PDEX · Pro-Dex, Inc.

Pro-Dex achieved a new quarterly revenue record of $19.9 million in Q3 fiscal 2026, up 15% from $17.4 million a year ago, primarily from $4.7 million higher shipments of its largest customer's next-generation orthopedic handpiece, partially offset by $2.4 million lower repair revenue from that customer and other shifts. Gross profit rose 6% to $6.1 million, but margins contracted 200 basis points to 31% due to an unfavorable product mix. Operating expenses surged 41% to $3.0 million, driven by selling, general, and administrative costs tied to the recent Advanced Precision Machining (APM) acquisition—including $200,000 in non-recurring legal and consulting fees—plus higher personnel expenses, despite lower R&D spending. This led to a 15% drop in operating income to $3.1 million. Net income nonetheless climbed to $3.9 million ($1.20 diluted EPS) from $3.3 million ($0.98), propelled by a $2.3 million realized gain on non-tradeable contingent value rights from Monogram Technologies, acquired by Zimmer Biomet. For the nine-month period, sales grew 16% to $57.1 million on $16.6 million more next-gen handpiece volume and $2.1 million higher CMF drivers/batteries shipments, offset by legacy product declines; operating income edged up 1% to $9.5 million despite 17% higher opex, with net income at $10.8 million ($3.27 EPS) reflecting a net $5.9 million investment gain after reversals. CEO Rick Van Kirk highlighted the revenue milestone and APM integration, which expands machining capacity, technology, and revenue streams for aerospace/defense alongside Pro-Dex's orthopedic focus. Balance sheet strengthened with cash at $10.0 million (up from $0.4 million at June 30, 2025), total assets $75.0 million, and equity $45.2 million, supporting debt of $18.5 million. No forward guidance provided, but management expressed confidence in sustained success.