Sono-Tek 2026 Q3 Earnings Net Income Surges 24% Despite Revenue Decline

Sono-Tek (SOTK) reported mixed Q3 2026 results, with revenue declining 3.6% year-over-year but net income rising 24%. The company maintained stable EPS at $0.02 and reiterated guidance for modest annual revenue growth.

Revenue

Sono-Tek’s total revenue fell to $5 million in Q3 2026, a 3.6% decrease from $5.19 million in the prior-year period. Fluxing Systems generated $222,000, while In-Line Coating Systems contributed $1.84 million. Multi-Axis Coating Systems accounted for $1.67 million, OEM Systems brought in $425,000, and Other segments totaled $847,000. The decline was attributed to reduced demand in the Alternative Energy segment and geopolitical policy shifts, partially offset by strong medical and electronics market performance.

Earnings/Net Income

The company’s profitability strengthened, with net income rising 24% to $339,959, driven by improved gross margins and operating leverage. EPS remained stable at $0.02, reflecting disciplined cost management. The sustained profitability for six consecutive years underscores operational resilience despite sector-specific headwinds.

Post-Earnings Price Action Review

A strategy of buying SOTK when earnings beat and selling after 30 days yielded a -18.05% return, underperforming the benchmark’s 52.59%. The approach avoided losses with a 0.00% maximum drawdown but delivered a negative Sharpe ratio of -0.08, indicating poor risk-adjusted returns. A 30-day holding period proved insufficient for price recovery, resulting in a -4.70% CAGR and 57.09% volatility.

CEO Commentary

Dr. Christopher Coccio, Executive Chairman, emphasized the success of prioritizing high-average-selling-price (ASP) production systems and maintaining cost discipline. Steve Harshbarger, CEO, highlighted sustained demand in medical and electronics sectors, offsetting alternative energy softness, and reiterated confidence in long-term growth driven by a strong backlog and strategic focus on high-ASP systems.

Guidance

Sono-Tek reiterated FY2026 guidance for modest revenue growth, balancing policy-driven market adjustments with expanding medical device demand.

Additional News

1. $2.8M Medical Device Order: Sono-Tek secured a $2.8 million order for advanced medical coating systems in October 2025, expanding its presence in high-value production.

2. $5M Medical System Deal: A $5 million order for MediCoat systems in September 2025 underscored growing adoption in precision manufacturing.

3. Conference Call Announcement: The company announced a Q2 2026 earnings call in October 2025, aligning with its strategy to enhance investor transparency.