HMS Networks (HMS) Q2 2025 earnings summary

Executive summary

• Order intake grew organically by 8% in Q2, with total growth of 6%, despite flat net sales and challenging market conditions from tariffs and FX.

• Adjusted EBIT margin improved to 21.4%, with EBIT at SEK 181 million and EPS rising to SEK 2.52; strong cash flow from operations reached SEK 201 million.

• Red Lion integration, including ERP and CRM, was completed, and investments in US production facilities are expected to improve margins.

• Market uncertainty and tariff/geopolitical risks delayed large projects, especially in New Industries and the Americas.

Financial highlights

• Net sales were SEK 843 million, flat year-over-year; organic sales declined 5%.

• Adjusted EBIT was SEK 181 million (21.4% margin), up from SEK 172 million (20.4%) last year.

• Gross margin was 61.8%, slightly down from 61.9% a year ago, mainly due to tariffs and FX.

• Cash flow from operations was SEK 201 million, up from SEK 152 million year-over-year.

• Book-to-bill ratio stood at 1.01, indicating stable demand.

Outlook and guidance

• Management remains cautiously optimistic for the year, expecting gradual improvement as tariff clarity emerges and delivery issues are resolved.

• Price increases to offset tariffs are expected to fully impact from Q3 onward, supporting margin recovery.

• No major cost increases or investments planned unless demand picks up; organization expected to remain stable.

• Long-term demand expected to be driven by automation and digitalization trends.