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Franklin Wireless Shares Fall Marginally as Loss Widens in FY26
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Shares of Franklin Wireless Corp. (FKWL - Free Report) have edged down 0.4% since reporting results for the fourth quarter of fiscal 2026. This compares with the S&P 500 Index’s 0.8% return over the same time frame. Over the past month, the stock has lost 3.6% against the S&P 500’s 0.8% advance.
Fiscal 2026 net sales fell 20.8% year over year to $36.5 million from $46.1 million in the prior year. Net loss widened to $6.9 million from $0.1 million, while the loss attributable to Franklin Wireless stockholders widened to $4.7 million from $0.2 million in the prior year. Loss per share was 40 cents compared with 2 cents a year earlier. Gross profit declined 21% to $6.3 million from $7.9 million, while the gross margin edged down to 17.1% from 17.2%.
Franklin Wireless Corp. Price, Consensus and EPS Surprise
Operating expenses declined 17.1% year over year to $8.9 million. Selling, general and administrative expenses fell 14.6% to $5.7 million, mainly because a $1.25-million incentive bonus accrued to president OC Kim in the prior year did not recur. Research and development expenses dropped 21.2% to $3.2 million as payroll and direct project costs decreased. Despite lower operating expenses, loss from operations was $2.7 million, reflecting the reduced sales base and lower gross profit.
Liquidity remained substantial at the end of the fiscal year. Cash and cash equivalents plus short-term investments totaled about $32 million as of June 30, 2026. However, operating activities used $6.3 million in cash against the $1.8 million generated a year earlier, driven in part by increases in inventories and accounts receivable and a decrease in accounts payable.
Investing activities generated $5.5 million, primarily from sales of short-term investments, while financing activities used $0.5 million for cash dividends. Customer concentration remained high — the two largest customers accounted for 60.9% and 27.5% of fiscal 2026 net sales. Franklin also said that it may require more than $2 million over the next 12 months for capital expenditure, software licenses, and testing and certification of new products.
Management Commentary
Management said that Franklin began a strategic shift during the six months ended June 30, 2026, aimed at reducing the dependence on mobile hotspots and increasing its focus on fixed wireless routers and telecommunications modules. The move followed a significant reduction in expected demand from a major customer for a legacy hotspot product. Franklin said that commercial and industrial routers, and telecommunications modules are at earlier stages of commercialization, making the timing and level of future revenue uncertain.
Management also noted weakening post-pandemic demand tied to remote education and work-from-home trends, including declining demand for mobile device management services. The company is working to improve its software offerings in response. At the same time, supply constraints and higher costs for memory components and printed-circuit-board materials have added complexity to production scheduling and product costs.
Factors Influencing the Headline Numbers
The 20.8% sales decline was concentrated in North America, where revenues fell to $36.5 million from $46.1 million. Franklin attributed the decrease primarily to a major carrier customer’s discontinuation of a key product that had been expected to contribute significant revenue, along with the timing of large prior-period deliveries that left customers working through inventory. Asia sales rose to $36,403 from $5,657, but remained immaterial to consolidated revenues.
Results were also pressured by a sharp swing in other income and expenses. Franklin recorded $4.4 million in net other expenses in fiscal 2026 versus $2.7 million in net other income in fiscal 2025. The change was driven largely by $4.6 million in litigation contingency expenses connected with a ruling against South Korea-based Franklin Technology Inc., along with a $1.1-million foreign-currency transaction loss. FTI appealed the judgment in August 2026.
Other Developments
The company described the ongoing strategic repositioning away from legacy hotspot products toward fixed wireless routers and telecommunications modules, including activity through majority-owned Sigbeat, which is intended to handle worldwide sales, marketing, customer support and operations for telecommunications modules.
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Franklin Wireless Shares Fall Marginally as Loss Widens in FY26
Shares of Franklin Wireless Corp. (FKWL - Free Report) have edged down 0.4% since reporting results for the fourth quarter of fiscal 2026. This compares with the S&P 500 Index’s 0.8% return over the same time frame. Over the past month, the stock has lost 3.6% against the S&P 500’s 0.8% advance.
Fiscal 2026 net sales fell 20.8% year over year to $36.5 million from $46.1 million in the prior year. Net loss widened to $6.9 million from $0.1 million, while the loss attributable to Franklin Wireless stockholders widened to $4.7 million from $0.2 million in the prior year. Loss per share was 40 cents compared with 2 cents a year earlier. Gross profit declined 21% to $6.3 million from $7.9 million, while the gross margin edged down to 17.1% from 17.2%.
Franklin Wireless Corp. Price, Consensus and EPS Surprise
Franklin Wireless Corp. price-consensus-eps-surprise-chart | Franklin Wireless Corp. Quote
Other Key Business Metrics
Operating expenses declined 17.1% year over year to $8.9 million. Selling, general and administrative expenses fell 14.6% to $5.7 million, mainly because a $1.25-million incentive bonus accrued to president OC Kim in the prior year did not recur. Research and development expenses dropped 21.2% to $3.2 million as payroll and direct project costs decreased. Despite lower operating expenses, loss from operations was $2.7 million, reflecting the reduced sales base and lower gross profit.
Liquidity remained substantial at the end of the fiscal year. Cash and cash equivalents plus short-term investments totaled about $32 million as of June 30, 2026. However, operating activities used $6.3 million in cash against the $1.8 million generated a year earlier, driven in part by increases in inventories and accounts receivable and a decrease in accounts payable.
Investing activities generated $5.5 million, primarily from sales of short-term investments, while financing activities used $0.5 million for cash dividends. Customer concentration remained high — the two largest customers accounted for 60.9% and 27.5% of fiscal 2026 net sales. Franklin also said that it may require more than $2 million over the next 12 months for capital expenditure, software licenses, and testing and certification of new products.
Management Commentary
Management said that Franklin began a strategic shift during the six months ended June 30, 2026, aimed at reducing the dependence on mobile hotspots and increasing its focus on fixed wireless routers and telecommunications modules. The move followed a significant reduction in expected demand from a major customer for a legacy hotspot product. Franklin said that commercial and industrial routers, and telecommunications modules are at earlier stages of commercialization, making the timing and level of future revenue uncertain.
Management also noted weakening post-pandemic demand tied to remote education and work-from-home trends, including declining demand for mobile device management services. The company is working to improve its software offerings in response. At the same time, supply constraints and higher costs for memory components and printed-circuit-board materials have added complexity to production scheduling and product costs.
Factors Influencing the Headline Numbers
The 20.8% sales decline was concentrated in North America, where revenues fell to $36.5 million from $46.1 million. Franklin attributed the decrease primarily to a major carrier customer’s discontinuation of a key product that had been expected to contribute significant revenue, along with the timing of large prior-period deliveries that left customers working through inventory. Asia sales rose to $36,403 from $5,657, but remained immaterial to consolidated revenues.
Results were also pressured by a sharp swing in other income and expenses. Franklin recorded $4.4 million in net other expenses in fiscal 2026 versus $2.7 million in net other income in fiscal 2025. The change was driven largely by $4.6 million in litigation contingency expenses connected with a ruling against South Korea-based Franklin Technology Inc., along with a $1.1-million foreign-currency transaction loss. FTI appealed the judgment in August 2026.
Other Developments
The company described the ongoing strategic repositioning away from legacy hotspot products toward fixed wireless routers and telecommunications modules, including activity through majority-owned Sigbeat, which is intended to handle worldwide sales, marketing, customer support and operations for telecommunications modules.