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SD

SOLITRON DEVICES INC (SODI)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 revenue rose 11% year over year to $3.99M, up sequentially from $2.70M in Q1; net loss of $0.23M ($-0.11 EPS) was driven by one-time stock awards ($0.225M) and COO option accrual ($0.105M). Backlog reached a record $18.64M (+146% YoY) and bookings were $4.32M (+147% YoY) .
  • Gross margin held at 21% YoY, but tariffs and other items pressured Q2 margin; SG&A rose on stock compensation, taking operating income to a loss of $0.29M .
  • Management reaffirmed the trajectory for steadier sales levels in Q3–Q4; Q3-to-date bookings were a record ~$13.8M and the expected AMRAAM Lot 39 order was received, lifting backlog to ~$29M as of early November (catalyst) .
  • No earnings call transcript was filed; Wall Street consensus estimates (S&P Global) are unavailable for EPS and revenue, limiting beat/miss analysis (S&P Global) [GetEstimates].

What Went Well and What Went Wrong

What Went Well

  • Revenue inflected in Q2 to $3.99M from $2.70M in Q1; bookings grew 147% YoY and backlog increased 146% YoY to $18.64M (“backlog continues to remain at record levels”) .
  • Strategic programs momentum: management “expects the AMRAAM Lot 39 order will be received in fiscal 2026 third quarter” (subsequently confirmed in Q3-to-date bookings release) .
  • New product initiatives: “increased interest in new product development, including silicon carbide,” with prototypes under customer testing, supporting medium-term growth optionality .

What Went Wrong

  • Profitability: net loss of $0.23M despite higher sales, primarily due to a “one-time fully vested stock grant…$225,000 and a $105,000 accrual related to the COO’s stock options,” plus tariff impacts on gross margin .
  • SG&A intensity: SG&A rose to $1.13M (+64% YoY), 28% of sales vs 19% in prior-year Q2, reflecting stock-based comp and higher sales-related costs .
  • Limited external visibility: no earnings call transcript and no analyst consensus from S&P Global, constraining immediate beat/miss framing for investors (S&P Global) [ListDocuments] [GetEstimates].

Financial Results

Quarterly YoY Comparison (Q2 FY2026 vs Q2 FY2025)

MetricQ2 FY2025 (Aug 31, 2024)Q2 FY2026 (Aug 31, 2025)
Revenue ($USD Millions)$3.58 $3.99
Gross Profit ($USD Millions)$0.74 $0.84
Gross Margin (%)21% 21%
SG&A ($USD Millions)$0.69 $1.13
Operating Income (Loss) ($USD Millions)$0.05 ($0.29)
Net Income (Loss) ($USD Millions)$0.02 ($0.23)
Diluted EPS ($USD)$0.01 ($0.11)
Units Shipped (K)16.12 20.81
Bookings ($USD Millions)$1.75 $4.32
Backlog ($USD Millions)$7.57 $18.64

Sequential Comparison

MetricQ4 FY2025 (Feb 28, 2025)Q1 FY2026 (May 31, 2025)Q2 FY2026 (Aug 31, 2025)
Revenue ($USD Millions)$3.13 $2.70 $3.99
Operating Income (Loss) ($USD Millions)($0.17) ($0.38) ($0.29)
Net Income (Loss) ($USD Millions)($0.37) ($0.34) ($0.23)
Diluted EPS ($USD)($0.18) ($0.16) ($0.11)
Backlog ($USD Millions)$18.11 $18.26 $18.64

Geographic Mix (Q2 FY2026)

RegionQ2 FY2025Q2 FY2026
United States ($USD)$3.58M $3.87M
Europe & Australia ($USD)$0.002M $0.10M
Far East & Middle East ($USD)$0.000M $0.018M
Canada & Latin America ($USD)$0.000M $0.000M
Total ($USD)$3.58M $3.99M

Customer Concentration (Q2 FY2026)

CustomerQ2 FY2025 (% of sales)Q2 FY2026 (% of sales)
ConMed Linvatec42% 40%
RTX (Raytheon)27% 25%
L3Harris14% —
Total (≥10% customers)83% 65%

KPIs

KPIQ2 FY2025Q2 FY2026
Units Shipped16,120 20,805
Bookings ($USD Millions)$1.75 $4.32
Backlog ($USD Millions)$7.57 $18.64

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales trajectoryQ3 FY2026“Sales to pick up at end of fiscal second quarter, before reaching a steadier level in the fiscal third quarter.” “Sales…reach a steadier level in the fiscal 2026 third and fourth quarters.” Maintained
AMRAAM Lot 39Q3 FY2026“Expectation AMRAAM Lot 39 order will be received in fiscal 2026 third quarter; ~10% higher quantity, higher pricing.” Order received; Q3-to-date bookings ~$13.8M; backlog ~$29.0M as of Nov 5, 2025 Achieved
Margin headwindsQ2 FY2026Not specifiedTariffs and other items negatively impacted gross margin in Q2 New disclosure
Formal revenue/EPS guidanceFY2026None issuedNone issuedMaintained

Earnings Call Themes & Trends

No Q2 FY2026 earnings call transcript was available (no documents found) [ListDocuments].

TopicPrevious Mentions (Q4 FY2025, Q1 FY2026)Current Period (Q2 FY2026)Trend
Defense program demand (AMRAAM/HIMARS)AMRAAM production expected to double in CY2025; strong HIMARS demand; bookings lag sales due to order timing Expect AMRAAM Lot 39 in Q3; confirmed received in Q3-to-date bookings Improving visibility
Supply chain/tariffsNot highlighted previouslyTariffs and other items pressured Q2 gross margin Headwind emerged
New product development (SiC)“Increased interest…including silicon carbide; prototypes under testing” Continued optimism for SiC prototypes and new revenue sources Ongoing execution
Bookings/backlog trajectoryQ4 FY2025 backlog $18.11M (+62% YoY) Q2 FY2026 backlog $18.64M (+146% YoY); Q3-to-date bookings record ~$13.8M Strengthening
Macro/DoD budgetUPL notes AMRAAM production increase request; subject to Congressional approval Reiterated dependence on government contracts; macro risks in forward-looking statements Policy-dependent

Management Commentary

  • “Backlog continues to remain at record levels. Backlog increased from $18.26 million at the end of fiscal 2026 first quarter to $18.64 million at the end of fiscal 2026 second quarter.”
  • “The decrease in profit despite increased sales was primarily due to a one-time fully vested stock grant…$225,000 and a $105,000 accrual related to the COO’s stock options. Tariffs and a few other miscellaneous items negatively impacted gross margin…”
  • “Bookings…have historically been lumpy and are difficult to predict…we expect AMRAAM Lot 39 order will be received in the fiscal 2026 third quarter…approximately 10% above the prior year’s order with pricing higher…”
  • “We continue to see increased interest in new product development, including silicon carbide…optimistic about creating additional revenue sources.”

Q&A Highlights

  • No Q2 FY2026 earnings call transcript was filed; no Q&A available for analysis [ListDocuments].

Estimates Context

  • S&P Global consensus for Q2 FY2026 EPS and revenue appears unavailable; GetEstimates returned no consensus values for EPS or revenue and only reflected actual revenue in the dataset (Values retrieved from S&P Global) [GetEstimates].
  • Given lack of coverage, estimate revisions are unlikely to be an immediate driver; focus near term on record Q3-to-date bookings and AMRAAM order timing as fundamental catalysts .

Key Takeaways for Investors

  • Revenue recovery underway; sequential improvement from Q1 to Q2 alongside record bookings and backlog supports stronger 2H trajectory, with AMRAAM Lot 39 now confirmed (near-term catalyst) .
  • Q2 profitability was depressed by one-time compensation charges and tariff headwinds; absent these, operating profile would have been closer to break-even on higher revenue .
  • Customer concentration remains high but diversified versus prior year; ConMed and RTX together at 65% of Q2 sales vs 83% prior-year, reducing single-program risk marginally .
  • Watch margins: tariff and cost factors constrained gross margin; monitor SG&A normalization post stock grants and potential pricing improvements tied to expiring multi-year agreements .
  • With limited analyst coverage, price discovery may hinge on company updates; the Nov 5 bookings release and subsequent backlog progression are likely stock-relevant events .
  • Medium-term optionality from silicon carbide prototypes and MEI integration could broaden revenue sources beyond core defense programs .
  • Liquidity adequate: $2.85M cash at Q2 with positive operating cash flow in 1H; continuing share repurchases signal capital discipline .