Transcat(US:TRNS)2025-11-03 21:06Revenue Growth - Q2 2026 consolidated revenue increased by 21.3% to $82.3 million, driven by service revenue growth of 19.9% to $52.8 million and distribution revenue growth of 24.0% to $29.4 million[4][5][12]. - Total revenue for the second quarter ended September 27, 2025, was $82.272 million, a 21.3% increase from $67.826 million in the same period last year[28]. - Service revenue increased to $52.836 million, up 19.9% from $44.083 million year-over-year[28]. - Distribution revenue rose to $29.436 million, reflecting a 23.5% increase compared to $23.743 million in the prior year[28]. - Service Revenue for Q2 FY 2026 reached $52,836 million, an increase of 19.9% from $44,083 million in Q2 FY 2025[40]. - Distribution Revenue for Q2 FY 2026 was $29,436 million, reflecting a 24.0% growth compared to $23,743 million in Q2 FY 2025[40]. - Total Revenue for Q2 FY 2026 amounted to $82,272 million, up 21.3% from $67,826 million in Q2 FY 2025[40]. Profitability Metrics - Adjusted EBITDA for Q2 2026 rose by 36.7% to $12.1 million, with an Adjusted EBITDA margin of 14.7%, reflecting strong revenue growth across both segments[4][7][14]. - Gross profit for the six months ended September 27, 2025, was $52.583 million, a 19.9% increase from $43.861 million in the same period last year[28]. - Operating income for the second quarter was $3.505 million, slightly down from $3.735 million year-over-year[28]. - Net income decreased by 61.4% to $1.3 million, while Adjusted Net Income fell by 13.9% to $4.2 million[5][7]. - Gross Profit for Q2 FY 2026 increased to $26,762 million, a rise of 26.2% from $21,206 million in Q2 FY 2025[40]. - Operating Income for Q2 FY 2026 was $3,505 million, down 6.2% from $3,735 million in Q2 FY 2025[40]. - Gross Margin for Q2 FY 2026 improved to 32.5%, compared to 31.3% in Q2 FY 2025[40]. - Operating Income as a percentage of Revenue decreased to 4.3% in Q2 FY 2026 from 5.5% in Q2 FY 2025[40]. Expenses and Costs - Operating expenses increased by 33.1% to $23.3 million, primarily due to expenses from acquired businesses and increased stock-based compensation[6]. - Selling, Marketing & Warehouse Expenses increased by 29.9% to $10,627 million in Q2 FY 2026 from $8,181 million in Q2 FY 2025[40]. - General and Administrative Expenses rose by 35.9% to $12,630 million in Q2 FY 2026, up from $9,290 million in Q2 FY 2025[40]. - Cost of Revenue for Q2 FY 2026 was $55,510 million, an increase of 19.1% from $46,620 million in Q2 FY 2025[40]. Debt and Financial Position - Total debt increased to $111.9 million as of September 27, 2025, primarily due to the Essco acquisition, with a leverage ratio of 2.26[13][14]. - Cash and cash equivalents increased to $5.082 million as of September 27, 2025, from $1.517 million at the end of March 2025[30]. - Total assets grew to $484.887 million as of September 27, 2025, compared to $385.242 million as of March 29, 2025[30]. Future Outlook and Strategy - The company expects a return to high single-digit service organic revenue growth in the second half of Fiscal 2026, barring increased economic uncertainty[3]. - The company is optimistic about future growth, leveraging recent acquisitions to enhance capabilities and geographic reach[3][14]. - Management highlighted the successful integration of the Essco Calibration acquisition, which is expected to contribute positively to long-term service organic growth[3][14]. - The company plans to expand its addressable calibration market through acquisitions and capability investments[24]. - Transcat's strategy includes leveraging its strong brand and unique value proposition to drive organic sales growth[24].