Smartoptics Group (SMOP) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $28.9 million, up 54.6% year-over-year, with strong growth in EMEA (112%) and Americas (36%), and $51.8 million for the first half, up 56.8% year-over-year.

• Growth driven by large account strategy, AI, and hyperscaler projects, with Solutions segment leading at 66.5% of Q2 revenue.

• EBITDA margin improved to 15.5% from 13.7% year-over-year, reflecting operational leverage and disciplined investment.

• Net profit after tax surged to $2.8 million from $0.4 million, with basic EPS rising 532.2% year-over-year.

• Strategic focus shifting to long-haul optical networking, expanding the addressable market to $11.5 billion, with forecasts up to $14 billion by 2029.

Financial highlights

• Gross margin declined to 46.1% from 48.6% last year, attributed to a single large U.S. Tier 2 customer project; margins expected to normalize.

• Record EBITDA of $4.5 million, up 74.2% year-over-year; EBIT margin rose to 12.5% from 9.8%; net profit after tax $2.8 million (+532.2%).

• Operating cash flow positive at $0.9 million, with net cash flow impacted by inventory build and $6.3 million dividend payment.

• Earnings per share (basic) for Q2 2026 was $0.028, up from $0.004 in Q2 2025.

• Cash and cash equivalents at period end: $2.1 million.

Outlook and guidance

• No near-term quarterly guidance, but production capacity is not expected to constrain growth in the second half of 2026.

• Book-to-bill ratio remains above one, indicating strong demand; addressable market projected to reach $14 billion by 2029.

• Targeting $300–$400 million in revenue by 2031, with EBIT margin above 16% in the latter half of the planning period.

• APAC region expected to contribute more significantly from late 2026 and into 2027, though performance remains project dependent.

• Growth ambitions supported by market share gains, disciplined investments, and a larger addressable market.