Q1 2027 ATS Corp Earnings Call Transcript
Key Points
- Life sciences trailing 12-month book-to-bill, excluding GLP-1, was approximately 1.1 times, driven by strength in radiopharmaceuticals.
- Service-related revenues grew 11% year-over-year, contributing to improved adjusted gross margin.
- Initiated an 18-month Fixed-Cost Transformation Program expected to generate annualized savings of $20 million in the initial European phase, with a total opportunity of approximately $70 million.
- Strong opportunity funnel in radiopharma, with the backlog now twice as material as GLP-1, and each new isotope facility representing a triple-digit million addressable market.
- Expanding opportunities in nuclear energy, with potential revenue of $50 million to $150 million per reactor project, and a strong track record in CANDU refurbishment.
- Adjusted gross margin improved both sequentially and year-over-year, indicating early success from focused actions.
- Leverage remains within target range at 2.9 times net debt to adjusted EBITDA, providing flexibility for strategic acquisitions.
- Adjusted revenues declined 5.2% year-over-year, reflecting lower opening backlog and planned reduction in transportation-related activity.
- Adjusted earnings from operations decreased 13.4% year-over-year, impacted by lower revenue base.
- Order bookings fell 5.3% year-over-year, with some anticipated Q1 orders slipping into future periods.
- Q1 cash flows used in operating activities were negative $10 million, due to timing of billing and collections on larger programs.
- Restructuring and reorganization charges totaled $27.2 million in Q1, with further charges expected through the balance of the year.
- The Fixed-Cost Transformation Program will take approximately 18 months to implement, with full benefits not realized until the second or third year.
- Revenue guidance for Q2 is $660 million to $700 million, indicating continued softness, and full-year growth depends on a strong recovery in order rates in the second half.
Welcome to the ATS Corporation Q1 conference call and webcast. This call is being recorded on August 6, 2026, at 8:30 A.M. Eastern Time. Following the presentation, we will conduct a question-and-answer session.
I'd now like to turn the call over to David Ocampo, Head of Investor Relations at ATS.
Thank you, operator, and good morning, everyone. On the call today are Doug Wright, Chief Executive Officer; and Anne Cybulski, Interim Chief Financial Officer.
Please note that our remarks today are accompanied by a slide deck, which can be viewed via our webcast and available at atsautomation.com. We caution that the statements made on the webcast and conference call may contain forward-looking information and our cautionary statement regarding such information, including the material factors that could cause actual results to differ materially from the statements, and the material factors or assumptions applied in making the statements are detailed in slide 3 of the slide deck.
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