Frequency Electronics Reports 9% Revenue Decline for Fiscal Year Ending April 30, 2026

Frequency Electronics, Inc. reported a decline in financial performance for the fiscal year ending April 30, 2026, with consolidated revenues of $63.2 million, a decrease of approximately 9% from $69.8 million in the previous fiscal year. The company experienced a significant drop in revenue from its FEI-NY segment, which accounted for 72% of total revenues, falling to $45.7 million from $53.3 million, a 14.3% decrease. In contrast, the FEI-Zyfer segment saw an increase in revenue of 16.5%, rising to $21.7 million from $18.7 million. The overall gross profit also decreased to $18.4 million, representing a gross margin of 29.1%, down from 43.1% in the prior year.

The company undertook a strategic restructuring, converting its subsidiary FEI-Elcom into a Delaware limited liability company effective April 30, 2026. This restructuring was part of a broader strategy to focus on higher-growth markets, including alternative position, navigation, and timing (ALT-PNT) solutions, quantum sensing, and proliferated satellite programs. The restructuring included a $3.8 million inventory write-down, which negatively impacted gross margins for the fiscal year. Additionally, the company incurred significant one-time charges related to changes in employee sick leave policies and other operational adjustments.

Operationally, Frequency Electronics reported a backlog of approximately $111 million as of April 30, 2026, a notable increase from $70 million at the end of the previous fiscal year. This backlog is expected to be filled primarily during the fiscal year ending April 30, 2027. The company’s workforce remained stable, with a total of 242 employees, and it continues to rely heavily on U.S. Government contracts, which accounted for approximately 91% of total sales in both fiscal years 2026 and 2025.

Looking ahead, Frequency Electronics anticipates a recovery in revenues as it prepares for increased demand in its core markets. The company plans to continue investing in research and development, with R&D expenses remaining consistent at approximately $6.1 million for both fiscal years. Management believes that the investments made in engineering talent and business process improvements will position the company for future growth, despite the challenges faced in fiscal 2026. The company also maintains a strong liquidity position, with working capital of $27 million as of April 30, 2026, and has entered into a $10 million revolving credit facility to support its operational needs.