Franklin Wireless Reports 20.8% Decline in Net Sales for Fiscal Year Ending June 30, 2026

Franklin Wireless Corp. reported a significant decline in financial performance for the fiscal year ending June 30, 2026, with net sales dropping by 20.8% to $36.5 million, down from $46.1 million in the previous year. The decrease was primarily attributed to the discontinuation of a key mobile hotspot product by a major customer, which had been expected to generate substantial revenue. In North America, sales fell by 20.8% to $36.5 million, while sales in Asia increased significantly, albeit from a low base, rising to $36,403 from $5,657 in the prior year.

The company's gross profit also decreased, falling to $6.3 million, a 21% decline from the previous year's $7.9 million. The gross profit margin remained relatively stable, at 17.1% compared to 17.2% in the prior year. Operating expenses decreased by 17.1% to $8.9 million, driven by a reduction in selling, general, and administrative expenses, which fell by 14.6% to $5.7 million. This reduction was partly due to the non-recurrence of a significant bonus paid in the previous year. However, research and development expenses also decreased by 21.2% to $3.2 million, reflecting a strategic shift in focus towards fixed wireless routers and telecommunications modules.

Franklin Wireless has been undergoing a strategic transition to reduce its reliance on mobile hotspot products, prompted by declining demand for certain legacy products. The company holds a 66.3% stake in Franklin Technology Inc., which focuses on research and development, and a 60% stake in Sigbeat Inc., which is responsible for global sales and marketing of telecommunications modules. The company is also exploring the integration of artificial intelligence-compatible hardware into its offerings, although no commercial implementation has occurred yet.

As of June 30, 2026, Franklin Wireless had a total of 69 employees across its operations. The company reported a net loss of $6.9 million for the fiscal year, compared to a loss of $140,429 in the previous year. This loss was exacerbated by a significant litigation settlement that resulted in a $4.6 million liability. The company’s liquidity position remains strong, with cash and short-term investments totaling approximately $32 million, which it believes will be sufficient to fund operations for the next twelve months.

Looking ahead, Franklin Wireless anticipates that its revenue growth will depend on maintaining existing customer relationships, increasing demand for wireless data products, and successfully launching new products. The company is also aware of the challenges posed by industry-wide supply constraints and rising costs for certain components, which could impact its ability to meet customer demands and maintain profitability.