Thales (HO) Q2 2026 earnings summary

Executive summary

• Order intake reached €12.5 billion, up 21% year-over-year (+22% organic), driven by strong Defence and Space performance, with robust contributions from Europe and the Middle East.

• Sales rose to €10.9 billion, up 6.7% (+7.8% organic), with Defence showing double-digit growth and Aerospace maintaining resilience despite order cancellations.

• Adjusted EBIT increased 9.9% to €1,372 million (12.5% margin), with margin improving and adjusted net income, Group share, rising 13% to €990 million.

• Free operating cash flow surged to €1,865 million, nearly triple the prior year, reflecting strong order intake and favorable customer payment phasing.

• Net income, Group share, declined to €485 million due to an exceptional charge from the F126 frigate program termination.

Financial highlights

• Order book at period end was €52.4 billion, up 5% year-over-year.

• Book-to-bill ratio improved to 1.14 from 1.01, indicating strong demand and backlog.

• Adjusted net income per share increased to €4.82 from €4.27.

• Net debt reduced to €519 million from €3,427 million a year earlier.

• Effective tax rate was 25.8%, or 21.0% excluding a temporary French corporate tax contribution.

Outlook and guidance

• 2026 guidance upgraded: organic sales growth of 6–7% (€23.3–€23.6 billion), adjusted EBIT margin of 12.6–12.8%, book-to-bill ratio expected above 1.1, and free operating cash flow conversion targeted at 100%–110%.

• Defense segment expected to sustain double-digit growth, supported by investments in capacity and R&D.

• Space segment to see low single-digit growth for the year, with margin turning positive.

• Guidance assumes no major macroeconomic or geopolitical disruptions and EUR/USD at 1.18.