Where are the biggest opportunities in Electronics (U.S., Asia, Korea, Taiwan)?

Sanjiv Lamba confirmed a healthy Electronics pipeline, with the bulk of projects expected from the U.S., but also strong pipelines in Taiwan and Korea, and some in China. “I see bulk of those projects out of the U.S. but see strong pipelines in Taiwan and Korea as well and some in China.”

Is the manufacturing inflection primarily from commercial space, and what's the outlook for other end markets in H2?

Sanjiv Lamba detailed a positive outlook for H2: resilient markets (healthcare, F&B) consistent; Electronics momentum to carry on (18% Q2 growth); manufacturing robust, especially U.S. (aerospace >1/3 growth); Chemicals Energy spotty; Metals & Mining steady. “Electronics, as you saw year-on-year had 18% growth in the second quarter, we expect Electronics momentum to carry on for the rest of the year as well.”

What's the impact, and what happens if the issue resolves this year?

Sanjiv Lamba stated Linde successfully navigated helium supply due to diverse sources, but higher dislocation costs make margin contribution dilutive. He expects slow normalization into early next year if issues resolve. Other Asian industrial activity dependent on Middle East hydrocarbons has scaled back. “Any change in the Strait of Hormuz and the fact that we restart helium production back in Qatar and get the alignment of all the supply chain elements... I don't think you will see normalization. This year, it will -- once those issues are resolved... will probably take us into the early part of next year.”

LIN

Linde (LIN) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Materials· Jul 31, 2026

Source: earnings call transcript

Executive summary

Linde Q2 FY26 — Record Sales & EPS Driven by Electronics and Backlog Growth

Linde delivered record sales and EPS in Q2 FY26, fueled by strong electronics demand and significant backlog additions. While the core industrial gas business performed well, margin performance was impacted by the U.S. home care business and mix effects from equipment sales. Management is actively addressing these challenges and expects sequential improvement, maintaining a robust long-term growth outlook.

Highlights

Achieved record sales and EPS levels, with both growing at near double-digit percent.
Increased backlog by $1 billion to a record $8.1 billion, driven by new electronics wins.
Electronics is the fastest-growing end market, with 18% YoY growth in Q2 FY26.
Manufacturing showed robust recovery, particularly in the U.S., with aerospace accounting for over 1/3 of growth.
Deployed $6 billion of capital year-to-date, split evenly between business investments and shareholder returns.

Concerns

Operating margins, excluding cost pass-through, declined approximately 30 basis points year-over-year.
U.S. home care business negatively impacted Americas margins, with a headwind estimated to be over $100 million in Q2 FY26.
APAC margin erosion mostly due to lower margin equipment sales for electronic customers.
Helium supply chain dislocation leading to higher costs, making its contribution positive on a dollar basis but dilutive on a margin basis.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Adjusted EPS	$17.70 to $17.90 high materiality	FY26 · 2026	High
Q3 2026 Adjusted EPS	$4.45 to $4.55 high materiality	Q3 · 2026	High
Project Start-ups (number of projects)	more than 20 projects medium materiality	Remainder of FY26 · 2026	High
Sale of Gas Backlog (end of year)	finish the year with an 8 handle high materiality	End of FY26 · 2026	High
Space Market Opportunity	$1 billion plus medium materiality	By 2030	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Americas (excluding U.S. home care) The gases business is doing well, with margins increasing when excluding the U.S. home care business and cost pass-through.	—	—	—	up 20 bps
APAC Margin erosion mostly due to lower margin equipment sales for electronic customers. Volume up 6% YoY, driven by base volume, significant equipment sales, and ramp-ups of backlog projects in ASEAN.	—	6%	—	erosion

LIN operating KPIs by quarter

LIN operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Sep 2025 Q3 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Backlog	$10B+ The year ended with more than $10 billion in backlog, including a record sale of gas backlog of $7 billion. Source: earnings call transcript	$10B The quarter ended with a strong backlog of $10 billion of which more than $7 billion is sale of gas projects, all underpinned by long-term contracts with secured returns driving future growth. Source: earnings call transcript	$10B The backlog remains at $10 billion, contractually securing long-term EPS growth while increasing our network density. Source: earnings call transcript	—	$8.1B During the second quarter, we achieved record sales and EPS levels with both growing at near double-digit percent, while increasing the backlog by $1 billion to a record $8.1 billion, after securing a new electronic spin in the US In addition, the backlog project pipeline remains healthy, but still new project opportunities under development. Source: earnings call transcript	—
Backlog Sale of gas	$7B The year ended with more than $10 billion in backlog, including a record sale of gas backlog of $7 billion. Source: earnings call transcript	$7B+ The quarter ended with a strong backlog of $10 billion of which more than $7 billion is sale of gas projects, all underpinned by long-term contracts with secured returns driving future growth. Source: earnings call transcript	—	$7.1B Furthermore, we signed 5 new projects that added $100 million to the sale of gas backlog, which ended the quarter at $7.1 billion. Source: earnings call transcript	$8.1B When considering the record $8.1 billion sale of gas backlog continued roll-up acquisition targets and project pipeline opportunities, we expect this number to remain a significant use of capital for the foreseeable future. Source: earnings call transcript	+14.1%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Sale of Gas Backlog $8.1 billion Q2 FY26

increased by $1 billion

Record level, after securing a new electronic spin in the U.S. Expects to finish the year with an '8 handle' despite $1.3 billion in project start-ups.

Capital programs

Taiwan JV Semiconductor Fab & Advanced Packaging Facilities under development $800 million

Funding: Taiwan JV

Benefit:ASUs and hydrogen production units

Not included in the backlog are a couple of electronics wins by our Taiwan JV, which will invest approximately $800 million to build, own and operate ASUs and hydrogen production units to supply to new semiconductor fab and advanced packaging facilities there.

Risks & headwinds

U.S. Home Care Business (Lincare) underperformance Q2 FY26

headwind estimated to be over $100 million

Mitigation:Actively pruning portfolio, series of actions underway to improve performance, evaluating strategic fit within Linde.

Operating margin decline Q2 FY26

30 basis points year-over-year

Mitigation:Actions underway to improve, expect sequential improvement into Q3. Many headwinds expected to be temporary.

Helium supply chain dislocation and higher costs Q2 FY26, extending into early next year

positive on a dollar basis, but dilutive on a margin basis

Mitigation:Ensuring reliable and safe supplies to existing customers, signing new long-term contracts, leveraging diverse supply sources, maintaining cabin, and strong logistics.

Middle East crisis impact on Asian industrial activity Q2 FY26

countries highly dependent on hydrocarbons coming out of the Middle East have had to scale back industrial activity

Mitigation:Everybody is hoping for resolution. Once that happens, you will see that normalization happen fairly quickly.

What to watch in Q3 FY26

U.S. Home Care Business (Lincare) margin improvement

Q3 FY26

Current negatively impacted Americas margins

Target sequential improvement

Why it matters

Lincare's underperformance was a primary driver of overall margin decline, and its improvement is key to overall profitability.

Even though we have been actively pruning this portfolio, it simply has not been enough to overcome the continued headwinds led by higher cost inflation and policy changes. We have a series of actions underway, and I fully expect sequential improvement into the third quarter.

Find out whether LIN delivers this. Inve re-checks your case every morning.

Q&A highlights

How much of a headwind has Lincare been, and is it currently profitable?

Sanjiv Lamba stated that without Lincare, Americas margins would have been up 20 basis points (ex-pass through). He acknowledged Lincare's negative impact due to cost inflation and policy changes, but emphasized aggressive actions are underway for sequential improvement, while also evaluating strategic fit.

“the Americas business ex the U.S. home care or Lincare business would be up 20 basis points on margin, ex pass through as we normally do.”

asked by Laurent Favre · answered by Sanjiv Lamba

2 min read 6 chapters

Detailed narrative

Electronics Growth and Backlog

Linde secured $1 billion in new electronics wins, contributing to a record $8.1 billion sale of gas backlog. The company expects electronics to remain the largest backlog contributor and fastest-growing market, with strong pipelines in the U.S., Taiwan, and Korea. This includes an $800 million investment by their Taiwan JV for ASUs and hydrogen production units for new semiconductor fabs.

U.S. Home Care Business Challenges

The U.S. home care business (Lincare) negatively impacted Americas segment margins, contributing to a 30 basis point year-over-year decline in operating margins (excluding cost pass-through). This is attributed to higher cost inflation and policy changes. Management is implementing aggressive actions for operational improvement and productivity, while also evaluating strategic options for the business.

End-Market Performance

Consumer-related markets (healthcare, food & beverage) grew consistently. Electronics grew 18% year-over-year. Manufacturing showed robust growth, particularly in the U.S., driven by aerospace (over 1/3 of manufacturing growth) and construction activity related to data centers. Metals and Mining, and Chemicals Energy markets grew low single digits, with APAC project backlog contributions driving chemicals growth.

Capital Management and Deployment

Year-to-date, Linde deployed $6 billion of capital, evenly split between business investments ($1.9 billion for acquisitions and project backlog) and shareholder returns. The company expects secured growth to remain a significant use of capital given the record backlog and project pipeline. Operating cash flow showed moderate year-over-year growth, with expectations for a stronger second half.

Helium Market Dynamics

The company successfully navigated the complex helium market, ensuring reliable supplies to contracted customers and signing new long-term contracts due to diverse supply sources and logistics capabilities. While pricing has improved, higher dislocation costs currently make the margin contribution dilutive, though positive on a dollar basis.

Normalization of the helium market is expected to be slow, likely extending into early next year, contingent on resolution of Strait of Hormuz issues.

CapEx Increase and Commercial Space

The CapEx estimate for the year was increased by $500 million, driven by new backlog wins and commercial space activities. For commercial space customers, Linde anticipates a blend of sale of gas and sale of plant models, with the company participating in both, particularly for atmospheric gases, while hydrogen remains primarily a sale of gas opportunity.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.