Nordson Posts 12% Revenue Jump in Q3

Key Points

• Revenue (GAAP) rose 12.1% to $741.5 million in Q3 FY2025. This surpassed GAAP revenue estimates for Q3 FY2025 and marked growth across key segments.

• Non-GAAP earnings per share reached $2.73. This represented a 13% increase year-over-year.

• Management now expects full-year sales for FY2025 to be just below the original guidance midpoint, but profitability above it.

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Nordson (NASDAQ:NDSN), a precision technology company specializing in dispensing and application equipment for adhesives, coatings, and industrial materials, announced its third-quarter results on August 20, 2025. The key news is that both GAAP revenue and non-GAAP earnings per share exceeded market expectations. GAAP revenue was $741.5 million, outpacing the $723.6 million estimate, and Non-GAAP EPS was $2.73, topping the $2.64 consensus. Compared to the prior year, the company achieved 12.1% GAAP revenue growth and a 13% rise in non-GAAP earnings per share. Management's assessment points to solid execution, with profitability running ahead of expectations, but noted a slightly more cautious outlook for full-year sales in FY2025, citing softer underlying demand in certain segments.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.

Business Overview and Focus Areas

Nordson develops and manufactures equipment and systems that precisely apply adhesives, coatings, sealants, biomaterials, and other materials. Its offerings serve a broad range of industries, including electronics, medical, packaging, and general manufacturing. About two-thirds of its revenue comes from international customers, reflecting an extensive global reach.

The heart of Nordson's business is its ability to deliver innovative, high-precision technology while addressing customer-specific and industry-wide needs. The company focuses on introducing new products, expanding into high-growth sectors like medical devices, and leveraging acquisitions to add scale. Key factors for success include technical innovation, global sales and support infrastructure, a strong reputation for customer service, and a culture that values employee development and operational discipline.

Quarter Highlights: Financial and Operational Performance

For the quarter, Net sales climbed 12.1% compared to the prior year, reaching $741.5 million (GAAP), with Non-GAAP EPS increasing 13% year over year. Both GAAP revenue and adjusted EPS (non-GAAP) were within the guidance given after the prior quarter. Organic growth, which strips out acquisition and currency effects to measure underlying performance, remained modest at 2% overall. Most of the headline revenue increase came from the integration of acquired businesses and currency translation, including the recent addition of Atrion's medical device platform.

By segment, Industrial Precision Solutions, which includes equipment for the dispensing and processing of adhesives and polymers, posted flat to slightly higher GAAP sales year over year (up 1%), but the segment posted a 2% organic decline. Management attributed this to persistent weak demand in polymer processing systems, partially offset by gains in other sub-categories. This segment's EBITDA margin remained stable at 37%.

The Medical and Fluid Solutions segment reported the fastest sales growth, climbing 32% year over year to $219 million (GAAP), with the bulk of the rise fueled by the acquisition of Atrion. Organic performance in this segment was flat but improved to 4% organic growth in Medical and Fluid Solutions when excluding the divestiture-bound contract manufacturing business. Management noted, "Our new employees again exceeded expectations and contributed to both sales and earnings results." Adjusted operating profit in this segment also improved, aided by efficiencies and higher contribution from new product lines, such as fluid control products for medical devices. EBITDA margin expanded to 38%.

The Advanced Technology Solutions segment, which provides electronics dispense equipment for uses like semiconductor packaging, grew sales by 17%. Notably, its organic growth rate was 15%, the highest in the company. Strong demand from electronics and semiconductor end markets fueled this performance, driving the segment's EBITDA margin up to 24% from 21% a year ago. Management credited product innovation, especially in its WaferSense sensor portfolio for electronics manufacturing, as a key driver.

Geographically, Asia Pacific showed the strongest sales gains, up 23.1% year over year with a 17.4% organic rise. This performance reflected robust demand in electronics and technology product markets. Americas and Europe delivered more modest top-line growth, with most gains in the Americas attributable to recent acquisitions and currency changes. Europe's organic growth was negative, offset by positive effects from currency and recent deals.

Free cash flow reached $226.4 million, up 58% from Q3 FY2024. Free cash flow conversion reached 180% of net income (non-GAAP), signaling strong capital efficiency. The company's board approved a new $500 million share repurchase program, and Nordson returned $218 million to shareholders via share buybacks year-to-date for the nine months ended Q3 FY2025, and Dividend payments reached $133 million for the first nine months of FY2025.

Gross margin, which measures the portion of revenue left after covering the direct costs to produce goods, slipped to 54.8 %, down one percentage point from a year ago. According to management, selling, general, and administrative costs rose slightly.

The quarter included progress on post-merger integration with Atrion, incremental demand in medical fluid products, and ongoing strength in electronics. Order backlogs decreased 5% sequentially, which management described as supporting achievement of full-year targets for FY2025, assuming completion of a planned divestiture in the medical contract manufacturing business in the fourth quarter. Inventory step-up amortization (an accounting item that can distort earnings post-acquisition) was zero, as in Q3 FY2024.

Looking Ahead: Guidance and Watch Points

Management updated its outlook for the remainder of fiscal 2025. Management now expects full-year sales to track slightly below the midpoint of its original FY2025 guidance range, while Full-year adjusted earnings per share are tracking slightly above the midpoint. This marks a subtle shift toward caution on revenue, while maintaining confidence in ongoing profitability.

Investors should monitor whether slow organic growth in core industrial businesses—particularly Industrial Precision Solutions, which saw a 2% organic sales decrease—can improve, and how the upcoming sale of the medical contract manufacturing unit may impact future results. The sequential decline in backlog of approximately 5% supports achieving the Company's original full-year sales and earnings guidance, assuming completion of the pending divestiture of the medical contract manufacturing business in the fourth quarter. Free cash flow and continued operational efficiency are positive watchpoints, but underlying sales trends bear close attention in coming periods.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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