Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported September 14, 2026 · Beat 6 of last 7 quarters
RF Industries, Ltd. reported Q3 FY2026 revenue of $24M, a beat of 2.9% against consensus, and EPS of $0.19, a miss of 5.0%.
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RF Industries is a small-cap supplier whose record quarter was driven by diversified demand across aerospace, telecom, industrial, and distribution channels, with its DAC thermal cooling systems positioned for edge data center and AI infrastructure deployments. Management's expectation of DAC sales north of $10 million and accelerating into fiscal 2027, plus accelerating small cell activity, suggests edge and densification spending is translating into real orders even as carrier CapEx remains roughly flat. The company's US manufacturing footprint and diversified supply chain are framed as differentiators for responding to shifting tariff and geopolitical conditions.
RF Industries reported record quarterly revenue of $24.0 million, up 21% year over year and 16% sequentially, with gross profit of $8.5 million and gross margin of 35.6%. Operating income was $1.8 million (7.3% margin) versus $720 thousand a year ago, GAAP net income was $1.4 million or $0.12 per diluted share, and non-GAAP net income was $2.2 million or $0.19 per diluted share. Adjusted EBITDA rose approximately 71% to $2.7 million, or 11.1% of sales, exceeding the company's 10% long-term goal. Q3 bookings were $22.5 million, a book-to-bill of approximately 0.94x, and backlog stood at $18.6 million at July 31 and $19.8 million as of the call. Every product line contributed, with custom cabling leading, interconnect stepping up from Q2, and integrated systems gaining traction; the company also unified its engineering and product line management teams under a single structure.
Management expects fiscal Q4 sales to be roughly the same as or above the record $24 million delivered in Q3, with backlog and pipeline providing line of sight for the balance of the year. The company did not issue formal revenue or EPS guidance but framed the second half as tracking to plan, with Ray Bibisi noting year-to-date bookings are ahead of year-to-date sales. DAC (direct air cooling) is expected to exceed $10 million in sales this fiscal year and accelerate into fiscal 2027, with NEMA 4 and edge data center opportunities becoming more material in fiscal 27 rather than this year. Small cell deployments, which lagged earlier in the year, are described as accelerating into Q4 and fiscal 2027, and the large aerospace customer relationship is characterized as long-term with no expected pockets of weakness. Management reiterated that operating leverage should continue to drive margin expansion at revenue above $20 million, and that the unified engineering/product management structure and AI enablement initiatives are intended to translate into faster product launches and measurable revenue impact.
“With what we know today, we expect sales in our current fiscal fourth quarter to be roughly the same or above our Q3 sales level.”
on Q4 guidance
“Our expectation is to be north of $10 million in sales. And accelerating.”
on DAC business size
“Importantly, our year to date bookings are ahead of our year to date sales. Reflecting continued strong demand across our end markets.”
on Bookings momentum
Did small cell integrations improve as expected, and are the first-half disruptions completely behind you?
Dawson said the small cell market had been tough on deployment predictability but started doing what the company expected in Q3, with momentum picking up into Q4 and fiscal 2027. He acknowledged dollars delivered there are behind original expectations for the year, but said it is now starting to accelerate and he feels bullish into fiscal 2027.
Can you bracket the size of the DAC business this year and growth expectations into next fiscal year?
Dawson said the company does not give product-line dollars but noted DAC has grown from immaterial a couple of years ago to millions of dollars per quarter, with an expectation to be north of $10 million in sales and accelerating. He called it a sticky business and one of the big growth engines, expanding beyond traditional telecom and wireless into new markets.
A wireless carrier was about 17% of sales this quarter — is that the outdoor build season, and does that level carry into Q4?
Dawson said top customer rankings move around based on project timing, but the company is comfortable with continued meaningful contribution because it sells four or five critical items into each customer across different applications and budgets. He said annually customers grow with RFI as it enters more applications, markets, and locations, giving comfort for continuation into Q4 and fiscal 2027.