Electronic components manufacturer CTS Corporation (NYSE:CTS) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 7.7% year on year to $137.3 million. The company’s full-year revenue guidance of $565 million at the midpoint came in 0.6% above analysts’ estimates. Its non-GAAP profit of $0.62 per share was 3.3% above analysts’ consensus estimates.
Is now the time to buy CTS? Find out by accessing our full research report, it’s free.
CTS (CTS) Q4 CY2025 Highlights:
- Revenue: $137.3 million vs analyst estimates of $135.9 million (7.7% year-on-year growth, 1% beat)
- Adjusted EPS: $0.62 vs analyst estimates of $0.60 (3.3% beat)
- Adjusted EBITDA: $32.6 million vs analyst estimates of $32.48 million (23.7% margin, in line)
- Adjusted EPS guidance for the upcoming financial year 2026 is $2.38 at the midpoint, missing analyst estimates by 1%
- Operating Margin: 16.5%, in line with the same quarter last year
- Free Cash Flow Margin: 18.9%, up from 15.6% in the same quarter last year
- Market Capitalization: $1.61 billion
“CTS delivered another quarter of strong performance, with diversified end‑market sales up 16% year over year, and closed 2025 with solid results. Diversified end-markets now represent 57% of revenue, demonstrating progress on our strategic priorities” said Kieran O’Sullivan, CEO of CTS Corporation.
Company Overview
With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE:CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $541.3 million in revenue over the past 12 months, CTS is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.
As you can see below, CTS’s 5% annualized revenue growth over the last five years was decent. This shows its offerings generated slightly more demand than the average business services company, a useful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. CTS’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
This quarter, CTS reported year-on-year revenue growth of 7.7%, and its $137.3 million of revenue exceeded Wall Street’s estimates by 1%.
Looking ahead, sell-side analysts expect revenue to grow 3.7% over the next 12 months. While this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector.
The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.
CTS has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average operating margin of 15.3%.
Looking at the trend in its profitability, CTS’s operating margin rose by 1.5 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q4, CTS generated an operating margin profit margin of 16.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
CTS’s EPS grew at a spectacular 14.8% compounded annual growth rate over the last five years, higher than its 5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into CTS’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, CTS’s operating margin was flat this quarter but expanded by 1.5 percentage points over the last five years. On top of that, its share count shrank by 10.2%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For CTS, EPS didn’t budge over the last two years, a regression from its five-year trend. We hope it can revert to earnings growth in the coming years.
In Q4, CTS reported adjusted EPS of $0.62, up from $0.53 in the same quarter last year. This print beat analysts’ estimates by 3.3%. Over the next 12 months, Wall Street expects CTS’s full-year EPS of $2.23 to grow 8.1%.
Key Takeaways from CTS’s Q4 Results
It was good to see CTS beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed. Zooming out, we think this was a mixed quarter. The stock remained flat at $55.58 immediately after reporting.
Is CTS an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
/Microsoft%20sign%20at%20the%20headquarters%20by%20VDB%20Photos%20via%20Shutterstock.jpg)
