Short answer
FREQUENCY ELECTRONICS INC (FEIM) filed its fiscal 2026 10-K annual report with the SEC on Jul 17, 2026. It reported revenue of $63M (−9.4% year over year) and net income of −$903,000.
- Top risk flagged: Regulatory risk: OFAC sanctions on Morion, a subsidiary of Russian Gazprombank, designated Specially Designated National on Oct 30, 2024, blocking all commercial ties
FY2026 key financial metrics · XBRL
- Revenue
- $63M
- −9.4% YoY
- Net income
- −$903,000
- −103.8% YoY
- Operating margin
- -4.7%
- −21.6 pp YoY
- Gross margin
- 29.1%
- −14.0 pp YoY
- EPS (diluted)
- −$0.09
- −103.7% YoY
- ROE
- -1.6%
- −44.2 pp YoY
- Operating cash flow
- $1M
- +189.8% YoY
Source: XBRL data from the FREQUENCY ELECTRONICS INC (FEIM) FY2026 10-K on SEC EDGAR. USD.
FREQUENCY ELECTRONICS INC FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business model: Precision time and frequency generation technology for commercial and U.S. Government satellite and secure communications systems
- New emphasis on quantum sensing products (magnetometers, Rydberg sensors) leveraging atomic clock physics, targeting a growing market segment
- Strategic focus shift: Prioritizing satellite payloads, C4ISR, and Electronic Warfare markets for significant revenue growth opportunities
- Backlog increased to $111M from $70M prior year, with 73% expected to be filled in fiscal 2027
- Revenue contribution shift: FEI-NY segment revenue 72% in 2026 (down from 76% in 2025), FEI-Zyfer up to 34% from 27%, reflecting expanded GPS tech integration
Management Discussion & Analysis
- Revenue $63.2M, down 9.4% YoY from $69.8M; FEI-NY down 14.3% to $45.7M, FEI-Zyfer up 16.5% to $21.7M
- Gross margin 29.1% vs 43.1%, operating loss $(3.0)M vs $11.7M income, SG&A 24.4% vs 17.6%, R&D 9.5% vs 8.7%
- Best segment: FEI-Zyfer revenues $21.7M up 16.5%; Worst segment: FEI-NY revenues $45.7M down 14.3%
- Operating cash flow $1.3M positive vs $(1.4)M prior year; Capex $2.9M vs $1.8M; $1.6M spent on share repurchases; $9.6M special dividend paid in prior year
- Management outlook: focus on ALT-PNT, quantum sensing, space defense, satellite programs growth; expects operating leverage as revenue increases; risks include reliance on key customers, inflation impact, and integration of new credit facility
Risk Factors
- Regulatory risk: OFAC sanctions on Morion, a subsidiary of Russian Gazprombank, designated Specially Designated National on Oct 30, 2024, blocking all commercial ties
- Geopolitical risk: 91% of sales depend on U.S. Government programs, subject to funding cuts, continuing resolutions, and debt ceiling risks impacting contract funding
- Supply chain risk: Dependence on space-qualified suppliers for key materials like circuit boards, risking delays, increased costs, and redesign needs due to supplier quality or consolidation issues
- Competitive risk: LEO commercial satellite systems with lower life requirements threaten demand for Frequency’s high-performance, longer-lived geosynchronous orbit products
- Financial risk: $10 million senior secured revolving credit facility covenants on leverage and fixed charge coverage risk default and acceleration of debt repayments
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