Transcat Reports 25.6% Revenue Growth in Q3 2026 Despite Net Loss

Transcat, Inc. reported significant financial results for the third quarter and the first nine months of fiscal year 2026, reflecting a strong performance driven by acquisitions and organic growth. For the third quarter ended December 27, 2025, the company achieved total revenue of $83.9 million, a 25.6% increase from $66.8 million in the same period last year. Service revenue rose by 29.1% to $53.7 million, while distribution revenue increased by 19.8% to $30.2 million. However, the company reported a net loss of $1.1 million, compared to a net income of $2.4 million in the prior year, primarily due to increased operating expenses and interest costs associated with recent acquisitions.

In the first nine months of fiscal year 2026, Transcat's total revenue reached $242.6 million, up 20.5% from $201.3 million in the same period of fiscal year 2025. Service revenue accounted for 64.2% of total revenue, increasing by 20.3% year-over-year, while distribution revenue also saw a 20.9% rise. The company’s gross profit for the nine-month period was $77.8 million, a 22.5% increase from $63.5 million, with a gross margin of 32.1%, slightly up from 31.6% in the previous year.

Strategically, Transcat has expanded its operations through acquisitions, including the purchase of Essco Calibration Laboratory and Martin Calibration, which contributed to the revenue growth. The company reported that acquired revenue from these transactions amounted to $9.8 million in the third quarter. The integration of these businesses is expected to enhance Transcat's service capabilities and geographic reach, aligning with its growth strategy in highly regulated industries.

Operationally, Transcat's employee headcount has increased as a result of these acquisitions, contributing to higher selling, marketing, and administrative expenses, which rose by 43.2% to $25.2 million in the third quarter. The company also reported a significant increase in stock-based compensation and executive transition costs. Despite the challenges, Transcat's management remains optimistic about future growth, projecting high single-digit organic revenue growth for the remainder of fiscal year 2026, supported by strong customer retention and increased activity levels.

Looking ahead, Transcat is focused on leveraging its recent acquisitions to drive sustainable growth and enhance shareholder value. The company anticipates maintaining a tax rate between 30% and 32% for the full fiscal year 2026 and is committed to executing its acquisition strategy while returning to historical levels of organic growth.