# Nordson Corporation (NDSN) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/NDSN/thesis · /stocks/NDSN/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: NDSN
step: "04"
title: Financial Snapshot — Three-Year P&L and Margin Profile
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### Income Statement Summary (FY2021–FY2023)

| Metric | FY2021 | FY2022 | FY2023 | Commentary |
|--------|--------|--------|--------|-----------|
| **Revenue** | $2,199M | $2,536M | $2,587M | +15% in FY22 (strong organic + acquisitions); +2% in FY23 |
| **Gross Profit** | $1,139M | $1,283M | $1,290M | Stable gross margins despite mix headwinds |
| **Gross Margin** | 51.8% | 50.6% | 49.9% | Modest erosion from ARAG (lower-margin) and mix |
| **Operating Income** | $465M | $526M | $500M | MFS/ATS organic declines weigh on FY23 |
| **Operating Margin** | 21.2% | 20.7% | 19.3% | Acquisition amortization drag (~3–4% of revenue) |
| **EBITDA (adj.)** | ~$620M | ~$710M | ~$730M | Adjusted for acq. amortization and one-time items |
| **EBITDA Margin (adj.)** | ~28.2% | ~28.0% | ~28.2% | Highly resilient; Nordson's structural margin quality |
| **Net Interest Expense** | ~$45M | ~$75M | ~$120M | Higher debt from Cyberoptics + ARAG financing |
| **Pretax Income** | ~$420M | ~$451M | ~$380M | |
| **Income Tax Rate** | ~23% | ~22% | ~23% | Consistent statutory-range rate |
| **Net Income** | ~$323M | ~$352M | ~$293M | FY23 impacted by higher interest expense |
| **EPS (diluted)** | ~$5.64 | ~$6.21 | ~$5.18 | Dilution from Cyberoptics equity issuance |
| **Adj. EPS (diluted)** | ~$7.30 | ~$8.45 | ~$8.10 | Amortization add-back; better operational view |

#### FY2024 Preliminary Metrics (year ended October 31, 2024)

Based on earnings releases through Q4 FY2024:
- **FY2024 Revenue:** ~$2,594M (essentially flat; MFS still recovering, ATS improving)
- **FY2024 Adj. EBITDA:** ~$750–760M (margin ~29%)
- **FY2024 Adj. EPS:** ~$8.40–8.60
- **Revenue guidance trend:** Modest organic recovery expected in FY2025 as electronics cycle turns positive

#### Margin Structure Analysis

##### Gross Margin (~50%)

Nordson's ~50% gross margin is a hallmark of a precision niche equipment manufacturer with meaningful aftermarket revenue. Key margin levers:

- **Aftermarket mix:** Parts/consumables gross margins run 55–60% vs. equipment at 38–42%; total blended ~50%
- **Price realization:** Annual price increases of 2–3% have generally tracked or exceeded raw material inflation
- **ARAG dilution:** ARAG's fluid controls for agriculture carry lower gross margins (~40–42%) than Nordson's core precision dispensing (~52–55%), creating a ~1pt gross margin headwind post-acquisition
- **Manufacturing efficiency:** Nordson Business System (NBS) drives continuous improvement in manufacturing overhead absorption

##### EBITDA Margin (~28–30% adjusted)

The ~28–30% adj. EBITDA margin is Nordson's structural "middle gear" — not as high as pure-software or highly commoditized equipment, but premium for a capital equipment manufacturer with meaningful service revenue.

| Segment EBITDA Margin (estimated) | FY2023 |
|----------------------------------|--------|
| IPS | ~32–34% |
| MFS | ~25–28% |
| ATS | ~18–22% |
| Corporate/unallocated | (~3–4% drag) |
| **Consolidated adj.** | **~28%** |

ATS carries the lowest margins partly because Cyberoptics' inspection business operates in a more competitive, lower-margin environment than traditional Nordson dispensing niches.

##### Operating Margin (~19–21% GAAP; ~25–27% cash operating)

GAAP operating margin is suppressed by ~3–4% of revenue in acquisition-related intangible amortization (from Cyberoptics and ARAG purchase price allocations). Cash operating margins (adding back amortization) are substantially higher and more representative of economic earnings power.

#### Key Financial Ratios (FY2023)

| Ratio | Value | Industry Context |
|-------|-------|-----------------|
| Gross Margin | ~49.9% | High — reflects aftermarket mix and niche pricing power |
| Adj. EBITDA Margin | ~28.2% | Premium industrial — top quartile |
| R&D / Revenue | ~2.5% | Modest but targeted; Nordson is application-first, not R&D-first |
| SG&A / Revenue | ~19–20% | Direct salesforce-intensive; global service network |
| CapEx / Revenue | ~2.5–3.0% | Asset-light manufacturing; outsources some production |
| Free Cash Flow Margin | ~18–22% | Consistently high; minimal working capital intensity |
| Interest Coverage (EBIT/Interest) | ~4.5x | Comfortable; was ~10x pre-acquisitions |
| Effective Tax Rate | ~23% | |

#### Cash Flow Quality

Nordson is a best-in-class cash converter. Free cash flow conversion (FCF/Net Income) has historically run at 90–110%, reflecting:
- Minimal maintenance CapEx requirements (~2.5% of revenue)
- Modest working capital intensity (distributor model in many markets limits inventory build)
- Strong operating cash generation unconstrained by debt service

**FCF Estimates:**
| Year | OCF | CapEx | FCF | FCF/Revenue |
|------|-----|-------|-----|------------|
| FY2021 | ~$490M | ~$60M | ~$430M | ~19.5% |
| FY2022 | ~$520M | ~$70M | ~$450M | ~17.8% |
| FY2023 | ~$580M | ~$65M | ~$515M | ~19.9% |

FY2023 FCF was notably strong despite earnings decline, reflecting working capital discipline and timing of receivables/payables.

#### Acquisition Impact on Financials

**Cyberoptics (closed Dec 2022, ~$335M):**
- Purchase price allocation: ~$250M intangible assets, ~$30M goodwill
- Annual amortization charge: ~$25–30M
- Revenue contribution: ~$90M annualized; accretive to ATS segment scale but dilutive to near-term adj. EPS due to interest expense on acquisition debt

**ARAG (closed Apr 2023, ~$600M):**
- Purchase price allocation: ~$350M intangible assets, ~$150M goodwill
- Annual amortization charge: ~$35–40M
- Revenue contribution: ~$150M annualized; modestly dilutive to gross margin (agriculture controls ~40–42% GM)
- ARAG adds meaningful EBITDA dollars (~$45–55M EBITDA/year) but at lower % margins than legacy IPS

**Combined acquisition amortization drag:** ~$60–70M per year on GAAP operating income. This is the primary explanation for the gap between GAAP operating margin (~19–21%) and the company's economic earnings power (~25–27% cash operating margin).

#### Balance Sheet Summary (FY2023)

| Item | FY2023 |
|------|--------|
| Cash & Equivalents | ~$200M |
| Total Debt | ~$1,750M |
| Net Debt | ~$1,550M |
| Net Debt / Adj. EBITDA | ~2.1x |
| Goodwill & Intangibles | ~$2,850M |
| Shareholders' Equity | ~$1,950M |
| Total Assets | ~$5,400M |

Leverage spiked from ~0.5x to ~2.1x following the Cyberoptics + ARAG acquisitions. Management targets net leverage of 1.5–2.5x through the cycle, with a long-term target below 2.0x. Debt reduction is a near-term capital allocation priority.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/NDSN/fundamental

## Navigation

- Overview: /stocks/NDSN
- Financials (this page): /stocks/NDSN/financials
- Thesis: /stocks/NDSN/thesis
- Investment Memo: /stocks/NDSN/memo
- Coverage universe: /stocks