Indra Sistemas, S.A.

Indra reported first-half 2026 revenue of EUR 3.2 billion, up 30% year on year; order intake rose 58% to EUR 5 billion; backlog reached a record EUR 20.5 billion, up 117%. EBIT margin was 9.9%, up 1.3 percentage points versus first half 2025, and net income was EUR 219 million, up 2%. EBITDA and EBIT increased by 22% and 51%, respectively. Free cash flow was EUR 1.5 billion versus EUR 65 million a year earlier, driven by PEM prepayments; net cash was EUR 1 billion and net debt-to-EBITDA was minus 1.3x. For 2026, management reaffirmed guidance for more than EUR 375 million of free cash flow excluding PEM prepayments, more than EUR 700 million of EBIT, and full-year Minsait growth of low-single to mid-single digits with EBIT margin guidance of 6.6% to 7%; CapEx guidance was around EUR 300 million.

The new CEO framed the environment as structurally favorable, pointing to rising European defense spending, sovereignty concerns, faster technology cycles and the convergence of civil and military technologies. He said Indra has the backlog, capabilities and momentum to benefit, but the key is execution: deliver faster, maintain quality and reliability, control critical technologies and compete globally. He also highlighted IndraMind as a sovereign AI platform and described it as central to the company’s future value creation.

The CFO said reported free cash flow of EUR 1.5 billion was almost entirely due to January PEM prepayments, and noted the comparable first-half free cash flow was only EUR 15 million after adjusting for PEMs and factoring. He highlighted net cash of EUR 1 billion, gross debt cost of 3% versus 3.1% a year earlier, and average debt maturity of 3.8 years versus 3.1 years. He also gave more detail on CapEx: first-half gross CapEx was EUR 205 million, net CapEx EUR 183 million, and full-year CapEx is guided at around EUR 300 million, with around EUR 100 million going into new factories and Hisdesat CapEx included but Hispasat CapEx also part of the total.

Analysts pressed on capital allocation, possible disposals, the timing of the Capital Markets Day and whether IndraMind targets could be lifted after U.S. AI model restrictions. Management said alliances, organic and inorganic moves remain open, but the strategic plan will define make-versus-buy priorities; on IndraMind, the CEO described an end-to-end, AI-native sovereign platform and the CFO said 2025 attributed revenues were EUR 323 million and first-half 2026 attributed revenues were EUR 191 million. Questions on defense revenue phasing and margins were met with reassurance that defense is in line with expectations, with H1 defense revenue at EUR 973 million and Q2 margins helped by Eurofighter; management also reaffirmed full-year EBIT above EUR 700 million and said they will not comment on press speculation about a forensic investigation. On the CMD, the CEO repeatedly asked for patience, saying he has only been on the job about 15 days and will announce timing when ready.