Skip to content
    HMH
    Earnings call· Jun 2026(Q2 FY26)

    HMH Holding Q2 FY26 earnings call HMH

    Aug 6, 2026 Source

    Executive summary

    HMH Holding Q2 FY26 — Strong Order Intake and Offshore Market Acceleration

    HMH Holding reported resilient Q2 FY26 results, marked by strong order intake and expanded adjusted EBITDA margins, despite some short-term headwinds in product orders and repair activity. The company is benefiting from a constructive offshore market, with increased visibility into future floater rig years and robust demand for digital technology upgrades. Management remains confident in market acceleration through H2 2026 and into 2027, expecting delayed opportunities to materialize.

    Highlights

    5

    • Orders for the quarter were $205 million, representing a book-to-bill ratio of 1.2x.

    • Adjusted EBITDA margins grew year-over-year to 20%.

    • Free cash flow was positive at $22 million, excluding IPO impact.

    • Aftermarket services order intake increased 50% year-over-year to $118 million.

    • Visibility into projected 2027 floater rig years reached 80%, up from 65% last year.

    Concerns

    3

    • Product revenue was $21 million, down 66% year-over-year and 38% quarter-over-quarter.

    • The Middle East situation caused a $10 million revenue headwind due to installation and commissioning delays.

    • Repair activity was slower than planned, impacting service revenue, though offset by digital technology volume.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full year 2026 Adjusted EBITDA
    $157 million to $177 million
    high materiality
    High
    Second half 2026 revenue
    meaningfully stronger than the first half
    medium materiality
    High
    Full year 2026 Capital Expenditures
    2% of revenue
    medium materiality
    High
    Q3 FY26 book-to-bill ratio
    above 1x
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Aftermarket Services
    Revenue down year-over-year due to lower repair activity, partially offset by stronger digital technology volume. Quarter-over-quarter increase driven by increased demand for repairs, digital technology and other services. Longer cycle digital technology orders replaced shorter-cycle repair activity.
    Order intake: $118 millionOrder intake YoY growth: 50%Order intake QoQ growth: 19%
    		$89 milliondown 4%up 24%supported by service mix, execution focus and selective cost actions
    Spares
    Year-over-year increase due to increased demand from customers preparing for upcoming contracts. Quarter-over-quarter decrease. Order intake driven by global offshore market dynamics.
    Order intake: $65 millionOrder intake YoY growth: 1%Order intake QoQ growth: 2%
    		$61 millionup 17%down 8%—
    Product
    Reflects lower backlog to start the quarter and partially due to delay in equipment deliveries and installation and commissioning work in the Middle East. Order and delivery delays in the Middle East adversely impacted revenue.
    		$21 milliondown 66%down 38%—

    Operational metrics

    11
    Adjusted EBITDA
    $34 millionup 3% year-over-year; up 13% quarter-over-quarter
    Q2 FY26

    Driven by service volumes quarter-over-quarter, higher spares activity offsetting lower product volume year-over-year.

    Adjusted EBITDA margin
    19.8%grew year-over-year to 20%
    Q2 FY26

    Supported by disciplined cost execution, favorable product mix and continued focus on operational efficiency.

    Cash and cash equivalents
    $120 million
    Q2 FY26

    Balance at quarter end.

    Total liquidity
    $195 million
    Q2 FY26

    Including the revolving credit facility.

    Capital expenditures and development costs
    $5.2 million
    Q2 FY26

    Primarily supporting aftermarket capabilities, service reliability and ongoing product development initiatives.

    IPO expenses
    $22.8 million
    Q2 FY26

    Nonrecurring impact.

    Restructuring expenses
    $5 million
    Q2 FY26

    Nonrecurring impact.

    Tax rate
    25%
    Q2 FY26

    Excluding the nonrecurring impact of the IPO expenses.

    Class A shares outstanding
    12,042,625
    Q2 FY26

    Used for basic EPS calculation after IPO.

    Class B shares outstanding
    31,891,652
    Q2 FY26

    Excluded from basic and diluted EPS calculation after IPO.

    Middle East revenue headwind
    $10 million
    Q2 FY26

    Due to specific installation commissioning delays and order delays related to the geopolitical situation.

    Industry KPIs

    7
    MetricValueDetails
    Rpo backlog80%%
    Book to bill ratio1.2xx
    FCF CAPEX leverage$22 millionUSD
    Digital recurring revenuestronger digital technology volume
    Aftermarket installed basestrong installed position
    Orders bookings by segment$205 millionUSD
    Segment adjusted EBITDA margin19.8%%

    Deals & partnerships

    1
    VariousStrategic M&A opportunities

    Advancing several strategic opportunities, encouraged by both the quality of assets under review and the broader opportunity set available in the market. Consistent with disciplined capital allocation strategy.

    Risks & headwinds

    3
    Geopolitical uncertainty and Middle East situationQ2 FY26, potentially extending beyond this year for new orders

    $10 million revenue headwind in Q2 FY26

    Mitigation: Revenue is recoverable; discussions accelerating; installation/commissioning expected to resume once situation resolves; opportunities are timing shifts.

    Slower customer decision-makingQ2 FY26

    Concentrated in product orders and repairs, leading to delays in project approvals and purchase orders

    Mitigation: Underlying demand environment remains intact; customer discussions continue to progress; opportunities represent timing shifts rather than changes in spending intentions.

    Slower repair activityQ2 FY26

    Impacted service revenue, partially offset by stronger digital technology volume

    Mitigation: Longer cycle digital technology orders replaced shorter-cycle repair activity; underlying demand for upgrades remains strong.

    What to watch in Q3 FY26

    5

    Middle East revenue recovery

    Next quarter / H2 FY26
    Current$10M headwind in Q2 FY26
    TargetResumption of installation/commissioning and new orders

    Why it matters

    Recovery of delayed revenue and orders from a significant regional market is crucial for overall revenue performance.

    I mean first of all, yes, it's all recoverable. So every bit of that, we think, yes, will be recovered. I think in terms of installation and commissioning, yes, I think you see that as soon as the situation kind of resolves itself.

    Q&A highlights

    5

    Understand the 80% visibility for 2027 floater rig years and scenarios for closing the remaining 20% gap.

    Tom McGee explained the remaining 20% involves rigs rolling off contract or reactivations, with increased certainty in forecasts. Eirik added that contracted rig years for the first 7 months of 2026 were 50% higher than the same period in 2025, indicating an upward trend for 2027.

    “I'd say you're starting to narrow the gap on the downside just by seeing the contract announcements that we've had. So we don't go rig by rig, but it's just trying to give comfort that what we see today is exactly what we've expected to see.”

    asked by Derek Podhaizer · answered by Tom McGee

    2 min read5 chapters

    Detailed Narrative

    01

    Offshore Market Dynamics and Visibility

    The offshore market continues to show positive momentum, particularly in the Floater segment, with healthy contract award activity across key basins. Operators are sanctioning projects and securing drilling capacity well ahead of required start dates, increasing visibility into 2027. Contract durations are extending to multi-well and multi-year campaigns, especially in deepwater and harsh environment markets. Industry forecasts suggest marketed floater utilization could reach 90% in 2027, with harsh environment assets being the strongest performers.

    02

    Digital Technology and Aftermarket Services Strength

    HMH saw strong order intake in aftermarket services, up 50% year-over-year, driven by robust digital technology upgrade orders. This indicates healthy upgrade demand and positions HMH to benefit from increased customer investment in equipment upgrades, automation, and digital solutions. While shorter-cycle repair activity was slower, longer-cycle digital technology orders replaced this, allowing for better operational planning and contributing to a stable margin profile for the segment.

    03

    Product and Regional Headwinds

    Product revenue declined significantly due to lower backlog and delays in project approvals and purchase orders, partly attributed to geopolitical uncertainty🌐. Specifically, the Middle East situation resulted in a $10 million revenue headwind in Q2 due to installation and commissioning delays. Management views these delays as timing shifts rather than changes in customer spending intentions, expecting the revenue to be recoverable once the situation resolves.

    04

    Capital Structure and M&A Strategy

    The company completed its IPO on April 2, significantly strengthening its capital structure. HMH ended the quarter with $120 million in cash and cash equivalents and total liquidity of approximately $195 million, with no long-term debt maturity until June 2028. HMH is actively advancing several strategic M&A opportunities, focusing on enhancing capabilities and expanding market presence in line with its disciplined capital allocation strategy.

    05

    Operational Efficiency and Margin Resilience

    Despite revenue choppiness, HMH demonstrated underlying margin resilience. Adjusted EBITDA margins grew year-over-year to 20%, driven by disciplined cost execution, favorable product mix, and a continued focus on operational efficiency. The company maintains an asset-light business model, carefully managing capital intensity while preserving flexibility for growth.

    AI-generated summary of the company’s earnings call. Not investment advice.