SMA Solar Technology Q3 Earnings Call Highlights

Key Points

• SMA Solar narrowed its 2026 forecast to the upper half of its prior range, targeting sales of €1.675–€1.725 billion and EBITDA of €205–€230 million, with its strongest quarter expected in Q4.
• Nine-month reported EBITDA rebounded to €146 million from a €17 million loss, while the order backlog grew to €1.9 billion from €1.3 billion. Results included significant positive items, including earnings from U.S. tariff refunds and inventory sales.
• The Home & Business division continued to recover, and SMA said its transformation was about 90% complete, targeting break-even in 2027. The company is also expanding into storage and data center infrastructure, with data center revenue expected mainly from 2028.

SMA Solar Technology ETR: S92 narrowed its 2026 sales and earnings forecasts to the upper half of its previous ranges after reporting a sharp improvement in nine-month profitability and a growing order backlog.

The solar technology company now expects full-year sales of €1.675 billion to €1.725 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of €205 million to €230 million. It previously raised its guidance in July.

SMA said the revised outlook reflected stronger execution, improved business conditions and better visibility for the fourth quarter, which it expects to deliver its highest sales and earnings contribution of the year.

Nine-Month Earnings and Cash Flow Improve

Gross sales rose to €1.2 billion in the first nine months of 2026 from €1.1 billion a year earlier, despite a €22 million revenue reduction related to U.S. tariff refunds in the Large Scale business.

Reported EBITDA climbed to €146 million from a loss of €17 million, giving the company a 12.6% margin. Before special effects described in its quarterly statement, EBITDA was about €110 million.

The company identified positive items including €39 million from the sale of previously written-down inventories, €3 million from the release of restructuring-related personnel provisions and €90 million in earnings from U.S. tariff refunds. Those benefits were partly offset by commissions and provisions for potential claims and litigation.

Free cash flow increased to approximately €136 million from €115 million a year earlier, while net capital expenditure fell to €14 million from €38 million. Total liquidity stood at €302 million at the end of September, and SMA said it had fully repaid cash drawn under its revolving credit facility in the first half.

The order backlog reached €1.9 billion, up from €1.3 billion a year earlier. Product orders accounted for €1.5 billion, with Large Scale representing the majority of that backlog.

Home Business Recovery Continues

Home & Business Solutions sales rose to €232 million from €181 million, reflecting higher demand. The division’s loss before interest and taxes narrowed to €29 million from €322 million as higher sales, restructuring savings and positive special items supported the recovery.

SMA said its transformation program, which focuses on the home and business division, was progressing according to plan. During the question-and-answer session, the company estimated that implementation was roughly 90% complete and reiterated its goal for the division to break even in 2027.

Demand for the division’s new hybrid inverters, battery portfolio and broader solutions appeared sustainable, SMA said, adding that it expected a similar demand level in the first quarter of next year. The company did not provide a 2027 sales forecast.

Large Scale & Project Solutions generated sales of €929 million, down from €954 million a year earlier, while its EBIT declined to €130 million from €200 million. The company cited provisions for service and remediation measures and potential customer litigation among the factors affecting the division’s result.

Storage and Data Centers Drive Expansion

SMA said its large-scale business has shifted toward battery storage and other applications. Photovoltaics’ share of that business’s revenue has fallen from 80% to less than 50% over five years, while storage’s share has risen from about 10% to more than 50%.

The company also opened its new Gigawatt Factory in Niestetal in September. Designed for utility-scale technologies, the facility has space for more than 60 gigawatts of annual production capacity under full utilization, SMA said.

SMA expects its push into data center power infrastructure to produce an initial meaningful revenue contribution from 2027, subject to project timing. In response to a question from Jefferies analyst Constantin Hesse, the company said it expected the bulk of data center orders to arrive next year, with associated revenue in 2028. It declined to quantify potential 2028 revenue.

Supply Constraints and Outlook Risks

Responding to Berenberg analyst Lasse Stüben, SMA said supply had tightened for selected components, including printed circuit boards, electronic components and memory chips. The company is building some safety stocks, reserving capacity and qualifying alternative sources to prevent shortages from limiting revenue.

SMA also said it had decided to raise prices on selected Home & Business Solutions products from January to address component cost increases. It did not expect the costs to have a material impact on Large Scale margins.

The company said its outlook remains subject to known trade and geopolitical conditions. It added that the commercial implications of forthcoming U.S. rules on critical power infrastructure are too early to quantify.

About SMA Solar Technology (ETR:S92)

SMA Solar Technology AG, together with its subsidiaries, engages in development, production, and sale of PV and battery inverters, transformers, chokes, monitoring systems for PV systems, and charging solutions for electric vehicles in Germany and internationally. It operates through Home Solutions, Commercial and Industrial Solutions, and Large Scale and Project Solutions segments. The company offers string and central solar inverters for various module types; battery inverters for high voltage batteries, on- and off- grid applications, commercial and industrial storage solutions, large scale storage solutions, and accessories; medium-voltage technology products; and DC-DC converters.

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