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AstroNova, Inc. (ALOT)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 revenue declined 10.9% year over year to $36.1M and fell 4.3% sequentially; GAAP net loss was $1.2M ($0.16 per diluted share) and adjusted EBITDA margin compressed to 5.7% as Product Identification shipments lagged and Aerospace lapped atypical prior-year orders .
  • Management cut FY2026 guidance: revenue to $149–$154M (from $160–$165M) and adjusted EBITDA margin to 7.5%–8.5% (from 8.5%–9.5%); expected FY2026 effective tax rate increased to ~32.8% (from ~25%) .
  • Execution milestones: shipments of redesigned MTEX QL-425/QL-435 label presses in July and AJ-800 direct-to-packaging in August; Aerospace began shipping ToughWriter 640 to a major OEM with 50% of Q2 flight-deck printer shipments now ToughWriter and target >80% by year-end .
  • Liquidity and covenants: $10.4M total liquidity at quarter-end; bank waived minimum fixed charge coverage ratio for Q2 and company is pursuing a real estate-backed debt restructuring expected within ~60 days, a near-term stock narrative catalyst .

What Went Well and What Went Wrong

What Went Well

  • Shipped redesigned printers incorporating MTEX autonomous ink printheads (QL-425/QL-435) and AJ-800 direct-to-packaging solution, beginning the commercialization of next-gen PI offerings .
  • Aerospace execution on the ToughWriter transition: began shipping ToughWriter 640 to a major aircraft OEM; ToughWriter represented 50% of flight-deck printer shipments in Q2, on track to >80% by FY2026 year-end .
  • Orders held steady YoY at $35.9M; Aerospace book-to-bill was 110% and segment backlog rose $1.1M sequentially, supporting second-half hardware shipments .

Quoted management:

  • “Our second quarter financial results were disappointing…Our priorities are to turn around the Product ID segment, rebuild customer relationships, secure new customers, and improve operational efficiency.” — Jorik Ittmann, CEO .
  • “We expect modest revenue growth in the second half…Improved EBITDA margin…will reflect a better product mix and the full impact of our cost restructuring efforts.” — Thomas DeByle, CFO .

What Went Wrong

  • Revenue fell $4.4M YoY; PI segment down 8.9% and Aerospace down 15.1% due to delayed new product launches, longer capital equipment sales cycles, weaker legacy product sales, and $1.3M of atypical Aerospace orders in the prior-year comp .
  • Recurring supplies/parts/service revenue in PI declined by $2.6M, evidencing customer attrition; consolidated gross margin fell to 32.2% from 35.3% YoY on lower volume and unfavorable mix .
  • Product ID book-to-bill was 95% with backlog down $1.3M sequentially; company required a covenant waiver and is seeking debt restructuring, highlighting near-term financial risk .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ2 FY2025 (Aug 3, 2024)Q1 FY2026 (Apr 30, 2025)Q2 FY2026 (Jul 31, 2025)
Revenue ($USD Millions)$40.539 $37.708 $36.102
GAAP Diluted EPS ($USD)$(0.04) $(0.05) $(0.16)
Non-GAAP Diluted EPS ($USD)$0.08 $0.05 $(0.04)
Gross Profit Margin (%)35.3% 33.6% 32.2%
Operating Margin (%)2.6% 1.5% (2.0%)
Adjusted EBITDA ($USD Millions)$3.851 $3.148 $2.055
Adjusted EBITDA Margin (%)9.5% 8.3% 5.7%

Estimate Comparison (S&P Global)

MetricQ2 FY2026 ActualQ2 FY2026 ConsensusBeat/Miss
Revenue ($USD Millions)$36.102 N/A*N/A*
Primary EPS ($USD)$(0.16) N/A*N/A*

Values retrieved from S&P Global. Coverage and consensus were unavailable for ALOT’s Q2 FY2026 quarter.*

Segment Breakdown

SegmentQ2 FY2025 Revenue ($M)Q1 FY2026 Revenue ($M)Q2 FY2026 Revenue ($M)
Product Identification$27.165 $26.289 $24.754
Aerospace$13.374 $11.419 $11.348
Total$40.539 $37.708 $36.102
SegmentQ2 FY2025 Operating Income ($M)Q1 FY2026 Operating Income ($M)Q2 FY2026 Operating Income ($M)
Product Identification$2.348 $2.791 $1.916
Aerospace$3.834 $2.764 $2.410
Total Segment OI$6.182 $5.555 $4.326
Corporate Expense$(5.121) $(4.984) $(5.034)
Operating Income (GAAP)$1.061 $0.571 $(0.708)

KPIs and Balance Sheet

KPIQ2 FY2025Q1 FY2026Q2 FY2026
Orders ($USD Millions)$35.8 $34.9 $35.9
Backlog ($USD Millions)$29.9 $25.5 $25.3
Product ID Book-to-Bill (%)86% 100% 95%
Aerospace Book-to-Bill (%)93% 76% 110%
Recurring Revenue Mix (%)N/A70% 70%
Cash & Equivalents ($USD Millions)N/A$5.353 $3.855
Net Debt ($USD Millions)N/AN/A$39.6
Liquidity ($USD Millions)N/A$10.4 $10.4
Leverage (Funded Debt/Adj. EBITDA, x)N/A3.5x 3.5x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY2026$160–$165 $149–$154 Lowered
Adjusted EBITDA Margin (%)FY20268.5%–9.5% 7.5%–8.5% Lowered
Effective Tax Rate (%)FY2026~25% ~32.8% Raised
D&A ($USD Millions)FY2026~5 Not updated in Q2 N/A

Earnings Call Themes & Trends

TopicQ4 FY2025 (Prior Two Quarters)Q1 FY2026 (Prior Quarter)Q2 FY2026 (Current)Trend
Product ID turnaround & cost actionsRestructuring plan targeting $3M annualized savings; portfolio simplification Reaffirmed FY2026 outlook; $1.9M savings executed; sales org restructured; next-gen print engine advancements New CEO reorganized sales to acquisition/retention; validating MTEX upgrades; weak PI orders; execution urgency Intensifying focus; ramp in 2H contingent on execution
Aerospace ToughWriter transition40% transition complete; royalty elimination roadmap Growth driven by ToughWriter shipments; defense renewal Began shipping TW640 to major OEM; 50% of shipments TW; >80% targeted by FY-end Positive mix tailwind; margin lift expected
Macro tailwinds (OEM build rates)Boeing strike impact noted; outlook to benefit from OEM backlogs Expect benefit from OEM build rates Anticipate steady growth as build rates increase Improving external backdrop
Liquidity & covenantsAmended/waived covenants for FY2025 year-end; eased FY2026 ratios Compliant at Q1; debt paydown Covenant waiver for Q2; pursuing real estate-backed restructuring within ~60 days Mixed: risk managed, restructuring pending
Recurring revenue & customer attrition71% recurring for FY2025 70% recurring; inventory bulk replenishment impacted cash 70% recurring; $2.6M PI recurring decline from attrition Attrition a headwind to be addressed
Leadership changesN/ASVP PI changes; CFO continued Jorik E. Ittmann appointed CEO; PI leadership promotions Organizational shift to accelerate change

Management Commentary

  • “We have been taking a hard look at our processes, strategy and capital allocation priorities…turn around the Product ID segment, rebuild customer relationships, secure new customers, and improve operational efficiency.” — Jorik Ittmann, CEO (press release) .
  • “We expect modest revenue growth in the second half…Improved EBITDA margin…reflect a better product mix and the full impact of our cost restructuring efforts.” — Thomas DeByle, CFO (press release) .
  • “We reorganized sales into two teams: customer acquisition and customer retention…Our success is dependent upon…validate with customers that the upgrades we have made to the MTEX product line meet their needs.” — CEO (call) .
  • “We have $10.4 million in total liquidity…The bank waived our fixed charge coverage ratio for the second quarter, and we are in discussions regarding restructuring of our debt.” — CFO (call) .

Q&A Highlights

  • The Q&A session concluded without material analyst questions being recorded; no incremental guidance detail beyond prepared remarks was provided .

Estimates Context

  • S&P Global consensus estimates were unavailable for both revenue and EPS for Q2 FY2026. Actual revenue was $36.1M and GAAP EPS was $(0.16); lack of coverage implies limited sell-side estimate anchoring for near-term adjustments . Values retrieved from S&P Global.*

Where estimates may need to adjust:

  • The guidance cut (revenue to $149–$154M; adjusted EBITDA margin to 7.5%–8.5%) and PI recurring attrition suggest models should lower 2H revenue/margin assumptions for PI and reflect improved Aerospace mix from ToughWriter shipments .

Key Takeaways for Investors

  • Guidance reset lowers FY2026 revenue and margin trajectory; near-term stock moves likely keyed to visibility on PI orders and confirmation of 2H shipment ramps for newly launched printers .
  • Aerospace is a relative bright spot: ToughWriter mix shift and OEM build-rate tailwinds support margin improvement and steadier hardware demand into 2H .
  • PI customer attrition and longer capital sales cycles are the core headwinds; watch for retention/acquisition metrics and recurring revenue stabilization in Q3/Q4 .
  • Liquidity adequate but covenant risk evident; real estate-backed debt restructuring within ~60 days is an event catalyst and risk mitigant to monitor .
  • Cost actions: full $3M annualized savings expected to benefit 2H; if realized, should partially offset mix/demand pressure and support margin improvement .
  • Non-GAAP excludes acquisition, restructuring, legal/proxy costs—monitor sustainability of adjusted EBITDA improvements vs GAAP profitability as PI turns around .
  • Leadership changes (new CEO, PI leadership promotions) elevate execution urgency; track product validation milestones (AJ-800, QL-425/435) and sales process effectiveness .