The record revenue headline is offset by deteriorating margins and rising costs from the APM integration. Watch the Q4 10-Q for operating expense normalization and margin recovery; the stock may trade on the revenue beat vs the operating income miss.
Price Chart
Executive Summary
Pro-Dex reported record Q3 FY2026 revenue of $19.9M (+15% YoY), driven by next-gen handpiece shipments to its largest customer. However, operating income fell 15% to $3.1M due to a 41% surge in SG&A from the APM acquisition and non-recurring legal fees, while gross margin contracted 200bps to 31% on unfavorable product mix. Net income benefited from a $2.3M realized gain on Monogram CVRs, masking underlying operational pressure.
Key Financial Metrics
Key Facts
- Q3 FY2026 revenue of $19.9M, a record quarterly high, up 15% YoY from $17.4M
- Operating income declined 15% to $3.1M from $3.6M YoY due to 41% increase in operating expenses
- Gross margin fell 200bps to 31% from 33% YoY, attributed to unfavorable product mix
- Net income of $3.9M ($1.20 diluted) included a $2.3M realized gain from Monogram CVRs; adjusted net income would be ~$1.6M
- Completed acquisition of Advanced Precision Machining (APM) during the quarter, adding $6.5M in goodwill and $712K in intangibles
- Total debt increased to $18.5M from $15.4M at June 30, 2025, reflecting APM acquisition financing
Financial Impact
Revenue grew $2.5M YoY to a record $19.9M, but operating profit fell $546K. Net income was boosted by a $2.3M non-operating gain.
Risk Factors
- Customer concentration risk — largest customer drives majority of revenue; legacy handpiece and repair revenue declining
- Integration risk from APM acquisition — operating expenses rose 41% with non-recurring fees and continuing G&A costs
- Gross margin compression — down 200bps YoY on product mix shift; may persist if next-gen handpiece carries lower margins
- Elevated debt levels — total notes payable increased to $18.5M from $15.4M, increasing interest expense
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001079973-26-000581 |
| Document: pdex_8k.htm | 0001079973-26-000581 |
| Document: 0001079973-26-000581-index-headers.html | 0001079973-26-000581 |
| Document: 0001079973-26-000581-index.html | 0001079973-26-000581 |
| Document: 0001079973-26-000581.txt | 0001079973-26-000581 |
| 8-K Data (Synthetic) | 0001079973-26-000581 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 6, 2026 20d ago | DEFA14A | $62.80 | awaiting T+20 | — | $60.66 (−3.41%) |
Oct 6, 2026 20d ago | DEF 14A | $62.80 | awaiting T+20 | — | $60.66 (−3.41%) |
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Aug 28, 2026 8w ago | 8-K | $62.10 $70.02 | ▲ +12.75% | ▲ +12.94% | $60.66 (−2.32%) |
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Apr 30, 2026 25w ago | 8-K | $48.36 $66.93 | ▲ +38.40% | ▲ +33.12% | $60.66 (+25.43%) |
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