October 2025 – September 2026 | Prepared: September 30, 2025
Key Finding: Revenue growth projected at 15.2% YoY driven by expanding customer base and 3% price increases. Operating leverage improving with SG&A declining from 27% to 25% of revenue.
| Month | Base Case | YoY Growth | Optimistic (+5%) | Conservative (-5%) |
|---|---|---|---|---|
| Oct 2025 | $1,840,000 | +14.8% | $1,932,000 | $1,748,000 |
| Nov 2025 | $1,875,000 | +15.2% | $1,969,000 | $1,781,000 |
| Dec 2025 | $1,795,000 | +13.5% | $1,885,000 | $1,705,000 |
| Q4 2025 | $5,510,000 | +14.5% | $5,786,000 | $5,234,000 |
| Q1 2026 | $5,920,000 | +15.8% | $6,216,000 | $5,624,000 |
| Q2 2026 | $6,185,000 | +16.2% | $6,494,000 | $5,876,000 |
| Q3 2026 | $6,205,000 | +14.9% | $6,515,000 | $5,895,000 |
| FY 2026 Total | $23,820,000 | +15.2% | $25,011,000 | $22,629,000 |
Revenue Drivers:
Based on 24 months of consistent growth patterns and confirmed pipeline
| Category | FY 2025 Actual | % of Revenue | FY 2026 Base | % of Revenue | YoY Change |
|---|---|---|---|---|---|
| Cost of Goods Sold | $12,377,000 | 63.9% | $14,940,000 | 62.8% | -1.1pp |
| Salaries & Wages | $1,757,000 | 9.1% | $2,145,000 | 9.0% | -0.1pp |
| Marketing & Sales | $801,000 | 4.1% | $952,000 | 4.0% | -0.1pp |
| Facilities & IT | $1,087,000 | 5.6% | $1,191,000 | 5.0% | -0.6pp |
| Other Operating | $1,622,000 | 8.4% | $1,787,000 | 7.5% | -0.9pp |
| Total Operating Expenses | $17,644,000 | 91.1% | $21,015,000 | 88.3% | -2.8pp |
Fixed vs Variable Analysis:
Supply chain volatility and wage inflation present forecast uncertainty
| Metric | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | FY 2026 |
|---|---|---|---|---|---|
| Gross Margin % | 36.8% | 37.0% | 37.5% | 37.3% | 37.2% |
| Operating Margin % | 10.2% | 10.8% | 11.5% | 11.2% | 11.0% |
| EBITDA Margin % | 11.8% | 12.4% | 13.1% | 12.8% | 12.6% |
| Net Margin % | 7.8% | 8.3% | 9.2% | 8.9% | 8.7% |
| Scenario | Revenue | Net Income | Net Margin | Confidence |
|---|---|---|---|---|
| Base Case | $23,820,000 | $2,072,000 | 8.7% | High |
| Optimistic | $25,011,000 | $2,526,000 | 10.1% | Medium |
| Conservative | $22,629,000 | $1,585,000 | 7.0% | Medium |
| Component | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | FY 2026 |
|---|---|---|---|---|---|
| Operating Cash Flow | $485,000 | $520,000 | $615,000 | $580,000 | $2,200,000 |
| Investing Cash Flow | ($75,000) | ($125,000) | ($85,000) | ($65,000) | ($350,000) |
| Financing Cash Flow | $0 | ($250,000) | $0 | ($250,000) | ($500,000) |
| Net Cash Flow | $410,000 | $145,000 | $530,000 | $265,000 | $1,350,000 |
| Ending Cash Balance | $3,320,000 | $3,465,000 | $3,995,000 | $4,260,000 | $4,260,000 |
Working Capital Metrics:
| Metric | Current (Sep 2025) | Target (Sep 2026) | Industry Benchmark | Status |
|---|---|---|---|---|
| Liquidity Ratios | ||||
| Current Ratio | 3.81 | 4.15 | 2.50 | Strong |
| Quick Ratio | 2.55 | 2.85 | 1.80 | Strong |
| Efficiency Ratios | ||||
| Inventory Turnover | 5.8x | 6.5x | 6.0x | Improving |
| Asset Turnover | 2.96x | 3.15x | 2.80x | Above Average |
| Leverage Ratios | ||||
| Debt to Equity | 0.00 | 0.00 | 0.45 | Excellent |
| Interest Coverage | N/A | N/A | 8.5x | No Debt |
Our forecast assumes continued economic stability with GDP growth of 2-3% annually. Revenue projections incorporate a 3% price increase effective October 2025 and an additional 2% in April 2026, reflecting our improved market position and value proposition. Volume growth of 10-12% is driven by:
September 2025 actuals exceeded forecast by 4.2%, primarily due to accelerated customer acquisition and stronger-than-expected performance in the services segment (+8% vs forecast). Historical seasonality shows Q2 as our strongest quarter (April-June), accounting for 27% of annual revenue, while Q4 typically represents 23% due to holiday impacts.
So What: The forecast demonstrates strong operational leverage with margins expanding 280 basis points year-over-year. Cash generation of $2.2M from operations provides flexibility for strategic investments without external financing.
Now What: Management should prioritize:
Our base case carries High Confidence for Q4 2025 - Q1 2026 based on contracted backlog and visible pipeline. Confidence decreases to Medium for H2 2026 due to macroeconomic uncertainties and competitive dynamics.
A 1% change in revenue impacts net income by approximately $95K (4.6% swing). A 1% change in COGS impacts net income by approximately $149K (7.2% swing).