I'd now like to turn the floor over to today's host, Steve Harshbarger, the President and CEO of Sono-Tek Corporation. The floor is yours.
Thanks, Kelly, and good afternoon, everybody. Thanks for joining us today. Again, as Kelly mentioned, my name is Steve Harshbarger, and I was appointed CEO of Sono-Tek in January of this year. I've been President of Sono-Tek for the past 11 years, and I've been with the company, actually, for over 30 years now. Let me first just thank the Investor Summit for inviting us to join the event today, and I'm excited to share more about the Sono-Tek story with you. Okay, this next slide, of course, is the standard Safe Harbor slide, and this is just a reminder that this presentation may contain some forward-looking statements, and, of course, that we never really can predict or guarantee what the future holds. You can please refer to the Safe Harbor language on this slide, which I'm sure you're already familiar with.
This slide shows our executive and senior management team at Sono-Tek, which I'm quite proud to be working alongside. Importantly, we've all been working together for over a decade, and in some cases, over two decades. Amongst this team are really the most experienced and knowledgeable minds in the world in the field of ultrasonic coating technology. A short history of Sono-Tek: the company was founded back in 1975 by Dr. Harvey Berger, the inventor of the ultrasonic atomizing nozzle, which still to this day is the heart of all Sono-Tek coating machines. At the time, the invention of the ultrasonic nozzle was a technically impressive achievement, but it really didn't significantly impact the world around us for many years.
In fact, it took several decades for the ultrasonic nozzle to transition from a small R&D device into the large full system solutions we build today, and you can see these along the top of this page. And these large thin-film coating systems that you see along the top of the slide are sold primarily into five market segments that we categorize as the microelectronics market, the alternative energy market, the medical device market, the industrial market, and the emerging R&D market. And on the right-hand side of this slide, you can see that three years ago we made a decision to uplist onto NASDAQ, and here you can see all of our market data. And so what is an ultrasonic nozzle? Well, if you look towards the center of this slide, you can see a cross-section of an ultrasonic nozzle.
This is an electromechanical device that is small enough to hold in the palm of your hand and will atomize liquid into very small, controllable micron-sized droplets. And there are many configurations of the ultrasonic nozzle that Sono-Tek has developed, and they are at the heart of every Sono-Tek coating machine. Sometimes our systems only need one or two ultrasonic nozzles, but sometimes there can be a dozen or more of these devices depending on the application and the size of the product the customer wants coated with a thin film. And these ultrasonic nozzles, in conjunction with some very sophisticated motion platforms that Sono-Tek manufactures, allow us to apply very thin nano to micron-thick coatings onto customers' products with extremely high uniformity. Now, this next slide shows you a cross-section of a thin film that's been ultrasonically spray-coated using one of our coating machines.
This film happens to be a perovskite layer, and this is commonly used in the clean energy sector, often for advanced solar applications. Now, I'm sure it's likely difficult for you to see this here, but the scale on this slide shows the pictures reflects a thin-film coating that's about one micron or slightly less than this picture, and to put this thickness in perspective, human hair is about 70 microns thick, so this coating is about one seventieth the thickness of a human hair that we're creating, and our machines often create coatings that are even thinner than this, and it's really all depending upon the application requirements. Now, this slide shows you the three primary disruptive markets that Sono-Tek is particularly focused on for growth. In the microelectronics market, we're primarily concentrated on thin-film coatings applied to semiconductor chips and handheld electronic devices.
The medical device markets range from drug coating machines for applying coatings onto things like stents or balloon catheter coatings to coatings on microfluidic devices, and really a wide range of other implantable devices that we coat, and lastly, you can see here the alternative energy market is really turning out a very high level of disruptive products that Sono-Tek systems coat, like fuel cells, advanced solar cells, or membranes that are used in green hydrogen generation. In all of these markets, Sono-Tek is very often working with well-known, leading global technology companies, which NDAs unfortunately prevent us from talking about who they are specifically, but many of these are the big Fortune 500 type of companies. Now, this slide contains our financials and our revenue history, with our most recently closed fiscal year, FY 2024, showing 30% year-over-year growth with $1.4 million in net income.
You can see a fairly consistent upward revenue growth trajectory, with one blip down in our FY 2023 revenue, which was a supply chain issue coming out of COVID, which we've since implemented increased vertical integration to reduce the possibility of this happening again. Significantly, though, even during that unplanned supply chain-induced dip in our FY 2023 revenue, you will notice that we still stayed profitable. You can also see on this slide our healthy gross margins that are consistently above 45%. We have a very strong cash position with almost $12 million of cash and cash equivalents. We have zero debt, and that includes owning our own industrial park and everything within it. And you can see we have here that we have a history of consistently remaining profitable alongside that growth trajectory. I believe this gives our investor base a very strong sense of security with Sono-Tek.
A common question I often get from our investors is to ask, "What changed in the past 10-12 years to accelerate our growth, which had been somewhat stagnant prior to this?" Well, about a decade ago, we started to see a significant shift in the rate at which manufacturers were applying functional and protective coatings onto new products that really historically never had coating on them. Protective and functional nano-thin films are now on so many products in our daily lives. They're on our foods, our clothes, our medical devices, and glasses, including thousands of different functional films that are on the components in our electronic devices and sensors. An item like a car has hundreds of different coating processes that are required in the manufacturing of the parts that go into that car.
So with all of these opportunities, it's been a very important part of Sono-Tek's strategy to focus on growth-oriented sectors that are developing disruptive technology products, where we can often get in on the ground floor early in the development stages. Recognizing the significant number of opportunities within our rapidly expanding addressable market, Sono-Tek implemented three strategic initiatives leading us down clear pathways for growth. The first was a shift to provide full system solutions. Now, historically, Sono-Tek primarily catered to the R&D sector with very basic ultrasonic nozzle setups, and we'd leave it to our customers to navigate any additional integration or modification requirements themselves to meet the needs of their specific application. Then, about a decade ago, Sono-Tek began a very important strategic shift in our strategy to provide our customers with much more than just these basic ultrasonic atomizing nozzles kits.
We became focused to provide our customers with all of the know-how, including all the hardware, all the software, and all the process expertise for their specific application needs within their specific markets. This shift propelled Sono-Tek's efforts to develop large, integrated production lines, which really increases the value to our customers and enables us to justify higher average selling prices across our product offering. The second significant pathway we established to accelerate our growth was the rapid expansion of our application engineering capabilities and our laboratory facilities, both here in our U.S. lab as well as our overseas distributor labs. Our application engineering team guides our customers in several ways. They'll help to define the proper liquid chemistry. They'll customize product handlings. They'll define and integrate the necessary machines that might sit before or after the ultrasonic coating process.
They'll even visit the end customer manufacturing sites to help develop the complete process. This full system solutions approach really differentiates Sono-Tek from our competitors and builds a very strong relationship with our customers, where we're really no longer a vendor, but really instead we become this partner that's attached at the hip with our customers. The third, and perhaps the most significant pathway to accelerate our growth, was the enhancement of our internal capabilities to develop and manufacture coating platforms that were scalable from R&D all the way through high-volume manufacturing. Now, these pictures on the right-hand side of the slide show you the transformative journey we've gone through over recent years. The top image is a typical R&D system. The middle picture here is a pilot line system, and the bottom pic is a high-volume production system.
Interestingly, it's not uncommon for a single customer to utilize all three of these systems. In phase one, they may validate their product's coating feasibility on a, say, $50,000-$70,000 R&D system, and then progress on to phase two where they scale up their manufacturing operations with a pilot line system ranging from $100,000-$200,000. And finally, in phase three, they may transition to high-volume production, where the average selling price of these machines can span from $250,000 to well over $1 million. The ability to strategically guide our customers through this process is really critical, and our focus is now on these large production platforms to propel our growth trajectory.
I should note here that Sono-Tek could have easily spent less money and not invested into these growth initiatives, which would have brought more money to the bottom line and potentially even a short-term higher stock price, but our future would certainly not look as bright had it not been for these investments in our growth initiatives. Now, this slide shows the progression of our average selling price over the past eight years. The blue bar represents systems priced under $75,000, while the orange systems are falling within the $75,000 to $150,000 range, and the green signifies our larger systems orders that are commanding prices exceeding over $150,000 here.
Notably, you can see our sales in the small platform category, the machines that are under that $75,000 area, have remained steady, while our growth has been propelled by our focused strategic shift to expand our product offering for larger platform systems with higher ASPs or average selling prices. We've witnessed over 50% growth in the systems priced between $75,000-$150,000, alongside a threefold increase in sales of machines priced over $150,000. This upward trajectory is expected to continue, with particular focus on continuing to accelerate sales of our highest ASP machines, of course, again, represented by that green section.
We can say this upward trajectory on our high ASP production lines is projected with a fairly high level of confidence because two of our most recently announced press releases announced orders that we received that had ASP production volume machines that were in the area of $2.9 million each for a combined $6 million of high ASP platforms, and these that are now presently in our backlog and are scheduled for FY 2026 delivery. The other press release we recently announced and not shown on this screen is a share buyback program we're in the process of implementing. We believe our stock price of recent has been on the low side, and we really plan to take advantage of buying on these dips.
Over government initiatives over the past several years, we got a big positive impact on accelerating Sono-Tek customers transitioning from R&D over to high-volume production lines in the clean energy sector in particular. Shown on this slide are just several of the highlights from government initiatives that are underway. Combined, the government's programs total well over $1 trillion that's being directed at the green economy, which starts to really drastically expand our total addressable market. We have a very large customer base using our R&D and pilot line systems in the clean energy sector to manufacture PEM electrolyzers, which are used in the area of green hydrogen generation, fuel cells, and carbon capture and reclaim applications. Our ultrasonic coating machines apply a critical catalyst layer onto a membrane, which lies at the heart of where these clean energy reactions take place.
Now, this market has historically been very slow to transition to production volumes, but that's changing due to these massive government investments. We see an acceleration of our green energy customer base transitioning from R&D to production, and as I just mentioned, we already have almost $6 million of large platform, high ASP, average selling price production systems in our backlog for planned FY 2026 shipment to the clean energy market. Over the past few weeks, I've also spent quite a bit of time diving into the potential impact of our customers from the green energy space with the upcoming administration change. It seems like a consensus from most policy experts is that we shouldn't see a significant impact on the primary areas that Sono-Tek focuses on in the clean energy market, at least not for the next several years.
Both administrations, they've expressed that energy independence is of very high importance, and while the Trump administration is certainly going to include new policies for carbon-based fuels as part of their overall package for energy independence, they have overall shown bipartisan support for developing the hydrogen economy and growing U.S.-based manufacturing capabilities of solar, and this is where most of Sono-Tek's significant clean energy customers are from. The clean energy sectors that I look at and are most likely to be negatively impacted by the new administration appear to be things like wind and electric vehicles, and these are both areas in which Sono-Tek customers have minimal involvement. Now, this slide updates you on where we're at halfway through our fiscal year 2025 and, more importantly, reflects why we're so optimistic for FY 2026 and beyond.
Our first half FY 2025 results showed an 11% year-over-year increase in revenue and a 13% year-over-year increase in net income, putting us in a good position for FY 2025, which closes on us on February 28th of 2025, but more importantly here, you can see an ongoing trend of our accelerating backlog, which is more than triple where it was six years ago, and last month, a little over a month ago now, we again announced another record high backlog of $11.7 million that is halfway through our current fiscal year FY 2025. Some key takeaways that I hope you can remember about Sono-Tek. We have a solid track record showing an upward revenue growth trajectory while consistently remaining profitable with a strong commitment to invest in our future growth.
I really love that it's very easy for an investor to quickly look at a Sono-Tek balance sheet and see immediately that this is a very fiscally responsible company with zero debt, significant upside potential, and minimal downside potential. We are the leader in a uniquely disruptive technology for thin film coating systems that's really only beginning phases of being adapted by many of the largest companies in the world. Our primary focus markets that are rapidly growing with large upside potential, such as the clean energy sector, the microelectronics sector, and the medical sector. And our strategy to guide our customers to high ASP production lines is going to be what's continuing to drive company growth.
This is an exciting period of time for Sono-Tek in our history here, and our systems are really advancing high-tech manufacturing processes that are really vital to our global economy, and they really do also contribute to the health and well-being of our planet. Sono-Tek is making a significant impact on the world, and those of you that are connected to us, you should be excited for what lies ahead for us in the future. I thank you all for joining us this afternoon. I hope you found this presentation helpful, and now I'm going to take a look on one of the other tabs here and see if we have any questions that may be coming up. Hold on just one second, please. Okay. So the first one I'm going to give you here, and I'm going to both read and answer the questions.
One is, what portion of your backlog, excuse me, is tied to the clean energy and high-growth sectors? Are there risks of order cancellations or delays given your current economic conditions? Yeah, I think that's a good question, and I think, of course, that's greatly the concern there, as I'm assuming, due to the administration change. There's a pretty significant chunk of our backlog because within that backlog I just mentioned to you was those two almost $3 million each, so almost $6 million of orders that came from that clean energy sector, which is in part of that $11.7 million order, and there's even a few other green energy orders within that backlog. What I believe is significant for us is those really large orders and our primary customers there, I don't believe that they will see any significant impact with an administration change.
The last order we announced was from a solar manufacturer, of which both administrations, and especially the Trump administration, have really expressed that they want things made here in the U.S., and this is a U.S. based company, and I believe that they already have a backlog that takes them almost through the end of 2026 for orders, and their backlog just seems to be accelerating very quickly. They're a rapidly growing company, and maybe even most importantly, they're profitable. Not every company can say that from this clean energy sector, but this is a company that's the real deal, and they are our most significant customer from that clean energy sector, so it is a significantly high portion of our backlog, but I don't think it's a backlog at risk, and I should also note that Sono-Tek gets a very large down payment with our machines.
Our machines, typically when they come in, we get up to 40%-60% with the down payment, and before they ship, we usually have 80% or 90% in our bank account. So we take very little risk with those orders as well. Let's see here. The other question I have says, "Thanks for the easy-to-follow presentation. Can you discuss the competitive landscape?" Yeah, the competitive landscape has changed significantly in recent years. Sono-Tek is very clearly, if we talk just about the ultrasonic spray coating market, today it's very small. It's only around maybe $42-$43 million market today. So it's teeny, and our goal is not to capture a bigger percentage-wise of that $42 million market.
It's to capture a much larger chunk of the global coatings market, which means stealing our business from other coating technologies like CVD or ALD or slot die or pressure spray coating systems. And that's more like a $8-$9 billion coatings market. But of the existing $42-$43 million ultrasonic spray coating market, we have seen a big shift where there are many more Chinese competitors that are coming into the market. However, they are not good at making these highly complex, large system coating platforms. They're very good at making, or good, I wouldn't say very good, but they're good at making vanilla, small, simple coating platforms.
But anybody that's going to be dealing with them, especially if you're the typical Sono-Tek customer base, which is large, multinational, Fortune 500-type companies, they don't typically want to risk partnering up with a much, much smaller company, which has high risk of stealing very proprietary technology. I mean, our customer base typically is using Sono-Tek as their coating solutions resource. So we're not just, again, not just a vendor to them. We're their partner, and we're helping them figure out how to create the proper coatings onto them. And if you're teaching a China-based company, they may be very well taking that technology that they've learned and bringing it back home to their home country and not necessarily keeping that all proprietary. So I think, although there are more competitors in the area, we have been holding on to our market share.
We are a little bit over 50% of the total market share today, of which we've been for quite a while, is where we estimate it for the competitive landscape in that aspect. I don't see any further questions here. Oh, no, maybe there is. Hold on. Let me just see. I think I've got one more button maybe to push here. Okay. Next question here. Can you describe the situation with negotiated but still pending orders? So I think this is asking me orders that we have not yet received, but there are intentions of customers of giving us these orders. And I'm imagining this might be, again, in particular in the clean energy sector. We have not had any indication that customers are holding orders or canceling orders at this point. And in particular, things like the hydrogen economy.
The Trump administration has been relatively positive towards that hydrogen economy and maybe less supportive for things like the wind economy or the electric vehicle area, but the hydrogen economy, it seems like both parties, both administrations have been very pro-hydrogen, so we don't anticipate any deceleration of our customer base there, and it seems like the money is still readily flowing to that customer base. Again, very fortunate for Sono-Tek. Let's see. Another question here. The P/E ratio has remained relatively elevated for years. How do you communicate to the market the value proposition of the stock, particularly to justify the multiple? Yeah, it has been elevated. There's no doubt about it. Right now, we are very much concentrated on growth of the company more than we're looking at profits.
I mean, we could turn that dial if we wanted to at any point and say, "Listen, let's make the company much more profitable." But we believe that would be at a big sacrifice of the opportunities that we see here for growth. So right now, we are very much focused on keeping the company remaining profitable, making some money, but we're going to be doing a lot of investing of money, which could be profit, in order to promote our organic growth of the company. And right now, we see that horizon going quite long. So until we see that that's not there, that we will be taking that strategy.
But again, at any point, if we decide, "Hey, we want to become a lot more profitable," it would not be difficult for Sono-Tek to turn the dial the other way and say, "Focus on profits and less on growth." And the last question I have here: Apple, Meta, and Amazon are developing smart glasses. Sono-Tek has coated glasses in the past. Is there an opportunity with smart glasses? We can't say customer specifics. We have very strong NDAs, in particular with our technology customer base. And again, Sono-Tek works with the most advanced technology companies in the world in these sort of areas. I can tell you glasses has been an area that we've had some pretty amazing successes from the applications standpoint of getting good results.
We've had some significantly sized customers that we've had great results from coating, but unfortunately, their product didn't mature into something that took off and didn't gain acceptance. I do believe the market for smart glasses is more prepared and better fit today than what it was in the past. So I'm optimistically thinking that glasses could be a significant upside potential for Sono-Tek in the future for us here. And that is an area that Sono-Tek is actively involved. And I think that's all the questions. I'm just going to take one last look to see if there's any more. And just a reminder of the time limit on the call as well. Oh, yeah, I apologize. Sometimes I get talking. I like to talk a lot about Sono-Tek. It's something I'm very proud about here with the team we've got here at Sono-Tek.
So I'll wrap up the call at this point. I appreciate everybody that came and joined us today. I hope you found the call informative. And again, feel free to reach out to me directly for any questions. And thanks again for joining us today.
Thank you. That does conclude the Sono-Tek Corporation presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.