CTS Lifts 2026 Sales Outlook After Record Margins

The Tip Desk · November 8, 2026 · 3 min read

The sensor maker raised full-year sales to $580 million–$590 million after third-quarter sales of $149.6 million and a 42.2% adjusted gross margin.

CTS Corporation (CTS) raised its 2026 sales outlook to $580 million–$590 million from $565 million–$585 million, and lifted adjusted diluted earnings guidance to $2.78–$2.88 a share from $2.55–$2.70, after a third quarter in which sales reached $149.6 million and adjusted gross margin hit a record 42.2%.

The global designer and manufacturer of sensors, actuators and electronic components said it is increasing the ranges assuming the continuation of current market conditions. The new sales and EPS ranges include the expected impact from the Millar acquisition.

Sales rose 5% from a year earlier. Diversified end-market sales, covering industrial, aerospace and defense, and medical, grew 7% and now represent 60% of total sales. Transportation sales increased 2%. CEO Pratik Trivedi said the company delivered another strong quarter with continued strength across an increasingly diversified portfolio.

Net income was $17.8 million, or 11.9% of sales, compared with $13.7 million, or 9.6% of sales, in the third quarter of 2025. Diluted earnings were $0.61 a share. Adjusted diluted EPS was $0.77, up 17 cents from $0.60 a year earlier. Adjusted EBITDA margin was 24.7%.

Adjusted gross margin expanded 330 basis points from 38.9% a year earlier. Operating cash flow was $43.5 million, up $14.5 million from $29.0 million in the third quarter of 2025. Free cash flow was $41.1 million after $2.4 million of capital expenditures.

The company had already raised 2026 guidance after the second quarter, when sales were $144.8 million and diversified end-market sales had grown 15% year over year. Transportation sales had declined 2% in that period. The third-quarter mix therefore showed transportation back in modest growth and diversified sales still a majority of the book.

Medical sales grew 21% year over year and were down 4% sequentially, with a book-to-bill of 0.7 and bookings down 5% year over year due to timing of orders. Aerospace and defense sales fell 7% year over year and rose 30% sequentially, with a book-to-bill of 1.9 and bookings up 102% year over year. Industrial sales rose 7% year over year and 1% sequentially, with a book-to-bill of 1.36. Transportation sales rose 2% year over year and 1% sequentially, with $1.2 billion of total booked business at the end of the third quarter.

Trivedi said the acquisition of Millar further advances the diversification strategy, especially in the medical end market. CTS described Millar as expanding the company into precision pressure sensing for medical, life sciences and industrial applications, with about $30 million of expected annual revenue in the second half of 2027.

Cash and cash equivalents were $143.9 million at September 30, 2026. Long-term debt was $55.0 million. The company declared a cash dividend of $0.04 a share in the quarter.

Guidance for the rest of 2026 therefore rests on the same diversified mix that carried the third quarter, with transportation booked business still large and Millar folded into the sales and EPS ranges the company now presents.