Executive Summary

Q2 FY2025 revenue fell 24% year over year to $74.7M and declined 11.9% sequentially from $84.8M in Q1; net loss widened to $9.5M (−$1.55 EPS), including approximately $3.3M in non-cash financing and warrant-related expenses .
Gross margin improved sequentially to 9.2% from 7.6% in Q1 (Q4 FY2024: 5.2%), while operating margin turned slightly positive at 0.7% (Q1: −0.3%, Q4: −2.5%), reflecting restructuring progress and October operating profitability .
Management expects “depressed revenue levels to continue” into Q3 due to holiday timing, but sees signs of demand normalization as excess customer inventories are largely consumed; several modest orders were pulled in and new opportunity activity increased .
A sale/leaseback of the Elk Grove Village property closed on Dec 13, 2024, reducing bank debt and expected to drive a one-time ~$7M capital gain in Q3 FY2025; de-leveraging efforts continue with Lincoln International .
S&P Global Street estimates for SGMA were unavailable via our SPGI integration at the time of writing; result-versus-consensus comparisons could not be performed (consensus unavailable).

What Went Well and What Went Wrong

What Went Well

Sequential margin progress: operating margin turned positive in Q2 (0.7%) and the company reported “an operating profit in October,” indicating restructuring benefits are taking hold .
Early demand normalization signals: management believes excess customer component inventory “has in large part been consumed,” which “should lead to overall demand increasing in 2025,” and noted modest order pull-ins and increased new opportunity activity .
Balance sheet de-levering milestone: executed an Elk Grove Village sale/leaseback (three-year lease with two one-year options), reducing bank debt and setting up a Q3 one-time ~$7M capital gain; continued strategic work with Lincoln International .
Management quote: “Our restructuring efforts are now showing a significant impact. We continue to right-size our Company offering significant upside for the operations.” .

What Went Wrong

Revenue softness persisted: Q2 revenue of $74.7M was down $24.0M YoY and down $10.1M sequentially versus Q1’s $84.8M, with management guiding softness to continue in Q3 due to holiday timing in NA and Asia .
Financing-related charges: approximately $3.3M of expenses (debt modification, expensing deferred financing costs, lender warrants remeasurement) impacted Q2, contributing to the net loss .
Macro and supply chain overhang: softness tied to the “general economy” and exacerbated by prior supply chain volatility and customer overordering; management’s backlog remains soft in the short term .

Financial Results

Consolidated P&L and Margins

Metric	Q4 FY2024	Q1 FY2025	Q2 FY2025
Revenue ($USD Millions)	$81.14	$84.78	$74.72
Net Income ($USD Millions)	$(3.38)	$(3.29)	$(9.47)
Diluted EPS ($USD)	$(0.55)	$(0.54)	$(1.55)
Gross Profit ($USD Millions)	$4.26	$6.41	$6.90
Operating Income ($USD Millions)	$(1.99)	$(0.22)	$0.53
Gross Margin %	5.2%	7.6%	9.2%
Operating Margin %	−2.5%	−0.3%	0.7%
Street Revenue Consensus ($USD)	N/A (unavailable)	N/A (unavailable)	N/A (unavailable)
Street EPS Consensus ($USD)	N/A (unavailable)	N/A (unavailable)	N/A (unavailable)

Notes:

Gross Margin % computed from reported gross profit and net sales; Operating Margin % computed from reported operating income and net sales .
Street estimates were unavailable via S&P Global for SGMA at the time of writing; comparisons to consensus could not be provided.

Balance Sheet Highlights

Metric	Apr 30, 2024	Jul 31, 2024	Oct 31, 2024
Total Assets ($USD Millions)	$223.79	$218.84	$204.66
Stockholders’ Equity ($USD Millions)	$66.07	$62.85	$53.45
Current Assets ($USD Millions)	$175.90	$167.89	$160.92
Current Liabilities ($USD Millions)	$145.89	$145.42	$138.58

Segment Breakdown

SigmaTron operates one reportable segment (EMS: PCB assemblies, electro-mechanical subassemblies, box-build products) . No segment revenue breakdown is provided.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue trajectory	Q3 FY2025	None specific	“Depressed revenue levels to continue” due to holiday timing in NA and Asia	Maintained cautious outlook
One-time capital gain	Q3 FY2025	None specific	~$7M capital gain from Elk Grove Village sale/leaseback	New item (raised)
Inventory reduction	Q3 FY2025	Ongoing focus to reduce working capital	“Expect significant gains” in inventory reduction during Q3	Strengthened execution
De-leveraging/bank debt	Ongoing	Engaged Lincoln International; bank covenant waivers and amendments in FY2024	Sale/leaseback executed, reduced bank debt; continued strategic options	Progressed

No explicit numeric guidance ranges (revenue, margins, OpEx, tax rate) were provided in Q2 materials.

Earnings Call Themes & Trends

No Q2 FY2025 earnings call transcript was available in the filings repository; themes below reflect cross-period management commentary from Q4 FY2024 and Q1/Q2 FY2025 press releases.

Topic	Previous Mentions (Q4 FY2024, Q1 FY2025)	Current Period (Q2 FY2025)	Trend
Demand softness/macro	Industry-wide slowdown; softness continued into Q1 FY2025	Softness persisted; backlog soft short term; holidays to weigh on Q3	Stabilizing after Q3, potential 2025 recovery
Supply chain/overordering	Component lead times normalizing; inventory reduction a focus	Customers’ excess inventory largely consumed; signals of demand improvement	Improving normalization
Inventory reduction	Continued focus; reduced working capital needs	Modest Q2 progress; “expect significant gains” in Q3	Accelerating
De-leveraging strategy	Bank covenant waivers; engaged Lincoln International	Sale/leaseback executed; reduced bank debt; ~$7M capital gain next quarter	Material progress
Profitability trajectory	Q4 loss; Q1 operating loss	October operating profit; Q2 operating margin positive	Improving
Customer activity	Backlogs intact; quoting new platforms	Modest order pull-ins; increased new opportunity activity	Turning positive

Management Commentary

“Unfortunately the softness we’ve seen in our revenue stream has continued during the second quarter… We currently expect the depressed revenue levels to continue for our third fiscal quarter, in part because of the holidays in December for North America and at the end of January in Asia.” — Gary R. Fairhead, CEO .
“On a positive note, the Company reported an operating profit in October, demonstrating that our restructuring efforts are now showing a significant impact. We continue to right-size our Company offering significant upside for the operations.” .
“We believe that the excess inventory that was the result of [customer overordering] has in large part been consumed, which should lead to overall demand increasing in 2025.” .
“On December 13, 2024, SigmaTron entered into a sale/leaseback of our Elk Grove Village property… we will have a one-time capital gain of approximately $7 million to report in our third quarter results.” .

Q&A Highlights

No Q2 FY2025 earnings call transcript was available in the filings repository; no Q&A highlights could be reviewed for this period.

Estimates Context

S&P Global Wall Street consensus estimates for SGMA were unavailable via our SPGI integration due to missing company mapping; as a result, comparisons versus consensus (revenue and EPS) could not be provided.
Implication: In the absence of consensus, investor focus should shift to sequential trajectory and qualitative demand normalization signals, plus near-term non-recurring gain in Q3.

Key Takeaways for Investors

Near-term caution: Management expects Q3 revenue to remain depressed due to holiday timing; demand normalization is more likely to emerge post-Q3 as excess customer inventories are worked down .
Margin inflection underway: Operating margin turned positive and October was profitable, signaling restructuring traction despite weak revenue; monitor sustainability as volumes recover .
Balance sheet strategy progressing: Sale/leaseback reduced bank debt and sets up a ~$7M non-recurring capital gain in Q3; continued de-leveraging with Lincoln International is supportive of flexibility .
Watch working capital: Inventory reduction is a key focus with “significant gains” targeted in Q3, which may further improve cash conversion and margin resilience .
Catalysts: Q3 print will include the sale/leaseback gain; any evidence of backlog strengthening or accelerated order pull-ins in early 2025 could be stock-positive .
Risk factors: Macro softness and pricing pressures, plus prior financing-related expenses, remain headwinds; continued covenant compliance under amended agreements is a watch item .
Positioning: With one segment (EMS) and multi-geography footprint, SGMA is leveraged to broad electronics demand; a return to normalized lead times and consumption of excess inventories improves the setup for FY2026 .

SIGMATRON INTERNATIONAL INC (SGMA)·Q2 2025 Earnings Summary