Novanta (NOVT) 6 Aug 242024 Q2 Earnings call transcript

Good morning. My name is [Devin], and I will be your conference operator today. At this time, I would like to welcome everyone to Novanta Incorporated Second Quarter 2024 earnings call [Operator instructions]. I would now like to turn the conference over to Ray Nash, Corporate Finance Leader for Novanta. Please go ahead.

much. very you Thank welcome Second and conference XXXX call. to morning, Quarter Novanta's earnings Good Nash, for Finance is Corporate This Ray Leader Novanta. Robert our With me Executive Financial and Chief Chair our Officer, Chief on today's Officer, call Matthijs is Buckley. and Glastra;

website If archived you of press section after from issued being shortly release this of it live a on our you will obtain www.novanta.com. Investor webcast our call Please may note, earnings call. today, the not have received our copy Relations be website and the at is

Before we known statements to our update assumptions cause from risks harbor We release filings. These in disclaim those forward-looking begin, remarks Any prepared our that with our we've need to represent this estimates any as we also of time. obligation to our SEC the in forward-looking results include may press We statements of other the could for outlined may and in our to change. remind make future involve safe statements. issued earnings questions that and and if our differ materially our everyone earlier our some today views forward-looking even responses comments made factors expectations. statements that in future only both forward-looking in unknown inherent today current today, and

as any after this time So you should representing not rely on any of as our call. of these forward-looking views statements

financial most I'm the on we reconciliations of reconciled use the now our measures measures. Executive to not available pleased in the section During this and call. Novanta, introduce website earnings that Chief directly GAAP Glastra. release. an is Officer promptly press Relations will reconciliation call, release, Chair Matthijs this Investor our this of of measures call to to during after financial be press measures To that are we provide the GAAP to as A will earnings non-GAAP non-GAAP certain non-GAAP we comparable financial to such referring measures extent the attachment

Thank outstanding Good everybody, thanks morning, quarter for quarter call. and results of joining the operating Ray. second our another XXXX. you, in Novanta delivered of

revenue, above prior Our profit challenging guidance delivered teams cash expectations flow market our environment. in and and a performance

For as year-over-year, model our flows approximately the delivered margins a our fourth guidance X% effect strong cash beating offsetting very points by revenue, an represents expanded of performance of EBITDA quarter reported reflects organic operating X% murky difficult markets and were execution over Motion previous resilient growth teams and and secular the represents beat acquisition. Adjusted was market in quarter, for straight which environment. basis our proven which excellent diversified at XX% we a XX% exposure prior of Solutions core in by Operating platforms to year-over-year. the guidance. and $XX Novanta with has XXX million gross The economic dilutive businesses customer $XX high-growth cycle scenarios. growth basis. $XXX the economic was million, in decline This second sticky life margins on million, expectations geopolitical multiple under long business Adjusted

in previously and other more applications Overall, by are reported medical likely continue on expected. customers into but being and the see capital business, experiencing and be time, to stay applications device and secular major appear themes as sciences with invasive in by momentum markets, all is including weakness to precision robust Medical such tailwinds with positioned our equipment automation, following and end well technology are their customers advanced depending year in many medicine on The markets prolonged demand life market. XXXX. strong this than players. we robotics This our seeing our surgery mixed technologies robotic proprietary Our end medicine. At precision and markets. in the improving industrial and minimally long-term we're visibility

due of consistent and a Industrial continues there, interest capital industrial capital The spending materializing remain certainly China. At recovery overall recovery economic broad-based spending an in muted challenges. and results materializing the this in also until and signs to XXXX. contracting expected were PMIs to with start Although the a impacts to we our rate are stage, we're despite China, in Europe larger XXXX. market environment seen U.S., expecting Europe improving in not regional

microelectronics with spots as and robotic bright Industrial. seeing evidenced some bookings' demand in growth. are U.S. are there Advanced solid our rebound showing signs improved markets of are And However, appearing are end spurt automation markets predicting recent a with within and The product XXXX. players indicators recovery beginning a lithography growth, therefore timing a strong coupled new in a recovery stronger of up of leading ramping of XXXX. multiple at the broader

which the year Novanta device full end to the are view In outlook year, the new many markets. our for for these dynamics. end XXXX half of customer product the of medical of demand second on of on now latest the continue the expect momentum launches, focused reflects of Our for accelerating back we market

While offset fundamentals fourth the and a much we intact. be still rate of this lower net Novanta personally by prolonged previously to in the albeit growth than in near-term will demand growth in this more expected. organic applications, science not at environment weakness life third will XXXX, remained the return challenge Despite the quarter, the very industrial the momentum be a result and year-over-year in

teams and focused for cash things to And set system, margins expand to continue say I'm record Novanta our second, and attractive flow. driving in stay cash our reflected the control, new of can are: on and growth flow at launch we additional companies which fit is to really XXXX, acquire continue a profit margins expanding and which X that products, We top first, using third, well strategy our the are executing proud priorities at returns.

deliver on year, revenue result, guidance our line a adjusted full adjusted ramp details more we As to in results our year a EBITDA in up, despite and minutes. full Robert the guide. still financial will cover EPS previously a expect mostly for with slower few

our improved bookings we bookings in in XX% devices. improvement quarter, last X.XX, and with and growing by to driven which versus saw bookings medical book-to-bill up further microelectronics, the our robotics is quarter, sequentially, automation and activity was Turning back second

Going a up technology prior into to device made approximately of quarter and particularly multiple Novanta versus We total in reported the in on organic sales the saw year second for basis and XX% XX% of on XXXX. Sales more grew strong basis. medical detail application areas, applications. growth grew an markets medical also X%

some this headwind $X last our we after However, line, applications product in precision a discussed and surgical organic our in or X by which growth offset million displays partially medicine point was softness earnings call. discontinuing

markets. industrial advanced to Turning

industry total expectations excluding our to challenges. were environment applications advance and across an the reported microelectronics up interest down rate the and economic basis sales and The to our line year-over-year on on down basis XX% sales. approximately subdued due sales For markets Novanta of performance organic this second XX% with market made a regional end was quarter, XX% in

While [Indiscernible], manufacturing. to the are these these continue view. robotics such which and for markets and and support Novanta XXXX strong are trends, advanced trends are driven secular to attractive is expected materializing that the industrial positioned remain Industry for precision signs applications in longer, as growth sector, by automation many outlook in

manufacturing year-over-year and into share lithography, area in subsystems subsystems is and high-growth in Finally, advanced new application the precision continue quarter, markets, speaking surgery, multiple sales competent growth invasive sales A and represented all applications. applications. to intelligent sequentially, gaining application to stay consistent X% intelligent pipeline geared our such we as microelectronics end representing were medicine and growth. Across product of roughly next-generation sales on increase focused second minimally areas. towards These a solutions strategic our robotics robotic just motion for with in applications surgery, automation modest

metrics. Novanta's Now strategic let some me on touch of growth

we markets. in particularly multiple win in customers end and activity For design automation our robotics saw businesses, as with markets end design solid our well as medical wins,

lean to new launches to are us from goal For product in continue in versus in a million more XXXX, positions current XXXX, scheduled new metrics, This more revenue with product new incremental we deliver for amount record product XXXX. XXXX $XX XX% which Novanta's to launches, of product our confidently offerings. of than up with to

product help new are some its seeing organic to in deliver long-term attractive years multiple their incremental We are sales. already should to many new launches as come. continue XXXX ramping for These products Novanta growth of revenue already

was is still at Our prior was quarter. the first sales launches. new new second from launched our products points Sequentially, of about which from new expectations the with increase ramp vitality index, and saw but line mid-teens product XX% quarter in the versus of in a it percent in and sales, gradual sales several This the past years, percentage quarter. product second the X by improved quarter

launched new of in which to to rebound we new expect ramping we a highlight our product vitality our results. the as begin As and contribution pipeline half to to XXXX products. will ramp stated to we XXXX launch last our since I call, before, platforms have strong are second above expected make our X and of XX% want index we

and This positioned III, medical, subsystem. angle First, precision uniquely applications both markets. the scanning subsystem, and Precision automotive location differentiated is of enclosed micromachining, Xx uniquely semiconductor laser controlling Elephant a manufacturing in the for incidence precision

and smoke OEM in second-generation At of surgery well positioned are endoscopy point, vendor in accelerating launch time, a in now is exciting leader medical with the platform team. every medical a minimally a This endoscopy. another evacuation Second, growth world global our by OEM this our we're invasive who an to major category. major

endoscopic still of a Third, expand our but in low. first is This smaller step fast-growing relatively pumps strategy platform the OEM. with new pump our where share in launch the a endoscopic to is

leveraging one endoscopy customer and We we pumps, insufflator our growth become next of are insufflation. to expect beyond our growth which drive engines playbook expertise in relationships to

installation module items RFID RFID to [ finally, health and size absolute miniature manufacturing factor [ the cloud small for identify smallest and encoder that [ medical in UHF and in ] ] port- care, readers ideal [ track markets. and RFP market, in form X and retail. of RAIN leading robotics Next, with small the are ] for used industrial ] ease applications And advanced our

product as XXXX well as launches on track for share timing. We XXXX planned details with some we more We'll remaining the further customer launches are some the into dependent in year. progress in on as launches

give The Solutions activities. to of on remains update a Novanta's brief acquisition like I'd integration Finally, on track. Motion

innovation excellent impressed together. how our well intimacy capabilities. We team, our customer are We're with continue be and integrating teams with to pleased more our our

a well, excited potential in its Motion priority Solutions Motion the realize softness start to Solutions recover. the for growth Novanta's business in remain acquisitions continue believe fact new end [indiscernible] market market on life as top and to the the is transaction the for seeing impact we allocation. this thesis we're sales, equipment eventually capital is science Although having progressing product near-term and

a We pipeline targets. strong have potential of

on environment. execute results in summary, expect transactions. to a balance well achieved very continue the to in XXXX, Therefore, marketplace you to additional EBITDA quarter be should of and We in Our second difficult operating strong, macroeconomic the good active expectations is sheet sales, beat for margins, flows. positioning us us Novanta XXXX. In cash in

of new performance. call integration We Overall, progressing to details company, ramp products more have for Motion beginning operations With we're which strong I Robert? on to the for Solutions the Robert up, quarter XXXX. the is and multiple strong and turn well over and to are financial provide another that, our positioned will nicely.

Thank morning, you, good and Matthijs, everyone.

gross gross the gross flat margin roughly profit or was of quarter Adjusted a or compared in margins million $XXX XX% Our to adjusted second XXXX. gross year-over-year. $XXX adjusted quarter non-GAAP adjusted second were million XX% XXXX margin

the Motion with was acquisition, expectations. Excluding points XXX adjusted our line basis impact in roughly margin up gross of Solutions

gross our in and factories teams. expansion continues deployment to commercial largely be driven growth Our Novanta system the our margin by

sales. $XX of the million or roughly approximately quarter, For XX% second expenses R&D were

margin Second million or expenses XX% Adjusted adjusted quarter approximately of in approximately XX% in or versus the million quarter SG&A prior was a of year. the EBITDA million $XX $XX sales. second were $XX EBITDA XXXX

tax the for the front, non-GAAP XX%. On XXXX rate quarter our tax of was second

track rate the our tax to year. Our on estimate remains full of for XX%

was the of earnings second $X.XX $X.XX per to in quarter share XXXX. Our non-GAAP compared adjusted

balance. debt growth remains interest higher higher on EPS due Our rates to muted a

Second million year, increase last compared quarter million second cash was approximately $XX of in the flow to quarter operating XX% year-over-year. $XX of an

managing to We debt with in X our million $XXX operating improvement with $XXX are capital cash rigorously track reducing and We the driving it gross segments. by net strong to second and million. performance our by pleased year-end. I'll We working with ended remain of approximately net and flows profits. X.Xx, expect of continue gross of to our the debt leverage quarter below a operating update the ratio on was momentum gross leverage or now this

and First, precision speak manufacturing I'll medicine to segment.

guidance. sequential with driven gross line is were down in volume. sales in up utilization bookings. year-over-year, XX% segment XX% margins by in was year-over-year X.XX%, book-to-bill by The increase declined in lower sales quarter factory Second this Adjusted from segment from which sequentially this lower the a largely

of the applications. industrial and revenues wins timing average. in New with sales, EUV company activities this Design product driven year-over-year product was approximately were weakness mid-teens in segment line down percent capital DUV new in of by and markets development spending the in

see the and tied second our with to improvements in product the half, expect gradual We introductions design in customers' new activities. wins

year-over-year, Turning sequentially. points with Adjusted X.X%, and our microelectronics, in driven segment and medical, this strong segment recovery margins mobile year-over-year The Bookings X% volumes. to This sequential improvement. a factory revenue XX% and robotics XX of on line the XX% Robotics represents quarter, year-over-year segment. a efficiencies by experienced Automation in increased book-to-bill grew and expectations was also a markets, basis and gross decline in sequential increased in demonstrating humanoids. automation overall robotics particularly

New the to progresses. in segment roughly sales Design were continued product the progress we the as see XX% and revenue of here digit segment. total was expect year-to-date, strong for year double wins up

experience growth. solutions, X% and reported of medical segment the XX% in growth year-over-year Finally, organic revenue a

down growth of markets. in is precision from spending surgery bioprocessing minimum bookings and prior flat capital XX% XX% precision in sequentially. the weaker a minimum mid-single for a prior down our in Whereas were life and bookings year Weakness up Bookings prior and XX% with line multi-omics medicine in of impact medicine anticipated in the our environment surgical and the line line versus our discontinuing segment expectations and The on saw vitality roughly displays, surgical smoke book-to-bill launch were remains The to XX% growth This sequentially and sequentially. Bookings index segment in year-over-year. tied sales were with level. which expectations. percentage in invasive evacuation this invasive the up would is been second-generation of business our line revenue year the Excluding versus have remained X.XX% our guidance. mid-teens digits. our insufflators, the is science, track in business

this up digit increased metric strong were ramp segment segment gross in accelerate to continue year-over-year. our in points Adjusted Design expect We wins XX up roughly we year-to-date. this to double products. margins as basis this

Excluding Motion was the segment expansion Solutions, this XXX margin over in basis points.

sales science capital The February, we guided it upper expectations the over with our our full a of back year year. Now growth businesses guidance. environment, half more course on turning we with coupled end to the customers' second When the based sequentially in Whereas easier the the range of the life comparisons for improvement stable and improving a in dynamics their spending end markets industrial the year. the anticipated life only science in as life due which at markets the looking range markets. as anticipated bottom no well organic to both is Solutions, growth This sequential of reduced from for in year. therefore, the science the of considered same revenue Motion also outlook in contributed now modest growth range

see new revenue a introductions improvement product market, stronger offset second a capital from science and sequentially both industrial spending by this the half end accelerating in Novanta medical improving in environment weaker and life device now is While markets. still partially

European is industrial spending, further the capital and the further and China have This measures. drops markets For Europe in recent PMI the in of the from in weakness first and half evident year. deteriorated China

bioprocessing markets multi-omics, recover seeing demand we here level. step not is an we're low off equipment capital into As already markets, which sales these and Furthermore, in we stand to obviously science, today, additional expecting life revenue down an are for year. of this

year, customers' into are second half market the assays, the purchases. to signs noncapital expected equipment equipment other still and customers recovery capital dollars as in are shift seeing of While deferred be this customers sales our a of our consumables, services,

XXXX equipment discovery drug spending positive demand its improve. Elsewhere a seeing capital On improving the positive, are declines, to capital many in our expected is leading indicator we activity tailwinds. this portfolio, coupled of in is expected development rate an uptick interest in sentiment, and with

traction U.S. New and surgical and with accelerating medical stay particularly robust is recover, in minimum robotics to is around are our the device products automation revenue the strong the beginning end lower demand our headwinds elsewhere. orders of overcome continues Based the market. February. microelectronics product accelerating, in invasive the business trends to we dynamic, the in this products positive to cannot market, in Unfortunately, gaining demand trending further we guidance our the revenue on in provided are

bottom greater of year expected is now $XX medical some second half from be nearly is of to full at current capital XXXX, recovery million. revenue previously year reported we revenues, microelectronics be $XX to Therefore, market, new the still communicated a approximately spending estimate prior million the Revenue in approximately a in growth revenue revenue low our in device to expected year range This largely is from than growth For single $XXX U.S. organic full space. driven GAAP the digit of robotic acquisitions million. XX%. environment of by better to decline X%. Revenue represents the growth product and robust at end expect a

the growth third to X% $XXX the sequentially on $XXX XXXX, year-over-year represents expect X% to revenue revenue of of up X% X%. million. million and quarter basis For GAAP a we and range between This organic in

to to the a albeit The dynamics third about. rate anticipated lower is returning quarter growth, I at than due talked

revenue to sequential we low the be the a level, On double-digit and medicine flat basis on basis. roughly and expect on segment percentage manufacturing a in precision third declined year-over-year quarter,

life science quarter the is expect both to to segment and spending weakness expect industrial spending. revenue from by in impacted sequentially segment capital to in return modest accelerate. the improving This We this year-over-year and environment growth fourth capital

year-over-year the improving environment representing first grow these to start markets expected year largely the and show the in as robotics of U.S. both automation half is demand third revenue XX% recovery, signs from in to of quarter, XX% the segment solid to Our end an

growth fourth markets segment growth XX% end the show low year-over-year by to expected in reported We expect comparisons. continue Solutions as And is basis, our to finally, mid-single-digit acquisition. Motion to an decline quarter year-over-year. double-digit easier we XX% growth, year-over-year organic improve solutions to strong organic expect On medical of the also from driven the and revenue

the Excluding been impact surgical year-over-year. product discontinuing revenue our the flat have line, would displays of organic

offset business market new market. the dynamics minimum business line While in see life beforementioned introductions from the line our broad to medicine declines in is product the precision our surgical of high invasive this single-digit adoption, continue by science

However, in the deliver products to greater revenue high life the in weakness this expected business, quarter, our growth and the fourth to low market. XX% organic is up to continue segment than growth as single-digit surgical science reported minimum invasive double-digit ramp in overcoming new

compared to on Moving third to they XX% flat or to the margins. to In up quarter, of expect expect adjusted we second quarter. we gross the a the range or gross this margin XX.X%. gross segment, delivered in margins be

full For XX%. the of margins XX.X% we gross adjusted XXXX, year to to now be expect approximately

gives by the what we versus raise current communicated to end basis February. XX outlook the points us bottom in of confidence Our range

using system We dilutive acquisitions. margin of This performance execute to Solutions of and team's evidence efficiencies. cost strong expect the the ability to structural to the drive our other overcome the quality Motion Novanta core the and improvements Growth business to of impact is continue

be million which expenses, approximately in approximately to quarter in $X and the $XXX in should $X.X approximately second $XX $X.X Stock third $XXX million million to expense, the million year. which million We second fourth $XX third were Depreciation the expect was quarter. in $X and be in quarter quarter to should million compensation million SG&A quarter. full for fourth and million roughly the third be R&D the the and expenses

$XX represent million quarter, we a For a expect of XX% will $XX third adjusted the margin. EBITDA growth range double-digit million, for and greater than year-over-year which to EBITDA

million the second half. of represent year XXXX $X EBITDA an expected $XXX approximately demonstrate margin full and which and the company in million, expect we to quarter. year-over-year double-digit the now third adjusted the EBITDA, XX% fourth to For million is for delivering range a $XXX Interest growth greater in than will expense be of

rate quarter of and third to full fourth tax to the around be expect We our XX% through non-GAAP the similar XXXX. year

this Pillar-X However, of both watching we of and are rules, income slightly which tax in changes jurisdictional to careful the of from rate could estimate. our both increase adoption the mix

For earnings third range quarter. $X.XX adjusted a $X.XX diluted the expect share, we of per to in

share, year per for full of earnings now of a to the expect XXXX, $X.XX $X.XX. diluted adjusted range For we

what outlook current raise us February. Our range we gives versus the bottom of in end back the confidence to by communicated $X.XX

to and quarters debt third following cash working as Finally, several the improve continue we strong momentum levels, from quarters continued net rigorously the we to past continue manage plan down strong debt. make reduce down our the acquisitions, we to in pay and be expect next a fourth flows execute cash profitability our capital to to gross us the in leverage, new to our our position we acquisition. and Until putting flow on to use continue existing pay

the As rates, assume always, and not changes foreign any impact can geopolitical climate. not macroeconomic this are we any negatively in disruptions exchange does guidance factoring significant that significant in

of While to environment. dramatically Novanta of product through we past strength by is by as quality some improving evidenced improving environment, product the the in improve continues our end an times are some new execution and we customer and a of improving markets introductions, The and work encouraged system, organization's of execution as market well device with the signs broad the strength macroeconomic medical recoveries the acquisition levels. which business our lead challenging Growth adoption X the to quarters financial continue strong

However, and this EBITDA flow in share the earnings and the improving year. per strong evidenced is also and for cash gross margins,

And into the years. and year, best in in of revenue half to growth continue growth the expect and quarter, in retain operating despite our revenue attract important guidance stronger above us in the stronger financial which concludes positive positioning questions. even and challenging we we third execution the positioned excellent an launches the by This teams. and performance that remarks. XXXX. To the capital up our reported are the open performance in we a scale and in flat our quarter that our to to was and testament Novanta's teams translates dramatically proud fourth for revenue of to business of for to showed spending, to due the resiliency demonstrate up This very bringing achieve We the environment. view business talent, delivered pauses on quarter. exposures. It prepared for the product organic great is cash some strong finally, expectations double-digit wrap half allow the emphasize supports business We well second second leaders breadth end revenue, our in of now up, in well new a coming much the revenue us performance We'll market profit organic to for tenacity This slightly a environment. XXXX flow second portfolio the to our of our results results no the matter call our are

instructions]. [Operator much. very you Thank

from Securities. The Lee first Jagoda CJS comes from question

you turning. acquire materialize you're And And then head I trends to other the more guess start Solutions, obviously, give of the you kind kind Motion several years. to are the that it position over mentioned you are of that bolster further? turning? bought on when you secular bioprocessing a that looking are of the some next hopeful confidence things us of will some going start context to tools What that you're gave the turn still had until 'XX, into you but Can things not kind I know life to sciences space. gives what around

consumable market indicator course, outlook, just yet activity what capital are multiple part side. our double about that a people not the is that albeit talking customers XXXX, improving, the there noncapital on that feel in is expected, space. uncertain. capital are as we we But parts improving seeing see can and it's side which basically of which see the we the this that order climate It's leading an is just So bit you improving And will we're of rapid not our about. customers' is an the therefore, that starting business, timing the the in but customers be actually the of talked basically is we as of to means actually improving incrementally and for improving a feel of as weakness

further now products customer and the Solutions looking are expand cycles. the manage business just and We new And will business. we new also structurally to our gain Motion through introduce slots

about So space the term. medium in the we're positive

I to that. And then would add

as I about by have they're selling customers launches stuff capital the or rate you going obviously equipment, with think this think some associated all sensitivity. to is that's interest our marketplace equipment capital into

in So back this return. year XXXX, faster the half an a us you'll the environment rate confidence interest and that improving of see is gives actually greater

being technologies proteomics you other about. customers types the based lot types markets In require and of genomics, that addition multi-omics U.S. to are launched and talking drugs a hear of most European and on of the the based our biologics biologics into including these new of technologies,

margins Are should expansion pull And and is of continued kind expectations temper margin ahead next is And expectations any that our of then expected be ahead everything meaning track? a for of of we or were improvement? there specific expectations. on gross year drivers that to be to of forward,

I think things track. continue on

gross a So XX% anticipating margin. we were driving

We are to on to accomplishing Solutions. impact dilutionary despite track that the Motion

with As we on [indiscernible] could Novanta cost gross by characteristics is gross downs Growth to customers. the factories, one on get products we We're for have and still that into driving XXXX. deep expect year, the I overall, our year. robust system. growth internal next think different business in our we're business the track being drive a driven Solutions dilutive strong that a is Obviously, for Motion into to we're sell units that our It material driving improvements productivity to final margins. But continuing margins, impact

any to -- that lose We some into XXXX, price. our additional that, we're have see we to get In as and to benefits we we drive to addition opportunity there. not of captured expecting additional footprint don't decrease price operating

level. pretty improve it continue I remains Everything that to eventually margins, demonstrates that driving And last good we XX% gross have this up years couple of that. feel pathway the to track. think we So on to

me, more quick for I then And can. if one one

your Just $XX in from know it's from lines. Matthijs, was think $XX the there product think it Is in the I new incremental products I don't the XXXX. prepared you if prior, million mentioned remarks, opportunity change million insufflation not, there? or any but I semantics

No.

that in have been I million, spoke I is surgery the is is to invasive calls, we've X I X consistent, think been in minimally another the new been $XX products, last, $XX includes which of have new and products line from which confusion. million speaking we realize script, incremental for the there gross I that earnings total there's revenue pretty some total number there revenue said about was product about million. of I $XX insufflation, mean the this say, which we would the but

end net generating. products of So is that any the life of of all

is effect and revenue we, So some larger products 'XX clear incremental the have benefit will some Novanta's some the ramps the shared clear. ramps. this that in course, variance, is just be, course, we as full really Hopefully, further prepared because product new the XXXX progressed in right that been of right, of be the now, of already products, will year-over-year b, absolute these though, there course, and are from offerings realized year of because, the But we happening to right? that's of remarks. a, not, of are in has to It's ramping impact the there. of amount so And So it's because next we maybe year. realize confusion

driver, Insufflation that it. only excited So are will, it's course, about total million we're product included It's broader hopefully, is of new which insufflating. why of the is of much It revenue. include more smoke large set is not that contributions a clear. but $XX that driver, a incremental evacuation in

comes with question Blair. next The from Brian Drab William

sure just If I left I'd detail the that guidance to changed might just on have I right. Robert, to this But the have much from listening bit. want with a call, impression quite make comments I the so been

million. And think – from missing XX.X%, $XX which the the at about? million million display are beginning am right you I other year, for there's $X now in parts, midpoint $XXX to midpoint was adjustment? like that initial display many business anything the away know take from with so like moving revenue, revenue the at of So the X million. Is to I -- XXX.X guidance just today, midpoint moving would and the we're right that using -- to but way $XXX billion

Yes.

think I million about then the of lower business. $XX is solutions easiest think motion there's also element display the and way to an there's it

in the the million the So customers $XX not had end less science the medicine end markets Solutions Motion markets, because life way materializing precision in anticipated. its tool are

dip our above little taking bit half same from end of we're half perspective, impact the representative tools that At in which life range bit is year it business. to then emphasize we There's end that getting line. And beginning we being of the of product back that in growth -- there's offset the science kind of Solutions higher the provided of little discontinuance course, we're of that's the that year. year. a a the in the where a bottom also about and from that on that we're are display I at Motion a I stronger fact the launched insufflators of back at double $X the were the the dilutionary of profit a the a that of in most And So so the right now, range a and are the to $XXX on minor business. to time, we gave range, of talked we're say so million fair the guidance $XXX billion, based would

businesses a well. to much and a flow flowing to that's strong stronger gross then EPS obviously, the margin, down from cash stronger are job a pure So a as good drive doing profit, that

I mean that. took EBITDA the you end margin of barely and changed low I see EPS up, the the

at everyone to guess year, the was maybe get the I and if end things -- of in So [ ]. the the then sciences obviously low still aspiration end the we little comments to a high then your to no changes worse, major of I life got And think were, maybe -- expected, it's of the things range. get get than but well, beginning kind worse and

piece the I capital say. would It's equipment just

activities of assays the there talked in if the you a as the [Indiscernible] calls end of associated. the it, you services, listen people it gets is dissect But -- they're into the there. in it's to pickup all lot So consumables -- about, if earnings market, talking about of

is, capital the a expansion. improving in that activity turning effectively, space, new as the the is when has just of increased increases that and start part So environment manufacturing labs year utilization it's drugs, now of about and in back introduce activity capacity on. requiring Part you of the and does in the and the an half

some you timing And or then business risk market, the end is well. of impactful the in seeing clearly, But the some launches that macro? are to of new product are which related launches product doing any of or product upcoming any more in the current really launches to MIS

Yes.

in spoke we the pluses -- or think I some minuses about past.

and than pushing running bit you see impacted by things expected. the certain their course, customers being certainly a macro are Of out better little they're and launches

average right where of the certainty does now, be. see we're diversification launching we to mean, amount the weeks also -- right let's can not want And the last feel rise and there So you clearly I think that yes, But products the I is few is there that improved helping. it say, the of in, macro are is we months.

this. impact we're yes, with seeing Right now, So have might that an timing. not

average that still our reconfirming So as on of and today, we're to customers are why that's number. sitting we're tracking that here

the products The associated of back the with minimum in of bulk invasive business. surgical [Indiscernible] half the the new year

other the types of the suite. more So OR into of products and it's with going insufflators associated

comment to accept on but just it. I'll no this, going ask I'm And

and sorry you XXXX? how persisting have you're to visibility just that much new As on the double-digit XXXX, said growth. you into you -- exiting a organic think again products you to revenue about double-digit be you and year, into the growth look Can going XXXX organic revenue comment

that run XX% you of quarter, in how kind think digit the fourth at growing about you in see XXXX. a to deliver it's least at wouldn't I a tough growth issue double you're very if is rate that then forward,

the in I -- the about uncertainty but of like on good. the and we'll sit how to life think would continue other and the rates different I you as the to any unfolds, that get we so here over this forth, -- to Regardless if industrial back recovery how and happens geopolitical the so think the environments feel disruptions the factors tool course there's monitor say, today, and grow recovery science given pretty of occurred we XXXX, as the due XX% that see in marketplace. in that's year we to and we market

We next the have question with Mason from Rob Baird.

pieces be be asking be again at third this of repeat may should would just risk walk question you versus But yourself. major drive in quarter in through revenue increase the sequential the the I understand you could the for? to that what the quarter looking we that fourth

single precision So I up up that's think look it the increase, double mid-single segments, manufacturing at at digit. and of up way medicine going looking if medical the and high you you're low the are what digit you easiest solutions the if got of -- individual automation, drivers digits. and maybe is Robotics

be it. will element medical of the So solutions larger the obviously,

product largest for part, the it, the which continued So the solutions the strength is track. really if materializing in the is summarize demand, is on in device which uptick is introductions, which of area, which sequential hospital segment large I around new spending, medical medical remains capital

single into continued support strong then capital high robotics the improvement precision So the capital back stronger down book-to-bill a and similar based a bookings, then the in automation you expected step now, if technologies back at backdrop the is a spending the a as look of spending. new to then maintain of to hospital there. And we bookings hospital somewhat sequential order strength by seeing bit OR that that's and and very some medicine the little get of market the a supported year. to despite step-up even microelectronics digit that go medical solutions, And the robotics shrink are half and around on book the products automation side, having up on there's going

kind And so that. of all that's by supported

industrial weaker and we We tools macro off obviously, cliff. science factor have factored environment life falls the in the but dip a if outlook in in double can't the

So profitability a confident what time. year we parts spaces for with nice and full new product lot we of come right the is can we moving can the at maintain that the in outlook feel of the have right that introductions

you And so that's step-up happening. where see the largest

in robotics the accelerate to business as maybe acceleration portions even well? apart relative Can little industrial medical automation did bookings the bit pull piece? microelectronics of noted to a that just was that you and just sequentially. sequential much related you how and the the that And then of bookings to relative And

we we're puts the markets, can I the -- launched solid in on to see seeing that automation, right? momentum is I can kind other well that further robotics some warehouse that, EV within reported on course, continues And but you slow from side, and And so as and it. products. just have industrial humanoid, Listen, environment, momentum, what seeing Of take and Robert think of see to that battery players also other then very course, as I right? a automotive recently will of well. we're But market, mean and add takes, be side many solid. you medical

of and that to that's are So growth to kind those And of talked what want Robert, kind add don't were you the that. know about. we're of further I seeing, drivers the if

good a that's think I characterization.

areas that actually the So industrial down or automotive, EV, an in in down pretty in solid robotics medical, the other But are is down kind stronger. uptick then and net-net battery. big Whereas would of an impact robotic in semi/microelectronics offsets the the decent space. -- growing of smaller be

they products from the the in there's that Matthijs Now said, same fact benefit space. new exact as happening

automation And robotics industrial versus maybe again just portion what one is of and question Remind last us medical? there.

will I before. in will get good back understand question. you I consistent a asked do to Actually, I -- we've never we into have on and that before. that It's breakout how that gotten you've a manner. question to

So you let me get on that. to back

concludes remarks. This Glastra to like turn Matthijs to any question-and-answer closing session. over our would I conference for the Mr. back

operator. Thank you,

and despite beat momentum We accelerating We to and Novanta new and second we near-term made operating back markets the for Novanta serve. expectations sales, launches. business end improving the and quarter. sequentially, top flows, some some progress recap, in our challenges for on our we priorities. This in margin, outstanding of the on expect to softness we cash our continue had see performance product profit of came So great

great long-term to for minimally platform progress the end large made invasive also next us. Novanta medicine, be We're exposure launches diversified secular will acquisition, Industry for which Solutions product and macro long-term with -- We and which industrial starting remains will markets X.X. over quarters. few well automation the the robotics in advanced precision positioned attractive the growth integrating an medical in we surgery and excited trends in Motion and

cash call. striving to to continue the will and our great challenges the dedicated make company additional great make day, and your strong interest I in the and place on and in earnings today's continue to would in all of continue of and a be doubling our in expansion. In new our forward employees place especially the of who to support third Novanta their you the appreciate to ongoing like company well very call a much. your on We wins to employees on customers, Novanta thank call. all down appreciate company grateful months you're focus applications I closing, system margin our adjourned. participating to work And several work. our you for for work. shareholders gross taking as growth in is flows drive as we quarter joining We design company, This high-growth Thank now interest on the always, as to look every diligently to efforts XXXX

concluded. The has today's for attending you you. Thank presentation. conference Thank now

now You disconnect. may