Novanta Inc.

Good morning, everyone. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to Novanta Incorporated's fourth quarter and full year 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, you may press star and then one on your touchtone telephones. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Ray Nash, Corporate Finance Leader for Novanta. Please go ahead.

Thank you very much. Good morning, and welcome to Novanta's fourth quarter and full year 2025 earnings conference call. This is Ray Nash, Corporate Finance Leader for Novanta. With me on today's call is our Chair and Chief Executive Officer, Matthias Glostra, and our Chief Financial Officer, Robert Buckley. If you've not received a copy of our earnings press release issued last night, you may obtain it from the investor relations section of our website at www.novanta.com. Please note this call is being webcast live and will be archived on our website shortly after the call. Before we begin, we need to remind everyone of the safe harbor for forward-looking statements that we've outlined in our earnings press release issued last night and also those in our SEC filings. We may make some comments today, both in our prepared remarks and in our responses to questions that may include forward-looking statements. These involve inherent assumptions with known and unknown risks and other factors that could cause our future results to differ materially from our current expectations. Any forward-looking statements made today represent our views only as of this time. We disclaim any obligation to update forward-looking statements in the future, even if our estimates change, so you should not rely on any of these forward-looking statements as representing our views as of any time after this call. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available as an attachment to our earnings press release. To the extent that we use non-GAAP financial measures during the call that are not reconciled to GAAP measures in the earnings press release, we will provide reconciliations promptly on the investor relations section of our website after this call. I am now pleased to introduce the Chair and Chief Executive Officer of Novanta, Matthias Glostra.

Thank you, Ray. Good morning, everybody, and thanks for joining our call. We said we would return to organic growth and double-digit profit growth in the fourth quarter, and we delivered. Noventa posted record revenue in the fourth quarter with 9% reported growth, 2% organic growth, and 4% sequential growth. Booking surged 25% year-over-year and 12% sequentially with a book-to-bill of 1.11%. Every single business delivered double digit bookings growth and a positive book to bill in the same quarter. That's the first time that's happened since 2022. For the full year, we hit $981 million in revenue, our biggest year ever. Full year bookings grew 14%, new product revenue grew over 60% in the full year, including over 80% growth in the fourth quarter, exceeding our expectations as our commercial excellence and innovation investments are paying off. These results set us up well for mid-single-digit organic growth in 2026. We also demonstrated strong double-digit year-over-year profit performance in the quarter with adjusted EBITDA growing by 17% and adjusted diluted EPS growing by 20%. While these are strong results, margins and cash flow came in below the expectations we set on our third quarter call. This came down to a single deliberate decision. As we move through the quarter, we prioritize customer deliveries over the pace of our regional manufacturing transfers. That was the right call for our customers, and it created a temporary period of higher dual running costs and elevated inventory. We have already acted on this in January, and Robert will walk through the specifics and our confidence in the recovery. Given the very highly dynamic environment, I'm very proud of our business performance and our team's ability to stay resilient and deliver these strong results. Taking a step back, Noventa's long-term growth strategy remains focused on winning in high growth end markets with durable secular tailwinds, AI-driven robotics and automation, minimally invasive and robotic surgery, digital manufacturing and precision medicine. We hold leading technology positions in these markets with exclusive design and product relationships that typically last up to a decade on our customers' platforms. We have established these unique long-term collaborative partnerships with the leading OEM customers across the world by solving their most complex needs with proprietary technologies and solutions. while leveraging the Novanta growth system to deliver on-time, high-quality products at the lowest possible cost. While our products typically represent no more than 10% of our customers' bill of material, they enable differentiation and innovation in their systems for their customers, improving clinical outcome, throughput, yield, cost per procedure or part, or never before possible performance. We've made disciplined, focused investments in the platforms we believe will drive the majority of our innovation-driven growth. Next-generation insufflation and POPs, robotic surgery technologies, intelligent physical AI solutions for connected care, warehouse automation, humanoids, and precision robotics, and intelligent subsystems for laser beam steering and precision medicine. These growth platforms represent a $4 billion incremental market opportunity by 2030. Our strategic focus is to continue to expand our business mix and technology leadership in medical technologies, medical consumables, and embedded software, further strengthening a portfolio that delivers predictable, sustainable, and consistent revenue, profit, and cash flow growth. With customer destocking behind us and accelerating new product and commercial excellence momentum, we're well on the path to get back to our long-term algorithms. mid to high single digit organic growth with less cyclicality, better resilience to geopolitical risks, and more consistent performance regardless of the market conditions. Acquisitions are the second pillar of our growth strategy, driving double-digit reported revenue growth and compounding cash flows. The setup here has never been stronger. Our teams have built the largest acquisition pipeline in my tenure as CEO, focused on mid to larger opportunities in metal technologies, medical consumables, bioprocessing, and embedded software. In November, we raised more than $600 million, specifically because of her confidence in this pipeline. With nearly a billion and a half in total acquisition capacity and a proven track record of disciplined value creation, we're actively working multiple opportunities and expect to deploy meaningful capital in 2026. Now, here's what we're seeing across our end markets and businesses. Our sales into minimally invasive and robotic surgery applications remain consistently strong with mid-teens double-digit growth in our advanced surgery business this past year. Our next-generation insufflators set the industry standard in improving patient safety, addressing smoke evacuation requirements, and optimizing surgical workflows. We are poised for another year of double-digit revenue growth in 2026, as our new product launches from 2025 continue to scale up, and also with additional launches that are happening in 2026 itself. Long-term, the business is on track to achieve approximately $400 million in revenue by 2030, driven by continued momentum in insufflation, expansion into robotic surgery and arthroscopy, and a rapidly scaling medical consumable business. Our robotics and automation business continues to see a sustainable growth outlook with three distinct Gen-AI driven tailwinds. First, Noventis technology leadership and physical AI applications, unique capabilities that enable the perception and reaction of precision robotics in this physical world and to do so safely. In 2016, we're ramping several new product launches including content we recently won in the warehouse robotics space. Second, a recovering semiconductor waver fab equipment market where we're seeing signs of an upcycle starting to take shape. And third, a highly specific and compelling opportunity in GPU drilling. Our air bearing spindles are currently the only qualified supplier for drilling AI driven GPU boards, a direct beneficiary of the ongoing build out of AI compute infrastructure. And this application is growing at a strong double digit rate. Together, these three drivers underpin our confidence in high single-digit growth for this business in 2026. Next, our precision manufacturing business has seen four consecutive quarters of double-digit bookings growth and accelerating sequential revenue momentum in the second half of 2025, driven by strong activity in our target markets. This gives us confidence in seeing mid-single-digit growth in the business in 2026. The long-term growth driver in this market is clear. Customers are digitizing and automating their manufacturing lines with ever-increasing demands for throughput, productivity, smaller form factors and higher tolerances. This is a durable multi-year tailwind for Noventa. What particularly excites me is our launches of intelligent laser beam steering subsystems with unique proprietary capabilities that we have been building for several years. We're hitting the market at exactly the right time as new digital and AI-enabled manufacturing capabilities are moving from early adoption into broader deployment. Finally, our precision medicine business experienced another quarter of sequential revenue growth in the fourth quarter. This business continues to gradually digest the life science equipment and market dynamics and the associated technology obsolescence cycle we are working through. We continue to believe in the long-term opportunities in the life science equipment market and are seeing investments in connected care and early disease detection as big drivers of healthcare productivity. In 2026, we expect sales to be roughly flat in this business with some shifts in demand between our different product categories. Our investments in intelligent RFID solutions and advanced machine vision technologies are helping to stabilize the outlook for the business this year and have strong long-term growth prospects. In particular, we're pleased with the recent Keyon acquisition, which is already outperforming versus our early expectations and helping to offer both near and long-term growth opportunities for this business. Now, let me give you a brief update on how we're building a stronger foundation for future growth as an organization. First, the Noventa growth system continues to become a deeper and more permanent way of working across the company. our continuous improvement engine embedded in our event away culture. NGS is a competitive differentiator that drives customer success and operational efficiency simultaneously, and that combination is difficult to replicate. Here's what that looks like in practice. This very week, we have over a dozen simultaneous Kaizen events happening across nine different global locations with over 150 employees participating, from senior leaders to frontline operators. working together on commercial excellence, innovation roadmaps, supply chain optimization, on-time delivery, and our site regionalization initiatives. On that last point, our regionalized manufacturing initiative is designed to solidify and expand our preferred supplier status with leading OEMs globally, helping our customers thrive in a de-globalizing world by manufacturing our products in the regions where they sell theirs. We're building manufacturing component centers with better scale, stronger systems, and deeper talent with full in-region for region capability. The strategic logic is clear, the customer response is very positive, and the long-term benefits to profitability, cash flow, and resilience will be durable. To conclude, I'm very proud of our team's performance in 2025. As we look ahead, our top three priorities for 2026 are clear. First, drive mid-single-digit organic growth on the back of record bookings, new product launches, and commercial momentum. Second, acquisitions, deploying our billion-and-a-half capacity into larger opportunities in our target markets. And third, completing our manufacturing foundation, finishing the regional transfers, scaling competent centers, and embedding the Noventa growth system across the organizations. With that, I will turn the call over to Robert to provide more details on our operations and financial performance. Robert?