CTS 2025 Q3 Earnings Beats Revenue Estimates, Net Income Falls 24.3%

CTS (CTS) reported fiscal 2025 Q3 earnings on October 28, 2025, with revenue rising 8.0% year-over-year to $142.97 million, surpassing expectations by $6.57 million. The company narrowed its full-year guidance to $535–$545 million in revenue and $2.20–$2.25 in adjusted diluted EPS. Despite strong revenue growth, net income declined 24.3% to $13.69 million, and the stock fell 8.59% pre-market following results.

Revenue

Transportation led with $58.55 million in revenue, followed by Industrial at $37.10 million. The Medical segment contributed $21.96 million, while Aerospace & Defense added $25.36 million. Total revenue reached $142.97 million, reflecting an 8.0% year-over-year increase driven by diversified market growth and the SyQwest acquisition.

Earnings/Net Income

Earnings per share (EPS) declined 21.7% to $0.47, down from $0.60 in 2024 Q3. Net income fell to $13.69 million, a 24.3% decrease from $18.08 million in the prior year. The EPS decline indicates a weak earnings performance despite revenue growth.

Post-Earnings Price Action Review

The strategy of buying CTS stock on revenue beats and holding for 30 days faces data limitations. While Q3 2025 revenue beat estimates by 4.8%, historical price data for prior revenue beats (2020–2024) is unavailable. The stock dropped 8.59% pre-market after Q3 2025 results, underscoring volatility. With insufficient data to assess long-term effectiveness, the strategy shows limited upside potential. <visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_yo1uruj4.json"></visualization>

CEO Commentary

Kieran O’Sullivan, CEO, highlighted strong diversified market growth, with 59% of Q3 revenue from industrial, aerospace, and medical segments. He emphasized strategic acquisitions and new contracts, such as a $5 million naval defense project for SyQwest.

Guidance

For FY2025, CTS narrowed sales guidance to $535–$545 million and adjusted diluted EPS to $2.20–$2.25. The company expects margin compression in Q4 but remains optimistic about long-term growth in diversified markets.

Additional News

Recent updates include a narrowed FY2025 outlook, a $5 million naval defense contract win for SyQwest, and $44 million returned to shareholders via dividends and buybacks. The company also reported $110 million in cash reserves and $91 million in long-term debt. Supply chain risks, including rare earth and semiconductor constraints, remain under monitoring.

<img src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-aime_generated_1761733929998.jpg.png" style="max-width:100%;">