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What changed in NOVANTA INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NOVANTA INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+611 added−598 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-25)

Top changes in NOVANTA INC's 2025 10-K

611 paragraphs added · 598 removed · 476 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

58 edited+13 added−22 removed95 unchanged
Biggest changeThe following table shows the external revenues, gross profit margin and operating profit for each of the segments for the years ended December 31, 2024, December 31 2023, and December 31, 2022 (dollars in millions): 2024 2023 2022 Revenue Gross Profit Margin Operating Profit Revenue Gross Profit Margin Operating Profit Revenue Gross Profit Margin Operating Profit Automation Enabling Technologies $ 490.6 47.9 % $ 106.4 $ 499.2 47.0 % $ 96.3 $ 534.1 45.9 % $ 105.4 Medical Solutions $ 458.6 41.4 % $ 57.5 $ 382.4 44.7 % $ 63.3 $ 326.8 42.5 % $ 46.9 See Note 18 to Consolidated Financial Statements for additional financial information about our reportable segments.
Biggest changeThe following table shows the external revenues, gross profit margin and operating profit for each of the segments for the year ended December 31, 2025 (dollars in millions): Revenue Gross Profit Margin Operating Profit Automation Enabling Technologies $ 500.8 47.8 % $ 114.5 Medical Solutions $ 479.8 41.6 % $ 51.2 See Note 19 to Consolidated Financial Statements for additional financial information about our reportable segments.
However, certain medical devices in compliance with: (1) the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028; or (2) the EU Medical Devices Regulation can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2030.
However, certain medical devices in compliance with: (1) the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028; or (2) the EU Medical Devices Regulation can continue to be placed on the Great Britain market until June 30, 2030.
Risk Factors—Risks Relating to Our Business— We are subject to extensive and dynamic medical device regulations, which may impede or hinder the approval, certification or sale of our products and, in some cases, may ultimately result in an inability to obtain approval or certification of certain products or may result in the recall or seizure of previously approved or certified products.” 13 Other Healthcare Laws and Regulations In the United States and other jurisdictions where we operate our business, there are healthcare laws and regulations that constrain our business operations, including our sales, marketing and promotional activities, and that limit the kinds of arrangements we may have with customers, physicians, healthcare entities and others in a position to purchase or recommend our products or other products or services we may develop and commercialize.
Risk Factors—Risks Relating to Our Business— We are subject to extensive and dynamic medical device regulations, which may impede or hinder the approval, certification or sale of our products and, in some cases, may ultimately result in an inability to obtain approval or certification of certain products or may result in the recall or seizure of previously approved or certified products.” Other Healthcare Laws and Regulations In the United States and other jurisdictions where we operate our business, there are healthcare laws and regulations that constrain our business operations, including our sales, marketing and promotional activities, and that limit the kinds of arrangements we may have with customers, physicians, healthcare entities and others in a position to purchase or recommend our products or other products or services we may develop and commercialize.
In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), and the General Data Protection Regulation (“GDPR”), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), and the General Data Protection Regulation (“GDPR”), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance 12 efforts.
For a further discussion of the importance of risks associated with our intellectual property rights, see applicable risk factors under Item 1A of this Annual Report on Form 10-K. Human Capital We believe that our employees are our most important asset. The Chief Human Resources Officer (“CHRO”) is responsible for developing and executing our human capital strategy.
For a further discussion of the importance of risks associated with our intellectual property rights, see applicable risk factors under Item 1A of this Annual Report on Form 10-K. 6 Human Capital We believe that our employees are our most important asset. The Chief Human Resources Officer (“CHRO”) is responsible for developing and executing our human capital strategy.
In accordance with its recently extended transitional 11 provisions, both (i) devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 and (ii) legacy devices lawfully placed on the EU market after May 26, 2021 in accordance with the EU Medical Devices Regulation transitional provisions may generally continue to be made available on the market or put into service, provided that the requirements of the transitional provisions are fulfilled.
In accordance with its recently extended transitional provisions, both (i) devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 and (ii) legacy devices lawfully placed on the EU market after May 26, 2021 in accordance with the EU Medical Devices Regulation transitional provisions may generally continue to be made available on the market or put into service, provided that the requirements of the transitional provisions are fulfilled.
A serious incident is any malfunction or deterioration in the characteristics or performance of a device on the market (e.g., inadequacy in the information supplied by the manufacturer, undesirable side-effect), which, directly or indirectly, might lead to either the death or serious 12 deterioration of the health of a patient, user, or other persons, or to a serious public health threat.
A serious incident is any malfunction or deterioration in the characteristics or performance of a device on the market (e.g., inadequacy in the information supplied by the manufacturer, undesirable side-effect), which, directly or indirectly, might lead to either the death or serious deterioration of the health of a patient, user, or other persons, or to a serious public health threat.
However, we also currently market certain Class II medical device products independently that are subject to these requirements. 510(k) Marketing Clearance Pathway To obtain 510(k) clearance, we must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market.
However, we also currently market certain Class II medical device products independently that are subject to these requirements. 8 510(k) Marketing Clearance Pathway To obtain 510(k) clearance, we must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market.
If satisfied that a relevant product conforms to the relevant essential requirements, a notified body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU.
If satisfied that a relevant product 10 conforms to the relevant essential requirements, a notified body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU.
Certain countries also mandate implementation of commercial compliance programs. In the EU, regulatory authorities have the power to carry out announced and, if necessary, unannounced inspections of companies, as well as suppliers and/or sub-contractors and, where necessary, the facilities of professional users.
Certain countries also mandate implementation of commercial compliance programs. 11 In the EU, regulatory authorities have the power to carry out announced and, if necessary, unannounced inspections of companies, as well as suppliers and/or sub-contractors and, where necessary, the facilities of professional users.
In the United States, the Federal Food, Drug and Cosmetic Act (the “FDCA”) and related regulations govern the conditions of safety, efficacy, clearance, approval, manufacturing, 9 quality system requirements, labeling, packaging, distribution, storage, recordkeeping, reporting, marketing, advertising, and promotion of medical devices.
In the United States, the Federal Food, Drug and Cosmetic Act (the “FDCA”) and related regulations govern the conditions of safety, efficacy, clearance, approval, manufacturing, quality system requirements, labeling, packaging, distribution, storage, recordkeeping, reporting, marketing, advertising, and promotion of medical devices.
The Chief 7 Executive Officer (“CEO”) and the CHRO regularly update our board of directors on the operation and status of these human capital activities, including, but not limited to, talent management, talent development, and succession planning.
The Chief Executive Officer (“CEO”) and the CHRO regularly update our board of directors on the operation and status of these human capital activities, including, but not limited to, talent management, talent development, and succession planning.
We utilize survey feedback mechanisms to measure employee engagement and organizational health. This enables us to gain insight into our current status and identify areas where we can improve. We have conducted six surveys of our entire employee population since 2018. We compare our employee engagement and organizational health scores against benchmark populations within our survey vendor's database.
We utilize survey feedback mechanisms to measure employee engagement and organizational health. This enables us to gain insight into our current status and identify areas where we can improve. We have conducted seven surveys of our entire employee population since 2018. We compare our employee engagement and organizational health scores against benchmark populations within our survey vendor's database.
Item 1. Busi ness Overview Novanta Inc. and its subsidiaries (collectively referred to as the “Company”, “Novanta”, “we”, “us”, “our”) is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage.
Item 1. Busi ness Overview Novanta Inc. and its subsidiaries (collectively referred to as the “Company”, “Novanta”, “we”, “us”, “our”) is a leading global supplier of core technology solutions that give medical, life science, and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage.
Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of the Quality System Regulation (the “QSR”), facility registration and product listing, reporting of adverse medical events, and truthful and non-misleading labeling, advertising, and promotional materials.
Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of the Quality Management System Regulation (the “QMSR”), facility registration and product listing, reporting of adverse medical events, and truthful and non-misleading labeling, advertising, and promotional materials.
Our failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products, which would have a material adverse effect on our business.
Our failure to maintain compliance with QMSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products, which would have a material adverse effect on our business.
The following table summarizes significant acquisitions since 2014: Company Year of Acquisition Total Purchase Price (in millions) Motion Solutions Parent Corp. 2024 $ 192.0 MPH Medical Devices S.R.O. 2022 $ 22.6 ATI Industrial Automation, Inc. 2021 $ 223.9 Schneider Electric Motion USA, Inc. 2021 $ 118.6 ARGES GmbH 2019 $ 73.2 Zettlex Holdings Limited 2018 $ 32.0 Laser Quantum Limited (24%) (1) 2018 $ 45.1 Laser Quantum Limited (35%) 2017 $ 31.1 W.O.M.
The following table summarizes significant acquisitions since 2017: Company Year of Acquisition Total Purchase Price (in millions) Keonn Technologies, S.L. 2025 $ 75.1 Motion Solutions Parent Corp. 2024 $ 192.0 MPH Medical Devices S.R.O. 2022 $ 22.6 ATI Industrial Automation, Inc. 2021 $ 223.9 Schneider Electric Motion USA, Inc. 2021 $ 118.6 ARGES GmbH 2019 $ 73.2 Zettlex Holdings Limited 2018 $ 32.0 Laser Quantum Limited (24%) (1) 2018 $ 45.1 Laser Quantum Limited (35%) 2017 $ 31.1 W.O.M.
We combine deep proprietary technology expertise and competencies in precision medicine, precision manufacturing, robotics and automation, and advanced surgery with a proven ability to solve complex technical challenges. This enables us to engineer core components and sub-systems that deliver extreme precision and performance, tailored to our customers' demanding applications.
We combine deep proprietary technology expertise and competencies in precision medicine, precision manufacturing, robotics and automation, and advanced surgery with a proven ability to solve complex technical challenges. This enables us to engineer proprietary technology solutions that deliver extreme precision and performance, tailored to our customers' demanding applications.
These include: • establishment registration and device listing with the FDA; 10 • QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; • labeling and marketing regulations, which require that promotion is truthful, not misleading and fairly balanced, provide adequate directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; • FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; • clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of the cleared devices; • medical device reporting regulations, which require that a manufacturer report to the FDA if a device that it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; • correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; • requirements governing Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data on the device.
These include: • establishment registration and device listing with the FDA; • QMSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; • labeling and marketing regulations, which require that promotion is truthful, not misleading and fairly balanced, provide adequate directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; • FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; • clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of the cleared devices; • medical device reporting regulations, which require that a manufacturer report to the FDA if a device that it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; • correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; • requirements governing Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data on the device. 9 Our manufacturing processes are required to comply with the applicable portions of the QMSR, which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use.
Our employee satisfaction score in the most recent survey in February 2024 was 95% of the benchmark score. This is an improvement of 5 percentage points compared to 2023. Following each survey cycle, we review the results with our teams across the Company and develop specific action plans based on the feedback we receive.
Our employee satisfaction score in the most recent survey in February 2025 was 97% of the benchmark score. This is an improvement of 2 percentage points compared to 2024. Following each survey cycle, we review the results with our teams across the Company and develop specific action plans based on the feedback we receive.
Backlog As of December 31, 2024 and December 31, 2023, our consolidated backlog was approximately $445.5 million and $473.1 million, respectively. Most orders included in backlog represent open orders for products and services that, based on management’s projections, have a reasonable probability of being delivered over the subsequent twelve months.
Backlog As of December 31, 2025 and December 31, 2024, our consolidated backlog was approximately $481.2 million and $445.5 million, respectively. Most orders included in backlog represent open orders for products and services that, based on management’s projections, have a reasonable probability of being delivered over the subsequent twelve months.
As of December 31, 2024, we employed approximately 3,000 people, of which approximately 41% were in the United States, 50% in Europe, and 9% in Asia. We win with our customers by delivering new technology innovations through our engineering teams of approximately 650 employees. We believe that our employees have a meaningful role in helping us develop our culture.
As of December 31, 2025, we employed approximately 3,000 people, of which approximately 36% were in the United States, 55% in Europe, and 9% in Asia. We win with our customers by delivering new technology innovations through our engineering teams of approximately 600 employees. We believe that our employees have a meaningful role in helping us develop our culture.
Revenue from our products sold to the medical market is generally affected by hospital, life science, and other healthcare provider capital spending, growth rates of surgical procedures, changes in regulatory requirements and laws, demand levels for life science automation technology, aggregation of purchasing by healthcare networks, changes in technology requirements, timing of OEM customers’ product development and new product launches, changes in customer or patient preferences, and general demographic trends. 5 Advanced Industrial Market For the year ended December 31, 2024, the advanced industrial market accounted for approximately 45% of our revenue.
Revenue from our products sold to the medical market is generally affected by hospital, life science, and other healthcare provider capital spending, growth rates of surgical procedures, changes in regulatory requirements and laws, demand levels for life science automation technology, aggregation of purchasing by healthcare networks, changes in technology requirements, timing of OEM customers’ product development and new product launches, changes in customer or patient preferences, and general demographic trends.
Products offered by our Medical Solutions segment are primarily manufactured at facilities in Irvine, California; Mukilteo, Washington; Syracuse, New York; Ludwigsstadt, Germany; Manchester, United Kingdom, and Přelouč, Czech Republic. The majority of our products are produced in manufacturing operations certified under either ISO 9001 certification or ISO 13485 certification. All of our manufacturing operations have been certified under ISO 14001.
Products offered by our Medical Solutions segment are primarily manufactured at facilities in Irvine, California; Syracuse, New York; Ludwigsstadt, Germany; Manchester, United Kingdom; Barcelona, Spain; and Přelouč, Czech Republic. 5 The majority of our products are produced in manufacturing operations certified under either ISO 9001 certification or ISO 13485 certification.
In addition, our reports and other information are filed with securities commissions or other similar authorities in Canada and are available over the Internet at https://www.sedar.com.
In addition, our reports and other information are filed with securities commissions or other similar authorities in Canada and are available over the Internet at https://www.sedarplus.ca/home/ .
Such regulations went into effect in the European Union (“EU”) in 2006 (“The Restriction of Hazardous Substances Directive” (“RoHS”)) and in 2007 (“Registration, Evaluation, Authorisation and Restriction of Chemicals” (“REACH”)), and in China in 2007 (“Management Methods for Controlling Pollution Caused by Electronic Information Products Regulation” (“China-RoHS”)).
Those standards may impact the material composition of our products entering specific markets. Such regulations went into effect in the European Union (“EU”) in 2006 (“The Restriction of Hazardous Substances Directive” (“RoHS”)) and in 2007 (“Registration, Evaluation, Authorisation and Restriction of Chemicals” (“REACH”)), and in China in 2007 (“Management Methods for Controlling Pollution Caused by Electronic Information Products Regulation” (“China-RoHS”)).
Machine Vision Medical and Advanced Industrial JADAK Camera-based machine vision products and solutions used for image analysis within medical devices and advanced industrial applications. RFID Technologies Medical and Advanced Industrial JADAK, ThingMagic RFID technologies via High-Frequency (HF) and Ultra-High Frequency (UHF) readers, writers and antennas for applications such as surgical part tracking and counterfeit detection.
Imaging, Identification and RFID Solutions Camera-based machine vision products and solutions used for image analysis within medical devices and advanced industrial applications, RFID technologies via High-Frequency (HF) and Ultra-High Frequency (UHF) readers, writers and antennas for applications such as surgical part tracking and counterfeit detection, and embedded and handheld data collection products for barcode identification.
The QSR also requires, among other things, maintenance of a device master file, device history file, and a complaints file. As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.
The QMSR also requires, among other things, maintenance of a medical device file. As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.
However, under the terms of the Ireland/Northern Ireland Protocol, the EU Medical Devices Regulation applies to Northern Ireland. Furthermore, on December 16, 2024, the UK government published an amendment to the UK Medical Devices Regulations to clarify and strengthen the post-market surveillance requirements for medical devices in Great Britain.
However, under the terms of the Ireland/Northern Ireland Protocol, the EU Medical Devices Regulation applies to Northern Ireland. Furthermore, on June 16, 2025, an amendment to the UK Medical Devices Regulations became applicable which aims to clarify and strengthen the post-market surveillance requirements for medical devices in Great Britain.
Strategy Our strategy is to drive sustainable, profitable growth through short-term and long-term initiatives, including: • disciplined focus on our diversified business model of providing components and sub-systems to long life-cycle OEM customer platforms in attractive medical and advanced industrial niche markets; • improving our business mix to increase medical sales as a percentage of total revenue by: - introducing new products aimed at attractive medical applications, such as minimally invasive and robotic surgery, ophthalmology, patient monitoring, drug delivery, clinical laboratory testing and life science equipment; 1 - deepening our key account management relationships with and driving cross selling of our product offerings to leading medical equipment manufacturers; and - pursuing complementary medical technology acquisitions; • increasing our penetration of high growth advanced industrial applications, such as laser materials processing, intelligent end-of-arm robotic technology solutions, robotics, laser additive manufacturing, automation and metrology, by working closely with OEM customers to launch application specific products that closely match the requirements of each application; • broadening our portfolio of enabling proprietary technologies and capabilities through increased investment in new product development, and investments in application development to further penetrate existing customers, while expanding the applicability of our solutions to new markets; • broadening our product and service offerings through the acquisition of innovative and complementary technologies and solutions in medical and advanced industrial technology applications; • expanding sales and marketing channels to reach new target customers; • improving our existing operations to expand profit margins and improve customer satisfaction by implementing lean manufacturing principles, strategic sourcing across our major production sites, and optimizing and limiting the growth of our fixed cost base; and • attracting, retaining, and developing world-class talented and motivated employees.
Strategy Our strategy is to drive sustainable, profitable growth through short-term and long-term initiatives, including: • disciplined focus on our diversified business model of providing proprietary technology solutions to long life-cycle OEM customer platforms in attractive medical and advanced industrial niche markets; • improving our business mix to increase medical sales as a percentage of total revenue by: - introducing new products aimed at attractive medical applications, such as minimally invasive and robotic surgery, ophthalmology, patient monitoring, drug delivery, clinical laboratory testing and life science equipment; 1 - deepening our key account management relationships with and driving cross selling of our product offerings to leading medical equipment manufacturers; and - pursuing complementary medical technology acquisitions; • increasing our penetration of high growth advanced industrial applications, such as laser materials processing, intelligent end-of-arm robotic technology solutions, robotics, laser additive manufacturing, automation and metrology, by working closely with OEM customers to launch application specific products that closely match the requirements of each application; • broadening our portfolio of enabling proprietary technologies and capabilities through increased investment in new product development, and investments in application development to further penetrate existing customers, while expanding the applicability of our solutions to new markets; • broadening our product and service offerings through the acquisition of innovative and complementary technologies and solutions in medical and advanced industrial technology applications; • expanding sales and marketing channels to reach new target customers; • strengthening our operational performance to expand profit margins and enhance customer satisfaction by deploying lean manufacturing principles and advancing strategic sourcing initiatives across our major production sites, while regionalizing our manufacturing footprint a establishing manufacturing centers of excellence to achieve greater efficiency and reduce overall production complexity; and • advancing a people first culture that promotes a growth mindset, cohesive and engaged teams, and continuous employee development to enable long‑term organizational excellence.
Additional legislation is expected to be implemented in 2026 and aims to enable greater international collaboration and practices, with more patient-centered, proportionate requirements for medical devices which are responsive to technological advances.
A draft of additional legislation in relation to the pre-market requirements for medical devices in Great Britain is expected in 2026 and aims to enable greater international collaboration and practices, with more patient-centered, proportionate requirements for medical devices which are responsive to technological advances.
We have sales and service centers located in the United States, Europe and Asia. To support our sales efforts, we maintain and continue to invest in a number of application centers around the world, where our application experts work closely with customers on integrating and using our solutions in their equipment.
Our local sales, applications, and service teams and our distributors work closely with our customers to ensure customer satisfaction with our products. To support our sales efforts, we maintain and continue to invest in a number of application centers around the world, where our application experts work closely with customers on integrating and using our solutions in their equipment.
This amendment will come into force on June 16, 2025 and aims to facilitate greater traceability of incidents and trends enabling the MHRA to act swiftly when needed to address safety issues and support the entire health system in better protecting patients.
It also aims to facilitate greater traceability of incidents and trends enabling the MHRA to act swiftly when needed to address safety issues and support the entire health system in better protecting patients.
The segment sells the majority of these products directly, utilizing a highly technical sales force, and also sells some indirectly, through resellers and distributors. 3 The Automation Enabling Technologies segment is comprised of the following eight product lines: Product Lines Key End Markets Brand Names Description Laser Beam Delivery Components Advanced Industrial and Medical Cambridge Technology Galvanometer and polygon optical scanning components that provide precise control and delivery of laser beams through motorized manipulation of mirrors and optical elements and are integrated by OEM manufacturers with their controlling hardware and software.
The segment sells the majority of these products directly, utilizing a highly technical sales force, and also sells some indirectly, through resellers and distributors. 3 The Automation Enabling Technologies segment is comprised of the following product lines: Product Lines Description Laser Beam Steering and Scanning Solutions Optical scanning and scan heads that provide precise control and delivery of laser beams through motorized manipulation of mirrors and optical elements integrated by OEM manufacturers.
World of Medicine GmbH 2017 $ 134.9 JADAK LLC 2014 $ 94.8 (1) After the acquisition of the remaining (approximately 24%) noncontrolling interests of Laser Quantum Limited (“Laser Quantum”) in September 2018, we owned 100% of the outstanding equity of Laser Quantum.
World of Medicine GmbH 2017 $ 134.9 (1) After the acquisition of the remaining (approximately 24%) noncontrolling interests of Laser Quantum Limited (“Laser Quantum”) in September 2018, we owned 100% of the outstanding equity of Laser Quantum. Segments Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer.
Advanced industrial applications include additive manufacturing, packaging converting, laser marking, micromachining and metrology. Medical applications include optical coherence tomography imaging, microscopy, and laser-based vision correction.
Advanced industrial applications include additive manufacturing, packaging converting, laser marking, micromachining and metrology. Medical applications include optical coherence tomography imaging, microscopy, and laser-based vision correction. Laser Sources Diode, Diode-pumped solid-state lasers and CO2 lasers. Applications include particle detection metrology, additive manufacturing, packaging converting, laser marking, micromachining, and medical applications in dental and dermatology.
The festival created greater awareness and aided in membership recruitment to drive greater inclusion and belonging. Compensation and Benefits We strive to provide market competitive compensation, benefits and services that help meet the varied needs of our employees.
Compensation and Benefits We strive to provide market competitive compensation, benefits and services that help meet the varied needs of our employees.
Medical Market For the year ended December 31, 2024, the medical market accounted for approximately 55% of our revenue.
Advanced Industrial Market For the year ended December 31, 2025, the advanced industrial market accounted for approximately 47% of our revenue.
We also use distributors, including manufacturers’ representatives, to either augment our selling effort or serve a local market where we have no direct sales force. Our local sales, applications, and service teams and our distributors work closely with our customers to ensure customer satisfaction with our products.
Marketing, Sales and Distribution We sell our products globally, primarily through our direct sales force. We also use distributors, including manufacturers’ representatives, to either augment our selling effort or serve a local market where we have no direct sales force.
Intelligent robotic end-of-arm technology solutions Advanced Industrial and Medical ATI Robotic accessories and end-of-arm tooling, including tool changers, multi-axis force torque sensors, utility couplers, material removal tools, collision sensors, and compliance devices. Applications include advanced industrial and medical robotics. Air Bearing Spindles Advanced Industrial Westwind High-speed and precision air bearings and air bearing spindles.
Robotic end-of-arm tooling Robotic accessories and end-of-arm tooling, including tool changers, multi-axis force torque sensors, collision sensors, and compliance devices. Applications include advanced industrial and automotive robotics. Air Bearing Spindles High-speed and precision air bearings and air bearing spindles. Applications include printed circuit board (“PCB”) manufacturing, and semiconductor manufacturing equipment.
Video Processing and Streaming and Capture Medical NDS, Med X Change Imaging management, including real-time distribution, documentation, control, recording, and streaming for surgical applications. High definition wireless transmission of video in minimally invasive surgical equipment. Touch Panel Displays Medical and Advanced Industrial Reach Technology Embedded capacitive and resistive touch panel technology that delivers high-performance solutions.
Integrated operating room technologies Imaging management solutions for real-time distribution, documentation, control, recording, and streaming in surgical applications, high definition wireless transmission of video in minimally invasive surgical equipment, and embedded capacitive and resistive touch panel technology for high-performance user interfaces.
Safety and Wellbeing of Our Employees We provide mandatory safety training in our facilities, which are designed to focus on empowering our employees with the knowledge and tools they need to make safe choices and to mitigate risks. In further support of our employees, we offer a global health and wellness resource center, “NovantaWELL”.
In addition to Novanta University, we utilize our Novanta Growth System, which provides processes, tools, and training with a focus on continuous improvement. 7 Safety and Wellbeing of Our Employees We provide mandatory safety training in our facilities, which are designed to focus on empowering our employees with the knowledge and tools they need to make safe choices and to mitigate risks.
Many of our customers participate in several market industries. During the years ended December 31, 2024 and December 31, 2023, revenue from an OEM customer primarily in the medical end market accounted for approximately 10% of our consolidated revenue. No customer accounted for 10% or more of our consolidated revenue during the year ended December 31, 2022.
During the years ended December 31, 2024, and December 31, 2023, revenue from an OEM customer primarily in the medical end market accounted for approximately 10% of our consolidated revenue. Our customers include many OEMs who integrate our products into their systems for sale to end users.
Business Environment In recent years, the global economy has faced significant challenges, including inflation, supply chain disruptions, business slowdowns, labor shortages, and market volatility. We address macroeconomic challenges by continuing to execute our strategy. There have been improvements in the supply chain with better on-time deliveries, and recent efforts have successfully addressed talent shortages.
Business Environment In recent years, the global economy has faced significant challenges, including inflation, supply chain disruptions, business slowdowns, labor shortages, and market volatility, and new and proposed tariffs announced by the U.S. Presidential Administration have introduced additional uncertainty. We address macroeconomic challenges by continuing to execute our strategy.
Certain products, including medical insufflators and endoscopic pumps and related disposables, are manufactured under current good manufacturing practices (“cGMPs”), which is a requirement for medical devices by the United States Food and Drug Administration (the “FDA”). 6 Marketing, Sales and Distribution We sell our products globally, primarily through our direct sales force.
All of our manufacturing operations have been certified under ISO 14001. More than 80% of our manufacturing operations are certified under ISO 45001. Certain products, including medical insufflators and endoscopic pumps and related disposables, are manufactured under current good manufacturing practices (“cGMPs”), which is a requirement for medical devices by the United States Food and Drug Administration (the “FDA”).
Such rules and regulations are subject to change by the governing agencies, and we monitor those changes closely. Environmental Regulations Most of our production facilities are subject to various federal, state, local, and/or foreign environmental regulations related to the use, storage, handling, and disposal of regulated materials, chemicals, and certain waste products.
Environmental Regulations Most of our production facilities are subject to various federal, state, local, and/or foreign environmental regulations related to the use, storage, handling, and disposal of regulated materials, chemicals, and certain waste products. We may face increasing complexity in our product designs and procurement operations due to the evolving nature of product compliance standards.
However, uncertainty remains about overall macroeconomic conditions due to geopolitical tensions and possible changes in trade policies. Economic tensions and changes in trade policies, such as higher tariffs, retaliatory measures, renegotiated free trade agreements, changes in government funding, and the ongoing impact from prolonged inflationary pressures could impact the global market for our products.
Economic tensions and changes in trade policies, such as higher tariffs, retaliatory measures, renegotiated free trade agreements, changes in government funding, and the ongoing impact from prolonged inflationary pressures have impacted the global market for our products and the related cost to manufacture. 2 Acquisitions We continuously evaluate our business mix and financial performance and have executed a series of acquisitions in line with our strategy.
Manufacturers are also notably responsible for entering the necessary data on EUDAMED, which includes the UDI database, and for keeping it up to date. Certain obligations for registration in EUDAMED are expected to become applicable in Q1 2026 (as EUDAMED is not yet fully functional).
Manufacturers are also notably responsible for entering the necessary data on EUDAMED, which includes the UDI database, and for keeping it up to date. The obligations for registration in EUDAMED will become applicable on May 28, 2026 (for the four first modules related to (i) economic factor and (ii) UDI/devices registrations, (iii) notified bodies and certificates, and (iv) market surveillance).
The resource center is a central information hub for all employees, with country-specific information on physical and mental health and wellness. Government Regulation Our current and contemplated activities and the products and processes that will result from such activities are subject to substantial government rules and regulations, both in the United States and internationally.
Government Regulation Our current and contemplated activities and the products and processes that will result from such activities are subject to substantial government rules and regulations, both in the United States and internationally. Such rules and regulations are subject to change by the governing agencies, and we monitor those changes closely.
Automation Enabling Technologies The Automation Enabling Technologies segment designs, manufactures and markets laser beam delivery components, laser beam delivery solutions, CO 2 lasers, solid state lasers, ultrafast lasers, optical and inductive encoders, precision motors, integrated stepper motors, servo drives, motion control solutions, intelligent robotic end-of-arm technology solutions, and air bearing spindles to customers worldwide.
Automation Enabling Technologies The Automation Enabling Technologies segment designs, manufactures and markets laser beam steering and scanning solutions, laser sources, robotic and precision motion, robotic end-of-arm tooling, and bearing spindles to customers worldwide.
The Medical Solutions segment is comprised of the following ten product lines: Product Lines Key End Markets Brand Names Description Medical Insufflators, Endoscopic Pumps and related disposables Medical WOM Insufflators, endoscopic pumps, and related disposables, and other accessories for minimally invasive surgery.
The segment sells the majority of these products directly, utilizing a highly technical sales force, and also sells some indirectly, through resellers and distributors. The Medical Solutions segment is comprised of the following product lines: Product Lines Description Medical Insufflators, Endoscopic Pumps and related disposables Insufflators, endoscopic pumps, and related disposables, and other accessories for minimally invasive surgery.
Prior period segment financial information has been recast to align with the new reportable segments. Our reportable segments have been identified based on commonality and adjacency of end markets and customers amongst our individual product lines. We evaluate the performance of, and allocate resources to, our segments based on revenue, gross profit and operating profit.
Our CODM utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company. Based upon the information provided to the CODM, we have determined that we have two reportable segments. Our reportable segments have been identified based on commonality and adjacency of end markets and customers amongst our individual product lines.
Inclusion and belonging are an important part of our culture and are leader led and embedded into our ways of working. Our aim is to foster a collaborative and inclusive workplace, reflected in our governance, leadership, and technical expertise at all levels in the organization. Our policy is to not tolerate discrimination and harassment.
Our aim is to foster a collaborative workplace, reflected in our governance, leadership, and technical expertise at all levels in the organization. Our policy is to not tolerate discrimination and harassment. We expect our teams to respect our core values and conduct themselves ethically at all times in accordance with the Novanta Code of Ethics and Business Conduct.
Our people leaders, with the support of our human resources organization, are accountable for ensuring that the onboarding process is complete and effective. In addition to Novanta University, we utilize our Novanta Growth System, which provides processes, tools, and training with a focus on continuous improvement. In 2024, we continued with Leadership Development programs for our front-line and mid-level leaders.
Our people leaders, with the support of our human resources organization, are accountable for ensuring that the onboarding process is complete and effective.
Certain U.S. facilities have a dedicated medical professional on site to provide basic and preventative healthcare services to employees, provide general first aid, assess employee health risks, and promote overall employee health. Additionally, all U.S. employees and their families have access to video and telephonic Telemedicine support seven 8 days a week, twenty-four hours a day.
Our larger U.S. facilities offer onsite health coaching on a regular basis. Additionally, all U.S. employees and their families have access to Virtual health coaches and a dedicated wellness portal. Employees and their families enrolled in the Company's medical plan also have access to telemedicine support seven days a week, twenty-four hours a day.
Light and Color Measurement Advanced Industrial Photo Research Light and color measurement devices, including spectroradiometers, photometers, and color characterization software, used in research and development and quality control testing. Laser Beam Delivery Solutions Medical Laser Quantum Optical light engine products that integrate lasers into light engines with full beam parameter control. Applications include DNA sequencing.
Advanced Motion Control Solutions High-precision, customized subsystems and components, specializing in proprietary precision motion and advanced motion control solutions for applications such as life sciences, medical equipment, industrial automation, and semiconductor manufacturing equipment. Light Engines Optical light engine products that integrate lasers into light engines with full beam parameter control. Applications include DNA sequencing.
We continue to foster an inclusive culture and promote lifelong learning by offering cultural awareness events and celebrations and integrate them into our standard work. Our Culture Council continues to support our Employee Resources Groups (“ERGs”) and Affinity Groups (“AG”) to increase inclusion and sense of belonging among our employees leading to greater employee engagement.
Our leadership team continues to sponsor and support our Employee Resources Groups (“ERGs”) and Affinity Groups (“AG”) to support inclusion and sense of belonging among our employees leading to greater employee engagement. Our ERGs and Affinity Groups are open to all employees.
Advanced Motion Control Solutions Medical and Advanced Industrial Motion Solutions High-precision, customized subsystems and components, specializing in proprietary precision motion and advanced motion control solutions. End Markets We primarily operate in two end markets: the medical market and the advanced industrial market.
End Markets We primarily operate in two end markets: the medical market and the advanced industrial market. 4 Medical Market For the year ended December 31, 2025, the medical market accounted for approximately 53% of our revenue.
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Recent Developments On January 2, 2024, we completed the acquisition of Motion Solutions Parent Corp. (“Motion Solutions”), an Irvine, California based provider of highly engineered integrated solutions, specializing in proprietary precision motion and advanced motion control solutions, for a total purchase price of $192.0 million in cash, net of working capital adjustments.
Added
Recent Developments On November 12, 2025, we issued 12,650,000 of our 6.50% tangible equity units (“Units”) at $50.00 per Unit, via a registered public offering. Each tangible equity unit is comprised of a prepaid stock purchase contract and a senior amortizing note due November 1, 2028 issued by the Company.
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The acquisition was financed with borrowings under our revolving credit facility. The addition of Motion Solutions enhances our product portfolio and further expands our presence in attractive medical and precision medicine applications. The Motion Solutions acquisition is included in our Medical Solutions reportable segment.
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The Company recorded net proceeds from the offering of $613.1 million. The tangible equity units are listed on Nasdaq under the ticker symbol “NOVTU.” On June 27, 2025, we entered into the Fourth Amended and Restated Credit Agreement.
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In addition, we continue to monitor geopolitical conflict in Israel, Russia and Ukraine for any potential impact on our businesses. 2 Acquisitions We continuously evaluate our business mix and financial performance and have executed a series of acquisitions in line with our strategy.
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The Fourth Amended and Restated Credit Agreement amends and restates, in its entirety, the Third Amended and Restated Credit Agreement dated as of December 31, 2019 (the “Third Agreement”).
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Segments During the fourth quarter of 2024, we updated our organizational structure and re-aligned our financial reporting structure under two reportable segments: Automation Enabling Technologies and Medical Solutions. Prior to the reorganization, the Company's historical reportable segments were: Precision Medicine and Manufacturing, Robotics and Automation, and Medical Solutions.
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The Fourth Amended and Restated Credit Agreement provides for an aggregate credit facility of approximately $1.0 billion, comprised of a €65.3 million euro-denominated 5-year term loan facility (the “Euro Term Loans”), a $75.0 million U.S. dollar denominated 5-year term loan facility (the “U.S.
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Laser Beam Delivery Solutions Advanced Industrial and Medical Cambridge Technology, Synrad, Laser Quantum Galvanometer and polygon optical scan heads that provide precise control and delivery of laser beams through motorized manipulation of mirrors and optical elements in multi-axis scan heads, highly integrated scanning subsystems, and controlling hardware and software.
Added
Term Loans”), and an $850.0 million 5-year revolving credit facility (the “Revolving Facility”, and together with the Euro Term Loans and the U.S. Term Loans, collectively, the “Senior Credit Facilities”).
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Advanced industrial applications include additive manufacturing, packaging converting, laser marking, micromachining and metrology. Medical applications include optical coherence tomography imaging, microscopy, super-resolution imaging, and laser-based vision correction. CO 2 ,Solid State and Ultrafast Lasers Advanced Industrial Synrad, Laser Quantum Continuous and pulsed CO 2 lasers with power ranges from 5 to 400 watts.
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The Senior Credit Facilities mature in June 2030 and include an uncommitted “accordion” feature pursuant to which the commitments thereunder may be increased by an additional $350.0 million in aggregate, subject to the satisfaction of certain customary conditions. On April 8, 2025, we acquired 100% of the outstanding stock of Keonn Technologies, S.L.
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Diode-pumped solid-state lasers and ultrafast lasers in the visible to near-infrared. Applications include coding, marking, engraving, cutting and trimming of non-metals, fine materials processing, additive manufacturing, packaging converting, microscopy, micromachining, super-resolution imaging and medical applications in dental and dermatology.
Added
(“Keonn”), a Barcelona, Spain-based leader in Radio-Frequency Identification (“RFID”) solutions for a purchase price of €64.8 million ($71.0 million), net of cash acquired, including €4.1 million ($4.5 million) estimated fair value of contingent consideration and €2.0 million ($2.2 million) related to a purchase price holdback.
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Optical and Inductive Encoders Advanced Industrial and Medical Celera Motion, Zettlex Optical and inductive encoders for precision motion control and sensing in semiconductor and electronics manufacturing, industrial and medical robotics, metrology, satellite communications, autonomous vehicles, medical devices, and laboratory and diagnostics equipment.
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The purchase includes up to €20.0 million ($21.9 million) in contingent consideration payable upon the achievement of certain revenue targets through December 2027. In addition, we have granted equity totaling €9.0 million ($9.9 million) to Keonn employees. Keonn is included in the Medical Solutions segment.
Removed
Precision Motors and Integrated Stepper Motors Advanced Industrial and Medical Celera Motion, Applimotion, IMS Direct drive motor components, integrated motion control solutions, and integrated motion sub-assemblies for precision motion control in semiconductor and electronics manufacturing, industrial and medical robotics, autonomous vehicles, automation equipment, metrology, satellite communications, agricultural robotics, medical devices, and laboratory and diagnostics equipment.
Added
There have been improvements in the supply chain with better on-time deliveries, and recent efforts have successfully addressed talent shortages. However, uncertainty remains about overall macroeconomic conditions due to geopolitical tensions and changes in trade policies.
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Servo drives and motion control solutions Advanced Industrial and Medical Celera Motion, Ingenia Precision motion servo drives and control software used in industrial robotics, medical robotics, autonomous vehicles, satellite communications, and medical equipment.
Added
We evaluate the performance of, and allocate resources to, our segments based on revenue, gross profit and operating profit.
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Applications include printed circuit board (“PCB”) manufacturing, automotive coating, and semiconductor manufacturing equipment. 4 Medical Solutions The Medical Solutions segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators and endoscopic pumps and related disposables, laser beam delivery solutions, video processing and streaming and capture, machine vision technologies, radio frequency identification (“RFID”) technologies, barcode identification technologies, thermal chart recorders, light and color measurement technologies, touch panel displays, and advanced motion control solutions.
Added
Robotic and Precision Motion Position sensors, force torque sensors, precision motors and servo drives, and advanced motion control software for high‑performance motion control and sensing. Applications include robotic surgery, warehouse automation, humanoids, semiconductor, agricultural, metrology, satellite communications, medical devices, and laboratory and diagnostics equipment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+9 added−11 removed182 unchanged
Biggest changeAlthough our quality system is currently designed to comply with ISO 13485:2016 in connection with our activities outside of the U.S., and although the FDA has stated that the standards contained in ISO 13485:2106 are substantially similar to those set forth in the QSR, it is unclear the extent to which this final rule, once effective, could impose additional or different regulatory requirements on us that could increase the costs of compliance or otherwise negatively affect our business.
Biggest changeAlthough the FDA has stated that the standards contained in ISO 13485:216 are substantially similar to those set forth in the QMSR, and although our quality management system is designed to comply with ISO:13485, the FDA has indicated that ISO:13485 certification alone will not ensure compliance under the QMSR, nor will ISO certification exempt manufacturers from FDA inspection.
However, certain medical devices in compliance with: the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028 while certain medical devices in compliance with the EU Medical Devices Regulation can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2030.
However, certain medical devices in compliance with the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028, while certain medical devices in compliance with the EU Medical Devices Regulation can continue to be placed on the Great Britain market until June 30, 2030.
The scope of our international operations subjects us to risks that could materially impact our results of operations, including: • foreign exchange rate fluctuations; • increases in shipping costs; • longer customer payment cycles; • greater difficulty in collecting accounts receivable; • use of incompatible systems and equipment; • problems with staffing and managing foreign operations in diverse cultures; • trade tariffs, trade barriers and export/import controls; • transportation delays and interruptions; • increased vulnerability to the theft of, and reduced protection for, intellectual property rights; • government currency control and restrictions, delays, penalties or required withholdings on repatriation of earnings; • failure to comply with foreign laws and regulations, including those that potentially conflict with other jurisdictions; • the impact of recessionary foreign economies; • political unrest and wars, such as the current situation with Ukraine and Russia and Israel and surrounding areas, which could delay or disrupt our business, and if such geopolitical unrest escalates or spills over to or otherwise impacts additional regions, it could heighten many of the other risk factors included in this Item 1A; and • natural disasters, health epidemics and acts of terrorism.
The scope of our international operations subjects us to risks that could materially impact our results of operations, including: • foreign exchange rate fluctuations; • increases in shipping costs; • longer customer payment cycles; • greater difficulty in collecting accounts receivable; • use of incompatible systems and equipment; • problems with staffing and managing foreign operations in diverse cultures; • trade tariffs, trade barriers and export/import controls; • transportation delays and interruptions; • increased vulnerability to the theft of, and reduced protection for, intellectual property rights; • government currency control and restrictions, delays, penalties or required withholdings on repatriation of earnings; 15 • failure to comply with foreign laws and regulations, including those that potentially conflict with other jurisdictions; • the impact of recessionary foreign economies; • political unrest and wars, such as the current situation with Ukraine and Russia and Israel and surrounding areas, which could delay or disrupt our business, and if such geopolitical unrest escalates or spills over to or otherwise impacts additional regions, it could heighten many of the other risk factors included in this Item 1A; and • natural disasters, health epidemics and acts of terrorism.
This level of debt could have significant consequences on our future operations, including: • reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • limiting our flexibility in planning for or reacting to, and increasing our vulnerability to, changes in our business, changes in the general economic environment, and market changes in the industries in which we operate; and 27 • placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.
This level of debt could have significant consequences on our future operations, including: • reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • limiting our flexibility in planning for or reacting to, and increasing our vulnerability to, changes in our business, changes in the general economic environment, and market changes in the industries in which we operate; and • placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.
In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters.
In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating 21 to healthcare matters.
Medical devices must be safe and effective and must not compromise the clinical condition or safety of patients, or the safety and health of users and – where applicable – other persons, provided that any risks which may be associated with their use constitute acceptable risks when weighed against the benefits to the patient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art.
Medical devices must be safe and effective and must not compromise the clinical condition or safety of patients, or the safety and health of users and – where applicable – other persons, provided that any risks which may be associated with their use constitute acceptable risks when weighed 19 against the benefits to the patient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art.
We may experience increased costs in 26 order to execute upon our sustainability goals and comply with future climate-change related government mandates as well as stricter environmental protection laws, which could have an adverse impact on our results of operations and financial condition. Certain regulations may require us to redesign our products to ensure compliance with the applicable standards.
We may experience increased costs in order to execute upon our sustainability goals and comply with future climate-change related government mandates as well as stricter environmental protection laws, which could have an adverse impact on our results of operations and financial condition. Certain regulations may require us to redesign our products to ensure compliance with the applicable standards.
As a result of these factors, our results of operations for any quarter are not necessarily indicative of results to be expected in future periods. Our business may be adversely affected by cyberattacks or other incidents that cause significant disruption in, or breach the security of, our information technology systems or those of our third-party providers.
As a result of these factors, our results of operations for any quarter are not necessarily indicative of results to be expected in future periods. 14 Our business may be adversely affected by cyberattacks or other incidents that cause significant disruption in, or breach the security of, our information technology systems or those of our third-party providers.
Our insurance policies may not cover all types of cybersecurity risks and liabilities, and even if coverages exist, they may not be sufficient to cover all costs or losses that we may incur. 16 Our reliance on international operations subjects us to risks not typically faced by companies operating exclusively in the U.S.
Our insurance policies may not cover all types of cybersecurity risks and liabilities, and even if coverages exist, they may not be sufficient to cover all costs or losses that we may incur. Our reliance on international operations subjects us to risks not typically faced by companies operating exclusively in the U.S.
There has been increased public focus and scrutiny from investors, governmental and nongovernmental organizations, customers, and other stakeholders and third parties on corporate sustainability and responsibility practices in recent years, including with respect to global warming and climate change, diversity, equity and inclusion, and labor and human rights, among other similar issues.
There has been increased public focus and scrutiny from investors, governmental and nongovernmental organizations, customers, and other stakeholders and third parties on corporate sustainability and responsibility practices in recent years, including with respect to global warming and climate change, equity and inclusion, and labor and human rights, among other similar issues.
There has similarly been an increase in activism and litigation alleging that corporate diversity, equity and inclusion programs may discriminate against certain groups. Many of our large, global customers are also committing to long-term targets to reduce greenhouse gas emissions within their supply chains.
There has similarly been an increase in activism and litigation alleging that corporate equity and inclusion programs may discriminate against certain groups. Many of our large, global customers are also committing to long-term targets to reduce greenhouse gas emissions within their supply chains.
A prolonged inability to obtain or increase in the prices of certain raw materials, key components or other goods is possible and could have a significant adverse effect on our business operations, damage our relationships with customers, or even lead to permanent loss of customer orders.
A prolonged inability to obtain or increase in the prices of 18 certain raw materials, key components or other goods is possible and could have a significant adverse effect on our business operations, damage our relationships with customers, or even lead to permanent loss of customer orders.
In addition, a 20 pandemic or other public health crisis may cause shipping and delivery delays. Such events could cause us to incur increased shipping costs that could not be passed on to our customers or impact our ability to deliver orders, negatively impacting our profitability and our relationships with customers.
In addition, a pandemic or other public health crisis may cause shipping and delivery delays. Such events could cause us to incur increased shipping costs that could not be passed on to our customers or impact our ability to deliver orders, negatively impacting our profitability and our relationships with customers.
Furthermore, the transition, design and implementation of new or upgraded ERP systems may be much more costly than we anticipated. Changes in foreign currency rates could have a material adverse effect on our financial position, results of operations, and cash flows.
Furthermore, the transition, design and implementation of new or upgraded ERP systems may be much more costly than we anticipated. 23 Changes in foreign currency rates could have a material adverse effect on our financial position, results of operations, and cash flows.
We produce complex products that can contain latent defects or performance problems. This could happen to both existing and new products. Such defects or performance problems could result in litigation against us and be detrimental to our business and reputation. 19 In addition, customers frequently integrate our products with other vendors’ products.
We produce complex products that can contain latent defects or performance problems. This could happen to both existing and new products. Such defects or performance problems could result in litigation against us and be detrimental to our business and reputation. In addition, customers frequently integrate our products with other vendors’ products.
Our inability to quickly increase production in response to a surge in demand has prompted customers to look for alternative sources of supply and has left our customers without a supply, both of which have harmed our reputation and made it difficult for us to retain our existing customers or to obtain new customers.
Our inability to quickly increase production in response to a surge in demand has prompted customers to look for alternative sources of supply and has left our customers without a supply, both of which have harmed our reputation and made it difficult for us to retain our 13 existing customers or to obtain new customers.
The continuing efforts of governments, insurance companies and other payors of healthcare costs to contain or reduce those costs could lead to patients being unable to obtain approval 23 for payment from these third-party payors for procedures in which our products are used.
The continuing efforts of governments, insurance companies and other payors of healthcare costs to contain or reduce those costs could lead to patients being unable to obtain approval for payment from these third-party payors for procedures in which our products are used.
Our sales channels and supply chain in the international marketplace make us subject to tariffs, trade restrictions and other taxes when the raw materials or components we purchase, and the products we sell, cross international borders. Trade tensions between countries, escalated in recent years.
Our sales channels and supply chain in the international marketplace make us subject to tariffs, trade restrictions and other taxes when the raw materials or components we purchase, and the products we sell, cross international borders. Trade tensions between countries have escalated in recent years.
Political conditions, including n ew and changing laws or tariffs, regulations, government funding, executive orders and enforcement priorities, may impact customer budgets and create uncertainty about how such laws and regulations will be interpreted and applied, which may impact 14 customer demand and adversely impact our business .
Political conditions, including n ew and changing laws or tariffs, regulations, government funding, executive orders and enforcement priorities, may impact customer budgets and create uncertainty about how such laws and regulations will be interpreted and applied, which may impact customer demand and adversely impact our business .
Such revenues and profitability may even decline as we integrate newly acquired operations into our existing businesses. We may fail to identify inherent weaknesses in acquired businesses or misinterpret market and technology trends and growth potentials during our acquisition due diligence process.
Such revenues and 17 profitability may even decline as we integrate newly acquired operations into our existing businesses. We may fail to identify inherent weaknesses in acquired businesses or misinterpret market and technology trends and growth potentials during our acquisition due diligence process.
We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations. We develop, configure and market our products to meet customer needs created by those regulations.
We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations. We develop, configure and market our products to meet customer 22 needs created by those regulations.
Our inability to maintain a competitive cost structure could have a material adverse effect on our business, financial condition and results of operations. Others may violate our intellectual property rights and cause us to incur significant costs to protect our rights.
Our inability to maintain a competitive cost structure could have a material adverse effect on our business, financial condition and results of operations. 16 Others may violate our intellectual property rights and cause us to incur significant costs to protect our rights.
We may be subject to additional tax obligations in countries that choose to adopt new tax requirements such as the proposed Pillar Two rules. Further, such tax law changes may cause our effective tax rate to fluctuate between periods.
We may be subject to 25 additional tax obligations in countries that choose to adopt new tax requirements such as the proposed Pillar Two rules. Further, such tax law changes may cause our effective tax rate to fluctuate between periods.
Material weaknesses in our internal control over financial reporting could also reduce our ability to obtain financing or could increase the cost of any financing we obtain. Item 1B. Unresolved Staff Comments None. 28
Material weaknesses in our internal control over financial reporting could also reduce our ability to obtain financing or could increase the cost of any financing we obtain. Item 1B. Unresolved Staff Comments None.
Many different governmental organizations are promulgating reporting standards and rules that focus on a myriad of sustainability topics, including new reporting requirements in various jurisdictions.
Many different governmental organizations are 24 promulgating reporting standards and rules that focus on a myriad of sustainability topics, including new reporting requirements in various jurisdictions.
We may require additional capital to adequately respond to future business challenges or opportunities, including, but not limited to, the need to develop new products or enhance our existing products, the need to invest in cloud-based ERP systems and other digital technology platforms to help accelerate the growth of our businesses, the need to build inventory or to invest other cash to support business growth, and opportunities to acquire complementary businesses and technologies.
We may require additional capital to adequately respond to future business challenges or opportunities, including, but not limited to, the need to develop new products or enhance our existing products, the need to invest in cloud-based ERP systems, artificial intelligence systems, and other digital technology platforms to help accelerate the growth of our businesses, the need to build inventory or to invest other cash to support business growth, and opportunities to acquire complementary businesses and technologies.
Products we sell into certain other foreign markets 17 could also become subject to retaliatory tariffs, making our products uncompetitive to similar products not subjected to such import tariffs.
Products we sell into certain other foreign markets could also become subject to retaliatory tariffs, making our products uncompetitive to similar products not subjected to such import tariffs.
While our management and our independent registered public accounting firm concluded that our internal control over financial reporting was effective as of December 31, 2024, it is possible that material weaknesses may be identified in the future. As part of our growth strategy, we intend to make additional acquisitions of privately held businesses.
While our management and our independent registered public accounting firm concluded that our internal control over financial reporting was effective as of December 31, 2025, it is possible that material weaknesses may be identified in the future. As part of our growth strategy, we intend to make additional acquisitions of privately held businesses.
If we are unable to satisfy the conditions in the Third Amended and Restated Credit Agreement or our needs exceed the amounts available under the revolving credit facility, we may need to obtain equity or debt financing. If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution.
If we are unable to satisfy the conditions in the Fourth Amended and Restated Credit Agreement or our needs exceed the amounts available under the revolving credit facility, we may need to obtain equity or debt financing. If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution.
Our Third Amended and Restated Credit Agreement, as amended, contains covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our borrowings thereunder.
Our Fourth Amended and Restated Credit Agreement, as amended, contains covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our borrowings thereunder.
We have invested, and continue to invest, human 24 and technology resources in our data compliance efforts that may be time-intensive and costly.
We have invested, and continue to invest, human and technology resources in our data compliance efforts that may be time-intensive and costly.
These fluctuations could be caused by: • quarterly variations in our results of operations; • changes in earnings estimates by analysts; • conditions in the markets we serve; • trading phenomena such as “short squeeze”; or • general market, political or economic conditions. In addition, the stock market has experienced extreme price and volume fluctuations in recent years.
These fluctuations could be caused by: • quarterly variations in our results of operations; • changes in earnings estimates by analysts; • conditions in the markets we serve; • trading phenomena such as “short squeeze”; or • general market, political or economic conditions. 26 The stock market has experienced extreme price and volume fluctuations in recent years.
Any of these occurrences could adversely affect our results of operations and damage our relationships with customers. Production difficulties and product delivery delays or disruptions could have a material adverse effect on our business. We assemble our products at our facilities in the U.S., the U.K., Germany and China.
Any of these occurrences could adversely affect our results of operations and damage our relationships with customers. Production difficulties and product delivery delays or disruptions could have a material adverse effect on our business. We assemble our products at our facilities in the U.S., the U.K., Germany, Czech Republic and China.
Any new equity securities we issue could have rights, preferences and privileges superior to those of the holders of our common shares. Further, our Third Amended and Restated Credit Agreement restricts our ability to obtain additional debt financing from other sources.
Any new equity securities we issue could have rights, preferences and privileges superior to those of the holders of our common shares. Further, our Fourth Amended and Restated Credit Agreement restricts our ability to obtain additional debt financing from other sources.
A portion of our revenue is derived from our European and Asian operations and includes transactions in Euros, British Pounds, Chinese Yuan and Japanese Yen, while our products are mainly manufactured in the U.S., the U.K., Germany and China.
A portion of our revenue is derived from our European and Asian operations and includes transactions in Euros, British Pounds, Chinese Yuan and Japanese Yen, while our products are mainly manufactured in the U.S., the U.K., Czech Republic, Germany and China.
As we continue to focus on developing our sustainability and corporate responsibility practices, such practices may not meet the standards of all of our stakeholders, and both advocates and opponents of such practices are increasingly resorting to a range of activism forms, including media campaigns, shareholder proposals, and litigations, to advance their perspectives.
As we continue to focus on developing our sustainability and corporate responsibility practices, such practices may not meet or be perceived to meet the standards of all of our stakeholders, and both advocates and opponents of such practices are increasingly resorting to a range of activism forms, including media campaigns, shareholder proposals, and litigations, to advance their perspectives.
In recent years, we have made a number of acquisitions, including the acquisitions of Motion Solutions Parent Corp., MPH Medical Devices S.R.O., ATI Industrial Automation, Inc., and Schneider Electric Motion USA, Inc., and we expect to continue to make acquisitions in the future.
In recent years, we have made a number of acquisitions, including the acquisitions of Keonn Technologies, S.L., Motion Solutions Parent Corp., MPH Medical Devices S.R.O., ATI Industrial Automation, Inc., and Schneider Electric Motion USA, Inc., and we expect to continue to make acquisitions in the future.
We expect the frequency and magnitude of cyberattacks to continue to accelerate as attackers are becoming increasingly more sophisticated, for example, by using techniques designed to circumvent controls, avoid detection, and obfuscate forensic evidence, such that we may be unable to timely or effectively detect, identify, investigate or remediate attacks in the future.
We expect the frequency and magnitude of cyberattacks to continue to accelerate as attackers are becoming increasingly more sophisticated, for example, by using artificial intelligence to automate and enhance attacks, and by using techniques designed to circumvent controls, avoid detection, and obfuscate forensic evidence, such that we may be unable to timely or effectively detect, identify, investigate or remediate attacks in the future.
The FDA and other regulatory agencies worldwide can ban certain medical devices; detain or seize adulterated 21 or misbranded medical devices; order recall, repair, replacement or refund of these devices; and require notification of healthcare professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health.
These agencies worldwide can ban certain medical devices; detain or seize adulterated or misbranded medical devices; order recall, repair, replacement or refund of these devices; and require notification of healthcare professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health.
The FDA and other worldwide regulatory agencies can take action against a company that promotes “ off-label ” uses. The FDA may also enjoin and restrain a company for certain violations of the FDCA and regulations pertaining to medical devices, or initiate action for criminal prosecution of such violations. Similar requirements apply in foreign jurisdictions.
The FDA and other worldwide regulatory agencies can take action against a company that promotes “off-label” uses. The FDA may also enjoin and restrain a company for certain violations of the FDCA and regulations pertaining to medical devices, or initiate action for criminal prosecution of such violations. Similar requirements apply in foreign jurisdictions.
Despite a recent increase in designations, the current number of notified bodies designated under the new regulation remains significantly lower than the number of notified bodies designated under the previous regime. The current designated notified bodies are therefore facing a backlog of requests, and as a consequence, review times have lengthened.
Despite a recent increase in designations, the current number of notified bodies designated under the new regulation remains significantly lower than the number of notified bodies designated under prior regulations. The current designated notified bodies are therefore facing a backlog of requests, and as a consequence, review times have lengthened.
Any adverse regulatory action, depending on its magnitude, may restrict a company from effectively marketing and selling its products, may limit a company's ability to obtain future premarket clearances, approvals or certifications, and could result in a substantial modification to the company's business practices and operations.
Any adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our products, may limit our ability to obtain future premarket clearances, approvals or certifications, and could result in a substantial modification to our business practices and operations.
We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could adversely affect our results of operations. Customers with liquidity issues may lead to additional bad debt expense.
We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could adversely affect our results of operations. Customers with liquidity issues may lead to additional credit losses.
To demonstrate compliance with the general safety and performance requirements, medical devices must undergo a conformity assessment procedure, which varies according to the type of medical device and its risk classification.
To demonstrate compliance with the general safety and performance requirements, medical devices must undergo a conformity assessment procedure, which varies according to the type of medical device and its risk classification, and which requires the intervention of a notified body.
Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets. As of December 31, 2024, we had $769.9 million of net intangible assets, including goodwill, on our consolidated balance sheet. Net intangible assets consist principally of goodwill, customer relationships, patents, trademarks, tradenames, and core technologies.
Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets. As of December 31, 2025, we had $828.1 million of net intangible assets, including goodwill, on our consolidated balance sheet. Net intangible assets consist principally of goodwill, customer relationships, patents, trademarks, tradenames, and core technologies.
In addition, the terms of any additional equity or debt issuances may adversely affect the value and price of our common shares. Our existing indebtedness could adversely affect our future business, financial condition and results of operations. As of December 31, 2024, we had $419.2 million of outstanding debt.
In addition, the terms of any additional equity or debt issuances may adversely affect the value and price of our common shares. Our existing indebtedness could adversely affect our future business, financial condition and results of operations. As of December 31, 2025, we had $259.6 million of total outstanding debt.
This situation may impact the way we are conducting our business in the EU and the EEA and the ability of our notified body to timely review and process our regulatory submissions and perform its audits.
This situation may impact the conduct of our business in the EU and the EEA and the ability of our notified body to timely review and process our regulatory submissions and perform its audits.
During the year ended December 31, 2024, approximately 49% of our revenues were from customers outside of the U.S.
During the year ended December 31, 2025, approximately 47% of our revenues were from customers outside of the U.S.
These fluctuations have had a substantial effect on the market prices of many companies, often unrelated to the operating performance of the specific companies. These market fluctuations could adversely affect the price of our common shares.
These fluctuations have had a substantial effect on the market prices of many companies, often unrelated to the operating performance of the specific companies. These market fluctuations could adversely affect the price of our common shares. In addition, the market price of our common shares may be influenced by the Units.
For instance, a customer that placed a large order in one period could subsequently experience a downturn in business and, as a result, could reduce the amount of products it purchases from us in future periods.
In addition, our sales are reactive to changes in our customers’ businesses. For instance, a customer that placed a large order in one period could subsequently experience a downturn in business and, as a result, could reduce the amount of products it purchases from us in future periods.
All medical devices placed on the market in the EU must meet the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation, including the requirement that a medical device must be designed and manufactured in such a way that, during normal conditions of use, it is suitable for its intended purpose.
In the EU, medical devices must comply with the EU Medical Devices Regulation, including the general safety and performance requirements in Annex I to the EU Medical Devices Regulation, which require that a medical device must be designed and manufactured in such a way that, during normal conditions of use, it is suitable for its intended purpose.
Such ratings are used by some investors to inform their investment or voting decisions. Unfavorable ratings could lead to negative investor sentiment towards us and/or our industry, which could have a negative impact on our access to and costs of capital. The effects of climate change and related regulatory responses may adversely impact our business.
Unfavorable ratings could lead to negative investor sentiment towards us and/or our industry, which could have a negative impact on our access to and costs of capital. The effects of climate change and related regulatory responses may adversely impact our business.
Such factors include: fluctuations in our customers’ businesses; decisions by customers to reduce their purchases of our products; timing and recognition of revenues from customer orders; timing and market acceptance of new products or enhancements introduced by us or our competitors; availability and pricing of parts from our suppliers and the manufacturing capacity of our subcontractors; changes in the prices of our products or of our competitors’ products; and fluctuations in foreign currency exchange rates. 15 We received in the past, and may receive in the future, several large orders in one quarter from a customer and then receive no orders from that customer in the next quarter.
Such factors include: fluctuations in our customers’ businesses; decisions by customers to reduce their purchases of our products; timing and recognition of revenues from customer orders; timing and market acceptance of new products or enhancements introduced by us or our competitors; availability and pricing of parts from our suppliers and the manufacturing capacity of our subcontractors; changes in the prices of our products or of our competitors’ products; and fluctuations in foreign currency exchange rates.
Some of our products and the related sales and marketing development activities and manufacturing processes are subject to extensive and rigorous regulation by the FDA pursuant to the Federal Food, Drug, and Cosmetic Act (the “FDCA”), by comparable agencies in foreign countries, and by other regulatory agencies and governing bodies.
Some of our products, and the related development, manufacturing and commercialization activities are subject to extensive and rigorous regulation by the FDA pursuant to the Federal Food, Drug, and Cosmetic Act (the “FDCA”), and by comparable or other regulatory agencies and governing bodies in the U.S. and around the world.
For example, we may be subject to, among others, the requirements of the EU Corporate Sustainability Reporting Directive, other EU directives, EU and EU member state regulations, various disclosure requirements (such as information on greenhouse gas emissions, climate risks, use of offsets, and emissions reduction claims) from the State of California as well as the SEC’s stayed rule on climate related disclosures, if put in place.
For example, we may be subject to, among others, the requirements of the EU Corporate Sustainability Reporting Directive, other EU directives, EU and EU member state regulations, various disclosure requirements (such as information on greenhouse gas emissions, climate risks, use of offsets, and emissions reduction claims) and/or from the State of California, pending ongoing litigation.
Under the FDCA, medical devices must receive FDA clearance or approval or an exemption from such clearance or approval before they can be commercially marketed in the U.S. In the EU, medical devices must comply with the EU Medical Devices Regulation, which repeals and replaces the EU Medical Devices Directive.
Under the FDCA, medical devices must receive FDA clearance or approval or an exemption from such clearance or approval before they can be commercially marketed in the U.S.
Later discovery of previously unknown problems with a product or manufacturer could result in fines, delays or suspensions of regulatory clearances, approvals or certification, seizures or recalls of products, physician advisories or other field actions, operating restrictions and/or criminal prosecution.
Later discovery of previously unknown problems with a product or manufacturer could result in fines, delays or suspensions of regulatory clearances, approvals or certification, seizures or recalls of products, physician advisories or other field actions, operating restrictions and/or criminal prosecution. We may also initiate field actions as a result of a failure to strictly comply with our internal quality policies.
For instance, the landscape concerning medical devices in the EU recently evolved. On May 26, 2021, the EU Medical Devices Regulation became applicable, and repealed and replaced the EU Medical Devices Directive and the EU Active Implantable Medical Devices Directive.
For instance, in 2021, the EU Medical Devices Regulation became applicable, and repealed and replaced the EU Medical Devices Directive and the EU Active Implantable Medical Devices Directive.
Under the UK Medical Devices Regulations, in order to be lawfully placed on the Great Britain market, Class I (non-sterile, non-measuring or non-re-useable) medical devices need to be self-certified, in accordance with United Kingdom Conformity Assessment (“UKCA”), and other medical devices need to be “UKCA” certified by a UK approved body.
In addition, the MHRA launched a consultation from November 14, 2024 to January 5, 2025 on proposals to update the pre-market requirements for medical devices in Great Britain. 20 Under the UK Medical Devices Regulations, in order to be lawfully placed on the Great Britain market, Class I (non-sterile, non-measuring or non-re-useable) medical devices need to be self-certified, in accordance with United Kingdom Conformity Assessment (“UKCA”), and other medical devices need to be “UKCA” certified by a UK approved body.
In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. Their designation process is significantly stricter under the new regulation.
In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. Their designation process has experienced considerable delays in recent years.
Our top ten customers accounted for approximately 37% of our sales for the year ended December 31, 2024. In any one reporting period, our major customers may contribute an even larger percentage of our consolidated sales.
The loss of sales, or significant reductions in orders from, any major customers may have a material adverse effect on us. Our top ten customers accounted for approximately 42% of our sales for the year ended December 31, 2025. In any one reporting period, our major customers may contribute an even larger percentage of our consolidated sales.
Adverse economic conditions, large inventory positions, limited marketing resources and other factors influencing these OEM customers could have a substantial adverse effect on our financial results.
Adverse economic conditions, large inventory positions, limited marketing resources and other factors influencing these OEM customers could have a substantial adverse effect on our financial results. We cannot assure investors that our OEM customers will not experience financial or other difficulties that could adversely affect their operations and, in turn, adversely affect our results of operations and financial condition.
In addition, exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries, medical devices are regulated. Most countries outside of the U.S. require that product approvals be renewed or recertified on a regular basis, generally every four to five years.
In addition, exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries, medical devices are regulated.
A failure, or perceived failure, to respond to expectations of all key stakeholders could cause harm to our business and reputation and have a negative impact on the market price of our common shares. Further, organizations that provide information to investors on corporate governance and related matters have developed rating processes for evaluating companies on sustainability and corporate responsibility matters.
A failure, or perceived failure, to respond to varying, and potential expectations of all key stakeholders could cause harm to our business and reputation and have a negative impact on the market price of our common shares.
Medical devices also need to bear a physical UKCA mark in order to be lawfully placed on the Great Britain market.
Medical devices also need to bear a physical UKCA mark in order to be lawfully placed on the Great Britain market. However, the MHRA intends to remove the requirement for a medical device and its labeling (i.e. packaging and instructions for use) in Great Britain to bear a physical UKCA mark.
Furthermore, on December 16, 2024, the UK government published an amendment to the UK Medical Devices Regulations to clarify and strengthen the post-market surveillance requirements for medical devices in Great Britain. This amendment will come into force on June 16, 2025.
On June 16, 2025, an amendment to the UK Medical Devices Regulations became applicable, and it strengthened the post-market surveillance requirements for medical devices in Great Britain.
Instead of requiring a medical device and its labeling to bear a UKCA mark, manufacturers would be required to assign a unique design identification (“UDI”) to medical devices before they are placed on the Great Britain market.
Instead, manufacturers would be required to assign a unique design identification (“UDI”) to a medical device and register the UDI in a publicly accessible database before the medical device is placed on the Great Britain market.
Increased competition may also result in price reductions, reduced profit margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand our new product development programs. 18 Our results of operations will be adversely affected if we fail to identify suitable acquisition candidates, complete acquisitions, successfully integrate recent and future acquisitions or grow the acquired businesses as planned.
Increased competition may also result in price reductions, reduced profit margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand our new product development programs.
If this change is implemented, we may no longer be required to affix the physical UKCA mark to our devices, but we may need to assign and affix a UDI. Understanding and ensuring compliance with any new requirements is likely to lead to further complexity and increased costs to our business.
If this change is implemented, we may no longer be required to affix the physical UKCA mark to our medical devices, but we may need to assign and affix a UDI, and register the UDI in a publicly accessible database.
The renewal or recertification process requires that we evaluate any device changes and any new regulations or standards relevant to the device and conduct appropriate testing to document continued compliance. Where renewal or recertification applications are required, they may need to be renewed and/or approved or certified in order for us to continue selling our products in those countries.
The renewal or recertification process requires that we evaluate any device changes and any new regulations or standards relevant to the device and conduct appropriate testing to document continued compliance.
As of December 31, 2024, we had outstanding debt of $419.2 million under our amended and restated senior secured credit agreement (as amended, the “Third Amended and Restated Credit Agreement”) and $346.2 million of additional borrowing capacity available under the revolving credit facility.
As of December 31, 2025, we had outstanding debt of $149.0 million under our fourth amended and restated senior secured credit agreement (as amended, the “Fourth Amended and Restated Credit Agreement”), $850.0 million of additional borrowing capacity available under the revolving credit facility, and $110.6 million outstanding under the senior amortizing notes (the “Amortizing Notes ” ) component of our 6.50% tangible equity units (“Units”).
These modifications may have an effect on the way we intend to develop our business in the EU and EEA. There are currently different regulations in place in Great Britain as compared to both Northern Ireland and the EU. Ongoing compliance with both sets of regulatory requirements may result in increased costs for our business.
For example, Great Britain currently has a different regulatory framework for our products as compared to both Northern Ireland and the EU. Ongoing compliance with multiple, different regulatory requirements may result in increased complexity and costs for our business.
The manufacturer may then apply the European Conformity (“CE”) mark to the device, which allows the device to be placed on the market throughout the EU. If we fail to comply with applicable laws and regulations, we would be unable to affix the CE mark to our products, which would prevent us from selling them within the EU.
If we fail to comply with applicable laws and regulations and the requirements described above or if we do not successfully pass a required audit, we would be unable to affix the CE mark to our products, which would likely prevent us from selling them within the EU or the EEA.
As a result, the timing of revenue recognition from customer orders can cause significant fluctuations in our operating results from quarter to quarter. In addition, our sales are reactive to changes in our customers’ businesses.
We received in the past, and may receive in the future, several large orders in one quarter from a customer and then receive no orders from that customer in the next quarter. As a result, the timing of revenue recognition from customer orders can cause significant fluctuations in our operating results from quarter to quarter.
Failure to comply with regulatory requirements could have a material adverse effect on our business, financial condition and results of operations.
Accordingly, it remains unclear the extent to which the QMSR may impose additional or different regulatory requirements on us that could increase the costs of compliance or otherwise negatively affect our business. Failure to comply with regulatory requirements could have a material adverse effect on our business, financial condition and results of operations.
Specifically, this final rule, which the FDA expects to go into effect on February 2, 2026, establishes the “Quality Management System Regulation”, which among other things, incorporates by reference the quality management system requirements of ISO 13485:2016.
For example, on February 2, 2026, the FDA’s final rule implementing the FDA’s Quality Management System Regulation (“QMSR”) became effective. The QMSR, which replaced the FDA’s former Quality System Regulation, sets forth the FDA’s cGMP requirements for medical devices, and among other things, incorporates by reference certain elements of the quality management system requirements of ISO 13485:2016.
In addition, we or our competitors may raise or lower prices of products in response to market demands or competitive pressures.
In addition, shipment delays caused by our third‑party shipping carriers or by government regulations affecting the movement of goods may further increase the risk of timing‑related revenue shortfalls and negatively impact our operating results. We or our competitors may raise or lower prices of products in response to market demands or competitive pressures.
Removed
For example, diminished growth expectations, economic and political uncertainty in regions across the globe and effects of the COVID-19 pandemic adversely impacted our customers’ financial condition and ability to maintain product order levels and reduced the demand for our products in 2020, and other pandemics and public health crises could have similar consequences.
Added
Additionally, the rapid advancement of artificial intelligence and machine learning technologies may accelerate the pace of innovation in our industry, potentially shortening product lifecycles, enabling competitors to achieve faster time-to-market, and requiring us to invest more heavily in AI-enabled capabilities to remain competitive.
Removed
Except for low risk medical devices (Class I), where the manufacturer can self-assess the conformity of its products with the general safety and performance requirements (except for any parts which relate to sterility, metrology or reuse aspects), a conformity assessment procedure requires the intervention of a notified body.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−1 removed8 unchanged
Biggest changeOur cybersecurity risk management program is designed to be integrated into our overall risk management program, and shares common methodologies and governance processes across the risk management program.
Biggest changeWe use these cybersecurity frameworks and information security standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. 27 Our cybersecurity risk management program is designed to be integrated into our overall risk management program, and shares common methodologies and governance processes across the risk management program.
Cybersecurity Governance The Board of Directors (the “Board”) recognizes the need for continually monitoring our information security risks and cybersecurity initiatives. The Audit Committee of our Board undertakes the primary oversight responsibility over our cybersecurity risks and information security controls. Management briefs the Audit Committee on information security matters at each quarterly meeting of the Audit Committee.
Cybersecurity Governance The Board of Directors (the “Board”) recognizes the need for continually monitoring information security risks and cybersecurity initiatives. The Audit Committee of our Board undertakes the primary oversight responsibility over our cybersecurity risks and information security controls. Management briefs the Audit Committee on information security matters at each quarterly meeting of the Audit Committee.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public, or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public, or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment. 28
The CISO, who is also our CIO, has over 23 years of experience managing global IT operations, including strategy, applications, infrastructure, information security, support and execution. The CISO/CIO holds a Master of Science degree in computer science and engineering (with a specialization in Information 29 Assurance) and a Doctorate of Engineering Management/Systems Engineering degree.
The CISO, who is also our CIO, has over 25 years of experience managing global IT operations, including strategy, applications, infrastructure, information security, support and execution. The CISO/CIO holds a Master of Science degree in computer science and engineering (with a specialization in Information Assurance) and a Doctorate of Engineering Management/Systems Engineering degree.
We design and assess our program based on various cybersecurity frameworks, such as the National Institute of Standards and Technology (“NIST”) as well as International Organization for Standardization (“ISO”) 27001. We use these cybersecurity frameworks and information security standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
We design and assess our program based on various cybersecurity frameworks, such as the National Institute of Standards and Technology (“NIST”) as well as International Organization for Standardization (“ISO”) 27001.
Removed
Our DCISO has served in various roles in information security for over 16 years and holds a Bachelor of Science degree in mathematics and computer science and a Master of Science degree in computer science.
Added
Our DCISO has over 18 years of experience in information security leadership and IT management, including strategy, risk management, compliance, data privacy, and governance. The Deputy CISO holds a Master of Science degree in Electrical Engineering and a Master of Business Administration (MBA) degree.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeLocation Principal Use Current Segment Approximate Square Feet Owned/Leased Bedford, Massachusetts United States Manufacturing, R&D, Marketing, Sales and Administration Automation Enabling Technologies, Medical Solutions, Corporate 147,000 Leased; expires in 2031 Apex, North Carolina United States Manufacturing, R&D, Marketing, Sales and Administration Automation Enabling Technologies 117,000 Leased; expires in 2028 Ludwigsstadt Germany Manufacturing and Administration Medical Solutions 105,000 Owned Přelouč Czech Republic Manufacturing and Administration Medical Solutions 95,000 Owned Wackersdorf Germany R&D Automation Enabling Technologies 68,000 Owned Mukilteo, Washington, United States Manufacturing, R&D, Marketing, Sales and Administration Automation Enabling Technologies 63,000 Owned Additional manufacturing, research and development, sales, service and logistics sites are located in California, Connecticut, Florida, Michigan, New York, and Oregon within the United States, and in China, Czech Republic, Germany, Italy, Japan, Spain and the United Kingdom.
Biggest changeLocation Principal Use Current Segment Approximate Square Feet Owned/Leased Bedford, Massachusetts United States Manufacturing, R&D, Marketing, Sales and Administration Automation Enabling Technologies, Medical Solutions, Corporate 147,000 Leased; expires in 2031 Apex, North Carolina United States Manufacturing, R&D, Marketing, Sales and Administration Automation Enabling Technologies 117,000 Leased; expires in 2028 Ludwigsstadt Germany Manufacturing and Administration Medical Solutions 105,000 Owned Přelouč Czech Republic Manufacturing and Administration Medical Solutions 95,000 Owned Suzhou China Manufacturing, Marketing and Sales Automation Enabling Technologies and Medical Solutions 55,000 Leased; expires in 2028 Stockport United Kingdom Manufacturing, R&D, Sales and Administration Automation Enabling Technologies and Medical Solutions 44,000 Leased; expires in 2036 Taunton United Kingdom Manufacturing, Sales and Administration Automation Enabling Technologies 33,000 Leased; expires in 2034 Additional manufacturing, research and development, sales, service and logistics sites are located in California, Connecticut, Florida, Michigan, New York, Oregon, Washington, and Wisconsin within the United States, and in China, Czech Republic, Germany, Italy, Japan, Spain and the United Kingdom.
We believe all our properties have been properly maintained. Ite m 3. Legal Proceedings The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. See Note 17 to Consolidated Financial Statements for additional information about legal proceedings involving the Company. Ite m 4. Mine Safety Disclosures Not applicable. 30 PA RT II
We believe all our properties have been properly maintained. Ite m 3. Legal Proceedings The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. See Note 18 to Consolidated Financial Statements for additional information about legal proceedings involving the Company. Ite m 4. Mine Safety Disclosures Not applicable. 29 PA RT II
Item 2. P roperties Our principal owned and leased properties as of December 31, 2024 are listed in the table below.
Item 2. P roperties Our principal owned and leased properties as of December 31, 2025 are listed in the table below.
These additional facilities cover approximately 670,000 square feet, of which approximately 560,000 square feet are leased and approximately 110,000 square feet are owned. We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases or in finding alternative facilities.
These additional facilities cover approximately 652,000 square feet, of which approximately 451,000 square feet are leased and approximately 201,000 square feet are owned. We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases or in finding alternative facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

104 edited+40 added−38 removed67 unchanged
Biggest changeNet cash used in financing activities was $60.2 million in 2022, primarily due to $59.0 million of term loan and revolving credit facility repayments, $46.3 million of contingent consideration payments related to prior year acquisitions, $11.7 million of payroll withholding tax payments related to net share settlement upon vesting of share-based compensation awards, $10.0 million of repurchases of common shares, and $2.5 million of debt issuance costs in connection with the Fifth Amendment, partially offset by $69.9 million of borrowings under our revolving credit facility used to fund the contingent consideration payment for our 2021 acquisition and the cash consideration for our 2022 acquisition.
Biggest changeFinancing Cash Flows Net cash provided by financing activities was $276.3 million in 2025, was primarily driven by proceeds from the issuance of tangible equity units, net of issuance costs, of $614.4 million, and borrowings under the credit facilities of $82.8 million, partially offset by $365.7 million of term loan and revolving credit facility repayments, $39.3 million related to the repurchase of common shares, $7.8 million of payroll tax payments upon vesting of share-based compensation awards, and $4.7 million of payments for debt issuance costs related to our senior credit facilities.
Revenue is measured as the amount of consideration we expect to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. 43 Substantially all of our revenue is recognized at a point in time, upon shipment, rather than over time.
Revenue is measured as the amount of consideration we expect to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Substantially all of our revenue is recognized at a point in time, upon shipment, rather than over time.
Financing Cash Flows Net cash provided by financing activities was $56.9 million in 2024, primarily due to borrowings under the credit facilities of $198.0 million, partially offset by $131.1 million of term loan and revolving credit facility repayments and $9.7 million of payroll withholding tax payments related to net share settlement upon vesting of share-based compensation awards.
Net cash provided by financing activities was $56.9 million in 2024, primarily due to borrowings under the credit facilities of $198.0 million, partially offset by $131.1 million of term loan and revolving credit facility repayments and $9.7 million of payroll withholding tax payments related to net share settlement upon vesting of share-based compensation awards.
These services generally involve a single distinct performance obligation. The consideration expected to be received in exchange for such services is normally the contractually stated amount. We occasionally sell separately priced non-standard/extended warranty services or preventative maintenance plans with the sale of products. The transfer of control over the service plans is over time.
These services 42 generally involve a single distinct performance obligation. The consideration expected to be received in exchange for such services is normally the contractually stated amount. We occasionally sell separately priced non-standard/extended warranty services or preventative maintenance plans with the sale of products. The transfer of control over the service plans is over time.
Management’s projections are revised, if necessary, in subsequent periods when underlying factors change the estimated probability of achieving the performance targets as well as the levels 44 of achievement. When the estimated achievement levels are adjusted at a later date, a cumulative adjustment to the share-based compensation expense previously recognized would be required.
Management’s projections are revised, if necessary, in subsequent periods when underlying factors change the estimated probability of achieving the performance targets as well as the levels of achievement. When the estimated achievement levels are adjusted at a later date, a cumulative adjustment to the share-based compensation expense previously recognized would be required.
There is no assurance that such capital will be available on reasonable terms or at all. 39 Significant factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability to attract long-term capital with satisfactory terms.
There is no assurance that such capital will be available on reasonable terms or at all. Significant factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability to attract long-term capital with satisfactory terms.
The DCF calculations also include a terminal value calculation that is based upon an expected long-term growth rate for the applicable reporting unit. The carrying values of each 45 reporting unit include assets and liabilities which relate to the reporting unit’s operations.
The DCF calculations also include a terminal value calculation that is based upon an expected long-term growth rate for the applicable reporting unit. The carrying values of each reporting unit include assets and liabilities which relate to the reporting unit’s operations.
In addition, we have the ability to expand our borrowing capacity by up to $350.0 million by exercising the accordion feature under our revolving credit agreement.
In addition, we have the ability to expand our borrowing capacity by up to $350.0 million by exercising the accordion feature under our Credit Agreement.
Impairment exists if the fair value of the intangible asset is less than its carrying value. An impairment charge equal to the difference is recorded to reduce the carrying value to its fair value.
Impairment exists if the 44 fair value of the intangible asset is less than its carrying value. An impairment charge equal to the difference is recorded to reduce the carrying value to its fair value.
The final cost to us will be determined by events as they actually become known, including actual return on plan assets and pension payments to plan participants. As of December 31, 2024, the fair value of plan assets exceeded the projected benefit obligation under the U.K. Plan by $4.2 million.
The final cost to us will be determined by events as they actually become known, including actual return on plan assets and pension payments to plan participants. As of December 31, 2025, the fair value of plan assets exceeded the projected benefit obligation under the U.K. Plan by $4.2 million.
All rights reserved. 32 Ite m 6. [Reserved] Ite m 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations ( “ MD&A”) should be read in conjunction with the Consolidated Financial Statements and Notes included in Item 8 of this Annual Report on Form 10-K.
All rights reserved. 31 Ite m 6. [Reserved] Ite m 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations ( “ MD&A”) should be read in conjunction with the Consolidated Financial Statements and Notes included in Item 8 of this Annual Report on Form 10-K.
We may seek to raise additional capital, which could be in the form of bonds, convertible debt or preferred or common equity, to fund business development activities or other future investing cash requirements, subject to approval by the lenders in the Third Amended and Restated Credit Agreement.
We may seek to raise additional capital, which could be in the form of bonds, convertible debt or preferred or common equity, to fund business development activities or other future investing cash requirements, subject to approval by the lenders in the Fourth Amended and Restated Credit Agreement.
Business Overview Novanta Inc. and its subsidiaries (collectively referred to as, the “Company”, “Novanta”, “we”, “us”, “our”) is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage.
Business Overview Novanta Inc. and its subsidiaries (collectively referred to as the “Company”, “Novanta”, “we”, “us”, “our”) is a leading global supplier of core technology solutions that give medical, life science, and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage.
The most recent annual goodwill and indefinite-lived intangible asset impairment test was performed as of the beginning of the second quarter of 2024, using a qualitative assessment, noting no impairment. As of December 31, 2024, there were no indicators of impairment of our long-lived assets. Accounting for Income Taxes .
The most recent annual goodwill and indefinite-lived intangible asset impairment test was performed as of the beginning of the second quarter of 2025, using a qualitative assessment, noting no impairment. As of December 31, 2025, there were no indicators of impairment of our long-lived assets. Accounting for Income Taxes .
Our Board of Directors may designate and issue one or more series of preferred shares in order to raise additional capital, provided that no shares of any series may be entitled to more than one vote per share. As of December 31, 2024, no preferred shares were issued and outstanding.
Our Board of Directors may designate and issue one or more series of preferred shares in order to raise additional capital, provided that no shares of any series may be entitled to more than one vote per share. As of December 31, 2025, no preferred shares were issued and outstanding.
In the event we determine that we are able to realize our deferred tax assets in the future in excess of their net recorded amounts, an adjustment to the valuation allowance for the deferred tax assets would be recorded and would increase our net income in the period in which such determination is made.
In the event we determine that we are able to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance for the deferred tax assets would be recorded and would increase our net income in the period in which such determination is made.
There have been improvements in the supply chain with better on-time deliveries, and recent efforts have successfully addressed talent 34 shortages. However, uncertainty remains about overall macroeconomic conditions due to geopolitical tensions and possible changes in trade policies.
There have been improvements in the supply chain with better on-time deliveries, and recent efforts have successfully addressed talent shortages. However, uncertainty remains about overall macroeconomic conditions due to geopolitical tensions and changes in trade policies.
The comparison assumes an investment of $100 was made on December 31, 2019 in the Company’s common shares and in each of the indices and, in the case of the indices, it also assumes reinvestment of all dividends. The performance shown is not necessarily indicative of future performance.
The comparison assumes an investment of $100 was made on December 31, 2020 in the Company’s common shares and in each of the indices and, in the case of the indices, it also assumes reinvestment of all dividends. The performance shown is not necessarily indicative of future performance.
The sources of our liquidity are subject to all of the risks of our business and could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences of global pandemics and geopolitical conflicts, prolonged supply chain disruptions and electronics and other material shortages, a decrease in demand for our products, our ability to integrate current and future acquisitions, deterioration in certain financial ratios, availability of borrowings under our revolving credit facility, and market changes in general.
The sources of our liquidity are subject to all of the risks of our business and could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences of geopolitical conflicts and global pandemics, prolonged supply chain disruptions and electronics and other material shortages, a decrease in demand for our products, our ability to integrate current and future acquisitions, deterioration in certain financial ratios, availability of borrowings under our Senior Credit Facilities, and market changes in general.
Based on the results of the most recent funding valuation in 2024, we will not be required to contribute any additional funds for the next three years. Future annual funding contributions, if any, will be determined in the next statutory funding valuation in 2027.
Based on the results of the most recent funding valuation in 2024, we will not be required to contribute any additional funds for the next two years. Future annual funding contributions, if any, will be determined in the next statutory funding valuation in 2027.
If our sales do not materialize as previously forecasted or at historical levels, we may have to increase our reserve for excess and obsolete inventory, which would reduce our operating income.
If our sales do not materialize as previously forecasted or at historical levels, we may have to increase our provision for excess and obsolete inventory, which would reduce our operating income.
In addition, the Credit Agreement contains various other customary representations, warranties and covenants applicable to the Company and its subsidiaries, including: (i) limitations on certain payments; (ii) limitations on fundamental changes involving the Company; (iii) limitations on the disposition of assets; and (iv) limitations on indebtedness, investments, and liens.
In addition, the Fourth Amended and Restated Credit Agreement contains various other customary representations, warranties and covenants applicable to the Company and its subsidiaries, including: (i) limitations on certain payments; (ii) limitations on fundamental changes involving the Company; (iii) limitations on the disposition of assets; and (iv) limitations on indebtedness, investments, and liens.
We believe our future operating cash flows will be sufficient to meet our future operating and capital expenditure cash needs for the foreseeable future, including at least the next 12 months. The availability of borrowing capacity under our revolving credit facility provides another potential source of liquidity for any future capital expenditures and other liquidity needs.
We believe our future operating cash flows will be sufficient to meet our future operating and capital expenditure cash needs for the foreseeable future, including at least the next 12 months. The availability of borrowing capacity under our Senior Credit Facilities provides another potential source of liquidity for any future capital expenditures and other liquidity needs.
Holders As of the close of business on February 17, 2025, there were approximately 30 holders of record of the Company’s common shares. Since many of the common shares are registered in “nominee” or “street” names, the Company believes that the total number of beneficial owners is considerably higher.
Holders As of the close of business on February 16, 2026, there were approximately 30 holders of record of the Company’s common shares. Since many of the common shares are registered in “nominee” or “street” names, the Company believes that the total number of beneficial owners is considerably higher.
The increase in operating income was primarily due to an increase in gross profit of $31.8 million and a decrease in amortization expense of $1.2 million, partially offset by an increase in R&D expenses of $9.0 million, an increase in SG&A expenses of $6.6 million, and an increase in restructuring, acquisition and related costs of $0.9 million.
The increase in operating income was primarily due to an increase in gross profit of $4.5 million, a decrease in restructuring, acquisition and related costs of $1.8 million, a decrease in amortization expense of $1.4 million, and a decrease in R&D expenses of $1.2 million, partially offset by an increase in SG&A expenses of $0.9 million.
These estimates are based on current interest rates on floating rate obligations, as defined in the Third Amended and Restated Credit Agreement, for the remainder of the contractual life of both the term loan and outstanding borrowings under the revolving credit facility, and the current commitment fee rate was used for the unused commitments under the revolving credit facility as of December 31, 2024.
These 41 estimates are based on current interest rates on floating rate obligations, as defined in the Fourth Amended and Restated Credit Agreement, for the remainder of the contractual life of both the term loan and outstanding borrowings under the revolving credit facility, and the current commitment fee rate was used for the unused commitments under the revolving credit facility as of December 31, 2025.
We combine deep proprietary technology expertise and competencies in precision medicine, precision manufacturing, robotics and automation, and advanced surgery with a proven ability to solve complex technical challenges. This enables us to engineer core components and sub-systems that deliver extreme precision and performance, tailored to our customers' demanding applications.
We combine deep proprietary technology expertise and competencies in precision medicine, precision manufacturing, robotics and automation, and advanced surgery with a proven ability to solve complex technical challenges. This enables us to engineer proprietary technology solutions that deliver extreme precision and performance, tailored to our customers' demanding applications.
Our primary ongoing cash requirements are funding operations, capital expenditures, investments in businesses, and repayment of debt and related interest payments. Our primary sources of liquidity are cash flows from operations and borrowings under our revolving credit facility.
Our primary ongoing cash requirements are funding operations, capital expenditures, investments in businesses, and repayment of debt and related interest payments. Our primary sources of liquidity are cash flows from operations and borrowings under our Senior Credit Facilities.
Restructuring, Acquisition and Related Costs Restructuring, acquisition and related costs primarily relate to our restructuring programs, acquisition related costs incurred for completed acquisitions, acquisition costs related to future potential acquisitions and failed acquisitions, and changes in fair value of contingent considerations. We recorded restructuring, acquisition and related costs of $13.7 million in 2024, versus $12.8 million in 2023.
Restructuring, Acquisition and Related Costs Restructuring, acquisition and related costs primarily relate to our restructuring programs, acquisition related costs incurred for completed acquisitions, acquisition costs related to future potential acquisitions and failed acquisitions, and changes in fair value of contingent considerations. We recorded restructuring, acquisition and related costs of $22.7 million in 2025, versus $13.7 million in 2024.
End Markets We primarily operate in two end markets: the medical market and the advanced industrial market. Medical Market For the year ended December 31, 2024, the medical market accounted for approximately 55% of our revenue.
End Markets We primarily operate in two end markets: the medical market and the advanced industrial market. Medical Market For the year ended December 31, 2025, the medical market accounted for approximately 53% of our revenue.
The decrease in operating income was primarily due to an increase in R&D expenses of $7.7 million, an increase in amortization expense of $7.1 million as a result of our 2024 acquisition, an increase in restructuring, acquisition and related costs of $5.6 million and an increase in SG&A expenses of $4.6 million, partially offset by an increase in gross profit of $19.2 million.
The decrease in operating income was primarily due to an increase in SG&A expenses of $6.2 million, an increase in restructuring, acquisition and related costs of $5.5 million, an increase in amortization expenses of $3.1 million as a result of our 2025 acquisition, and an increase in R&D expenses of $1.2 million, partially offset by an increase in gross profit of $9.7 million.
Net Income Net income was $64.1 million for 2024, compared to $72.9 million for 2023, and $74.1 million for 2022, reflecting the impact of the factors described above. Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities.
Net Income Net income was $53.8 million for 2025, compared to $64.1 million for 2024, reflecting the impact of the factors described above. Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities.
Dollars of $86.6 million and $332.6 million, respectively. The Credit Agreement contains various covenants that, we believe, are usual and customary for this type of agreement, including a maximum allowed leverage ratio and a minimum required fixed charge coverage ratio (as defined in the Third Amended and Restated Credit Agreement).
The Fourth Amended and Restated Credit Agreement contains various covenants that, we believe, are usual and customary for this type of agreement, including a maximum allowed leverage ratio and a minimum required fixed charge coverage ratio (as defined in the Fourth Amended and Restated Credit Agreement).
Advanced Industrial Market For the year ended December 31, 2024, the advanced industrial market accounted for approximately 45% of our revenue.
Advanced Industrial Market For the year ended December 31, 2025, the advanced industrial market accounted for approximately 47% of our revenue.
Amortization of purchased intangible assets, excluding the amortization of developed technologies that is included in cost of revenue, was $25.8 million, or 2.7% of revenue, in 2024, versus $20.4 million, or 2.3% of revenue, in 2023.
Amortization of purchased intangible assets, excluding the amortization of developed technologies that is included in cost of revenue, was $27.5 million, or 2.8% of revenue, in 2025, versus $25.8 million, or 2.7% of revenue, in 2024.
As of December 31, 2024, future interest payments under our Senior Credit Facilities are estimated to be approximately $52.7 million through maturity based on the current contractual term, with $24.4 million payable within the next twelve months.
As of December 31, 2025, future interest payments under our Senior Credit Facilities are estimated to be approximately $33.6 million through maturity based on the current contractual term, with $8.1 million payable within the next twelve months.
Share repurchases have been made under the 2020 Repurchase Plan pursuant to Rule 10b-18 under the Securities Exchange Act of 1934. During the year ended December 31, 2022, we repurchased 4 thousand shares for an aggregate purchase price of $0.5 million at an average price of $116.95 per share under the 2020 Repurchase Plan.
Share repurchases have been made under the 2020 Repurchase Plan pursuant to Rule 10b-18 under the Securities Exchange Act of 1934. During the year ended December 31, 2025, we repurchased 357 thousand shares for an aggregate purchase price of $39.3 million at an average price of $110.17 per share under the 2020 Repurchase Plan.
On December 12, 2022, the EU member states agreed to implement the Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Model Rules. These rules, which impose a global corporate minimum income tax rate of 15%, have been enacted or introduced in proposed legislation in 45 countries.
On December 12, 2022, the EU member states agreed to implement the Organisation for Economic Co-operation and Development’s (“OECD”) Pillar Two Model Rules. These rules, which establish a global minimum corporate income tax rate of 15%, have been enacted or proposed legislation in numerous countries worldwide, including most of the jurisdictions in which we operate.
As of December 31, 2024, $71.7 million of our $114.0 million of cash and cash equivalents was held by our subsidiaries outside of North America. Generally, our intent is to use cash held in these foreign subsidiaries to fund our local operations or acquisitions by those local subsidiaries and to pay down borrowings under our senior credit facilities.
Generally, our intent is to use cash held in these foreign subsidiaries to fund our local operations or acquisitions by those local subsidiaries and to pay down borrowings under our Senior Credit Facilities. Approximately $74.0 million of the outstanding borrowings under our Senior Credit Facilities were held in our subsidiaries outside of North America as of December 31, 2025.
Unallocated costs Unallocated costs primarily represent costs of corporate and shared SG&A functions and other public company costs that are not allocated to the reportable segments, including certain restructuring and most acquisition related costs. Unallocated costs for 2024 increased by $4.3 million, or 8.8%, from 2023. The increase in operating loss was primarily due to an increase in SG&A expenses.
Unallocated costs Unallocated costs primarily represent costs of corporate and shared SG&A functions and other public company costs that are not allocated to the reportable segments, including certain restructuring and most acquisition related costs. Unallocated costs for 2025 increased by $18.3 million, or 34.4%, from 2024.
The results of funding valuations depend on both the funding deficit and the assumptions used, such as asset returns, discount rates, 42 mortality rates, retail price inflation and other market driven assumptions. Each assumption used represents one estimate of many possible future outcomes.
Plan based on actuarial methods as permitted by the Pensions Regulator in the U.K. The results of funding valuations depend on both the funding deficit and the assumptions used, such as asset returns, discount rates, mortality rates, retail price inflation and other market driven assumptions. Each assumption used represents one estimate of many possible future outcomes.
However, our future results may include favorable or unfavorable adjustments to our tax liabilities in the period that the assessments are made or resolved, or when the statute of limitations for certain periods expires.
We believe that we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our tax liabilities in the period that the assessments are made or resolved, or when the statute of limitations for certain periods expires.
Automation Enabling Technologies Automation Enabling Technologies segment gross profit for 2024 increased $0.2 million, or 0.1%, versus 2023, primarily due to an increase in gross profit margin, partially offset by a decrease in revenue. Automation Enabling Technologies segment gross profit margin was 47.9% in 2024, versus a gross profit margin of 47.0% for 2023.
Automation Enabling Technologies Automation Enabling Technologies segment gross profit for 2025 increased $4.5 million, or 1.9%, versus 2024, primarily due to an increase in revenue. Automation Enabling Technologies segment gross profit margin was 47.8% in 2025, versus a gross profit margin of 47.9% for 2024.
The increase, in terms of total dollars and as a percentage of revenue, was the result of more acquired intangible assets from our 2024 acquisition.
The increase, in terms of total dollars and as a percentage of revenue, was the result of more acquired intangible assets from our 2025 acquisition, partially offset by certain intangible assets being fully amortized in 2025.
Cash Flows Cash and cash equivalents totaled $114.0 million as of December 31, 2024, versus $105.1 million as of December 31, 2023.
Cash Flows Cash and cash equivalents totaled $380.9 million as of December 31, 2025, versus $114.0 million as of December 31, 2024.
The following table summarizes these financial covenants and our compliance therewith as of December 31, 2024: Requirement Actual as of December 31, 2024 Maximum consolidated leverage ratio (1) 3.50 1.86 Minimum consolidated fixed charge coverage ratio 1.50 4.69 (1) Maximum consolidated leverage ratio shall be increased to 4.00 for four consecutive quarters following a designated acquisition, as defined in the Fifth Amendment.
The following table summarizes these financial covenants and our compliance therewith as of December 31, 2025: Requirement Actual as of December 31, 2025 Maximum consolidated leverage ratio (1) 3.75 0.71 Minimum consolidated fixed charge coverage ratio 1.25 6.25 (1) Maximum consolidated leverage ratio shall be increased to 4.25 for four consecutive quarters following a designated acquisition, as defined in the Fourth Amended and Restated Credit Agreement.
Strategy Our strategy is to drive sustainable, profitable growth through short-term and long-term initiatives, including: • disciplined focus on our diversified business model of providing functionality to long life-cycle OEM customer platforms in attractive medical and advanced industrial niche markets; • improving our business mix to increase medical sales as a percentage of total revenue by: - introducing new products aimed at attractive medical applications, such as minimally invasive and robotic surgery, ophthalmology, patient monitoring, drug delivery, clinical laboratory testing and life science equipment; - deepening our key account management relationships with and driving cross selling of our product offerings to leading medical equipment manufacturers; and - pursuing complementary medical technology acquisitions; • increasing our penetration of high growth advanced industrial applications, such as laser materials processing, intelligent end-of-arm robotic technology solutions, robotics, laser additive manufacturing, automation and metrology, by working closely with OEM customers to launch application specific products that closely match the requirements of each application; • broadening our portfolio of enabling proprietary technologies and capabilities through increased investment in new product development, and investments in application development to further penetrate existing customers, while expanding the applicability of our solutions to new markets; • broadening our product and service offerings through the acquisition of innovative and complementary technologies and solutions in medical and advanced industrial technology applications; • expanding sales and marketing channels to reach new target customers; • improving our existing operations to expand profit margins and improve customer satisfaction by implementing lean manufacturing principles, strategic sourcing across our major production sites, and optimizing and limiting the growth of our fixed cost base; and • attracting, retaining, and developing world-class talented and motivated employees.
We believe that the Purchasing Managers Index on manufacturing activities specific to different regions around the world may provide an indication of the impact of general economic conditions on our sales into the advanced industrial market. 32 Strategy Our strategy is to drive sustainable, profitable growth through short-term and long-term initiatives, including: • disciplined focus on our diversified business model of providing proprietary technology solutions to long life-cycle OEM customer platforms in attractive medical and advanced industrial niche markets; • improving our business mix to increase medical sales as a percentage of total revenue by: - introducing new products aimed at attractive medical applications, such as minimally invasive and robotic surgery, ophthalmology, patient monitoring, drug delivery, clinical laboratory testing and life science equipment; - deepening our key account management relationships with and driving cross selling of our product offerings to leading medical equipment manufacturers; and - pursuing complementary medical technology acquisitions; • increasing our penetration of high growth advanced industrial applications, such as laser materials processing, intelligent end-of-arm robotic technology solutions, robotics, laser additive manufacturing, automation and metrology, by working closely with OEM customers to launch application specific products that closely match the requirements of each application; • broadening our portfolio of enabling proprietary technologies and capabilities through increased investment in new product development, and investments in application development to further penetrate existing customers, while expanding the applicability of our solutions to new markets; • broadening our product and service offerings through the acquisition of innovative and complementary technologies and solutions in medical and advanced industrial technology applications; • expanding sales and marketing channels to reach new target customers; • strengthening our operational performance to expand profit margins and enhance customer satisfaction by deploying lean manufacturing principles and advancing strategic sourcing initiatives across our major production sites, while regionalizing our manufacturing footprint and establishing manufacturing centers of excellence to achieve greater efficiency and reduce overall production complexity; and • advancing a people first culture that promotes a growth mindset, cohesive and engaged teams, and continuous employee development to enable long‑term organizational excellence.
However, as local laws and regulations and/or the terms of our indebtedness restrict certain of our subsidiaries from paying dividends and transferring assets to us, there is no assurance that our subsidiaries will be permitted to provide us with sufficient dividends, distributions or loans when necessary.
However, as local laws and regulations and/or the terms of our indebtedness restrict certain of our subsidiaries from paying dividends and transferring assets to us, there is no assurance that our subsidiaries will be permitted to provide us with sufficient dividends, distributions or loans when necessary. 38 As of December 31, 2025, $67.6 million of our $380.9 million of cash and cash equivalents was held by our subsidiaries outside of North America.
Likewise, should we determine that we will not be able to realize all or part of our net 46 deferred tax assets in the future, an adjustment to the valuation allowance for the deferred tax assets will be recorded and will reduce our net income in the period in which such determination is made.
Likewise, should we determine that we will not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the valuation allowance for the deferred tax assets will be recorded and will reduce our net income in the period such determination is made. 45 In conjunction with our ongoing review of our actual results and anticipated future earnings, we continuously reassess the adequacy of the valuation allowance currently in place on our deferred tax assets.
Basic earnings per common share (“basic EPS”) of $1.78 in 2024 decreased $0.25 from basic EPS of $2.03 in 2023. Diluted earnings per common share (“diluted EPS”) of $1.77 in 2024 decreased $0.25 from diluted EPS of $2.02 in 2023.
Basic earnings per common share (“basic EPS”) of $1.47 in 2025 decreased $0.31 from basic EPS of $1.78 in 2024. Diluted earnings per common share (“diluted EPS”) of $1.47 in 2025 decreased $0.30 from diluted EPS of $1.77 in 2024.
There is no expiration date for the 2020 Repurchase Plan. 31 Performance Graph The following graph compares the cumulative total return on the Company’s common shares with the cumulative total return on the Nasdaq Composite Index and the Russell 2000 Index for the period from December 31, 2019 through December 31, 2024.
No shares have been repurchased under the 2025 Repurchase Plan as of December 31, 2025. 30 Performance Graph The following graph compares the cumulative total return on the Company’s common shares with the cumulative total return on the Nasdaq Composite Index and the Russell 2000 Index for the period from December 31, 2020 through December 31, 2025.
This was primarily attributable to an increase in gross profit of $21.6 million, partially offset by an increase in selling, general and administrative (“SG&A”) expenses of $11.5 million, an increase in amortization expense of $5.3 million, an increase in research and development and engineering (“R&D”) expenses of $3.8 million, and an increase in restructuring, acquisition and related costs of $0.9 million.
This was primarily attributable to an increase in selling, general and administrative (“SG&A”) expenses of $19.7 million, an increase in restructuring, acquisition and related costs of $8.9 million, and an increase in amortization expense of $1.7 million, partially offset by an increase in gross profit of $13.7 million.
Medical Solutions Medical Solutions segment operating income was $57.5 million, or 12.5% of revenue, in 2024, versus $63.3 million, or 16.5% of revenue, in 2023.
Medical Solutions Medical Solutions segment operating income was $51.2 million, or 10.7% of revenue, in 2025, versus $57.5 million, or 12.5% of revenue, in 2024.
The borrowings outstanding under the Senior Credit Facilities bear interest at rates based on (a) the Base Rate, as defined in the Credit Agreement, plus a margin ranging between 0.00% to 0.75% per annum, determined by reference to our consolidated leverage ratio, or (b) the Term SOFR Screen Rate, the Alternative Currency Daily Rate or the Alternative Currency Term Rate, as defined in the Credit Agreement, plus a margin ranging between 0.75% and 1.75% per annum, determined by reference to our consolidated leverage ratio.
The borrowings under the Fourth Amended and Restated Credit Agreement bear interest at the Base Rate (as defined in the Fourth Amended and Restated Credit Agreement) plus a margin ranging between zero and 0.75% per annum, determined by reference to the our consolidated leverage ratio, or SOFR, SONIA or EURIBOR, as applicable, plus a margin ranging between 1.00% and 1.75% per 39 annum, determined by reference to our consolidated leverage ratio.
In addition, we are obligated to pay a commitment fee on the unused portion of the revolving credit facility, ranging between 0.20% and 0.30% per annum, determined by reference to our consolidated leverage ratio. As of December 31, 2024, we had outstanding borrowings under the Senior Credit Facilities denominated in Euro and U.S.
In addition, we are obligated to pay a commitment fee on the unused portion of the Revolving Facility. As of December 31, 2025, we had outstanding borrowings under the Senior Credit Facilities denominated in Euro and U.S. Dollars of $74.0 million and $75.0 million, respectively.
Interest Income (Expense), Foreign Exchange Transaction Gains (Losses), and Other Income (Expense), Net The following table sets forth interest income (expense), foreign exchange transaction gains (losses), and other income (expense) for 2024, 2023, and 2022 (in thousands): 2024 2023 2022 Interest income (expense), net $ (31,489 ) $ (25,818 ) $ (15,616 ) Foreign exchange transaction gains (losses), net $ 413 $ (255 ) $ 67 Other income (expense), net $ (442 ) $ (675 ) $ (371 ) Interest Income (Expense), Net Net interest expense was $31.5 million in 2024 versus $25.8 million in 2023.
Interest Income (Expense), Foreign Exchange Transaction Gains (Losses), and Other Income (Expense), Net The following table sets forth interest income (expense), foreign exchange transaction gains (losses), and other income (expense) for 2025 and 2024 (in thousands): 2025 2024 Interest income (expense), net $ (21,472 ) $ (31,489 ) Foreign exchange transaction gains (losses), net $ (2,190 ) $ 413 Other income (expense), net $ (708 ) $ (442 ) Interest Income (Expense), Net Net interest expense was $21.5 million in 2025 versus $31.5 million in 2024.
Economic tensions and changes in trade policies, such as higher tariffs, retaliatory measures, and renegotiated free trade agreements, changes in government funding, and the ongoing impact from prolonged inflationary pressures could impact the global market for our products. In addition, we continue to monitor geopolitical conflict in Israel, Russia and Ukraine for any potential impact on our businesses.
Economic tensions and changes in trade policies, such as higher tariffs, retaliatory measures, renegotiated free trade agreements, changes in government funding, and the ongoing impact from prolonged inflationary pressures have impacted the global market for our products and the related cost to manufacture.
Plan with respect to all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally and in any capacity whatsoever) under the U.K. Plan. Our funding policy is to fund the U.K. Plan based on actuarial methods as permitted by the Pensions Regulator in the U.K.
On July 1, 2013, the Company provided a Guarantee (the “Guarantee”) in favor of the trustees of the U.K. Plan with respect to all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally and in any capacity whatsoever) under the U.K. Plan. Our funding policy is to fund the U.K.
Operating Expenses The following table sets forth operating expenses for 2024, 2023, and 2022 (dollars in thousands): % Change % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Research and development and engineering $ 95,515 $ 91,682 $ 85,770 4.2 % 6.9 % Selling, general and administrative 175,943 164,460 158,901 7.0 % 3.5 % Amortization of purchased intangible assets 25,794 20,445 26,338 26.2 % (22.4 )% Restructuring, acquisition and related costs 13,709 12,814 4,384 7.0 % 192.3 % Total $ 310,961 $ 289,401 $ 275,393 7.4 % 5.1 % 36 Research and Development and Engineering Expenses Research and development and engineering (“R&D”) expenses are primarily comprised of employee compensation and related expenses and cost of materials for R&D projects.
Operating Expenses The following table sets forth operating expenses for 2025 and 2024 (dollars in thousands): % Change 2025 2024 2025 vs. 2024 Research and development and engineering $ 95,484 $ 95,515 0.0 % Selling, general and administrative 195,659 175,943 11.2 % Amortization of purchased intangible assets 27,477 25,794 6.5 % Restructuring, acquisition and related costs 22,652 13,709 65.2 % Total $ 341,272 $ 310,961 9.7 % Research and Development and Engineering Expenses Research and development and engineering (“R&D”) expenses are primarily comprised of employee compensation and related expenses and cost of materials for R&D projects.
The following table summarizes our cash and cash equivalent balances, cash flows and unused borrowing capacity available under our revolving credit facility for the years indicated (in thousands): 2024 2023 2022 Cash and cash equivalents, end of year $ 113,989 $ 105,051 $ 100,105 Net cash provided by operating activities $ 158,512 $ 120,075 $ 90,779 Net cash used in investing activities $ (208,189 ) $ (19,892 ) $ (42,541 ) Net cash provided by (used in) financing activities $ 56,943 $ (97,853 ) $ (60,154 ) Unused borrowing capacity available under the revolving credit facility, end of year $ 346,249 $ 416,596 $ 336,587 41 Operating Cash Flows Net cash provided by operating activities was $158.5 million in 2024, versus $120.1 million in 2023.
The following table summarizes our cash and cash equivalent balances, cash flows and unused borrowing capacity available under our revolving credit facility for the years indicated (in thousands): 2025 2024 Cash and cash equivalents, end of year $ 380,871 $ 113,989 Net cash provided by operating activities $ 64,056 $ 158,512 Net cash used in investing activities $ (74,322 ) $ (208,189 ) Net cash provided by financing activities $ 276,330 $ 56,943 Unused borrowing capacity available under the revolving credit facility, end of year $ 850,000 $ 346,249 Operating Cash Flows Net cash provided by operating activities was $64.1 million in 2025, versus $158.5 million in 2024.
Limited, a wholly owned subsidiary of the Company. Our U.K. Plan was closed to new members in 1997 and stopped accruing additional pension benefits for existing members in 2003, thereby limiting our obligation to benefits earned through that date.
Our U.K. Plan was closed to new members in 1997 and stopped accruing additional pension benefits for existing members in 2003, thereby limiting our obligation to benefits earned through that date. Benefits under this plan were based on the participants’ years of service and compensation as of the date the plan was frozen, adjusted for inflation.
Prior period segment financial information has been recast to align with the new reportable segments. Business Environment In recent years, the global economy has faced significant challenges, including inflation, supply chain disruptions, business slowdowns, labor shortages, and market volatility. We address macroeconomic challenges by continuing to execute our strategy.
Business Environment In recent years, the global economy has faced significant challenges, including inflation, supply chain disruptions, business slowdowns, labor shortages, and market volatility, and new and proposed tariffs announced by the U.S. Presidential Administration have introduced additional uncertainty. We address macroeconomic challenges by continuing to execute our strategy.
Accordingly, share-based compensation expenses associated with attainment-based PSUs may differ significantly from period to period based on changes to both the probability and the level of achievement against the specified performance targets.
Accordingly, share-based compensation expenses associated with attainment-based PSUs may differ significantly from period to period based on changes to both the probability and the level of achievement against the specified performance targets. 43 For market-based PSUs, share-based compensation expenses are recognized based on the fair value of the market-based PSUs, which is determined using the Monte-Carlo simulation valuation model as of the date of grant.
The increase in net interest expense was primarily due to an increase in average debt levels to fund the 2024 acquisition and an increase in the weighted average interest rate, partially offset by an increase in interest income. The weighted average interest rate on our outstanding debt was 6.58% and 6.21% for 2024 38 and 2023, respectively.
The decrease in net interest expense was primarily due to a decrease in average debt levels and a decrease in the weighted average interest rate. The weighted average interest rate on our outstanding debt was 5.57% and 6.58% for 2025 and 2024, respectively.
We recorded a tax provision of $10.9 million in 2023. The effective tax rate for 2023 was 13.0% of income before income taxes.
Income Tax Provision We recorded a tax provision of $15.8 million in 2025, compared to a tax provision of $15.0 million in 2024. The effective tax rate for 2025 was 22.7% of income before income taxes, compared to an effective tax rate of 18.9% of income before income taxes for 2024.
Medical Solutions segment revenue in 2023 increased $55.6 million, or 17.0%, versus 2022, primarily due to increases in sales from our advanced surgery and precision medicine products, and $8.1 million of revenue contributions from our 2022 acquisition. 35 Gross Profit The following table sets forth the gross profit and gross profit margin for each of our reportable segments for 2024, 2023 and 2022 (dollars in thousands): 2024 2023 2022 Gross profit: Automation Enabling Technologies $ 234,975 $ 234,798 $ 245,005 Medical Solutions 189,957 170,787 139,031 Unallocated (3,387 ) (5,688 ) (5,564 ) Total $ 421,545 $ 399,897 $ 378,472 Gross profit margin: Automation Enabling Technologies 47.9 % 47.0 % 45.9 % Medical Solutions 41.4 % 44.7 % 42.5 % Total 44.4 % 45.4 % 44.0 % Gross profit and gross profit margin can be influenced by a number of factors, including product mix, pricing, volume, manufacturing efficiencies and utilization, costs for raw materials and outsourced manufacturing, headcount, inventory obsolescence and fair value adjustments, warranty expenses, and intangible amortization.
Gross Profit The following table sets forth the gross profit and gross profit margin for each of our reportable segments for 2025 and 2024 (dollars in thousands): 2025 2024 Gross profit: Automation Enabling Technologies $ 239,506 $ 234,975 Medical Solutions 199,701 189,957 Unallocated (3,923 ) (3,387 ) Total $ 435,284 $ 421,545 Gross profit margin: Automation Enabling Technologies 47.8 % 47.9 % Medical Solutions 41.6 % 41.4 % Total 44.4 % 44.4 % Gross profit and gross profit margin can be influenced by a number of factors, including product mix, pricing, volume, manufacturing efficiencies and utilization, costs for raw materials and outsourced manufacturing, headcount, inventory obsolescence and fair value adjustments, warranty expenses, and intangible amortization.
No shares were repurchased during the years ended December 31, 2024 or 2023. As of December 31, 2024, we had $49.5 million available for share repurchases under the 2020 Repurchase Plan.
No shares were repurchased during the years ended December 31, 2024 or 2023. As of December 31, 2025, we had $10.2 million available for share repurchases under the 2020 Repurchase Plan. In September 2025, our Board of Directors approved a share repurchase plan (the “2025 Repurchase Plan”) authorizing the repurchase of $200.0 million worth of common shares.
If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable.
We review the status of each significant matter and assess our potential financial exposure on a quarterly basis. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss.
Included in net interest expense was non-cash interest expense of approximately $1.2 million for both 2024 and 2023, related to the amortization of deferred financing costs on our debt. Net interest expense was $25.8 million in 2023 versus $15.6 million in 2022.
Included in net interest expense was non-cash interest expense of approximately $1.5 million for 2025 and $1.2 million 2024, related to the amortization of deferred financing costs. Net interest expense also included $0.9 million interest expense related to the amortizing notes.
Investing Cash Flows Net cash used in investing activities was $208.2 million in 2024, primarily related to the $191.2 million of cash considerations (net of cash acquired) paid for our 2024 acquisition and capital expenditures of $17.2 million. Net cash used in investing activities was $19.9 million in 2023, primarily related to capital expenditures of $20.0 million.
Net cash used in investing activities was $208.2 million in 2024, primarily related to the $191.2 million of cash consideration (net of cash acquired) paid for our 2024 acquisition and capital expenditures of $17.2 million. We have no material commitments to purchase property, plant and equipment as of December 31, 2025.
The term loan facility requires quarterly scheduled principal repayments of approximately €1.1 million that began in March 2020 with the remaining principal balance due upon maturity. We may make additional principal payments at any time, which will reduce the next quarterly installment payment due.
Term Loans), with the remaining principal balance of the term loans due on June 27, 2030, if the maturity date of the term loan facility is not otherwise extended. We may make additional principal payments at any time, which will reduce the next quarterly installment payment due.
The net increase in cash and cash equivalents is primarily attributable to cash provided by operating activities of $158.5 million, and $198.0 million of borrowings under our revolving credit agreement, partially offset by $191.2 million of cash consideration for the 2024 acquisition, $131.1 million of debt repayments, $17.2 million of capital expenditures, and $9.7 million of payroll withholding tax payments related to net share settlement upon vesting of share-based compensation awards.
The net increase in cash and cash equivalents is primarily attributable to $614.4 million of proceeds from the issuance of tangible equity units, net of issuance costs paid, $82.8 million of borrowings under our Senior Credit Facilities, and cash provided by operating activities of $64.1 million, partially offset by $365.7 million of debt repayments, $64.3 million of cash consideration for our 2025 acquisition, $39.3 million related to the repurchase of common shares, $15.6 million of capital expenditures, and $7.8 million of payroll tax payments upon vesting of share-based compensation awards.
R&D expenses increased in terms of total dollars primarily due to higher compensation related expenses. Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses include costs for sales and marketing, sales administration, finance, human resources, legal, information systems and executive management.
R&D expenses were $95.5 million, or 9.7% of revenue, in 2025, versus $95.5 million, or 10.1% of revenue, in 2024. Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses include costs for sales and marketing, sales administration, finance, human resources, legal, information systems and executive management.
As of December 31, 2024, we had $70.4 (€67.6) million term loan and $348.8 million revolver borrowings outstanding under our Senior Credit Facilities.
As of December 31, 2025, we had no outstanding revolver borrowings under our Senior Credit Facilities.
Medical Solutions Medical Solutions segment revenue in 2024 increased $76.2 million, or 19.9%, versus 2023, primarily due to revenue from our 2024 acquisition, and an increase in sales from our advanced surgery products, partially offset by a decrease in revenue from our precision medicine products.
Medical Solutions Medical Solutions segment revenue in 2025 increased $21.1 million, or 4.6%, versus 2024, primarily driven by a $33.7 million increase in revenue from our advanced surgery products, partially offset by a $12.6 million decline in precision medicine products.
Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position. We expense legal fees as incurred. Recent Accounting Pronouncements See Note 2 to Consolidated Financial Statements for recent accounting pronouncements that could have a significant effect on us.
As additional information becomes available, we will reassess the potential liability related to our pending claims and litigation and may revise our estimates. Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position. We expense legal fees as incurred.
In 2025, we are contractually required to make $4.7 million in repayments under our term loan facility. In addition, we may make optional repayments under our revolving credit facility from time to time with available cash generated from future operating activities. Other Liquidity Matters Pension Plans We maintain a defined benefit pension plan (the “U.K. Plan”) in Novanta Technologies U.K.
In 2026, we are contractually required to make $6.2 million in repayments under our term loan facilities. In addition, we are contractually required to make $33.9 million in repayments under our Amortizing Notes. Other Liquidity Matters Pension Plans We maintain a defined benefit pension plan (the “U.K. Plan”) in Novanta Technologies U.K. Limited, a wholly owned subsidiary of the Company.
As of December 31, 2024, the Company’s total amount of unrecognized tax benefits was $4.8 million, of which $4.1 million would favorably affect our effective tax rate, if recognized. Over the next twelve months, we may need to recognize up to $0.8 million of previously unrecognized tax benefits due to statute of limitations closures.
As of December 31, 2025, the Company’s total amount of gross unrecognized tax benefits was $4.4 million, of which $3.7 million would favorably affect our effective tax rate, if recognized.
We received $0.8 million net working capital adjustment in 2022 related to our 2021 acquisition. We have no material commitments to purchase property, plant and equipment as of December 31, 2024. We expect to use approximately $20 million to $30 million in 2025 for capital expenditures related to investments in new property, plant and equipment for our existing businesses.
We expect to use approximately $20 million to $25 million in 2026 for capital expenditures related to investments in new property, plant and equipment for our existing businesses.
Material Cash Requirements Senior Credit Facilities As of December 31, 2024, we had $70.4 million (€67.6 million) term loan and $348.8 million revolving credit facility borrowings outstanding under the Senior Credit Facilities.
Material Cash Requirements Senior Credit Facilities As of December 31, 2025, we had $74.0 (€63.1) million outstanding under the Euro Term Loans and $75.0 million outstanding under the U.S. Term Loans. As of December 31, 2025, we had no outstanding revolver borrowings under our Senior Credit Facilities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

228 edited+72 added−50 removed136 unchanged
Biggest changeThe assessment of the estimate of fair value required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions relative to revenue growth rates and discount rate. 50 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the estimate of the fair value of acquired developed technology and customer relationships for Motion Solutions included the following, among others: • We tested the effectiveness of controls over the valuation of developed technology and customer relationships, including management's controls over revenue growth rates and discount rates. • We evaluated the reasonableness of management's estimate of revenue growth rates: o We compared revenue forecasts assumptions to historical results. o We compared revenue forecasts to peer companies. o We compared revenue forecast and growth rates to similar businesses acquired by the Company in prior years. o With the assistance of our fair value specialists, we compared the long-term growth rate used to calculate the terminal value to market information. o We compared revenue forecasts to internal communication to management and the Board of Directors and other information obtained while performing the audit. • We evaluated the reasonableness of management's estimate of the discount rate by comparison to the historical discount rates used on similar prior acquisitions. • With the assistance of our fair value specialists, we evaluated the reasonableness of the fair value estimate for the developed technology and customer relationships and discount rate: o We evaluated the reasonableness of the valuation methodologies selected. o We tested source information underlying the determination of certain assumptions, tested the mathematical accuracy of calculations and compared those to the amounts selected by management. o We developed an independent range for the discount rate and compared such rate to the Company’s discount rate used in the valuation of the developed technology and customer relationship assets. /s/ Deloitte & Touche LLP Boston, Massachusetts February 25, 2025 We have served as the Company’s auditor since 2024. 51 Re port of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Novanta Inc.
Biggest changeGiven the significant professional judgment and the complexity of the accounting analysis required by management to evaluate the classification of the Purchase Contracts, performing audit procedures to assess the reasonableness of management’s conclusions required a high degree of auditor judgment and increased audit effort, including the need to involve professionals with expertise in accounting for complex financial instruments and our fair value specialists. 49 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the classification of the TEUs included the following, among others: • We tested the effectiveness of controls over the Company’s evaluation of the Purchase Contracts, including management’s controls over the technical accounting analysis performed related to classification. • We evaluated management's accounting conclusions through the following procedures: o Obtained and evaluated the Company's accounting memoranda regarding the application of the relevant accounting guidance for the TEUs. o Obtained, read and compared the underlying terms and conditions of the relevant contracts to the Company's accounting memoranda and evaluated management's identification of significant terms and conditions. o Evaluated the Company's conclusions regarding the accounting treatment applied to the transactions with the assistance of professionals with expertise in accounting for complex financial instruments. • With the assistance of our fair value specialists, we evaluated the valuation methodology and mathematical accuracy used to calculate the probability of the Company’s stock price being above and below the variable share settlement range. /s/ Deloitte & Touche LLP Boston, Massachusetts February 23, 2026 We have served as the Company’s auditor since 2024. 50 Re port of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Novanta Inc.
This program was focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program was focused on cost reduction actions to improve gross margins for the overall company.
This program was focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program was focused on cost reduction actions to improve gross margins for the overall company.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
It is allocated on a weighted average basis as follows: equities ( 5 %), bonds ( 90 %) and other assets ( 5 %). (2) This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds ( 79 %) and other assets ( 21 %).
It is allocated on a weighted average basis as follows: equities ( 5 %), bonds ( 90 %) and other assets ( 5 %). (2) This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds ( 79 %) and other assets ( 21 %). 16.
The probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made.
This probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made.
In February 2020, the Company’s Board of Directors approved a new share repurchase plan (the “2020 Repurchase Plan”) authorizing the repurchase of an additional $ 50.0 million worth of common shares.
In February 2020, the Company’s Board of Directors approved a share repurchase plan (the “2020 Repurchase Plan”) authorizing the repurchase of an additional $ 50.0 million worth of common shares.
Other Information Rule 10b5-1 Trading Plans No officers or directors adopted , modified , and/or terminated a “Rule 10b5-1 trading agreement” or a “non-Rule 10b5-1 trading agreement,” as defined in Item 408 of Regulation S-K, during the three months ended December 31, 2024 . Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable.
Other Information Rule 10b5-1 Trading Plans No officers or directors adopted , modified , and/or terminated a “Rule 10b5-1 trading agreement” or a “non-Rule 10b5-1 trading agreement,” as defined in Item 408 of Regulation S-K, during the three months ended December 31, 2025 . Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable.
Each Guarantor may be released from its obligations under its respective Guarantee and its obligations under the Third Amended and Restated Credit Agreement upon the occurrence of certain events, including, but not limited to: (i) the Guarantor ceasing to be a subsidiary; or (ii) payment in full of the principal and accrued and unpaid interest on the Senior Credit Facilities and all other obligations.
Each Guarantor may be released from its obligations under its respective Guarantee and its obligations under the Fourth Amended and Restated Credit Agreement upon the occurrence of certain events, including, but not limited to: (i) the Guarantor ceasing to be a subsidiary; or (ii) payment in full of the principal and accrued and unpaid interest on the Senior Credit Facilities and all other obligations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024 1. Organization and Basis of Presentation Novanta Inc. and its subsidiaries (collectively referred to as the “Company”, or “Novanta”) is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025 1. Organization and Basis of Presentation Novanta Inc. and its subsidiaries (collectively referred to as the “Company”, or “Novanta”) is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage.
Restricted Stock Units and Deferred Stock Units The Company’s RSUs have generally been issued to employees and the Company's Board of Directors with vesting periods ranging from zero to five years and vest based solely on service conditions. Accordingly, the Company recognizes compensation expense on a straight-line basis over the requisite service period.
Restricted Stock Units and Deferred Stock Units The Company’s RSUs have generally been issued to employees and the Company's Board of Directors with vesting periods ranging from zero to four years and vest based solely on service conditions. Accordingly, the Company recognizes compensation expense on a straight-line basis over the requisite service period.
Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
PA RT III Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated herein by reference to the Company’s Definitive Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission. Ite m 10.
PA RT III Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated herein by reference to the Company’s Definitive Proxy Statement for the 2026 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission. Ite m 10.
Non-cash interest expense related to the amortization of the deferred financing costs was $ 1.2 million, $ 1.2 million and $ 1.2 million for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively. Unamortized deferred financing costs are presented as a reduction to the debt balances on the consolidated balance sheets.
Non-cash interest expense related to the amortization of the deferred financing costs was $ 1.2 million, $ 1.2 million and $ 1.2 million for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. Unamortized deferred financing costs are presented as a reduction to the debt balances on the consolidated balance sheets.
During the years ended December 31, 2024, December 31, 2023 and December 31, 2022, the Company recognized $ 0.1 million, $ 0.1 million and $ 0.1 million, respectively, of expense for an increase in interest and penalties related to uncertain tax positions. The Company files income tax returns in Canada, the U.S., and various foreign jurisdictions.
During the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company recognized $( 0.1 ) million, $ 0.1 million and $ 0.1 million, respectively, of expense for an increase in interest and penalties related to uncertain tax positions. The Company files income tax returns in Canada, the U.S., and various foreign jurisdictions.
Evaluation of Disclosure Controls and Procedures as of December 31, 2024 Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2024.
Evaluation of Disclosure Controls and Procedures as of December 31, 2025 Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2025.
We have adopted an insider trading policy governing the purchase, sale, and other disposition of our securities by our directors, officers, and employees, and by the Company. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Company.
We have adopted an insider trading policy governing the purchase, sale, and other disposition of our securities by our directors, officers, and employees, and by the Company. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Compan y.
As of December 31, 2024 , the Company’s outstanding equity awards for which compensation expense will be recognized in the future consisted of time-based RSUs, performance stock units (“PSUs”) and stock options granted under the Amended and Restated 2010 Incentive Plan.
As of December 31, 2025, the Company’s outstanding equity awards for which compensation expense will be recognized in the future consisted of time-based RSUs, performance stock units (“PSUs”) and stock options granted under the Amended and Restated 2010 Incentive Plan.
Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Novanta Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Novanta Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2024 2020 Restructuring As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2020 restructuring program in the third quarter of 2020.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2025 2020 Restructuring As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2020 restructuring program in the third quarter of 2020.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making their assessment, our management utilized the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making their assessment, our management utilized the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.
Fair Value of Debt As of December 31, 2024 and December 31, 2023 , the outstanding balance of the Company’s debt approximated its fair value based on current rates available to the Company for debt of the same maturities. The fair value of the Company’s debt is classified as Level 2 under the fair value hierarchy. 12.
Fair Value of Debt As of December 31, 2025 and December 31, 2024 , the outstanding balance of the Company’s debt approximated its fair value based on current rates available to the Company for debt of the same maturities. The fair value of the Company’s debt is classified as Level 2 under the fair value hierarchy. 12.
As of December 31, 2024 , no preferred shares had been issued and outstanding. Common Shares The Company has an unlimited number of no-par value common shares authorized for issuance. Holders of common shares are entitled to one vote per share.
As of December 31, 2025 , no preferred shares had been issued and outstanding. Common Shares The Company has an unlimited number of no-par value common shares authorized for issuance. Holders of common shares are entitled to one vote per share.
The Company reviews the useful life assumptions, including the classification of certain identifiable intangible assets as “indefinite-lived,” on a periodic basis to determine if changes in circumstances warrant revisions to them. Costs associated with patent and intellectual property applications, renewals or extensions are typically expensed as incurred. 59 NOVANTA INC.
The Company reviews the useful life assumptions, including the classification of certain identifiable intangible assets as “indefinite-lived,” on a periodic basis to determine if changes in circumstances warrant revisions to them. Costs associated with patent and intellectual property applications, renewals or extensions are typically expensed as incurred.
Changes in Internal Control Over Financial Reporting There has been no change to our internal control over financial reporting during the fiscal quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There has been no change to our internal control over financial reporting during the fiscal quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
In addition, Guarantors guarantee the due and punctual payment, fees and interest on the overdue principal of the Senior Credit Facilities and the due and punctual performance of all obligations of the Company in accordance with the terms of the Third Amended and Restated Credit Agreement.
In addition, Guarantors guarantee the due and punctual payment, fees and interest on the overdue principal of the Senior Credit Facilities and the due and punctual performance of all obligations of the Company in accordance with the terms of the Fourth Amended and Restated Credit Agreement.
Charges related to credit losses are included in selling, general and administrative expenses and are recorded in the period that the outstanding receivables are determined to be uncollectible. Account balances are charged off against the allowance for doubtful accounts when the Company believes it is certain that the receivable will not be recovered.
Charges related to credit losses are included in selling, general and administrative expenses and are recorded in the period that the outstanding receivables are determined to be uncollectible. Account balances are charged off against the allowance for doubtful accounts when the Company believes it is certain that the receivable will not be recovered. 57 NOVANTA INC.
Based on our evaluation under the framework in Internal Control—Integrated Framework (2013 ) , issued by COSO, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Based on our evaluation under the framework in Internal Control—Integrated Framework (2013 ) , issued by COSO, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
As of December 31, 2024, the Company had disallowed business interest expense carryforwards of $ 1.5 million under Section 163(j) of the Internal Revenue Code. These carryforwards have no expiration date and can be utilized indefinitely to offset future taxable income, subject to the limitations of Section 163(j). No business interest expense carryforward existed as of December 31, 2023.
These carryforwards have no expiration date and can be utilized indefinitely to offset future taxable income, subject to the limitations of Section 163(j). As of December 31, 2024, the Company had disallowed business interest expense carryforwards of $ 1.5 million under Section 163(j) of the Internal Revenue Code.
Furthermore, the Company believes there are no jurisdictions in which the outcome of unresolved issues or claims is likely to be material to its results of operations, financial position or cash flows. Furthermore, the Company believes that it has adequately provided for all significant income tax uncertainties. 88 NOVANTA INC.
The Company believes there are no jurisdictions in which the outcome of unresolved issues or claims is likely to be material to its results of operations, financial position or cash flows. Furthermore, the Company believes that it has adequately provided for all significant income tax uncertainties.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2025 expressed an unqualified opinion on the Company’s internal control over financial reporting.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Certain components and materials included in the Company’s products are currently purchased from single source suppliers. There can be no assurance that a disruption of the supply of such components and materials would not create substantial manufacturing delays and additional cost to the Company.
Certain components and materials included in the Company’s products are currently purchased from single source suppliers. There can be no assurance that a disruption of the supply of such components and materials would not create substantial manufacturing delays and additional cost to the Company. 94 NOVANTA INC.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. 62 NOVANTA INC.
Practical Expedients and Exemptions The Company expenses incremental direct costs of obtaining a contract when incurred if the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the consolidated statement of operations. 64 NOVANTA INC.
Practical Expedients and Exemptions The Company expenses incremental direct costs of obtaining a contract when incurred if the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the consolidated statement of operations.
Generally, the Company is no longer subject to U.S. or foreign income tax examinations, including transfer pricing tax audits, by tax authorities for the years before 2014.
Generally, the Company is no longer subject to U.S. or foreign income tax examinations, including transfer pricing tax audits, by tax authorities for the years before 2015.
As of December 31, 2024, the Company had incurred cumulative costs of $ 10.4 million related to the 2022 restructuring program. The 2022 restructuring program was completed in the fourth quarter of 2023.
As of December 31, 2025, the Company had incurred cumulative costs of $ 10.4 million related to the 2022 restructuring program. The 2022 restructuring program was completed in the fourth quarter of 2023.
The time duration of these foreign currency contracts approximates the underlying foreign currency transaction exposures, generally less than three months. These foreign currency contracts are not designated as cash flow, fair value or net investment hedges. Changes in the fair value of these foreign currency contracts are recognized in income before income taxes. 62 NOVANTA INC.
The time duration of these foreign currency contracts approximates the underlying foreign currency transaction exposures, generally less than three months. These foreign currency contracts are not designated as cash flow, fair value or net investment hedges. Changes in the fair value of these foreign currency contracts are recognized in income before income taxes.
The following table summarizes the fair values of Plan assets by asset category as of December 31, 2024 (in thousands): Asset Category Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Not Subject to Leveling Mutual Funds: Balanced (1) $ 5,118 $ — $ — $ — $ 5,118 Fixed income (2) 21,136 — — — 21,136 Cash 391 391 — — — Total $ 26,645 $ 391 $ — $ — $ 26,254 (1) This class comprises a diversified portfolio of global investments which seeks growth from equities and credit assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2025 The following table summarizes the fair values of Plan assets by asset category as of December 31, 2024 (in thousands): Asset Category Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Not Subject to Leveling Mutual Funds: Balanced (1) $ 5,118 $ — $ — $ — $ 5,118 Fixed income (2) 21,136 — — — 21,136 Cash 391 391 — — — Total $ 26,645 $ 391 $ — $ — $ 26,254 (1) This class comprises a diversified portfolio of global investments which seeks growth from equities and credit assets.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.
The dilutive effects of market-based PSUs are included in the weighted average common share calculation based on the number of shares, if any, that would be issuable as of the end of the reporting period, assuming the end of the reporting period is also the end of the performance period.
The dilutive effects of market-based PSUs is included in the weighted average common share outstanding based on the number of shares, if any, that would be issuable as of the end of the reporting period, assuming the end of the reporting period is also the end of the performance period.
In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company continuously reassesses the possibility of releasing the valuation allowance currently in place on its deferred tax assets. As of December 31, 2024, the Company had net operating loss carry forwards of $ 6.8 million (tax effected).
In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company continuously reassesses the possibility of releasing the valuation allowance currently in place on its deferred tax assets. As of December 31, 2025, the Company had net operating loss carry forwards of $ 7.6 million (tax effected).
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 25, 2025 expressed an unqualified opinion on those financial statements.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 23, 2026, expressed an unqualified opinion on those financial statements.
Acquisition-related costs were $ 1.0 m illion, zero , and $ 1.0 million for the years ended December 31, 2024, 2023, and 2022 , respectively, related to the acquisitions that occurred during those years, if any. 5.
Acquisition-related costs were $ 2.2 million , $ 1.0 m illion, and zero for the years ended December 31, 2025, 2024, and 2023 , respectively, related to the acquisitions that occurred during those years, if any. 5.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
See Note 11 for a discussion of the estimated fair value of the Company’s outstanding debt and Note 14 for a discussion of the estimated fair value of the Company’s pension plan assets. 8.
See Note 11 for a discussion of the estimated fair value of the Company’s outstanding debt and Note 15 for a discussion of the estimated fair value of the Company’s pension plan assets. 8.
Certain Relationships and Related Transactions, and Director Independence The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 29, 2025 and is incorporated herein by reference. It em 14.
Certain Relationships and Related Transactions, and Director Independence The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 28, 2026 and is incorporated herein by reference. It em 14.
The Company recognizes compensation expense associated with the Hybrid PSUs ratably over the performance period based on the fair value of the PSUs as of the grant date and the number of shares that are deemed probable of vesting based on the estimated achievement of the pertinent company financial performance metrics at the end of the specified performance period.
The Company recognizes compensation expense associated with the Hybrid PSUs ratably over the performance period based on the fair value of the PSUs as of the grant date and the number of shares that are deemed probable of vesting based on the estimated achievement of the pertinent company financial performance metrics at the end 81 NOVANTA INC.
As of December 31, 2024, and December 31, 2023, one customer represented approximately 13% and 10%, respectively, of the Company's outstanding accounts receivable balance. Credit risk with respect to trade accounts receivable is generally minimized because of the diversification of the Company’s operations, as well as its large customer base and its geographic dispersion.
As of December 31, 2025, and December 31, 2024, one customer represented approximately 17 % and 13 %, respectively, of the Company's outstanding accounts receivable balance. Credit risk with respect to trade accounts receivable is generally minimized because of the diversification of the Company’s operations, as well as its large customer base and its geographic dispersion.
Principal Accountant Fees and Services The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 29, 2025 and is incorporated herein by reference. PA RT IV
Principal Accountant Fees and Services The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 28, 2026 and is incorporated herein by reference. PA RT IV
Ite m 11. Executive Compensation The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 29, 2025 and is incorporated herein by reference. Ite m 12.
Ite m 11. Executive Compensation The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 28, 2026 and is incorporated herein by reference. Ite m 12.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP 50 Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers LLP 52 Consolidated Balance Sheets as of December 31, 2024 and 2023 53 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 54 Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022 55 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 56 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 57 Notes to Consolidated Financial Statements 58 49 Report of Independent Regist ered Public Accounting Firm To the Board of Directors and Stockholders of Novanta Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP 49 Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers LLP 51 Consolidated Balance Sheets as of December 31, 2025 and 2024 52 Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 53 Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 54 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 55 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 56 Notes to Consolidated Financial Statements 57 48 Report of Independent Regist ered Public Accounting Firm To the Board of Directors and Stockholders of Novanta Inc.
The operating results of Motion Solutions were included in the Company’s results of operations beginning January 2, 2024. Motion Solutions contributed revenues o f $ 82.4 million and an income before income taxes of $ 0.2 million t o the Company’s operating results for the twelve months ended December 31, 2024.
The operating results of Motion Solutions were included in the Company’s results of operations beginning January 2, 2024. Motion Solutions contributed revenues of $ 82.4 million and an income before income taxes of $ 0.2 million to the Company’s operating results for the twelve months ended December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included in this Annual Report on Form 10-K. 97 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Novanta Inc.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, our independent registered public accounting firm, as stated in their report which is included below in this Annual Report on Form 10-K. 99 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Novanta Inc.
Wilson 66 Director Chair of the Audit Committee Member of the Compensation Committee Former Chief Financial Officer and Senior Vice President of PerkinElmer, Inc., a life sciences diagnostics, discovery and analytical solutions company The remainder of the response to this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 29, 2025 and is incorporated herein by reference.
Wilson 67 Director Chair of the Audit Committee Member of the Compensation Committee Member of the Transaction Committee Former Chief Financial Officer and Senior Vice President of PerkinElmer, Inc., a life sciences diagnostics, discovery and analytical solutions company The remainder of the response to this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 28, 2026 and is incorporated herein by reference.
The maximum potential amount of future payments that the Guarantors could be required to make under the Guarantee is the principal amount of the Senior Credit Facilities plus all accrued and unpaid interest thereon. However, as of December 31, 2024, the Guarantors were not expected to be required to perform under the Guarantee.
The maximum potential amount of future payments that the Guarantors could be required to make under the Guarantee is the principal amount of the Senior Credit Facilities plus all accrued and unpaid interest thereon. However, as of December 31, 2025, the Guarantors were not expected to be required to perform under the Guarantee. 75 NOVANTA INC.
At the election of the Company, and so long as no default shall have occurred, the Company may reinvest all, or any portion, of the net proceeds from such asset dispositions or incurrence of debt within a year. As of December 31, 2024, the Company had $ 346.2 million additional borrowing capacity available under the revolving credit facility.
At the election of the Company, and so long as no default shall have occurred, the Company may reinvest all, or any portion, of the net proceeds from such asset dispositions or incurrence of debt within a year. As of December 31, 2025, the Company had $ 850.0 million additional borrowing capacity available under the revolving credit facility.
Plan for the years ended December 31, 2024 and December 31, 2023 , respectively, primarily resulted from changes in the discount rate assumptions. The funded status of the U.K. Plan was included in other long term assets on the accompanying consolidated balance sheet as of December 31, 2024 and December 31, 2023, respectively.
Plan for the years ended December 31, 2025 and December 31, 2024 , respectively, primarily resulted from changes in the discount rate assumptions. The funded status of the U.K. Plan was included in other long term assets on the accompanying consolidated balance sheet as of December 31, 2025 and December 31, 2024, respectively. 84 NOVANTA INC.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 29, 2025 and is incorporated herein by reference. 100 Ite m 13.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required to be disclosed by this item is contained in the Proxy Statement for the Company’s Annual Meeting of Shareholders scheduled to be held on May 28, 2026 and is incorporated herein by reference. 102 Ite m 13.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts February 25, 2025 98 It em 9B.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts February 23, 2026 100 It em 9B.
Impairment Charges Impairment analyses of goodwill and indefinite-lived intangible assets are conducted in accordance with ASC 350, “Intangibles — Goodwill and Other.” The Company performs its goodwill impairment test annually at a reporting unit level, which is generally at least one level below a reportable segment, as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that an impairment may exist.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2025 Impairment Charges Impairment analyses of goodwill and indefinite-lived intangible assets are conducted in accordance with ASC 350, “Intangibles — Goodwill and Other.” The Company performs its goodwill impairment test annually at a reporting unit level, which is generally at least one level below a reportable segment, as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that an impairment may exist.
Revenue by end market was approximately as follows: Year Ended December 31, 2024 2023 2022 Medical 55 % 54 % 49 % Advanced Industrial 45 % 46 % 51 % Total 100 % 100 % 100 % The majority of the revenue from the Automation Enabling Technologies segment is generated from sales to customers in the advanced industrial market.
Revenue by end market was approximately as follows: Year Ended December 31, 2025 2024 2023 Medical 53 % 55 % 54 % Advanced Industrial 47 % 45 % 46 % Total 100 % 100 % 100 % The majority of the revenue from the Automation Enabling Technologies segment is generated from sales to customers in the advanced industrial market.
The following table summarizes restructuring costs associated with the 2022 restructuring program by reportable segment (in thousands): Year Ended December 31, Cumulative Costs as of 2023 2022 December 31, 2024 Automation Enabling Technologies $ 6,771 $ 1,358 $ 8,129 Medical Solutions 1,359 56 1,415 Unallocated costs 831 — 831 Total $ 8,961 $ 1,414 $ 10,375 90 NOVANTA INC.
The following table summarizes restructuring costs associated with the 2022 restructuring program by reportable segment (in thousands): Year Ended December 31, Cumulative Costs as of 2023 December 31, 2025 Automation Enabling Technologies $ 6,771 $ 8,129 Medical Solutions 1,359 1,415 Unallocated costs 831 831 Total $ 8,961 $ 10,375 92 NOVANTA INC.
By contrast, a hypothetical 10% weakening of the U.S. dollar against other currencies would result in an approximately $0.7 million increase in the net fair value of our foreign currency contracts as of December 31, 2024. Interest Rates Our exposure to market risk associated with changes in interest rates relates primarily to our borrowings under our Senior Credit Facilities.
By contrast, a hypothetical 10% 46 weakening of the U.S. dollar against other currencies would result in an approximately $10.2 million decrease in the net fair value of our foreign currency contracts as of December 31, 2025. Interest Rates Our exposure to market risk associated with changes in interest rates relates primarily to our borrowings under our Senior Credit Facilities.
The Company’s matching contributions to the plans were $ 6.8 million, $ 6.8 million and $ 5.9 million for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively. Defined Benefit Plan The Company maintains a frozen defined benefit pension plan in the U.K. (the “U.K. Plan”). The U.K.
The Company’s matching contributions to the plans were $ 7.0 million , $ 6.8 million and $ 6.8 million for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. Defined Benefit Plan The Company maintains a frozen defined benefit pension plan in the U.K. (the “U.K. Plan”). The U.K.
(2) The tax effect on this component of comprehensive income (loss) was $ 376 , $ 156 and $( 401 ) in 2024, 2023 and 2022 , respectively. The accompanying notes are an integral part of these consolidated financial statements. 55 NOVANTA INC.
(2) The tax effect on this component of comprehensive income (loss) was $ 68 , $ 376 and $ 156 in 2025, 2024 and 2023 , respectively. The accompanying notes are an integral part of these consolidated financial statements. 54 NOVANTA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2024 The number of common shares to be issued upon settlement following vesting of market-based PSUs is determined based on the relative market performance of the Company’s common shares compared to the Russell 2000 Index over the specified performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200 % of the target number of shares.
The number of common shares to be issued upon settlement following vesting of market-based PSUs is determined based on the relative market performance of the Company’s common shares compared to the Russell 2000 Index over the specified performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200 % of the target number of shares.
As of December 31, 2024 and December 31, 2023 , contract liabilities were $ 5.9 million and $ 5.8 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets.
As of December 31, 2025 and December 31, 2024, contract liabilities were $ 11.1 million and $ 5.9 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets.
The increase in the contract liability balance during the year ended December 31, 2024 is primarily due to cash payments received in advance of satisfying performance obligations, partially offset by $ 4.3 million of revenue recognized during the year that was included in the contract liability balance at December 31, 2023.
The increase in the contract liability balance during the year ended December 31, 2025 is primarily due to cash payments received in advance of satisfying performance obligations, partially offset by $ 4.5 million of revenue recognized during the year that was included in the contract liability balance at December 31, 2024. 63 NOVANTA INC.
As the Motion Solutions acquisition was structured as a stock acquisition for income tax purposes, the goodwill is not deductible.
As the Keonn acquisition was structured as a stock acquisition for income tax purposes, the goodwill is not deductible.
The Amended and Restated 2010 Incentive Plan will expire and no further Awards may be granted after May 13, 2031 . As of December 31, 2024 , there were 1,678,372 shares available for future Awards under the Amended and Restated 2010 Incentive Plan.
The Amended and Restated 2010 Incentive Plan will expire and no further Awards may be granted after May 13, 2031 . As of December 31, 2025 , there were 1,251,140 shares available for future Awards under the Amended and Restated 2010 Incentive Plan.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2024 For the years ended December 31, 2024, 2023 and 2022 , the Company recognized aggregate net gain of $ 4.9 million, net gain of $ 2.5 million, and net loss of $( 2.4 ) million, respectively, from the settlement of foreign currency forward contracts, which were included in foreign exchange transaction gains (losses) in the consolidated statements of operations. 9.
For the years ended December 31, 2025, 2024 and 2023, the Company recognized aggregate net loss of $ 2.1 million , net gain of $ 4.9 million, and net gain of $ 2.5 million, respectively, from the settlement of foreign currency forward contracts, which were included in foreign exchange transaction gains (losses) in the consolidated statements of operations. 9.
The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statement disclosures. 63 NOVANTA INC.
The amendments in ASU 2025-09 are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-09 on its consolidated financial statement disclosures.
Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases.
Accounting for Income Taxes The asset and liability method is used to account for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases.
Amortization expense for patents and developed technologies is included in cost of revenue in the accompanying consolidated statements of operations. Amortization expense for customer relationships and definite-lived trademarks, trade names and other intangibles is included in operating expenses in the accompanying consolidated statements of operations.
Amortization expense for customer relationships and definite-lived trademarks, trade names and other intangibles is included in operating expenses in the accompanying consolidated statements of operations.
For the years ended December 31, 2024, 2023 and 2022, changes in the allowance for doubtful accounts were as follows (in thousands): 2024 2023 2022 Balance at beginning of year $ 571 $ 995 $ 556 Addition to credit loss expense 223 175 532 Write-offs, net of recoveries of amounts previously reserved ( 288 ) ( 612 ) ( 92 ) Exchange rate changes ( 1 ) 13 ( 1 ) Balance at end of year $ 505 $ 571 $ 995 Inventories Inventories, which include materials and conversion costs, are stated at the lower of cost or net realizable value, using the first-in, first-out method.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) AS OF DECEMBER 31, 2025 For the years ended December 31, 2025, 2024 and 2023, changes in the allowance for doubtful accounts were as follows (in thousands): 2025 2024 2023 Balance at beginning of year $ 505 $ 571 $ 995 Addition to credit loss expense 897 223 175 Write-offs, net of recoveries of amounts previously reserved ( 72 ) ( 288 ) ( 612 ) Exchange rate changes 11 ( 1 ) 13 Balance at end of year $ 1,341 $ 505 $ 571 Inventories Inventories, which include materials and conversion costs, are stated at the lower of cost or net realizable value, using the first-in, first-out method.

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