Novanta reported a strong third quarter, with revenue rising 23% to $305 million and customer bookings up 29%. The company also said it completed its largest acquisition to date, Riverpoint Medical, which is performing in line with expectations as Novanta works on operational synergies.
The results showed a divide between the company’s GAAP and adjusted measures: adjusted earnings and EBITDA increased, while GAAP operating income, net income and diluted earnings per share fell from a year earlier. Novanta maintained its 2026 outlook and expects reported revenue growth of more than 15% in 2027.
Key details
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Revenue growth reflected both acquisitions and underlying demand. Third-quarter revenue was $305 million, up $57.2 million, or 23.1%, from a year earlier. Acquisitions added $32.9 million, or 13.3%, to the increase. Organic revenue growth was 9.9%; currency movements reduced revenue slightly.
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Adjusted results improved, while GAAP earnings declined. Adjusted EBITDA rose 38.3% to $80.3 million, and adjusted diluted EPS increased 20.7% to $1.05. Adjusted operating income was $65.1 million, compared with $47.4 million a year earlier. GAAP operating income fell to $13.9 million from $21.8 million, net income declined to $2 million from $10.7 million, and diluted EPS was $0.05 versus $0.30.
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Bookings and backlog increased. Customer bookings grew 29% year over year, and backlog reached $543 million.
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Cash generation strengthened. Operating cash flow was $39.3 million in the quarter, compared with $8.5 million a year earlier. For the year to date, it was $155.9 million, versus $55.3 million.
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Both reporting segments grew revenue, but their margin trends differed.
- Automation Enabling Technologies revenue rose to $145 million from $125 million. Gross profit increased to $73 million from $59 million, and gross margin expanded to 50.2% from 47.3%.
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Medical Solutions revenue rose to $160 million from $123 million. Gross profit increased to $64 million from $53 million, but gross margin narrowed to 39.9% from 43.0%.
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Riverpoint Medical is part of the growth story. Novanta said the acquisition is performing in line with expectations and that it is making progress on operational synergies. The company also cited a new-product pipeline, but did not provide financial details on the expected synergies.
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Fourth-quarter guidance calls for continued reported revenue growth. Novanta expects revenue of $306 million to $312 million, representing growth of more than 18%. It forecast adjusted EBITDA of $76 million to $79 million and adjusted diluted EPS of $0.91 to $0.96, equivalent to growth of 0% to 5%.
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The company maintained its full-year 2026 outlook. It expects revenue of $1.135 billion to $1.140 billion, or about 16% reported growth, including approximately 7% organic growth. Adjusted EBITDA is forecast at $274 million to $277 million, up more than 24%, and adjusted diluted EPS at $3.66 to $3.71, growth of 11% to 13%. Novanta expects about $200 million in operating cash flow.
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Novanta expects reported revenue growth above 15% in 2027. The company pointed to its backlog, new-product contributions and positions in markets it says benefit from favorable long-term trends.
What the results show
Acquisitions accounted for a meaningful share of the quarter’s revenue increase, while organic growth was also positive at 9.9%. The stronger adjusted results and cash flow contrast with lower GAAP income and EPS; the announcement did not attribute that decline to a specific cause. The segment results also show different margin patterns: Automation Enabling Technologies expanded its gross margin, while Medical Solutions’ margin contracted.