Nordson (NDSN) Q3 2025 earnings summary

Executive summary

• Achieved Q3 sales of $742 million, up 12% year-over-year, surpassing guidance midpoint, with strong organic and inorganic growth, notably from the Atrion acquisition and robust demand in Asia-Pacific.

• Adjusted EPS rose 13% year-over-year to $2.73, and EBITDA increased 15% to $239 million, driven by operational excellence and segment performance.

• Record free cash flow of $226 million, with 180% cash conversion, enabled debt reduction, share repurchases, and continued investment.

• Net leverage reduced to 2.2x EBITDA, reflecting disciplined capital allocation.

• New $500 million share repurchase authorization approved, bringing total to $800 million.

Financial highlights

• Q3 sales: $742 million (+12% YoY); organic sales up 2% (3% excluding held-for-sale medical business); Atrion contributed 8% to growth; currency added 2%.

• Gross margin: 54.8%; EBITDA: $239 million (32% of sales, +15% YoY); net income: $126 million.

• Adjusted EPS: $2.73 (+13% YoY), $0.08 above guidance midpoint; reported EPS: $2.22.

• Net interest expense: $26 million (+$8 million YoY) due to higher debt from Atrion acquisition.

• Free cash flow: $226 million (record), 180% of net income; leverage ratio improved to 2.2x EBITDA.

Outlook and guidance

• FY25 sales expected slightly below midpoint of guidance, reflecting pending medical contract manufacturing divestiture; adjusted EPS tracking slightly above midpoint.

• Sequential improvement anticipated in IPS and medical segments; ATS faces tougher comps but remains in multi-year growth cycle.

• Backlog down 5% from Q3 but supports FY outlook; guidance assumes divestiture completion in Q4.