SOLITRON DEVICES INC (SODI)·Q3 2025 Earnings Summary

Executive Summary

• Q3 FY2025 revenue was $3.369M, down 19% year-over-year, while net income rose to $0.266M ($0.13 EPS) on improved operating performance and reduced other losses versus prior year .
• Bookings surged 66% YoY to $8.05M, rebuilding demand momentum; backlog ended at $12.28M (-5% YoY) providing visibility into future deliveries .
• Sequentially, revenue fell versus Q2 FY2025 ($3.581M) but profitability improved materially (net income $266k vs $17k) as Q2’s vendor quality issue (2,000+ parts scrapped) did not recur at the same magnitude .
• Management highlighted robust pipeline and silicon carbide development, noted an anticipated ~$5M order from the largest program “coming soon,” and moved to secure end‑of‑life components to support deliveries for 10–20 years—key catalysts for sentiment and backlog trajectory .
• No earnings call transcript was available; Wall Street consensus from S&P Global was unavailable at time of request, limiting estimate beat/miss analysis [GetEstimates error: S&P Global daily limit exceeded].

What Went Well and What Went Wrong

What Went Well

• Bookings strength: Q3 bookings were approximately $8.05M (+66% YoY), indicating demand recovery and program momentum .
• Profitability resilience: Despite lower sales, Q3 net income increased to $266k ($0.13 EPS), with narrative indicating adjusted operating income of $361k excluding non-cash items, reflecting improved core execution .
• Strategic positioning: Management emphasized increased interest in new product development including silicon carbide and prototypes in testing, supporting future revenue optionality .

What Went Wrong

• Revenue decline: Net sales decreased 19% YoY to $3.369M due to lower beginning backlog and increased rework; backlog ended at $12.28M (-5% YoY), signaling demand timing variability .
• Vendor quality headwinds: In Q2 a plating supplier issue led to fully reserving 2,000+ parts, weighing on revenue and margins; while conditions improved in Q3, the sequential sales still declined from Q1 ($3.967M) and Q2 ($3.581M) .
• Orders still pending: The anticipated ~$5M order from the largest program had not been received by Q3 reporting, with management stating it was expected “soon,” leaving near-term visibility partly dependent on timing .

Financial Results

Income Statement Comparison

Notes:

• Discrepancy: Q3 operating income appears as $0.326M in the table (gross profit minus SG&A), while the press release narrative states “reported operating income was $283,000,” then “adjusted” operating income of $361,000 excluding intangible amortization and non‑operating contingent interest costs .
• Q2 “adjusted” operating income ($103k) excludes intangible amortization and non‑operating interest costs .

KPIs

Segment/Contribution (disclosed items)

Guidance Changes

Earnings Call Themes & Trends

No Q3 FY2025 earnings call transcript available; themes below reflect disclosures across Q1–Q3 press releases.

Management Commentary

• “Reported operating income was $283,000 in the fiscal 2025 third quarter… adjusted… $361,000” (excludes $52k intangible amortization and $26k non‑operating interest costs related to contingent consideration) .
• “Bookings in the quarter were significantly higher than the prior year quarter… We still have not received the order from our largest program… approximately $5 million and will be coming soon” .
• “We continue to see increased interest in new product development, including silicon carbide. We have developed various prototypes for testing by potential customers and continue to be optimistic about creating additional revenue sources” .

Q&A Highlights

• No earnings call transcript or Q&A available for Q3 FY2025; company communicated results and outlook via press releases and 8‑K filings .

Estimates Context

• Wall Street consensus (S&P Global/Capital IQ) for Q3 FY2025 EPS and revenue was unavailable at the time of request; attempted retrieval returned an S&P Global daily limit error. As a result, we cannot assess beat/miss versus consensus for this quarter [GetEstimates error: S&P Global daily limit exceeded].
• Given absence of consensus, near-term estimate adjustments are likely to focus on stronger bookings trajectory ($8.05M) and management’s commentary about pending ~$5M program order and long-tail end‑of‑life deliveries, which may support improved revenue cadence in subsequent quarters .

Key Takeaways for Investors

• Demand is firming: Q3 bookings of $8.05M and backlog of $12.28M point to improving order flow; watch for the ~$5M program order as a near-term catalyst .
• Profitability recovery: Q3 net income of $266k ($0.13 EPS) versus Q2’s $17k underscores normalization after vendor quality issues; adjusted OI highlights underlying momentum .
• Revenue cadence remains timing‑dependent: Sequential sales declines from Q1 ($3.967M) to Q2 ($3.581M) to Q3 ($3.369M) reflect back‑log timing/rework; stronger bookings should begin to translate into steadier deliveries .
• Strategic longevity: End‑of‑life component stocking to support deliveries over 10–20 years stabilizes long‑tail revenue and enhances customer retention .
• Technology optionality: Silicon carbide prototypes and customer testing expand design‑win potential and diversify revenue sources .
• Monitoring items: Resolution of supplier cost recovery, timing of large program orders, and any changes in defense budget appropriations remain key drivers for backlog conversion and topline trajectory .
• No consensus available: With S&P Global estimates unavailable, price action may be driven more by bookings/backlog updates and order announcements than beat/miss optics this quarter [GetEstimates error: S&P Global daily limit exceeded].