CTS (CTS) Q4 2025 earnings summary

Executive summary

• Achieved 9% year-over-year revenue growth in Q4 2025 and 5% for the full year, with diversified end markets up 16% and now comprising 57–60% of total revenue.

• Adjusted gross margin expanded by 150 bps for both Q4 and full year, reaching 39.1% and 38.5% respectively.

• Adjusted diluted EPS for Q4 was $0.67 (up from $0.50), and full-year adjusted diluted EPS was $2.23 (up from $2.12).

• Operational execution led to gross margin expansion, robust cash flow, and increased shareholder returns.

• Transportation sales were flat in Q4 and down 7% for the year, but new business awards and product wins position the segment for future growth.

Financial highlights

• Q4 2025 sales: $137 million, up 9% year-over-year; full-year sales: $541 million, up 5%.

• Q4 net income was $20 million (14.4% of sales); full-year net income was $65 million (12.1% of sales).

• Adjusted EBITDA margin for Q4 was 23.7%; full-year adjusted EBITDA margin was 22.8%.

• Operating cash flow: $29 million in Q4, $102 million for the year; free cash flow for FY 2025 was $86 million.

• Returned $62 million to shareholders in 2025 via dividends and share buybacks.

Outlook and guidance

• 2026 sales expected in the range of $550–$580 million; adjusted diluted EPS guidance: $2.30–$2.45.

• Diversified end markets expected to remain strong, with medical, industrial, and defense to drive growth.

• Transportation and commercial vehicle sales projected flat to slightly down due to tariffs and global demand; softness anticipated in H1 2026.