Sono-Tek Corporation (NASDAQ:SOTK) reported a significant jump in profitability for its third fiscal quarter, as a strategic pivot toward complex, high-value coating systems offset a slight dip in overall revenue.
The Milton, New York-based manufacturer of ultrasonic coating technology delivered its seventh consecutive quarter of revenue exceeding the $5 million threshold, while its sales pipeline reached an all-time high.
For the quarter ended November 30, 2025, net sales totaled $5 million, a 4% decline compared to the $5.2 million reported in the prior-year period.
However, the company’s focus on high-average selling price (ASP) systems resulted in a dramatic expansion of its gross margin, which climbed to 50% from 45% a year ago.
This margin strength trickled down to the bottom line, with net income rising 24% to $340,000 for the quarter.
The nine-month results told a similar story of efficiency.
While sales were essentially flat at $15.3 million, net income surged 32% to $1.25 million.
The company's performance was bolstered by explosive growth in its In-Line Coating Systems segment—up 2,177%—and a 27% increase in medical market sales, which includes precision coatings for stents and balloon catheters.
Sono-Tek enters the final quarter of its fiscal year with a robust balance sheet, reporting $11.7 million in cash and marketable securities and zero debt.
Despite policy-driven softness in the U.S. electrolysis market, management reiterated its full-year 2026 guidance for modest revenue growth, supported by the conversion of its record backlog into high-margin shipments.