ATS (ATS) Q1 2027 earnings summary

Executive summary

• Launched an 18-month Fixed-Cost Transformation Program targeting margin expansion and capital efficiency, with the first phase in Europe expected to deliver $20 million in annualized savings, about 30% of the total program opportunity.

• Revenues for Q1 FY2027 were $693.7M (adjusted: $698.3M), down 5.8% year-over-year, with a net loss of $0.3M compared to net income of $24.3M last year; adjusted basic EPS was $0.35, down from $0.41.

• Order Bookings declined 5.3% year-over-year to $656M, and Order Backlog fell 8.7% to $1,889M, though backlog remains diversified and supports long-term growth.

• Artificial intelligence is seen as a key demand driver and differentiator across end markets, with strong long-term demand in life sciences, radiopharma, energy, and food and beverage.

• Gross margin on adjusted revenues improved both sequentially and year-over-year, driven by growth in energy and services revenues.

Financial highlights

• Q1 adjusted revenues were $698.3M, down 5.2% year-over-year; organic revenue declined 6.4%.

• Adjusted earnings from operations were $68.1M (9.8% margin), down 13.4% year-over-year.

• Adjusted EBITDA was $92.9M (13.3% margin), down from $101.5M (13.8%) year-over-year.

• Free cash flow was negative $25.9M, compared to positive $139.5M in the prior year.

• Non-cash working capital was 14.3% of revenues, within the long-term target of 15% or less.

Outlook and guidance

• Q2 FY2027 revenues expected between $660M and $700M, reflecting lower opening backlog.

• Margins are expected to strengthen in H2 as backlog converts and cost actions take effect; long-term adjusted earnings from operations margin target remains at 15%.

• Reoccurring revenues expected to comprise 25–35% of total on a trailing twelve-month basis.

• Market funnels remain strong or stable across all segments, supporting future growth.

• Macro environment remains fluid, but no material impact from trade, tariffs, or geopolitical issues to date.