Tennant Restores Organic Growth and Reaffirms 2026 Outlook

The Tip Desk · November 10, 2026 · 4 min read

Third-quarter net sales were $322.3 million, 6.2% higher than a year earlier, as organic growth swung to 5.7% and robotics sales reached about $37.3 million.

Tennant Company (TNC), the floor-care equipment maker, reported third-quarter net sales of $322.3 million, a 6.2% increase from a year earlier, as organic growth swung to 5.7% after a 1.9% organic decline in the first quarter.

Volume contributed 4.1 percentage points to the year-over-year sales increase and pricing 1.6 percentage points. The company said the organic gain was driven primarily by higher volumes in North America and, to a lesser extent, price realization, partially offset by continued softness in certain Asia-Pacific markets and uneven demand across Europe, the Middle East and Africa.

Americas organic sales grew 8.1%, reversing the first-quarter company-wide organic decline. EMEA organic sales rose 2.3%, on price realization and higher volume across most European markets, partly offset by lower sales in Southern Europe. APAC organic sales fell 4.8%, on lower equipment volume and unfavorable pricing in certain markets, reflecting softer demand and distributor overstock, partly offset by volume growth in India.

Robotics sales of approximately $37.3 million increased 71% year over year, accelerating from 37% growth in the second quarter. The company said the increase was supported by growth across equipment and autonomy subscriptions and continued customer adoption of autonomous cleaning solutions, and that year-to-date robotics sales already exceeded full-year 2025. It also launched the P1 autonomous vacuum to cover more applications and price points.

Orders grew 9.5% year over year, after 6.6% growth in the second quarter and 10% growth in the first quarter. Backlog was approximately $118 million, down from $127 million at the end of the second quarter. President and Chief Executive Officer Dave Huml said the company is taking disciplined action to address softer demand in EMEA and APAC and is encouraged by strong Americas orders, an elevated backlog and continued robotics momentum.

Adjusted EBITDA was $48.8 million, or 15.1% of net sales, up 420 basis points sequentially from 10.9% in the second quarter. The company said higher volume, pricing and tariff refunds were more than offset by inflationary cost pressures and part availability constraints in cost of sales, and by higher selling, general and administrative and research and development expense, including ERP-related costs and robotics investment.

Gross margin was 42.3%, down 40 basis points from the year-ago quarter, including a one-time benefit of approximately $6.1 million, or 190 basis points, related to refunds of previously paid tariffs following changes to IEEPA-related regulations. Excluding that benefit, gross margin was approximately 40.4%, down 230 basis points from the prior year. The company said roughly two-thirds of the decline came from North America and one-third from EMEA, driven by inflationary pressures mostly tied to the Middle East conflict and by part availability constraints that led to production inefficiencies and under-absorption, only partly offset by pricing.

Selling and administrative expense was $92.7 million, down $3.9 million from the year-ago quarter, and 28.8% of sales versus 31.8% a year earlier. Adjusted S&A as a percentage of net sales rose to 27.8% from 27.5%. Research and development expense rose to $12.4 million from $10.5 million a year earlier, driven by continued investment in innovation, including robotics and autonomous solutions.

Net income was $19.5 million, or $1.12 a share, up from $14.9 million, or $0.80 a share, a year earlier. Adjusted diluted EPS was $1.40, down 4.1% from $1.46. The company said the adjusted decline reflected the operating results above coupled with higher interest expense, partially offset by the benefit of share repurchases.

Cash flow from operating activities was $11.9 million in the quarter, a $16.8 million decrease from the prior-year period, driven by lower operating performance and increased working capital requirements, including higher accounts receivable and inventory balances and lower accounts payable. Cash and cash equivalents were $75.3 million at September 30, with $289.4 million of unused revolving capacity. Net leverage was 2.0 times on trailing-twelve-month adjusted EBITDA of $138.8 million, versus 1.0 times at year-end 2025.

The company reaffirmed full-year 2026 guidance of net sales of $1,270 million to $1,310 million, organic net sales growth of 3.5% to 7.0%, adjusted EBITDA of $155 million to $170 million and adjusted EBITDA margin of 12.2% to 13.0%, after the second-quarter release had raised net sales guidance and lowered adjusted EBITDA guidance. It said backlog of approximately $118 million and solid visibility into the fourth quarter support that outlook.