HMH Holding (HMH) Q2 2026 earnings summary

Executive summary

• Orders reached $205 million in Q2 2026, up 19% year-over-year, with a book-to-bill ratio of 1.2x, driven by strong demand in digital technology and services despite product booking delays and geopolitical uncertainty.

• Revenue was $170.8 million, down 16% year-over-year and flat sequentially, reflecting lower product and service revenues but higher spare parts revenue.

• Adjusted EBITDA was $33.9 million, up 3% year-over-year, with margin expanding to 19.8% from 16.1% a year ago, supported by cost discipline and favorable mix.

• Free cash flow was $22.2 million for the quarter, and liquidity ended at $195 million, including $119.7 million in cash.

• Completed IPO in April 2026, raising $197.8 million plus $12.9 million from over-allotment, with proceeds used for debt repayment, share repurchases, and working capital.

Financial highlights

• Product revenue declined 65% year-over-year and 38% sequentially due to backlog and Middle East delays; service revenue decreased 4% year-over-year but rose 24% sequentially; spare parts revenue increased 17% year-over-year.

• Adjusted EBITDA margin improved to 19.8%, up 370 basis points year-over-year.

• Gross margin rose to 36%, up 10 percentage points year-over-year, driven by cost optimization and favorable mix.

• SG&A expenses increased due to a $22 million pre-IPO stock-based compensation expense.

• Net loss for Q2 2026 was $5.0 million, impacted by IPO-related expenses.

Outlook and guidance

• Management expects stronger revenue and activity in the second half of 2026, supported by a growing backlog and improved customer visibility.

• Full-year 2026 adjusted EBITDA guidance is $157–$177 million, with performance expected to improve in the second half.

• CapEx (excluding development costs) projected at 2% of revenue for 2026, reflecting an asset-light model.

• Long-term offshore and energy investment outlook remains constructive despite macroeconomic and geopolitical uncertainties.

• Approximately 80% visibility into projected 2027 floater rig years, up from 65% last year.