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IEH Corp (IEHC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $7.22M, up 41% YoY, but the company posted a small net loss of $0.06M (−$0.03 basic EPS) as margins compressed; management attributed the margin pressure vs the prior two quarters to product mix and higher overhead/indirect costs .
  • Sequentially, revenue declined modestly (Q3: $7.22M vs Q2: $7.34M), and operating margin dipped negative (−1.8%) versus a positive 2.4% in Q2, reflecting mix and cost headwinds despite continued demand strength in defense and space .
  • Backlog decreased YoY to ~$12.83M (from ~$16.99M), though management cited a strong sales pipeline and opportunities from competitive shifts; cash ended the quarter at $9.04M, underscoring improved liquidity .
  • Wall Street consensus estimates from S&P Global were unavailable at retrieval; no formal quantitative guidance was issued, so near-term stock catalysts hinge on order flow/backlog rebuilding, mix improvement, and aerospace production normalization .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue grew 41% YoY, with strength driven by defense (up 85% YoY in the quarter) and space (up 366% YoY); management highlighted robust defense and commercial space markets .
    • Cash and liquidity improved; cash rose to $9.04M with positive operating cash flow in the first nine months, supporting working capital and operations .
    • Management emphasized pricing actions and intensified marketing to target new industries, with favorable long-term demand outlook in commercial aerospace (once production normalizes), defense, and commercial space .

  • What Went Wrong

    • Margins declined vs the prior two quarters due to product mix and higher overhead/indirect costs, driving a small net loss in Q3 despite revenue growth .
    • Commercial aerospace revenue fell 38% YoY in the quarter, tied in part to issues at a major aircraft manufacturer; overall backlog was down YoY (~$12.83M vs ~$16.99M) .
    • SG&A rose YoY in the quarter (+15.6%) on higher marketing and sales commissions, blunting the benefit of higher volumes .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($)$5,107,757 $7,104,977 $7,341,124 $7,217,616
Operating Income ($)$(969,189) $332,979 $173,196 $(130,086)
Net Income ($)$(926,053) $392,787 $246,443 $(61,640)
Basic EPS ($)$(0.39) $0.17 $0.10 $(0.03)
Operating Margin (%)(−19.0%) 4.69% 2.36% (−1.80%)
Gross Profit ($)$628,007 ——$1,648,149
Gross Margin (%)12.3% ——22.8%

Notes:

  • Operating Margin and Gross Margin are calculated from cited revenue/COGS/operating income figures (source figures cited).
  • No S&P Global consensus estimates were available at retrieval; therefore, no estimate comparison is shown .

Segment/Industry Mix (as % of revenue)

IndustryQ3 2024Q3 2025
Defense46.4% 60.8%
Commercial Aerospace42.9% 18.7%
Space5.3% 17.3%
Other5.4% 3.2%

KPI Snapshot

KPIPriorCurrent
Cash & Cash Equivalents$6,139,823 (3/31/2024) $9,041,167 (12/31/2024)
Inventories (net)$8,731,618 (3/31/2024) $7,589,249 (12/31/2024)
Backlog~$16,990,000 (12/31/2023) ~$12,830,000 (12/31/2024)
Working Capital$18,295,711 (3/31/2024) $19,460,819 (12/31/2024)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025/Q4 and beyondN/ANo formal quantitative guidance provided in press release/10-QMaintained “no guidance”
MarginsFY2025/Q4 and beyondN/ANo formal quantitative guidance; management cited mix/overhead headwinds in Q3Commentary only
Other (OpEx, OI&E, tax, dividends)—N/ANo formal guidance disclosed—

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Commercial aerospace production“Growth may be uneven while the commercial aircraft industry continues to produce below target levels.” “Growth and improvements may still be uneven… commercial aircraft industry continues to produce below their target levels.” Unchanged caution; awaiting normalization
Defense demandStrong driver of YoY growth in Q1/Q2 commentary Defense up materially YoY; management expects strong growth projections in defense Positive
Space marketPositive outlook noted in Q1/Q2 Space revenue up 366% YoY in Q3; continued investment in commercial space Positive acceleration
Pricing actionsNoted pricing adjustments and improving margins in Q1/Q2 context Adjusting pricing to offset rising input costs; takes time to materialize in margins Ongoing execution
Mix/marginsImproving YoY in Q1/Q2 Margins lower vs prior two quarters due to mix and rising overhead/indirect costs Near-term headwind
Backlog/pipelineRecovery trajectory with uneven quarter-to-quarter growth Backlog “not where we want it,” but sales pipeline strong; seeing competitive share opportunities Mixed: pipeline strong, backlog lighter
LiquidityCash up 40% since start of fiscal year (Q2 PR) Cash up vs last year; strong operating cash generation YTD Improving

Management Commentary

  • “Our margins this quarter were lower than the prior two quarters due primarily to product mix, and increasing overhead and indirect costs. We continue to adjust pricing to compensate for the rise in our input costs, but it takes time for those adjustments to materialize in our statements as margin improvements.”
  • “Our backlog is not currently where we want it to be, but our sales pipeline is strong, changes in the competitive landscape offer opportunities to win market share, and we continue to intensify our marketing efforts to target new industries for our signature Hyperboloid products.”
  • Long-term outlook: management cites favorable trends in defense, commercial space launch, and eventual normalization in commercial aerospace production as supportive for multi-year growth .

Q&A Highlights

  • Not applicable; company disclosures for the quarter were provided via the 8‑K press release and 10‑Q, with no formal quantitative guidance to clarify. Commentary emphasized pricing actions, mix-driven margin variability, and a strong pipeline despite a lighter backlog .

Estimates Context

  • S&P Global (Capital IQ) Wall Street consensus for Q3 FY2025 EPS and revenue was unavailable at retrieval; as a result, comparisons vs estimates cannot be provided at this time. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue growth remains robust (+41% YoY) on defense and space strength; the mix shift away from commercial aerospace in Q3 was notable and linked to production challenges at a major OEM .
  • Margin headwinds appear transitory and mix-driven; management is pursuing pricing to offset input cost inflation, but timing to flow through P&L can lag, suggesting near-term variability .
  • Backlog decreased YoY to ~$12.83M, but management points to a strong pipeline and competitive share opportunities; order conversion in coming quarters will be key to sustain growth .
  • Liquidity and working capital are solid (cash $9.04M; working capital ~$19.46M), providing operational flexibility to execute pricing/marketing initiatives and support lead times .
  • Commercial aerospace remains a swing factor; normalization of production should be a medium‑term catalyst for mix and margin improvement, while defense/space momentum underpins near‑term revenue .
  • With no formal guidance and no consensus available, focus on sequential backlog trends, industry mix, and SG&A trajectory as primary signals for earnings power recovery .

Supporting detail:

  • Income statement and segment mix from the Q3 FY2025 10‑Q and the Q3 press release .
  • Prior quarters (Q1/Q2 FY2025) revenue, profitability, and management commentary from 8‑K press releases .
  • Backlog, liquidity, and cash flow metrics from the Q3 FY2025 10‑Q .