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- **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

Revenue

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SOTK

SOTK fundamentals

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