KE · Kimball Electronics, Inc.

Kimball Electronics delivered Q3 fiscal 2026 results aligned with expectations, posting net sales of $352.9 million, a 3.4% sequential increase from Q2, primarily fueled by double-digit 10.2% growth in the medical vertical to $106.1 million. This offset year-over-year declines across automotive (down 3%), medical (down 8%, adjusted for a $24 million non-recurring consigned inventory sale in Q3 FY2025), and industrial (down 8%). GAAP operating income rose slightly to $11.8 million (3.3% of sales) from $11.7 million (3.1%) YoY, with adjusted operating margin steady at 4.2%. Net income improved to $5.7 million ($0.23 diluted EPS) from $3.8 million ($0.15), and adjusted net income reached $8.0 million ($0.33 adjusted EPS). CEO Richard D. Phillips highlighted solid margins, positive operating cash flow of $14.9 million (ninth straight quarter), and strategic investments in medical CMO capabilities for future growth and margin expansion, complemented by inorganic opportunities. The company affirmed FY2026 guidance, with net sales projected at $1,400-$1,460 million and adjusted operating margin at the high end of 4.2%-4.5%, signaling confidence in a strong Q4 finish. Balance sheet remains solid with $163 million debt, $276 million borrowing capacity, and Cash Conversion Days improved to 90 from 91 prior quarter and 99 in Q3 FY2025. Share repurchases of 165,000 shares for $4 million underscore capital return discipline amid open orders of $602 million.