Interim report: January – September 2025

Third quarter

• Order intake increased by 26% to SEK 855 m (677). Organically, order intake increased by 22%
• Net sales increased by 13 % to SEK 894 m (792). Organically, net sales increased by 8%
• Adjusted EBIT reached SEK 244 m (194), equal to a 27.3% (24.5) adjusted operating margin
• EBIT reached SEK 213 m (163), equal to a 23.9% (20.6) operating margin
• Adjusted profit after tax totaled SEK 195 m (126) and adjusted basic earnings per share were SEK 3.88 (2.51)
• Profit after tax totaled SEK 164 m (95) and basic earnings per share were SEK 3.26 (1.89)
• Cash flow from operating activities amounted to SEK 258 m (205)
• New financial and strategic targets have been set, presented at HMS Capital Markets Day on September 9

First nine months

• Order intake increased by 36% to SEK 2,601 m (1,918). Organically, order intake increased by 14%
• Net sales increased by 17% to SEK 2,627 m (2,253). Organically, net sales decreased by 4%
• Adjusted EBIT reached SEK 643 m (503), equal to a 24.5% (22.3) adjusted operating margin
• EBIT reached SEK 526 m (396), equal to a 20.0% (17.6) operating margin
• Adjusted profit after tax totaled SEK 480 m (342) and adjusted basic earnings per share were SEK 9.56 (7.05)
• Profit after tax totaled SEK 363 m (235) and basic earnings per share were SEK 7.23 (4.86)
• Cash flow from operating activities amounted to SEK 646 m (415)
• New organizational structure from January 1, 2025, to strengthen customer focus and cross-selling

CEO comments

A STRONG QUARTER WITH POSITIVE DEVELOPMENTS IN NORTH AMERICA
During the third quarter, we saw improvements in all markets. The most positive development is in North America, where customers' investments, particularly in energy and infrastructure, are creating new business opportunities for us.

Order intake for the quarter amounted to SEK 855 million (677), representing an organic increase of 22%. All markets delivered solid growth, although compared to a weak third quarter in 2024.

Revenue for the quarter reached a record level of SEK 894 million (792), corresponding to an organic increase of 8%. The gross margin was 64.1% (63.5%), driven by a favorable product mix and, to some extent, price adjustments implemented to offset U.S. tariff costs. Operating expenses increased organically by 7% compared to the previous year, derived from investments in sales and marketing.

The adjusted operating profit reached a new record of SEK 244 million (194), corresponding to a margin of 27.3%. The impact of exchange rates on the result for the quarter was minimal, primarily due to effective currency hedging strategies. However, this positive effect is expected to decrease in the coming quarter.

We delivered another quarter of strong cash flow from operations, totaling SEK 258 million (205), supported by continued inventory reductions of SEK 16 million. The net debt to adjusted EBITDA ratio continues to improve and now stands at 2.66x, moving steadily toward our long-term target of below 2.5x.

IMPROVEMENTS ACROSS ALL DIVISIONS
Compared to the previous year, we are seeing positive signals across all major geographic markets. North America is driving sales growth, while order intake grows by over 20% in all our main markets.

In North America, we see strong performance in our largest division, Industrial Data Solutions (IDS), with an organic increase in order intake of 15%. The delayed deliveries of SEK 15 million from Q2 related to the implementation of a new ERP system have now been delivered, and our production unit in the U.S. is operating at full capacity. We continue to invest in increased capacity and productivity. Price adjustments to offset tariff effects are fully reflected in the quarter and contribute to both improved revenue and gross margin within the division.

China continues to perform well, particularly within the Industrial Network Technology division (INT), where we offer a competitive technology portfolio that meets little domestic competition. China has now surpassed Japan as our largest market in Asia. INT shows a solid organic increase in order intake of 34%.

New Industries (NI) is also showing better performance than in previous quarters, with an organic improvement in order intake of 21%, especially driven by a rebound in building automation, which has seen promising order intake and a couple of larger projects.

Our large market in Germany is performing slightly better than in previous quarters, although we are still seeing a cautious approach from several customers.

STRATEGY 2030 AND NEW STRATEGIC TARGETS
On September 9, we held a well-attended Capital Markets Day, where we presented our strategic plan for 2030 along with new strategic targets. The strategy focuses on accelerating efforts to win new customers while expanding business with existing ones. In addition to organic growth, acquisitions will be a high priority to strengthen and broaden the offering across all divisions. Over the next five years, we will make significant investments in new product offerings and gradually develop our SaaS business model. To ensure continued stable profitability, HMS has also set goals to further improve operational efficiency.

Strategic goals have been set for sustainability, people/customers, and growth and profitability. The financial targets include a revenue goal of SEK 7.5 billion by 2030, with an EBITA margin of 25%.

TARIFFS
The market is adapting to the new conditions with increased tariffs becoming part of everyday life. We are implementing activities to create as much flexibility as possible by reviewing logistics flows and increasing investments in our production facility in York, Pennsylvania. We see opportunities to move selected products and production steps to our U.S. operations to reduce the impact of the tariffs. We anticipate further changes in tariff regulations, and we are investing in maintaining high flexibility in our production processes.

OUTLOOK
Uncertainty surrounding tariffs, geopolitics, and regulations continues to make the market hesitant in certain geographies. As before, we remain cautiously optimistic about the development potential for the year, although uncertainty persists regarding the macroeconomic situation. In the longer term, we believe that incentives and trends toward regionalized industrial production (North America, Europe, China, and Southeast Asia) will create greater demand for automation, digitalization, and communication in industrial applications—which is positive for HMS. We are optimistic about our ability to continue winning new customers and expanding business with our current customers through continued investments in product development, innovation, and sales resources. Creating profitable growth, both organically and through acquisitions, will be our priority in the coming years.

Halmstad October 21, 2025

Staffan Dahlström
Chief Executive Officer

For more information, please contact:
Staffan Dahlström, CEO HMS, +46 (0)35 17 29 01
Joakim Nideborn, CFO HMS, +46 (0)35 710 6983

This information is such that HMS Networks AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact persons set out above, at 07.30 CEST on October 21, 2025.

HMS Networks AB (publ) is a market-leading provider of solutions in Industrial Information and Communication Technology (Industrial ICT) and employs over 1,100 people. Local sales and support are handled through over 20 sales offices all over the world, as well as through a wide network of distributors and partners. HMS reported sales of SEK 3,059 million in 2024 and is listed on the NASDAQ OMX in Stockholm in the Large Cap segment and Telecommunications sector.

Attachment

• HMS Networks Q3 Report 2025