ams-OSRAM (AMS1N) Q2 2026 Earnings Report

The call conveyed a predominantly positive operational and strategic momentum: revenue and adjusted EBITDA landed at the high end of guidance, core semiconductors grew strongly (+13% like-for-like), record design wins (~EUR 1.6bn in Q2, ~2.5bn H1) and clear progress across Digital Photonics (microLED, ToF, AI photonics) underpin longer-term growth. Balance sheet moves (EUR 1bn notes at 7.25%, EUR 570m divestment) materially improved liquidity and reduced annual interest expense by ~EUR 40m. However, meaningful near-term cash burn, transitional hit to reported revenue and EBITDA from divestments, input-cost inflation (gold +25%+), FX headwinds, and regional softness in China represent non-trivial near-term challenges. Management articulated a path to positive free cash flow in 2027 and has active cost and portfolio measures underway. Overall, positives around growth, product momentum and capital structure improvements outweigh the near-term cash and cost headwinds, but investors should watch 2026 cash flow and margin impacts during the transition.

Management guided Q3 revenue of €770–€870m and adjusted EBITDA around 16% ±1.5 percentage points (assumes EUR/USD = 1.15), noting reported revenue will be ~€40m lower and EBITDA ~1.5pp lower following the non‑optical sensor divestment; full‑year 2026 revenue is now expected modestly lower and adjusted EBITDA somewhat lower versus prior, with net income expected positive in the high double‑digit million euro range. They said free cash flow excluding disposal proceeds will remain negative (presented on the slides as >‑€100m, later cited in Q&A at roughly ‑€300m) but see a clear path to positive FCF in 2027. CapEx is guided at ≈8% of revenue for 2026. The Simplify program targets €200m annual savings by 2028 (≈€10m realized, ~€30m by YE‑26, ~€100m by end‑27). Liquidity: ~€1.0bn cash at quarter end (≈€1.6bn after the €570m Infineon close) and total liquidity ≈€1.5bn (≈€2.1bn post‑Infineon). Capital structure moves included a €1bn 2032 senior note at 7.25% (demand 6x) that reduces annual interest cost by ≈€40m; ~€725m of ’29 senior notes remain outstanding and convertible notes outstanding are ~€430m.