Novanta Inc.

Good morning. My name is Andrea, and I will be your conference operator today. At this time, I would like to welcome everyone to Novanta Incorporated's second quarter 2026 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, then one on your touchtone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Marci Meditz, Corporate Finance Leader for Novanta. Please go ahead.

Thank you very much. Good morning and welcome to Novanta's second quarter 2026 earnings conference call. This is Marci Meditz, Corporate Finance Leader for Novanta. With me on today's call is our chair and chief executive officer, Matthijs Glastra, our chief financial officer, Robert Buckley, and our co-chief operating officers, Chuck Ravetto and John Lesica. If you have 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 this 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'm now pleased to introduce the Chair and Chief Executive Officer of Novanta, Matthijs Glastra.

Thank you, Marcie. Good morning, everybody, and thanks for joining our call. Novanta delivered an outstanding second quarter. We delivered strong results, 9% organic sales growth, 10% on a reported basis, 16% adjusted EBITDA growth, 47% adjusted gross margin, which was a 100 basis point improvement year over year, Adjusted DPS growth of 17% and operating cash flow that year-to-date exceeds the operating cash flow we generated in all of 2025. All of our business units grew organically in the quarter. The combination of these strong results give us a terrific foundation to close our largest acquisition in history. With the close of Riverpoint Medical at the end of July, we're also raising our full year 2026 outlook. positioning Noventa to deliver more than 15% rewarded revenue growth year over year for the full year. Very proud of the performance in our accomplishments, putting us on a solid growth trajectory and a path to exceeding our strategic goals. For 2026, we remain focused and are executing well on our top three priorities. First, organic growth. Our innovation engine is now a very strong contributor. New product revenue grew by more than 50% in the quarter and is up over 60% year-to-date, lifting our vitality index to approximately 29% of sales from 21% a year ago. Bookings are up 18% year-to-date and backlog is up 11%. While some timing of custom orders impacted our advanced surgery business in the first and second quarters, our year-to-date book-to-bill was well over 1.0. Organic growth is now accelerating with all four business units delivering on solid organic growth in the quarter. As we look out to the remainder of the year, we expect to see many of these trends to continue with strong new product revenue, design wins, and continued strength in precision robotics, physical AI, semiconductors, and minimally invasive and robotic surgery. Second, acquisitions. In June, we announced and just recently closed the acquisition of Riverpoint Medical, A milestone transformative acquisition, our largest to date, and an extremely strong strategic and financial fit for Noventa. Riverpoint accelerates our shift into minimally invasive surgery markets with long-term secular growth dynamics. It roughly doubles our recurring medical consumable business to approximately $300 million, from about 15% of revenue to roughly 25% annualized, and expands our medical and market exposure to 60% of revenue. It is expected to be immediately accretive to revenue growth, gross margins, EBITDA margins, and earnings per share, as well as long-term organic growth rates. Integration is underway under leadership of John Lesica, and the more time we spend with the RiverPoint team, the more impressed we are by the depth of their customer relationships, their innovation mindset, and their commitment to quality. We're excited to welcome them to Noventa. Our third priority for 2026 is about completing our manufacturing foundation. In the second quarter, we completed the manufacturing moves and closure of two of our factories. The establishment of our regional Lighthouse Manufacturing Centers of Excellence is well underway, supported by two new MRP system implementations, the Noventa Grow system, and world-class manufacturing teams. Given the strong progress and momentum being made to regionalize our manufacturing, reduce the company's complexity and asset intensity, and establish a lower cost structure, we decided to accelerate our strategy by announcing two additional factory closures by the end of the first quarter of 2027 as part of our current restructuring program. These manufacturing moves are also underway now, on a solid track to ensure Novanta achieves better scale, stronger systems, and a full in-region for region capability, which ultimately deepens our preferred supplier position with leading OEMs, dramatically reduces or eliminates our sensitivity to trade disruptions while sustainably expanding gross margin, profit margins and cash flows. Stepping back, the first half performance validates our strategy. We win in end markets with durable secular till winds. Our growth platforms represent a nearly and many more. We've been in them by solving our OEM's customers' hardest problems with proprietary technology, which designs us in for the better part of a decade. And we deploy capital to compound that position, which this quarter meant Riverpoint. The macro remains complex and we're watching it closely, but complexity and opportunity travel together and what is in front of us is accelerating demand, record new Product Momentum, the strongest team Noventa has ever had, and the balance sheet to keep acting. Chuck Ravetto and John Lesica are both with us today. They will walk you through their segment's new product launches, design wins, and customer momentum behind these results, and more on the Riverpoint integration. John, over to you.