Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 5 of last 7 quarters
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Novanta's accelerating growth in AI-driven robotics, semiconductor applications, and Gen AI-related infrastructure (up ~25% YoY) reinforces the broad-based nature of the AI infrastructure buildout, extending beyond data centers into manufacturing, robotics, and advanced packaging. The company's first significant humanoid servo drive orders and doubling of air bearing spindle capacity signal early but tangible demand from AI-enabled physical systems, which could drive multiyear growth for precision motion and photonics suppliers.
Novanta delivered 9% organic revenue growth in Q2, with all four business units growing. Adjusted gross margin improved 100 bps YoY to 47%, adjusted EBITDA grew 16% YoY to $60.7 million, and adjusted EPS rose 17% to $0.89, beating consensus. The company closed its largest acquisition ever, Riverpoint Medical, which roughly doubles its recurring medical consumables business to ~$300 million and expands medical end-market exposure to 60% of revenue. Bookings grew 18% YoY, new product revenue grew over 50%, and the Gen AI-related applications (estimated at ~17% of revenue) grew ~25% YoY.
Management raised full-year 2026 guidance, now expecting GAAP revenue of approximately $1,130–$1,140 million (reported growth >15%, organic growth up to 7%), adjusted EBITDA of $273–$278 million (up 24–26% YoY), and adjusted EPS of $3.68–$3.74 (up 12–14% YoY). The raise incorporates the Riverpoint Medical acquisition, which closed at the end of July and is expected to contribute ~$25 million of adjusted EBITDA in the back half. Management also accelerated two additional manufacturing site closures (to be completed by Q1 2027) and began doubling capacity at the China factory for air bearing spindles, citing committed demand for the next two years. They expect gross margins to improve to ~48% in Q3 and full year 2026 gross margins around 47%, with continued momentum in AI-driven robotics, semiconductors, and minimally invasive surgery, while precision medicine is expected to return to growth in late 2027.
“We delivered strong results, 9% organic sales growth, 10% on a reported basis, 16% adjusted EBITDA growth, 47% adjusted gross margin, which was a 100 basis point improvement year-over-year, adjusted EPS growth of 17% and operating cash flow that year-to-date exceeds the operating cash flow we generated in all of 2025.”
on Q2 performance
“In the quarter, we have seen our first significant orders of our servo drives to support the deployment of hundreds of humanoids in customers' testing and learning facilities to start their journey of learning how to operate humanoids in a factory and in a human-occupied environment.”
on Humanoid robotics orders
“We're raising our full year 2026 outlook, positioning Novanta to deliver more than 15% reported revenue growth year-over-year for the full year.”
on Guidance raise
How should we think about the biggest drivers in the change in organic growth and the EBITDA increase, excluding the Riverpoint transaction?
Robert Buckley noted the increase was largely from the AET segment, which improved profitability through site closures and reduced asset intensity. EPS guidance improved by ~$0.02 from the base business and ~$0.06 from Riverpoint in the back half.
Can you quantify the first significant order for servo drives on the humanoid side? Did it have a material impact on gross margins?
Chuck Ravetto said the order represents a move beyond prototyping into training centers, but it is not a significant part of margin. Matthijs Glastra added that bookings are improving faster than expected but remain small, and the volumes for training robots are larger than prototypes.
Can you talk about the impact of Riverpoint for the back half, specifically Q3 revenue assumptions?
Robert Buckley said Riverpoint is expected to contribute ~$35 million in Q3, with a conservative Q4, and ~$60–65 million for the back half. He noted the EBITDA margin is ~40%, contributing ~$25 million in EBITDA and $0.06 to EPS.