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    RELL
    Earnings call· May 2026(Q4 FY26)

    RICHARDSON ELECTRONICS, LTD. RELL

    Jul 23, 2026 Source

    Executive summary

    Richardson Electronics Q4 FY26 — Strong Revenue Growth Across All Segments and Record Canvas Performance

    Richardson Electronics delivered a strong Q4 FY26, driven by significant revenue growth across all three business units and record performance in Canvas. The company is strategically focusing on higher-value engineered solutions and expanding into battery energy storage, with a disciplined approach to managing market uncertainties and investing in long-term growth opportunities. AI adoption is increasing internally, and the 'Made in America' initiative is moving into execution with new commercial activities.

    Highlights

    5

    • Consolidated net sales increased 27.6% to $66.2 million in Q4 FY26, marking the eighth consecutive quarterly year-over-year increase.

    • Canvas segment achieved record quarterly revenue of $12.3 million, up 29.5% YoY, with a Q4 book-to-bill ratio of 1.3.

    • PMT sales grew 28.1% YoY (excluding legacy healthcare), driven by strong demand in semiconductor wafer fab and RF/microwave products.

    • GES sales increased 20.4% YoY, with a growing pipeline of nearly 50 active opportunities for Battery Energy Storage (BES) solutions.

    • Operating income improved significantly to $3.9 million (non-GAAP $3.5 million) in Q4 FY26, compared to $0.6 million (non-GAAP $0.8 million) in Q4 FY25.

    Concerns

    3

    • Consolidated gross margin slightly decreased to 31.2% in Q4 FY26 from 31.6% in Q4 FY25 due to product mix in PMT and GES.

    • Operating expenses increased to $17.6 million in Q4 FY26 from $15.6 million in Q4 FY25, partly due to a $0.4 million unclaimed property state audit settlement.

    • The global environment remains mixed with tariff uncertainty, geopolitical risks, inflation, and uneven industrial demand creating challenges.

    Guidance & targets

    5
    CategoryTargetConfidence
    BES Order Announcement
    multi-million dollar order
    high materiality
    High
    PMT and GES Growth
    another year of growth
    medium materiality
    High
    CT Healthcare Program Bottom Line
    significantly improved
    medium materiality
    Medium
    Made in America Initiative Revenue Conversion
    convert to revenue
    medium materiality
    Medium
    Canvas Outlook
    foresee a cross next year
    low materiality
    Low

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Power & Microwave Technologies (PMT)
    Q4 FY26 sales, excluding legacy healthcare business. Driven by strong growth in semiconductor wafer fab and RF and wireless components (SATCOM, radar, communication markets). Full FY26 sales grew 14.2% YoY.
    		$47.1 million31.1%——
    Green Energy Solutions (GES)
    Q4 FY26 sales growth, resulting from higher sales of wind products. Full FY26 sales grew 7.3% YoY. Experienced growth adoption of PEM modules across multiple wind turbine platforms, with international expansion into Europe, Asia, Brazil, Australia, India, France, and Italy. Shipped first BES program in Q4.
    		—20.4%——
    Canvas
    Q4 FY26 revenue, setting a new quarterly record. Full FY26 revenues were $37.3 million, up 12.4% from $33.1 million in FY25. Gross margin was 32.3% in Q4 FY26 compared to 32.1% in Q4 FY25. Business remains project-focused, with orders from medical OEM customers for robotic-assisted surgery, navigation, endoscopy, and HMI solutions, as well as commercial and industrial applications.
    		$12.3 million29.5%—32.3%

    Operational metrics

    28
    Non-GAAP Operating Income
    $3.5 millioncompared to $0.8 million (Q4 FY25)
    Q4 FY26
    Non-GAAP Operating Income
    $6.1 millioncompared to $2.6 million (FY25)
    FY26
    Non-GAAP Net Income
    $3.0 millioncompared to $1.8 million (Q4 FY25)
    Q4 FY26
    Non-GAAP Net Income
    $5.7 millioncompared to $3.2 million (FY25)
    FY26
    Non-GAAP EPS
    $0.21compared to $0.12 (Q4 FY25)
    Q4 FY26
    Non-GAAP EPS
    $0.40compared to $0.22 (FY25)
    FY26
    EBITDA
    $5.0 millionversus $2.9 million (Q4 FY25)
    Q4 FY26
    Adjusted EBITDA
    $4.2 millionversus $3.1 million (Q4 FY25)
    Q4 FY26
    EBITDA
    $11.3 millionversus $2.5 million (FY25)
    FY26
    Adjusted EBITDA
    $10.4 millionversus $7.5 million (FY25)
    FY26
    Consolidated Net Sales Growth
    27.6%YoY
    Q4 FY26

    Compared to $51.9 million in the prior year's fourth quarter.

    Consolidated Net Sales Growth
    9.4%YoY
    FY26

    Compared to $208.9 million in fiscal year 2025.

    Consolidated Gross Margin Change
    -40YoY
    Q4 FY26

    Consolidated gross margin was 31.2% in Q4 FY26 versus 31.6% in Q4 FY25, due to lower margin in PMT and GES from product mix, partially offset by higher margin in Canvas.

    Consolidated Gross Margin Change
    20YoY
    FY26

    Consolidated gross margin was 31.2% in FY26, up from 31.0% in FY25.

    Operating Expenses as % of Net Sales
    26.6%versus 30.0% (Q4 FY25)
    Q4 FY26
    Operating Expenses as % of Net Sales
    28.8%from 29.8% (FY25)
    FY26
    Cash and investments balance
    $31.8 millioncompared to $29.5 million (end of Q3 FY26) and $35.9 million (end of FY25)
    end of FY26

    Increase from Q3 related to net income, adjusted for depreciation and amortization, and lower inventory, partially offset by higher accounts receivable.

    Cash Dividends Paid
    $0.9 million
    Q4 FY26
    Cash Dividends Paid
    $3.4 million
    FY26
    Quarterly Cash Dividend Declared
    $0.06
    Q1 FY27

    To be paid in the first quarter of fiscal 2027.

    Canvas Gross Margin
    32.3%compared with 32.1% (Q4 FY25)
    Q4 FY26
    Canvas Gross Margin
    32.0%down from 32.9% (FY25)
    FY26

    Product mix continued to create pressure, but margins remain solid.

    AI Opportunities Identified
    47
    Q4 FY26

    Identified during a 90-day AI Advisory Engagement.

    AI Opportunities Ready to Execute
    32
    Q4 FY26

    Classified as ready to execute using existing AI tools, with no additional technology investment required.

    AI Potential Future Agent Build Opportunities
    11
    Q4 FY26
    AI Users Increase
    46%
    Q4 FY26

    Increase in users during the AI Advisory Engagement period.

    AI Message Volume Increase
    60%
    Q4 FY26

    Increase in message volume during the AI Advisory Engagement period.

    Manufactured/Exclusive Product Mix
    55-60%
    Q4 FY26

    Percentage of products sold that are either manufactured directly or exclusively for the company to its specifications.

    Industry KPIs

    6
    MetricValueDetails
    Orders book to bill1.3ratio
    Segment revenue growthPMT: $47.1 million, up 31.1% YoY (excluding legacy healthcare); GES: up 20.4% YoY; Canvas: $12.3 million, up 29.5% YoYUSD, %
    Design wins product cycle rampsBES program, 20 Newton meter wind turbine product
    Order visibility backlog policyBacklog as an important indicator of demand and future revenue visibility
    Capacity expansion internal sourcingSweetwater, Texas location
    End market revenue mix organic growthPMT: Semiconductor wafer fab, RF and microwave products; GES: Wind products; Canvas: Medical, industrial

    Orderbook & backlog

    2
    Combined Backlog (PMT & GES)24.8%end of FY26

    increase

    Reflects customer orders that are already committed or scheduled, providing greater confidence in the pipeline. Most PMT backlog is scheduled within one year; Canvas backlog can deplete over 2-3 years but new orders are expected to exceed depletion.

    Canvas Backlog$40.8 millionend of Q4 FY26

    up from $38.2 million (end of Q3 FY26)

    Provides a solid foundation for continued momentum and improved visibility. Book-to-bill ratio of 1.3 in Q4 FY26.

    Product announcements

    3
    ProductTypeDetails
    Siemens MX series CT tubesmilestone
    Battery Energy Storage (BES) programlaunch
    20 Newton meter wind turbine productlaunch

    Deals & partnerships

    2
    GoshenTechnology partnership for Battery Energy Storage (BES) products.

    Goshen provides batteries, and Richardson builds containers and integrates them, meeting 'Made in America' qualifications. Mutual support in bringing batteries and BES products to market. Goshen batteries will be used in a recently booked BES order for a federal reservation in Alaska.

    KKWINAgreement for UPS products.

    Part of expanding power management applications.

    Risks & headwinds

    3
    Global Macroeconomic Uncertaintyongoing

    tariff uncertainty, geopolitical risks, inflation, uneven industrial demand

    Mitigation: Disciplined management of sourcing, pricing, inventory, customer commitments, and operating expense control; strong balance sheet and technical sales organization.

    Product Mix Impact on Gross MarginQ4 FY26

    40 basis point decrease in consolidated gross margin (Q4 FY26 YoY)

    Mitigation: Strategic focus on higher value engineered solutions and improved operating disciplines to support margin improvement over time.

    Increased Operating ExpensesQ4 FY26

    $17.6 million (Q4 FY26) compared to $15.6 million (Q4 FY25), including a $0.4 million unclaimed property state audit settlement

    Mitigation: Ongoing efforts to improve efficiency and free up cash for critical growth initiatives, including downsizing CT healthcare team and closing Dubai operations.

    What to watch in Q1 FY27

    5

    BES Multi-Million Dollar Order Announcement

    Q1 FY27
    CurrentPipeline of nearly 50 active opportunities
    TargetAnnouncement of multi-million dollar order

    Why it matters

    Signals initial commercial traction and revenue conversion for the new Battery Energy Storage strategy, validating market interest and partnership effectiveness.

    In fact, we expect to announce a multi-million dollar order for our BES systems in Q1.

    Q&A highlights

    8

    What is the visibility for Semi-Fab demand into Q1 FY27, and what are the lead times for new orders?

    Management has limited visibility but receives very positive feedback from customers and end-customers, expecting continued growth throughout FY27. The company aggressively manages inventory to have piece parts in stock, awaiting customer releases for new orders.

    “The feedback we're getting from our customers in that space and then their customers and customers is very, very positive. We saw, as you know, excellent growth in Q3 and Q4, and that, according to the customer and their end customers, should continue throughout FY27.”

    asked by Anja Soderstrom · answered by Gregory Peloquin

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Focus on Engineered Solutions

    Richardson Electronics is strategically aligning its efforts to pursue higher-value engineered solutions, repeatable sales opportunities, and customer programs. This approach leverages the company's technical knowledge, application engineering, global sourcing capabilities, and inventory position to create value. This focus on a more profitable mix of business, combined with operating disciplines, supported the margin improvements achieved during the year and is expected to drive future growth.

    02

    Battery Energy Storage (BES) Expansion

    The company is actively advancing its efforts in battery energy storage, viewing it as a natural extension of its power conversion and energy-related applications. A growing pipeline of nearly 50 active opportunities, including data centers and industrial applications in North America, is being developed. The first BES program shipped in Q4 FY26, and a multi-million dollar order is expected to be announced in Q1 FY27, highlighting accelerating momentum in this strategically important market.

    03

    AI Adoption and Productivity Initiatives

    Richardson Electronics completed a 90-day AI Advisory Engagement, identifying 47 AI opportunities across supply chain, manufacturing, engineering, sales, and finance. Of these, 32 were classified as ready for immediate execution without additional technology investment. The engagement led to a 46% increase in AI users and a 60% increase in message volume, with six pilot programs validated for execution, establishing a practical foundation for improving productivity and workflow consistency.

    04

    Made in America Initiative Progress

    The 'Made in America' strategy is transitioning from prospecting to execution, converting customer interest into commercial activities across aerospace, unmanned defense systems, Defense Electronics, and U.S.-based Industrial Manufacturing. Key opportunities include a US-made self-checkout kiosk program for a major national restaurant chain and a significant U.S. defense program. These initiatives are expected to begin converting to revenue later in FY27, driven by customer demand for reliable supply chains and faster response times.

    05

    CT Tube Business Restructuring

    The CT tube business has been streamlined to focus entirely on repairing Siemens tubes, following the completion of production on the Altitude Program in March 2026. The company also downsized its CT healthcare team. Beta Siemens MX series tubes have been shipped for final review, with full release anticipated soon, and management expects significantly improved bottom-line results from this focused program in FY27.

    06

    Conservative Capital Allocation

    Management reiterated its long-standing conservative approach to capital allocation, prioritizing the employment of capital in new growth opportunities, such as battery energy storage and engineered solutions, over share buybacks. The company maintains a strong cash position of $31.8 million at the end of FY26 and has no outstanding debt on its revolving line of credit, providing financial flexibility for strategic investments and potential facility expansion.

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