Key Highlights

  • Revenue was USD 97.1 million in the fiscal second quarter ended September 26, 2026, up about 18% from USD 82.3 million (own arithmetic), led by service Revenue of USD 64.8 million.
  • Quarterly Net Income was USD 2.4 million, or USD 0.25 per diluted share, against USD 1.3 million, or USD 0.14, a year earlier.
  • Six-month net income was USD 3.7 million, down about 17% from USD 4.5 million, as general and administrative expense and interest costs rose.
  • Long-term Debt rose to USD 116.9 million from USD 99.9 million at March 28, 2026, with USD 25.9 million spent on acquisitions in six months.

Service Revenue Drives an Acquisition-Fueled Quarter

Transcat (NASDAQ:TRNS) filed its 10-Q for the fiscal second quarter of 2027 on November 3, 2026, covering the period ended September 26, 2026. Total revenue was USD 97.1 million, about 18% above the prior-year quarter on simple arithmetic, with service revenue up about 23% to USD 64.8 million and distribution revenue up about 10% to USD 32.3 million. Gross Profit rose to USD 32.6 million from USD 26.8 million, and Operating Income rose to USD 5.0 million from USD 3.5 million. The company provides accredited calibration services and distributes professional test and measurement instruments to regulated industries such as life sciences.

Why Six-Month Profit Fell Despite Higher Sales

For the six months, revenue grew to USD 190.0 million from USD 158.7 million, but operating income was nearly flat at USD 8.8 million. General and administrative expense jumped to USD 31.5 million from USD 23.6 million, and interest expense rose to USD 3.2 million from USD 1.7 million as borrowing under the revolving Credit Facility funded purchases. That left six-month net income at USD 3.7 million, about 17% below last year's USD 4.5 million, simple arithmetic on the reported figures. The Equity statement shows first quarter net income of USD 1.3 million, against USD 3.3 million a year earlier, so the weaker first quarter explains most of the six-month decline. Stock-based compensation also rose to USD 4.2 million from USD 3.0 million. The filing extract did not break out the causes of the higher administrative costs.

Leverage, Cash Flow and What to Watch Next

Operating cash flow for six months was USD 19.0 million, versus USD 16.5 million, while Capital spending was USD 8.1 million. Net borrowing on the revolver was USD 17.0 million, the difference between USD 37.3 million drawn and USD 20.3 million repaid, taking long-term debt to USD 116.9 million. Cash was only USD 5.8 million, Goodwill stood at USD 234.0 million and shareholders' equity was USD 309.2 million. Growth that relies on acquisitions carries integration and borrowing-cost risk, and the extract does not include management guidance, so the next quarter's Margin and interest expense are the key checks.

Where Things Stand

Revenue grew because of acquisitions and service demand, but profit growth has lagged: quarterly net income improved while six-month net income fell about 17% because first-quarter Earnings were lower than a year earlier. Transcat (NASDAQ:TRNS) has funded growth with debt, and higher interest and administrative costs absorbed part of the gross profit gain. The extract shows no management guidance, so the main items to watch are the third quarter margin trend, the pace of further acquisitions and debt levels against operating cash flow.