ATS Corp /ATS (ATS)·Q3 2026 Earnings Summary
ATS Corporation Beats on Revenue and EPS as New CEO Outlines Margin Expansion Playbook
February 4, 2026 · by Fintool AI Agent
ATS Corporation (NYSE: ATS) delivered a solid Q3 FY2026, beating both revenue and EPS estimates while new CEO Doug Wright made his earnings call debut with a clear focus on margin expansion, operational discipline, and disciplined capital allocation. The stock rose ~4-7% on the results as the automation specialist demonstrated continued execution across life sciences, nuclear, and consumer products segments.
Did ATS Beat Earnings?
Yes — ATS beat on both revenue and EPS.
Revenue grew 16.7% YoY including 12.6% organic growth and a 4.1% FX tailwind. Life sciences revenue of C$391M was the second highest in company history.
Gross margin of 29.6% declined 111 basis points from last year due to program mix — specifically, the nuclear refurbishment work that's growing rapidly tends to carry lower gross margins but remains accretive to the bottom line.
Ask Fintool AI AgentHow Did the Stock React?
ATS shares are up approximately 4-7% in today's session, trading around $29.66 after opening at $27.81.* The stock is now near its 52-week high of $32.73 and up significantly from the 52-week low of $20.90.
The positive reaction reflects:
- Clean beat on revenue and EPS
- New CEO's clear articulation of margin expansion priorities
- Record backlog in Energy and Consumer Products
- Minimal tariff exposure confirmed
- Leverage now back within target range (3.0x)
*Values retrieved from S&P Global
What Did the New CEO Say?
Doug Wright, who joined as CEO in mid-January 2026, used his first earnings call to outline three key priorities:
1. Margin Expansion Through ABM Execution
"We recognize that margin expansion potential has not been realized, and I think we have a lot of runway in front of us. While I'm not ready to establish a new target for the organization yet, our team knows that we need to do better."
Wright identified opportunities across:
- ABM productivity tools — "just need to drive harder at executing"
- Commercial actions — "get more value for the important work that our teams do"
- Higher-margin applications — focusing R&D on technically challenging work
- Aftermarket mix — moved services teams into business units for end-to-end ownership
2. Focused End Market Strategy
"We're aligned to strong and growing end markets in the portfolio... I wouldn't say that my appointment brings any outlook change in terms of the end markets that we're focused on."
3. Disciplined Capital Deployment
"We're not going to change our level of discipline and focus and our committed leverage architecture... you should expect us to favor deploying capital toward M&A going forward."
What Changed From Last Quarter?
Key Changes:
- Leadership transition: New CEO Doug Wright, outgoing CFO Ryan McLeod, Anne Cybulski as Interim CFO
- Restructuring upsized: Total costs now expected at C$20M (up from prior estimate), payback unchanged
- Services embedded: Moved services business into operating units for better accountability and margin ownership
Order Backlog Breakdown
Total Backlog: ~C$2.1B | Trailing 12-month book-to-bill: 1.06x
Life Sciences (C$1.1B backlog)
The largest segment continues to diversify beyond GLP-1 auto-injectors:
- Radiopharma (Comecer business) — "a key growth market" with strong customer relationships
- GLP-1 auto-injectors — executing against healthy backlog as customers scale
- Visual inspection, med tech, mail order pharmacy — pipeline diversification underway
On GLP-1 sustainability concerns:
"Our customers are still being pretty consistent, that there's a lot of long-term opportunity in GLP-1s that we'll continue to support over time."
Energy/Nuclear (C$296M backlog, +87% YoY — Record)
- Life extension and refurbishment programs for CANDU reactors (18-24 month execution)
- Active engagement on SMR programs including fuel production, fuel handling, and modular fabrication
- New order in Q3 for new build reactor fuel fabrication
Consumer Products (C$321M backlog — Record)
- Large enterprise warehouse packaging automation program
- Leveraging global manufacturing and aftermarket capabilities
Food & Beverage (C$203M backlog)
- Strong funnel driven by brand recognition in tomato and fresh fruit processing
Transportation
- Remains muted; taking a "more targeted" approach
- Moving away from mega projects to focus on niches like battery assembly and hybrid engines
Ask Fintool AI AgentWhat Did Management Guide?
Q4 FY2026 Revenue: C$710-750M
Full Year FY2026:
- Revenue growth ~13.6% YTD, organic ~8% YTD
- Adjusted earnings from operations up 14% YTD
- CapEx guidance lowered to C$70-90M (from prior range)
Capital Allocation & Balance Sheet
With leverage back in the target range, Wright signaled increased appetite for M&A:
"We have a pretty rich pipeline across a number of our end markets... you should expect us to favor deploying capital toward M&A going forward."
The company emphasizes targets with:
- ABM margin improvement potential
- Aftermarket/services opportunity
- Technology fit within existing end markets
Tariff Exposure?
Minimal impact confirmed. Most exports from Canada to the US continue to be covered under USMCA. The global, decentralized operating model positions ATS to adapt and serve customers where capital is being deployed.
On reshoring tailwinds in life sciences:
"I wouldn't say that it's necessarily dependent on tariff dynamics. I think it's related to just the dramatic increase in demand for these therapeutics and just needing raw capacity."
Historical Beat/Miss Track Record
Data retrieved from S&P Global
ATS has had a mixed beat/miss record, but Q3 FY26 represents the first dual beat since Q1 FY25, potentially signaling improving execution under new leadership.
Key Risks & Concerns
- Gross margin pressure — Mix shift toward nuclear (lower GM but bottom-line accretive) may continue
- GLP-1 lumpiness — Order cycle volatility as customers work through capacity additions
- CFO transition — Ryan McLeod departing, Anne Cybulski serving as interim
- Transportation remains weak — Strategic decision to be more selective limits growth in this segment
- M&A execution risk — CEO signaling increased appetite for deals
Forward Catalysts
- Q4 FY26 earnings (May 2026) — First full quarter under Doug Wright's leadership
- New CFO announcement — Search underway
- SMR program progression — Early-stage investments could convert to meaningful orders
- M&A announcements — Pipeline described as "pretty rich"
- Margin targets — New framework expected from new CEO
Ask Fintool AI AgentThe Bottom Line
ATS Corporation delivered a clean Q3 FY26 with beats on both revenue and EPS, breaking a streak of mixed results. New CEO Doug Wright's first earnings call struck the right notes for investors: margin expansion is the priority, end market focus is unchanged, and capital deployment will resume with discipline now that leverage is back in range.
The stock's 4-7% reaction reflects relief that the leadership transition appears orderly and strategic priorities are clear. With life sciences diversifying beyond GLP-1, nuclear at record backlog, and the ABM toolkit ready for sharper execution, ATS is positioned to deliver on Wright's margin expansion ambitions — though investors will want to see the framework and targets in future quarters.
Related Links: