Thank you, operator. Good morning, everybody.

Welcome to HMS Networks Q2 2026. Sunny day in Halmstad where I'm sitting, and Joakim is sitting a bit further south, north of Malmö.

I hope the sun is shining there as well. Sun is also shining in our numbers.

We are very happy to present this Q2 report. I start with a quick business update, then Joakim will do a detailed summary of the financial numbers, and then we end up with a Q&A at the end.

A few highlights: if look on our net sales, good growth, organic growth 12%, we're happy with that; in total, backed by M&A and some favorable currency, +18%, strong currency and good quarter. Net sales 991, we are not really at 1,000 million yet, but the coming quarters, we'll get there.

Also, order intake are solid, organic 15% and totally 20%, but we are not really seeing pre-orders. In Q1, we saw some pre-orders, mainly relating to the acquisition we made for this Molex business, but now we feel that there's a good balance between order intake and net sales.

Fantastic development on our profits: EBITDA 266, growth from—what is it?—59% from last year. An EBITDA margin stronger than our goal of 25%, 26.8%, we're very happy with that.

We also very happy to see a fantastic cash flow from operations, 334 million. This really helps us in also how we leverage and how we deal with our debt situation.

Joakim will talk about that. Strong EPS.

We happy about the numbers. A few business highlights—see if we can move to the next one here.

As we said, good record quarter, but we also see that the growth is coming from all our big markets, it's broad-based. We're very happy to see a 35% order growth in APAC, very good.

The two major things driving this is our data center automation business. Why we say data center automation is that, as we are not really part of the computing inside the data center.

However, we see more and more that our customers directly and indirectly are involved in these data center expansions. These are huge facilities, and this large buildings require power, cooling, automation, and other things.

We see that this is also driving our industrial automation companies' growth to deliver automation equipment into these huge facilities. We also have a good position with semiconductor OEMs.

These are the companies who makes the semiconductor machines and responsible for the process. Of course, AI is driving the semiconductor market, and we also start to see a lot of good orders from our semiconductor OEM customers.

We see as the flip side of that coin is also increased lead times and prices for memory, especially memory, but also other components, semiconductor components and PCB is starting to have longer lead times, increased pricing, and we are trying to mitigate that as everybody else in this industry. It's a hot market, and we see that also in the lead times.

During the quarter, we also made a—we call it strategic minority investment in a small Swedish AI company called Ekkono. They are really good in making machine learning technology.

This is not large language models that are cloud-connected; this is embedded machine learning. That's another way of doing AI, and our ambition is to work with them and also use their technology to embed in our products to make sure that our customers can both use the communication side of this, but also do some light AI functionality within their OEM devices.

We're very happy to receive the EcoVadis gold medal here in June. EcoVadis is a very big organization looking for environmental and sustainability aspects of a company, but also going beyond CO2, it's also about ethics and governance and responsible sourcing, it fits very well into our strategy.

We are in the category of large companies, together with Schneider Electric and Bosch, to receive gold medal, which means that we are top 5% of all companies here. We are very proud of that, and that really shows that we are doing the right things in our sustainability work.

With that short introduction of the business, I would like to hand over to Joakim to talk about the numbers.

All right. Thanks a lot, Staffan.

Let's get going with the order intake. As you've seen and Staffan also talked about, we see a little bit of a change compared to Q1, that we are not really seeing these pre-orders anymore, these long orders, customers placing deliveries throughout the year.

We talked about in Q1 that we had about 130 million SEK for these long orders. If you adjust for that, I say we are just seeing the same pace, more or less, that we've been seeing in the first quarter as well.

Good, solid, solid growth here, 15% growth in Q2 and 12% year-to-date on the organic side. We actually see a lot of good demand, really broad on all our markets growing well.

What's a little bit surprising and very positive is that APAC is leading out the growth, 35%, and also EMEA going quite well with 15%. Now, of course, the comparable Q2 2025 wasn't our best quarter, it's in one way a simple comparable there, but it's good also to see that APAC and EMEA is showing the way on the order side.

On the division side, we have to note that the INT divisions is continuing to perform very well. We have now an organic growth of above 20% for four straight quarters.

I think we've been talking about this, that it was expected that we were going to see a rebound in INT. I think Staffan and I have been mistaken a little bit on the timing.

We thought we would see this more in 2025, a bit earlier, but now we've been seeing it for some time, that we are coming back strong in the INT division. Also, Staffan mentioned this as well, that the main driver is data center investments throughout the value chain in different ways.

We're coming in with our products, same products as we always sell, but to various new applications for us. That was a solid quarter on the order side.

On the net sales side, very similar numbers, 991 million, organic growth of some 12% here as well. You see, we're closing in on the 1 billion mark, slowly but safely growing.

Of course, the Q4 and Q1 solid order intake has been supporting now the sales in Q2. We have, as for 2025, we didn't see the best growth in the first half, and now we're back to double-digit growth for the third straight quarter here, so that's also good to see that it's coming back solid.

Book-to-bill happened to be straight one, I think that's pretty much what we can expect from the future as well, somewhere around the one 1.0 in book-to-bill. Here was a bit of a different mix on geographies: Americas coming in strong with a very good start of the year on the order side, and the 28% organic growth in sales.

Talking about the different divisions, I think starting with IDS, the largest division with 46% of the profits and a big gearing towards the American market. I think we're quite happy to see over time, you see the bottom graph, we added also the EBITDA margin history since the first quarter 2025, when we made the split into the new divisions.

We see here that we have kind of established the business on a good operating margin level that is slightly above the 25% in the quarter, 27.5%, and it's a pretty good lift from where we started out when we established this division in beginning of 2025. That's very good to see.

Also, here we have some product launches, and both within remote access and network switches. That will be a good, important steps for the future growth until 2030.

In the business plan we have with the strategy until 2030, this will be key aspects of building that growth. Also, here, kind of broad-based demand, good development in all regions, nothing that sticks out, and yeah, good, solid performance in IDS.

Then we go to INT. You see a bit of a different development here on the order side compared to Q1, with this is where we had the majority of these pre-buying orders related to the Molex acquisition, where some customers secured more or less the full year deliveries with orders in Q1.

I think we're quite happy to see that we get 38 million of orders for Molex in Q2. We didn't really expect that to be as good.

On sales side, I think we've seen that more stable, that deliveries will pace out in time, pretty much as we see here, that's what we expected at least. We must also mention, again, we talked about the fourth consecutive quarter with over 20% growth on orders, and very happy with the development, obviously, in INT.

Also here, you see a strong development on the EBITDA margin, now above 30%, and we've been around that level now for three quarters. This is maybe where we've been seeing the largest demand from semiconductors and data center investments, and that has been driving gateway business for us, and you'll see that when we talk about the margin soon, that this is also one of the reasons the gross margin has been strong for us.

Then we have New Industries. Here we have also solid development with a 7% organic growth in orders, 11% on sales.

Also here, not meeting the best Q2, but it's solid, solid business. We know that we're struggling in the end markets within the vehicle communication that is selling a lot into the automotive market, which is obviously not the best, especially not in Europe.

I think that is someone met up from a good quarter from building automation business despite the slowdown in the Middle East, which is a very important, strategic market for the building automation business. I think with everything going on in the world, if we can develop like this in this division, I think we need to be fairly happy.

The margins, it's a bit of a smaller division, margins can vary a bit up and down, and now this quarter it was a little bit softer. You see on the graph, it's been bumping up and down a little bit between the quarters, I think don't read in too much about that slightly lower profitability.

Then about the profitability then, we do an EBITDA of 266 million, a new record result for us, and 26.8% EBITDA margin, 27% year-to-date, it's also good to see that we can keep this level above our targets of the 25%. Maybe the main contributor, except for volume, is the pretty good gross margin of 63.8%, which came in a little bit stronger than what we expected ourselves here.

The comparable of 61.8% is towards the Q2 level last year, which was tough from the tariff situation, where we saw pretty high tariff costs in the beginning, where those tariff wars kind of escalated, especially between the US and China. Now the situation is much more stable, and we have not yet gotten any tariffs back.

That is something we are working on at the moment and hope to be able to be successful with that. We'll come back to report on how that turns out.

Otherwise, I mentioned also the strong gateway business from INT that is supporting the margins here as well, and that's maybe where we had a little bit of a positive surprise on the margin side. We know going forward, Staffan mentioned it as well, that we see now continued longer lead times, especially on memories, but also some other components, and also price increases are starting to take off.

We've been seeing some already in year-to-date. However, for us, it's kind of been offset by having inventories, and going forward, we will not be able to supply by our own inventory, we're dependent on new deliveries, and then we will see a price increase that is coming.

I think we can have a bit of a margin pressure from this level in the second half. Nothing dramatic, and we will, of course, monitor the situation and maybe do adjustments if it's needed, but I think we can expect a slightly lower gross margin for the second half.

On the OPEX side, we have been stepping up the investment pace a little bit, both in R&D and in strengthening the organization overall. We see an organic increase of 9% and a bit of a step-up as well compared to Q1.

I think we have gotten in the most increase of the run rate so far this year, I believe we'll see something similar to this level going forward for the second half of the year as well, I think the run rate in Q2 is probably quite representable of what we will see. As communicated before, we have also increased R&D investments, and you see that also in the capitalized R&D, which is increasing a bit, and now we're at 27 million in Q2, similar level as in Q1, and similar expectations for the coming quarters as well.

I do also want to mention that we have a positive EBITDA impact of 6 million, which is related to a divestment of a subsidiary, where we're selling off the sales entity of Peak France that we acquired in 2024, we're selling that to the managing director that will run it in a way taking in a bit more special projects that we do not normally do in the group, we feel it's better to treat this as a distributor on very good terms, and we're happy to continue this collaboration for the future. Then earnings per share, 3.65.

Nothing super interesting happening here. We have a slightly higher estimated tax, which is explained in the slightly lower EPS compared to the previous quarter, even if the EBITDA was on similar levels.

Then I also want to make a couple of comments on the cash flow from operating activities, which was, by far, a record with 334 million. We have a couple of things that is supporting us sort of a one-time effect here.

We did have pretty high receivables going out of Q1, and that is now flowing in, we were reducing working capital a little bit and getting a 60—sorry, 53 million positive effect from the working capital reduction. Also, inventories are down a little bit.

I think going forward, given what we said on the component side, on the memory side, we do believe that we will have to tie up a little bit more inventories. We would be happy to tie up a bit more inventories when it comes to memories.

Now, it's not so easy to do that given the allocation that is going on, but we'll do our best to increase and secure the demand on the memory side for the coming year or so. That's the plan for the second half.

Otherwise, for the year, also solid cash flow from operations of 584 million, a pretty big improvement compared to previous year. Then let me also stop on looking at the net debt, where we have 2.26 billion SEK in net debt going out of the quarter, small increase actually compared to Q1, explained by the dividend has gone out in Q2 with 241 million.

We also made the final payment of the Peak acquisition that impacted this a little bit. We're managing to come down to 1.74 net debt through EBITDA multiplier when it comes to the pre-IFRS 16 level, which is a small improvement compared to Q1.

Given the legacy of the last year or so, I think we're quite happy to be on that level, and we're now focusing on some continued M&A things. With the new division structure, I think we're on a good level in the divisions, having good dialogues going, quite happy to see that.

We also managed to reduce the interest costs, both, of course, from the lower leverage as such, but also from better terms in the new bank agreement that we signed around New Year. That's good to see.

Then for me, it's just left to kind of summarize what we said for the second quarter. I'll try to do this quickly.

As you've seen, solid organic growth, pretty much driven from all markets, new record net sales of 991 million, the two larger divisions are both on double-digit organic growth, both when it comes to orders and sales, and, again, data center investments are the main driving factor for the growth. When it comes to profitability, we have also record profitability, record cash flow, very happy with the cash conversion here, and looking good for the future, even if we know the third point here, that it is still a bit uncertain macro, and we know that we will see these longer lead times and slightly higher cost for memories.

We just want to flag we're doing all that we can to mitigate the situation, but there might be some disturbance during the second half of the year. With that, I'd like to hand over to the operator for any questions we have.

Yes. Hello, Staffan and Joakim.

I hope you can hear me.

Yes.

Yes.

Great. Could you just help me understand how we should think about this strong margin improvement?

You mentioned it here on the call, but the margin is quite strong despite the higher investments. Is this mainly driven from volumes and pricing and tailwinds from the gross margin, the mix, and or is it that the cost initiatives are still lagging here, and you expect more to come in H2?

Maybe I can start with that. I guess you were referring to the EBITDA margin with the question.

If we take the different parts, obviously, the gross margin improvement is helping that a bit. I think, with that said, we've been on this operating margin level now for a couple of quarters, it's not only that.

I think the simple answer is like this: the top line is growing faster than the cost. Now you saw, we had a 9% organic increase on the cost side, I think we are investing in the organization as we would like to do, I wouldn't say that there's a lot of things lagging on that side.

Then it's not given that the growth would be forever double-digit organically, I think right now we have a good pacing on top line versus cost. As I mentioned, I think we have, at least for 2026, we have set the organization we believe we need for the rest of the year and taking the main investments that we need for the rest of the year.

I don't think you will see a higher pace for 2026. We need to be able to absorb the things that we add as well.

Great. Thank you for that.

How sustainable is the current strength in data centers and semiconductors, you think? How much of the demand is project-driven versus temporary?

Maybe I can take that. If we try to zoom out a bit, it's clear that we are not involved in the compute.

This servers and the IT environment, that's not our business. We see more and more that we have three different things: that, first of all, our industrial automation customers, like the Rockwell Automation and Schneider Electric, they are selling quite much automation equipment to these facilities for cooling and power and all these things.

There, especially our division INT, is coming in, where we are embedded inside their things that they sell to the data centers. That's one pillar.

The second pillar is that we have our own system integrators that are involved in this integration of systems inside this big facilities. There we mainly sell the division IDS through the American mainly system integrators, where we sell gateway switches, and these are more of the things that they realize when they do this kind of, "Oh, wait a minute.

We have the wrong protocols between these two machines. Let's buy 50 HMS gateways to solve this problem."

That's the second pillar. The third pillar is what Joakim mentioned about the semiconductor, where we have good business with the OEMs in semiconductor, the machine builders, and, of course, AI, the compute side drives all these investments in semiconductor fabs, and they're our customers is supplying the machines.

All these three different pillars are indirect to the data centers, but we see quite clearly that they are driven outside the data center momentum. Okay.

Now we see, how long will this momentum continue? Right now, we see enormous investments, especially in US, about these facilities.

It will not continue forever, I'm quite sure, but right now, we don't see that it's slowing down. There seems to be a lot of investments, and we see that this magnificent five with Meta and Google and they all invest heavily in this.

I think we are floating [chuckles] behind because all this automation investments related to data centers, and we see this as a continued trend for quite some time, we think. Okay.

Thank you for that. How large is semi and AI data centers verticals for you, you think?

I know you will ask that. As I say, we are supplying our standard products to our normal customers, and for them, part of their business is data centers.

We don't have full transparency, and we don't have trustworthy data that can say how much is our market share and how much of that our business, because it comes as a portion of our regular business. We don't really have good data on that.

I see. Thank you for that.

I jump back in line, and I wish you a good summer.

Thanks, Jesper. Thank you.

Good morning. You said that the gross margin was elevated now in Q2 partly on mix.

What do you expect ahead? Could you quantify the step change in the second half in gross margin so that we don't extrapolate the Q2 levels too much?

That's the first question.

Maybe I start with that one then. I think what we see is, as you said, it's a little bit elevated from the mix.

Then we also expect now to have maybe a bit of headwind from the semi-conductor increase. I think let's say maybe it's a percentage point elevated due to a extraordinary mix in the quarter, and then maybe we could have another percentage point impact, something like that, from the semis.

I would expect us to be still north of 62, but not necessarily north of 63. That's the best guess we can do at the moment.

Okay. Thank you.

Also, could you maybe describe the pacing during the quarter over the individual months, over the markets and the segments? That would be helpful as well.

No,

that was a lot of details. I don't think we're going to go into all that.

I guess what we can say is that we've had a slightly lower, slightly weaker May, and, well, then a better start and a better finish to the quarter.

Okay. Thank you.

Last one: you talked a bit about it on 2026, but just an update on the product development efforts which you talked more in detail at the CMD. Is it going where you want it to in terms of the deliverables, and also CapEx and costs involved?

2026 seems to be on track. What about the rest of the planning period?

Do you want to take that one, Staffan, or should I?

Maybe you can talk about the cost side. We're happy to see that we are releasing new product generations.

We just release a fantastic product line from N-Tron, NT7000, which we believe is a fantastic product line for Ethernet switches. We released the new generation of Ewon products, and later this year, we have a big Anybus release.

I think we're seeing good progress on the product releases. I think the question was also how we see about the cost related to that, Joakim.

I think we've been keeping the plans that we've set pretty well. If anything—I don't want to promise too much here, but we see, actually, we're coming out slightly better than planned on this INT project, where we've been able to have massive gains using AI tools for the coding.

We were actually doing more than what we had planned to do in the same timeframe, which I guess is also maybe part of the explanation that we're managing to grow top line quicker than the cost side, that we've been a little bit more efficient there than we thought. I think that's positive.

Otherwise, I think we're keeping the plans, and as I said before, the run rate that you see right now, both in terms of activation of R&D costs and on the cost, I think that's pretty much what we expect to be at for the rest of the year.

Thank you.

Thanks, Viktor.

All right. Thank you very much.

I must say that we are very happy. If we look back two years ago, we did two big acquisitions: Red Lion in North America mainly and Peak-System in Germany, two years—well, 1.5, 2 years ago.

We formed a new organization 1.5 year ago to make sure we take the advantage of this new capabilities we had. We released our new strategy at the Capital Markets Day last fall, and we're seeing good progress here.

We have a fairly good market as well, but I must say I'm very happy to see that things are falling into the right places and the organic development is going really well. We're happy with the Q2, and at least for me, I will celebrate with an extra ice cream today, and I hope you have a good opportunity to do the same.

I would like to say a big thank you from myself and from Joakim, and wish you all a nice summer, and look forward to hear from you during the coming quarter. Thank you, and goodbye.