Siemens - Q2 FY26 Earnings Analysis

Performance Highlights

Siemens reported Q2 FY26 group revenue of €19.8bn, up 6% on a comparable basis, while Industrial Business profit margin expanded to 15.4% and EPS pre PPA reached €2.81, including a €0.17 gain from the divestment of its U.S. airport logistics business. Orders surged 18% comparable to €24.1bn, lifting the group book-to-bill to 1.22 and pushing the record order backlog to €124bn. Digital Industries was the primary profit engine, with segment margin expanding 370 basis points year-on-year to 19.2%, as Software revenue grew 14% and Automation revenue rose 6%, both delivering economies of scale. Smart Infrastructure posted record quarterly orders of €7.5bn, up 35% comparable, anchored by triple-digit data center order growth in the U.S. and Electrification revenue up 18%, while Mobility was the key drag, with margin contracting 220 basis points to 7.6% due to U.S. tariff impacts of -170 basis points and delayed project call-offs.

Management Outlook and Forward Catalysts

Management confirmed FY26 group guidance of 6%–8% comparable revenue growth and EPS pre PPA of €10.70–€11.10, while tightening Digital Industries revenue growth guidance to 7%–10% from the prior 5%–10% range, signalling conviction in the software-led margin expansion thesis. The clarified timeline for a direct spin-off of Siemens Healthineers, with a shareholder vote scheduled at the February 2027 AGM, marks a significant portfolio simplification step and sharpens the investment case around the core industrial technology platform. Bulls will focus on whether the €53.5bn Mobility backlog converts into H2 revenue catch-up, whether data center-driven SI order momentum sustains into FY27, and whether DI Software ARR growth of 11%–12% comparable accelerates as Altair cross-selling synergies materialise. Bears will watch U.S. tariff escalation risks in Mobility, persistent FX headwinds that weighed -80 basis points on IB margin in Q2, and macro uncertainty in key DI verticals such as Automotive and Machine Building.