Executive Summary

Q3 2025 revenue grew 7.2% year-over-year to $14.17M, with diluted EPS of $0.63; gross margin improved sequentially to 44.3% but remained below last year’s 47.8% due to mix and tariffs .
Versus S&P Global consensus, revenue was a slight beat ($14.17M vs $14.10M*), EPS was a miss ($0.63 vs $0.69*), and EBITDA missed ($2.90M vs $3.32M*) .
Backlog ended Q3 at $58.8M (+47.9% YoY), reflecting robust aerospace and defense demand; sequentially down from $61.2M in Q2 as orders translated to shipments .
Stock reaction: despite operational strength, shares fell post-earnings; one outlet reported a 7.48% decline, closing at $53.45 on the day of the call .

What Went Well and What Went Wrong

Sequential margin improvement for a second quarter as operational initiatives took hold: “this marks two consecutive quarters of sequential improvement” in gross margin, aiding profitability trajectory .
Strong demand across end-markets: revenue growth driven by avionics, space, and industrials product shipments, supporting diversified demand beyond defense .
Backlog strength: $58.8M at quarter-end (+47.9% YoY), underpinned by robust aerospace and defense programs and a surge in avionics/space orders .

Gross margin pressure vs prior year: 44.3% vs 47.8% given product mix and higher tariff-related costs; management highlighted tariffs as a new structural headwind starting in 2025 .
EPS missed S&P Global consensus ($0.63 vs $0.69*), and EBITDA missed ($2.90M vs $3.32M*), reflecting margin compression and higher OpEx from R&D, commissions, and stock comp .
Higher tax expense including a one-time adjustment reversing a deferred tax asset associated with capitalized R&D costs, weighing on net income .

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$12.73	$13.28	$14.17
Diluted EPS ($USD)	$0.56	$0.53	$0.63
Gross Margin (%)	42.5%	43.6%	44.3%
Adjusted EBITDA ($USD Millions)	$2.50	$2.42	$3.18
Operating Income ($USD Millions)	$2.01	$1.84	$2.55

Metric	Q3 2024	Q3 2025 Actual	Consensus Estimate
Revenue ($USD Millions)	$13.21	$14.17	$14.10*
Diluted EPS ($USD)	$0.81	$0.63	$0.69*
EBITDA ($USD Millions)	$3.22	$2.90	$3.32*

Values marked with an asterisk (*) retrieved from S&P Global.

KPI	Q1 2025	Q2 2025	Q3 2025
Backlog ($USD Millions)	$55.5	$61.2	$58.8
Cash and Equivalents ($USD Millions)	$13.66	$15.53	$18.33

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Guidance	FY/Q4 2025	None provided	None provided	Maintained (no formal guidance)

The company did not issue quantitative revenue, margin, OpEx, OI&E, tax rate, or segment guidance in Q3 materials .

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q1 2025)	Current Period (Q3 2025)	Trend
Tariffs/Macro	Gross margin impact from tariffs and mix	Initial tariff impact; pursuing FAR exemptions; diversified sourcing; no demand impact	Higher tariff-related costs cited for YoY margin compression	Persistent headwind; mitigation efforts ongoing
Backlog/Demand	Backlog $61.2M (+35% YoY)	Backlog $55.5M (+20% YoY)	Backlog $58.8M (+47.9% YoY) with aerospace/defense and avionics/space orders	Strong demand; slight sequential dip as orders convert to shipments
Product Performance (Avionics/Space/Industrials)	Growth driven by defense program shipments	Growth led by defense product shipments	Strength in avionics, space, and industrials shipments	Broadening demand beyond core defense
Partnerships/Technology	—	—	Partnership with Indiana Micro to market tunable microwave filters; scaling for volume production	Portfolio expansion; potential future revenue/mix shift
Regulatory/Legal (Warrants)	—	Distributed warrant dividend Apr 25	Warrants trigger achieved; exercisable through Dec 11, 2025	Corporate action; potential capital structure impact
R&D Execution/OpEx	—	Higher R&D and commissions noted	Higher R&D, commissions, stock comp and corporate expenses impacting OpEx	Ongoing investment to support growth
Supply Chain	—	Imports (JP/CN/KR), Noida finishing; redundancy and pricing focus	Tariff headwinds persist; operational initiatives cited	Mitigation and optimization continue

Sources for Q3 call themes and participants: Seeking Alpha and MarketScreener transcript pages .

“The third quarter delivered 7.2% revenue growth year-over-year… this marks two consecutive quarters of sequential improvement. These gains validate our operational initiatives… positioning us to strengthen profitability amid a dynamic market.” — Cameron Pforr, CEO .
Margin commentary: gross margin decline vs prior year primarily due to product mix and higher tariff-related costs .
Backlog commentary: demand remains robust across aerospace/defense, new program launches, and a surge in avionics/space orders .
Strategic expansion: “We are excited to announce our partnership with Indiana Microelectronics… to manufacture their designs and go to market with high-performance tunable filters” — Cameron Pforr .

Analysts focused on R&D priorities and design engineering hiring, tariff mitigation strategies, and the revenue potential of the Indiana Microelectronics partnership; management also discussed opportunities in telecom and industrial markets .
Call participants included EVP Finance Linda Biles and CEO Cameron Pforr; Q&A featured Sidoti & Company and others .
Clarifications: continued tariff impact on margins, with mitigation via FAR exemptions and supply chain adjustments; OpEx elevated by R&D and stock-based compensation .

EPS missed S&P Global consensus ($0.63 actual vs $0.69*), driven by lower gross margin and higher OpEx (R&D, commissions, stock comp) and a higher tax expense including a one-time deferred tax asset reversal .
Revenue slightly beat ($14.17M actual vs $14.10M*) on strength in avionics, space, and industrials .
EBITDA missed ($2.90M actual vs $3.32M*), reflecting margin mix and tariff headwinds; Adjusted EBITDA was $3.18M .
Values marked with an asterisk (*) retrieved from S&P Global.

Mixed quarter vs consensus: slight revenue beat but EPS and EBITDA misses; underscores sensitivity to mix and tariff costs — watch margin trajectory into Q4 and 2026 .
Backlog remains elevated and diversified; sequential dip from Q2 likely reflects conversion to shipments rather than demand weakness — supports multi-quarter revenue visibility .
Tariffs are the key structural headwind; monitor progress on FAR exemptions and supply chain localization/diversification to restore prior margin levels .
Strategic initiatives (Indiana Micro partnership) could add new high-performance RF products and scale production, potentially improving mix and pricing power over time .
Elevated OpEx from R&D and stock comp reflects investment phase; evaluate ROI via new program wins (e.g., multi-domain data link production contract) and future backlog quality .
Leadership continuity: Cameron Pforr appointed CEO post-quarter, signaling continued focus on operational execution and defense-aligned strategy .
Near-term trading: post-print drawdown suggests positioning reset; catalysts include Q4 margin progression, warrant exercise dynamics, and any additional program awards or avionics/space order momentum .