AstroNova (ALOT) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue increased 14.1% year-over-year to $40.5 million, driven by strong Test & Measurement growth and the MTEX acquisition, with domestic revenue up 18.2% and international up 8.8%.

• The Product Identification segment benefited from the MTEX acquisition, with Q2 revenue up over 5% year-over-year and non-GAAP operating profit up 26.5% excluding MTEX.

• Net loss for Q2 was $0.3 million, a significant improvement from a $1.6 million loss in the prior year, impacted by MTEX acquisition costs and CFO transition charges.

• Strong demand in aerospace, especially for printers and MRO services, was fueled by global aviation recovery and new military contracts.

• MTEX integration is ongoing, with initial Q2 revenue under $0.8 million and an operating loss of $1.4 million; full integration is expected by the end of FY2025.

Financial highlights

• Q2 gross profit was $14.3 million, up 47.5% year-over-year, with gross margin improving to 35.3% from 27.3%; non-GAAP gross margin was 35.6%.

• Q2 operating income was $1.1 million, compared to a $1.2 million loss in the prior year; non-GAAP operating income was $2.2 million.

• Adjusted EBITDA for Q2 was $3.9 million, up 5.3% year-over-year.

• Q2 EPS was $(0.04) basic and diluted; non-GAAP diluted EPS was $0.08; six-month EPS was $0.12 basic and $0.11 diluted.

• Bookings in Q2 were $35.8 million, up from $30.1 million last year; backlog at quarter-end was $29.9 million.

Outlook and guidance

• Full-year FY2025 guidance reaffirmed for mid-single-digit percent organic revenue growth, with margin guidance lowered to 9%-10% due to MTEX integration delays; target margin of 13%-14% for FY2026.

• MTEX expected to contribute $8–10 million in revenue for FY2025, with profitability improvements anticipated as integration completes and backlog shipments in Q3 and Q4.

• Long-term goal to improve Adjusted EBITDA margin by 100 basis points annually beyond FY2026.

• Focus for the remainder of FY2025 is on inventory reduction and debt repayment.