XP Power (XPP) Q2 2026 earnings summary

Executive summary

• Strong recovery and broad-based growth across all sectors and regions, led by Semiconductor Manufacturing Equipment as a new investment cycle accelerates.

• Order intake surged 55% year-on-year to £167.2m, with growth in all sectors and regions, especially semiconductor manufacturing equipment.

• Product portfolio increasingly focused on strategic areas, with manufacturing footprint optimized and capacity scaling to meet demand.

• Robust order book and balance sheet underpin confidence in meeting full-year expectations and supporting ongoing investment.

• Adjusted operating profit rose to £8.6m, with adjusted gross margin at 45.9%, exceeding the mid-40s target.

Financial highlights

• H1 2026 order intake reached £167.2m, up 55% year-over-year in constant currency; revenue was £109.1m, up 2% in constant currency.

• Adjusted gross margin improved by 450bps to 45.9%; adjusted operating profit rose 23% to £8.6m; adjusted diluted EPS increased to 14.2p.

• Net debt increased to £47.7m, with leverage at 1.3x; net capital expenditure was £10.1m, mainly for Malaysia and Vietnam facilities.

• Adjusted EBITDA for H1 was £16.3m; adjusted operating cash conversion dropped to 52% due to increased working capital investment.

• Book-to-bill ratio was 1.53x, the highest since H1 2022.

Outlook and guidance

• Full-year revenue expected to be at least £244m, with H2 revenue of at least £135m supported by a strong order book.

• Effective tax rate for the year guided at 20%-25%; capital spend expected between £25-30m; leverage targeted to approach 1x by year-end.

• Market recovery is translating into stronger business momentum, with confidence in delivering strong growth through H2 2026 and beyond.

• Dividend reinstatement and additional shareholder returns considered once leverage is structurally below 1x EBITDA.