Somero Enterprises (SOM) investor relations material

Executive summary

• 2025 marked a pivotal year with a smooth CEO transition, a refreshed strategic framework focused on fortify, innovate, and amplify, and a 40th anniversary celebration reinforcing leadership in the laser screed market across 90+ countries.

• Challenging, uneven construction markets led to a soft first half and strong second half, with trading performance aligned to revised expectations and momentum continuing into 2026.

• New product launches, including Hammerhead and SRS-4/e, contributed $13 million in revenue and expanded the addressable market.

• Disciplined execution protected margins and cash flow despite macro uncertainty.

• The board expects 2026 revenue, profitability, and cash generation to be broadly in line with 2025.

Financial highlights

• 2025 revenue declined to $88.9M from $109.2M in 2024, a 19% year-over-year decrease, but improved 23% in H2 over H1.

• Adjusted EBITDA was $17.5M (20% margin), supported by cost actions and strong operating cash flow.

• Gross margin was 52%, down from 54% in 2024 due to lower volumes and unabsorbed overhead.

• Operating cash flow improved to $17.9M; net cash increased to $33.2M, aided by advanced customer deposits.

• $12M returned to shareholders via dividends and buybacks; ending cash position was higher than expected.

Outlook and guidance

• 2026 guidance assumes continued softness in large boom screeds but expects offset from Hammerhead sales, expanded dealer network, and additional product launches.

• Revenue, profitability, and cash generation are expected to be broadly comparable to 2025, with potential upside if large line declines stabilize.

• No major CapEx projects planned for 2026; focus remains on disciplined execution and strategic investment.

• Customers remain cautious amid macro uncertainty, but long-term non-residential fundamentals remain intact.