Ultra Clean posts record $759 million in revenue as EnerSys offers $16 per Ultralife share
Key Facts
Ultra Clean on Oct. 27 reported record revenue of $759 million and adjusted diluted earnings of $1.15 per share for the third quarter ended Sept. 25, 2026, while EnerSys agreed to buy Ultralife for $16 per share in cash. Ultra Clean said revenue rose 49% from the same period a year earlier and 18% from the second quarter. The results topped analysts’ estimates for revenue and earnings, while EnerSys said its deal had an enterprise value of about $320 million. The announcements offer different catalysts for the two stocks: operating growth at Ultra Clean and a cash acquisition offer for Ultralife shareholders. Ultra Clean shares closed at $51.48 on Oct. 27, then reached $57.25 in after-hours trading at 5:41 p.m. Eastern time.
Ultra Clean revenue was $759 million, compared with $510 million in the third quarter of 2025, the company said. Diluted earnings per share under generally accepted accounting principles were $0.85, while non-GAAP diluted earnings were $1.15. Zacks estimated earnings per share at $0.91, putting the result 26.37% above its estimate; revenue also exceeded the consensus estimate by 4.63%. Investing.com estimated earnings per share at $0.94, $0.21 below the actual result, and revenue at $728.07 million. The quarterly comparison showed improved margins and earnings: adjusted gross margin rose to 17.3% from 16.7%, operating margin to 9.0% from 7.0%, and adjusted net income to $53.2 million from $32.3 million in the previous quarter.
The products segment accounted for most of Ultra Clean’s revenue, generating $681.9 million in the third quarter, while the services segment contributed $77.1 million. Chief Executive James Xiao said the company expanded production to keep pace with accelerating customer demand. The company linked its plans to demand associated with AI-driven industrial expansion, with a focus on joint innovation with customers and developing more advanced solutions. In its statement, it said it was “expanding production and meeting accelerating customer demand.” That places the record revenue growth in the context of the rising demand cited by the company, while the results point to higher revenue and margins during the quarter.
Ultra Clean set fourth-quarter 2026 revenue guidance of $800 million to $860 million and GAAP diluted earnings of $1.02 to $1.26 per share. It also forecast non-GAAP diluted earnings of $1.11 to $1.35 per share. The low end of the revenue forecast exceeds third-quarter revenue of $759 million, while the range remains the company’s outlook for the coming period. The company did not provide a reconciliation for its non-GAAP earnings forecast, saying its preparation would require unreasonable effort. The outlook makes the fourth quarter the next period in which the company’s ability to sustain the revenue and earnings levels it reported will be evident.
In a separate deal, EnerSys offered to pay $16 in cash for each Ultralife share, a 166% premium to the unaffected closing price on Oct. 26, according to its announcement. The deal has an enterprise value of about $320 million. EnerSys said the acquisition expands its defense power solutions platform and adds capabilities for applications including munitions, soldier power, unmanned aircraft and counter-drone systems, and autonomous systems. It also said Ultralife complements its expertise in multi-chemistry battery technologies and reserve power technologies, supported by a patent portfolio. Ultralife generated revenue of $191 million in fiscal 2025 and has more than 700 employees, according to EnerSys.
EnerSys expects annualized cost savings of $15 million to $20 million during the first 18 months after the companies are combined. It also said the deal could increase adjusted diluted earnings per share within about 18 months of closing, excluding transaction and integration costs and nonrecurring items. The company will fund the acquisition with cash on hand, while closing is subject to regulatory approvals and the tender of at least a majority of Ultralife’s outstanding shares. The parties expect the deal to close in the first quarter of 2027. The agreement provides for a two-step acquisition, beginning with a tender offer followed by a subsequent merger under which Ultralife would become a wholly owned subsidiary of EnerSys. The tender offer is to begin as soon as practicable and no later than ten business days after the date of the agreement.