Landis+Gyr revenue falls 6.3% to $501.4 million as it raises margin outlook
Key Facts
Landis+Gyr on October 29 reported unaudited results for the second quarter and first half of fiscal 2026, ended September 30, with first-half revenue of $501.4 million, down 6.3% year over year. The company attributed the decline mainly to the timing of a transition between two large customer projects. The chief executive said first-half revenue performance was "in line with expectations" and reflected the timing of that transition. The results thus combined lower sales with improvement in adjusted operating profitability metrics. The company also narrowed its revenue forecast and raised the range for its adjusted EBITDA margin for the fiscal year.
Performance varied across the two segments in the first half: Connected Platforms revenue fell 9.3% to $363.7 million, while Grid Intelligence revenue rose 2.6% to $137.7 million. The year-over-year revenue decline was more pronounced in the second quarter, when revenue fell 5.9% to $269.2 million from $286.2 million in the year-earlier period. Orders in the quarter fell 59.7% to $170.3 million, compared with $422.5 million a year earlier. First-half orders totaled $337.3 million, equivalent to a book-to-bill ratio of 0.7 times. Committed backlog also fell 6.5% year over year to $3,722.1 million as of September 30.
By contrast, adjusted gross profit rose 4.0% to $189.2 million, and its margin increased 370 basis points to a record 37.7% for the half-year period. Adjusted EBITDA rose 3.5% to $73.9 million, while its margin improved to 14.7% from 13.3% in the year-earlier period. The chief executive said the company also posted a record adjusted gross margin in the second quarter. Net income from continuing operations was $51.1 million, or $1.84 per diluted share, up 268% year over year. Net income attributable to group shareholders, including discontinued operations, was $58.6 million, a measure separate from adjusted EBITDA.
Cash flow from operating activities improved to $74.0 million in the first half, up 220% from $23.1 million in the year-earlier period. As of September 30, net debt was $258.1 million, and net debt to last-12-month adjusted EBITDA was 1.5 times; the company said net debt declined after share buybacks and dividend distributions in July. Items excluded from adjusted EBITDA included $46.8 million in tariff refunds and $5.1 million in transformation expenses. The company said some transformation expenses were related to preparations for a potential U.S. listing. This places the improvement in adjusted metrics alongside exceptional items the company disclosed in presenting the period's results.
Landis+Gyr narrowed its fiscal 2026 revenue forecast to $1,085–$1,115 million, compared with the previous range of $1,075–$1,125 million. The range therefore remained centered on the same midpoint, while the distance between its endpoints narrowed. The company raised its adjusted EBITDA margin forecast to 15.0–16.0% from 14.5–15.5%. It attributed the higher margin outlook to progress in operational efficiency. The chief financial officer said: "We expect a strong second half of fiscal 2026, supported by an increasing pace of new customer projects and continued improvement in profitability."
The company announced on October 26 a contract with a U.S. investor-owned electric utility to supply more than 3 million advanced smart metering points. The agreement includes Revelo meters, grid technologies, management systems and security solutions, according to Landis+Gyr's announcement. The contract followed the end of the first half of the fiscal year, while the CFO said an increasing pace of new customer project execution supports the second-half outlook. In June, the company raised its medium-term outlook through fiscal 2028 to mid-single-digit compound annual revenue growth, citing a $3.9 billion backlog. It set January 26, 2027, for its third-quarter trading update and May 5, 2027, for its fiscal 2026 results.