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Nordson's (NDSN) 3Q25 earnings report is propelling the stock sharply higher as the industrial technology company surpassed EPS and revenue expectations while reaffirming its full-year sales and EPS guidance. Additionally, NDSN announced a new $500 mln share repurchase authorization, bringing its total repurchase capacity to approximately $800 mln, signaling confidence in its financial health and commitment to enhancing shareholder value through disciplined capital allocation.

• The company's 12% yr/yr revenue growth was driven by an 8% contribution from acquisitions, notably the May 2024 $800 mln acquisition of Atrion Corporation, a supplier of medical devices and components, which significantly boosted the Medical and Fluid Solutions segment. The Atrion acquisition contributed to a 31% sales increase in this segment, with reported sales reaching $219 mln, though organic growth was flat when including the contract manufacturing business slated for divestiture.
• Overall, NDSN's sales grew by 2%, underpinned by the company’s diversified portfolio and operational execution across its precision technology offerings. On that note, the Advanced Technology Solutions (ATS) segment emerged as the standout performer, with revenue climbing 17% to $171 mln. The strong growth in ATS was fueled by heightened demand for electronics dispense product lines, particularly for semiconductor packaging applications, where NDSN’s Spectrum S2 system has solidified its position as an industry standard.
• This demand reflects a rebound in electronics markets exiting a cyclical downturn, with NDSN capitalizing on its technological leadership and close-to-customer business model to capture market share. The segment’s operating profit rose by $11 mln to $37 mln, and its EBITDA margin expanded to 24%, up from 21% a year ago, demonstrating strong conversion on incremental sales and operational efficiencies.
• The ATS segment’s strength helped offset sluggishness in NDSN’s largest segment, Industrial Precision Solutions (IPS), which saw a 2% organic sales decline, with total sales remaining nearly flat yr/yr. The weakness in IPS was primarily driven by softer demand for polymer processing systems, impacted by cautious customer spending amid economic uncertainty and higher interest rates affecting capital-intensive projects. This was partially offset by growth in nonwovens, precision agriculture, and packaging product lines, but the segment’s performance reflects broader market challenges in industrial end markets, particularly in polymer processing applications.
• NDSN reaffirmed its FY25 guidance that was initially provided in December 2024 within its 4Q24 earnings report. Specifically, NDSN had guided for EPS of $9.70-$10.50 and sales of $2.75-$2.87 bln at that time. With a 5% sequential decline in backlog following a strong Q3, the company remains confident in achieving these targets, contingent on the completion of the medical contract manufacturing business divestiture in 4Q25, which is expected to streamline operations and enhance EBITDA margins in the Medical and Fluid Solutions segment.

NDSN’s 13% adjusted EPS growth, driven by exceptional performance in the ATS segment, underscores its ability to capitalize on high-growth electronics markets while navigating challenges in its IPS segment. The new $500 mln share repurchase program, combined with a healthy balance sheet and strategic divestiture, positions NDSN to enhance EPS growth and deliver long-term shareholder value.