CTS (CTS) Q4 2025 earnings summary

Executive summary

• Achieved Q4 2025 sales of $137 million, up 9% year-over-year, and full-year sales of $541 million, up 5%, with diversified end markets growing 16% and now comprising up to 59% of total revenue.

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

• Adjusted diluted EPS was $0.67 in Q4 (up $0.29 year-over-year) and $2.23 for the full year, with net income of $20 million in Q4 and $65 million for the year.

• Transportation sales declined 7% for the year due to market dynamics in China and commercial vehicles, but new business awards totaled $100 million in Q4.

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

Financial highlights

• Q4 adjusted gross margin was 39.1%, up 150 basis points year-over-year; full-year adjusted gross margin was 38.5%, also up 150 basis points.

• Q4 adjusted diluted EPS was $0.62, up from $0.50 in Q4 2024; full-year adjusted diluted EPS was $2.23, up from $2.12 in 2024.

• Adjusted EBITDA margin for 2025 was 22.8%, with Q4 at 23.7%.

• Operating cash flow was $29 million in Q4 and $102 million for the year; free cash flow for the year was $86 million.

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

Outlook and guidance

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

• Diversified end markets expected to remain solid, with medical therapeutics and industrial demand to drive growth.

• Aerospace and defense revenue anticipated to grow with improved government funding cycles.

• Transportation production volumes expected to be flat to marginally down due to tariffs and global demand.

• Growth in diversified end markets is expected to continue, while commercial vehicle-related sales are projected to remain soft.