GUER · Guerrilla RF, Inc.

Guerrilla RF, Inc. reported robust top-line growth in Q1 FY2026, with revenue reaching $6.5 million, up 47.8% from $4.4 million in the prior-year quarter. This increase was primarily driven by continued strength in the Company’s core product shipments, reflecting ongoing demand across key end markets and the increase in productions resulting from continuing design wins, as noted in Management's Discussion. This growth was partially offset by a decrease in the Company’s automotive category, which declined to $1.1 million, primarily due to reduced demand in certain legacy automotive programs, including compensator and SDARS applications.

Gross profit expanded sharply to $4.5 million, a 69.2% increase from $2.7 million, lifting the gross margin to 69.9%. The improvement in gross margin was primarily driven by higher production volumes, improved manufacturing efficiencies, and favorable product mix. Gross profit may fluctuate from period to period as revenues fluctuate due to the mix of products sold to customers, royalty revenue volume, operational efficiencies, and changes to technology expenses and customer support. Over these same periods, overhead expenses increased modestly in absolute dollars but declined as a percentage of revenue, demonstrating improved operating leverage on higher sales volumes.

Net income turned positive at $1.1 million, compared to a $3.5 million loss in Q1 FY2025 (131.7% improvement), with diluted EPS of $0.06 versus -$0.34. This swing reflects the combined impact of revenue acceleration, margin gains, and expense discipline.

Cash flow dynamics showed moderation in burn rates, with net cash provided by operating activities at -$1.3 million, improved from -$2.3 million prior year. Capital expenditures were $63 thousand, resulting in free cash flow of -$1.3 million. The Company's product backlog can be materially impacted by supply chain constraints, a shift in customer ordering patterns whereby customers place orders in anticipation of extended product delivery lead times, or other customer order delivery request modifications, underscoring ongoing volatility risks. Looking forward, as sales and marketing efforts expand, these expenses are expected to rise in absolute dollars but decline as a percentage of revenues, while R&D expenses are anticipated to increase absolutely but decrease as a percent of revenues amid business growth.