Transcat, Inc.

Transcat reported first-quarter fiscal 2027 consolidated revenue of $92.9 million, up 22% year over year, and consolidated gross profit of $30.7 million, up 19%. Diluted EPS was $0.14, while adjusted diluted EPS was $0.51. Adjusted EBITDA was $14 million, up 19% year over year. By segment, Service revenue grew 27% with 13% organic growth; Service gross profit rose 31% and Service gross margin expanded 90 basis points. Distribution revenue grew 11%, and Distribution gross margin was 31.4%, down 380 basis points year over year. Cash flow was also positive: operating free cash flow was $4.8 million, capital expenditures were $4 million, total debt was $110.4 million, available borrowings were $39.6 million, and leverage was 2.19x. For the full fiscal year, management said it expects high-single-digit Service organic growth and Service gross margin expansion, and it kept its tax rate outlook at 31% to 32%.

Jaime Irick said his first 100 days reinforced his confidence in Transcat’s growth opportunity and highlighted a need to become as strong on operational excellence as the company has been on growth. He emphasized levers such as customer process improvements, lean principles, pricing, mix optimization, and AI to support margin expansion and better customer solutions. His tone was constructive and optimistic, and he repeatedly pointed to strong end-market demand, share gains, and the company’s ability to grow both organically and through M&A.

Tom Barbato focused on the quarter’s financial drivers: strong Service performance, operating leverage, and productivity gains. He cited consolidated revenue of $92.9 million, gross profit of $30.7 million, adjusted EBITDA of $14 million, adjusted EPS of $0.51, and operating free cash flow of $4.8 million; he also noted $4 million of capex, $110.4 million of debt, $39.6 million of unused revolver capacity, and 2.19x leverage. On margins and taxes, he said Service gross margin expanded 90 basis points, Distribution gross margin was 31.4% because prior-year rebates were unusually high, and the full-year tax rate should normalize to 31% to 32%.

Analysts pressed management on why Service organic growth came in at 13% versus the implied high-single-digit full-year outlook, and management said performance was broad-based across end markets rather than driven by one area. They also asked about rental growth, with management saying it was in the expected high-single-digit to low-double-digit range, and about the timing of AI and operational-excellence benefits, which management said are already starting to lift results but will take time to fully show through. Other questions covered higher G&A and tax rate, both of which management tied mainly to CEO transition costs and stock-based compensation, and market share, where management said Transcat is still a small share of a large North American calibration market and is taking share broadly, especially as some competitors pull back.