Transcat, Inc. (Nasdaq: TRNS) reported powerful third-quarter fiscal 2026 results today, characterized by a massive 26% surge in total revenue and a strategic return to high single-digit organic growth. The leader in accredited calibration and distribution services successfully navigated a complex industrial landscape to deliver $83.9 million in revenue, handily beating analyst expectations of $80.9 million. The results signal a robust recovery in operational momentum, specifically within the company’s high-margin Service segment.
Financial Performance Summary
Transcat’s diversified model showed strength across both Service and Distribution, with the following key metrics for the quarter ended December 27, 2025:
Total Revenue: $83.9 million (up 26% YoY).
Service Revenue: $53.7 million (up 29% YoY), driven by strong demand in life sciences and aerospace.
Service Organic Growth: Returned to 7%, aligning with historical performance targets.
Distribution Revenue: $30.2 million (up 20% YoY), fueled by a surge in high-margin instrument rentals.
Gross Margin: Expanded 60 basis points to 30.1%.
Adjusted EBITDA: Grew 27% year-over-year.
Segment Deep Dive & Strategy
The company’s “Service-First” strategy continues to pay dividends, particularly as it integrates recent acquisitions and leans into its rental fleet.
| Segment | Growth | Key Driver |
| Service | +29% | Integration of acquired companies and high demand in regulated end-markets. |
| Distribution | +20% | Strategic shift toward rentals, which carry significantly higher margins than outright sales. |
Management Commentary
CEO Lee D. Rudow expressed confidence in the company’s trajectory and its ability to maintain growth despite broader economic uncertainty.
“Transcat delivered strong performance across our entire business portfolio… highlighted by 7% service organic revenue growth,” said Rudow. “Our talented team’s execution paired with robust revenue growth enabled us to deliver 27% adjusted EBITDA growth. As expected, service organic revenue returned to more historic levels.”
Management also touched upon the ongoing CEO succession plan, noting that the search for the next leader is progressing well with both internal and external candidates under evaluation.
Investor Outlook & Takeaways
The Rental Catalyst: Distribution gross margins expanded by 330 basis points, a direct result of Transcat’s tactical push into the rental market. This pivot is transforming a traditionally cyclical segment into a more predictable, high-margin revenue stream.
Market Resilience: Strong positioning in “recession-resistant” industries; Life Sciences, Aerospace & Defense, and Energy provides a defensive buffer that few industrial distributors can match.
Guidance Reaffirmed: Management expressed high confidence in meeting full-year fiscal 2026 expectations, citing a “differentiated value proposition” and a healthy acquisition pipeline.
