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    BKTI
    Earnings call· Jun 2026(Q2 FY26)

    BK Technologies Q2 FY26 earnings call BKTI

    Aug 13, 2026 Source

    Executive summary

    BK Technologies Q2 FY26 — Double-Digit Revenue Growth and Record Cash Balance

    BK Technologies delivered solid Q2 FY26 results with double-digit revenue growth and significant gross margin expansion, driven by strong demand for its BKR Series radios and BK ONE solutions. Despite increased investments in R&D and higher tax provisions impacting net income, the company achieved a record cash balance and strong free cash flow, reiterating its full-year guidance and focusing on strategic product development and market transitions.

    Highlights

    5

    • Revenue grew 10.6% to $23.4 million, extending TTM revenue growth to 15.7%.

    • Gross margin expanded 445 basis points to 51.9% due to favorable product mix and BKR 9000 adoption.

    • Achieved a record cash balance of $29.9 million, up from $22.8 million at the end of 2025, with no debt.

    • Trailing 12-month after-tax free cash flow reached $19 million, a 49% year-over-year increase.

    • Received purchase orders for over 200 BKR 9500 radios sight unseen and completed initial beta testing for BKR Play with positive feedback.

    Concerns

    5

    • GAAP net income decreased to $3.2 million ($0.79 diluted EPS) from $3.7 million ($0.96 diluted EPS) YoY, primarily due to a $560,000 increase in income tax provision.

    • Operating margin declined from 18.9% in Q2 FY25 to 16.4% in Q2 FY26 due to higher R&D investments.

    • Non-GAAP adjusted EBITDA margin decreased from 20.9% in Q2 FY25 to 19.4% in Q2 FY26.

    • Non-GAAP adjusted EPS decreased to $1.01 from $1.30 in Q2 FY25.

    • Selling, general and administrative expenses increased to $8.3 million from $6 million YoY, reflecting higher engineering costs.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Revenue
    at least $90 million
    high materiality
    High
    Full-year 2026 Gross Margin
    50% or greater
    high materiality
    High
    Full-year 2026 GAAP EPS
    $3.15
    high materiality
    High
    Full-year 2026 Non-GAAP Adjusted EPS
    $3.55
    high materiality
    High
    BKR 9500 Customer Deliveries
    start in the first half of 2027
    medium materiality
    High
    BKR Play General Release
    January of 2027
    medium materiality
    High
    BKR 9500 FCC Approval
    early 2027
    medium materiality
    Medium
    Estimated Tax Rate
    26%
    medium materiality
    High
    Diluted EPS Impact from Higher Tax Rate
    approximately $0.42 per share
    medium materiality
    High

    Operational metrics

    24
    Revenue
    $23.4 million10.6% increase YoY
    Q2 FY26

    Sales for the second quarter totaled $23.4 million, an increase of 10.6% compared to $21.2 million in the second quarter of 2025.

    Trailing 12-Month Revenue Growth
    15.7%
    TTM Q2 FY26

    extending our trailing 12-month revenue growth to 15.7%

    Gross Profit Margin
    51.9%expanded 445 basis points YoY
    Q2 FY26

    Gross profit margin in the second quarter was 51.9% compared with 47.4% in the second quarter of 2025, reflecting favorable product mix and continued robust adoption of our higher-margin BKR 9000.

    Selling, General and Administrative Expenses
    $8.3 millionincreased from $6 million YoY
    Q2 FY26

    Selling, general and administrative expenses for the second quarter increased to $8.3 million compared to $6 million in the same quarter last year. The increase in SG&A reflects higher engineering costs associated with new product and solution development to accelerate growth, which is in alignment with our Vision 2030 investment strategy.

    Stock-Based Compensation Expense
    $512,000
    Q2 FY26

    SG&A expense for the quarter also includes noncash stock-based compensation expense of approximately $512,000.

    Operating Income
    $3.8 milliondeclined from $4.0 million YoY
    Q2 FY26

    Operating income was $3.8 million in the second quarter of 2026 with operating margin of 16.4%, expanding sequentially from 15.4%, although declining from 18.9% in the prior year second quarter on higher research and development investments.

    Operating Margin
    16.4%declined from 18.9% YoY; expanded sequentially from 15.4%
    Q2 FY26

    Operating income was $3.8 million in the second quarter of 2026 with operating margin of 16.4%, expanding sequentially from 15.4%, although declining from 18.9% in the prior year second quarter on higher research and development investments.

    GAAP Net Income
    $3.2 millioncompared with $3.7 million YoY
    Q2 FY26

    We delivered GAAP net income of $3.2 million or GAAP EPS of $0.79 per diluted share compared with net income of $3.7 million or $0.96 per diluted share in the prior year period.

    GAAP EPS
    $0.79compared with $0.96 YoY
    Q2 FY26

    We delivered GAAP net income of $3.2 million or GAAP EPS of $0.79 per diluted share compared with net income of $3.7 million or $0.96 per diluted share in the prior year period.

    Income Tax Provision Increase
    $560,000YoY increase
    Q2 FY26

    Income tax provisions increased by $560,000 versus the year ago quarter, which impacted diluted EPS by about $0.14 per share

    Diluted EPS Impact from Income Tax Provision
    $0.14
    Q2 FY26

    Income tax provisions increased by $560,000 versus the year ago quarter, which impacted diluted EPS by about $0.14 per share

    Pretax Income
    $4 millionstable YoY
    Q2 FY26

    pretax income remained stable year-over-year at $4 million

    Effective Tax Rate
    21%
    Q2 FY26

    The company's effective tax rate for the second quarter of 2026 was about 21%.

    Non-GAAP Adjusted EBITDA
    $4.5 millioncompared with $4.4 million YoY
    Q2 FY26

    For the second quarter of 2026, we reported non-GAAP adjusted EBITDA of $4.5 million with an adjusted EBITDA margin of 19.4%, which is somewhat lower than the 20.9% rate on $4.4 million of adjusted EBITDA for the second quarter of 2025.

    Adjusted EBITDA Margin
    19.4%lower than 20.9% YoY
    Q2 FY26

    For the second quarter of 2026, we reported non-GAAP adjusted EBITDA of $4.5 million with an adjusted EBITDA margin of 19.4%, which is somewhat lower than the 20.9% rate on $4.4 million of adjusted EBITDA for the second quarter of 2025.

    Non-GAAP Adjusted Earnings
    $4.1 millioncompared to $5.1 million YoY
    Q2 FY26

    Non-GAAP adjusted earnings, which adds back noncash stock-based compensation expenses and noncash income tax provision, expense was $4.1 million or $1.01 per diluted share. This compares to adjusted earnings of $5.1 million or $1.30 per diluted share in the second quarter of 2025.

    Non-GAAP Adjusted EPS
    $1.01compared to $1.30 YoY
    Q2 FY26

    Non-GAAP adjusted earnings... was $4.1 million or $1.01 per diluted share. This compares to adjusted earnings of $5.1 million or $1.30 per diluted share in the second quarter of 2025.

    Return on Invested Capital
    above 45%improved from >30% in 2024 and 2025
    TTM Q2 FY26

    Return on invested capital improved to more than 30% in 2024 and 2025 and maintained above 45% in the second quarter of 2026 on a trailing 12-month basis.

    Cash and investments balance
    $29.9 millionup from $22.8 million at end of 2025; up $1 million sequentially
    as of June 30, 2026

    On June 30, 2026, we had $29.9 million in cash, a healthy improvement over $22.8 million as of the end of 2025 as well as no debt.

    Working Capital
    $46.1 millionimproved from $37.3 million at December 31, 2025
    as of June 30, 2026

    Working capital improved to $46.1 million as of June 30, 2026, compared with $37.3 million at December 31, 2025.

    Shareholders' Equity
    $52 millionincreased from $44.7 million at December 31, 2025
    as of June 30, 2026

    Shareholders' equity increased to $52 million compared with $44.7 million on December 31, 2025.

    BKR 9500 Purchase Orders
    in excess of 200 radios
    Q2 FY26

    Since the introduction, we have received purchase orders in excess of 200 radios from a variety of customers. This is especially exceptional since customers have placed these radio orders sight unseen.

    Tango Tango Public Safety Agencies
    1,500
    current

    Our recently announced licensing agreement with Tango Tango extends our patented InteropONE technology into one of the country's largest push-to-talk over cellular networks, expanding our reach to more than 1,500 public safety agencies

    Tango Tango Active Users
    35,000
    current

    expanding our reach to more than 1,500 public safety agencies and over 35,000 active users.

    Industry KPIs

    7
    MetricValueDetails
    Capital returnno repurchases
    Backlog order book—
    Orders backlog qualityvery efficient supply chain
    Product orders order growthyear-over-year growth
    Recurring software service revenuerecurring licensing fees over time
    Revenue mix by product customer type—
    Design wins product cycle transitionsin excess of 200 radiosunits

    Orderbook & backlog

    1
    BacklognullQ2 FY26

    Orders do not stay in backlog for long due to efficient supply chain; spikes occur with large orders (e.g., from U.S. forestry) that take a few months to quarters to deliver.

    Product announcements

    2
    ProductTypeDetails
    BKR 9500 in-vehicle multiband radiomilestone
    BKR Play (tethering solution)milestone

    Deals & partnerships

    1
    Tango TangoLicensing agreement to extend InteropONE technology into Tango Tango's push-to-talk over cellular network.

    Our recently announced licensing agreement with Tango Tango extends our patented InteropONE technology into one of the country's largest push-to-talk over cellular networks, expanding our reach to more than 1,500 public safety agencies and over 35,000 active users. This creates a pathway for recurring licensing fees over time while also promoting BKR Play and our BKR Series multiband platform to the Tango Tango customer base.

    Risks & headwinds

    3
    Increased income tax provisionQ2 FY26, FY26

    $560,000 year-over-year increase in Q2 FY26; impacted diluted EPS by $0.14 per share in Q2 FY26; forecasted $0.42 per share diluted EPS impact for FY26.

    Mitigation: Management notes this is due to normalization of tax profile and profitability increases, not underlying business softness.

    Higher operating expenses due to R&D investmentsQ2 FY26

    $2.4 million year-over-year increase in operating expenses in Q2 FY26; SG&A increased to $8.3 million from $6 million YoY.

    Mitigation: Strategic investment in new products and solutions to accelerate growth and strengthen competitive positioning, aligned with Vision 2030.

    Decline in operating margin and adjusted EBITDA marginQ2 FY26

    Operating margin declined from 18.9% in Q2 FY25 to 16.4% in Q2 FY26; Adjusted EBITDA margin declined from 20.9% in Q2 FY25 to 19.4% in Q2 FY26.

    Mitigation: Attributed to higher R&D investments; management anticipates profitability trajectory will remain strong as product mix shifts favorably and platforms scale.

    What to watch in Q3 FY26

    5

    BKR 9500 FCC Approval

    early 2027 (Q1 FY27)
    CurrentSubmitted for testing
    TargetApproval received

    Why it matters

    FCC approval is a critical step before manufacturing and customer deliveries can begin, impacting future revenue from this new product.

    We recently submitted the 9500 for FCC testing and expect to receive FCC approval in early 2027.

    Q&A highlights

    3

    What is driving the strong demand for the BKR 9000 radio?

    The traction is driven by successful field performance, leading existing customers to buy more radios and recommend them to other agencies, which is reflected in year-over-year growth in orders and sales.

    “I think the key thing that's driving the traction is we are shipping more radios into the field and those radios are performing well. As customers deploy these radios, they're buying additional radios for their fleet. But not only that, they're introducing the BKR 9000 to other agencies in the surrounding area.”

    asked by Luke Fingerson · answered by John Suzuki

    2 min read6 chapters

    Detailed Narrative

    01

    Vision 2030 Strategy Execution

    The company is successfully executing its Vision 2030 strategy, delivering double-digit revenue growth and record cash balances in the first half of 2026. This performance is driven by strong demand for BKR Series radios and growing adoption of BK ONE solutions, underscoring the strength of their business model and steady progress towards long-term objectives.

    02

    Multiband Radio Market Transition

    BK Technologies is addressing the industry shift from single-band to multiband radios, which represents a multiyear tailwind. Their BKR 9000 and the new BKR 9500 in-vehicle multiband radio are positioned to capture this market, enabling public safety first responders to communicate across neighboring or federal agencies directly, a capability currently lacking for most single-band users.

    03

    On-Person Broadband Connectivity Solution

    The company is tackling the constraint of lost connectivity for first responders outside their vehicles by tethering BKR Series radios to smartphones via BKR Play. This patent-pended solution aims to close the connectivity gap between in-vehicle and on-person broadband, representing a substantial growth runway within their Vision 2030 roadmap.

    04

    New Product Development & Milestones

    The BKR 9500 in-vehicle multiband radio made its public debut to wide acclaim and has already received over 200 purchase orders sight unseen. It was recently submitted for FCC testing, with approval expected in early 2027 and customer deliveries in H1 2027. BKR Play completed initial beta testing with positive feedback and is targeting a general release in January 2027.

    05

    Software Ecosystem Expansion and Licensing

    BK Technologies is expanding its software ecosystem, highlighted by a licensing agreement with Tango Tango. This agreement extends their patented InteropONE technology into one of the country's largest push-to-talk over cellular networks, expanding their reach to over 1,500 public safety agencies and 35,000 active users, creating recurring licensing fees and promoting their multiband platform.

    06

    Financial Discipline and Strategic Investment

    Despite increased operating expenses due to R&D investments in new products and solutions, the company maintained stable pretax income. They emphasize a disciplined approach to balancing strategic investment with profitability and cash generation, focusing capital deployment on engineering, software, and product development to strengthen competitive positioning and create shareholder value.

    AI-generated summary of the company’s earnings call. Not investment advice.