Executive Summary

Q2 2025 revenue was $0.924M, down 13.5% YoY, with diluted EPS of ($0.01) vs $0.02 in Q2 2024; sequentially, revenue was roughly flat vs Q1 2025 ($0.918M), while gross margin improved q/q to 57.0% (from 52.4%) but remained below Q2 2024’s 59.7% .
Drivers: lower net sales due to weaker shipments and a lower starting backlog, and reduced net investment income as money market yields declined .
Outlook/capital allocation: management does not expect material 2025 benefits from new initiatives (medium-term value focus) and authorized a $500k–$700k share repurchase (up to 100k shares) to begin in the quarter .
Strategic catalysts: MGHL share subscription remains pending but “expected to be completed in 2025,” and P3 Logistic Solutions advanced AI-driven edge device prototypes (field testing planned) .

What Went Well and What Went Wrong

Liquidity and balance sheet remained strong: working capital of $41.6M and cash, cash equivalents and marketable securities of ~$41.8M as of 6/30/25 .
Backlog recovery during the quarter: order backlog rose to $527k as of 6/30/25 from $336k at 12/31/24 (though below $737k at 6/30/24) .
Strategic progress: management highlighted advancing P3’s AI-based edge devices toward field testing and reiterated confidence that the MGHL transaction will close in 2025 .

Top-line pressure: Q2 revenue fell 13.5% YoY to $0.924M as shipments softened and beginning backlog was lower; diluted EPS turned to a loss of ($0.01) vs $0.02 YoY .
Lower net investment income due to declining yields on U.S. Treasury money market funds, a notable headwind in a company of this size where investment income is material .
Mix/operations: gross margin declined YoY to 57.0% (from 59.7%), reflecting lower‑margin product sales, and SG&A increased vs Q2 2024, pressuring profitability .

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$1.157	$0.918	$0.924
Gross Margin %	60.0%	52.4%	57.0%
Net Income Attributable to LGL ($USD Millions)	$0.202	($0.006)	($0.051)
Diluted EPS ($)	$0.04	($0.00)	($0.01)

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$1.068	$0.924
Gross Margin %	59.7%	57.0%
Pre‑Tax Income ($USD Millions)	$0.237	($0.031)
Net Income Attributable to LGL ($USD Millions)	$0.137	($0.051)
Diluted EPS ($)	$0.02	($0.01)

Segment	Revenue Q2 2024 ($000)	Revenue Q2 2025 ($000)	Segment Profit (Loss) Q2 2024 ($000)	Segment Profit (Loss) Q2 2025 ($000)
Electronic Instruments	650	661	44	68
Merchant Investment	318	274	237	148
Corporate	211	173	(134)	(247)
Consolidated	1,179	1,108	138 (pre‑tax)	(31) (pre‑tax)

KPI	12/31/2024	3/31/2025	6/30/2025
Backlog ($000)	336	295	527
Working Capital ($000)	41,738	41,807	41,634
Cash & Cash Equivalents ($000)	41,585	41,925	41,735

Metric/Item	Period	Previous Guidance	Current Guidance/Update	Change
Benefits from new initiatives (P3, MGHL)	FY 2025	None formal	“We do not expect to recognize any material benefits from our new initiatives in 2025 but expect to develop value in the medium term.”	Qualitative: no 2025 benefits
Share repurchase authorization	2H 2025	Existing plan (shares remaining)	Board authorized commencement of $500k–$700k repurchase; not to exceed 100k shares; expected to begin this quarter	New/activated
Warrants exercise window	Through Nov 2025	Exercise mechanics	Five warrants per share; $4.75 strike; oversubscription privilege from Oct 16; ~45k shares issued to date (as of the announcement)	Updated exercise details

No quantitative revenue, margin, OpEx, OI&E, or tax-rate guidance was provided in Q2 materials .

(No Q2 2025 earnings call transcript was available; themes reflect company press releases/8‑K commentary.)

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology initiatives (P3)	Selected for DARPA Venture Horizons; P3 “tactical edge artificial intelligence” development strengthens	Advancing AI‑driven tactical edge device prototypes; preparing field tests in agriculture/industrial settings	Moving from R&D toward field testing/commercialization
MGHL transaction	Expected to close in Q2 2025	Still pending; “believe this transaction will be completed in 2025”	Timing pushed out, still confident
Backlog trajectory	12/31/24 backlog $336k; Q1 backlog dipped to $295k	Q2 backlog improved to $527k (but below $737k in Q2 2024)	Recovering vs Q1, still below prior year
Net investment income/rates	Benefited in FY24; pressure emerged as yields moderated in Q1 2025	Lower yields continued to pressure net investment income	Ongoing headwind
Capital returns	No repurchases disclosed in Q1 release	Board activated $500k–$700k buyback; up to 100k shares	Initiating buyback program

“We do not expect to recognize any material benefits from our new initiatives in 2025 but expect to develop value in the medium term.” (Q2 8‑K press release) .
P3 is “developing new opportunities with AI‑driven tactical edge device prototypes” with field trials planned to measure efficiency and performance gains in agriculture and industrial environments .
On strategic direction (context from prior quarter’s commentary): “The growth in our Electronic Instruments business reflects our commitment to driving innovation and delivering high‑performance instruments to our customers.” — Marc Gabelli, Q4 2024 .

No Q2 2025 earnings call transcript was available; no Q&A themes or clarifications were disclosed in the 8‑K/press materials .

Wall Street consensus (S&P Global) for Q2 2025 was not available for EPS or revenue; no estimate counts were returned, suggesting limited sell‑side coverage for this micro‑cap. Therefore, beat/miss vs consensus cannot be determined (Values retrieved from S&P Global).*
Actual revenue for Q2 2025 was $0.924M; diluted EPS was ($0.01) .

Fundamentals: Q2 topline was soft YoY but sequentially stable, with a q/q gross margin lift as mix improved; profitability was pressured by lower net investment income and higher SG&A .
Liquidity/cash optionality: ~$41.7M cash and equivalents and ~$41.6M working capital provide ample flexibility to fund initiatives and repurchases despite near‑term earnings volatility .
Backlog inflected positively in Q2 versus Q1, a constructive data point for near‑term shipments; watch conversion in Q3/Q4 .
Capital return: the newly activated $500k–$700k buyback (up to 100k shares) introduces near‑term technical support and potential EPS accretion if executed at discounts to book .
Strategic catalysts: MGHL closing and P3 field trials are the narrative drivers; successful execution could expand addressable markets and diversify earnings beyond investment income .
Estimates: With no visible consensus, stock moves may key off company‑specific updates (backlog, repurchase cadence, MGHL progress) rather than headline “beats/misses” (Values retrieved from S&P Global).*
Risk monitor: continued pressure on net investment income if short‑term yields decline further and any delays/slippage in strategic initiatives timing .