FEIM - Frequency Electronics, Inc.

Frequency Electronics, Inc. designs and manufactures precision frequency control products and timing systems, including quartz oscillators, microwave components, and satellite communication subsystems used in defense, space, and commercial applications. The company operates primarily on government defense contracts and commercial satellite programs, supplying directly to prime contractors such as Lockheed Martin, Northrop Grumman, and government agencies including the U.S. Department of Defense. Revenue is approximately $50-60M annually, with the majority derived from U.S. defense and space markets. Products are embedded in missile systems, GPS satellites, and military communications platforms requiring high-stability frequency references.

Past Year Trends

• Revenue grew 26% year-over-year to $69.8 million in FY2025 (ended April 30, 2025), with Q4 FY2025 reaching $20.0 million — the highest quarterly revenue in 25 years. (Bullish)
• Net income surged approximately 325% year-over-year to $23.7 million ($2.47 per diluted share) in FY2025 versus $5.6 million ($0.59 per share) in FY2024, driven by operating leverage on higher satellite program revenues. (Bullish)
• Satellite program revenues grew 76% year-over-year to $40.9 million, rising from 42% to 59% of total consolidated revenue in FY2025, increasing concentration risk in a single end-market. (Neutral)

Next Year Trends

• The internally developed TuRbo compact rubidium atomic clock is expected to generate $1–2 million in FY2026 revenue from already-received orders, with management projecting a $20+ million annual market opportunity by FY2027 as drone and aircraft radar applications adopt smaller-form-factor timing hardware. (Bullish)
• FEIM was awarded a Leidos subcontract in March 2025 as part of a $12 million Defense Innovation Unit Transition Quantum Sensing Program to develop a Nitrogen Vacancy Diamond Magnetometer with MIT Lincoln Labs, representing a new revenue stream contingent on successful lab-to-deployment transition. (Bullish)
• Backlog declined to $70 million as of April 30, 2025 from $78 million a year prior, and the company's growing revenue concentration in satellite payloads (59% of FY2025 revenue) creates exposure to lumpy program timing and potential delays in government satellite procurement. (Bearish)

Red Flags

No severe red flags identified as of August 2025.