Novanta Inc. (NOVT) Business Profile

What it does

Novanta supplies components and subsystems to original equipment manufacturers, or OEMs: companies that incorporate those parts into machines and devices sold to their own customers. Its customers operate in medical, life science and advanced industrial markets. Matthijs Glastra is its chair and chief executive officer.

Its technologies perform tasks that require precise control of light, movement or fluids. For example, its laser-scanning equipment directs beams for manufacturing and medical applications. Its motion products include sensors, motors and controls used in equipment such as surgical robots and laboratory instruments. It also makes accessories that attach to the end of a robot arm, including tool changers and sensors.

For medical equipment makers, Novanta supplies devices such as insufflators and pumps used in minimally invasive surgery, as well as related disposables. Other products help identify or track items, analyze images, control movement and distribute video in operating rooms. Light engines combine lasers for uses including DNA sequencing.

Novanta designs and manufactures much of this equipment itself. It works with customers on integrating its products into their machines and provides application support after a sale. In 2026, it acquired Riverpoint Medical, expanding its medical consumables business.

How it makes money

Novanta earns revenue by selling technologies and related products through its reporting segments. Most products in each segment are sold directly to equipment makers, with some sales through resellers and distributors. Customers consider performance, reliability, application support and price when choosing a supplier.

Automation Enabling Technologies sells laser sources and beam-scanning equipment, precision motion components, robotic tooling and air bearing spindles. Customers use these products in applications ranging from laser marking and semiconductor manufacturing to robotic surgery and medical imaging. The segment generated $500.8 million of revenue in FY2025.

Medical Solutions sells insufflators, endoscopic pumps and related disposables, along with imaging, identification, motion-control, light-engine and operating-room technologies. The segment generated $479.8 million of revenue in FY2025. Its products can be used in medical devices, life science equipment and some industrial applications.

Some medical sales come from consumable products rather than equipment alone. Novanta says its 2026 acquisition of Riverpoint Medical roughly doubles its recurring medical consumable business. It also expects the acquisition to expand its medical end-market exposure.

Novanta increased total revenue in 2025; in Q2 2026, both organic and reported sales grew. The company does not disclose a single pricing model across its product lines.

Customers and how it sells

Novanta’s customers include equipment makers that integrate its products into systems for hospitals, laboratories, manufacturers and other end users. Before selecting a supplier, an OEM may assess application expertise, manufacturing capabilities, product quality, customization and the ability to manage supply over long periods.

In 2025, OEM customers operating primarily in the medical end market accounted for portions of consolidated revenue. They bought across multiple product lines. Novanta serves both the medical and advanced industrial end markets.

The United States accounted for 52.9% of FY2025 revenue. Germany represented 11.7%, the rest of Europe 14.0%, China 9.50% and the rest of Asia-Pacific 9.90%. Novanta sells globally, primarily through its direct sales force, and uses distributors to supplement that team or reach local markets. It has service and application centers in the United States, Europe and Asia, where specialists help customers integrate and use its products.

Suppliers and costs

Novanta uses a range of raw materials, components and parts. Most are available from alternative domestic and foreign sources, and the company can sometimes redesign parts when shortages arise. For certain inputs used in principal products, however, it has identified only a limited number of suppliers or a single source. It also relies on a limited number of suppliers for some subassemblies.

The company performs most manufacturing internally and outsources a smaller portion, primarily for cost reasons. Its factories span the United States, Europe and China. Certain medical products are made under manufacturing practices required for medical devices by the U.S. Food and Drug Administration.

Operating costs include manufacturing, research and development, selling and administration, amortization, and restructuring and acquisition costs. In 2025, operating income fell, reflecting higher selling and administrative expenses and higher restructuring, acquisition and related costs, among other changes.

In 2026, Novanta completed factory closures and announced additional closures targeted for the first quarter of 2027. It is also expanding capacity at its China factory for air bearing spindles.

Competitive position

Novanta competes across medical and advanced industrial applications against both large organizations with broad product ranges and smaller companies specializing in particular technologies. No competitors are named in the supplied company disclosures. Customers choose suppliers using criteria that include performance, reliability, support, price, product range and geographic coverage.

Some of Novanta’s products become part of an OEM’s own equipment design. Once certain products are incorporated, there are generally barriers to changing suppliers until the equipment’s life cycle ends, particularly in medical markets. Our reading: these design-in relationships are a meaningful source of protection because replacing a component can be difficult during a customer’s product life cycle, although the protection varies by product.

Novanta also maintains application centers and technical sales teams that work with customers on integration and support. Our reading: application knowledge and customer support can strengthen relationships, but rivals can compete on the same dimensions as well as on price and performance.

The company uses patents, trade secrets, confidentiality agreements and other intellectual-property protections. It does not consider any individual patent material to the business as a whole. Our reading: the broader collection of know-how and intellectual property can support the business, but the available evidence does not establish the strength of any one patent as a company-wide barrier.

Growth opportunities

Novanta’s growth strategy includes developing products for medical applications such as minimally invasive and robotic surgery, patient monitoring, drug delivery and laboratory testing. It also aims to sell more products to existing medical equipment customers and pursue complementary acquisitions. In advanced industrial markets, it works with equipment makers on application-specific products for robotics, automation, laser processing and metrology.

In Q2 2026, all of its business units grew organically, and new-product revenue grew in the quarter. Novanta expects continued demand in areas including precision robotics, semiconductors and minimally invasive surgery.

The acquisition of Riverpoint Medical closed at the end of July. Novanta expects it to increase exposure to medical consumables and contribute to growth and margins. Following the acquisition, the company raised its full-year 2026 revenue outlook.

Novanta is also expanding capacity at its China factory for air bearing spindles. It says the business has committed demand and that customers are partly funding the expansion.

Structural risks

• Customer spending and concentration. Economic and political conditions can affect customers’ business activity and capital spending. Medical OEM customers accounted for portions of consolidated revenue in 2025, and demand can also depend on the timing of their product development and launches.

• Supply and manufacturing. Some principal products depend on limited or single-source suppliers. Shortages and interruptions can affect production, while manufacturing transfers and site closures require execution.

• International exposure. Novanta’s operations and sales outside the United States expose it to currency fluctuations, tariffs, trade barriers, transportation interruptions and geopolitical unrest. Trade policy changes and inflation have affected its markets and manufacturing costs.

• Medical regulation. Medical devices and manufacturing processes are subject to regulatory requirements. Failure to comply can result in penalties, restrictions on operations, product recalls or loss of business.

• Technology and competition. Customers’ technology requirements change, and Novanta competes with both broad-based and specialized suppliers. Competitive success requires continuing advances in performance, support and price-for-performance.

• Financing. Novanta may need additional capital for business opportunities or to repay or refinance debt, and that capital may not be available on acceptable terms.

Bottom line

Our reading

Novanta is a component and subsystem supplier whose customer relationships can last through equipment life cycles, particularly in medical markets. Its exposure spans medical and industrial demand, while the Riverpoint Medical acquisition adds recurring consumables. The business also depends on a small number of large medical customers, some constrained supply sources and successful execution of manufacturing changes.