Smartoptics (SMOP) Q2 2026 earnings summary

Executive summary

• Achieved record revenue of $28.9 million in Q2 2026, up 54.6% year-over-year, with strong growth in EMEA (112%) and Americas (36%), and $51.8 million for the first half, up 56.8% year-over-year.

• Growth driven by large account strategy, AI, and hyperscaler projects, with Solutions segment leading at 66.5% of revenue.

• EBITDA margin improved to 15.5% from 13.7% year-over-year, reflecting operational leverage and disciplined cost management.

• Strategic investments in technology, inventory, and new Stockholm facility support future growth in metro and long-haul WDM markets.

• Market demand remains robust, fueled by global data traffic growth, AI infrastructure investments, and expansion into long-haul optical networking.

Financial highlights

• Gross margin declined to 46.1% from 48.6% last year, attributed to a single large U.S. Tier 2 customer project; margins expected to normalize.

• EBITDA for Q2 2026 was $4.5 million, up 74.2% year-over-year; EBIT $3.6 million, with operating margin at 12.5%.

• Net profit after tax surged to $2.8 million, up from $0.4 million year-over-year; basic EPS $0.028.

• Operating cash flow positive at $6.8 million in Q2 2026, despite strategic inventory build-up.

• Employee benefit expenses increased 29% due to organizational growth and salary adjustments.

Outlook and guidance

• No near-term quarterly guidance, but production capacity is not expected to constrain growth in the second half of 2026.

• Book-to-bill ratio remains above one, indicating strong demand; market growing faster than expected, driven by AI and hyperscale data center demand.

• Targeting $300–$400 million in revenue by 2031, with EBIT margin above 16% in the latter half of the planning period.

• Addressable market projected to reach $14 billion by 2029, more than doubling from current levels.

• APAC region expected to contribute more significantly from late 2026 and into 2027, though performance remains project dependent.