Novanta’s first quarter results aligned with Wall Street’s revenue expectations and demonstrated operational consistency despite ongoing macroeconomic volatility. Management attributed the quarter’s performance to strong growth in the Advanced Surgery unit, successful new product launches in minimally invasive surgery and robotics, and resilient cash flow generation. CEO Matthijs Glastra pointed to the company’s “disciplined execution in this volatile environment” and was particularly pleased with the “robust $32 million of operating cash flows,” marking continued strength in working capital management. The quarter also saw Novanta close a small strategic acquisition, further expanding its technology portfolio.
Is now the time to buy NOVT? Find out in our full research report (it’s free).
Novanta (NOVT) Q1 CY2025 Highlights:
- Revenue: $233.4 million vs analyst estimates of $233.3 million (1.1% year-on-year growth, in line)
- Adjusted EPS: $0.74 vs analyst estimates of $0.67 (9.9% beat)
- Adjusted EBITDA: $49.98 million vs analyst estimates of $50.21 million (21.4% margin, in line)
- Revenue Guidance for Q2 CY2025 is $235 million at the midpoint, below analyst estimates of $240.7 million
- Adjusted EPS guidance for Q2 CY2025 is $0.73 at the midpoint, below analyst estimates of $0.75
- EBITDA guidance for Q2 CY2025 is $52.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 12.8%, in line with the same quarter last year
- Market Capitalization: $4.52 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Novanta’s Q1 Earnings Call
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Lee Jagoda (CJS Securities) asked about the revenue contribution and profitability of the Keonn acquisition. CFO Robert Buckley said it should be slightly accretive to EPS in the first year, with more material revenue impact expected in 2026 as ramp-up continues.
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Lee Jagoda (CJS Securities) requested clarity on the $20 million cost savings program and its relationship to tariff mitigation. Buckley explained the savings are incremental, targeting both tariff impact and deferred revenue from China shipments, with some investments to be reinstated if conditions improve.
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Brian Drab (William Blair) inquired about the trajectory of new product revenue and potential deferrals. CEO Matthijs Glastra confirmed strong momentum in medical devices, stating the majority of new products are already launched and performing well, especially in healthcare.
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Brian Drab (William Blair) asked for details on exposure to NIH funding. Buckley indicated that the precision medicine business unit is most affected, though it is difficult to quantify the exact revenue percentage tied to NIH-funded customers.
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Rob Mason (Baird) questioned the timeline and capital requirements for regional manufacturing expansion. Glastra noted the strategy was already underway, with accelerated implementation due to trade issues, and Buckley added that CapEx needs are modest given Novanta's asset-light production model.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will closely watch (1) the pace of new product adoption and incremental sales in medical devices and automation, (2) the effectiveness and speed of Novanta’s tariff mitigation and regional manufacturing strategies, and (3) signs of stabilization or further weakness in the precision medicine and life sciences segments. Progress on integrating the Keonn acquisition and its contribution to software-enabled solutions will also serve as a key marker for long-term growth.
Novanta currently trades at $126.70, up from $119.78 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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