HMS Networks posts record Q2 as data-centre demand drives growth
HMS Networks, the Halmstad-listed industrial communications vendor, delivered its strongest quarter on record in the three months to June 2026, with order intake rising 20% year-on-year to SEK 979 million and net sales up 18% to SEK 991 million. Organic growth stood at 15% and 12% respectively, with all regional divisions contributing positively.
Profitability improved sharply. EBITA reached SEK 266 million, representing a margin of 26.8% against 19.8% in the prior-year period, a 59% uplift in absolute earnings. Cash generation was equally strong, with operating cash flow of SEK 334 million (SEK 201 million in Q2 2025), helping reduce net debt to 1.74x EBITDA from 3.12x a year earlier. Chief executive Staffan Dahlström attributed the performance to sustained demand from customers investing in data-centre buildout across multiple stages of the semiconductor and industrial automation supply chain.
The deals and investments
Two corporate transactions shaped the quarter. HMS completed the acquisition of Molex's industrial communications business earlier in the year; Dahlström noted that an order pull-forward effect linked to that deal, visible in Q1, did not recur in Q2. The company also took a minority stake in Ekkono, a Swedish AI startup, through its Industrial Network Technology (INT) division. The financial terms of the Ekkono investment were not disclosed. HMS said the partnership is intended to embed Ekkono's edge inference capability directly into OEM industrial devices, enabling machine data to be analysed on-device rather than simply transmitted upstream.
APAC was the fastest-growing region, with order intake rising 35%, while EMEA delivered 15% growth. Automotive demand within EMEA remained subdued. INT, HMS's largest division, recorded organic order intake growth exceeding 20% for the fourth consecutive quarter.
Market context and supply-chain risks
HMS operates in the industrial ICT segment, connecting factory-floor equipment to enterprise networks via protocols such as EtherNet/IP, PROFINET, and EtherCAT. The segment is broadly benefiting from automation and factory digitisation trends that predate, but have been amplified by, the current wave of AI-related capital expenditure. Several well-capitalised competitors, including Moxa, Hilscher and Siemens's communications module units, contest the same device-connectivity market, making the sustained organic growth rate of 12%-15% notable.
The company flagged a potential headwind for the second half: rising prices and lengthening lead times for memory components and certain other semiconductors, a direct consequence of data-centre AI infrastructure demand consuming capacity. HMS said it cannot rule out limited gross margin pressure and some delivery challenges in H2 2026, and that its supply chain team is working to pre-secure critical components. This is a sector-wide dynamic; industrial electronics vendors without the purchasing scale of the hyperscalers are increasingly exposed to allocation risk as memory and power-management ICs are prioritised for AI accelerator platforms.
Sustainability and outlook
In June, HMS received an EcoVadis Gold Medal, placing it in the top 5% of all companies evaluated and the top 1% within communications equipment manufacturing. The company cited improvements in sustainability reporting, supply-chain governance, and climate and human-rights processes.
Looking ahead, HMS maintained a positive medium-term demand outlook while acknowledging uncertainty around the macroeconomic environment, Middle East instability and global trade policy. Dahlström noted that long-term reshoring and regional diversification trends across North America, Europe, China and Southeast Asia should structurally benefit demand for industrial automation and communication hardware. Profitable growth through both organic investment and further acquisitions remains the stated strategic priority.
For the first six months of 2026, HMS reported net sales of SEK 1,962 million, EBITA of SEK 530 million (27.0% margin), and operating cash flow of SEK 584 million.