Sono-Tek Corp (NASDAQ:SOTK) stock fell 2.06% (As on December 14, 10:34:56 AM UTC-4, Source: Google Finance) after the company earnings matched while revenue topped estimates. The gross margin expanded to 50% and net income rose 24% to $340,000; for the first nine months, sales were essentially flat at $15.3 million, but gross margin improved to 51% and net income climbed 32% to $1.25 million. The company ended the quarter debt-free with $11.7 million in cash and securities and a record $12.26 million backlog, reflecting strong order momentum driven by high-ASP production systems, medical, electronics and industrial demand, even as policy-driven softness in U.S. alternative energy and electrolysis markets weighed on some product categories and regions. Management highlighted strong growth in in-line coating, OEM and fluxing systems, robust medical and industrial sales, and a mixed geographic picture with higher North American sales offset by declines in Asia Pacific, Latin America and EMEA, underscoring Sono-Tek’s strategic shift toward higher-margin systems and its reinforced positioning for continued, if modest, top-line growth.
Moreover, Sales in the U.S. and Canada increased by 21% in the third quarter, driven by shipments of high-ASP in-line coating systems. However, sales in the Asia Pacific region declined by 34% in the third quarter due to timing issues, although they increased by 13% over the first nine months, supported by medical activity in China and alternative energy demand in Japan and South Korea. The company shipped eight high-ASP systems totaling approximately $5.9 million to a major solar customer, contributing to the increase in In-Line Coating Systems revenue. The company is transitioning from primarily selling ultrasonic nozzles and components to providing complete machine solutions and higher-value subsystems, which are sold at higher average selling prices.
SOTK in the third quarter of FY26 has reported the adjusted earnings per share of 2 cents, which matches the analysts’ estimates for the adjusted earnings per share of 2 cents. The company had reported the adjusted revenue decline of 3.6 percent to $5 million in the third quarter of FY26, beating the analysts’ estimates for revenue of $4.99 million. The company experienced a significant increase in In-Line Coating Systems revenue, which rose by 126% due to the shipment of high-ASP systems to a major solar customer. Conversely, Multi-Axis Coating Systems revenue decreased by 46% due to reduced demand following government policy changes
The company anticipates wide variations in order flow and shipments from quarter to quarter. It expects continued sales growth in the medical and alternative energy markets and aims to leverage its innovative technologies and global reach to develop thin-film coating technologies that enable better outcomes for customers.