Franklin Wireless Reports 4.3% Decrease in Net Sales, Achieves 40.5% Increase in Gross Profit

Franklin Wireless Corp. reported a decrease in net sales for the three months ended September 30, 2025, totaling $12.7 million, down 4.3% from $13.3 million in the same period last year. The decline was primarily attributed to reduced demand from major carrier customers in North America, which saw a drop of 4.4% in sales to $12.7 million. In contrast, sales in Asia increased significantly, albeit from a low base, rising to $11,909 from just $464 a year earlier. Despite the decrease in sales, the company achieved a gross profit of $2.9 million, a 40.5% increase from the previous year, resulting in a gross profit margin of 22.8%, up from 15.5%. This improvement was driven by a higher proportion of high-margin sales and reduced production costs.

Operating expenses also saw a decline, decreasing by 5.1% to $2.3 million, primarily due to lower legal and stock option expenses. Selling, general, and administrative expenses fell to $1.4 million, while research and development costs decreased to $949,752. The company reported a net income of $550,536, down from $648,656 in the prior year, but net income attributable to the parent company increased to $640,478 from $515,187, reflecting improved operational efficiency.

In terms of operational metrics, Franklin Wireless reported a significant increase in accounts receivable, which rose to $6.8 million from $1.3 million, indicating a potential delay in cash collections. The company’s total current assets increased to $47.4 million, up from $45.2 million, while total liabilities rose to $14.9 million from $13.4 million. The increase in liabilities was primarily due to higher accounts payable, which reached $9.6 million, up from $8.1 million.

Strategically, Franklin Wireless continues to focus on its joint venture with Forge International, which aims to enhance its telecommunications module offerings. The company holds a 60% stake in Sigbeat Inc., which is expected to drive sales and marketing efforts for its products. The company’s outlook remains cautious, with management noting that future revenue growth will depend on maintaining existing customer relationships, adapting to market demand shifts, and successfully launching new products. The company believes it has sufficient liquidity, with cash and short-term investments totaling approximately $38.7 million, to support its operations for at least the next year.