Pro‑Dex, Inc. announced a contract amendment that extends its largest customer relationship through December 31, 2028. The amendment, executed on December 17, 2025, guarantees purchase orders through the end of 2026 and establishes a framework for continued collaboration through 2028.
The customer accounts for roughly 75% of Pro‑Dex’s revenue, making the extension a critical safeguard against concentration risk. By locking in a multi‑year partnership, the company secures a predictable revenue stream that underpins its operational planning and capital allocation.
In fiscal 2025, Pro‑Dex’s three largest customers generated 94% of sales, up from 88% in fiscal 2024. The extended contract therefore represents a significant portion of the company’s top‑line and provides a cushion against potential churn or demand fluctuations from other segments.
Management highlighted the strategic importance of the deal. President and CEO Richard L. Van Kirk said the amendment “extends more than fifteen years of collaboration with this customer and positions us for continued revenue growth.” The statement underscores the company’s focus on long‑term relationships to drive growth.
The extension also offers financial upside. Pro‑Dex reported a 22% year‑over‑year revenue increase to $17.4 million in Q3 FY2025, driven by shipments of the customer’s next‑generation orthopedic handpiece. The secured purchase orders through 2026 are expected to sustain that momentum, offsetting margin compression seen in Q4 FY2025 when gross margin fell to 20% from 27% due to product mix and tariff costs.
While the deal strengthens revenue visibility, it does not eliminate concentration risk. Pro‑Dex continues to pursue diversification initiatives, but the company’s heavy reliance on a single client remains a headwind that investors monitor closely.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.