Novanta (NOVT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $233.4 million, up 1.1% year-over-year, with 2% organic growth and Automation Enabling Technologies offsetting Medical Solutions decline.

• Adjusted EBITDA reached $50 million (up 1%), operating income rose 26.6% to $32.4 million, and net income increased 45% to $21.2 million.

• Adjusted gross margin was 46%, with gross profit margin improving to 44.7% year-over-year.

• Closed the Keonn acquisition in April, expanding into AI-enhanced RFID and cloud-based software.

• Strong new product launches in surgical robotics, minimally invasive surgery, and warehouse automation.

Financial highlights

• Adjusted gross profit was $108 million (46% margin), with Automation Enabling Technologies at 49% and Medical Solutions at 41.7%.

• Adjusted EBITDA was $50 million (21% margin), and non-GAAP EPS was $0.74, flat year-over-year.

• Free cash flow was $32.9 million, with cash conversion above 120% of net income for the eighth consecutive quarter.

• Ended Q1 with $392 million gross debt (1.9x leverage) and $286 million net debt (1.4x leverage).

• Operating expenses were $71.9 million, with R&D at $23 million (10% of sales) and SG&A at $46 million (20% of sales).

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance reiterated despite $20 million annual tariff-related cost increases.

• Q2 2025 revenue guidance: $230–$240 million, trending toward the high end, with adjusted EBITDA $50–$55 million and adjusted gross margin 45.5%–46.5%.

• Diluted EPS guidance for Q2: $0.68–$0.78.

• Only quarterly revenue guidance will be issued until visibility improves.

• Proactive cost containment actions targeting $20 million in annualized savings to offset trade and global disruptions.