Key Highlights

  • Net sales rose 6.2% to USD 322.3 million, with organic growth of 5.7% led by North America and robotics.
  • Net income rose 30.9% to USD 19.5 million, though adjusted Diluted Earnings per Share fell 4.1% to USD 1.40.
  • Orders grew 9.5% year over year, and Backlog remained elevated at approximately USD 118 million.
  • Adjusted EBITDA was USD 48.8 million, a 15.1% Margin that rose 420 basis points from the second quarter.

Quarter in Numbers

Tennant Company (NYSE:TNC), a maker of cleaning equipment and autonomous cleaning solutions, reported third-quarter 2026 net sales of USD 322.3 million, up 6.2% from USD 303.3 million. Volume added 4.1 percentage points, price added 1.6 points, acquisitions 0.4 points and currency 0.1 points, for organic growth of 5.7%. Net Income was USD 19.5 million, up 30.9%, and diluted earnings per share were USD 1.12 versus USD 0.80, while adjusted diluted earnings per share were USD 1.40 versus USD 1.46.

Adjusted EBITDA was USD 48.8 million versus USD 49.8 million, a margin of 15.1% versus 16.4%. Higher volume, pricing and Tariff refunds were more than offset by inflationary cost pressures, part availability constraints and higher selling, administrative and research costs, including ERP-related costs and robotics investment. Adjusted EPS also reflected higher interest expense, partly offset by share repurchases.

Regional and Robotics Trends

Organic sales in the Americas grew 8.1% on higher North American volumes and price realization, EMEA grew 2.3%, and APAC fell 4.8% on lower equipment volume and unfavorable pricing amid softer Demand and distributor overstock, partly offset by growth in India. Robotics sales were approximately USD 37.3 million, up 71%, supported by equipment and autonomy subscriptions, and year-to-date robotics sales already exceed the full-year 2025 figure. The company launched the P1 autonomous vacuum to address more applications and price points.

President and chief executive Dave Huml said orders grew 9.5%, record third-quarter net sales rose 6%, gross margin recovery progressed ahead of plan, and the North America ERP operation continued to improve, though parts shortages affected shipments and contributed to the backlog of USD 118 million.

Margins and Expenses

Gross margin was 42.3%, down 40 basis points, and included a one-time benefit of about USD 6.1 million, or 190 basis points, from refunds of previously paid tariffs after changes to IEEPA-related regulations. Excluding it, gross margin was about 40.4%, down 230 basis points, with roughly two-thirds of the decline from North America and one-third from EMEA, driven by Inflation mostly tied to the Middle East conflict and by part availability constraints that caused production inefficiencies.

Selling and administrative expense fell USD 3.9 million to USD 92.7 million, or 28.8% of sales versus 31.8%, on lower ERP implementation costs and the absence of legal contingency costs. Research and Development expense rose to USD 12.4 million from USD 10.5 million.

Guidance and Regional Demand Markers

For the nine months, net sales were USD 944.2 million, up 3.5%, net income was USD 27.3 million versus USD 48.2 million, and adjusted EBITDA was USD 113.2 million with a margin of 12.0% versus 15.5%. The company reaffirmed full-year guidance, citing strong Americas orders, an elevated backlog and robotics momentum, while taking disciplined action on softer demand in EMEA and APAC. Items to track include parts availability, conversion of the USD 118 million backlog, tariff-related items in gross margin and APAC demand.