Transcat reported fiscal third-quarter earnings of $0.26 per share for the period ended December 2025, falling short of the Zacks Consensus Estimate of $0.30. This represents a year-over-year decline from $0.45 per share in the same quarter of fiscal 2025, driven primarily by elevated operating expenses in the calibration services division and higher-than-anticipated labor costs across its five service centers.

Total revenue for the quarter grew 2.4% year-over-year to $55.8 million, as strong demand for laboratory equipment calibration was partially offset by slower instrument sales. Service revenue accounted for 68% of the total, increasing 5.2% from a year ago, while product revenue declined 3.1%. Gross margin contracted by 120 basis points to 38.7%, reflecting increased technician headcount and supply chain inflation in specialty parts.

Transcat announced a return to high single-digit organic growth in its service business, with service organic revenue up 8.3% sequentially. Management attributed the acceleration to new long-term calibration contracts secured in the semiconductor and biopharmaceutical end markets, which now represent 24% of service backlog. The company reaffirmed its full-year guidance for service organic growth of 7%–9% and reiterated plans to open two additional service centers by the end of fiscal 2026.