Kimball Electronics delivered fourth quarter results that exceeded market expectations, prompting a significant negative reaction from investors. Management cited persistent softness in its Automotive and Industrial segments as key drivers of the year-over-year sales decline, with CEO Richard Phillips noting that “strong double-digit year-over-year growth in the Medical vertical” was not enough to offset these headwinds. The company also faced pressure from tariff impacts and program transitions in North American Automotive, while the Industrial segment was impacted by lower HVAC demand.
Is now the time to buy KE? Find out in our full research report (it’s free for active Edge members).
Kimball Electronics (KE) Q4 CY2025 Highlights:
- Revenue: $341.3 million vs analyst estimates of $339.3 million (4.5% year-on-year decline, 0.6% beat)
- Adjusted EPS: $0.28 vs analyst estimates of $0.26 (9.8% beat)
- Adjusted EBITDA: $24.54 million vs analyst estimates of $21.15 million (7.2% margin, 16% beat)
- The company lifted its revenue guidance for the full year to $1.43 billion at the midpoint from $1.4 billion, a 2.1% increase
- Operating Margin: 3.8%, in line with the same quarter last year
- Market Capitalization: $601.5 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Kimball Electronics’s Q4 Earnings Call
- Michael Crawford (B. Riley Securities) asked about the importance of Nexteer as an Automotive customer. CFO Jana Croom confirmed Nexteer accounted for 20% of sales and noted growing contributions from other large customers.
- Crawford (B. Riley Securities) inquired about the Indianapolis facility’s growth potential. Croom explained its significant size and expansion opportunities, but cautioned revenue impact depends on customer mix and ramp timing.
- Derek Soderberg (Cantor Fitzgerald) questioned Automotive’s outlook post-program anniversaries. Croom stated the segment should stabilize and potentially grow modestly in the coming quarters, with European programs gaining traction.
- Anja Soderstrom (Sidoti) asked about margin impact from the new facility. CEO Phillips expects long-term accretion, but Croom highlighted short-term drag due to depreciation and transition costs.
- Maxwell Michaelis (Lake Street Capital Markets) sought details on the Electronic Power Pack opportunity. Croom described the program as strategic, though currently smaller than past braking programs, with potential for growth as adoption increases.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) the pace of customer adoption and revenue contribution from the Indianapolis medical manufacturing facility, (2) stabilization of Automotive sales as the company moves past legacy program headwinds and ramps new European initiatives, and (3) progress on restructuring and cash management efforts, particularly around inventory and working capital. Execution in these areas will be crucial for Kimball Electronics to deliver on its growth and margin targets.
Kimball Electronics currently trades at $24.81, down from $30.72 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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