Sonoma FY2027 Q1 earnings: 60% revenue growth moves EBITDA positive

Sonoma Pharmaceuticals (Nasdaq: SNOA) reported fiscal Q1 2027 revenue of $6.4 million, up 60% year over year, while its net loss narrowed to $0.3 million from $1.2 million. Higher revenue, an improved gross margin, and unchanged operating expenses helped company-reported EBITDA turn positive for the quarter.

Core Financial Results

Revenue growth translated into a larger gross profit, with gross margin expanding to 40% from 36%. Operating expenses remained flat at $2.6 million despite the increase in sales, substantially reducing the net loss.

The release’s headline describes the result as the company’s first positive adjusted EBITDA, while the body of the release labels the measure EBITDA. The detailed reconciliation was not included in the supplied text.

Business and Geographic Performance

U.S. revenue increased 141% year over year, outpacing the company’s 60% total revenue growth. Sonoma did not disclose the absolute U.S. revenue amount or provide a detailed geographic or product-level breakdown, so the precise contribution from each market cannot be determined.

During June 2026, the FDA granted a new 510(k) clearance for Microdacyn Wound Irrigation Solution. The clearance added expanded claims, multiple-use authorization, and additional packaging configurations. Since the start of fiscal 2027, Sonoma has also added distributors in Taiwan, Vietnam, and the United States, broadening its commercial network.

Revenue Growth and Flat Expenses Moved EBITDA Above Break-Even

The central change this quarter was operating leverage. Gross profit increased by about $1.1 million while operating expenses stayed at $2.6 million, allowing most of the additional gross profit to reduce losses rather than being absorbed by higher overhead.

That relationship explains why the net loss narrowed sharply and EBITDA moved from a $1.0 million loss to a $0.1 million gain. Sonoma has not yet reached GAAP profitability, but the quarter shows that revenue growth can materially improve earnings when operating expenses remain controlled.

Profitability and Balance Sheet

Cost of revenue was $3.8 million, or 60% of sales, compared with a gross margin of 40%. The four-percentage-point improvement in gross margin contributed to the better EBITDA result alongside higher revenue.

Sonoma held $5.3 million in cash and cash equivalents as of June 30, 2026. The supplied release did not include quarterly operating cash flow, free cash flow, or comparative cash-balance figures, limiting assessment of how the narrower accounting loss affected liquidity.

Risks Investors Should Monitor

• GAAP losses continue: Although EBITDA became positive, Sonoma still recorded a $0.3 million net loss. Further progress will depend on preserving operating leverage and converting growth into bottom-line profitability.
• Margin remains important: Cost of revenue totaled $3.8 million against $6.4 million of sales. Changes in product mix or costs could affect the company’s ability to maintain the improved 40% gross margin.
• Commercial execution is required: The FDA clearance and new distributor relationships expand Sonoma’s opportunities, but the company did not quantify their revenue contribution. Their impact will depend on successful commercialization.
• Limited cash-flow visibility: The release disclosed $5.3 million in cash but did not provide operating or free cash flow, making it difficult to evaluate quarterly cash consumption from the available information.

Summary

Sonoma’s fiscal Q1 2027 results were defined by 60% revenue growth, faster expansion in the U.S., and improved operating leverage. A higher gross margin and flat operating expenses narrowed the net loss and moved EBITDA above break-even. Investors’ next focus will be whether the company can sustain that expense discipline, preserve margins, and turn its regulatory and distribution expansion into continued profitable growth.