Nordson Corporation (NASDAQ: NDSN) Q2 2025 Earnings call | 08/21/2025

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Company: Nordson Corporation (a precision technology company specializing in dispensing, fluid management, and surface treatment)
Quarter: Fiscal Q2 2025 (Ended April 30, 2025)
Call Date: May 29, 2025

Key Financial Highlights:

Revenue Growth: Achieved sales of $683 million, a 5% increase year-over-year. This growth was primarily driven by the acquisition of Atrion.
Profitability: Delivered strong EBITDA margins of 32%. Adjusted earnings per share (EPS) were $2.42, a 3% increase from the prior year and slightly above guidance.
Cash Flow: Generated strong free cash flow of $103 million, with a 92% conversion rate from net income.
Capital Deployment: Returned $129 million to shareholders through $85 million in share repurchases and $44 million in dividends.

Segment Performance:

Advanced Technology Solutions (ATS): Sales grew 18% year-over-year to $161 million. Strength was driven by robust demand in semiconductor and electronics end-markets, specifically in electronic suspense, optical, and X-ray inspection systems. EBITDA margins expanded significantly to 25%.
Medical and Fluid Solutions (MFS): Sales increased 20% to $203 million, fueled by the strong performance of the recently acquired Atrion business. This was partially offset by double-digit declines in medical interventional product lines due to ongoing destocking.
Industrial Precision Solutions (IPS): Sales decreased 8% to $319 million. The decline was due to weaker system sales in industrial coatings and polymer processing, though this was partially offset by growth in nonwovens, precision agriculture (ARAG), and packaging.

Strategic Initiatives & Updates:

Successful Atrion Integration: The Atrion acquisition continues to perform above expectations, contributing significantly to sales and margins in the MFS segment.
Portfolio Divestiture: Announced an agreement to divest select medical contract manufacturing product lines. This move is intended to sharpen focus on higher-growth, higher-margin proprietary medical components and will be accretive to segment margins upon closing (expected in Q4 FY25).
Operational Efficiency: Implemented targeted restructuring actions expected to deliver over $15 million in annualized cost savings by 2026. The company also completed the move of its industrial coatings systems business to a new, more efficient facility.

Outlook & Guidance:

Q3 FY25 Guidance: Sales are forecast between $710 - $750 million with adjusted EPS between $2.55 - $2.75.
Tariff Impact: Management stated that current tariff levels did not have a material impact on Q2 results and are not expected to significantly impact Q3. The company's "in-region, for-region" manufacturing strategy and agile pricing are key mitigating factors.
Market Conditions: Demand remains mixed. While ATS shows strong momentum and destocking in MFS is lessening, certain industrial end markets like automotive remain a headwind. The overall backlog increased 5% sequentially.

In summary, Nordson delivered a solid quarter with revenue and earnings exceeding expectations, driven by a strategic acquisition and strength in its technology-focused segment.

About this video

Nordson Corporation reported strong fiscal second quarter 2025 results, with revenue up 12.1% year over year to $741.5 million, beating analyst expectations of $722.2 million. Adjusted earnings per share (EPS) rose 3.5% to $2.73, surpassing estimates of $2.64. Adjusted EBITDA was $238.5 million, representing a margin of 32.2%, exceeding forecasted $230.1 million. The company maintained an operating margin of 25.3%, consistent with the previous year, and achieved free cash flow margin of 30.5%, up from 21.6% a year ago. Organic revenue growth was 2.1%, outperforming the expectation of flat growth. Key growth drivers included strength in advanced technology solutions, particularly in semiconductor and medical segments, as well as contributions from the Atrion acquisition. Nordson’s balance sheet remains healthy with a current ratio of 2.53 and moderate debt levels. The company executed $85 million in share buybacks during Q2, with $282 million remaining under authorization, signaling strong capital return discipline. For fiscal Q3 2025, Nordson expects sales between $710 million and $750 million, with adjusted EPS guidance of $2.55 to $2.75. Management highlighted continued focus on operational excellence, customer-centric innovation, and disciplined capital allocation to navigate market uncertainties and sustain growth momentum. #Nordson #NDSN #Q22025 #EarningsCall #RevenueGrowth #EPS #AdjustedEBITDA #OperatingMargin #FreeCashFlow #Semiconductor #MedicalSegment #AtrionAcquisition #ShareBuybacks #CapitalReturn #CustomerInnovation #OperationalExcellence #QuarterlyReport #StockMarket #Investing #EarningsCallTranscript #GrowthStrategy

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