Shares of Trio-Tech International (TRT Quick QuoteTRT - Free Report) have lost 43.9% since the company reported its earnings for the quarter ended June 30, 2026. This compares to the S&P 500 Index’s 0.3% decline over the same time frame. Over the past month, the stock has plunged 35.8% against the S&P 500’s 0.03% rise.

Trio-Tech’s Earnings Snapshot

For the fourth quarter of fiscal 2026, Trio-Tech reported revenues of $14.9 million, up 39.9% from $10.7 million in the year-ago quarter. Semiconductor Back-end Solutions (SBS) revenues surged 84.7% to $12.1 million from $6.6 million, while Industrial Electronics (IE) revenues declined 31.8% to $2.8 million from $4.1 million.

TRT posted a net loss attributable to common shareholders of $199,000, against net income of $183,000 a year earlier. Loss per basic and diluted share was approximately 2 cents against split-adjusted earnings of 2 cents per share in the prior-year quarter.

For fiscal 2026, Trio-Tech’s revenues increased 71.6% to $62.6 million from $36.5 million in fiscal 2025. SBS revenues nearly doubled, rising 98.6% to $49 million, while IE revenues increased 15.3% to $13.6 million. Gross profit increased 13.9% to $10.4 million, though gross margin contracted to 16.6% from 25.1%.

TRT posted an operating loss of $204,000 against operating income of $254,000 a year earlier, while net loss attributable to common shareholders narrowed to $34,000 from $41,000.

TRT’s Other Key Business Metrics

Fourth-quarter fiscal 2026 gross profit increased 5.7% to $2.8 million from $2.6 million a year earlier, but gross margin contracted to 19% from 25%. Operating expenses rose 40.9% to $3 million from $2.2 million, contributing to an operating loss of $266,000 against operating income of $467,000 in the prior-year period. Other income was $9,000 against other expense of $315,000 in the comparable period.

Trio-Tech exited fiscal 2026 with a backlog of $24.2 million compared with $11 million reported a year earlier. SBS accounted for $19.8 million of the backlog and IE for $4.4 million.

Net cash provided by operating activities increased to $3.4 million in fiscal 2026 from $0.4 million, while cash, cash equivalents, short-term deposits and restricted term deposits totaled approximately $28.5 million compared with $19.5 million as of June 30, 2025.

Trio-Tech’s Management Commentary

Chairman and CEO S.W. Yong said that fiscal 2026 benefited from strong demand for semiconductor reliability testing, including AI-related chip testing, as customers expanded advanced-computing programs and diversified testing activity across Southeast Asia. Management also highlighted TRT’s expansion beyond AI into automotive semiconductor applications. A recently announced three-year production burn-in contract with a new global IDM customer represents Trio-Tech’s second EV semiconductor production burn-in customer.

The company also pointed to its expanded Malaysian capacity as an important part of its growth strategy. Trio-Tech added approximately 104,000 square feet of space in Perai, Penang, to support rising demand from a North American customer.

Factors Influencing TRT’s Headline Numbers

The sharp increase in SBS revenues was the principal driver of Trio-Tech’s top-line growth. For fiscal 2026, SBS revenues increased 98.6% to $49 million, supported by stronger AI and automotive semiconductor testing demand, while IE revenues rose 15.3% to $13.6 million.

However, the stronger revenue performance did not translate proportionately into profitability. Overall gross margin for the year fell to 16.6% from 25.1%, while higher general and administrative and selling expenses also weighed on operating results. General and administrative expenses increased 18.8% and selling expenses rose 17.9%.

TRT also reported increased customer concentration. Its three largest customers accounted for about 57.6% of fiscal 2026 revenues compared with 41% in fiscal 2025, with one major U.S.-based SBS customer accounting for 38.7% of consolidated revenues. The increase was primarily linked to new service business resulting from the customer’s geographic sourcing realignment.

Trio-Tech’s Fiscal 2027 Outlook

Trio-Tech expects continued demand for semiconductor back-end testing across AI, high-performance computing and automotive applications. Of previously announced burn-in board orders totaling $14.2 million, about $7.9 million remained to be delivered at fiscal year-end, while the company received an additional order of approximately $1.5 million in the first quarter of fiscal 2027.

TRT also expects production volumes at its expanded Malaysian facility to increase progressively beginning in the second quarter of fiscal 2027. IE entered the new fiscal year with first-quarter bookings of approximately $4.6 million, and management anticipates year-over-year growth in the segment while pursuing opportunities in data centers and industrial energy-efficiency applications.