Executive Summary
AstroNova delivered a solid first quarter of fiscal 2026 (Q1 FY2026; QQ1 2026) with revenue of $37.7 million, up 14.4% year over year and 0.9% sequentially, and a strong 83% of revenue being recurring. Gross profit reached $12.7 million (gross margin of 33.6%), with adjusted gross margin of 34.6% reflecting favorable volume and ongoing mix. Management attributes the quarterly uplift to the ToughWriter transition in aerospace, higher demand for desktop label printers, and a $1.4 million increase in product sales from the prior year’s acquisition. The company also advanced its cost-reduction program by $1.9 million in annualized savings during the quarter and plans to complete the remaining actions in Q2, signaling improved profitability potential as the year progresses.
Management highlighted three strategic growth drivers: (1) expand adjacencies in aerospace via the ToughWriter transition and aftermarket opportunity; (2) accelerate the launch and adoption of next-generation product identification (ID) solutions (QL425, QL435, AJ800) to unlock higher-volume end markets; and (3) streamline operations and strengthen segment accountability through restructuring and incentive alignment. Notable quarter-even catalysts include a renewed $10 million multiyear ToughWriter contract for a prime defense contractor, a ramp in ToughWriter shipments, and new space-based data acquisition opportunities (Amazon Kuiper Systems).
The company reaffirmed fiscal 2026 guidance: revenue of $160–$165 million and adjusted EBITDA margin of 8.5%–9.5% (midpoint implies about 7% revenue growth and ~80 bps year-over-year EBITDA margin expansion). AstroNova entered the year with a lean balance sheet tilt: total liquidity of $12.6 million, cash of $5.4 million, revolver availability of $7.2 million, and net debt of ~$41.7 million (leverage ~3.5x). Management emphasized prioritizing inventory turns (>3x from ~2x) and cash generation as core catalysts to scale margins through the ToughWriter transition and ID solution rollouts. Overall, Q1 marks a turning point with early traction across segments, but execution risk remains as the product ID pipeline and aerospace transition scale in H2 2026.
Key Performance Indicators
QoQ: 104.64% | YoY:-57.58%
QoQ: 97.59% | YoY:-131.84%
QoQ: 97.60% | YoY:-131.06%
Key Insights
Revenue: $37.708 million, up 14.4% YoY and 0.9% QoQ. Gross profit: $12.652 million; gross margin 33.56% (adjusted gross margin 34.60%). Operating income: $0.571 million (1.51% of revenue); EBITDA: $1.886 million (EBITDA margin 5.00%). Net income: -$0.376 million (-0.99% of revenue); diluted EPS: -$0.0497. Recurring revenue: 83% of quarterly sales. Cash flow: CFO $4.395 million; capex $0.060 million; free cash flow $4.335 million. Balance sheet: cash and equivalents $5.353 million; total assets $...
Financial Highlights
Revenue: $37.708 million, up 14.4% YoY and 0.9% QoQ. Gross profit: $12.652 million; gross margin 33.56% (adjusted gross margin 34.60%). Operating income: $0.571 million (1.51% of revenue); EBITDA: $1.886 million (EBITDA margin 5.00%). Net income: -$0.376 million (-0.99% of revenue); diluted EPS: -$0.0497. Recurring revenue: 83% of quarterly sales. Cash flow: CFO $4.395 million; capex $0.060 million; free cash flow $4.335 million. Balance sheet: cash and equivalents $5.353 million; total assets $150.324 million; total liabilities $73.773 million; total stockholders’ equity $76.551 million; total debt $49.801 million; net debt $41.705 million; funded debt to EBITDA 3.5x (target ~2x). Backlog: $25.5 million; orders: $34.9 million (up 5.4% YoY). Segment highlights: Product Identification revenue up 13.8% YoY; Aerospace revenue up 16.8% YoY. Recurring revenue contribution remains a strategic strength.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
37.71M |
14.40% |
0.93% |
| Gross Profit |
12.65M |
5.68% |
-0.66% |
| Operating Income |
571.00K |
-57.58% |
104.64% |
| Net Income |
-376.00K |
-131.84% |
97.59% |
| EPS |
-0.05 |
-131.06% |
97.60% |
Management Commentary
Strategy and execution: Greg Woods outlined three strategic drivers: (1) aerospace leadership through ToughWriter migration, (2) launch of disruptive next-generation product ID solutions, and (3) operational simplification with restructuring and KPI-linked incentives. Quote: “We delivered double-digit growth in both segments and increased consolidated adjusted operating income by 13.5% year over year.” (Gregory Woods)
Product ID and aerospace momentum: Q1 featured three new product ID solutions (QL425, QL435, AJ800) and expectations of broader rollout in Q2. Quote: “We launched three next-generation product identification solutions ahead of schedule… ahead of schedule with the rollout of two additional next-generation products that we have in our pipeline.” (Gregory Woods)
Aerospace contracts and revenue mix: A renewed $10 million multiyear ToughWriter contract with a prime defense contractor, with $1.7 million of revenue expected this fiscal year, supported by higher aerospace shipments. “ToughWriter printers were 42% of the first-quarter shipments, and we remain on track to double the percentage by the fiscal year-end.” (Thomas DeByle)
Tariffs and pricing: Tariffs have had negligible impact; price increases and tariff surcharges implemented to mitigate exposure. “We implemented price increases on April first and tariff surcharges in the first week of May.” (Gregory Woods)
Guidance and outlook: Management reaffirmed full-year guidance, highlighting a path to growth through ID solutions and ToughWriter adoption, with margin expansion via cost reductions and higher-margin product mix. “We are reiterating our guidance for the full year of fiscal 2026. We expect to deliver year revenue of $160 million to $165 million, a 7% year-over-year increase at the midpoint, and an adjusted EBITDA margin in the range of 8.5% to 9.5%.” (Gregory Woods)
Channel and pipeline: Strong orders and backlog dynamics, including a renewed, upsized UK private-label contract and a three-year label supply contract; Amazon Kuiper systems order expands the space-data acquisition footprint. “Product ID orders were up $3.3 million to $26.2 million… Amazon Kuiper Systems… for our data acquisition systems.” (Gregory Woods/Tom DeByle).
"We delivered double-digit growth in both segments and increased consolidated adjusted operating income by 13.5% year over year."
— Gregory Woods
"We reiterating our guidance for the full year of fiscal 2026. We expect to deliver year revenue of $160 million to $165 million, a 7% year-over-year increase at the midpoint, and an adjusted EBITDA margin in the range of 8.5% to 9.5%."
— Gregory Woods
Forward Guidance
Financial outlook remains constructive with near-term headwinds from legacy contracts and acquisition-related dilution but offset by a clear path to margin expansion through higher ToughWriter mix, accelerated cost reductions, and growth in next-generation ID printers. The company reaffirmed fiscal 2026 guidance: revenue of $160–$165 million and adjusted EBITDA margin of 8.5%–9.5%. The trajectory hinges on (i) continued uptake of the new QL425, QL435, and AJ800 printers and (ii) acceleration of ToughWriter transitions among commercial and defense customers, with anticipated higher aftermarket revenue. Key factors investors should monitor: (a) pace of product ID solution adoption and installed base expansion, (b) speed and mix of ToughWriter transitions reducing legacy royalty exposure, (c) realization and sustainability of cost-reduction actions (targeting $3 million by Q2), (d) inventory turns improvement toward >3x, (e) aerospace demand influenced by build rates at Boeing and Airbus, and (f) tariff/pass-through effectiveness given ongoing global supply dynamics.