ams-OSRAM AG

Q2 revenue was EUR 805 million, up 4% year on year and 9% like-for-like/constant currency. Adjusted EBITDA was close to 17%, slightly lower year on year because of the specialty lamps deconsolidation plus higher raw prices and FX headwinds. Free cash flow was minus EUR 19 million and operating cash flow was minus EUR 77 million, with net interest payments of close to EUR 40 million and CapEx in line with the full-year guidance of approximately 8% of revenue. For Q3, the company guided to revenue of EUR 770 million to EUR 870 million and adjusted EBITDA around 16% ±1.5 percentage points, assuming a EUR/USD rate of 1.15. For full-year 2026, guidance was described as broadly unchanged, with revenue modestly lower due to divestments and FX, adjusted EBITDA somewhat lower than last year, and net result expected in the high double-digit million-euro range. Excluding divestment proceeds, management said 2026 free cash flow should be a bit more than EUR -300 million, while still seeing a clear path to positive free cash flow in 2027.

Aldo Kamper framed the quarter as evidence that the strategy is working: the core semiconductor business is taking share, design wins are turning into growth, and Digital Photonics is moving from development toward productization. He highlighted milestones in microLED light engines for AI smart glasses, new optical-interconnect development on the receive side, and first ToF wins in robotics and smartphones. His tone was confident but measured, repeatedly emphasizing that some opportunities are still early and will be built step by step.

Rainer Irle emphasized execution on both the P&L and the balance sheet. He cited Q2 revenue of EUR 805 million, adjusted EBITDA close to 17%, free cash flow of minus EUR 19 million, and operating cash flow of minus EUR 77 million, noting seasonal working-capital buildup, lower factoring, bonus payments, and roughly EUR 40 million of net interest payments. He also detailed financing actions: EUR 1 billion of new notes at 7.25%, redemption of expensive 2029 debt, EUR 127 million of converts repurchased, cash of about EUR 1 billion at quarter-end, and about EUR 1.6 billion of cash after the Infineon sale closed, with total liquidity around EUR 2.1 billion. He said Simplify should deliver EUR 200 million of annual savings by 2028, with about EUR 10 million already realized and roughly EUR 30 million targeted by year-end 2026.

Analysts focused on smart-glass microLED timing, the size of the photodiode opportunity, Q2 cash burn, capex, and whether optical-interconnect content could expand further. Management said the smart-glass program still has work to do on both the company and customer sides, but progress is good; it would not give launch timing details. On AI photonics, Aldo said the photodiode is a smaller revenue item than the emitter side but is important for system integration and could become a triple-digit million-euro opportunity by the end of the decade, depending on how much value the company captures. On cash flow, Rainer said 2026 free cash flow excluding divestment proceeds should be a bit more than EUR -300 million, and that 2027 should show a path toward positive free cash flow.