Ultralife Corporation (NASDAQ:ULBI) saw its shares sink 5.05% in pre-market trading on Tuesday after the company posted third-quarter results that fell short of Wall Street expectations, despite reporting solid year-over-year revenue growth.
For the quarter ending September 30, 2025, Ultralife reported an adjusted loss of $0.07 per share, a sharp miss compared to analyst projections for $0.21 in earnings. Revenue climbed 21.5% year over year to $43.4 million, but still came in far below the $53 million consensus estimate. Excluding contributions from its Electrochem acquisition, organic sales were up just 2.5%, underscoring softer underlying demand.
Profitability took a hit as well. Gross margin slid to 22.2%, down from 24.3% a year earlier, with the company citing production inefficiencies tied to quality problems with raw materials in its Battery & Energy Products division.
“Although revenue grew 2.5% organically and 21.5% including the Electrochem acquisition for the third quarter, supply chain issues caused manufacturing inefficiencies in our Battery & Energy Products business and orders continued to be delayed in our Communications Systems business, both of which impacted overall profitability,” said Mike Manna, President and Chief Executive Officer.
Ultralife posted an operating loss of $1 million, which included $1.1 million in one-off charges—among them a $0.5 million provision to close its Calgary facility. The company expects to shut down the site in the first quarter of 2026 and anticipates roughly $0.8 million in annual savings once the move is complete.
Despite the weak quarter, Ultralife’s order book strengthened. Backlog climbed to $90.1 million, up from $84.5 million at the end of the second quarter, hinting at possible improvement ahead.
By segment, Battery & Energy Products revenue rose 22.8% to $39.9 million, while Communications Systems sales increased 8.2% to $3.4 million from the same quarter last year.