Key Tronic Corp Reports Q4 2025 Earnings: EPS $(0.36), Revenue $110.5 Million

Key Tronic Corp reported Q4 2025 earnings with a net loss of $(0.36) per share and revenue of $110.5 million, down from $126.6 million in the same period of fiscal year 2024. The company faced reduced demand and tariff disruptions, but implemented cost reduction initiatives and expanded its manufacturing footprint to support long-term growth. Cash flow from operations increased to $18.9 million from $13.8 million in fiscal year 2024.

Key Tronic Corp (KTCC) reported its Q4 FY2025 earnings, revealing a challenging quarter with a significant drop in revenue and an increased net loss compared to the previous year. Despite these setbacks, the company remains optimistic about future growth, driven by strategic expansions and new contracts. The stock experienced a 5.3% increase in aftermarket trading, closing at $2.83.

Revenue for Q4 FY2025 fell to $110.5 million, down from $126.6 million the previous year. The company reported a net loss of $3.9 million for the quarter, compared to a $2.0 million loss in the same period last year. Key Tronic secured a significant contract with a data processing equipment OEM, potentially worth $20 million annually. The company is expanding its manufacturing footprint in the U.S. and Vietnam, with a $28 million investment in a new facility in Arkansas.

Key Takeaways
- Revenue: Revenue for Q4 FY2025 fell to $110.5 million, down from $126.6 million the previous year.
- Net Loss: The company reported a net loss of $3.9 million for the quarter, compared to a $2.0 million loss in the same period last year.
- Strategic Initiatives: Key Tronic secured a significant contract with a data processing equipment OEM and is expanding its manufacturing footprint in the U.S. and Vietnam.

Financial Highlights
- Revenue: $110.5 million, down from $126.6 million year-over-year.
- Gross Margin: 6.2%, down from 7.2% the previous year.
- Net Loss: $3.9 million or $0.36 per share, compared to $2.0 million, or $0.18 per share, in Q4 FY2024.
- Cash Flow: Cash flow from operations increased to $18.9 million from $13.8 million in fiscal year 2024.

Outlook & Guidance
Key Tronic did not provide specific forward guidance due to ongoing uncertainties. However, the company anticipates growth in its U.S. and Vietnam production facilities and aims for a $20 million run rate for its new data processing contract by the end of FY2026. The company is targeting an incremental gross margin of 15-20% on new revenues.

InvestingPro rates the company’s overall financial health as 'FAIR' with a score of 1.99, suggesting room for improvement. Subscribers to InvestingPro can access 6 additional ProTips and a comprehensive Pro Research Report for deeper insights into KTCC’s financial health and growth potential.

Executive Commentary
CEO Brett Larson expressed optimism about cost reductions and future demand for U.S. manufacturing, stating, "Over the long term, we remain very encouraged by our cost reductions." CFO Tony Voorhees added, "We expect to see growth in our U.S. and Vietnam production."

Risks and Challenges
Global tariff uncertainties are causing delays in program launches. The company faces increased competition in the contract manufacturing sector. Macroeconomic pressures could impact demand for Key Tronic’s products. Supply chain disruptions remain a potential risk.

References
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-key-tronics-q4-2025-reveals-revenue-drop-and-strategic-expansions-93CH-4213603