Rogers Q3 Adjusted EPS Rises 54% as EBITDA Margin Tops 20%

Rogers Corporation reported stronger third-quarter 2026 earnings as revenue increased across all end markets and adjusted EBITDA margin exceeded 20%, reaching its highest level since 2021. The materials maker also projected year-over-year sales and adjusted earnings growth for the fourth quarter, supported by electronics and communications, aerospace and defense, and industrial demand.

Third-quarter net sales rose 9.3% year over year to $236.1 million from $216.0 million, including a $2.4 million foreign-exchange benefit. Sales were also up from $216.8 million in the second quarter.

GAAP net income increased to $22.6 million, or $1.26 per diluted share, compared with $8.6 million, or $0.48 per share, a year earlier. Adjusted earnings per diluted share climbed 54% to $1.39 from $0.90, marking the company’s highest adjusted EPS since 2022.

Adjusted EBITDA reached $47.7 million, up 28% from $37.2 million in the prior-year quarter. The adjusted EBITDA margin expanded by 300 basis points to 20.2% from 17.2%, reflecting the benefit of higher sales and operational improvements. Gross margin increased to 34.2% from 33.5% a year earlier and 32.5% in the preceding quarter.

Adjusted operating expenses were $46.9 million, broadly consistent with $46.8 million a year earlier. As a percentage of sales, however, adjusted operating expenses declined to 19.9% from 21.7%.

Growth Across End Markets

Industrial remained Rogers’ largest end market, accounting for 34% of third-quarter sales. Revenue in the category grew at a low-single-digit rate, with higher sales in renewable energy and other applications. The company reported increases across all regions.

Automotive represented 24% of sales and posted high-single-digit growth. Rogers attributed the increase to improved sales for advanced driver-assistance systems and stronger demand across both internal-combustion-engine and electric-vehicle platforms.

Electronics and communications contributed 20% of quarterly revenue. Continued growth in wireless infrastructure offset lower consumer electronics sales. Aerospace and defense, which represented 15% of sales, recorded mid-single-digit growth driven by defense and commercial aerospace applications.

By business segment, Advanced Electronics Solutions sales increased 13.5% year over year, with improvement across all end markets. Elastomeric Material Solutions revenue rose 4.3%, supported by automotive and aerospace and defense demand.

Rogers said it secured new aerospace and defense, automotive, and industrial design wins during the quarter. Management expects design wins to support higher utilization across its global factories. In adjacent growth areas, customer testing continued for data-center signal-integrity and chip-cooling solutions, while benchmark testing for thermal-runaway protection was completed and customer sampling was beginning.

Cash Generation and Fourth-Quarter Outlook

Net cash provided by operating activities was $41.4 million, compared with $28.9 million in the prior-year quarter. Free cash flow, defined as operating cash flow less non-acquisition capital expenditures, increased to $35.4 million from $21.2 million. Rogers ended September with $236.4 million in cash and short-term investments, up from $211.4 million at the end of June.

For the fourth quarter, Rogers expects net sales of $215 million to $225 million. The $220 million midpoint represents approximately 9% year-over-year growth, with higher sales anticipated in electronics and communications, aerospace and defense, and industrial markets.

The company projects a gross margin of 32.5% to 33.5%, adjusted earnings of $0.90 to $1.10 per diluted share, and adjusted EBITDA of $37 million to $43 million. At the midpoint, adjusted EBITDA would be $40 million, equal to 18.2% of sales and 110 basis points above the prior-year margin. Rogers said the outlook implies 12% year-over-year growth in adjusted EPS and a 16% increase in adjusted EBITDA. Full-year capital expenditures are expected to total $30 million to $35 million.

Rogers cautioned that its outlook remains subject to adoption delays for new technologies, execution risks tied to restructuring and manufacturing initiatives, uncertain economic and political conditions, trade restrictions and tariffs, foreign-exchange movements, supply constraints, and disruptions to global operations. The company also identified risks involving product development, acquisitions and divestitures, litigation, tax and environmental rules, intellectual property, cybersecurity, and its ability to attract and retain skilled personnel.