July 8, 2026

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Sono-Tek Corporation (NASDAQ: SOTK) reported fiscal first-quarter 2027 results with higher revenue, expanded gross margin, stronger operating income, and improved net income, supported by growth in medical coating systems.
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Sono-Tek is a precision ultrasonic coating systems company that designs and manufactures thin-film coating equipment used in medical devices, microelectronics, alternative energy, industrial manufacturing, and research applications.
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The company reported EPS of $0.05, in line with estimates. Revenue came in at $5.66 million, slightly below estimates of $5.70 million, though net sales increased 10.3% from the prior-year quarter.

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Results Showed Higher Revenue and Profit Growth

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Net sales increased 10% to $5.66 million, driven by strong demand in the medical market, partly offset by lower Alternative Energy shipments.
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Gross profit increased 21% to $3.21 million.
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Gross margin expanded to 57% from 52%, helped by favorable product mix, higher-value system shipments, stronger U.S. sales, and lower distributor commission expenses.
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Operating income increased 86% to $897,000, while operating margin improved to 16% from 9%.
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Net income increased 53% to $741,000, or $0.05 per diluted share, compared with $485,000, or $0.03 per diluted share, a year earlier.

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Medical Segment Led Growth

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Medical revenue increased to $3.95 million from $809,000 a year earlier.
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Growth was driven by specialty stent coating systems in the U.S. and Drug-Eluting Balloon platforms across the U.S., China, and Europe.
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Electronics and microelectronics revenue was $863,000, down from $943,000.
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Alternative Energy and Clean revenue fell to $319,000 from $3.25 million, reflecting reduced electrolysis demand and the absence of solar shipments that benefited the prior-year quarter.
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Industrial revenue increased to $530,000 from $119,000, supported by system upgrades and R&D nano-coating applications.

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Balance Sheet, Backlog and Outlook

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Sono-Tek ended the quarter with $16.65 million in cash, cash equivalents, and marketable securities, up from $14.81 million at the prior fiscal year-end.
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The company had no outstanding debt.
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Backlog was $7.73 million as of May 31, 2026, up 3% from $7.48 million a year earlier, though down from $9.12 million at fiscal 2026 year-end.
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Sono-Tek expects revenue growth and profitability in the first half of fiscal 2027 compared with the first half of fiscal 2026, supported by medical demand and continued adoption of higher-value production-scale coating systems.
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For the full fiscal year, the company expects revenue to be relatively flat to modestly higher compared with fiscal 2026, reflecting limited visibility in certain clean energy markets and shipment timing for larger production platforms.

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The Bigger Picture

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Sono-Tek’s quarter showed the benefit of shifting toward higher-value production systems.
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Revenue increased, gross margin expanded sharply, and operating income nearly doubled. The medical segment was the clear driver, especially demand for stent coating and Drug-Eluting Balloon platforms.
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The main question is consistency. Sono-Tek’s results can move based on shipment timing, product mix, and demand in clean energy markets. If medical demand remains strong and higher-value systems become a larger share of sales, the company could have a stronger path to sustainable margin improvement.
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