Executive Summary

IEH reported Q2 FY2026 revenue of $7.08M (down 3.6% YoY) and a small net loss of $0.03M as higher gold prices, tariffs, and other cost inflation pressured margins; operating income was a loss of $0.10M versus a profit last year .
Sequentially, revenue improved from Q1 FY2026 ($6.31M to $7.08M), while losses narrowed materially (operating loss improved from $0.76M to $0.10M; net loss from $0.65M to $0.03M), reflecting better volume and ongoing pricing actions amid cost headwinds .
Management highlighted “over $7 million” of new missile-defense orders in Q2 and the highest backlog since December 2020; they expect continued demand tailwinds from U.S. stockpile rebuilds, sole‑source programs, and a ramp in Boeing 737 MAX output to support margins as mix improves .
No formal numeric guidance or Street consensus was available; key stock catalysts center on defense backlog conversion, commercial aerospace volume recovery, and evidence of margin recapture as pricing actions catch up to gold and tariff cost inflation .

What Went Well and What Went Wrong

What Went Well
- Booked “over $7 million” in new orders supporting missile defense and other programs in the quarter; backlog reached its highest level since December 2020, improving revenue visibility .
- Sequential improvement: revenue rose QoQ and operating/net losses narrowed materially versus Q1 FY2026, indicating stabilization after customer schedule delays last quarter .
- Management expects margin support from sole‑source defense business and sees incremental demand from commercial aerospace, citing FAA approval for increased Boeing 737 MAX output as a tailwind to volumes “in the coming months” .
What Went Wrong
- YoY decline: revenue fell 3.6% YoY; operating swung to a loss ($0.10M vs. +$0.17M prior year) and net moved to a small loss as cost inflation outpaced pricing .
- Input cost pressures continued: “steep rise in gold” and tariffs weighed on margins; pricing actions remain in “catch‑up” mode, delaying full margin recapture .
- No formal guidance or estimate framework provided; lack of consensus and limited disclosures constrain visibility into near‑term profitability inflection timing .

Financial Results

Income statement snapshot (oldest → newest)

Metric	Q3 FY2025	Q1 FY2026	Q2 FY2026
Revenue ($)	$7,217,616	$6,308,155	$7,077,592
Operating Income ($)	-$130,086	-$755,306	-$104,380
Net Income ($)	-$61,640	-$654,618	-$26,861
Basic EPS ($)	-$0.03	-$0.27	-$0.01

Margins (derived from reported figures)

Metric	Q3 FY2025	Q1 FY2026	Q2 FY2026
Operating Margin %	-1.8% (calc from )	-12.0% (calc from )	-1.5% (calc from )
Net Income Margin %	-0.9% (calc from )	-10.4% (calc from )	-0.4% (calc from )

Notes: Margins are calculated using reported revenue and income figures cited above.

KPI and operating context

KPI	Q1 FY2026	Q2 FY2026
Orders booked (defense/missile programs)	“Over $2.5M” in recent weeks	“Over $7M” in the quarter
Backlog	+25% since start of FY2026	Highest since December 2020
Cash (YoY)	+43% vs. Q1 FY2025	+9% vs. Q2 FY2025

Estimates comparison (S&P Global)

Metric	Period	Consensus	# of Est.	Actual	Surprise
Revenue	Q2 FY2026	NA*	NA*	$7,077,592	NA*
EPS (Basic)	Q2 FY2026	NA*	NA*	-$0.01	NA*

*Values retrieved from S&P Global; consensus not available via S&P Global for this period.

Segment breakdown: IEH does not provide segment reporting in these releases; results reflect the consolidated business focused on defense, aerospace, space, medical, and industrial end markets .

Guidance Changes

No formal numeric guidance was issued. Management provided qualitative outlook commentary:

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Backlog	FY2026 trajectory	No formal guidance	Backlog highest since Dec 2020; strong defense pipeline with “over $7M” Q2 orders; commercial aerospace recovery expected to accelerate (737 MAX output increase)	N/A (qualitative positive)
Margins	Near-term	No formal guidance	Margins pressured by gold and tariffs; pricing actions ongoing but still “catch‑up”; sole‑source defense business expected to be “highly profitable” to aid margins	N/A (qualitative mixed)
Capital allocation/M&A	Ongoing	Not specified	Actively pursuing acquisitions to diversify products and markets	N/A

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 FY2026; themes below reflect disclosures and management commentary in the Q1 and Q2 releases.

Topic	Previous Mentions (Q3 FY2025, Q1 FY2026)	Current Period (Q2 FY2026)	Trend
Cost inflation (gold, tariffs) and margins	Lower margins due to product mix and rising overhead; pricing adjustments underway	“Steep rise in gold” and tariffs still weighing on margins; pricing still in catch‑up	Persistent headwind
Defense demand/backlog	Strong pipeline; booked >$2.5M recent orders; backlog up 25% since FY26 start	Booked >$7M in defense orders; backlog highest since Dec 2020	Strengthening
Commercial aerospace	Sector below targets but improving outlook	Seeing more business; expects acceleration with FAA approval to increase 737 MAX output	Improving
Pricing actions	Adjusting pricing to offset input cost increases	Continuing aggressive/strategic price increases; still catching up	Ongoing
Sole‑source mix/profitability	Not emphasized	Sole‑source defense business noted as “highly profitable,” supportive of margins	Positive mix

Management Commentary

“While our losses narrowed compared to the first quarter of this fiscal year, the steep rise in gold, along with tariffs and other rising costs, continue to pressure our margins. While we continue to aggressively and strategically raise prices, we are still playing ‘catch‑up’ to these increases.” — Dave Offerman, President & CEO .
“In this quarter alone we booked over $7 million in new orders in support of missile defense and other military programs. This has led to our highest backlog since December 2020.” .
“It is also worth noting that much of this business is sole‑source and thus highly profitable, which should go a long way toward improving our margins.” .
“We are starting to see more business for the commercial aerospace platforms we support, in particular the Boeing 737 Max… we expect that growth to accelerate in the coming months.” .
Q1 context: “Revenue was lower… due primarily to customer schedule delays, along with the still slow recovery of the commercial aircraft sector.” .

Q&A Highlights

No earnings call transcript or Q&A session was available for Q2 FY2026 in the company’s SEC/press materials for this period. As a result, any guidance clarifications or detailed line‑item commentary beyond the press release were not accessible .

Estimates Context

Wall Street consensus (S&P Global) for Q2 FY2026 was not available; no EPS or revenue consensus values were provided. Actual revenue was $7.08M and EPS was -$0.01, per the company’s release .
Implication: In the absence of consensus, investors will focus on sequential trajectory (improving losses, higher revenue) and order/backlog momentum as the primary anchors for near‑term expectations .
S&P Global data note: consensus was NA*; Actuals shown above are from company filings.
*Values retrieved from S&P Global.

Key Takeaways for Investors

Defense demand is accelerating: “over $7M” in Q2 orders and backlog at a five‑year high provide visibility into 2H/FY2026 revenue conversion; watch for backlog‑to‑sales cadence in coming quarters .
Margin recovery is the swing factor: gold price and tariff pressures remain, but management expects mix/pricing and sole‑source programs to support gross margin as pricing catches up; monitor unit economics as volumes normalize .
Sequential stabilization: QoQ revenue up and losses narrowed markedly versus Q1 FY2026, suggesting improving operating leverage off a higher volume base .
Commercial aerospace upside optionality: increased Boeing 737 MAX output could lift IEH’s volumes; track airline build schedules and IEH’s aerospace line items for confirmation .
Lack of formal guidance and Street coverage increases uncertainty; near‑term stock reaction likely tied to additional order announcements, backlog conversion pace, and evidence of gross margin improvement amid input cost relief or successful pricing .

Citations

Q2 FY2026 8‑K/Press Release (Nov 10, 2025): Revenue, operating income/loss, net income/loss, EPS, orders, backlog, cost pressures, pricing, Boeing 737 MAX commentary .
Q1 FY2026 8‑K/Press Release (Aug 13, 2025): Revenue, operating loss, net loss, EPS, backlog and orders context, cash YoY .
Q3 FY2025 8‑K/Press Release (Feb 12, 2025): Revenue, operating loss, net loss, EPS, margin commentary and pricing adjustments .

Additional References (document headers and administrative items): .

IEH Corp (IEHC)·Q2 2026 Earnings Summary