Sono-Tek 2026 Q2 Earnings Modest Revenue Growth as Net Income Rises 24%

Sono-Tek reported fiscal Q2 2026 earnings on October 14, 2025, with revenue flat at $5.16 million year-over-year but net income growing 24%. The company raised its full-year guidance, citing strong medical device demand and a 50% sequential increase in backlog.

Sono-Tek’s Q2 2026 revenue remained stable at $5.16 million, matching the $5.16 million reported in the prior year. This represents the sixth consecutive quarter with sales exceeding $5 million, underscoring the company’s consistent performance. The revenue distribution across business segments was as follows: Fluxing Systems contributed $165,000, In-Line Coating Systems generated $1.53 million, Multi-Axis Coating Systems accounted for $2.03 million, OEM Systems contributed $394,000, and Spare Parts, Services and Other segments totaled $1.04 million. This segmental breakdown highlights the diversified nature of Sono-Tek’s revenue streams and the strong performance in key product categories.

Sono-Tek’s net income for Q2 2026 surged 24% to $423,693, or $0.03 per share, compared to $340,685, or $0.02 per share, in Q2 2025. This marked a significant improvement in profitability, driven by a 3% increase in gross profit to $2.6 million and a 47% rise in operating income to $421,000. The company has maintained profitability for six consecutive years, demonstrating strong operational efficiency and effective cost control. The 24% increase in net income reflects Sono-Tek’s ability to leverage its product mix and reduce operating costs while maintaining a solid gross margin of 50%.

Price Action
Sono-Tek's stock price experienced a decline in the immediate aftermath of the earnings report. During the latest trading day, the stock tumbled 8.16%, and over the most recent full trading week, it fell 8.99%. However, the stock showed a positive trend month-to-date, gaining 3.58%. These movements highlight the mixed investor sentiment in the short term, influenced by both the earnings results and broader market dynamics.

Post-Earnings Price Action Review
Steve Harshbarger, President, CEO & Director of Sono-Tek, emphasized the company's strategic focus on the medical device industry, which has shown a 150% year-over-year increase in sales, reaching $1 million. He highlighted the shift to larger, more complex systems and forward deployed engineering as key priorities, noting the strong momentum in the medical device sector. Despite a decline in clean energy orders, Harshbarger expressed confidence in the medical sector offsetting this. The CEO also outlined the company's current orders, including a $5 million and $2.8 million recent medical device orders, and a $11.2 million backlog. He described a cautiously optimistic outlook, acknowledging macroeconomic shifts but projecting modest revenue growth for FY 2026, with potential for significant growth in FY 2027 as new orders ship.

CEO Commentary
Sono-Tek’s CEO and President, Steve Harshbarger, highlighted the success of the company's growth strategies, particularly the adoption of complex large-scale production systems with higher average selling prices (ASPs). He emphasized the strong demand and momentum in the medical device industry, noting the global adoption of Sono-Tek’s advanced coating platforms by leading manufacturers. Harshbarger also expressed confidence in the company's strong balance sheet and backlog, which position Sono-Tek to navigate potential short-term demand shifts. He reaffirmed the company’s commitment to its long-term growth strategy, aiming for continued revenue growth and profitability.

Guidance
Sono-Tek updated its fiscal 2026 guidance, anticipating modest revenue growth. This revised outlook balances caution over clean energy and tariff policy shifts with optimism about the medical device sector. The company expects Q3 revenue to be slightly higher than Q4 due to a delayed shipment, projecting that the streak of $5 million-plus quarterly revenue will extend beyond six to eight quarters. Sono-Tek maintains a strong financial position with $10.6 million in cash, no debt, and plans to invest $300,000 in annual capital expenditures for facility upgrades and equipment.

Additional News
Sono-Tek recently announced a $5 million order for multiple state-of-the-art MediCoat systems designed for high-precision, scalable manufacturing, further underscoring the growing demand in the medical device industry. Additionally, the company secured a $2.8 million order from another major medical device manufacturer. These developments reinforce Sono-Tek’s strategic focus on expanding its presence in the medical sector. The company also plans to host a conference call on October 14, 2025, at 10:30 am ET to discuss its second quarter and first half fiscal 2026 financial results. During the call, management will provide further insights into the company’s performance and outlook. Sono-Tek remains committed to innovation and growth, leveraging its expertise in ultrasonic coating systems to serve diverse industries and meet evolving market demands.