Trio-Tech grew fiscal 2026 revenue 72% to $62.6M on AI-chip testing in Malaysia, but gross margin fell to 16.6% and shareholders were left with a $34K net loss as one customer rose to 38.7% of sales.
Revenue
$63M
+71.6% YoY
Net income
-$34K
Diluted EPS
$0.00
Operating margin
-0.3%
Revenue up 72% on AI-chip testing, but almost none of it reached Trio-Tech shareholders
Trio-Tech International, a Singapore-based semiconductor testing and equipment company, grew revenue 72% to $62.6 million in fiscal 2026 (the year ended June 30, 2026), from $36.5 million a year earlier. Nearly all of the increase came from one new line of work: final testing of AI chips at its Malaysia operation, which started in the first quarter of the fiscal year. Final testing means checking finished chips before they ship.
That growth barely moved the bottom line. The company swung to a $0.2 million operating loss, down from a $0.3 million profit a year earlier. Net loss attributable to Trio-Tech's own shareholders was $34,000, against a $41,000 loss in fiscal 2025, which rounds to a loss of $0.00 per share in both years. Three things explain the gap: the new testing work carries much lower margins, corporate costs roughly doubled, and until December 2025 half of the Malaysia unit's profit belonged to an outside partner.
Key figures
Metric
FY2026
FY2025
YoY Change
Revenue
$62.6M
$36.5M
+71.6%
Gross margin
16.6%
25.1%
-8.5 pts
Operating income (loss)
$(0.2)M
$0.3M
Swung to a loss
Operating margin
-0.3%
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0.7%
-1.0 pts
Net income (all owners, incl. minority partners)
$0.22M
$0.00M
Up from break-even
Net loss attributable to Trio-Tech shareholders
$(0.03)M
$(0.04)M
Loss narrowed by $7K
Diluted EPS
$(0.00)
$(0.00)
Flat
Revenue from largest customer
$24.2M (38.7%)
$1.3M (3.5%)
+$22.9M
Year-end backlog (both segments)
$24.2M
$11.0M
+119%
Operating cash flow
$3.4M
$0.4M
+$3.1M
Operating margin is operating income divided by revenue: the share of sales left after running the business, before interest and tax. The filing's percentage table shows -0.4% because its line items are rounded individually; -0.3% is the dollar figures divided directly ($204K loss on $62,605K revenue). Share counts reflect the two-for-one stock split on January 5, 2026.
Segments: revenue doubled in chip testing, profit didn't move
Trio-Tech reports two segments. Semiconductor Back-end Solutions (SBS) covers chip testing services and test equipment such as burn-in systems and boards (burn-in means running chips under heat and electrical stress to weed out early failures). Industrial Electronics (IE) covers distribution and equipment for non-semiconductor customers. (The real estate business stopped being a separate reporting segment in fiscal 2025 and now sits in "Corporate/Others".)
Segment
FY2026 revenue
FY2025 revenue
Change
Gross margin FY26 / FY25
Operating income FY26 / FY25
Semiconductor Back-end Solutions
$49.0M
$24.7M
+99%
15.7% / 27.4%
$403K / $411K
Industrial Electronics
$13.6M
$11.8M
+15%
20.3% / 20.5%
$176K / $236K
Corporate / Others
$0.03M
$0.04M
-6%
n/m
$(783)K / $(393)K
Total
$62.6M
$36.5M
+72%
16.6% / 25.1%
$(204)K / $254K
SBS revenue rose $24.3 million. Management puts the gain down to "stronger demand for artificial intelligence ('AI') and automotive related semiconductor testing services and products." Malaysia added AI-chip final testing, Thailand had higher testing volumes, and Singapore sold more equipment, with full-year burn-in board sales up about 58.4%. China was the only operation where revenue fell. The filing says some customers "relocated their testing activities to other geographic markets in response to cross-border tariffs and geopolitical considerations."
Even so, SBS operating income slipped from $411K to $403K. Gross margin fell from 27.4% to 15.7%. The filing explains that the new final-testing work "required no capital investment, resulting in lower margin profiles that reflect the reduced risk exposure." In other words, Trio-Tech earns a thinner cut on work that runs without its own capital at stake. Management warns that SBS gross margin "is expected to trend below historical levels" as this work becomes a bigger share of the mix. SBS operating expenses also rose $946K, mainly from more staff and performance bonuses in Singapore, Malaysia and Thailand. Headcount across the company rose from 614 to 943 full-time employees.
IE revenue grew 15%. Sales of aerospace-related products roughly doubled and distribution sales grew, partly offset by weaker equipment sales. Gross margin held at about 20%, but operating income fell to $176K from $236K. The filing attributes this to spending on the move into aerospace and a $194K expected credit loss charge (a provision for customer bills that may not be paid).
Corporate loss doubled to $783K because of higher stock-based compensation, which rose with the share price, and professional fees tied to the stock split and other corporate activity. That cost is what pushed the company from a small operating profit to a small operating loss, even though both business segments stayed profitable.
Where the revenue came from
The 10-K does not break revenue out by country. By management's description, the growth came from Malaysia (the new AI-chip testing), Singapore (equipment and testing) and Thailand (testing volumes), while China declined. Pre-tax income by jurisdiction shows the same split between the home office and the operations: a $585K loss in the U.S. (where corporate costs sit) against $974K of pre-tax income from foreign operations. Only about 5 of the company's 943 full-time employees are in the U.S.
One customer now drives the business
Customer concentration rose sharply. The three largest customers made up 57.6% of revenue, up from 41.0%.
One U.S.-based SBS customer ("Customer A") accounted for $24.2 million, or 38.7% of revenue, up from $1.3 million (3.5%) a year earlier. The filing ties this to "new service business associated with the customer's geographic sourcing realignment," meaning the customer moved testing work away from its previous locations.
One IE customer accounted for 10.4% ($6.5 million), down from 16.8%.
Customer A's share of trade receivables (unpaid customer bills) rose to 22.2% from 4.5%.
This is the most important risk in the filing. Close to two-fifths of revenue now depends on one customer's sourcing decisions, and the same kind of relocation that shifted work to Malaysia is what took work away from China.
Why shareholders saw so little of the profit
The group earned $219K in consolidated net income, up from break-even. Minority partners' share was $253K, however, up from $41K. That leaves Trio-Tech's own shareholders with a $34K loss.
The main reason is Malaysia. Until December 3, 2025, Trio-Tech owned only 50% of Trio-Tech Malaysia, the unit doing the AI-chip testing. On that date it bought the other 50% from its partner Lodestar for RM14.2 million (about $3.5 million in cash). The partner's share of Malaysia's profit counted as "non-controlling interest" up to that date. From December onward, all of Malaysia's profit belongs to Trio-Tech. Minority stakes remain in two smaller subsidiaries: Trio-Tech owns 55% of SHI International and 76% of Prestal Enterprise.
Other items below operating income also helped:
Foreign-exchange losses shrank to $110K from $671K.
Prestal received $363K of dividend income from an unlisted investment, which did not happen the year before.
Tax expense rose to $228K from $168K on higher profits in Singapore and Thailand.
Cash and balance sheet
Operating cash flow rose to $3.4 million from $0.4 million. Most of the improvement came from working capital: accounts payable (bills owed to suppliers) jumped to $7.6 million from $1.9 million. Capital spending nearly doubled to $1.7 million, mostly on equipment in Malaysia.
In April 2026 the company sold 1,052,632 new shares at $9.50 each in a registered direct offering, raising about $10.0 million before fees. About $40 million remains available under its shelf registration (a pre-approved filing that lets it sell more shares quickly).
Year-end cash was $21.4 million, up from $10.9 million. Short-term deposits added another $7.1 million. The company has no outstanding credit-line borrowings and $0.4 million of bank loans.
Collections got faster: days sales outstanding (how long customers take to pay, on average) fell to 70 days from 106. Inventory is taking longer to sell, at 112 days versus 88, because the company is building stock for a larger Singapore backlog.
Leased assets grew to $5.5 million from $0.9 million, mostly because of a new plant lease in Malaysia. That adds to fixed costs if volumes fall.
The filing also discloses a ransomware attack on a Singapore subsidiary on March 11, 2026. Management says it caused no material disruption or financial impact.
Takeaway: Trio-Tech has become a much bigger but lower-margin business built largely around one U.S. customer's AI-chip testing in Malaysia. Revenue nearly doubled in chip testing, but segment profit was flat and gross margin fell from 25% to 17%. The fiscal 2027 test is whether buying out the Malaysia partner turns that volume into earnings for Trio-Tech shareholders, now that none of Malaysia's profit goes to a partner.
Outlook
Management gives no revenue or earnings guidance. The order book points to a busier fiscal 2027:
SBS backlog was $19.8 million at June 30, 2026, up from $6.7 million. About $9.1 million of that is a "soft" testing-services backlog, meaning management's estimate of the next three months of customer demand rather than firm orders.
IE backlog was roughly flat at $4.4 million, up from $4.3 million.
Management expects SBS margins to stay below their historical levels. It also flags two cost pressures: memory shortages, which are lengthening lead times and raising component costs for its equipment, and changing U.S. semiconductor tariffs, including a Section 232 tariff imposed in January 2026. Three things will decide whether fiscal 2027 earnings improve. First, Malaysia now contributes a full year of 100%-owned profit. Second, corporate costs from the stock split and share-price-linked pay could ease. Third, Customer A has to keep its volumes in Malaysia. If that customer moves its work again, the sales growth could reverse as quickly as it arrived.