Sonoma Pharmaceuticals Inc. reported third‑quarter 2026 revenue of $4.3 million, a 22% year‑over‑year increase that still falls short of the $5.24 million consensus estimate, missing revenue guidance by $0.94 million. Gross margin expanded to 38% from 36% in the same quarter last year, driven by higher pricing and a shift toward higher‑margin U.S. dermatology products.
The company’s net loss narrowed to $0.48 million from a $0.90 million loss in Q3 2025, while the nine‑month loss fell to $2.59 million from $2.90 million. EBITDAS loss improved to $1.0 million, compared with $1.9 million for the prior year, reflecting flat operating expenses and a 2‑percentage‑point margin lift. Despite these gains, the company remains unprofitable and continues to report a going‑concern warning, citing substantial doubt about its ability to continue as a going concern without additional capital or further cost cuts.
Revenue growth was concentrated in the U.S. dermatology market, where sales rose 98% to $3.2 million, driven by strong demand for over‑the‑counter products and expanded distributor relationships. Latin America revenue declined 12% to $0.8 million, reflecting weaker demand and currency headwinds. The company’s HOCl platform remains the core of its product strategy, with ongoing regulatory progress in the U.S. and international markets.
CEO Amy Trombly emphasized that the quarter “demonstrates continued execution of our strategic priorities” and highlighted regulatory milestones and leadership changes, including a new Audit Committee Chair and a Senior Vice President of Regulatory, Quality and Product Development. She reiterated the company’s focus on expanding its HOCl portfolio and strengthening its U.S. distribution network, while acknowledging the need for additional financing to address liquidity concerns.
Analysts had expected revenue of $5.24 million and EPS of ($0.05). Sonoma reported an EPS of ($0.48), missing the estimate by $0.43. Investors reacted cautiously, with the market weighing the revenue and EPS misses against the company’s margin improvement and the ongoing going‑concern warning. The stock closed at $3.05 on the announcement day, reflecting a tempered response to the mixed results.
The earnings miss and the going‑concern statement underscore the company’s fragile financial position, despite revenue growth and margin expansion. Management’s guidance remains unchanged, but the company’s liquidity constraints and the need for additional capital raise questions about its near‑term viability. Investors will likely monitor subsequent funding efforts and cost‑control initiatives to assess whether Sonoma can transition to profitability and sustain its growth trajectory.
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