Loading...
01/11 11:09
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call showed positive financial performance with improved EBITDA and gross margin, strong aerospace and medical sales, and shareholder returns. Despite transportation sales decline, guidance remains optimistic. Analysts' Q&A highlighted growth in therapeutics and potential recovery in transportation. The integration of SyQwest and operational efficiency are progressing well. Overall, the positive financial metrics and optimistic guidance suggest a likely stock price increase in the near term.
Sales $135 million, up 4% from $130 million in the second quarter of 2024. Diversified end market sales increased 13% year-over-year, driven by organic growth and the SyQwest acquisition. Transportation sales were down 6% due to China market dynamics and softness in commercial vehicle products.
Adjusted EBITDA 23% in the quarter, an improvement of 250 basis points sequentially and 130 basis points compared to the second quarter of 2024. This was due to favorable mix impact and operational execution.
Adjusted Gross Margin 38.7% in the second quarter, up 296 basis points compared to the second quarter of 2024 and up 174 basis points sequentially. Favorable mix impact and operational execution contributed to this improvement.
Adjusted Diluted Earnings $0.57 per share, up approximately 30% from the first quarter of 2025 and up 7% from the prior year period.
Operating Cash Flow $28 million in the second quarter, compared to $20 million in the second quarter of 2024, driven by strong cash generation.
Aerospace and Defense Sales Up 34% from the second quarter of 2024. Excluding SyQwest acquisition, sales were up 6%. SyQwest contributed $4.5 million in revenue.
Medical End Market Sales Up 8% compared to the same period in 2024. Demand for therapeutic products increased approximately 60% year-over-year, while bookings were down 10% due to softness in diagnostic bookings.
Industrial Market Sales Up 6% compared to the prior year period. Bookings increased 22% year-over-year, reflecting a gradual recovery.
Transportation Sales $61 million in the second quarter, down approximately 6% from the same period last year due to China market dynamics and softness in commercial vehicle products.
Shareholder Returns $26 million returned to shareholders through dividends and share buybacks in 2025, including $17 million for 412,000 shares repurchased in the second quarter.
Next-generation smart actuator: Launched for the commercial vehicle market.
Medical ultrasound products: Wins across all regions and an award for a pacemaker application. Added a new customer for an ultrasound application.
Corvus technology: Advanced technology enabling precise position sensing for motor position sensing.
Diversified end markets: Sales up 13% year-over-year, driven by organic growth and SyQwest acquisition. Medical, aerospace, defense, and industrial markets contributed significantly.
Aerospace and Defense: Sales up 34% year-over-year, with SyQwest contributing $4.5 million. Multiple orders for sonar transducers and other applications.
Industrial market: Sales up 6% year-over-year. New business awards for EV charging stations in Europe and millimeter wave small cell frequency applications.
Adjusted EBITDA: Improved by 250 basis points sequentially and 130 basis points year-over-year.
Cash flow generation: Generated $28 million in operating cash flow in Q2 2025, up from $20 million in Q2 2024.
Gross margin: Adjusted gross margin improved to 38.7%, up 296 basis points year-over-year.
Diversification strategy: Focused on increasing growth in medical, industrial, aerospace, and defense markets. Transitioning from component supplier to subsystem supplier in Aerospace and Defense.
SyQwest acquisition: Integration progressing well, contributing to revenue growth and a strong pipeline of opportunities.
Transportation Sales: Sales were down 6% from the same period last year due to impacts of China market dynamics and softness for commercial vehicle products. Additionally, production volumes are expected to decrease in 2025 due to tariff impacts and rare earth supply issues for OEMs and Tier 1 suppliers.
Medical End Market: Bookings in the quarter were down 10% compared to the prior year period due to softness in diagnostic bookings. Demand in the medical end market is expected to be mixed, with strength in therapeutics but some softness in diagnostic ultrasound.
Aerospace and Defense: Revenue from the SyQwest acquisition introduces seasonality, with timing influenced by U.S. government funding approvals. Geopolitical and tariff impacts are creating uncertainty.
Industrial Market: Gradual recovery is observed, but demand is subject to evolving trade tariffs and associated economic uncertainty.
Electric Vehicle (EV) Market: Electric vehicle penetration rates have softened in some regions, while hybrid adoption improves. Interest in e-brake products is slower as OEMs recalibrate EV investments.
Geopolitical and Tariff Impacts: Tariffs and geopolitical environment are creating uncertainty, impacting transportation revenue and overall market dynamics.
Revenue Guidance: CTS Corporation is maintaining its guidance of sales in the range of $520 million to $550 million for 2025.
Earnings Per Share (EPS) Guidance: Adjusted diluted EPS is expected to be in the range of $2.20 to $2.35 for 2025.
Medical End Market Outlook: Demand in the medical end market is expected to be mixed, with strength in therapeutics and some softness in diagnostic ultrasound. Volume increases in portable ultrasound diagnostics and therapeutics are expected to enhance growth over time.
Aerospace and Defense Outlook: Revenue is expected to grow due to a healthy backlog of orders and momentum from the SyQwest acquisition. SyQwest revenues are anticipated to improve in the second half of 2025.
Industrial Market Outlook: Sales are expected to improve in the second half of 2025, supported by megatrends of automation, connectivity, and efficiency.
Transportation Market Outlook: Production volumes are expected to decrease in 2025 due to tariff impacts and rare earth supply issues. North American light vehicle market is expected to be around 15 million units, European production at 16 million units, and China volumes at 30 million units. Electric vehicle penetration rates have softened in some regions, while hybrid adoption continues to improve. Commercial vehicle-related revenue is anticipated to remain soft for the remainder of the year.
SyQwest Revenue Seasonality: Revenues from the SyQwest acquisition are expected to improve in the second half of 2025, influenced by U.S. government funding approvals.
Dividends: In total, we returned $26 million to shareholders through dividends and share buybacks so far in 2025.
Share Repurchase: During the quarter, we repurchased 412,000 shares of CTS stock for approximately $17 million. We have $38 million remaining under our current share repurchase program.
The earnings call reflects mixed signals: while aerospace, defense, industrial, and medical markets show strong performance, the transportation sector struggles, and EPS guidance was lowered due to tax impacts. Positive aspects include strong market growth and the SyQwest acquisition meeting expectations, but the adverse tax impact and transportation market softness temper enthusiasm. The Q&A session highlighted some concerns, such as unclear management responses and ongoing tax issues. Given the balance of positive and negative factors, the stock price is likely to remain stable over the next two weeks.
The earnings call showed positive financial performance with improved EBITDA and gross margin, strong aerospace and medical sales, and shareholder returns. Despite transportation sales decline, guidance remains optimistic. Analysts' Q&A highlighted growth in therapeutics and potential recovery in transportation. The integration of SyQwest and operational efficiency are progressing well. Overall, the positive financial metrics and optimistic guidance suggest a likely stock price increase in the near term.
The earnings call presents a mixed sentiment. Positive elements include a strong book-to-bill ratio, revenue growth in diversified markets, and shareholder returns via buybacks. However, challenges such as declining transportation sales, geopolitical uncertainties, and a drop in EPS temper optimism. The Q&A session reveals some uncertainties, particularly around tariffs and the China market, but also highlights potential growth in diversified markets. Overall, the sentiment is balanced, leading to a neutral stock price prediction over the next two weeks.
The company's earnings call reveals mixed results: a positive diversification strategy and an improved gross margin, but significant risks include an EPS miss, declining transportation sales, and a weak book-to-bill ratio. The Q&A section highlights concerns about tariffs and unclear timelines for product ramp-up. The lowered revenue guidance further contributes to a negative outlook, likely resulting in a stock price decline of 2% to 8%.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
