Earnings call transcript: Sono-Tek misses Q2 2027 estimates as shares fall 11%

Sono-Tek Corp. missed Wall Street's earnings estimates for the second quarter of fiscal 2027, causing its shares to drop 11.1% to $6.33 in premarket trading. The ultrasonic coating systems manufacturer reported earnings of $0.02 a share, below expectations of $0.04, on revenue of $5.23 million, less than the forecasted $5.56 million.

Despite the profit and revenue shortfalls, the company's revenue grew 1.3% year-over-year, and first-half revenue increased 6% to $10.9 million. Gross margins expanded to 55% in the first half, up from 51% a year earlier. Sono-Tek's backlog increased to $9.5 million at the end of August and rose further in the quarter due to new orders.

The medical market contributed 289% growth in first-half sales, reaching about $7.1 million and becoming the company's largest growth driver. Management predicted flat to modest revenue growth for the rest of fiscal 2027 but noted improving visibility for fiscal 2028.