Aug 20, 2026 earnings call — Record quarter with strong backlog and cash flow
Record third-quarter sales of $818 million and backlog up 35%.
Revenue $0.8B (est $0.8B) · EPS $3.25 (est $3.09)
Key quotes
"Order entry momentum continued to accelerate, driving backlog up 35% compared to the prior year."
"On Slide #5, you'll see we achieved record level sales of $818 million in the third quarter, up 10% from prior year third quarter sales of $742 million."
"Our free cash flow generation during the quarter was $237 million, resulting in a 144% conversion rate on net income, excluding the noncash loss that I mentioned a moment ago."
Analyst Q&A 5
Backlog size, delivery speed, outlook
Q (Michael Halloran · Baird): He asked how to put the backlog in context, whether lead times have lengthened, and what visibility the backlog gives into next year.
A: They said backlog growth is broad-based across all 3 segments and generally turns over in about 6 months. Management said there is no elongation in lead times; lead times have reduced over the years and they can often deliver faster. They also said about 80% or so of backlog ships within roughly six months, with a few long-lead items for larger systems.
"Our backlog, generally speaking, turns over in about 6 months." — Daniel Hopgood (CFO)
Why ATS and medical raised guidance
Q (Jeffrey Hammond · KeyBanc Capital Markets): He asked how the $0.35 raise breaks down by business, whether ATS is driving the gain, and about IPS margins and tariff refunds.
A: They said ATS was a big driver of the upside and medical also showed acceleration; IPS was steady and as expected. They reiterated long-term incremental margin targets of 35% to 40% and said the current playbook is to maximize growth while maintaining strong margins. On tariffs, they said tariffs have not had a material impact overall and tariff recoveries are not a significant item.
"I would say, given the current market dynamics, our focus is really maximizing growth potential and maintaining margin performance, which is already very strong, certainly within the IPS business." — Daniel Hopgood (CFO)
MFS growth split and ATS durability
Q (Matt Summerville · D.A. Davidson): He asked for more detail on MFS growth between EFD, medical components and interventional, and asked how durable the ATS cycle looks into fiscal 2027.
A: They said the 11% MFS growth was pretty broad-based, with EFD helped by electronics-based demand and medical components (including interventional and specialty fluid components) also contributing. For ATS, they said the segment delivered an all-time record and 30% organic growth in the quarter, and they expect to build off this peak but move toward longer-term mid-single-digit growth next year. They also noted a lot of current demand is in Asia and that North American chip infrastructure orders are not yet showing up.
"As you know, in the quarter, we delivered an all-time record for this segment." — Sundaram Nagarajan (CEO)
New IPS uses and long-term tax rate
Q (Christopher Glynn · Oppenheimer): He asked whether there are emerging IPS applications (polymers, coatings, adhesives) and about the longer-term tax rate opportunity.
A: They said IPS keeps finding new, often small application wins across many end markets and that these tend to be 'singles' rather than big home runs, with early-stage interest in battery, solar, defense and data center uses. They noted the IPS business (a roughly $1 billion to $1.4 billion scale) growing at 3% is meaningful and stable. On tax, they said 18% is a good long-term expectation for the ongoing rate.
"18% is kind of reflective of our ongoing rate expectation." — Daniel Hopgood (CFO)
M&A pipeline and criteria
Q (Edward Magi · BNP Paribas): He asked for color on the M&A pipeline, which end markets look attractive, and how they will use cash given leverage and free cash generation.
A: They said M&A remains an important part of Nordson's growth algorithm and they have a healthy number of opportunities but stay disciplined to strategic and financial criteria. They said they will do different sizes of deals (noting bolt-ons like Capstan and prior Atrion) and look for attractive end-market niches, differentiated technologies, growth above market, Nordson-like margins and returns that exceed cost of capital. They reiterated their long-term view that, on average, about half of growth should be inorganic and half organic.
"Look, I would continue to remind is M&A is an important part of Nordson's growth algorithm." — Sundaram Nagarajan (CEO)