Electro‑Sensors, Inc. reported third‑quarter 2025 results that included net sales of $2.748 million, a 9.4% year‑over‑year increase from $2.512 million in Q3 2024. Gross margin expanded to 53.1%, up 270 basis points from 50.4% a year earlier, while operating income rose to $181 thousand, a 4.6% increase from $173 thousand in Q3 2024. Net income reached $208 thousand, and diluted earnings per share fell to $0.06 from $0.07 a year earlier.
The revenue lift was driven by stronger demand in the company’s industrial automation distribution channels and higher OEM sales. Management attributed the growth to pricing power and effective supply‑chain management, including sales‑price adjustments implemented earlier in the year. These actions helped offset the impact of rising input costs and supply‑chain disruptions that the company has been experiencing.
Margin expansion was largely a result of the company’s pricing strategy and improved supply‑chain efficiency. The 270‑basis‑point gain in gross margin reflects higher average selling prices and better cost control in the manufacturing process. Operating income increased in line with revenue growth, but the company’s operating expenses also rose, driven by higher headcount, variable compensation, and stock‑based awards disclosed in the 10‑Q filing.
Despite the top‑line and margin gains, EPS and net income slipped because the increase in operating expenses outweighed the revenue‑driven margin improvement. The company’s president, David L. Klenk, noted that while record revenue and margin expansion were encouraging, ongoing supply‑chain and labor‑market challenges continue to pressure profitability. He emphasized the company’s focus on managing costs and maintaining pricing power to sustain profitability moving forward.
The company’s guidance for the remainder of the year was not updated in the filing, so investors will need to monitor future releases for any changes in revenue or earnings outlook. Analysts will likely weigh the company’s ability to sustain margin expansion against the backdrop of supply‑chain headwinds and rising operating costs.
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