HMS Networks (HMS) Q3 2025 earnings summary

Executive summary

• Q3 2025 net sales reached SEK 894 million, up 13% year-over-year with 8% organic growth, and order intake rose 26% to SEK 855 million, with 22% organic growth, led by North America and IDS division.

• Achieved record adjusted EBIT of SEK 244 million (27.3% margin), with record cash flow from operations of SEK 258 million and cash conversion rate of 91%.

• New five-year strategy and 2030 targets aim to double revenue to SEK 7.5 billion, reach a 25% EBITA margin, and increase SaaS and recurring revenue share.

• North America and EMEA led order intake, with China now the largest market in Asia and Middle East emerging as a key market.

• New organizational structure with three divisions implemented to enhance customer focus and cross-selling.

Financial highlights

• Adjusted EBIT for Q3 was SEK 244 million (27.3% margin), up from SEK 194 million (24.5%) last year.

• Adjusted EPS for Q3 was SEK 3.88, up 55% from 2.51, with a one-time tax benefit.

• Gross margin improved to 64.1% from 63.5%, supported by favorable product mix and price increases.

• Cash flow from operations in Q3 was SEK 258 million, up from SEK 205 million.

• OpEx increased 7% year-over-year, mainly due to sales, marketing, and strategic investments.

Outlook and guidance

• Management expects continued organic growth, with cautious optimism amid ongoing volatility from tariffs, geopolitics, and macroeconomic factors.

• Strategic targets for 2030 include SEK 7.5 billion in net sales, 25% EBITA margin, and 30–50% of adjusted EPS in dividends.

• More than 50% of organic growth from 2026–2030 expected from new products, with ARR to exceed 10% of revenues and direct sales surpassing 55%.

• Investments in U.S. production, AI-driven efficiency, and R&D will support future margin and capacity improvements.