Nordson’s third quarter saw flat sales compared to the previous year, as the company navigated persistent softness in selected industrial and advanced technology product lines. Management highlighted that strong operational execution, portfolio optimization—including the divestiture of its medical contract manufacturing business—and successful restructuring efforts helped drive a notable expansion in adjusted operating margin. CEO Sundaram Nagarajan credited broad-based demand in medical products and stable aftermarket parts for offsetting declines in polymer processing and x-ray systems. Nagarajan noted, “We achieved record EBITDA of $256 million, expanding margin to 34% in the quarter.”
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Nordson (NDSN) Q3 CY2025 Highlights:
- Revenue: $751.8 million vs analyst estimates of $761.8 million (flat year on year, 1.3% miss)
- Adjusted EPS: $3.03 vs analyst estimates of $2.93 (3.4% beat)
- Adjusted EBITDA: $255.8 million vs analyst estimates of $246.7 million (34% margin, 3.7% beat)
- Revenue Guidance for Q4 CY2025 is $650 million at the midpoint, below analyst estimates of $656 million
- Adjusted EPS guidance for the upcoming financial year 2026 is $11.15 at the midpoint, beating analyst estimates by 0.6%
- Operating Margin: 28.5%, up from 24% in the same quarter last year
- Organic Revenue was flat year on year vs analyst estimates of flat growth (81.6 basis point miss)
- Market Capitalization: $13.28 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Nordson’s Q3 Earnings Call
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Michael Halloran (Baird) asked about the breadth of semiconductor demand in advanced technology and margin sustainability; CEO Sundaram Nagarajan emphasized continued strength in AI-driven applications, while CFO Dan Hopgood clarified that upper 30% margins in medical are sustainable, though Q3 margins were unusually strong.
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Mitchell Moore (KeyBanc) questioned the outlook for polymer processing and order intake within IPS; Nagarajan stated that order and backlog trends indicate the segment has bottomed and is expected to improve, no longer acting as a drag on results.
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Matt Summerville (D.A. Davidson) pressed for clarity on x-ray system demand and portfolio M&A actionability; Nagarajan explained that x-ray performance is influenced by both semiconductor and automotive exposure, and outlined a disciplined approach to acquisitions, while Hopgood said share repurchases would continue alongside M&A.
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Andrew Buscaglia (BNP) challenged the rationale behind conservative guidance despite signs of end-market stabilization; Hopgood responded that the guidance range reflects prudent planning for a variety of scenarios, even though current indicators are positive.
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Christopher Glynn (Oppenheimer) probed the sustainability of working capital improvements and the lumpiness of technology orders; Hopgood highlighted structural enhancements to working capital management and suggested that, despite short-term fluctuations, multi-year growth in technology solutions is achievable.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will track (1) the pace of recovery in polymer processing and automotive-related business lines, (2) sustained growth in medical and semiconductor-driven advanced technology segments, and (3) the impact of new product launches and technology transitions in x-ray inspection. Execution on working capital improvements and margin discipline will also be key for measuring strategic progress.
Nordson currently trades at $236.52, in line with $236.32 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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