Tennant Company

Tennant Company (NYSE: TNC) makes commercial and industrial floor-cleaning equipment, parts and related services. Its robotics revenue includes autonomous machines and subscriptions for autonomous cleaning.

Third-quarter results

The table compares the three months ended September 30. Amounts are USD millions, except per-share figures.

Organic sales growth, excluding acquisitions and currency movements, was 5.7%. Volumes contributed 4.1 percentage points and pricing 1.6 points. Robotics revenue was approximately $37.3 million, up 71% from a year earlier.

Orders increased 9.5%. The backlog was approximately $118 million at September 30, compared with $127 million in June. Parts shortages continued to limit shipments.

Margin recovery and the tariff refund

Gross margin was 42.3%, versus 42.7% a year earlier. It included a $6.1 million benefit from refunds of previously paid tariffs. Tennant put the margin excluding that benefit at about 40.4%, up from Q2's 39.5%.

Adjusted EBITDA removes interest, taxes, depreciation and amortization, with further adjustments for selected restructuring, planning-system, transaction, legal and investment costs. Subtracting the refund from Q3's $48.8 million leaves $42.7 million, compared with $35.3 million of adjusted EBITDA in Q2 and $49.8 million a year earlier.

In its June quarterly report, Tennant said refund claims had been submitted but were not yet approved or recognized at June 30. Its August earnings release did not state a refund assumption for the annual outlook.

Earlier expectations and the final quarter

In August, Tennant raised its full-year sales forecast while reducing its adjusted profit forecast because margin recovery was slower than expected. The November outlook repeats those ranges: revenue of $1.270 billion to $1.310 billion, adjusted EBITDA of $155 million to $170 million and adjusted earnings of $3.80 to $4.45 per share.

Adjusted EBITDA over the first nine months was $113.2 million. Subtracting that from the annual range leaves $41.8 million to $56.8 million needed in Q4 to reach the target.

Cash flow and borrowing

Q3 operating cash flow was $11.9 million, capital spending was $6.7 million and common dividends were $5.2 million. For the first nine months, operating cash flow was negative $14.3 million, versus positive $50.8 million a year earlier. Capital spending was $15.2 million, versus $17.2 million.

Inventories, customer receivables and lower amounts owed to suppliers absorbed cash. Tennant said inefficiencies following its North American planning-system rollout affected working capital and cash conversion.

At September 30, cash was $75.3 million, versus $106.4 million at December 31, 2025. Noncurrent debt was $358.3 million, versus $273.2 million, with a further $0.4 million due currently at both dates. Unused revolving credit capacity was $289.4 million.

Completed distributor acquisitions

Tennant acquired Swedish distributors Clean Machine Falkenberg AB and Repax AB on February 2, 2026, for a total purchase price of $7.7 million. Their results have been included since closing.

It acquired distributor Reinigungstechnik 4 You GmbH on September 1, 2025, for $3.6 million. Both transactions expanded its European operations.