Kovanyi Scientific Company saw a robust 47% increase in revenue in the first quarter.

Kovani Science ( NASDAQ: KEQU ), this laboratory furniture and technology products manufacturer released its Q1 financial report for FY 2026 on September 10, 2025. Benefiting from the completion of the acquisition of Nu Aire, revenue for this quarter saw a significant year-on-year rise, and profits also climbed. Management pointed out that the order backlog remains high, but warned that project deliveries may experience fluctuations for the remainder of the year. Overall, the company reported significant revenue growth, an expansion of its order pipeline, and continued investment in corporate platform and integration efforts.

| Indicator | FY2026 Q1( as of July 31, 2025 ) | FY2025 Q1( as of July 31, 2024 ) | Year-on-year change | |------|---------------------------|---------------------------|--------| | Diluted Earnings per Share ( GAAP ) | $1.04 | $0.74 | 40.5% | | Diluted Earnings Per Share ( Non-GAAP ) | $1.10 | $0.93 | 18.3% | | Revenue | $71.1 million | $48.4 million | 46.9% | | Adjusted EBITDA( Non-GAAP) | $6.5 million | $4.1 million | 61.4% | | Order Backlog | $205.0 million | $159.4 million | 28.6% | | Cash and cash equivalents | $19.5 million | Not applicable | Not applicable |

Business Overview and Company Focus

Kovani develops, manufactures, and installs laboratory furniture systems for research, education, healthcare, and industrial environments. Its product portfolio includes steel and wooden integrated furniture, fume hoods, and technical equipment for controlled environments.

The company's growth strategy focuses on acquiring public and private contracts, expanding international business, and entering adjacent product categories. The recent acquisition of Nu Aire has added biosafety cabinets, carbon dioxide incubators, and ultra-low temperature freezers to the company's product portfolio, further enriching Covani's product range and market coverage.

Quarterly Highlights: Revenue, Profitability, and Business Drivers

In the first quarter of fiscal year 2026, Covance Science recorded revenue of $71.1 million, a year-on-year increase of 46.9%, reflecting the consolidation of Nu Aire's performance. The domestic segment contributed $54.4 million, a year-on-year increase of 53.0%, while international sales reached $16.8 million, a year-on-year increase of 30.2%.

Net profit attributable to Kovani Science increased to $3.1 million, a year-on-year rise of 41%. Diluted earnings per share increased from $0.74 to $1.04. Gross margin improved from 25.8% in the same period last year to 29.4%.

The domestic division benefited from increased sales and improved profit margins, thanks to enhanced production efficiency and ongoing cost control. Management emphasized that the addition of Nu Aire products is one of the main factors contributing to the strong domestic performance. In the international division, sales growth accelerated as delays in customer construction sites began to ease, supporting more project deliveries and settlements.

However, the corporate sector reported a pre-tax loss of $3.1 million, a significant increase from a loss of $2 million in the same period last year. This increase is mainly related to the growing infrastructure investments by Covani and the ongoing costs associated with the integration of the Nu Aire subsidiary.

Business Outlook and Investor Focus

The management has not provided specific revenue or EPS guidance for future quarters or fiscal years. However, they indicated that despite potential short-term fluctuations due to uneven project delivery and increased corporate investment, the consolidated EBITDA for the fiscal year 2026 is expected to exceed that of fiscal year 2025.

The company's end-of-quarter backlog of $205 million is at a historically strong level, but down from $214.6 million at the end of the previous quarter. Management emphasized the unpredictability of project timelines, citing an uncertain government and regulatory environment as potential factors affecting short-term performance. Investors may focus on changes in backlog, trends in integration costs, and whether the profitability improvements seen this quarter, as Covani Science further absorbs the Nu Aire business and invests in long-term infrastructure, can be sustained.

I personally believe that although the acquisition has brought considerable revenue rise, the ongoing existence of integration costs and the uncertainty of project delivery may raise some concerns for investors. Covani's laboratory equipment business is significantly affected by the budgets of government and educational institutions, and in the current economic environment, these customers' spending decisions may be more cautious. It is worth paying attention to whether the company can successfully integrate Nu Aire's product line and achieve the expected synergies.