Executive Summary

Q2 FY2025 delivered revenue of $682.9M (+5% YoY) and adjusted EPS of $2.42, modestly above S&P Global consensus for both revenue ($671.9M*) and EPS ($2.36*) as ATS strength offset IPS weakness and medical interventional destocking .
EBITDA was $217.2M (32% margin), up 7% YoY on improving ATS incrementals and strong Atrion contribution; GAAP diluted EPS was $1.97 as restructuring and acquisition amortization drove a $0.45 adjustment to EPS .
Q3 FY2025 guidance: sales $710–$750M and adjusted EPS $2.55–$2.75; management stated this is “in line with the full-year guidance we set at the beginning of our fiscal year” ($2.75B–$2.87B sales; adj. EPS $9.70–$10.50) .
Stock catalysts: sustained ATS demand tied to AI/HPC semiconductor investments, margin-accretive portfolio actions (sale of medical contract manufacturing lines), easing medical destocking, and IPS sequential improvement as industrial coatings transition completes; tariffs are manageable but end-market demand sensitivity remains a watch item .

What Went Well and What Went Wrong

What Went Well

Electronics and semi strength drove ATS organic sales +18% YoY; EBITDA rose 43% to $40M (25% margin), reflecting cost actions and manufacturing optimization .
Atrion performed “above expectations,” supporting MFS sales +20% YoY with EBITDA up 22% to $77M (38% margin); backlog grew ~5% q/q .
CEO: “Our results outperformed the mid-point of our sales and earnings guidance… Operational excellence drove strong profit performance of 32% EBITDA” .
CFO: Tariff impact “not material” in Q2; leverage 2.4x with robust YTD FCF conversion of 116% and $85M share repurchases in the quarter .

What Went Wrong

IPS sales -8% YoY on weaker industrial coatings and polymer processing systems; segment EBITDA -12% to $114M (36% margin) from lower volumes .
Medical interventional organic sales declined ~10% as destocking persisted; organic MFS (ex. contract manufacturing) down ~4% YoY in Q2 .
Gross margin slipped YoY to 54.7% (from 56.2%); net interest expense increased to $26M due to Atrion-related debt; GAAP diluted EPS fell to $1.97 (vs. $2.05 prior year) .

Financial Results

Quarterly performance (chronologically ordered)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$744.5	$615.4	$682.9
GAAP Diluted EPS ($)	$2.12	$1.65	$1.97
Adjusted EPS ($)	$2.78	$2.06	$2.42
Gross Margin %	54.1%	54.6%	54.7%
EBITDA ($USD Millions)	$241.1	$188.1	$217.2
EBITDA Margin %	32%	31%	32%

Q2 YoY and vs. Estimates

Metric	Q2 2024	Q2 2025	Consensus (S&P Global)
Revenue ($USD Millions)	$650.6	$682.9	$671.9*
GAAP Diluted EPS ($)	$2.05	$1.97	n/a
Adjusted EPS ($)	$2.34	$2.42	$2.36*
EBITDA ($USD Millions)	$203.4	$217.2	n/a
EBITDA Margin %	31%	32%	n/a

Values marked with * retrieved from S&P Global.

Segment breakdown – Q2 FY2025

Segment	Sales ($M)	Operating Profit ($M)	EBITDA ($M)	EBITDA Margin %
Industrial Precision Solutions (IPS)	$318.8	$95.7	$113.5	36%
Medical & Fluid Solutions (MFS)	$202.8	$56.8	$76.5	38%
Advanced Technology Solutions (ATS)	$161.3	$31.6	$39.5	25%
Corporate	—	($15.3)	($12.4)	—
Total	$682.9	$168.8	$217.2	32%

Geographic breakdown – Q2 FY2025

Region	Sales ($M)	Total Variance vs. Q2’24
Americas	$292.5	(0.7%)
Europe	$172.5	(5.3%)
Asia Pacific	$218.0	+25.2%
Total	$682.9	+5.0%

KPIs

KPI	Q2 FY2025
Backlog growth q/q	~+5%
Net interest expense	$26.0M
Effective tax rate	~19%
Leverage (Net Debt/TTM EBITDA)	~2.4x
Net debt (approx.)	~$2.1B
Share repurchases	$85M in Q2
Dividend per share	$0.78 (Q3 dividend declared)
YTD Free Cash Flow	$240.9M
YTD FCF Conversion	116%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Sales ($M)	Q2 FY2025	$650–$690	Actual: $682.9	In range
Adjusted EPS ($)	Q2 FY2025	$2.30–$2.50	Actual: $2.42	In range
Sales ($M)	Q3 FY2025	—	$710–$750	New
Adjusted EPS ($)	Q3 FY2025	—	$2.55–$2.75	New
Sales ($B)	FY2025	$2.75–$2.87	“In line” reaffirmed qualitatively	Maintained
Adjusted EPS ($)	FY2025	$9.70–$10.50	“In line” reaffirmed qualitatively	Maintained
Dividend ($/sh)	Q3 FY2025	$0.78 (Q2 paid)	$0.78 (declared)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/HPC semiconductor cycle	Q4: Electronics demand improving at FY-end in ATS . Q1: ATS down YoY, footprint optimization actions .	Strong ATS demand across electronics dispense, optical, X-ray; growth concentrated with Asian customers; HPC/AI investments driving orders .	Strengthening, early cycle upswing
Tariffs/macro	Limited in prior docs; cautious FY2025 posture .	Tariffs “not material” in Q2; in‑region/for‑region model mitigates exposure; watch end‑market demand .	Manageable, monitored
Supply chain/manufacturing footprint	Q1: Industrial coatings plant transition to SC begun .	ICS transition substantially completed; expanded electronics manufacturing into India .	Positive execution
Medical interventional destocking	Q1: Destocking impacting MFS; backlog +$85M .	Destocking easing gradually; fluid components returning to growth; portfolio pruning (divestiture) .	Improving, normalization
Portfolio actions	Q4: Atrion integration progressing well .	Divest select medical contract manufacturing product lines (~4% of MFS YTD sales), ~100 bps margin accretion to MFS post‑sale .	Margin‑accretive refocus
Precision agriculture (ARAG)	Q4: Broad performance vs record comps .	Double‑digit organic growth; strength in Europe/South America; margins at/better than corporate even in downturn .	Recovering/growing

Management Commentary

CEO: “Strength in our electronics systems sales and steady growth in nonwovens systems, precision agriculture and medical fluid components… Atrion acquisition continues to perform above expectations… Operational excellence drove strong profit performance of 32% EBITDA” .
CFO: “Gross profit… a healthy and consistent 55% of sales… EBITDA… $217M or 32%… impact of tariffs was not material… net interest expense was $26M… effective tax rate of 19%” .
CEO on guidance: “Order entry and backlog support a third quarter performance that is in line with the full-year guidance we set at the beginning of our fiscal year” .
AI/HPC narrative: “Incredible investment… for computing power, be it for AI… at the heart… complex new generation chips… plays really well to Nordson” .
Portfolio: “Divest select product lines within our medical contract manufacturing business… accretive to our margins post‑sale” .

Q&A Highlights

ATS sustainability: Management sees strong order entry tied to AI/HPC with most growth from Asian customers; US onshoring is incremental upside; ATS is inherently lumpy but through‑cycle ~5% organic growth with structurally higher margins post cost actions .
MFS destocking: Destocking is reducing; fluid components returning to growth; recovery expected to be gradual rather than spiky; Atrion innovation pipeline supports growth .
Portfolio divestiture: Medical contract manufacturing sale ~4% of MFS YTD sales; expected to be ~100 bps accretive to MFS margins post‑sale .
Tariffs and pricing: Tariffs currently manageable; in‑region/for‑region mitigates exposure; pricing adjustments are ongoing, division‑led, focused on competitiveness and margin preservation .
IPS outlook: Industrial coatings and polymer processing remain headwinds (automotive); sequential improvement expected as SC plant transition completes; adhesive-related businesses steady .

Estimates Context

Q2 FY2025 results vs S&P Global consensus: Adjusted EPS $2.42 vs $2.36* (beat); revenue $682.9M vs $671.9M* (beat). Q1 had modest misses (adj. EPS $2.06 vs $2.08*; revenue $615.4M vs $639.4M*) .
Q3 FY2025 consensus ahead of print at the time: EPS $2.64*; revenue $723.6M* vs company guidance $710–$750M .
Values marked with * retrieved from S&P Global.

Implication: Estimate revisions likely drift upward for ATS‑linked names and MFS (Atrion), while IPS remains mixed; street models should reflect improving ATS margins and easing medical destock, with corporate tax rate ~19% and higher interest expense from acquisition debt .

Key Takeaways for Investors

ATS cycle tied to AI/HPC is accelerating, with Asia‑led demand and improving margins; this is the core near‑term growth driver and potential upside to H2 .
MFS mix is improving—Atrion outperformance and divestiture of lower‑margin medical contract manufacturing should lift segment margins ~100 bps post‑sale; destocking is easing .
IPS remains a drag YoY but should improve sequentially as the industrial coatings facility transition finishes; watch automotive exposure and polymer processing .
Profitability resilient: EBITDA margin at 32% with pricing discipline, decentralized execution, and in‑region/for‑region footprint mitigating tariffs; monitor end‑market demand sensitivity .
Cash returns continue: $85M buybacks and steady dividend ($0.78/sh), underpinned by strong FCF conversion; leverage at ~2.4x provides flexibility .
Q3 guidance aligns with full‑year targets; catalysts include continued ATS order strength, medical recovery, and execution on portfolio reshaping .
Risk checks: tariff policy shifts impacting customer capex, automotive demand softness in IPS, and timing lumpiness in ATS shipments .

Additional Relevant Press Releases (Q2 FY2025 window)

Dividend: Declared $0.78 per share for Q3 FY2025, payable July 3, 2025 (same as Q2) .
Electronics Solutions: Case study with PTI showing >99% underfill yields and ~30% cycle time reduction in panel‑level packaging for AI/HPC—supports ATS demand narrative .

NORDSON CORP (NDSN)·Q2 2025 Earnings Summary