AstroNova(ALOT) - 2026 Q2 - Quarterly Results

Executive Summary & Business Highlights AstroNova reported disappointing Q2 FY26 results, leading to a revised outlook and strategic re-evaluation, despite new product advancements CEO Statement & Strategic Priorities CEO Jorik Ittmann expressed disappointment with Q2 FY26 results, prompting a strategic re-evaluation focused on Product ID turnaround and operational efficiency - CEO Jorik Ittmann expressed disappointment with Q2 FY26 financial results and adjusted the company's outlook[3] - Strategic priorities include turning around the Product ID segment, rebuilding customer relationships, securing new customers, and improving operational efficiency[3] Key Business Updates AstroNova launched new Product ID printers with MTEX printheads and began shipping the ToughWriter 640 flight deck printer for its Aerospace segment - Shipped first redesigned Product ID printers incorporating MTEX's autonomous ink printheads (QL-425, QL-435 professional label presses, and AJ-800 direct-to-packaging print solution)[4][6] - Aerospace business began shipping the ToughWriter 640 flight deck printer to a major aircraft manufacturer, aiming for over 80% of flight deck printer shipments to be ToughWriters by end of fiscal 2026[5][6] Fiscal 2026 Second Quarter Highlights Q2 FY26 revenue declined 10.9% to $36.1 million due to Product ID challenges, leading to revised FY26 revenue guidance of $149-$154 million and 7.5%-8.5% adjusted EBITDA margin Q2 FY26 Key Highlights | Metric | Value | Change | Notes | | :--- | :--- | :--- | :--- | | Revenue | $36.1 million | -10.9% YoY | Reflects challenges in Product Identification shipments | | Redesigned Product ID MTEX label presses | Shipped | N/A | Advanced from development to commercial release | | ToughWriter® shipments to major OEM | Started | N/A | On track for >80% of flight deck printer shipments by end of FY26 | | Revised FY26 Revenue Guidance | $149 - $154 million | Downward | Previously $160 - $165 million | | Revised FY26 EBITDA Margin Guidance | 7.5% - 8.5% | Downward | Previously 8.5% - 9.5% | Financial Performance Overview AstroNova's Q2 FY26 financial performance was challenging, marked by significant declines in consolidated revenue and gross profit, leading to an operating loss and widened net loss Consolidated Financial Results (GAAP) AstroNova's Q2 FY26 GAAP results showed significant declines in revenue and gross profit, resulting in an operating loss and a widened net loss Three Months Ended July 31, 2025 (vs. August 3, 2024) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | $ Variance ($ thousands) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,102 | $40,539 | $(4,437) | (10.9)% | | Gross Profit | $11,633 | $14,326 | $(2,693) | (18.8)% | | Gross Profit Margin | 32.2% | 35.3% | | | | Operating Income (Loss) | $(708) | $1,061 | $(1,769) | (166.7)% | | Operating Margin | (2.0)% | 2.6% | | | | Net Income (Loss) | $(1,243) | $(311) | $(932) | 299.7% | | Net Income (Loss) per Common Share – Basic | $(0.16) | $(0.04) | | | - Revenue declined $4.4 million due to delays in new product launches in Product Identification and a difficult year-over-year comparison in Aerospace[7] - Gross profit decline and margin reduction were attributed to lower sales volume and unfavorable product mix[8] - Operating loss primarily resulted from lower sales volume, partially offset by approximately $0.9 million in lower operating expenses[8] Segment Performance Both Product Identification and Aerospace segments experienced revenue and operating income declines in Q2 FY26, driven by new technology deployment delays and tough prior-year comparisons Product Identification Segment The Product ID segment's revenue decreased by 8.9% to $24.8 million, primarily due to delays in new technology deployment, longer sales cycles, and lower legacy product sales, leading to reduced operating income Product ID Segment Performance (Q2 FY26 vs. Q2 FY25) | Metric | Q2 FY26 ($ millions) | Q2 FY25 ($ millions) | $ Variance ($ millions) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $24.8 | $27.2 | $(2.4) | (8.9)% | | Operating Income | $1.9 | $2.3 | $(0.4) | N/A | | Operating Margin | 7.7% | 8.6% | | | - Lower revenue was attributed to delays in new technology deployment, longer sales cycles for higher-value printing equipment, and decreased sales for legacy QuickLabel® and TrojanLabel® products[10] - Operating income reflected lower sales volume and $0.1 million in restructuring charges[11] Aerospace Segment The Aerospace segment experienced a 15.1% revenue decrease to $11.3 million, largely due to higher comparable sales in the prior year from atypical orders, resulting in a significant drop in operating profit Aerospace Segment Performance (Q2 FY26 vs. Q2 FY25) | Metric | Q2 FY26 ($ millions) | Q2 FY25 ($ millions) | $ Variance ($ millions) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $11.3 | $13.4 | $(2.0) | (15.1)% | | Operating Profit | $2.4 | $3.8 | $(1.4) | (37.1)% | - Revenue decrease was driven by higher prior-year comparable sales from atypical orders, including large spare printer orders and non-recurring engineering revenue[13] Balance Sheet and Cash Flow Cash and cash equivalents decreased by $1.2 million in H1 FY26, with lower cash from operations, while total debt was reduced by $3.2 million, and the company is exploring real estate-backed financing Balance Sheet & Cash Flow Highlights (H1 FY26) | Metric | July 31, 2025 ($ millions) | Change from Jan 31, 2025 ($ millions) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $3.9 | Down $1.2 | | Cash provided by operations (H1 FY26) | $4.6 | Down from prior year | | Capital expenditures (H1 FY26) | $0.1 | Down $0.7 from prior year | | Total Debt Reduction (H1 FY26) | $3.2 | N/A | | Net Debt (July 31, 2025) | $39.6 | Down from $41.6 (Jan 31, 2025) | - The company entered into an amended credit agreement, waiving non-compliance with a minimum fixed charge coverage ratio covenant for Q2 FY26, and is discussing restructuring financing into a real estate-backed loan[17] Orders and Backlog Overall orders for Q2 FY26 remained relatively flat at $35.9 million, with total backlog slightly decreasing to $25.3 million, as Product ID's book-to-bill was 95% and Aerospace's was 110% Orders and Backlog (Q2 FY26 vs. Q2 FY25) | Metric | Q2 FY26 ($ millions) | Q2 FY25 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Total Orders | $35.9 | $35.8 | Relatively unchanged | | Total Backlog (July 31, 2025) | $25.3 | N/A | Down from $25.5 (Q1 FY26) | | Product ID Orders | $23.4 | $23.4 | Relatively unchanged | | Product ID Book-to-Bill Ratio | 95% | N/A | | | Aerospace Orders | $12.5 | $12.5 | Relatively unchanged | | Aerospace Book-to-Bill Ratio | 110% | N/A | | - Product ID backlog decreased by $1.3 million from Q1 FY26, while Aerospace backlog increased by $1.1 million due to timing variability[19][20] Fiscal Year 2026 Outlook AstroNova revised its FY26 revenue guidance downward to $149-$154 million and adjusted EBITDA margin to 7.5%-8.5%, anticipating modest growth in the second half from new Product ID solutions and cost restructuring Revised Fiscal 2026 Guidance | Metric | Previous Guidance ($ millions) | Revised Guidance ($ millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $160 - $165 | $149 - $154 | Downward | | Adjusted EBITDA Margin | 8.5% - 9.5% | 7.5% - 8.5% | Downward | | Expected Effective Tax Rate | N/A | ~32.8% | N/A | - Modest revenue growth and improved EBITDA margin are expected in the second half of FY26, driven by recently launched Product ID solutions and the full impact of cost restructuring efforts[21] Company Information & Non-GAAP Measures This section provides details on AstroNova's earnings call, company profile, rationale for using Non-GAAP financial measures, and important forward-looking statement disclaimers Earnings Conference Call Information AstroNova hosted a conference call and webcast on September 9, 2025, to discuss Q2 FY26 financial and operating results, with replays available for review - Conference call and webcast held on September 9, 2025, at 10:00 a.m. ET to review Q2 FY26 results[24] - Telephonic replay available until September 23, 2025, and webcast replay on the Investor Relations section of the company's website[25] About AstroNova, Inc. AstroNova (Nasdaq: ALOT) is a leading innovator in specialized print technology solutions, focusing on profitable growth through innovation, expanding its installed base, and strategic aftermarket sourcing - AstroNova (Nasdaq: ALOT) specializes in print technology solutions, providing products that acquire, store, analyze, and present data[26] - Strategy: drive profitable growth via innovative technologies, expand installed base for recurring revenue, and strategically source aftermarket products[26] - Segments include Product Identification (digital marking and identification solutions) and Aerospace (airborne printing, avionics, data acquisition)[27] Use of Non-GAAP Financial Measures AstroNova utilizes Non-GAAP financial measures to provide investors with a clearer understanding of core operating results and facilitate comparisons, acknowledging limitations in reconciling forward-looking Adjusted EBITDA - Non-GAAP measures (e.g., Non-GAAP gross profit, operating income, net income, Adjusted EBITDA) are used to help investors understand core operating results and compare performance[28] - Management uses Non-GAAP measures for evaluating core operating performance, comparing to prior periods and competitors, and for financial/operating decision-making[28] - Forward-looking Adjusted EBITDA margin cannot be reconciled to GAAP without unreasonable effort due to the unpredictability of cost of sales, operating expenses, depreciation, amortization, and stock-based compensation[29] Forward-Looking Statements This news release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially, with no obligation for the company to update them - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations[31] - Key risks include the success of Product ID sales improvement, customer adoption of redesigned print solutions, realization of cost-reduction benefits, Aerospace customer build rates, benefits from next-generation print engine technology, and successful restructuring of financing arrangements[31] - The company undertakes no obligation to publicly update or revise any forward-looking statements[31] Financial Statements (GAAP) This section provides AstroNova's unaudited condensed consolidated GAAP financial statements, including statements of income (loss), balance sheets, and cash flow, for the specified periods Condensed Consolidated Statements of Income (Loss) This section presents AstroNova's unaudited condensed consolidated statements of income (loss), detailing revenue, gross profit, operating income (loss), and net income (loss) for the three and six months ended July 31, 2025, and August 3, 2024 Condensed Consolidated Statements of Income (Loss) (Three Months Ended) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | $ Variance ($ thousands) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,102 | $40,539 | $(4,437) | (10.9)% | | Gross Profit | $11,633 | $14,326 | $(2,693) | (18.8)% | | Operating Income (Loss) | $(708) | $1,061 | $(1,769) | (166.7)% | | Net Income (Loss) | $(1,243) | $(311) | $(932) | 299.7)% | | Net Income (Loss) per Common Share – Basic | $(0.16) | $(0.04) | | | Condensed Consolidated Statements of Income (Loss) (Six Months Ended) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | $ Variance ($ thousands) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $73,810 | $73,500 | $310 | 0.4% | | Gross Profit | $24,286 | $26,298 | $(2,012) | (7.7)% | | Operating Income (Loss) | $(135) | $2,407 | $(2,542) | (105.6)% | | Net Income (Loss) | $(1,619) | $869 | $(2,488) | (286.3)% | | Net Income (Loss) per Common Share – Basic | $(0.21) | $0.12 | | | Condensed Consolidated Balance Sheets This section presents AstroNova's unaudited condensed consolidated balance sheets as of July 31, 2025, and January 31, 2025, providing a snapshot of the company's financial position, including assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheets Highlights | Metric | July 31, 2025 ($ thousands) | January 31, 2025 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | $75,230 | $78,017 | | Property, Plant and Equipment, net | $17,018 | $17,639 | | Total Assets | $143,149 | $145,595 | | Total Current Liabilities | $43,876 | $46,346 | | Total Liabilities | $67,363 | $69,845 | | Total Shareholders' Equity | $75,786 | $75,750 | Condensed Consolidated Statements of Cash Flow This section provides AstroNova's unaudited condensed consolidated statements of cash flow for the six months ended July 31, 2025, and August 3, 2024, detailing the sources and uses of cash from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flow Highlights (Six Months Ended) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,644 | $7,066 | | Net Cash Used for Investing Activities | $(107) | $(21,559) | | Net Cash Provided by (Used for) Financing Activities | $(5,968) | $14,576 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(1,195) | $297 | | Cash and Cash Equivalents, End of Period | $3,855 | $4,824 | Segment Financials & Non-GAAP Reconciliations This section provides detailed GAAP and Non-GAAP segment financial data, including sales, profit, revenue breakdown, bookings, backlog, and comprehensive reconciliations of GAAP to Non-GAAP measures Segment Sales and Profit (GAAP) This section presents AstroNova's unaudited GAAP segment sales and profit data for Product ID and Aerospace, detailing revenue, gross profit, and operating income for the three and six months ended July 31, 2025, and August 3, 2024 Segment Sales and Profit (GAAP) - Three Months Ended July 31, 2025 | Metric | Product ID ($ thousands) | Aerospace ($ thousands) | Total ($ thousands) | | :--- | :--- | :--- | :--- | | Revenue | $24,754 | $11,348 | $36,102 | | Gross Profit | $7,677 | $3,956 | $11,633 | | Gross Profit Margin | 31.0% | 34.9% | 32.2% | | Segment Operating Income | $1,916 | $2,410 | $4,326 | | Segment Operating Margin | 7.7% | 21.2% | 12.0% | Segment Sales and Non-GAAP Profit This section presents AstroNova's unaudited Non-GAAP segment sales and profit for Product ID and Aerospace, providing a view of performance adjusted for specific non-recurring items for the three and six months ended July 31, 2025, and August 3, 2024 Segment Sales and Non-GAAP Profit - Three Months Ended July 31, 2025 | Metric | Product ID ($ thousands) | Aerospace ($ thousands) | Total ($ thousands) | | :--- | :--- | :--- | :--- | | Revenue | $24,754 | $11,348 | $36,102 | | Non-GAAP Gross Profit | $7,679 | $3,952 | $11,631 | | Non-GAAP Gross Profit Margin | 31.0% | 34.8% | 32.2% | | Non-GAAP Segment Operating Income | $2,019 | $2,411 | $4,430 | | Non-GAAP Segment Operating Margin | 8.2% | 21.2% | 12.3% | Revenue by Market and Type This section details AstroNova's revenue breakdown by market categories and by type (Hardware vs. Recurring Supplies, Parts & Service) for both Product ID and Aerospace segments across several fiscal quarters Product ID Revenue by Market (Q2 FY26) | Market Category | Q2 FY26 Revenue ($ thousands) | | :--- | :--- | | Desktop Label Printers | $15,190 | | Mail & Sheet/Flat Pack Printers | $3,740 | | Professional Label Printers | $3,506 | | Direct to Package/Overprint Printers | $2,230 | | Flexible Packaging Printers | $69 | | Other | $19 | | TOTAL Product ID | $24,754 | Consolidated Revenue by Type (Q2 FY26) | Revenue Type | Q2 FY26 Revenue ($ thousands) | | :--- | :--- | | AstroNova HW | $10,936 | | AstroNova Recurring Supplies, Parts & Service | $25,166 | | TOTAL CONSOLIDATED | $36,102 | Bookings and Backlog Details This section provides detailed bookings and backlog information for AstroNova consolidated, Product ID, and Aerospace segments across several fiscal quarters, including book-to-bill ratios AstroNova Consolidated Bookings and Backlog (Q2 FY26) | Metric | Q2 FY26 ($ thousands) | | :--- | :--- | | Beginning backlog (incl. MTEX) | $25,491 | | Revenue Recognized (Billings) | $36,102 | | New Bookings During Period | $35,901 | | Backlog End of Period | $25,291 | | Book/Bill% | 99% | Segment Book-to-Bill Ratios (Q2 FY26) | Segment | Book/Bill% | | :--- | :--- | | Product Identification | 95% | | Aerospace | 110% | Reconciliation of GAAP to Non-GAAP Items This section provides a detailed reconciliation of GAAP to Non-GAAP financial measures, adjusting for items like inventory step-up, restructuring charges, and acquisition expenses to present core operational performance Key Non-GAAP Adjustments (Three Months Ended July 31, 2025) | Adjustment Type | Impact on Non-GAAP Operating Income ($ thousands) | | :--- | :--- | | MTEX-related Acquisition Expenses | $(25) | | Restructuring Charges | $689 | | Non-Recurring Legal Expenses | $69 | | Non-Recurring Proxy Costs | $355 | Key Non-GAAP Adjustments (Six Months Ended July 31, 2025) | Adjustment Type | Impact on Non-GAAP Operating Income ($ thousands) | | :--- | :--- | | MTEX-related Acquisition Expenses | $311 | | Inventory Step-Up | $61 | | Restructuring Charges | $1,247 | | Non-Recurring Legal Expenses | $69 | | Non-Recurring Proxy Costs | $355 | Reconciliation of Net Income and Margin to Adjusted EBITDA and Margin This section reconciles Net Income (Loss) and Margin to Adjusted EBITDA and Margin, adjusting for interest, tax, depreciation, amortization, share-based compensation, and non-recurring items to show profitability before non-operating and non-cash charges Adjusted EBITDA Reconciliation (Three Months Ended July 31, 2025) | Metric | Value ($ thousands) | | :--- | :--- | | Net Income (Loss) | $(1,243) | | EBITDA | $468 | | Adjusted EBITDA | $2,055 | | Adjusted EBITDA Margin | 5.7% | Adjusted EBITDA Reconciliation (Six Months Ended July 31, 2025) | Metric | Value ($ thousands) | | :--- | :--- | | Net Income (Loss) | $(1,619) | | EBITDA | $2,355 | | Adjusted EBITDA | $5,203 | | Adjusted EBITDA Margin | 7.0% | Reconciliation of Segment Gross Profit and Margin to Non-GAAP Gross Profit and Margin This section reconciles GAAP Segment Gross Profit and Margin to Non-GAAP Segment Gross Profit and Margin for Product ID and Aerospace, adjusting for inventory step-up and restructuring charges to show segment-specific gross profitability Non-GAAP Segment Gross Profit & Margin (Q2 FY26) | Segment | GAAP Gross Profit ($ thousands) | Non-GAAP Gross Profit ($ thousands) | GAAP Gross Profit Margin | Non-GAAP Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Product ID | $7,677 | $7,679 | 31.0% | 31.0% | | Aerospace | $3,956 | $3,952 | 34.9% | 34.8% | | Total | $11,633 | $11,631 | 32.2% | 32.2% | Reconciliation of Segment Operating Profit and Margin to Non-GAAP Operating Profit and Margin This section reconciles GAAP Segment Operating Income and Margin to Non-GAAP Segment Operating Income and Margin for Product ID and Aerospace, with adjustments for inventory step-up and restructuring charges, providing a segment-level view of operating performance Non-GAAP Segment Operating Profit & Margin (Q2 FY26) | Segment | GAAP Operating Income ($ thousands) | Non-GAAP Operating Income ($ thousands) | GAAP Operating Margin | Non-GAAP Operating Margin | | :--- | :--- | :--- | :--- | :--- | | Product ID | $1,916 | $2,019 | 7.7% | 8.2% | | Aerospace | $2,410 | $2,411 | 21.2% | 21.2% | | Total | $4,326 | $4,430 | 12.0% | 12.3% |