ams Osram (AMS) Q2 2026 Fixed Income earnings summary

Executive summary

• Revenue and adjusted EBITDA reached the high end of guidance, with Q2 2026 revenue at EUR 805 million and adjusted EBITDA margin of 16.9%, driven by strong core semiconductor growth and Digital Photonics milestones.

• Core semiconductor business grew 13% year-on-year, supported by automotive and industrial demand, and significant design wins totaling over EUR 1.6 billion in Q2 and EUR 2.5 billion in H1.

• Major divestments completed or signed, including non-optical sensor and CMOS image sensor businesses, supporting deleveraging and liquidity improvement.

• Digital Photonics strategy advanced with progress in microLED arrays for AR smart glasses, AI photonics, and dedicated business lines for innovation.

• Balance sheet strengthened through EUR 1 billion senior notes issuance at 7.25%, reducing annual interest costs by EUR 40 million.

Financial highlights

• Q2 2026 group revenue was EUR 805 million, up 4% year-on-year, with adjusted EBITDA of EUR 136 million (16.9% margin).

• Adjusted net result was EUR -55 million; IFRS net result ranged from EUR -121 million to EUR -154 million, mainly due to high interest and transformation costs.

• Free cash flow was negative, ranging from EUR -119 million to -EUR 190 million, impacted by working capital, transformation, and interest payments.

• Cash and cash equivalents at quarter-end were EUR 994 million; total liquidity post-divestment reached EUR 2.1 billion.

• CapEx remained in line with guidance at approximately 8% of revenue.

Outlook and guidance

• Q3 2026 revenue expected between EUR 770 million and EUR 870 million; adjusted EBITDA margin guidance at 16% ±1.5%.

• FY26 outlook unchanged, with slight revenue softening due to divestments and FX; adjusted EBITDA margin temporarily pressured by transition effects.

• FY27 targeted for return to positive free cash flow, excluding divestment proceeds.

• 2030 targets include over EUR 200 million free cash flow, net debt/adj. EBITDA below 2x, and at least 25% adjusted EBITDA margin.

• Net result for 2026 expected to be positive in the high double-digit million EUR range, supported by divestment gains.