Sono-Tek (SOTK) Q2 2026 earnings summary

Executive summary

• Achieved record first-half revenue of $10.3 million, with net income up 35%–36% year-over-year to $909,000–$917,000, and sixth consecutive quarter of revenue over $5 million.

• Backlog increased 50% sequentially to $11.21 million at August 31, 2025, reflecting strong medical device sector orders.

• Medical market sales surged 150% year-over-year in Q2, offsetting declines in clean energy and industrial markets.

• Diversification strategy and shift to larger, high-ASP systems are driving growth and improving gross margins.

• Operating income for Q2 FY2026 increased 47% to $421,000, driven by higher gross profit and lower operating expenses.

Financial highlights

• Q2 revenue was $5.16 million, up slightly year-over-year and sequentially from Q1.

• Q2 gross profit increased 3% to $2.6 million, with gross margin at 50%–50.2% due to favorable product mix and reduced costs.

• First half FY2026 net sales increased 1% to $10.3 million; gross profit up 6% to $5.25 million, with margin at 51%.

• Q2 net income rose 24%–27% to $424,000; first-half net income was $909,000–$917,000, or $0.06 per share.

• Cash and marketable securities totaled $10.6 million at August 31, 2025, with no debt.

Outlook and guidance

• FY26 guidance updated to anticipate modest revenue growth, with most large backlog orders shipping in FY 2027.

• Cautious outlook due to shifts in clean energy and tariff policy, but medical device demand expected to offset headwinds.

• Q3 expected to be slightly stronger than Q4 due to shipment timing.

• Management expects continued sales growth in medical and alternative energy markets, with order flow and shipments varying quarter to quarter.