Novanta (NOVT) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue rose 2.2% year-over-year to $241M, driven by Automation Enabling Technologies and acquisition-related growth, while Medical Solutions was flat; net income was $4.5M and diluted EPS $0.12.

• Adjusted EBITDA was $52.2M (21.6% margin), up 2% year-over-year; adjusted EPS was $0.76, up 4% year-over-year.

• Operating income declined 42% year-over-year to $14.9M due to higher restructuring, acquisition, and related costs, as well as increased SG&A and R&D expenses.

• Bookings increased 10% year-over-year and 20% sequentially, with a book-to-bill ratio of 1.02; strong new product and design win momentum, especially in advanced surgery and robotics.

• Acquisition of Keonn Technologies completed in April 2025, supporting RFID and software integration in medical markets.

Financial highlights

• Q2 2025 gross profit was $106.7M (44.3% margin), up 3% year-over-year; adjusted gross margin was 46.1%.

• Adjusted EBITDA was $52.2M (21.6% margin); adjusted operating income was $40.7M, nearly flat year-over-year.

• Operating cash flow was $15.1M, down from $41.1M in Q2 2024, mainly due to tax timing, inventory purchases, and the Keonn acquisition.

• Gross debt at quarter-end was $465M (gross leverage 2.2x), net debt $355M (net leverage 1.7x); leverage ratio at quarter-end was 1.93.

• Cash and cash equivalents at quarter-end were $109.9M; $536.5M available under revolving credit facility.

Outlook and guidance

• Full-year 2025 GAAP revenue expected at $970M–$985M (2–4% growth); organic revenue expected to be down 1% to up 1%.

• Adjusted gross margin expected at ~46%; adjusted EBITDA $225M–$230M (23% margin, 7–10% growth); adjusted EPS $3.22–$3.36 (5–9% growth).

• Q3 2025 revenue guidance: $244M–$247M (flat to up 1% year-over-year, 1–2% sequential growth); adjusted EPS $0.78–$0.85.

• Management expects to complete the 2025 restructuring program by end of 2026, with total charges estimated between $20M and $25M.

• Capital expenditures for 2025 projected at $15–$20M.