Arcadis (ARCAD) Q2 2026 earnings summary

Executive summary

• Organic net revenue growth accelerated to 2.2% in Q2 2026 and 1.5% for H1 2026, with upgraded 2026 growth guidance and improved margins, reflecting strong execution and strategic focus on high-growth markets and digital solutions.

• Record backlog of €4.0 billion, with Q2 order intake up 13.5% organically to €1.1 billion, supporting long-term visibility.

• Strategic acquisitions and investments, including SATEL (Spain) and Nomic (US), strengthen energy, digital, and AI capabilities.

• Transformation initiatives include redeploying leaders to client-facing roles and launching a performance-linked incentive program.

• Rejected WSP acquisition proposal, citing undervaluation and confidence in intrinsic value and future prospects.

Financial highlights

• Q2 2026 net revenues reached €974M (+2.2% YoY); H1 2026 net revenues were €1,907M (+1% YoY); operating EBITA margin for Q2 was 11.4%.

• Net income for H1 2026 was €102M (-4% YoY); free cash flow was -€149M, reflecting seasonal working capital movements.

• Book-to-bill ratio at 1.13x in Q2 2026, supporting backlog growth.

• Net working capital improved to 12.2% of revenues; days sales outstanding at 66 days.

• Dividend payout ratio maintained at 30%-40% of net income; leverage target 1.5x-2.5x Net Debt/Operating EBITDA.

Outlook and guidance

• 2026 organic net revenue growth guidance upgraded to low-single-digit growth; operating EBITA margin guidance reaffirmed at 11.7%-12.0%.

• 2027-2029 targets: mid-single-digit organic net revenue growth and mid- to high-teens operating EBITDA margin by 2029.

• Transitioning to operating EBITDA as primary guidance metric from January 2027.