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BK Technologies Corp (BKTI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong execution: revenue grew 21% year-over-year to $24.4M, gross margin expanded to 49.9%, GAAP diluted EPS was $0.87, and non-GAAP adjusted diluted EPS was $1.27, reflecting favorable product mix and operating leverage .
  • The quarter featured robust federal demand, including multiple USDA Forest Service purchase orders totaling $12.9M, and increasing traction/pricing power for the BKR 9000 multiband radio, both cited as key drivers of growth and margin improvement .
  • BK reiterated full-year 2025 targets: high single-digit revenue growth, gross margin of 47%+, GAAP EPS of $3.15, and non-GAAP adjusted EPS of $3.80; record quarter-end cash of $21.5M with no debt underscores balance sheet strength .
  • Versus S&P Global consensus, BK posted a significant beat: revenue $24.41M vs $22.10M*, and “Primary EPS” $1.27 vs $0.86*; beats were driven by federal orders and mix-shift to higher-margin multiband radios. Values retrieved from S&P Global .*

What Went Well and What Went Wrong

What Went Well

  • Strong demand from federal customers, including $12.9M in USDA Forest Service purchase orders; management emphasized “strong revenue growth, margin expansion and a significant increase in profitability” .
  • Mix shift to the BKR 9000 multiband radio (premium price point) drove gross margin to 49.9% vs 38.8% last year; CEO: “market recognition for our BKR 9000 multiband radio… helped drive margin improvement” .
  • Financial position improved materially: record cash balance of $21.5M and debt-free at quarter-end; operating leverage within an asset-light model highlighted by management .

What Went Wrong

  • SG&A increased to $7.3M (vs $5.2M last year) amid investments and ~$0.6M non-cash stock comp; RSU-related share issuance (39,250 shares at $38.27) tied to 2023 performance criteria for BKR 9000 .
  • Non-GAAP adjustments continue to be necessary (e.g., non-cash income tax provision in Q2/Q3); management noted one-time items from manufacturing transition and tax provision adjustments affecting comparability .
  • Tariff uncertainty and supplier cost pressures discussed earlier in the year; management flagged potential tariff impacts and supply chain shifts (USMCA, Vietnam, shift away from China) as a monitored headwind .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$20.179 $19.054 $21.165 $24.411
Gross Margin (%)38.8% 47.0% 47.4% 49.9%
GAAP Diluted EPS ($)$0.63 $0.55 $0.96 $0.87
Adjusted Diluted EPS ($)$0.71 $0.68 $1.30 $1.27
Operating Income ($USD Millions)$2.611 $2.916 $3.997 $4.845
Net Income ($USD Millions)$2.357 $2.132 $3.741 $3.436
Adjusted EBITDA ($USD Millions)$3.109 $3.226 $4.417 $5.252
Actual vs Estimates (Q3 2025)ConsensusActual
Revenue ($USD Millions)$22.10*$24.411
Primary EPS ($)$0.86*$1.27

Values retrieved from S&P Global.*

Segment breakdown: Not disclosed in reported materials .

KPIs

KPIQ1 2025Q2 2025Q3 2025
Backlog ($USD Millions)$18.8 ——
Cash & Equivalents ($USD Millions)$8.920 $11.853 $21.471
Working Capital ($USD Millions)$24.6 $28.9 $33.8
USDA Forest Service POs Announced ($USD Millions)—$12.9 $12.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY 2025Single-digit growth High single-digit growth Raised in Q2; Maintained in Q3
Gross MarginFY 2025≥42% ≥47% Raised in Q2; Maintained in Q3
GAAP Diluted EPSFY 2025>$2.40 $3.15 per diluted share Raised in Q2; Maintained in Q3
Non-GAAP Adjusted Diluted EPSFY 2025>$2.80 $3.80 per diluted share Raised in Q2; Maintained in Q3

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Federal orders & seasonalityQ1: Federal orders delayed by CR; seasonality strongest in Q2/Q3; orders only need to be placed by Sept 30 . Q2: Announced $12.9M USDA FS orders post-quarter .Robust federal activity; multiple USDA FS POs totaling $12.9M cited as growth driver .Strengthening federal demand
Tariffs/macroQ1: USMCA tariff-free from Mexico in Q1; Vietnam 10% (risk to 46%); halted China shipments after 145% tariff; shifting production to Taiwan; monitoring July deadline .Not highlighted in Q3 PR; management remains focused on controllables .Ongoing monitored risk
Product mix (BKR 9000)Q1: BKR 9000 revenue up sequentially; expected 2–3x higher in 2025 vs 2024 . Q2: Demand momentum and margin tailwind from mix .BKR 9000 premium pricing and traction cited as margin driver .Increasing mix/price realization
Manufacturing model & costsQ1: Contract manufacturing model (East West) and cost reductions supporting margin . Q2: Outsourced manufacturing efficiencies; gross margin improvement .Asset-light operating leverage highlighted .Positive leverage, stable execution
R&D/Products (BK ONE, BKR 9500)Q1: BKR 9500 mobile planned for 2027; RelayONE introduced, first order received . Q2: RelayONE PO (Latimer County) and continued R&D investments .Continued technology investments and partnerships; strengthening competitive position .Continued investment
SG&A/OpEx trajectoryQ1: Operating leverage expected over time . Q2: SG&A up with sales/marketing/engineering investment .SG&A $7.3M; includes ~$0.6M stock comp; issuance of 39,250 shares for RSUs .Higher spend but leveraged

Management Commentary

  • “This was an excellent quarter for us, reflecting strong revenue growth, margin expansion and a significant increase in profitability. Our revenue growth… driven by robust federal order activity… We’re also seeing increased market recognition for our BKR 9000 multiband radio which commands a premium price point and helped drive margin improvement” — John Suzuki, CEO .
  • “We ended the quarter with a record cash balance and no debt, underscoring the power of our proven, asset light model and strong operating leverage… we remain confident in our ability to meet or surpass our previously stated full-year 2025 guidance” — John Suzuki, CEO .

Q&A Highlights

  • Q3 2025 earnings call transcript was not available in our document set; therefore, Q&A highlights for Q3 cannot be provided [SearchDocuments returned none].

Estimates Context

MetricPeriodS&P Global ConsensusActual
Revenue ($USD Millions)Q3 2025$22.10*$24.411
Primary EPS ($)Q3 2025$0.86*$1.27
  • BK delivered a material beat vs consensus on revenue and “Primary EPS” (normalized), supported by federal orders and higher-margin BKR 9000 mix . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin story intact and strengthening: gross margin at 49.9% driven by BKR 9000 mix and outsourced manufacturing benefits; sustained >47% full-year target suggests continued pricing power and cost discipline .
  • Demand visibility improved via federal orders (USDA FS $12.9M) and seasonally strong Q2/Q3; mix shift likely to continue benefiting margin and earnings .
  • Operating leverage and balance sheet strength (record $21.5M cash, no debt) provide flexibility for R&D and strategic initiatives (BK ONE, BKR 9500) without equity/debt dependence .
  • SG&A investments (marketing/engineering) are elevating OpEx near-term but should produce operating leverage as BKR 9000 scales; stock comp and one-time tax items are key non-GAAP adjustments to monitor .
  • With significant beats vs S&P consensus in Q3, street estimates for FY EPS may drift higher; monitor any tariff developments and federal procurement cadence into Q4 seasonally softer period .
  • Near-term trading implication: beat and reiterated guidance are positive catalysts; monitor follow-through orders and gross margin durability in Q4; Medium-term thesis: asset-light model, expanding BKR 9000 adoption, and continued federal/institutional demand support profitable growth .

Non-GAAP Adjustments and Reconciliation Notes

  • Q3 adjusted diluted EPS of $1.27 reflects add-backs including ~$0.637M stock comp and ~$0.932M non-cash income tax provision; Q3 adjusted EBITDA of $5.252M reconciles from net income with tax, interest, and D&A add-backs .
  • Management notes they do not provide forward-looking non-GAAP reconciliations due to inherent difficulty quantifying certain items .