Ultralife ULBI

NASDAQ ULBI

$5.63 -0.31 (-5.22%)

At close: Sep 9, 2026 · 4:00 PM EDT

Key Stats

Market Cap102.15 Mn

P/E-15.35

P/S0.55

Div. Yield0.00

Total Debt (Qtr)44.60 Mn

Revenue Growth (1y) (Qtr)-1.27

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About

Ultralife Corporation designs and manufactures power and communications systems including rechargeable and non-rechargeable batteries, charging systems, RF amplifiers, power supplies, cable and connector assemblies, amplified speakers, equipment mounts, case equipment, man-portable systems, integrated communication systems for fixed or vehicle applications, and custom engineered systems related to those product lines. The company serves customers across the globe in the government, defense and commercial sectors with an emphasis on strong engineering and a collaborative approach to problem solving. Ultralife continuously evaluates growth opportunities through new product development, sales force expansion, and acquisitions.

Ultralife generates revenue by selling its products worldwide through original equipment manufacturers, industrial and defense supply distributors, and directly to U. S. and foreign defense departments. The company's primary offerings include Lithium 9-volt, cylindrical, thin cell and other non-rechargeable batteries, rechargeable batteries, uninterruptible power supplies, charging systems and accessories, RF amplifiers, power supplies, cable and connector assemblies, amplified speakers, equipment mounts, case equipment, man-portable systems, integrated communication systems, and communications and electronics systems design. Revenue is derived from both product sales and technology contracts with government agencies and private sector third parties.

The company operates through the following segments: Battery & Energy Products and Communications Systems.

Battery & Energy Products: This segment includes Lithium 9-volt, cylindrical, thin cell and other non-rechargeable batteries, in addition to rechargeable batteries, uninterruptible power supplies, charging systems and accessories. The segment manufactures and markets products under the Ultralife®, Ultralife Thin Cell®, Ultralife HiRate®, LithiumPower®, SMART CIRCUIT®, SODIUMPOWER®, WE. ARE. POWER®, AMTI®, ABLE™, ACCUTRONICS™, ENTELLION™, McDowell Research®, SWE DRILL-DATA®, SWE SEASAFE (& DESIGN)®, SWE SEASAFE DIRECT®, SWE SOUTHWEST ELECTRONIC ENERGY CORP®, SWE Southwest Electronic Energy Group®, Excell Battery Group™, Criterion Gauge™, POW-R BMS®, POW-R-BMS®, POW-R TOTE® and Electrochem® brands. Revenues for this segment were $178,042 for the year ended December 31, 2025, with segment contribution of $20,223.
Communications Systems: This segment includes RF amplifiers, power supplies, cable and connector assemblies, amplified speakers, equipment mounts, case equipment, man-portable systems, integrated communication systems for fixed or vehicle applications, and communications and electronics systems design. The segment markets products under the Ultralife brand for military and commercial applications, including integration of information technology equipment and power conversion capability into rugged cases. Revenues for this segment were $13,117 for the year ended December 31, 2025, with segment contribution of $(1,290).

Ultralife operates in highly competitive battery and communications systems markets, facing competition from development-stage companies and major domestic and international firms with greater financial, technical, marketing, sales, manufacturing, distribution and other resources. The company competes on the basis of design flexibility, performance, price, reliability and customer support. Ultralife believes its experience in battery cell manufacturing provides significant production and design expertise that would be difficult for new competitors to reproduce without substantial time and expense, particularly in the non-rechargeable battery market where technological and economic barriers to entry exist due to large capital expenditures required for automated production facilities.

Ultralife serves a diverse customer base including original equipment manufacturers, industrial and defense supply distributors, U. S. and foreign defense departments, and government agencies. The company has long-term contracts with the U. S. government and other customers, with one major customer, L3Harris Technologies, comprising 27% of total revenues in 2025 and 23% in 2024. Sales to U. S. customers were $137,077 and to foreign customers were $54,082 in 2025, reflecting a global footprint across defense, commercial and industrial sectors.

Investment Thesis

▲ Bull case

Ultralife is poised to capitalize on a record backlog of $115.1 million, which represents a 21.1% year-over-year increase and reflects strong customer commitment to its newer product lines, with over $12 million attributable to products launched within the last year. This backlog is not merely a reflection of past orders but signals deepening customer trust in Ultralife’s ability to deliver complex, mission-critical RF and portable power solutions, particularly in defense and medical sectors where qualification cycles are long but revenue recognition is durable once achieved. The company’s strategic shift to unify its branding under the Ultralife master brand—completed this year—eliminates customer confusion from legacy sub-brands and strengthens its value proposition as a single-source provider of integrated power and communication systems. This clarity is especially critical as Ultralife pursues vertical integration opportunities through its Telemetry Power Systems business, where internal use of Electrochem-acquired cells in pack assemblies is expected to more than double in 2026, reducing reliance on third-party suppliers, improving gross margins, and accelerating time-to-market for customized solutions. The convergence of a growing backlog, brand simplification, and vertical integration creates a self-reinforcing cycle: higher internal cell utilization lowers costs, which improves margins and enables more aggressive pricing on new product wins, further feeding backlog growth. Management’s quiet confidence in this dynamic—evident in their emphasis on “leverage of our business model” without overstating near-term profits—suggests the market is underestimating how these structural improvements will translate into sustained profitability beyond the current quarter’s one-time costs.

▼ Bear case

Ultralife’s Q1 2026 performance reveals persistent structural weaknesses that the market may be overlooking amid optimism about backlog growth, particularly the deteriorating gross margin profile driven by recurring operational inefficiencies and an unfavorable sales mix. Gross margin declined 380 basis points year-over-year to 21.3%, with nearly $0.8 million of the shortfall attributable to nonrecurring production disruptions—including substation failures at Newark, extended inventory reconciliation at Ranum, and weather-related shutdowns—that suggest systemic vulnerabilities in its manufacturing footprint rather than isolated incidents. The company’s admission that these events negatively impacted gross margin by a quantifiable amount implies they are not merely weather-related flukes but symptoms of aging infrastructure, inadequate redundancy planning, and insufficient investment in operational resilience, especially in its Northeast facilities where energy costs are also rising. Compounding this, the shift in sales mix toward lower-margin commercial battery products (69-31 commercial-government split in Q1 2026 vs. 64-36 in Q1 2025) and the 25.7% decline in Communications Systems revenue—attributed to order timing but reflective of weak underlying demand—further eroded profitability. Operating expenses rose 10.5% year-over-year, driven by over $0.8 million in one-time consulting, litigation, and transition costs tied to gross margin improvement initiatives and ERP integration, signaling that the company is spending heavily just to stabilize baseline operations rather than fund growth. The fact that adjusted EBITDA fell to 6.8% of sales from 10.7% a year ago, despite a record backlog, indicates that revenue growth is not yet translating into scalable profitability, and the company’s reliance on the 45x tax credit—a temporary Inflation Reduction Act benefit set to phase down after 2032—to offset interest expenses highlights a fragile earnings foundation. Until Ultralife demonstrates consistent, margin-accretive execution without relying on one-time adjustments or tax benefits, the market’s enthusiasm for its backlog may be premature.

Ultralife’s Q1 2026 performance reveals persistent structural weaknesses that the market may be overlooking amid optimism about backlog growth, particularly the deteriorating gross margin profile driven by recurring operational inefficiencies and an unfavorable sales mix. Gross margin declined 380 basis points year-over-year to 21.3%, with nearly $0.8 million of the shortfall attributable to nonrecurring production disruptions—including substation failures at Newark, extended inventory reconciliation at Ranum, and weather-related shutdowns—that suggest systemic vulnerabilities in its manufacturing footprint rather than isolated incidents. The company’s admission that these events negatively impacted gross margin by a quantifiable amount implies they are not merely weather-related flukes but symptoms of aging infrastructure, inadequate redundancy planning, and insufficient investment in operational resilience, especially in its Northeast facilities where energy costs are also rising. Compounding this, the shift in sales mix toward lower-margin commercial battery products (69-31 commercial-government split in Q1 2026 vs. 64-36 in Q1 2025) and the 25.7% decline in Communications Systems revenue—attributed to order timing but reflective of weak underlying demand—further eroded profitability. Operating expenses rose 10.5% year-over-year, driven by over $0.8 million in one-time consulting, litigation, and transition costs tied to gross margin improvement initiatives and ERP integration, signaling that the company is spending heavily just to stabilize baseline operations rather than fund growth. The fact that adjusted EBITDA fell to 6.8% of sales from 10.7% a year ago, despite a record backlog, indicates that revenue growth is not yet translating into scalable profitability, and the company’s reliance on the 45x tax credit—a temporary Inflation Reduction Act benefit set to phase down after 2032—to offset interest expenses highlights a fragile earnings foundation. Until Ultralife demonstrates consistent, margin-accretive execution without relying on one-time adjustments or tax benefits, the market’s enthusiasm for its backlog may be premature.

Peer group

Peer Comparison

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S.No.	Ticker	Company	match	Market Cap	P/E	P/S	Total Debt (Qtr)
1	ENS	EnerSys	primary	6.60 Bn	18.82	1.74	1.07 Bn
2	QS	QuantumScape Corp	primary	3.38 Bn	-8.35	-	-
3	FLNC	Fluence Energy, Inc.	primary	1.91 Bn	-13.78	0.73	-
4	EOSE	Eos Energy Enterprises, Inc.	primary	1.32 Bn	-1.13	6.17	0.45 Bn
5	ENVX	Enovix Corp	primary	0.73 Bn	-4.26	20.28	0.53 Bn
6	NRGV	Energy Vault Holdings, Inc.	primary	0.69 Bn	-6.23	3.06	0.34 Bn
7	AMPX-WT	Amprius Technologies, Inc.	primary	0.47 Bn	-10.95	4.28	-
8	ELVA	Electrovaya Inc.	primary	0.29 Bn	124.95	4.05	0.04 Bn

Ultralife ULBI

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