require minimum Excess Availability, so a decline in those assets or a covenant breach could restrict liquidity.
• Carrier capex cyclicality — The company historically depended on cyclical wireless carrier capital spending, and management's reduced reliance on that spending depends on continued execution of its diversification into newer markets.
• Goodwill and long-lived asset impairment — The 10-K identifies impairment assessment of goodwill, indefinite-lived intangibles and definite-lived assets as critical accounting estimates; at July 31, 2026 the balance sheet carried $8.085 million of goodwill and $10.264 million of amortizable intangibles.
• Concentration of backlog — Backlog of $18.6 million at July 31, 2026 equals roughly three-quarters of quarterly revenue, so timing of a limited number of larger custom projects can swing reported sales period to period.

Outlook

Management frames the third quarter as evidence of operating leverage as revenue scales above a $20 million quarterly run rate, with growth at every level of the income statement and Adjusted EBITDA up 69% year over year. It points to margin expansion from the mix shift into custom cabling and integrated systems and to diversification into aerospace, edge data centers, AI infrastructure, transportation and public safety. Going into the September 14, 2026 release, backlog stood at $19.8 million, above the $18.6 million at quarter end.