Ultralife 2025 Q3 Earnings Net Loss Deteriorates 547% Amid Supply Chain Strains

Ultralife (ULBI) reported Q3 2025 earnings that fell short of expectations, with a net loss of $1.25 million (-$0.07 EPS) compared to a $279,000 profit in 2024 Q3. The results highlight operational challenges despite 21.5% year-over-year revenue growth, driven by the Electrochem acquisition.

Revenue

Total revenue rose to $43.37 million, up 21.5% from $35.69 million in 2024 Q3. The Battery & Energy Products segment led with $39.95 million in sales, reflecting the inclusion of Electrochem Solutions. Communications Systems revenue increased to $3.42 million, contributing 8.2% growth compared to the prior year. Organic growth, excluding Electrochem, stood at 2.5%, underscoring softer demand in commercial sectors.

Earnings/Net Income

The company swung to a loss of $0.07 per share, a 450% negative change from a $0.02 profit in 2024 Q3. Net income deteriorated to -$1.25 million, a 547% decline from $279,000. The earnings shortfall was driven by supply chain inefficiencies and delayed orders, which pressured margins.

Post-Earnings Price Action Review

The strategy of buying ULBI shares after its Q3 revenue report and holding for 30 days has underperformed historically, with a cumulative -26.2% return over three years. This lags behind the S&P 500’s +29.6% and the NASDAQ Composite’s +44.4% during the same period. The poor performance suggests the market either failed to react positively to the earnings or faced volatile post-earnings corrections.

CEO Commentary

CEO Mike Manna emphasized 2.5% organic growth but acknowledged supply chain disruptions and delayed orders as profit drag. Strategic priorities include lean process improvements, supply chain resilience, and manufacturing rationalization. Manna also highlighted progress on new product qualifications and vertical integration in oil & gas to drive sustainable growth.

Guidance

Ultralife expects to complete the Calgary facility closure by Q1 2026, achieving $0.8 million in annual savings. The company aims to optimize operating leverage through new product production and expand its pipeline of large, multi-year programs. Risks such as supply chain issues and inflation remain key concerns.

Additional News

1. Electrochem Acquisition Integration: The acquisition of Electrochem Solutions boosted Battery & Energy Products revenue by 22.8% to $39.9 million, though organic growth was muted at 1.9%.

2. Calgary Facility Closure: A $0.5 million charge was recorded for closing the Calgary site, with $0.8 million in annual savings expected post-2026 Q1.

3. Backlog Growth: Orders increased to $90.1 million exiting Q3, up from $84.5 million in Q2, signaling potential future revenue.