Vishay Precision Group NYSE: VPG reported its highest quarterly adjusted revenue in three years as demand for sensors used in artificial intelligence infrastructure helped lift orders and expand its backlog.
The company said third-quarter adjusted revenue rose 10% from a year earlier to $87.4 million. President and CEO Ziv Shoshani said the order momentum could support revenue growth of 10% to 12% in 2027, above the annual target in the company’s three-year plan.
GAAP net revenue was $85.1 million after accounting for $2.3 million in federal tariff refunds that the company intends to pass on to customers. The refunds reduced both revenue and cost of products sold under GAAP, with no impact on gross profit dollars, Senior Director of Investor Relations Steve Cantor said.
Sensor orders reach another record
Adjusted orders totaled $103 million in the third quarter, producing a consolidated book-to-bill ratio of 1.17. It was the eighth consecutive quarter at or above 1.0, Shoshani said. A ratio above 1.0 indicates orders exceeded revenue during the period.
Sensors revenue climbed 21% year over year and 15% from the second quarter to $38.4 million. Segment bookings rose 8% sequentially to a second consecutive quarterly record of $51.7 million, for a book-to-bill ratio of 1.35.
Shoshani cited demand for precision resistors used in semiconductor equipment and elevated bookings from manufacturers of high-speed fiber-optic transmission equipment supporting data centers. He also pointed to sustained demand in avionics and defense applications.
Asked how much of the business was tied to AI, Shoshani estimated that AI-related activity represented roughly 20% to 30% of the Sensors segment. He said that included semiconductor and fiber-optic data applications and potentially humanoid robotics.
Third-quarter humanoid-related bookings were about $200,000, while sales were $300,000. Shoshani said an initial customer moved the start of its production ramp to the fourth quarter because of supply-chain challenges. VPG expects orders to increase gradually beginning in the current quarter, with volume accelerating through 2027. The customer also invested in VPG’s related capacity expansion, he said, without specifying the amount.
Other segments and cost reductions
Weighing Solutions adjusted revenue fell 2% from a year earlier to $26.9 million, excluding the tariff refunds. The 11% sequential decline reflected seasonal softness in Europe, mainly for process-weighing products. Adjusted orders of $28.6 million were flat with the second quarter.
Measurement Systems revenue increased 8% year over year and 10% sequentially. Shoshani attributed the sequential gain partly to higher sales of DSI thermal-mechanical simulation systems for the steel market. Segment orders rose 19% from the second quarter to approximately $22.2 million, including a 40% increase in steel-related orders.
Shoshani said some of a previously deferred KELK order was fulfilled in the third quarter, with the main portion expected to be delivered in the fourth.
The company achieved nearly $4.2 million in cost savings in the first nine months and remains on track for approximately $6 million for the year, Shoshani said. The initiatives are part of a three-year plan targeting about $20 million in reductions through measures including manufacturing footprint changes, automation and procurement efficiencies.
Margins improve, but currency weighs on profit
Adjusted gross margin improved to 39.3% from 38.6% in the second quarter. Adjusted EBITDA rose to $8.2 million, or 9.4% of revenue, from $5.2 million, or 6.5%, in the prior quarter.
GAAP net earnings were $559,000, or $0.04 per diluted share. Adjusted net earnings were $1.8 million, or $0.14 per diluted share. The adjusted tax rate rose to 48% from 37% in the first half because of a shift in the geographic mix of income, reducing adjusted earnings per share by about $0.03, Shoshani said.
CFO Bill Clancy said unfavorable foreign exchange rates reduced adjusted operating profit by $3.4 million compared with the prior-year quarter. For full-year 2026, the company is assuming an operational tax rate of approximately 45%.
Cash from operations was $11.1 million, and adjusted free cash flow was $5.5 million. VPG ended the quarter with $80.9 million in cash and $15.7 million in long-term debt.
Outlook and capacity
For the fourth quarter, VPG forecast net revenue of $84 million to $91 million, excluding expected tariff refunds to customers and assuming constant third-quarter exchange rates. Shoshani said the range accounts for backlog timing, fewer working days than in the third quarter and some volatility associated with humanoid customers’ supply chains.
Shoshani said backlog stood at $151 million at the end of the third quarter and that the company expected a fourth-quarter order run rate similar to the third quarter’s. VPG is adding equipment, personnel and manufacturing capacity, particularly for Sensors, to increase output and reduce lead times.
The CEO said the company sees potential for first-quarter 2027 revenue of $90 million or more, supporting its view that full-year revenue could rise 10% to 12% from 2026.
About Vishay Precision Group (NYSE:VPG)
Vishay Precision Group, Inc NYSE: VPG is a global provider of precision measurement and sensing technologies. The company develops and manufactures products that measure force, weight, pressure, torque, and other physical variables for use in industrial and commercial applications.
VPG's offerings include precision resistors and strain gauges, load cells, load pins, force and torque sensors, pressure sensors, weighing components, and related measurement instruments and software. Its products support applications such as industrial automation, process control, transportation, aerospace, agriculture, medical equipment, and consumer products.
The company operates through businesses focused on Sensors, Weighing Solutions, and Measurement Systems, serving customers across North America, Europe, Asia, and other international markets.
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