AstroNova Reports 8.5% Sequential Growth in Revenue for Third Quarter Fiscal 2026

Jorik Ittmann, President and Chief Executive Officer of AstroNova, noted, “Our third quarter results indicate our efforts to stabilize the business, reignite sales in our Product ID segment and develop a greater sense of urgency in the business to deliver for our customers and shareholders are having a positive impact. We drove improvements in our mail & sheet/flatpack operations to provide more timely lead times for our customers and to reduce dated backlog. Importantly, the strong margins of our Aerospace segment confirm the value of the leading market position of our ToughWriter brand flight deck printers which are displacing legacy products for our highest volume major aircraft partners. This action combined with encouraging aircraft build rate forecasts bode well for this segment.”

Mr. Ittmann added, “While we have improved our financial results sequentially, including growing Product ID’s valuable and profitable recurring supplies, parts and service revenue, work remains to deliver consistent growth while we capture the benefits of our Aerospace segment.”

Third Quarter Fiscal 2026 Overview¹ (comparisons are to the prior-year period unless noted otherwise)

Compared with the trailing second quarter of fiscal 2026, revenue increased 8.5% reflecting growth in both Aerospace and Product ID segments. Gross profit improved sequentially by 400 basis points as a result of productivity improvements and improved product mix. Operating income increased over the trailing quarter representing operating leverage on higher volume and improved product mix.

Compared with the prior-year period, revenue declined $1.3 million as the combined growth in Product ID and the Aerospace segment’s Commercial Aircraft, Defense and Other markets sales did not fully offset lower Aerospace Aftermarket revenue, which had a tough comparison against an unusually strong third quarter in FY 2025. Tariff mitigation contributed $0.4 million in revenue and foreign currency translation was a $0.3 million benefit in the quarter.

As a result of improved productivity and a more profitable mix, gross profit was up $0.5 million, or 3.5%, and gross margin expanded 230 basis points compared with the prior-year period despite lower revenue and a provision for inventory of $0.4 million related to the closure of a warehouse. On an adjusted basis, gross margin expanded 320 basis points from the prior-year period to 37.2%.

Operating expenses in the quarter were $12.9 million up from $12.5 million in the prior-year period. Savings from cost reduction actions were offset by $0.4 million in legal expenses related to ongoing litigation, $0.1 million of costs related to the contested proxy solicitation and a $0.3 million goodwill impairment charge associated with the May 2024 MTEX acquisition. Operating income for the quarter was $1.3 million similar to the prior-year period, while non-GAAP operating income was $2.6 million, up $0.9 million, or 57.8% compared with the prior-year period.

Interest expense of $0.8 million was down 12.4% as debt balance decreased from $46.7 million in the prior-year end to $40.3 million as of the end of the quarter fiscal. Improved financial performance resulted in net income of $0.4 million, or $0.05 per share, compared with $0.2 million in the prior-year period. Non-GAAP net income was $1.5 million, or $0.20 per share. Adjusted EBITDA was $4.2 million and Adjusted EBITDA margin was 10.7%.

Product Identification (Product ID) Segment Review

Product ID revenue was $26.8 million for the third quarter of fiscal 2026, up 2.0%, or $0.5 million, compared with the prior year and was up $2.1 million, or 8.5%, sequentially. Sequential growth was across all product categories with Mail & Sheet/Flat Pack Printers increasing $0.5 million, or 14.4%, as productivity improvements enabled higher shipment levels.

Operating income for Product ID of $1.9 million was similar with the prior-year period, as improved volume and mix helped to offset an inventory provision of $0.7 million related to a warehouse closure and true-up between segments and a $0.3 million goodwill impairment charge. Operating margin was 7.0% compared with 7.1% in the prior-year period. Non-GAAP segment operating income grew $1.0 million, or 50%, to $2.9 million. Non-GAAP operating income margin for the third quarter of fiscal 2026 was 10.6%.

Aerospace Segment Review

Aerospace segment revenue was $12.3 million in the fiscal 2026 third quarter, a decrease of 12.7%, or $1.8 million. The decline reflects the benefit of $2.3 million in revenue in the prior-year period from atypical orders related to replacement printheads that had built up in backlog pending certification.

Despite lower sales, Aerospace segment operating profit was $4.5 million, up $1.3 million, or 39.4%, over the prior-year period from a $0.3 million benefit from an inventory provision true-up between segments as well as improved product mix.

Balance Sheet and Cash Flow

Cash provided by operations in the third quarter of fiscal 2026 was $3.4 million and was $8.1 million year to date. The improvement in cash generation in the quarter was a combination of stronger cash earnings and reduced working capital requirements, primarily due to lower inventory.

Capital expenditures in the quarter were $86 thousand and $0.2 million year to date compared with $0.3 million and $1.1 million, respectively, in the prior year periods.

Cash at the end of the third quarter of fiscal 2026 was $3.6 million, down $1.4 million from the end of fiscal 2025. The Company strengthened its balance sheet and reduced debt by $3.2 million in the quarter and by $6.4 million year to date. Debt as of October 31, 2025 was $40.3 million compared with $46.7 million as of January 31, 2025.

On October 31, 2025, the Company executed an amended credit agreement which extended the maturity of its revolving credit facility, temporarily increased the facility to $27.5 million, and refinanced previous term loans resulting in a new $10 million term loan and a new $9.7 million term A-2 loan. The new credit structure reduces principal payments and eliminates the foreign currency exchange rate volatility of the Euro payments. It also provides greater flexibility in its EBITDA covenant.

Bookings and Backlog by Segment

Orders in the quarter for the Product ID segment were $22.5 million, down $4.3 million compared with the prior-year period due to delays in renewing blanket orders with certain customers. The Company expects those orders to be renewed in the fourth quarter of fiscal 2026. As a result, the book to bill ratio for the segment was 84% and backlog decreased by $4.4 million from second quarter of fiscal 2026.

Orders in the quarter for the Aerospace segment increased $2.6 million, or 23.7%, over the prior-year period to $13.4 million primarily related to major OEM orders improving as inventory better aligns with build rates. The book to bill ratio for the segment was 109%. Backlog at the end of the third quarter of fiscal 2026 increased by $1.1 million compared with second quarter of fiscal 2026.

Fiscal 2026 Outlook

“Our solid performance in the third quarter and the progress we are making in the business provide us further confidence in our expectations for the full year," concluded Mr. Ittmann.

AstroNova has maintained its revenue expectations for fiscal 2026 within a range of $149 million to $154 million implying fourth quarter revenue in a range of $36 million to $41 million. Adjusted EBITDA margin expectations are in a range of 7.5% to 8.5% for the year.

Earnings Conference Call Information

AstroNova will host a conference call and webcast today at 8:30 a.m. ET to review financial and operating results for the third quarter of fiscal 2026. A question and answer session will follow.

To access the conference call, please dial (201) 689-8560 or find the webcast and accompanying slide presentation at https://investors.astronovainc.com/investors/events-and-presentations/default.aspx.

A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Wednesday, December 24, 2025. To listen to the archived call, dial (412) 317-6671 and enter a replay PIN 13756179. The webcast replay will be available on the Investor Relations section of the Company’s website where a transcript will be posted once available.

About AstroNova, Inc.

AstroNova (Nasdaq: ALOT) is a leading innovator in specialized print technology solutions. The Company designs, manufactures, distributes and services a broad range of products that acquire, store, analyze, and present data in multiple formats on a variety of media. Its strategy is to drive profitable growth through innovative new technologies, building its installed base to expand recurring revenue while strategically sourcing its aftermarket products.

The Product Identification segment provides a wide array of digital, end-to-end product marking and identification solutions, including hardware, software, and supplies for OEMs, commercial printers, and brand owners for printing on paper, labels, paperboard packaging, corrugated boxes, and paper bags. The Aerospace segment is a global leader in providing products designed for airborne printing solutions, avionics, and data acquisition including flight deck printing solutions, networking hardware, and specialized aerospace-grade supplies. More information about the Company can be found at www.astronovainc.com.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release contains the Non-GAAP financial measures: Non-GAAP gross profit, Non-GAAP gross profit margin, Non-GAAP operating expenses, Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP net income (loss), Non-GAAP net income per Common Share - diluted , Non-GAAP segment gross profit, Non-GAAP segment gross profit margin, Non-GAAP segment operating income, Non-GAAP segment operating margin, Adjusted EBITDA, and Adjusted EBITDA Margin. AstroNova believes that the inclusion of these Non-GAAP financial measures helps investors gain a meaningful understanding of changes in the Company’s core operating results and can help investors who wish to make comparisons between AstroNova and other companies on both a GAAP and a Non-GAAP basis. AstroNova’s management uses these Non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring its core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. These measures are also used by the Company’s management to assist with their financial and operating decision-making. Please refer to the financial reconciliation table included in this news release for a reconciliation of the Non-GAAP measures to the most directly comparable GAAP measures for the nine months ended October 31, 2025 and November 2, 2024 and the year ending January 31, 2025.

AstroNova has not reconciled the forward-looking Adjusted EBITDA margin included in its fiscal 2026 financial targets and outlook to the most directly comparable forward-looking GAAP measure because this cannot be done without unreasonable effort due to the lack of predictability regarding cost of sales, operating expenses, depreciation and amortization, and stock-based compensation. The impact of any of these items, individually or in the aggregate, may be significant.

Forward-Looking Statements

Information included in this news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but rather reflect our current expectations concerning future events and results. These statements may include the use of the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “continues,” “may,” “will,” and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning the Company’s anticipated performance, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, (i) the risk that our efforts to improve sales in our Product Identification segment may not result in the benefits we expect, (ii) the risk that our Aerospace customers may not continue to convert to our ToughWriter^® printer in the volumes or on the schedule that we expect; (iii) the risk that we may not realize the anticipated benefits of our next-generation print engine technology; and (iv) those factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025 and subsequent filings AstroNova makes with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The reader is cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this news release.