Novanta (NOVT) Q1 2026 earnings summary

Executive summary

• Revenue rose 10.4% year-over-year to $257.7 million, with organic growth of 3.1%, driven by acquisitions and growth in Automation Enabling Technologies and Medical Solutions segments.

• Operating income declined 15.1% to $27.5 million due to higher SG&A and restructuring costs, despite higher gross profit.

• Adjusted EBITDA increased 14.2% to $57.1 million, and Adjusted Diluted EPS grew 9.5% to $0.81.

• Bookings surged 37% year-over-year, resulting in a 1.10 book-to-bill ratio.

• Net income was $21.1 million, nearly flat compared to the prior year, with diluted EPS at $0.51, down from $0.59.

Financial highlights

• Gross profit increased by $9.2 million to $113.6 million, but gross margin declined to 44.1% from 44.7% due to higher material and freight costs.

• SG&A expenses rose $8.8 million year-over-year, reflecting higher compensation and system implementation costs.

• Cash flow from operations was $51.6 million, up 63% from $31.7 million, aided by improved working capital and lower bonus payouts.

• Free cash flow was $47.8 million, up from $32.9 million a year ago.

• Cash and cash equivalents stood at $388.8 million as of April 3, 2026.

Outlook and guidance

• Q2 2026 GAAP revenue expected between $259 million and $264 million; Adjusted EBITDA $58–$62 million; Adjusted Diluted EPS $0.81–$0.86.

• Full-year 2026 GAAP revenue guidance is $1,040–$1,055 million; Adjusted EBITDA $245–$250 million; Adjusted Diluted EPS $3.50–$3.65.

• Management expects to complete ongoing restructuring programs by end of 2026, with total charges for the 2025 program estimated at $25 million.

• Capital expenditures for 2026 are projected at $30–$40 million, including capacity expansion in China.

• Guidance assumes stable foreign exchange rates.