HMS Networks (HMS) Q1 2026 earnings summary

Executive summary

• Achieved strong organic growth in Q1 2026, with net sales up 15% year-over-year and double-digit organic order intake growth, led by North America and China, while Europe and Japan showed gradual improvement.

• Order intake surpassed SEK 1.1 billion, marking a significant milestone, with all divisions and regions reporting positive development and INT division showing the strongest growth.

• Integration of the Molex Industrial Communications asset acquisition exceeded expectations, contributing positively to order intake, revenue, and R&D capabilities.

• Investments in product development and increased use of AI tools to boost R&D efficiency, with continued focus on cybersecurity initiatives.

• Market conditions remain robust in North America and China, with Europe and Japan gradually improving; Middle East exposure is minimal.

Financial highlights

• Q1 2026 net sales reached SEK 971 million, up 9% reported and 15% organic year-over-year.

• Order intake was SEK 1,108 million, up 19% reported and 10% organic year-over-year.

• EBITDA margin reached 27.2%, exceeding expectations, with EBITA at SEK 264 million and stable gross margin.

• Adjusted EPS was SEK 3.78; reported EPS was SEK 3.24.

• Cash flow from operations was SEK 250 million in Q1, up from SEK 187 million last year.

Outlook and guidance

• Management remains optimistic for coming quarters, citing stable markets, robust customer investment, and a strong order book despite global uncertainties.

• Book-to-bill ratio of 1.16 signals favorable growth conditions.

• Some pre-orders (SEK 130 million) in Q1 are not expected to recur in subsequent quarters.

• OPEX expected to rise gradually due to investments in R&D and AI.

• Gross margin target of 65% by 2030 remains unchanged.