Novanta Inc. Reports 1.1% Revenue Growth to $233.4 Million in Q1 2025

Novanta Inc. reported a slight increase in revenue for the first quarter of 2025, achieving $233.4 million, up from $230.9 million in the same period last year, marking a 1.1% growth. The company’s operating income rose significantly by 26.6% to $32.4 million, compared to $25.6 million in the prior year. This increase in profitability was driven by a $4.0 million rise in gross profit and a reduction in restructuring and acquisition-related costs, which fell by $4.7 million. Net income for the quarter was $21.2 million, or $0.59 per share, compared to $14.7 million, or $0.41 per share, in the previous year.

In terms of segment performance, the Automation Enabling Technologies segment saw a revenue increase of 4.9% to $123.2 million, primarily due to heightened demand for robotics and automation products. Conversely, the Medical Solutions segment experienced a revenue decline of 2.9% to $110.2 million, attributed to decreased sales in precision medicine products, despite growth in advanced surgery products. The overall gross profit margin improved to 44.7%, up from 43.5% in the prior year, reflecting better product mix and operational efficiencies.

Operationally, Novanta's total assets decreased slightly to $1.39 billion from $1.39 billion at the end of 2024, with cash and cash equivalents at $106.0 million. The company reported a total employee headcount of 1,200, reflecting its ongoing commitment to maintaining a skilled workforce. The company also noted a significant increase in accounts receivable, which rose to $164.2 million from $151.0 million, indicating a potential increase in sales activity.

Strategically, Novanta announced the acquisition of Keonn Technologies, S.L., a leader in RFID solutions, for an initial cash payment of approximately $66.4 million, with additional contingent payments based on revenue targets. This acquisition is expected to enhance Novanta's capabilities in the Medical Solutions segment. The company continues to focus on expanding its product offerings and market presence, particularly in high-growth areas such as advanced industrial applications and medical technologies.

Looking ahead, Novanta remains optimistic about its growth trajectory, despite ongoing macroeconomic challenges such as inflation and supply chain disruptions. The company plans to leverage its strong cash flow and available credit facilities to support future investments and acquisitions, aiming to drive sustainable, profitable growth in both its Automation Enabling Technologies and Medical Solutions segments.