Schmid Group (NASDAQ: SHMD) lowered its full-year 2026 Adjusted EBITDA margin guidance to 6-9% from a previous target of more than 12%, citing margin pressure despite strong top-line growth.

The German manufacturer reaffirmed its full-year 2026 revenue guidance of more than €100 million, following a significant revenue surge in the first half of the fiscal year.

Financial Performance

SCHMID Group posted revenue of €46.0 million for the six months ended June 30, 2026, compared to €16.9 million in the same period last year. This represents a 172% increase year-over-year.

Revenue growth was driven primarily by the Technical Equipment & Processes segment, which rose from €10.7 million to €39.4 million. Spare parts and services revenue also increased slightly to €6.4 million from €5.9 million.

Gross profit turned positive at €9.8 million (margin: 21.2%), reversing a loss of €1.6 million in the prior year. However, management noted that gross margins were lower than anticipated due to a product mix shift toward lower-margin business in China, which accounted for more than half of total revenues.

The operating result widened slightly to a loss of €8.0 million from €7.8 million. This was impacted by increased general administrative expenses (€8.5 million vs €5.5 million), driven by share-based compensation (€1.4 million), restructuring costs (€0.4 million), and recapitalization expenses (€1.4 million). A foreign exchange loss of €1.7 million further weighed on results, contrasting with a €6.3 million gain in the prior year.

Net income widened significantly to a loss of €47.8 million, primarily due to non-cash effects related to the conversion of XJ Harbour liability into shares and fair-value movements of warrants.

What the Numbers Show

While revenue nearly tripled, the divergence between top-line growth and margin contraction highlights a strategic trade-off. The company prioritized volume—particularly in China—to rebuild order momentum, accepting lower gross margins on those specific products. This is evident in the fact that while gross profit turned positive, the operating loss persisted due to high one-time restructuring and financing costs, suggesting that operational leverage has not yet fully materialized despite the revenue surge.

Order Intake and Backlog

Order momentum accelerated significantly in the second quarter. Year-to-date order intake as of August 21, 2026, reached €96.6 million, with Q3 orders through August 21 totaling €52.3 million alone. The order backlog stood at €95.0 million.

The company maintains its full-year 2026 order intake guidance of €125–150 million, now expecting to land in the upper half of that range. Management expects a roughly equal split between its German and Chinese plants in the second half, leading to a higher-margin product mix.

Balance Sheet and Liquidity

SCHMID Group actively deleveraged during the period, reducing financial debt by close to €30 million between December 31, 2025, and June 30, 2026. This included converting €30.75 million of debt into equity.

Cash provided by operating activities was negative at €-29.3 million, mainly due to a €26.1 million spend on rebuilding working capital from unusually low levels. However, cash position improved following a $20.0 million convertible note issuance in July 2026. Cash and cash equivalents stood at approximately €14.3 million as of July 31, 2026. Additionally, about $21 million remains available under a standby equity purchase agreement.

Total debt as of June 30, 2026, was €23.4 million (excluding convertible instruments). The company stated that existing liquidity and operational cash flows are sufficient to meet obligations for the next twelve months.

Outlook and Operational Updates

Management confirmed full-year 2026 revenue guidance of more than €100 million. The "Sprint" cost-saving program in Germany is expected to yield €4 million in annual savings, with most departures occurring in Q3. A new purchasing cost reduction program, "Sprint II," targets approximately 5% savings on material expenses.

Operational highlights include the delivery of its first InfinityLine H+ system to a U.S. technology company and a signed agreement for a new manufacturing campus in Zhongshan, China, expected to begin operations in Q4 2027.

SCHMID Group N.V. (NASDAQ: SHMD) will host an investor conference call and webcast on August 25, 2026, to discuss its financial results for the first half of fiscal year 2026. The global provider of advanced manufacturing solutions for the electronics and semiconductor industries expects to publish its H1 2026 results with the U.S. Securities and Exchange Commission before the scheduled call.

The event is scheduled for 9:00 a.m. ET (3:00 p.m. CEST). A live webcast will be accessible via the company’s website, with a replay available after the conclusion of the event. Presentation materials accompanying the call will also be posted on the corporate site.

Conference Format

Management will lead with a review of the company’s financial performance and key business developments. This will be followed by a question-and-answer session. SCHMID Group stated that it will manage the Q&A process and may prioritize questions from covering analysts as well as those submitted in advance.

About SCHMID Group

Headquartered in Freudenstadt, Germany, SCHMID Group employs more than 800 people worldwide. Founded in 1864, the company operates technology centers and manufacturing facilities in Germany and China, alongside global sales and service locations. Its portfolio focuses on customized systems for substrates, printed circuit boards, and other electronic components, targeting high-growth applications such as advanced packaging, semiconductor technologies, and AI-driven electronics.