Ultralife Q2 sales up 13% YoY to $48.6mln, down 8.7% ex Electrochem.

• Ultralife Corp Q2 sales up 13% to $48.6mln, excluding Electrochem, sales down 8.7%. • Gross profit at $11.6mln, or 23.9% of revenue. • Operating income at $2.3mln, including one-time costs. • GAAP EPS at $0.05. • Adjusted EBITDA at $4.1mln.

Ultralife Corporation (NASDAQ: ULBI) reported mixed financial results for the second quarter of 2025, with revenues up 13% year-over-year to $48.6 million, but missing analyst expectations. The company's gross profit was $11.6 million, or 23.9% of revenue, while operating income stood at $2.3 million, including one-time costs. GAAP EPS was $0.05, and adjusted EBITDA was $4.1 million [1].

The revenue increase was driven primarily by the inclusion of Electrochem, which offset flat organic sales in the Battery & Energy Products segment. However, the Communications Systems segment saw a significant drop in sales, declining by 57.2% to $2.7 million, due to delayed purchase orders and prior year shipments. This segment's gross profit also fell, contributing to the overall decline in profitability [2].

Tariffs and unfavorable product mix further impacted Ultralife's gross margin, leading to a 100 basis point reduction in profitability. The company expects the Communications Systems business to rebound in the second half of 2025, with early purchase orders from new battery product programs and increased demand from medical and oil & gas sectors. Additionally, Ultralife anticipates sustained growth in global defense spending [1].

Ultralife's net income for the quarter was $900,000, down from $2.7 million in the same period last year. The company also reported operating expenses of $9.3 million, with a one-time adjustment of $300,000 for the Mississauga closure. The company's debt reduction efforts continued, with $2.7 million of acquisition debt repaid [2].

The company's adjusted EBITDA was $4.1 million, down from $5.4 million in the previous quarter. The trailing twelve months adjusted EBITDA was $15.4 million. Ultralife's working capital was $69.1 million, with a current ratio of 3.3, and no draws made under the $30 million revolver. The company also received the full employee retention credit of $1.8 million, which was applied to debt [2].

Ultralife's CEO, Mike Manna, highlighted the company's ongoing supply chain challenges and margin improvement efforts focused on pricing, cost controls, and vertical integration stemming from the Electrochem acquisition. The company is also pursuing multiple new product launches and qualification activities, including new server cases, amplifiers, and thin cell batteries. However, management expressed caution on quantifying near-term revenue impact as sales pipelines are still converting from evaluation to orders [2].

Ultralife initiated litigation targeting recovery in the millions of dollars for cyberattack-related insurance claims, which if successful could materially impact future results. The company cautions investors not to place undue reliance on forward-looking statements, reflecting current expectations. The potential risks and uncertainties that could cause actual results to differ materially include uncertain global economic conditions, reductions in revenues from key customers, delays or reductions in U.S. and foreign military spending, acceptance of new products on a global basis, and disruptions or delays in the supply of raw materials and components [2].

References:
[1] Reuters. (2025). Ultralife Q2 revenue misses estimates. Retrieved from https://www.tradingview.com/news/reuters.com,2025:newsml_PLX442F4F:0-ultralife-q2-revenue-misses-estimates/
[2] MITrade. (2025). Ultralife Q2 Earnings Call Transcript. Retrieved from https://www.mitrade.com/insights/news/live-news/article-8-1021696-20250808