ATS Reports Fourth Quarter and Fiscal 2025 Results

CAMBRIDGE, Ontario–(BUSINESS WIRE)–ATS Corporation (TSX and NYSE: ATS) («ATS» or the «Company») today reported its financial results for the three and twelve months ended March 31, 2025. All references to «$» or «dollars» in this news release are to Canadian dollars unless otherwise indicated.

Fourth quarter highlights:

• Previously disclosed preliminary fourth quarter 2025 results are unchanged, except that the before tax-impact of the EV customer settlement in the amount of $171.1 million is accounted for under IFRS as (i) a partial decrease to revenue in the quarter of $146.9 million (referred to as “EV customer settlement – revenue portion”); and (ii) a partial increase of SG&A of $24.2 million (referred to as “EV customer settlement – other»), as opposed to being fully reflected as an increase of SG&A in the Company’s previously disclosed preliminary fourth quarter 2025 results. Consequently, the Company presents an adjusted revenues¹ amount for the quarter, which adjusts for the EV customer settlement – revenue portion.
• Revenues were $574.2 million (adjusted revenues¹ of $721.1 million) compared to $791.5 million a year ago.
• Net income (loss) was $(68.9) million compared to $48.5 million a year ago.
• Adjusted net income¹ was $40.0 million, which excludes the impact of the Company’s EV customer settlement, compared to $64.3 million a year ago (see «Update on Large EV Customer»).
• Basic earnings (loss) per share were (70) cents, compared to 49 cents a year ago.
• Adjusted EBITDA¹ was $97.1 million compared to $115.8 million a year ago.
• Adjusted basic earnings per share¹ were 41 cents compared to 65 cents a year ago.
• Order Bookings² were $863 million, 9.1% higher compared to $791 million a year ago.
• Order Backlog² was $2,139 million, 19.3% higher compared to $1,793 million a year ago.

«Today, ATS reported fourth quarter results for fiscal ’25. This was another strong quarter for Order Bookings, which included both organic growth and meaningful contributions from our acquisitions,» said Andrew Hider, Chief Executive Officer. «With the EV customer matter behind us, our Order Backlog provides good revenue visibility as we enter fiscal ’26, with a clear focus on our growth strategy.»

Year-to-date highlights:

• Revenues were $2,533.3 million (adjusted revenues of $2,680.2 million) compared to $3,032.9 million a year ago.
• Net income (loss) was $(28.0) million compared to $194.2 million a year ago.
• Adjusted net income¹ was $144.4 million, which excludes the impact of the Company’s EV customer settlement, compared to $255.3 million a year ago.
• Basic earnings (loss) per share were $(0.29), compared to $1.98 a year ago.
• Adjusted EBITDA¹ was $368.9 million compared to $470.6 million a year ago.
• Adjusted basic earnings per share¹ were $1.47 compared to $2.61 a year ago.
• Order Bookings¹ were $3,305 million, 14.3% higher compared to $2,891 million a year ago.

Mr. Hider added: «As we close out fiscal ’25, the importance of our strategic end markets is clear. While ATS is not immune to uncertainties in the macroeconomic environment, we remain optimistic about our ability to drive profitable growth. Our global teams’ unwavering commitment to delivering on customer and shareholder value through their daily work, and the ABM provides ATS with a solid foundation as we enter fiscal ’26.»

Financial results

(In millions of dollars, except per share and margin data)

Recent Acquisitions

On July 24, 2024, the Company acquired Paxiom Group («Paxiom»). With headquarters in Montreal, Canada, Paxiom is a provider of primary, secondary, and end-of-line packaging machines in the food & beverage, cannabis, and pharmaceutical industries. Paxiom’s product line complements ATS’ packaging and food technology businesses and allows ATS to offer complete packaging and end-of-line solutions. The total purchase price paid (based on finalization of post-closing adjustments) was $146.4 million.

On August 30, 2024, the Company acquired all material assets of Heidolph Instruments GmbH & Co. KG and Hans Heidolph GmbH («Heidolph»), a leading manufacturer of premium lab equipment for the life sciences and pharmaceutical industries, with headquarters in Schwabach, Germany and facilities in the United States («U.S.»), South Korea and China. The purchase price paid in the second quarter of fiscal 2025 was $45.1 million ($30.3 million Euros).

Fourth quarter summary

Fourth quarter fiscal 2025 IFRS revenues were 27.5% or $(217.3) million lower than in the corresponding period a year ago, primarily reflecting a year-over-year decrease in organic revenue (excluding contributions from acquired companies and foreign exchange translation) of $120.2 million or 15.2%, and the $146.9 million impact from the one-time settlement with an EV customer, partially offset by revenues earned by acquired companies of $28.5 million. On an adjusted basis (excluding the impact of the EV customer settlement), revenues were 8.9% or $70.4 million lower than in the corresponding period a year ago. The following analysis is performed on adjusted revenues unless otherwise noted. Revenues generated from construction contracts decreased 19.4% or $97.0 million from the prior period, which included revenues relating to execution on large electric vehicle («EV») Order Bookings. This was partially offset by contributions from acquisitions of $6.3 million and the positive impact of foreign exchange translation. Revenues from services decreased 6.5% or $11.0 million, primarily due to timing of customer projects, partially offset by the positive impact of foreign exchange translation. Revenues from the sale of goods increased 30.8% or $37.6 million primarily due to revenues earned by acquired companies of $20.3 million, in addition to organic revenue growth on higher Order Backlog entering the period.

By market, revenues generated in life sciences increased $41.7 million or 11.1% year-over-year. This was primarily due to contributions from acquisitions totalling $19.4 million, in addition to organic revenue growth on higher Order Backlog entering the quarter and the positive impact of foreign exchange translation. Revenues generated in food & beverage increased $13.2 million or 13.2% from the corresponding period last year due to contributions from acquisitions of $9.1 million and the positive impact of foreign exchange translation. Revenues generated in consumer products increased $19.1 million or 27.2% year-over-year due to higher Order Backlog entering the quarter. Revenues in transportation decreased $153.8 million or 69.2% year-over-year, due to lower Order Backlog entering the quarter, as the prior year included several large EV projects. Revenues in energy increased $9.4 million or 38.7% year-over-year due to higher Order Backlog entering the quarter.

Net loss for the fourth quarter of fiscal 2025 was $68.9 million ((70) cents per share basic), compared to net income of $48.5 million (49 cents per share basic and diluted) for the fourth quarter of fiscal 2024. The decrease primarily reflected lower revenues, and higher selling, general and administrative («SG&A») costs and net finance costs partially offset by lower income tax expense. Adjusted basic earnings per share were 41 cents compared to 65 cents in the fourth quarter of fiscal 2024 (adjusted basic earnings per share is a non-IFRS financial measure — see «Non-IFRS and Other Financial Measures» and «Reconciliation of Non-IFRS Measures to IFRS Measures»).

Depreciation and amortization expense was $38.0 million in the fourth quarter of fiscal 2025, compared to $36.3 million a year ago.

EBITDA was $(75.6) million ((10.5)% EBITDA margin) in the fourth quarter of fiscal 2025 compared to $111.1 million (14.0% EBITDA margin) in the fourth quarter of fiscal 2024. EBITDA for the fourth quarter of fiscal 2025 included $3.5 million of restructuring charges, $0.9 million of incremental costs related to acquisition activity, $0.6 million of acquisition-related fair value adjustments to acquired inventories, $146.9 million of revenue impact from the one-time settlement with an EV customer, $24.2 million of SG&A impact from the one-time settlement with an EV customer, and $3.4 million of recoveries of stock-based compensation expenses due to revaluation. EBITDA for the corresponding period in the prior year included $6.6 million of restructuring charges, $4.6 million of incremental costs related to acquisition activity, $2.0 million of acquisition-related fair value adjustments to acquired inventories, and a $8.5 million recovery of stock-based compensation revaluation expenses. Excluding these costs, adjusted EBITDA was $97.1 million (13.5% adjusted EBITDA margin), compared to $115.8 million (14.6% adjusted EBITDA margin) for the corresponding period in the prior year. Lower adjusted EBITDA reflected lower revenues and increased SG&A expenses, partially offset by increased gross margin profitability. EBITDA and adjusted EBITDA are non-IFRS financial measures, and EBITDA margin and Adjusted EBITDA margin are non-IFRS ratios — see «Non-IFRS and Other Financial Measures» and «Reconciliation of Non-IFRS Measures to IFRS Measures».

Order Backlog Continuity

(In millions of dollars)

Order Bookings

Fourth quarter of fiscal 2025 Order Bookings were $863 million, a 9.1% year-over-year increase, reflecting 2.6% in organic Order Bookings growth, in addition to 4.0% of growth from acquired companies and 2.5% from positive foreign exchange translation impacts. Order Bookings from acquired companies totalled $31.5 million. By market, Order Bookings in life sciences increased compared to the prior-year period primarily due to $16.5 million of contributions from acquired companies, mostly from Heidolph, in addition to the positive impact of foreign exchange translation. Order Bookings in food & beverage decreased compared to the prior-year period due to timing of customer projects. Order Bookings in consumer products increased from the prior period primarily due to a large customer project award. Order Bookings in transportation decreased, as expected, compared to the prior-year period reflecting reduced investment in EV production by North American transportation customers as they respond to dynamics in their markets. Order Bookings in energy increased compared to the prior-year period primarily due to timing of customer projects.

Trailing twelve month book-to-bill ratio at March 31, 2025 was 1.23:1. Book-to-bill ratio, Order Bookings and organic Order Bookings growth are supplementary financial measures — see «Non-IFRS and Other Financial Measures.»

Backlog

At March 31, 2025, Order Backlog was $2,139 million, 19.3% higher than at March 31, 2024, primarily on account of higher Order Backlog in life sciences, consumer products, food & beverage and energy markets, partially offset by lower Order Backlog within the transportation market which included several large EV programs a year ago.

Outlook

The life sciences funnel remains strong, with a focus on strategic submarkets of pharmaceuticals, radiopharmaceuticals, and medical devices. Management continues to identify opportunities with both new and existing customers, including those who produce auto-injectors and wearable devices for diabetes and obesity treatments, contact lenses and pre-filled syringes, automated pharmacy solutions, as well as opportunities to provide life science solutions that leverage integrated capabilities from across ATS. Funnel activity in food & beverage remains strong. The Company continues to benefit from strong brand recognition within the global tomato processing, other soft fruits and vegetable processing industries, and there is continued interest in automated solutions within the food & beverage market more broadly. Funnel activity in consumer products is stable, although discretionary spending by consumers, influenced by factors such as inflationary pressures, may impact timing of some customer investments in the Company’s solutions. In transportation, the funnel consists of smaller opportunities relative to the size of the Order Bookings received throughout fiscal years 2023 and 2024 as North American industry participants continue to moderate new capacity investment to match end market demand and reduce platform costs, particularly in EV. See «Update on Large EV Customer» below. Funnel activity in energy remains strong and includes longer-term opportunities in the nuclear industry. The Company is focused on clean energy applications including solutions for the refurbishment of nuclear power plants, early participation in the small modular reactor market, and grid battery storage.

Funnel growth in markets where sustainability requirements are a focus for customers — including nuclear and grid battery storage, as well as consumer goods packaging — provide ATS with opportunities to use its capabilities to respond to customer sustainability standards and goals, including global and regional requirements to reduce carbon emissions. Customers seeking to de-risk or enhance the resiliency of their supply chains, address a shortage of skilled workers or combat higher labour costs also provide future opportunities for ATS to pursue. Management believes that the underlying trends driving customer demand for ATS solutions, including rising labour costs, labour shortages, production onshoring or reshoring and the need for scalable, high-quality, energy-efficient production remain favourable.

Order Backlog of $2,139 million is expected to help mitigate some of the impact of quarterly variability in Order Bookings on revenues in the short term. The Company’s Order Backlog includes several large enterprise programs that have longer periods of performance and therefore longer revenue recognition cycles, particularly in life sciences. In the first quarter of fiscal 2026, management expects to generate revenues in the range of $680 million to $730 million. This estimate is calculated each quarter based on management’s assessment of project schedules across all customer contracts in Order Backlog, expectations for faster-turn product and services revenues, expected delivery timing of third-party equipment and operational capacity.

Supplier lead times are generally acceptable across key categories; however, inflationary or other cost increases (see «Tariffs»), and price and lead-time volatility may continue to disrupt the timing and progress of the Company’s margin expansion efforts and affect revenue recognition. Over time, achieving management’s margin target assumes that the Company will successfully implement its margin expansion initiatives, and that such initiatives will result in improvements to its adjusted earnings from operations margin that offset these shorter-term pressures (see «Forward-Looking Statements» for a description of the risks underlying the achievement of the margin target in future periods).

The timing and geographies of customer capital expenditure decisions on larger opportunities can cause variability in Order Bookings from quarter to quarter (see «Tariffs»). Revenues in a given period are dependent on a combination of the volume of outstanding projects the Company is contracted to perform, the size and duration of those projects, and the timing of project activities including design, assembly, testing, and installation. Given the specialized nature of the Company’s offerings, the size and scope of projects vary based on customer needs. The Company seeks to achieve revenue growth organically and by identifying strategic acquisition opportunities that provide access to attractive end-markets and new products and technologies and deliver hurdle-rate returns. After-sales revenues and reoccurring revenues, which ATS defines as revenues from ancillary products and services associated with equipment sales, and revenues from customers who purchase non-customized ATS product at regular intervals, are expected to provide some balance to customers’ capital expenditure cycles.

The Company continues to target improvements in non-cash working capital. Over the long-term, the Company expects to continue investing in non-cash working capital to support growth, with fluctuations expected on a quarter-over-quarter basis. The Company’s long-term goal is to maintain its investment in non-cash working capital as a percentage of annualized revenues below 15%. The Company expects that continued cash flows from operations, together with cash and cash equivalents on hand and credit available under operating and long-term credit facilities will be sufficient to fund its requirements for investments in non-cash working capital and capital assets, and to fund strategic investment plans including some potential acquisitions. Acquisitions could result in additional debt or equity financing requirements for the Company. Non-cash working capital as a percentage of adjusted revenues is a non-IFRS ratio — see «Non-IFRS and Other Financial Measures.»

The Company continues to make progress in line with its plans to integrate acquired companies, and expects to realize cost and revenue synergies consistent with announced integration plans.

Reorganization Activities

In the fourth quarter of fiscal 2025, restructuring expenses of $3.5 million were recorded in relation to the Company’s previously disclosed reorganization activities. For the year ended March 31, 2025, total costs of $24.0 million were recorded.

Update on Large EV Customer

The Company recently announced that it has entered into a settlement agreement (the «Agreement») with an EV customer with respect to the previously disclosed outstanding payments owed by such customer. Under the terms of the Agreement, the Company expects to receive payment from the customer of U.S. $134.75 million (approximately $194 million at the year-end exchange rate) in the first quarter of fiscal 2026, with no further work required by the Company on these projects. This settlement results from discussions which were originally disclosed in the Company’s management’s discussion and analysis for the three and six months ended September 29, 2024 (the «MD&A»). The Company determined that it was willing to settle its disagreement with this customer based on a number of factors, including but not limited to, the benefit of receiving a cash payment in the near term, particularly in light of the volatility and uncertainty of the overall global macro-economic environment and the impact of such environment on the automotive sector, in addition to previously announced reductions to automakers’ EV end-market demand.

In light of the Agreement, in the Company’s annual audited consolidated financial statements for the year ended March 31, 2025 (i) all previous amounts related to the program with the customer, including accounts receivable, contract assets, and inventories have been written-off accordingly, (ii) the settlement amount has been reflected in accounts receivable, and (iii) a reduction to net income of $129 million (approximately $171 million before income taxes) related to the Agreement has been reflected. The before tax-impact of the EV customer settlement is accounted for under IFRS as (i) a partial decrease to revenue in the quarter (referred to as “EV customer settlement – revenue portion”); and (ii) a partial increase of selling, general and administrative («SG&A») costs.

Tariffs

With respect to tariffs by the U.S. on goods from various jurisdictions globally, and related international responses, management continues to actively monitor the situation and is seeking to mitigate risks where possible. In the current environment, while some customers are evaluating capital spending, particularly within the laboratory research space, which is reliant on external funding, management has not seen any material or quantifiable impact on Order Bookings or outlook to date. Supply chain impacts have been largely mitigated through alternative sourcing, along with pricing strategies. ATS’ global footprint and decentralized operating model, along with ABM tools, provide some flexibility to address potential disruptions over the longer term; however, the Company could see impacts over time arising from unmitigated costs related to the tariffs themselves, potential supplier price increases, and the timing and geographies of customers’ capital spend. The Company’s equipment and product revenues from its Canadian and European operations being sold into the U.S. has represented just over 20% of the Company’s total revenues for the year ended March 31, 2025. See «Risk Factors – International trade risk» in the Company’s fiscal 2025 Annual Information Form.

Internal Controls Requirements

As a dual listed Company in both Canada and the United States (including the Company’s May 2023 U.S. listing and Initial Public Offering on the NYSE), the Company under the U.S. Sarbanes-Oxley Act 2002, as amended, is required to maintain effective disclosure controls and procedures and internal control over financial reporting, and for the first time is required to furnish a report by management on internal control over financial reporting which is required to be accompanied by an attestation report by the Company’s auditor. In completing this work this year, the Company concluded that such controls were not effective as of March 31, 2025 as described in the Company’s fiscal 2025 MD&A.

Contacts

For more information, contact:
David Galison

Head of Investor Relations

ATS Corporation

730 Fountain Street North

Cambridge, ON, N3H 4R7

(519) 653-6500

dgalison@atsautomation.com

For general media inquiries, contact:
Matthew Robinson

Director, Corporate Affairs & Communications

ATS Corporation

730 Fountain Street North

Cambridge, ON, N3H 4R7

(519) 653-6500

mrobinson@atsautomation.com

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