Novanta’s (NASDAQ:NOVT) Q2 CY2026 Sales Top Estimates, Guides for Strong Full-Year Sales

Medicine and manufacturing technology provider Novanta (NASDAQ:NOVT) announced better-than-expected revenue in Q2 CY2026, with sales up 10.3% year on year to $265.8 million. On top of that, next quarter’s revenue guidance ($302 million at the midpoint) was surprisingly good and 14.9% above what analysts were expecting. Its non-GAAP profit of $0.89 per share was 7.2% above analysts’ consensus estimates.

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Company Overview

Originally a pioneer in the laser scanning industry during the late 1960s, Novanta (NASDAQ:NOVT) offers medicine and manufacturing technology to the medical, life sciences, and manufacturing industries.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Novanta grew its sales at an impressive 10.7% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Novanta’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 7% over the last two years was well below its five-year trend.

This quarter, Novanta reported year-on-year revenue growth of 10.3%, and its $265.8 million of revenue exceeded Wall Street’s estimates by 1.3%. Company management is currently guiding for a 21.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and suggests its products and services will see some demand headwinds.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Novanta has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 12.3%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Novanta’s operating margin decreased by 1.4 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, Novanta generated an operating margin profit margin of 6.8%, down 4.6 percentage points year on year. Conversely, its revenue and gross margin actually rose, so we can assume it was less efficient because its operating expenses like marketing, R&D, and administrative overhead grew faster than its revenue.

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.

Novanta’s solid 10.1% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Novanta, its two-year annual EPS growth of 8.6% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q2, Novanta reported adjusted EPS of $0.89, up from $0.76 in the same quarter last year. This print beat analysts’ estimates by 7.2%. Over the next 12 months, Wall Street expects Novanta’s full-year EPS to grow 13.3% from $3.48 to $3.94.

Key Takeaways from Novanta’s Q2 Results

We were impressed by Novanta’s optimistic EBITDA guidance for next quarter, which blew past analysts’ expectations. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $153 immediately following the results.

Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).