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.

• Operational execution led to a 150 basis point gross margin expansion for both Q4 and the full year, with adjusted gross margin reaching 39.1% in Q4 and 38.5% for the year.

• Adjusted diluted EPS increased to $0.67 in Q4 and $2.23 for the full year, with net income of $20 million in Q4 and $65 million for the year.

• 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.

• Focused on diversification, margin expansion, and cash generation, with new product offerings and business awards in transportation.

Financial highlights

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

• Q4 net income was $19.7–$20 million; full-year net income was $65.3 million.

• Adjusted EBITDA margin for Q4 was 23.7% and for the full year 22.8%, both up year-over-year.

• Free cash flow for FY 2025 was $86 million, with $16 million in capital expenditures.

• Operating cash flow was $29 million in Q4 and $102 million for the year; cash balance at year-end was $82 million.

Outlook and guidance

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

• Diversified end markets expected to remain strong, with medical therapeutics and industrial automation as key drivers.

• Aerospace and defense revenue projected to grow in 2026 as government funding normalizes.

• Transportation and light vehicle production volumes expected to be flat to slightly down due to tariffs and global demand.