AstroNova Reports Earnings Decline Amid Strategic Challenges
Shares of AstroNova, Inc. (ALOT) have dropped 21.2% since the company disclosed its earnings for the quarter ending January 31, 2025. In comparison, the S&P 500 index experienced a smaller decline of 3.2% over the same period. When looking at the past month, AstroNova’s stock fell by 25.1%, while the S&P 500 decreased by 3.8%.
For fiscal Q4 2025, AstroNova reported a non-GAAP net income of 6 cents per share, a significant decrease from 33 cents per share recorded in the same period last year. (You can view the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Financial Performance Overview
The company achieved revenues of $37.4 million, down 5.6% from $39.6 million in the year-ago quarter. This decline was mainly attributed to reduced sales in both the Product Identification (PI) and Test & Measurement (T&M) segments.
AstroNova’s GAAP net loss for the quarter stood at $15.6 million, compared to a net income of $2.7 million a year prior. A notable factor in this decline was a $13.4 million non-cash goodwill impairment charge associated with the MTEX acquisition. When excluding one-time items, non-GAAP net income totaled $0.4 million, down from $2.5 million a year earlier.
Segment Performance Breakdown
Revenue from the PI segment fell 3.6% year-over-year to $25.7 million, despite some contribution from MTEX. Meanwhile, T&M revenues dropped 9.9% to $11.7 million, affected by a delayed defense order and postponed deliveries due to the Boeing strike. The PI segment recorded a significant operating loss of $11.2 million, compared to a profit of $3.2 million in the prior year, primarily due to the impairment charge. Adjusted non-GAAP operating profit for the PI segment decreased to $2.3 million from $3 million year over year, while T&M segment operating profit fell to $2.3 million from $3.7 million.
Management Insights
CEO Greg Woods described fiscal 2025 as a “challenging year,” pointing to the complexities of integrating MTEX, the impact of the Boeing strike, and issues with the timing of large defense orders. Despite these challenges, the company has advanced its internal AstroNova Operating System to enhance efficiency throughout the organization. Progress was made in leadership, HR systems, and finance processes. Moreover, the company continues to simplify its product offerings while focusing on improving profitability through operational realignment and waste reduction.
Challenges Affecting Financial Results
The goodwill impairment charge greatly affected the financial results, stemming from revised expectations regarding MTEX’s performance. Unfavorable product mix and deferred defense orders also hampered margins and revenues, resulting in gross margin decreasing to 34.1% from 37.2% year over year. Operating expenses increased due to the impairment, higher selling and administrative costs, and rising R&D spending. While revenue met preliminary expectations, profitability suffered due to structural inefficiencies and acquisition-related expenses.
Fiscal Year 2025 Summary
For the full fiscal year, revenue was $151.3 million, reflecting a modest 2.2% increase from $148.1 million in fiscal 2024. However, AstroNova reported a GAAP net loss of $14.5 million, or $1.93 per share, compared to a net income of $4.7 million, or 63 cents per share, the previous year. On a non-GAAP basis, net income for fiscal 2025 was $2.7 million, or 33 cents per share, down from $7.2 million, or 97 cents per share, in fiscal 2024. Adjusted EBITDA also fell, declining to $12.3 million from $17.6 million in the previous year.
Fiscal 2026 Forecast
AstroNova reaffirmed its projections for fiscal 2026, estimating net revenue between $160 million and $165 million, indicating a midpoint growth of 7% compared to fiscal 2025. The company aims for an adjusted EBITDA margin expansion of 60 basis points, targeting a range between 8.5% and 9.5%. Management attributes these expected improvements to new product launches and a shift towards higher-margin, recurring revenue streams. Plans include the rollout of next-generation print engine technologies and a migration to the ToughWriter printer product line, which is anticipated to enhance working capital efficiency and decrease royalty expenses.
Recent Developments
During the quarter, AstroNova made strides in integrating MTEX, acquired in May 2024. The company is utilizing MTEX’s facilities in Portugal to create a Center of Manufacturing Excellence in Europe, which aims to improve manufacturing flexibility and supply chain management. Additionally, AstroNova secured an amendment and waiver to its credit agreement with Bank of America, providing more favorable covenant terms and lowering debt service payments for fiscal 2026. This restructuring is intended to enhance liquidity as the company implements its operational transformation and cost-reduction strategies.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
