U.S. stock futures edge higher; earnings season continues
AstroNova Inc. reported a notable 14.4% year-over-year increase in revenue for the first quarter of fiscal year 2026, reaching $37.7 million. The company experienced a net loss of $400,000, translating to a loss of $0.05 per share. According to InvestingPro data, the company has not been profitable over the last twelve months, with a negative return on assets of -10.39%. Despite the loss, the stock saw a positive pre-market reaction, with shares rising by 7.79% to $9.82. AstroNova’s strong revenue growth and strategic initiatives in product innovation and cost reduction were key highlights.
Key Takeaways
- Revenue increased by 14.4% year-over-year, reaching $37.7 million.
- Stock price rose 7.79% in pre-market trading.
- New product launches and cost reduction efforts are underway.
- The company maintains a strong liquidity position with $12.6 million.
Company Performance
AstroNova’s performance in Q1 FY2026 demonstrated significant progress, with revenue climbing 14.4% compared to the same period last year. The company attributed this growth to its expanding product portfolio and strategic market positioning. The commercial aerospace sector’s positive macro backdrop and increased build rates from Boeing and Airbus contributed to the company’s performance. AstroNova also secured new contracts in its product identification segment, enhancing its competitive position.
Financial Highlights
- Revenue: $37.7 million, up 14.4% year-over-year
- Net Loss: $400,000, equating to a loss of $0.05 per share
- Adjusted EBITDA: $3.1 million, a 27.6% increase year-over-year
- Gross Profit: $12.7 million, representing 33.6% of sales
- Liquidity: $12.6 million, including $5.4 million in cash
Market Reaction
AstroNova’s stock responded positively to the earnings announcement, with pre-market trading showing a 7.79% increase, pushing the share price to $9.82. This movement reflects investor optimism about the company’s growth trajectory and strategic initiatives. However, InvestingPro data shows the stock has declined 42.23% over the past six months. The stock’s performance is notable given its 52-week range, with a low of $7.53 and a high of $18.25, indicating potential for recovery. Current trading levels appear to align with InvestingPro’s Fair Value assessment.
Outlook & Guidance
AstroNova provided a full-year revenue guidance of $160 million to $165 million, anticipating a 7% year-over-year growth. The company plans to improve its adjusted EBITDA margin to between 8.5% and 9.5%. Upcoming product launches, including six more disruptive solutions in FY2026, are expected to drive margin improvements and revenue growth.
Executive Commentary
CEO Greg Woods emphasized the company’s strategic focus, stating, "We are executing a clear strategy to deliver revenue growth and improve our profitability." He also noted, "We believe that this quarter reflected a positive turning point in our business," highlighting the optimism surrounding AstroNova’s future.
Risks and Challenges
- Supply Chain Flexibility: While AstroNova boasts a flexible supply chain, potential disruptions could impact production.
- Market Competition: The competitive landscape in aerospace and product identification remains intense.
- Macroeconomic Pressures: Global economic factors could influence demand in key markets.
AstroNova’s Q1 FY2026 results underscore its strategic advancements and market opportunities, positioning the company for continued growth despite current challenges. For deeper insights into AstroNova’s financial health, valuation metrics, and expert analysis, explore the comprehensive Pro Research Report available exclusively on InvestingPro.
Full transcript - AstroNova Inc (ALOT) Q1 2026:
Conference Operator: Greetings. Welcome to AstroNova First Quarter Fiscal Year twenty twenty six Financial Results. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.
It is now my pleasure to introduce Deborah Pawlowski, Investor Relations for AstroNova. Thank you. You may begin.
Deborah Pawlowski, Investor Relations, AstroNova: Thank you and good morning everyone. We certainly appreciate your interest in AstroNova and thank you for sharing your time with us today. Joining me on our call are Greg Woods, our President and Chief Executive Officer and Tom DeByle, our Chief Financial Officer. You should have the earnings release that went out this morning as well as the slides that will accompany our conversation today. If not, you can find these documents on the Investor Relations section of our website at astronovainc.com.
If you would turn to slide two we’ll discuss the cautionary statement. As you are likely aware during the formal presentation as well as the Q and A session management may make some forward looking statements about our current plans, beliefs and expectations. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks, uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with Securities and Exchange Commission. These documents can be found on our website or at sec.gov.
Also as noted on the slide management will refer to some non GAAP financial measures. We believe these will be useful in evaluating our performance. However you should not consider the presentation of this additional information in isolation or or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non GAAP measures with comparable GAAP measures in the tables that accompany today’s release and slides. Now if you will please turn to slide three, I’ll turn the call over to Greg.
Greg?
Greg Woods, President and Chief Executive Officer, AstroNova: Thank you Debbie, and good morning everyone and thank you for joining us. Before I get into the details of the quarter, I want to reiterate our strategy to drive long term revenue growth and improve profitability. AstroNova has a unique position in the global data visualization market with deeply embedded relationships, high performance technology, and a strong recurring revenue model. Our goal is to leverage our technologies and market position and our streamlined organization to deliver stronger growth and earnings with more predictable performance. Core to the strategy are three strategic drivers.
First, our aerospace segment, which has a leading market share in cockpit printers, is rapidly advancing the transition of customers from our legacy models to our high performance and high reliability Tough Writer printers. This transaction deepens our position with leading aerospace customers, decouples us from royalty costs associated with legacy products, and simplifies our product portfolio, which reduces supply chain complexity and inventory levels, improving cash generation and margins. The transition also enables us to capture a larger percentage of aftermarket sales. Our ToughRider technology enables us to better leverage the positive macro backdrop of the commercial aerospace market as both Boeing and Airbus continue to ramp up their build rate. The second strategic driver is the launch of highly disruptive next generation product identification solutions.
These commercial scale printing solutions unlock new end markets with large customers that have higher volume printing needs. They also allow us to better control the supply chain for our ink and critical print engine components, lowering costs over time. This provides more avenues for growth, and we have already been gaining traction with both new and existing customers. And the third strategic driver is further streamlining operations through headcount reductions and restructuring, while strengthening segment level accountability. We are working to structure incentive compensation with key performance indicators including growth, profitability, cash generation, and earnings per share to further improve alignment between management and shareholders.
We are laser focused on executing this strategy. With that, if you’ll turn to slide four, let me touch on the quarterly highlights. We believe that our first quarter of fiscal twenty twenty six results are an early indication of the traction we are making with our strategy. We delivered double digit growth in both segments and increased consolidated adjusted operating income by 13.5% year over year. This was driven by our continued Tough Writer transition, renewed defense shipments of half a million dollars, higher demand for our desktop label printers, and a $1,400,000 increase in product sales from last year’s acquisition.
We also accelerated our previously announced $3,000,000 annualized cost reduction plan by completing 1,900,000 of annualized cost saving actions in the quarter, most of which will begin to be realized in the second quarter. We plan to complete the remainder of the cost saving actions in the second quarter. During Q1, we launched three next generation product identification solutions ahead of schedule. The QL425 and the QL435 were launched as an extension of our flagship quick label line of high resolution color label printers, bringing a new level of speed, flexibility, and cost efficiency to our professional labeling customers. We also released a new direct to package printer, the AJ800, which enables printing on sustainable packaging materials like corrugated cardboard, die cut boxes, and paper bags, as well as wood.
And the AG-eight hundred expands our product portfolio into larger print media and higher volume production. We are ahead of schedule with the rollout of two additional next generation products that we have in our pipeline. These are expected to be launched in the second quarter. In Q1, we up trained and upgraded our sales team, implemented a new targeted sales strategy under our recently appointed segment leadership, and restructured our go to market approach. We are pleased with the progress the team has made already and encouraged by the early interest and orders they have generated.
In aerospace, at the end of the quarter, we announced a renewed $10,000,000 multi year contract win for the delivery of our Tough Rider products over the next five years to a prime defense contractor. And shipments on this program began late in Q1. We expect to realize $1,700,000 of revenue this fiscal year from this program. The hard work and hard decisions made over the past six months are improving results, but we still have more work to do. We expect our margin profile and aftermarket sales to strengthen as the rollout of our new product ID solutions gain market acceptance and our top rate of transition continues to advance.
For the full year, we continue to expect to deliver revenue in the range of 160,000,000 to $165,000,000 and adjusted EBITDA margin in the range of 8.5% to 9.5%. This is a critical juncture for AstroNova and we are confident in our ability to deliver long term shareholder value through the focused execution of our strategy. Looking at slide five, we will review orders and backlog and discuss the opportunities we are seeing in our markets. First quarter orders of $34,900,000 were up 5.4% or $1,800,000 compared with prior year period driven by a combination of higher demand for new and existing product identification hardware and supplies. Product ID orders were up 3,300,000 to 26,200,000.0.
We secured a three year label supply contract with a multinational beauty company, which is a new account for us. We also captured a renewed upsize contract from a large private label coffee grocer in The UK. This current customer also will be upgrading its entire fleet of quick label printers. While declines of $1,500,000 in aerospace orders partially offset overall order growth, we continue to have strong demand for tough riders, reflecting the improved bill rates of the major commercial aircraft OEMs. As we have previously pointed out, aerospace orders can vary quarter to quarter based on timing of customer contracts.
For example, shortly after the end of Q1, we received a $1,000,000 ToughRider printer order from an in flight entertainment customer. During the quarter, we did also further expand our space launch data acquisition business. We secured an order from a new customer, Amazon Kuiper Systems, for our data acquisition systems to be used on their low earth orbit satellite program. Backlog for the quarter declined by $2,800,000 year over year to $25,500,000 primarily driven by clearing previously delayed shipments. As we move through fiscal twenty twenty six, we expect to benefit from our new product introductions and the increasing build rates with Airbus and Boeing.
Before I pass the call over to Tom, please turn to slide six and I will touch on what we are seeing regarding tariffs. The headline commentary is that so far the impacts have been negligible for our business. Our aerospace shipments are insulated from many of the tariffs due to the contracts we have in place, which essentially hedge our exposure on the sales side. Most of our exposure comes from the component part. However, due to the expense and regulatory difficulties associated with making changes to aerospace avionics, we typically carry large inventories of the most critical component.
This gives us a multi month protection from vendor and or tariff issues. For product ID, our next generation print engine allows us to source ink from across the world providing flexibility on supply costs. Additionally, our global manufacturing presence in The United States, Europe and Canada gives us more options for rerouting our shipments. To further combat tariffs we implemented price increases on April 1 and tariff surcharges in the May. We continue to remain agile and look for ways we can partner with and source from alternative suppliers to minimize cost impacts.
I’ll now hand the call over to Tom for the financial review. Tom?
Tom DeByle, Chief Financial Officer, AstroNova: Thank you, Greg. Good morning, everyone. On slide seven, you can see our first quarter revenue of $37,700,000 grew 14.4% year over year and 0.9 sequentially. 83% of the quarter’s revenue was reoccurring. The first quarter is a seasonally slow quarter, so we expect improvements throughout fiscal twenty twenty six.
Year over year revenue growth was 13.8% in product identification and 16.8% in aerospace. Product identification sales increased for the quarter was driven by 1,400,000.0 incremental Emtek sales and higher demand for tabletop and direct to package printers and supplies. Importantly, we unveiled three new product identification solutions at the Fespa Global Print Expo in Germany. We expect these product launches to help drive product identification hardware sales in the second half of fiscal twenty twenty six with continued growth of our recurring media and supply sales as we increase the installed base. For aerospace, increased printer shipments to a major OEM and the carryover of shipments to a defense contractor under the recently renewed contract primarily drove revenue growth.
The $10,000,000 multi year contract award began shipping in the first quarter, and we expect to ship the remaining portion of the expected $1,700,000 in orders before our fiscal year end. We also expect an increase in the ToughRider shipments from an existing commercial aerospace customer beginning in the second quarter as we transition away from the legacy printers. ToughRider aerospace printers were 42% of the first quarter shipments and we remain on track to double the percentage by the fiscal year end. Turning to slide eight, gross profit was $12,700,000 up $700,000 increase year over year, representing 33.6% of sales. Adjusted gross profit was 13,100,000.0 a $1,100,000 increase year over year, representing 34.6 of sales.
The increase in gross profit was primarily driven by higher sales volume, but year over year margin was negatively impacted by dilution related to the acquisition and a legacy aerospace printer contract, which we expect to be completed by the end of the second quarter of fiscal twenty twenty six. On an adjusted basis, gross margin increased 30 basis points from the trailing period, reflecting higher volume in the quarter. Going forward, we expect gross profit and margin to improve throughout fiscal twenty twenty six as we increase the percentage of ToughRider sales and the next generation Product ID printer sales and supplies. Looking at slide nine, Product ID operating income for the quarter was $2,800,000 or 10.6% of sales compared with $3,000,000 in the prior year period. On a non GAAP basis, operating income was $3,100,000 or 11.9% of revenue.
The year over year and quarter over quarter improvement in non GAAP operating income was driven by higher sales, was partially offset by lower margins on the acquired legacy technology. Looking at Slide 10, Aerospace operating income for the quarter was 2,800,000.0 a 24.2% of sales compared to $1,700,000 in the prior year period. On a non GAAP basis, operating income was $2,900,000 or 25.7% of revenue. The sequential and the year over year growth of operating income and margin were driven by improved product mix as we transitioned commercial and defense customers to our higher margin ToughRider solutions and benefited from operating leverage gained on higher volume. Operating income was partially offset by legacy printer contract that is expected to be completed in the second quarter.
Aerospace operating expense was lower year over year as we benefited from a $300,000 reserve reversal related to a commercial airline. Turning to Slide 11, net loss was $400,000 or a negative $05 per share compared with net income of $1,200,000 or $0.15 per share in the prior year period. Adjusted net income was $400,000 or $05 per share. Adjusted EBITDA of $3,100,000 increased 27.6 compared with the prior year period and grew 28% compared with the trailing fourth quarter of fiscal twenty twenty five. Adjusted EBITDA margin for the first quarter expanded 80 basis points year over year and sequentially.
We are expecting operating expenses to be benefit from the restructuring program for the remainder of fiscal twenty twenty six. Moving to slide 12, during the quarter we strengthened our balance sheet by paying down $3,900,000 in debt and improved liquidity. We ended the quarter with $12,600,000 in total liquidity, including $5,400,000 in cash and $7,200,000 in revolver availability. Our leverage ratio of funded debt to EBITDA is 3.5 times. Our targeted leverage ratio is approximately two times.
At the end of the quarter, we are in compliance with our covenants of our lending agreement. Cash provided by operations in the first quarter was $4,400,000 down from $6,900,000 in the prior year period. The decline was primarily driven by the timing of associated with bulk replenishment of legacy ink, print heads and media supplies amounting to about $3,000,000 We are focused on improving our inventory turns from current levels of approximately two times to more than three times over the fiscal twenty six and twenty seven years. Capital expenditures were $60,000 in the quarter and we expect to be less than $2,000,000 for the full fiscal year. Now, please turn to slide 13 and I’ll hand the call back to Greg for closing comments.
Greg Woods, President and Chief Executive Officer, AstroNova: Thanks, Tom. We are executing a clear strategy to deliver revenue growth and improve our profitability. We have implemented changes in the organization and are working diligently to deliver on our strategic plan. We believe that this quarter reflected a positive turning point in our business as we gained traction in both of our segments and controlled our costs. We have several catalysts that we are confident will propel our growth in fiscal twenty twenty six and beyond.
First, we are focused on launching our innovative product ID solutions, three of which have already been launched and are receiving strong customer interest and orders. We expect to launch six more disruptive solutions before the end of fiscal twenty twenty six. Second, we continue to make rapid progress on the ToughRider transition program with several large commercial and defense customers transitioning to ToughRiders that will ramp up shipping in Q2 and beyond. Importantly, we are looking critically at our cost structure and cash flow generation. We are on track to complete our 3,000,000 cost reduction program by Q2, and we will continue to manage our costs prudently as we roll out next generation and higher margin solutions across our product ID and aerospace segments.
We believe the actions we have taken in the past six to twelve months put us in a position to scale into new end markets and new geographies with high margin solutions. Furthermore, we have additional long term opportunities to improve margins through the roll off of royalties from legacy cockpit printers and through our multi source ink supply program based on our new print engine technology. We are reiterating our guidance for the full year of fiscal twenty twenty six. We expect to deliver full year revenue of $160,000,000 to $165,000,000 a 7% year over year increase at the midpoint, and adjusted EBITDA margin in the range of 8.5% to 9.5% or an 80 basis point expansion year over year at the midpoint. In summary, we are pleased with the progress that has been made this quarter, but we have more work to do.
I want to thank our team for their hard work and position us for the future. We remain confident in our plan and believe we have the right people, infrastructure, and go to market strategy in place to drive long term growth and profitability. Now Tom and I will be happy to take your questions.
Conference Operator: Thank And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, it is star one on your telephone keypad if you would like to ask a question, and we will pause for a brief moment to poll for questions. Once again, will poll for questions. We’ll just pause for one brief moment to see if there are any final questions. There are no questions at this time.
I would like to turn the conference back over to management for closing remarks.
Greg Woods, President and Chief Executive Officer, AstroNova: Great. Thank you. And thanks everyone for joining us here today. We look forward to keeping you updated on our progress at AstroNova. And enjoy the weekend and we’ll talk to you guys soon.
Have a good day.
Conference Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.
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