CTS (CTS) Q2 2026 earnings summary

Executive summary

• Revenue grew 7% year-over-year to $145 million in Q2 2026, with diversified end markets up 15% and representing 59% of total sales, offsetting modest declines in transportation.

• Achieved record profitability: gross margin at 41.5%, adjusted EBITDA margin at 25.4%, and adjusted diluted EPS at $0.74, including $0.07 from unusual items.

• Net income for Q2 2026 was $19.2 million (13.2% of sales), up from $18.5 million in Q2 2025.

• CEO transition announced with Pratik Trivedi succeeding Kieran O'Sullivan effective July 6, 2026.

• Book-to-bill ratio was 1.1 overall, with diversified markets at 1.17, indicating strong demand.

Financial highlights

• Adjusted gross margin reached a record 41.5%, up 270 basis points year-over-year.

• Adjusted EBITDA margin improved by 240 basis points to 25.4% year-over-year.

• Adjusted diluted EPS was $0.74, up from $0.57 in Q2 2025, with $0.07 from FX and customer reimbursement.

• Operating cash flow was $33.4 million; free cash flow was $28.8 million.

• Cash and cash equivalents at quarter-end were $108 million; borrowings at $55 million.

Outlook and guidance

• Full-year 2026 sales guidance raised to $565–$585 million; adjusted diluted EPS expected at $2.55–$2.70.

• Diversified end markets expected to maintain growth; transportation volumes forecasted flat to slightly down.

• No material impact anticipated from recent tariff announcements; ongoing monitoring of geopolitical and cost environments.