10-Q · May 15, 2026
Escalon Medical Corp. reported a decline in consolidated net revenue of approximately $601,000 or 6.3% to $8,875,000 for the nine months ended March 31, 2026, mainly due to reduced sales in key segments including…
Earnings analysis · 10-K
ESMC earnings analysis
Filed October 13, 2026 · Our reading of the company's report
The latest report
Escalon returned to modest revenue growth, led by Sonomed and service plans, and materially strengthened liquidity through the $3.0 million AXIS asset sale. However, underlying profitability remained thin: operating…
Read full summary
Escalon returned to modest revenue growth, led by Sonomed and service plans, and materially strengthened liquidity through the $3.0 million AXIS asset sale. However, underlying profitability remained thin: operating income was only $45,000, equivalent to a 0.4% operating margin, while operating cash flow turned negative at $403,000. The outlook is balanced, with improved liquidity and lower debt offset by Trek declines, tariff and supplier exposure, and an unremediated inventory-control material weakness.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.27
- Segment
- One operating and reportable segment; management reported consolidated revenue of $12.736 million.
- Segment
- Products generated $12.083 million of revenue and service plans generated $654,000.
- Segment
- Domestic revenue was $6.830 million, or 53.6%, and foreign revenue was $5.906 million, or 46.4%.
What stood out
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Revenue Rebounded on Sonomed Growth
Consolidated revenue increased 5.7% to $12.736 million from $12.046 million. Sonomed sales and services increased $1.259 million, more than offsetting a $518,000 decline in Trek revenue and a $51,000 decline in AXIS revenue.
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AXIS Sale Strengthened Liquidity
The company sold its AXIS software assets for $3.000 million, received $2.800 million of net proceeds, and recognized a $2.814 million pretax gain. Cash increased to $3.065 million from $546,000 at June 30, 2025.
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Reported EPS Improved Sharply
Net income applicable to common stockholders increased to $2.012 million, or $0.27 per diluted share, from $28,000, or effectively $0.00 per diluted share, in fiscal 2025. The improvement was primarily driven by the AXIS gain and a $1.139 million deferred tax benefit.
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Service Plans and Ultrasound Investment
Service-plan revenue rose 22.9% to $654,000 from $532,000, supporting recurring customer-care revenue. Research and development spending was $501,000, including a $152,000 increase in ultrasound development investment.
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Balance Sheet Deleveraged
Working capital increased to $4.624 million from $1.927 million and the current ratio improved to 2.94-to-1 from 1.72-to-1. Debt to total capital declined to 14.1% from 21.5%, including repayment of the $127,000 TD Bank balance.
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Focused, Asset-Light Product Strategy
Management describes competition as based primarily on technological innovation, reliability, quality and price, with continued emphasis on new or enhanced products and regulatory clearances. Capital expenditures remained limited at $4,421, while the company paid no common-stock dividends.
What to watch
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Unremediated Inventory-Control Weakness
Management again reported a material weakness in internal control over financial reporting, first identified in fiscal 2023, relating to inventory reserve calculations. The spreadsheet still relies on manual entries, management review does not cover certain manual inputs and links, and enhanced controls had not yet been tested for operating effectiveness as of June 30, 2026.
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Tariff and Supplier Concentration Exposure
The filing identifies a 10% tariff on most imports and additional country-specific tariffs that could increase cost of goods sold, reduce margins and disrupt sourcing; management said the ultimate financial impact cannot currently be reasonably estimated. Exposure is meaningful because foreign sales were $5.906 million, or 46.4% of revenue, and the largest supplier represented 45% of total purchases.
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Earnings Quality and Cash Conversion
Fiscal 2026 operating cash flow was negative $403,000 compared with positive $381,000 in fiscal 2025, despite reported net income of $4.013 million. The filing attributes the cash-use calculation partly to the noncash $2.800 million AXIS-sale gain and $1.139 million deferred-tax benefit, highlighting dependence on non-operating items for reported earnings and liquidity improvement.
Management's outlook
No quantitative annual revenue or EPS guidance was provided. Management stated that it believes current liquidity is sufficient to fund operations, working capital needs and strategic initiatives for the foreseeable future, while noting it may evaluate additional financing.
Earlier filings 4
10-Q · February 17, 2026
Escalon Medical Corp. reported a 4.4% increase in consolidated net revenue of $6.267 million for the six months ended December 31, 2025, driven primarily by Sonomed product sales. However, operating cash flow showed a…
10-Q · November 14, 2025
Escalon Medical Corp. reported a decline in consolidated revenue of 3.8% to $2,675,000 for the three months ended September 30, 2025, compared to the same quarter last year, largely due to decreased sales in Sonomed and…
10-K · September 29, 2025
Escalon Medical Corp. reported modest growth in revenue, with total revenue increasing by 0.5% to approximately $12.05 million for the fiscal year ending June 30, 2025. The company achieved net income of approximately…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.