ATS (ATS) Q4 2025 earnings summary

Executive summary

• Fourth quarter bookings reached CAD 863 million, up 9% year-over-year, with full-year bookings at a record CAD 3.3 billion, driven by diversified growth and acquisitions.

• Adjusted Q4 revenues were CAD 721 million, down 9% year-over-year, mainly due to lower EV revenues.

• A negotiated settlement with an EV customer resulted in a CAD 194 million inflow, reducing net debt and providing financial flexibility, but also led to a significant one-time charge and net loss for the year.

• Life sciences, energy, and consumer products segments showed strong backlogs and opportunity funnels, while transportation remained challenged but is expected to improve.

• Recent acquisitions (Paxiom and Heidolph) contributed to growth in life sciences and food & beverage segments.

Financial highlights

• Q4 adjusted revenues: CAD 721 million (down 8.9% year-over-year); Q4 adjusted earnings from operations: CAD 74.3 million (down 23% year-over-year); Q4 adjusted EBITDA: CAD 97.1 million (down 16.1% year-over-year).

• Q4 adjusted EPS: $0.41, down from $0.65 last year; Q4 net loss: $(68.9) million versus net income of $48.5 million in Q4 F2024.

• Fiscal 2025 adjusted revenues: $2,680.2 million, down from $3,032.9 million last year; adjusted EBITDA margin for the year was 13.8%.

• Free cash flow for fiscal 2025 was negative $52.3 million, but Q4 free cash flow improved to $10.3 million from $(16.3) million year-over-year.

• Net debt to pro forma adjusted EBITDA: 3.9x, expected to decrease after EV settlement.

Outlook and guidance

• Fiscal 2026 Q1 revenue expected between CAD 680 million and CAD 730 million, supported by a robust order backlog.

• Order backlog at quarter-end: CAD 2.1 billion, highest in eight quarters, supporting revenue visibility.

• Book-to-bill ratio at 1.23, above 1 in all market verticals, indicating strong demand.

• Margin expansion expected as transportation recovers and life sciences bookings convert to revenue, though inflation and supply chain volatility may impact short-term results.

• Effective tax rate expected in the mid-20% range going forward.