Sono-Tek Corporation Reports 2% Revenue Increase and Improved Gross Profit in Q1 Fiscal 2026

Sono-Tek Corporation reported a modest increase in financial performance for the first quarter of fiscal year 2026, with net sales rising 2% to $5.13 million compared to $5.03 million in the same period last year. The company achieved a gross profit of $2.67 million, reflecting a 9% increase from $2.45 million in the prior year, resulting in a gross margin improvement to 51.9% from 48.8%. This growth was attributed to a favorable product mix, particularly driven by a significant repeat order in the Alternative Energy sector, which contributed to a notable increase in the average selling price of their systems.

In terms of operational metrics, Sono-Tek's backlog decreased to $7.48 million from $8.68 million at the end of February 2025, a decline of 14%. The company noted that this decrease is typical due to the variability in order flow associated with high average selling price platform machine orders. The sales breakdown indicated a substantial increase in Integrated Coating Systems, which surged by 309% to $3.05 million, primarily due to a $2.95 million order for advanced solar applications. However, Multi-Axis Coating Systems sales fell by 75% to $677,000, reflecting reduced demand in North America.

The company’s operating income also saw a significant increase, rising to $483,000 from $238,000 in the previous year, driven by higher gross profit and a reduction in operating expenses. Total operating expenses decreased slightly to $2.18 million from $2.22 million, with reductions in research and development, as well as marketing and selling expenses. However, general and administrative costs increased due to higher corporate expenses and stock-based compensation.

Sono-Tek's cash and cash equivalents, along with marketable securities, totaled $10.9 million as of May 31, 2025, down from $11.9 million at the end of February 2025. The company reported a net income of $485,000 for the quarter, up from $331,000 in the prior year, despite an increase in income tax expense due to higher income before taxes. The company continues to focus on expanding its sales capabilities and enhancing its product offerings, particularly in the clean energy sector, which is expected to drive future growth.

Looking ahead, Sono-Tek anticipates continued fluctuations in order flow and shipments, particularly as it transitions to higher-value subsystems and complete machine solutions. The company remains committed to leveraging its innovative technologies and expanding its market reach, particularly in the Alternative Energy sector, which is expected to be a significant growth driver in the coming quarters.