Rogers NYSE: ROG reported third-quarter 2026 sales growth across each of its end markets, with higher profitability and cash generation supporting an improved full-year operating outlook. The company said adjusted earnings per share reached its highest quarterly level since 2022 as volume, product mix and operating-cost discipline lifted margins.
Third-quarter sales totaled $236.1 million, up 9% from the prior-year period, including a $2.4 million benefit from foreign-currency translation. Adjusted EPS rose 54% year over year to $1.39, exceeding the high end of the company’s guidance range. Adjusted EBITDA increased 28% to $47.7 million, while adjusted EBITDA margin expanded 300 basis points to 20.2% of sales, the company’s highest level since 2021.
“Sales increased across all end markets, reflecting a combination of improved demand, new program activities, and continued execution against our commercial priorities,” President and CEO Ali El-Haj said during the company’s earnings call.
Growth Across Major End Markets
Industrial, which accounted for 34% of third-quarter sales, posted a slight year-over-year revenue increase, supported by renewable-energy and other applications. Automotive represented 24% of sales and grew at a high-single-digit rate, driven by improved demand for advanced driver-assistance systems and stronger sales into both internal-combustion-engine and electric-vehicle platforms.
Electronics and communications, representing 20% of revenue, continued to post strong growth as higher sales of laminate circuit materials for wireless infrastructure more than offset lower smartphone sales. Aerospace and defense accounted for 15% of sales and rose at a mid-single-digit rate, reflecting gains in defense and commercial aerospace applications.
By business segment, Advanced Electronic Solutions sales increased 13.5% year over year, with growth across end markets and particular strength in electronics and communications. Elastomeric Material Solutions sales rose 4.3%, led by automotive and aerospace-and-defense demand.
Gross margin improved 70 basis points from a year earlier to 34.2%. Chief Financial Officer Laura Russell said higher volume and mix aided the result, partly offset by increased commodity costs. The company also benefited from lower adjusted operating expenses, although higher costs associated with its new ceramic facility in China reduced some of those gains.
Design Wins and Data Center Development
Rogers highlighted several design wins during the quarter, including laminate material selected for a drone-detection system, elastomeric materials designed into an electric-vehicle battery-pack application, and curamik active-metal-brazed substrates selected for multiple EV models at a global automaker.
The company also said a major data-center end user selected its silicone materials to protect sensitive server-tray components. Rogers secured additional design wins in both its Advanced Electronic Solutions and Elastomeric Material Solutions businesses for energy-storage-system applications.
El-Haj said two of the recently disclosed opportunities are material and are expected to contribute revenue in the second and third quarters of 2027. One program began a gradual ramp in the fourth quarter of 2026 and is expected to reach full volumes by the second quarter of 2027.
The company continued customer testing for its signal-integrity and chip-cooling products aimed at AI data centers. Rogers said its laminate circuit materials are being sampled for high-speed digital applications, while multiple generations of microchannel-cooler prototypes have been developed and tested with lead customers. El-Haj said customer activity in these areas is increasing rather than slowing, with more sampling and testing underway.
Rogers completed benchmark testing for its thermal-runaway-protection solution and has begun customer sampling. It is also developing electromagnetic-interference shielding products tailored to priority customer applications, with initial sampling targeted for early 2027.
Cash Flow, Capital Allocation and Outlook
Cash and short-term investments stood at $236.4 million as of Sept. 30, an increase of $25 million from the end of the second quarter. Cash from operations was $41.4 million and free cash flow was $35.4 million. The company spent $6 million on capital expenditures, paid $4.6 million in cash taxes and repurchased $9.3 million of shares during the quarter.
Russell said Rogers will continue balancing share repurchases with investments in organic growth and strategic priorities. Management also said it is more active in evaluating mergers and acquisitions, with El-Haj indicating that one or both of two opportunities under review could become actionable within the next two quarters. The company said any potential transaction would need to add strategic capabilities and offer favorable financial contribution over the medium to long term.
For the fourth quarter, Rogers forecast revenue of $215 million to $225 million, representing approximately 9% year-over-year growth at the midpoint. While sales are expected to decline sequentially due to normal seasonality and customers’ year-end operating patterns, the company expects year-over-year growth in aerospace and defense and industrial markets.
- Gross margin is projected at 32.5% to 33.5%.
- Adjusted EPS is expected to range from $0.90 to $1.10, compared with $0.89 in the fourth quarter of 2025.
- Adjusted EBITDA is forecast at $37 million to $43 million, or a 16% year-over-year increase at the midpoint.
- The company expects a non-GAAP full-year tax rate of approximately 31%.
Management said its recent design-win activity is ahead of the pace contemplated at its investor day, where it outlined a target of roughly 5% annual organic growth. El-Haj said the company expects growth momentum to continue into 2027.
About Rogers (NYSE:ROG)
Rogers Corporation NYSE: ROG is a global manufacturer of engineered materials and specialty components used in demanding applications. The company develops high-performance elastomers, polymer composites, laminates and other material technologies designed to provide electrical insulation, thermal management, vibration control, protection and reliability.
Its products are used in electric and hybrid vehicles, power electronics, telecommunications and 5G infrastructure, aerospace and defense systems, healthcare equipment, renewable energy systems and various industrial applications.
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