Key Highlights

  • Total Revenue was USD 97.1 million, up 18.0%, and service revenue rose 22.6% to USD 64.8 million.
  • Gross profit increased 21.9% to USD 32.6 million, and the consolidated gross Margin was 33.6%.
  • Net income was USD 2.4 million, compared with USD 1.3 million, and adjusted EBITDA was USD 14.9 million.
  • Service organic revenue increased 15.8%, and acquired revenue was USD 5.5 million in the quarter.

Revenue and Gross Profit

Transcat, Inc. (NASDAQ:TRNS), the calibration services and distribution company, filed its Quarterly Report for the second quarter of fiscal year 2027, ended September 26, 2026. Consolidated revenue was USD 97.1 million, an increase of USD 14.8 million, or 18.0%, from USD 82.3 million. The company attributes the increase to acquisitions, service organic revenue growth and a USD 2.9 million increase in distribution revenue. Acquired revenue, which covers the twelve months after an Acquisition date, was USD 5.5 million.

Service revenue was USD 64.8 million versus USD 52.8 million. It included USD 3.5 million of incremental revenue from the acquisitions of Essco, SCM and Southeastern, and service organic revenue increased 15.8%. The company cites high customer retention and Demand in life sciences, aerospace and defense, and other regulated end markets. Distribution revenue was USD 32.3 million versus USD 29.4 million, up 9.8%.

Gross profit was USD 32.6 million, up USD 5.9 million, and the gross margin was 33.6%, which is 110 basis points above the prior-year quarter. Service Gross Profit was USD 22.3 million, a margin of 34.4% versus 32.2%, and distribution gross profit was USD 10.4 million, a margin of 32.0% versus 33.2%. The company attributes the margin increase to organic service revenue growth and service mix.

Analyst estimates were EPS of USD 0.45 against reported EPS of USD 0.64, and revenue of USD 92.5 million against reported revenue of USD 97.1 million.

Expenses and Earnings

Total operating expenses were USD 27.6 million, up USD 4.3 million, or 18.7%, and were 28.4% of revenue versus 28.3%. Selling, Marketing and Warehouse expenses were USD 11.8 million, and general and administrative expenses were USD 15.8 million versus USD 12.6 million. The company cites increases in amortization of acquisition-related intangible assets, stock-based compensation and executive transition costs.

Operating income was USD 5.0 million, up 43.6%, and the Operating Margin was 5.2% versus 4.3%. Interest and other expense, net was USD 1.9 million, and the provision for income taxes was USD 0.8 million. Net Income was USD 2.4 million, or 2.5% of revenue, compared with USD 1.3 million, or 1.5%. Adjusted EBITDA, a non-GAAP measure, was USD 14.9 million, up USD 2.8 million, or 23.1%, and was 15.4% of revenue versus 14.7%.

Six-Month Results and Service Trends

For the six months, revenue was USD 190.0 million versus USD 158.7 million. Service revenue was USD 127.3 million versus USD 102.0 million, distribution revenue was USD 62.7 million versus USD 56.7 million, and gross profit was USD 63.4 million versus USD 52.6 million. Operating Income was USD 8.8 million, compared with USD 8.8 million a year earlier.

Service revenue growth was 22.6% in the second quarter and 27.3% in the first quarter of fiscal 2027. Trailing twelve-month service revenue was USD 242.6 million, up 24.0%, compared with 23.5% growth in the prior quarter. The company stated that the timing of service orders varies from quarter to quarter and that trailing twelve-month information gives a better indication of progress. It expects to subcontract 13% to 16% of service revenue to third-party vendors.

Items to Follow

Items to follow are service organic revenue, the contribution of the Essco, SCM and Southeastern acquisitions, operating expenses and the gross margin by segment.