Novanta (NOVT) Q1 2026 earnings summary

Executive summary

• Revenue rose 10.4% year-over-year to $257.7 million in Q1 2026, with 3.1% organic growth, driven by acquisitions and strong performance in Automation Enabling Technologies and Medical Solutions.

• Bookings grew 37% year-over-year, with a book-to-bill ratio of 1.10, and all business units achieved double-digit bookings and revenue growth.

• Adjusted EBITDA increased 14.2% to $57.1 million, with margin expanding by 70 basis points; adjusted diluted EPS up 9.5% to $0.81.

• Operating cash flow climbed 63% year-over-year to $51.6 million, with cash flow conversion to net income over 200%.

• Operating income declined 15.1% to $27.5 million due to higher SG&A and restructuring costs, despite higher gross profit.

Financial highlights

• Q1 2026 non-GAAP adjusted gross profit was $118M (45.6% margin), down 60 bps year-over-year; GAAP gross profit was $113.6 million (44.1% margin), down from 44.7%.

• Adjusted EBITDA reached $57M (22% margin), up 14% year-over-year.

• Adjusted diluted EPS was $0.81, up 9% year-over-year, despite a $0.03 headwind from inflation and tariffs.

• Operating cash flow was $52M, up 63% year-over-year and six-fold sequentially.

• Ended Q1 with $389M cash, $249M gross debt, and net leverage ratio of -0.6x; net debt improved to $(139.4) million.

Outlook and guidance

• FY 2026 GAAP revenue expected at $1,040M–$1,055M (reported growth >7%, organic up to 6%).

• Adjusted EBITDA guidance: $245M–$250M (11%–13% growth); adjusted EPS: $3.50–$3.65 (6%–11% growth).

• Q2 2026 GAAP revenue expected at $259M–$264M (6%–8% organic, up to 10% reported growth); adjusted EBITDA: $58M–$62M; adjusted EPS: $0.81–$0.86.

• Cash flow conversion expected to remain above 100% of net income.

• Management expects to complete ongoing restructuring programs by end of 2026, with total charges for the 2025 program estimated at $25 million.