Transcat
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Transcat (TRNS) investor relations material

Transcat Q3 2026 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q3 2026 earnings summary3 Feb, 2026

Executive summary

  • Fiscal Q3 2026 revenue rose 26% year-over-year to $83.9 million, with both service and distribution segments achieving double-digit growth, driven by strong demand and acquisitions.

  • Service organic revenue growth returned to 7%–7.3%, contributing to overall service segment growth of 29%.

  • Gross margin expanded 60 basis points to 30.1%, and adjusted EBITDA increased 27% to $10.1 million.

  • Net loss was $1.1 million, primarily due to higher amortization, interest expense, stock-based compensation, and CEO transition costs.

  • CEO succession plan is nearing completion, with related one-time charges and additional search expenses expected in Q4.

Financial highlights

  • Consolidated gross profit rose 28% to $25.3 million, with gross margin at 30.1%.

  • Adjusted EBITDA grew 27% to $10.1 million, with margin expansion of 10 basis points.

  • Adjusted diluted EPS was $0.26, normalizing for acquisition and non-recurring costs.

  • Operating cash flow and free cash flow for the nine months ended December 2025 were $16.9–$17.9 million.

  • Total debt rose to $99.9 million, with leverage ratio at 2.00 and $50.1 million available under the credit facility.

Outlook and guidance

  • Management reaffirms high single-digit organic service revenue growth guidance for Q4 and the remainder of fiscal 2026.

  • Fiscal 2026 income tax rate expected to be 30%–32%.

  • Margin normalization expected as onboarding costs subside, with continued focus on organic growth and acquisitions.

  • Optimism for long-term shareholder value supported by recent acquisitions and expanded geographic footprint.

Service segment operating loss drivers?
Target leverage ratio and debt reduction plan?
Recurring vs. non-recurring operating expense growth?
When will service margin start-up costs normalize?
What is the long-term service opportunity in AI/data centers?
Recalibrate long-term organic growth due to onshoring?
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Transcat Inc. provides calibration and laboratory instrument services, along with the distribution of test, measurement, and control instrumentation. Its services support quality assurance and regulatory compliance in industries such as pharmaceuticals, aerospace, and energy. The company is headquartered in Rochester, New York, and its shares are listed on the NASDAQ.

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