EarningsQ3 2026 Earnings Report
DE:XT1 Q3 2026 EPS Results
Actual EPS€0.69
Consensus EPS€0.59
Beat/MissBeat by +€0.11
One Year Ago EPS€0.54
DE:XT1 Q3 2026 Revenue Results
Actual Revenue€134.51M
Expected Revenue€131.20M
Beat/MissBeat by +€3.31M
YoY Revenue Growth+4.46%
Earnings Announcement Details
QuarterQ3 2026
Date10/27/2026
TimeBefore Open
Conference CallTuesday, October 27, 2026
DE:XT1 Upcoming Earnings
CTS's next earnings date is estimated for February 9, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
DE:XT1 Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive overall. CTS reported revenue growth, record gross margin and adjusted EPS, strong cash generation, healthy bookings, significant medical and industrial momentum, a substantial aerospace and defense backlog, progress in transportation initiatives, and raised full-year 2026 guidance. The main challenges were medical book-to-bill timing, a year-over-year Aerospace and Defense sales decline, expected normalization from unusually favorable gross-margin mix, transportation market uncertainty, and Millar EBITDA not initially being accretive.Company Guidance
Revenue Growth and Record Profitability
Third-quarter revenue was $149.6 million, up 5% year-over-year and 3% sequentially. Adjusted gross margin reached a record 42.2%, up 330 basis points year-over-year; adjusted EBITDA margin was 24.7%, up approximately 90 basis points; and adjusted diluted EPS was a record $0.77, compared with $0.60 in the prior-year quarter.
Diversified End-Market Expansion
Diversified end-market sales increased 7% year-over-year and represented 60% of total company revenue, up from 59% in the prior-year period. For 2026 year to date, diversified sales were up 12%.
Strong Bookings and Customer Additions
The third-quarter book-to-bill ratio was 1.18, reflecting sustained customer demand across the portfolio. Diversified bookings were particularly strong with a 1.3 book-to-bill ratio, and CTS added one new industrial customer and one new transportation customer.
Gross Margin Improvement Supported by Execution and Mix
The record 42.2% adjusted gross margin reflected strong operational execution, a favorable product mix, approximately $1.4 million of favorable foreign currency impact, and an above-normal favorable end-market mix from the timing of certain projects.
Medical Market Growth and Strategic Wins
Medical revenue was $27 million, up 21% year-over-year. Demand was broad-based across sensing and actuation technologies, particularly applications supporting advanced diagnostics and therapeutic treatments. CTS secured wins in implantable pacemaker applications, ultrasound diagnostics, and therapeutic applications across all regions, while continuing to partner with global medical OEMs on next-generation programs.
Millar Acquisition Expands Medical and Sensing Portfolio
The completed Millar acquisition expands CTS's exposure to medical and industrial markets and adds capabilities in pressure, chemical, and electrochemical sensing and differentiated catheter-based technologies. Millar's vertically integrated design, microfabrication, and precision manufacturing capabilities support demanding applications. Millar is expected to generate approximately $30 million of annual revenue, with the acquisition expected to be EPS accretive in the second half of 2027.
Millar Gross Margin and Growth Opportunity
Management stated that Millar's gross margin is expected to be accretive to CTS's overall gross margin. The acquisition is intended to drive revenue growth through complementary technologies, expanded customer relationships, and CTS's broader engineering and commercial capabilities.
Aerospace and Defense Backlog Strength
Aerospace and Defense sales were $24 million, 30% higher sequentially. Orders remained healthy, reflected in a 1.91 book-to-bill ratio and a healthy backlog entering the fourth quarter. CTS also successfully scaled production of a critical sensing solution for a U.S. Navy undersea warfare application.
Aerospace and Defense Technology Expansion
CTS continues moving up the value chain from components to higher-value sensing solutions and integrated subsystems for naval sonar, undersea warfare, and secure communications. Management cited increasing investments in traditional defense infrastructure and customer engagement in modern warfare applications as support for long-term growth in the end market.
Industrial Market Momentum
Industrial sales were $40 million, up 7% year-over-year and 1% sequentially, extending the recovery trend that began in 2025. Growth was broad-based across OEM customers and distribution partners, and the industrial book-to-bill ratio was 1.36.
Industrial Design Wins and Secular Opportunities
CTS secured multiple industrial design wins across distribution components, industrial printing, data centers, refrigeration, HVAC systems, and industrial automation. Management expects industrial demand to remain healthy, supported by data center applications, automation, connectivity, digitalization, and increased focus on energy efficiency.
Transportation New Business and eBrake Progress
Transportation sales were $60 million, up 2% year-over-year and 1% sequentially. New wins expanded CTS's presence across global vehicle platforms, established entry into the seat-track market with Japanese OEMs, and extended the floor-hinged pedal business into China. Multiple eBrake opportunities are progressing across future hybrid and electric vehicle platforms.
Record Booked Business
Total booked business was approximately $1.2 billion at the end of the quarter, and CTS added one new tier-one customer during the quarter.
Strong Cash Generation and Balance Sheet
Third-quarter operating cash flow was $44 million, capital expenditures were $2.4 million, and free cash flow was approximately $41 million. At quarter-end, cash was $144 million and borrowings were $55 million.
Capital Allocation and Share Repurchases
CTS continued its balanced capital allocation approach, supporting organic growth, strategic acquisitions, and shareholder returns. The company repurchased 57,000 shares for approximately $3.4 million during the quarter, with $75 million remaining under the current repurchase program.
Raised Full-Year 2026 Guidance
Assuming continuation of current market conditions for full-year 2026, management raised guidance to sales of $580 million-$590 million and adjusted diluted EPS of $2.78-$2.88.
Tax Rate Outlook
The effective tax rate was 18.9% for the quarter excluding discrete items. Management continues to expect a full-year tax rate of 20%-22%, excluding discrete items.
DE:XT1 Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed