BK Technologies Corp. Q4 FY2025 earnings call

• Operational performance: Fourth quarter 2025 marked strong business performance with 20% Y/Y revenue growth, driven by state and local agency order volumes. Gross margin expanded due to favorable product mix and BKR 9000 adoption. Adjusted EBITDA increased 78% Y/Y. Full year 2025 revenue grew 12.5%, gross margin expanded 1,086 basis points, and operating income more than doubled. - Strategic initiatives: Implemented cost management initiatives and strategic partnership for manufacturing to improve supply chain resilience. Vision 2025 objectives were met with revenue nearly doubling, gross margin target achieved in Q4 2025, and adjusted EBITDA margin at 20.5% for full year 2025. Vision 2030 introduced with goals to increase market share, double revenue, expand gross margin to 60%, and achieve adjusted EBITDA margin of 35%.

Fourth quarter 2025 revenue was $21.5 million, up 20% year over year. Gross margin in Q4 2025 was 50.4% compared to 41.2% in Q4 2024, expanding by over 900 basis points. Adjusted EBITDA was $4.7 million, up 78% year over year, with adjusted EBITDA margin at 22%. Full year 2025 revenue was $86.1 million, up 12.5%. Gross margin for full year 2025 was 48.8%, up 1,086 basis points from 37.9% in 2024. Operating income for full year 2025 was $16 million, more than doubling from $7.8 million in 2024. GAAP net income for full year 2025 was $13.5 million. Non-GAAP adjusted EPS for Q4 2025 was $1.17, up from $0.61 in Q4 2024. Full year 2025 non-GAAP adjusted EPS was $4.32.

• 2026 full-year guidance: Revenue of at least $90 million, full-year gross margin of 50% or greater, full-year GAAP diluted EPS of $3.15, and full-year non-GAAP adjusted EPS of $3.55. - Product development: BKR 9500 multiband mobile radio on track for shipping in first half of 2027, with initial customer validation strong. Decision to expense future development costs for BKR 9500, reducing reported EPS by ~$0.50 in 2026 but seen as conservative accounting treatment.

Q: Jason Schmidt asked about sales cycle length for BKR 9000, pushback from customers, and if 2025 traction was from initial or expanding orders.

A: Expansion on BKR 9000 is from new orders, customers from fire and law enforcement sides have positive feedback with no pushback.

Q: Jason Schmidt also asked about 2030 metrics and capital allocation.

A: Expect 9500 to be a driver with ratio of handheld to in-vehicle radios, capital allocation priorities are investing in core portfolio, considering acquisitions tailored to core solution offering, and returning money to shareholders if no better alternatives.

Q: Robert Van Voorhis asked about R&D development expense for 9500 and pricing strategy.

A: Expect to continue investing in core products, engineering expense won't go down but less in sustainment of 9500. Pricing strategy is to gain market share first and then consider price increases when incremental market share gain is less than possible from price hikes.