Transcat (TRNS) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 consolidated revenue rose 7.3% year-over-year to $278.4 million, driven by consistent demand in both services and products, with Q4 revenue up 9% to $77.1 million.

• Service revenue increased 7% to $181.4 million, with calibration services and acquisitions, notably Martin Calibration, as key growth drivers.

• Distribution revenue grew 7.8% to $97 million, supported by rental platform expansion.

• Operating cash flow reached a record $38.6 million, up 18% year-over-year, and operating free cash flow improved by $6.5 million to $25.8 million.

• Adjusted EBITDA for Q4 rose 9% to $12.7 million; full-year Adjusted EBITDA was $39.7 million, up 3%.

Financial highlights

• Q4 consolidated gross profit was $25.9 million, up 8%, with gross margin at 33.6%; full-year gross profit increased 7% to $89.5 million, with gross margin at 32.1%.

• Q4 net income was $4.5 million, down from $6.9 million due to prior-year non-cash profit; full-year net income rose 6% to $14.5 million.

• Q4 adjusted diluted EPS was $0.64 (down from $0.66); full-year adjusted diluted EPS was $2.29 (down from $2.35).

• Q4 adjusted EBITDA margin was 16.5%, consistent with prior year; full-year adjusted EBITDA margin was 14.3%.

• Q4 operating income fell 24.6% to $6.9 million; full-year operating income decreased 9.6% to $17.9 million.

Outlook and guidance

• High single-digit organic growth is expected as macroeconomic volatility subsides, with momentum anticipated in the back half of the year.

• The service segment is projected to have substantial growth runway, both organically and through acquisitions.

• Rental business is expected to grow in line with historical high single-digit trends, with investments supporting continued expansion.

• Net capital expenditures for fiscal 2026 are expected to be $14–$16 million; income tax rate expected in the 27% to 29% range.

• Continued focus on automation, productivity, and strategic acquisitions to drive long-term value.