Industrial manufacturer Standex (NYSE: SXI) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 27.6% year on year to $217.4 million. Its non-GAAP profit of $1.99 per share was 4.4% above analysts’ consensus estimates.

Is now the time to buy Standex? Find out by accessing our full research report, it’s free for active Edge members.

Commenting on the quarter's results, President and Chief Executive Officer David Dunbar said, "Following record operating performance in fiscal year 2025, our fiscal first quarter performance provided a strong start to the fiscal year, positioning us well to surpass our previously provided outlook of greater than $100 million of incremental sales in fiscal year 2026. In the fiscal first quarter, we booked orders of $226 million, the highest quarterly order intake ever. On the top-line, sales increased 27.6% year-on-year to $217.4 million, comprised of a 7% contribution from new products and 30% contribution from sales into fast growth markets. We remain on track for organic growth in fiscal year 2026, primarily driven by new product launches, strong tailwinds in the electrical grid, defense and aviation end markets, and improving general industrial markets. Sales from fast growth markets, such as electrical grid, electric and hybrid vehicles, renewable energy, commercialization of space, and defense, totaled approximately $62 million in the fiscal first quarter and are now expected to exceed $270 million in fiscal year 2026.

Company Overview

Holding over 500 patents globally, Standex (NYSE: SXI) is a manufacturer and distributor of industrial components for various sectors.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Standex’s 6.9% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Standex’s annualized revenue growth of 6% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Standex reported robust year-on-year revenue growth of 27.6%, and its $217.4 million of revenue topped Wall Street estimates by 0.7%.

Looking ahead, sell-side analysts expect revenue to grow 9% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and indicates its newer products and services will fuel better top-line performance.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

Operating Margin

Standex has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 14.5%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Standex’s operating margin rose by 2.3 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Standex generated an operating margin profit margin of 13.6%, down 2.2 percentage points year on year. Since Standex’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Standex’s EPS grew at an astounding 17.7% compounded annual growth rate over the last five years, higher than its 6.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Standex’s earnings to better understand the drivers of its performance. As we mentioned earlier, Standex’s operating margin declined this quarter but expanded by 2.3 percentage points over the last five years. Its share count also shrank by 1.9%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Standex, its two-year annual EPS growth of 8.6% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q3, Standex reported adjusted EPS of $1.99, up from $1.71 in the same quarter last year. This print beat analysts’ estimates by 4.4%. Over the next 12 months, Wall Street expects Standex’s full-year EPS of $8.13 to grow 7.6%.

Key Takeaways from Standex’s Q3 Results

It was good to see Standex narrowly top analysts’ revenue and EPS expectations this quarter. On the other hand, its EBITDA missed. Zooming out, we think this was a mixed quarter. The stock remained flat at $240 immediately following the results.

Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.