Revenue beat: $154.3 million against a $149.3 million estimate, 3.4% ahead, and up 14.0% year over year to a quarterly record.
Non-GAAP EPS beat: $0.63 against $0.596 estimated, 5.7% ahead; GAAP diluted EPS was $0.48 against $0.30 a year ago.
Guidance raised, but the shape matters: full-year revenue growth goes to 10%-11% from 8%-10%, while the fourth-quarter guide of $143.0-151.0 million sits below the $154.3 million just delivered and the non-GAAP EPS guide of $0.46-0.54 below the $0.63 just earned.
CNC machining carried the quarter, up 16.4% to $73,359 thousand, with injection molding up 12.5% and 3D printing up 11.4%; sheet metal fell 4.7% to $4,063 thousand.
The one thing that matters: the operating leverage is real but it is not coming from price or mix. GAAP gross margin fell to 44.5% from 45.3% while operating margin rose to 9.4% from 6.5%, so the quarter was won on cost discipline below the gross line.
Key metrics
Metric
Reported
Prior year
Change
Revenue
$154.3 million
—
14.0%
GAAP operating margin
9.4%
6.5%
—
Non-GAAP operating margin
11.9%
10.0%
—
Adjusted EBITDA
$26.2 million
$21.1 million
up 23.8%
Non-GAAP diluted earnings per share
$0.63
$0.47
up 33% YoY
Revenue per customer contact
$7,427
$6,370
increased 16.6% year-over-year
Guidance changes
Item
New guidance
Prior guidance
Full year 2026 revenue growth
between 10% and 11%
8% - 10%
Q4 2026 revenue
between $143.0 million and $151.0 million
—
Q4 2026 GAAP diluted net income per share
between $0.28 and $0.36
—
Q4 2026 non-GAAP diluted net income per share
between $0.46 and $0.54
—
Quality of earnings
The beat is clean at the earnings line. GAAP net income rose 63.0% to $11,762 thousand on 14.0% revenue growth, and the distance to non-GAAP narrowed: total adjustments were $4,107 thousand against $4,665 thousand a year ago.
Margin expansion sits below the gross line, not at it. GAAP gross margin fell to 44.5% from 45.3% while GAAP operating margin rose to 9.4% from 6.5%, with marketing and sales spend flat at $24,528 thousand against $24,574 thousand on 14.0% more revenue.
Cash backs the earnings only partly. Nine-month operating cash flow of $55,746 thousand covered $29,025 thousand of net income but fell from $57,874 thousand a year earlier, as operating assets and liabilities consumed $14,575 thousand and receivables rose to $99,256 thousand from $78,962 thousand at year-end.
Gotchas & watch items
The full-year raise is largely already banked: nine-month revenue grew 11.7% to $442,995 thousand, and with the fourth quarter guided to $143.0-151.0 million the new 10%-11% range implies a slower finish than the quarter just reported.
Underlying gross margin is weaker than reported: a $709 thousand net trade refund credit sits in cost of revenue, and excluding it non-GAAP gross margin is 44.5% against 45.9% a year ago, a 140 basis point decline.
Restructuring has become a running cost: restructuring and transformation charges were $434 thousand in the quarter and $2,779 thousand for nine months against nil a year ago, with a further $937 thousand of exit and disposal costs year to date, all excluded from non-GAAP earnings.
Growth is coming from fewer customers spending more: customer contacts fell to 20,777 from 21,252 while revenue per contact rose to $7,427 from $6,370.