ATS (ATS) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenues declined 17% year-over-year to $612.8 million, mainly due to lower transportation/EV segment revenues, while life sciences achieved record order bookings, offsetting transportation weakness.

• Adjusted earnings from operations were $56.5 million (9.2% margin), down 43% year-over-year; net loss was $0.9 million compared to net income of $50.7 million last year.

• Transportation segment was realigned to protect margins, with workforce and capacity reallocated mainly to life sciences.

• Integration of recent acquisitions and expansion of digital and recurring revenue offerings remain key priorities.

• Ongoing commercial dispute with a major EV customer has impacted collections and working capital.

Financial highlights

• Q2 revenues were $612.8 million, down 17% year-over-year, with organic revenue down 23.5%; acquisitions contributed 5.5% growth, FX added 1.3%.

• Adjusted EBITDA was $78.3 million, down 32.6% year-over-year; adjusted earnings from operations margin was 9.2%.

• Adjusted basic EPS was $0.25, down from $0.63 in Q2 2024.

• Order bookings were $742 million, flat year-over-year; life sciences bookings grew over 20% organically.

• Free cash flow for Q2 was negative $61.6 million, compared to negative $13.3 million last year.

Outlook and guidance

• Order backlog ended Q2 at $1.824 billion, with life sciences backlog at a record $1.132 billion (up 32% YoY).

• Q3 revenues expected in the range of $620–680 million.

• Margin expansion and sequential revenue growth expected as transportation reorganization completes.

• Transportation expected to remain a smaller portion of the business (around 10–11% of backlog).

• Management anticipates improvements in non-cash working capital by fiscal year-end, except for delays related to large EV projects.