HMS Networks (HMS) Q1 2025 earnings summary

Executive summary

• Q1 2025 order intake surged 97% to SEK 930 million, with 12% organic growth and strong contributions from Red Lion and PEAK-System acquisitions, while net sales rose 44% to SEK 890 million but declined 17% organically.

• Adjusted EBIT reached SEK 218 million (24.5% margin), and adjusted EPS was SEK 3.17, with cash flow from operations at SEK 187 million supporting deleveraging.

• New divisional structure implemented in 2025, now operating through IDS, INT, and NI divisions.

• Integration of Red Lion and PEAK-System acquisitions contributed significantly to growth and profitability.

• Strong cash flow and new organization supported leverage reduction and operational improvements.

Financial highlights

• Q1 2025 net sales: SEK 890 million (+44% year-over-year), organic net sales -17%.

• Order intake: SEK 930 million (+97% year-over-year), organic +12%.

• Adjusted EBIT: SEK 218 million (24.5% margin); adjusted EPS: SEK 3.17.

• Gross margin improved to 63% from 62.6% year-over-year.

• Cash flow from operations: SEK 187 million; cash conversion: 73%.

Outlook and guidance

• Book-to-bill ratio at 1.09 signals continued demand and a positive outlook for future sales.

• Management remains cautiously optimistic for 2025, with tariff and macroeconomic uncertainty persisting.

• Focus on integrating acquisitions, reducing leverage, and investing in product development.

• Long-term growth expected from automation and digitalization, especially in the US.

• European market remains soft but is expected to recover.