AstroNova Revenue Drops 11% in Fiscal Q2

Key Points

• Revenue fell 10.9% from the prior year to $36.1 million, leading to lower full-year guidance.

• Gross margin contracted by 3.1 percentage points, while adjusted EBITDA dropped 46.6% year over year.

• Delayed product rollouts and weaker demand in key segments put near-term profitability and cash flow under pressure.

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AstroNova (NASDAQ:ALOT), a company specializing in data visualization technology, including digital printing systems for industry and aerospace, reported its results on September 9, 2025. The most significant news was a revenue decline to $36.1 million (non-GAAP) paired with margin pressures and a downward revision of guidance for both full-year revenue and adjusted EBITDA margin. The quarter fell below management expectations as delays in product rollouts and reduced demand weighed on results. Overall, the period saw both sales and profitability decline from the prior year, and management’s outlook has become more cautious as risks around demand and execution remain elevated.

Business Overview and Recent Focus

AstroNova builds data visualization hardware and software, with products including digital label printers and ruggedized printers for aerospace flight decks. Its business operates through two main segments: Product Identification and Aerospace. The company’s technologies help customers in packaging, labeling, and aircraft data capture.

Recently, AstroNova focused on integrating acquisitions, launching advanced digital printers, and ramping up new product lines like the MTEX-based presses. Key areas include improving innovation, expanding its product portfolio, and strengthening its manufacturing and supply network to facilitate growth and maintain competitiveness.

Quarterly Highlights: Data, Execution, and Key Developments

Consolidated revenue declined 10.9% to $36.1 million. This followed delays in launching new products in the Product Identification segment and weaker performance in Aerospace, where last year’s unusually high orders created a tough comparison. Gross profit margin contracted from 35.3 % a year ago to 32.2 %, reflecting lower volumes and less favorable product mix. Adjusted EBITDA fell nearly by half to $2.1 million, as profitability suffered across both segments.

Sales in the Product Identification segment dropped 8.9% to $24.8 million. This part of the business centers on digital label printers and related supplies, including the QuickLabel and TrojanLabel product families. Because new digital presses and the AJ-800 direct-to-packaging printer faced rollout delays, with most new hardware shipments only beginning after the quarter ended, recurring revenue from supplies and service also declined.

The Aerospace segment, which provides onboard printers such as ToughWriter flight deck printers for aircraft, reported $11.3 million in revenue—a 15.1% decrease from the prior year. The comparison suffered because last year (Q2 FY2025) saw $1.3 million in atypical orders and nonrecurring engineering revenue, both of which did not repeat. However, the ToughWriter 640 program advanced as shipments began to a major original equipment manufacturer (OEM), and management expects that over 80% of flight deck printer shipments will be ToughWriters by year-end FY2026, up from just over 50% earlier in the year.

Order trends and backlog provide little sign of near-term recovery. Total bookings were flat year over year at $35.9 million, with the backlog stood at $25.3 million as of July 31, 2025. Product Identification orders and backlog both declined sequentially, while Aerospace orders were relatively unchanged from the prior-year period but backlog edged up $1.1 million from the prior quarter, suggesting some stability in aircraft demand. Management noted that “modest revenue growth” is expected in the second half of FY2026, but Flat orders and lackluster customer uptake of new products constrain expectations for a more robust rebound.

There was $0.1 million of restructuring charges in Product Identification. Restructuring efforts have begun to lower operating expenses, down nearly $0.9 million from last year, but the lag in revenue conversion means benefits have yet to flow through to profitability.

Looking Forward: Guidance and Investor Focus

Management reduced its forecast for FY2026 revenue to a range of $149 million to $154 million, down from the previous target of $160 million to $165 million. This implies revenue will be roughly flat compared with the prior fiscal year. Guidance on adjusted EBITDA margin was also lowered to 7.5–8.5%, matching last year at the midpoint and eliminating previous expectations for improvement.

Leadership did not provide quantitative guidance beyond these revised ranges. Investors will want to monitor trends in Product Identification hardware rollout, cash flow given tightened liquidity, further debt restructuring, and whether cost savings and new product demand begin to materialize in the coming quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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