ams-OSRAM AG

Q2 revenue was EUR 805 million, up 4% year on year and 9% on a like-for-like basis at constant currencies. Adjusted EBITDA was close to 17%, and management said it was at the high end of guidance; adjusted EBITDA was slightly lower year on year due mainly to the deconsolidation of the specialty lamps business, plus higher raw prices and FX headwinds. Core semiconductor revenue grew 13% year on year like-for-like. Free cash flow in Q2 was minus EUR 19 million, operating cash flow was minus EUR 77 million, and CapEx remained in line with full-year guidance of approximately 8% of revenue. For Q3, management expects revenue of EUR 770 million-EUR 870 million and adjusted EBITDA around 16 ±1.5 percentage points, assuming EUR/USD of 1.15. For full-year 2026, revenue is expected to be modestly lower due to divestments and FX, adjusted EBITDA somewhat lower than last year, and net result positive in the high double-digit million euro range. Excluding divestment proceeds, management expects free cash flow for 2026 to be a bit more than EUR -300 million, and it reiterated a clear path to positive free cash flow in 2027.

Aldo Kamper emphasized that the quarter showed strong execution across the core semiconductor business, where share and content gains are translating into growth. He stressed that Digital Photonics is moving from technology development toward productization, pointing to microLED smart glasses, optical interconnects, and multi-zone ToF as key longer-term opportunities. His tone was upbeat and strategic, framing the company as building the next generation of growth platforms while also sharpening the portfolio.

Rainer Irle highlighted Q2 revenue of EUR 805 million, adjusted EBITDA near 17%, and free cash flow of minus EUR 19 million. He said operating cash flow was minus EUR 77 million because of working capital build ahead of smartphone and lighting seasons, EUR 40 million of factoring reduction, annual bonus payouts, and net interest payments of close to EUR 40 million. He also detailed the financing actions: a EUR 1 billion senior note due 2032 at 7.25%, redemption of the 12.25% 2029 USD notes and part of the 10.5% 2029 notes, cash of about EUR 1 billion at quarter-end and about EUR 1.6 billion after the Infineon divestment closed, and a plan to realize about EUR 10 million of annualized Simplify savings already, with around EUR 30 million by end-2026 and about EUR 100 million by end-2027.

Analysts focused on the timing and scale of the smart glasses microLED opportunity, with management saying there is still work to do on both its side and the customer side, but progress toward mass production is good. On AI photonics, management said the photodiode array is a natural extension that increases system integration and stickiness, but the business remains early and the revenue opportunity is still a triple-digit million euro opportunity only toward the end of the decade. Questions also probed free cash flow and cash burn; management said 2026 cash flow excluding divestment proceeds will be a bit more than EUR -300 million, with continued factoring reduction and restructuring payouts, but that next year it sees a path to positive free cash flow.