What were the key takeaways from Sono-Tek's earnings call?

What is the revenue and EPS growth rate for Sono-Tek year over year?

What guidance did Sono-Tek's management provide for the next earnings period?

What is Sono-Tek's gross profit margin?

What were the key takeaways from Sono-Tek’s earnings call?

What is the market's earnings forecast for Sono-Tek next quarter?

What factors drove the changes in Sono-Tek's revenue and profit?

What does Sono-Tek do and what are its main business segments?

- **Medical Device Breakthrough**: Q2 medical sales +150% YoY to $1M, driven by China and global balloon catheter orders, defying tariffs with 3-4x ASP premium.
- **FDE Margin Expansion**: Forward-deployed engineering team now 3x larger, driving 60-70% of high ASP systems and expected margin improvement in FY 2027.
- **Semiconductor Growth**: New 300mm wafer coating opportunities emerge, with strong showings at Semicon and optics-related OEM wins.
- **Backlog Strength**: $11.2M backlog (near record) to fuel FY 2027, with FY 2026 modest growth reflecting extended system build times.

**【CEO Summary Section】**
- Q2 2026 revenue reached $5.16 million, marking the sixth consecutive quarter above $5 million, with first-half record revenue of $10.3 million (+1% YoY). Medical device sales surged 150% YoY to $1 million, driven by balloon catheter coating systems shipped globally.
- Gross profit increased 3% YoY to $2.6 million (50% margin), supported by high ASP systems and cost reductions. Net income rose 27% to $431,000, reflecting higher gross profit and lower expenses.
- Backlog stands at $11.2 million (near record levels), with $5 million+ orders from medical and clean energy sectors. FY 2026 guidance: modest revenue growth, offsetting clean energy softness with medical device momentum.

**【CFO Financial Commentary】**
- Q2 2026: Net income $424,000 (+24% YoY), EPS $0.03. First-half net income $917,000 (+36% YoY), EPS $0.06. Gross margin expanded to 51% (vs. 49% prior year), driven by favorable product mix.
- Operating expenses decreased 3% YoY to $2.17 million, with R&D down 5% to $627,000 and marketing/sales down 12% to $871,000. Strong cash position: $10.6 million with no debt.
- First-half R&D investment $1.3 million, supporting new product development in medical and semiconductor markets.

**【Q&A Key Highlights】**
- **Medical Device Success**: China-based customers chose Sono-Tek despite tariffs, citing quality superiority over local competitors. Balloon catheter systems sold to U.S., Europe, and China, with ASPs 3-4x higher than domestic alternatives.
- **FDE Strategy Impact**: Forward-deployed engineering team (now 3 engineers) accelerates adoption, shortens sales cycles, and drives 60-70% of high ASP system sales. Margins expected to expand as production scales.
- **Semiconductor Expansion**: Strong showings at Semicon Arizona, with interest in 300mm wafer coating systems. New optics-related OEM wins signal long-term growth potential.
- **Backlog Visibility**: $11.2 million backlog to be recognized over FY 2027, with ~10-15% shipping in Q3/Q4 2026. FY 2026 guidance reflects cautious near-term outlook, but FY 2027 poised for significant growth.

Sono-Tek Corporation (SOTK) Q2 2026 Earnings Call Transcript

- **4% Revenue Growth**: Driven by high ASP systems in clean energy (64% YoY) and medical recovery.
- **$8.6M Backlog**: Includes two record $2.95M orders, 8 clean energy systems set to ship in H1 FY2026.
- **Medical Momentum**: Balloon coating systems at $250k+ ASP, targeting 100+ units over next 3 years.
- **Semiconductor Expansion**: New wafer shuttling systems with ASP $500k-$1m, leveraging EU/Asia demand.
- **Cash Strength**: $11.9M cash, no debt, with $435k FY2026 CapEx for manufacturing upgrades.


**【Management Opening Remarks】**
- Full year 2025 revenue grew 4% to $20.5 million, driven by high ASP systems in clean energy and medical markets.
- FY2025 net income of $1.3 million ($0.08 per share), stable compared to prior year.
- Solid backlog of $8.6 million at end of Q4, including two record orders of $2.95 million each.
- FY2026 outlook: Expect continued growth in medical and semiconductor sectors, despite near-term clean energy uncertainty.

**【CEO Business Review】**
- **Clean Energy Growth**: 64% YoY increase in sales, driven by production-scale systems for solar cells, carbon capture, and green hydrogen.
- **Medical Market Recovery**: 22% YoY decline in FY2025 due to stent coating softness, but strong momentum in balloon coating systems for cardiac interventions.
- **Semiconductor Expansion**: New wafer shuttling systems and partnerships for production-scale coating solutions (ASP $500k-$1m).
- **Geographic Shift**: 61% of sales now from US/Canada (up from 55%), offsetting declines in Latin America and China.

**【CFO Financial Highlights】**
- Gross margin 47.5% (down 2.5pts vs prior year) due to product mix and cost allocation changes.
- Operating expenses stable at $8.73 million, with R&D investment of $2.7 million.
- Strong cash position of $11.9 million, no debt.
- FY2026 CapEx guidance: $435k for manufacturing upgrades.

**【Q&A Key Takeaways】**
- **Order Visibility**: 8 clean energy systems ($2.95m each) in backlog, expected to ship in Q1/Q2 FY2026.
- **Market Risks**: US clean energy policy uncertainty, but EU/Asia demand resilient.
- **Tariff Impact**: Minimal to date, but ongoing trade negotiations could affect international sales.
- **Medical Growth**: Balloon coating systems at $250k+ ASP, targeting 100+ units over next 3 years.
- **M&A Potential**: Open to strategic acquisitions if aligns with $40m+ revenue runway.


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