Technology

Iridium Announces 2023 Results; Company Issues 2024 Outlook

Published

2 years ago

February 15, 2024

Extends estimate of useful life of satellites by five years

MCLEAN, Va., Feb. 15, 2024 /PRNewswire/ — Iridium Communications Inc. (Nasdaq:IRDM) (“Iridium”) today reported financial results for the fourth quarter and full-year 2023 and issued its full-year 2024 guidance. Net income was $38.0 million, or $0.30 per diluted share, for the fourth quarter of 2023, as compared to net loss of $0.8 million, or $0.01 per diluted share, for the fourth quarter of 2022. Operational EBITDA (“OEBITDA”)(1) for the fourth quarter was $114.1 million, as compared to $107.0 million for the prior-year period, representing a year-over-year increase of 7%. Net income benefitted from a year-over-year decrease in depreciation expense resulting from a change in the estimated useful lives of the Company’s satellites, an increase in tax benefit and continued growth in total commercial services revenue.

Iridium reported fourth-quarter total revenue of $194.7 million, which consisted of $148.0 million of service revenue and $46.7 million of revenue related to equipment sales and engineering and support projects. Total revenue was in line with last year’s comparable period and included an 8% increase in service revenue. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 76% of total revenue for the fourth quarter of 2023.

The Company ended the quarter with 2,279,000 total billable subscribers, which compares to 1,999,000 for the year-ago period and is up from 2,236,000 for the quarter ended September 30, 2023. Total billable subscribers grew 14% year-over-year, driven by growth in commercial IoT.

Full-Year 2023 Iridium Business Highlights

For the full year, Iridium reported net income of $15.4 million, or $0.12 per diluted share, as compared to net income of $8.7 million, or $0.07 per diluted share, for 2022. The change primarily resulted from an increase in income tax benefit offset in part by an increase in interest expense related to the fees paid for the refinancing of our Term Loan and the increase in the Secured Overnight Financing Rate (SOFR), which is the benchmark interest rate of the Term Loan. The Company reported record total revenue in 2023 of $790.7 million, which was up 10% from the year-ago period. Total revenue included $584.5 million of service revenue and $206.2 million of revenue related to equipment sales and engineering and support services. OEBITDA for 2023 was $463.1 million, a 9% increase from $424.0 million in the prior year. Capital expenditures were $73.5 million for the full-year 2023.

“Iridium executed well in 2023, delivering another solid year of commercial services growth. Strength was broad based with subscriber growth across all commercial service lines,” said Matt Desch, CEO, Iridium. Desch added, “Our strong cash flow supported ongoing return of more than $310 million of capital to shareholders, including dividend payments of about $65 million in 2023.”

In the fourth quarter of 2023, Iridium conducted its annual evaluation of asset useful lives. The analysis considered the health of Iridium’s constellation, satellite performance and the successful launch of five in-orbit spares in 2023. As a result of this assessment, the satellites’ estimated useful lives have been extended by five years from 12.5 years to 17.5 years. The change will affect the timing of certain revenue and expense items.

Commenting on the change in estimated useful life of Iridium’s satellites, Desch said, “This action is a validation of our expectations for Iridium’s extended capex holiday.”

Fourth-Quarter Iridium Business Highlights

Service – Commercial

Commercial service remained the largest part of Iridium’s business, representing 62% of the Company’s total revenue during the fourth quarter. The Company’s commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services. These customers rely on Iridium’s products and services as critical to their daily operations and integral to their communications and business infrastructure.

Commercial service revenue was $121.5 million, up 10% from last year’s comparable period due to broad-based growth across all revenue lines.Commercial voice and data: Revenue was $55.6 million, up 12% from the year-ago period. Subscribers grew 3% from the year-ago period to 408,000. Average revenue per user (“ARPU”) was $45 during the fourth quarter, compared to $41 in last year’s comparable period, with the increase due primarily to higher access fees.Commercial IoT data: Revenue was $36.1 million, up 12% from the year-ago period. Subscribers grew 18% from the year-ago period to 1,709,000 customers, driven by continued growth in consumer personal communications devices. ARPU was $7.12 in the fourth quarter, compared to $7.50 in last year’s comparable period. The decrease in ARPU resulted primarily from customer mix, including the effect of the growing proportion of personal communications subscribers, who typically utilize lower ARPU plans.Commercial broadband: Revenue was $14.6 million, up 5% from $13.9 million in the year-ago period. ARPU was $294 during the fourth quarter, compared to $313 in last year’s comparable period, reflecting the increased prevalence of Iridium’s use as a companion service rather than primary.Hosted payload and other data service: Revenue was $15.2 million, up 3% from $14.7 million in the year-ago period. There was a year-over-year decrease in hosted payload revenue related to the change in the estimated useful lives of Iridium’s satellites described above that went into effect in the fourth quarter of 2023. This decrease was more than offset by higher precision location service revenues of which $2 million was non-recurring and resulted from an updated estimate on a customer contract.Iridium’s commercial business ended the quarter with 2,134,000 billable subscribers, which compares to 1,860,000 for the prior-year quarter and is up from 2,094,000 for the quarter ended September 30, 2023. IoT data subscribers represented 80% of billable commercial subscribers at the end of the quarter, an increase from 78% at the end of the prior-year period.

Service – U.S. Government

Iridium’s voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.

Under Iridium’s Enhanced Mobile Satellite Services contract (the “EMSS Contract”), a seven-year, $738.5 million fixed-price airtime contract with the U.S. Space Force signed in September 2019, Iridium provides specified satellite airtime services, including unlimited global standard and secure voice, paging, fax, Short Burst Data®, Iridium Burst®, RUDICS and Distributed Tactical Communications System services for an unlimited number of Department of Defense and other federal government subscribers. Iridium also provides maintenance and support work for the U.S. government’s dedicated Iridium gateway under two other contracts with the U.S. Space Force. Iridium Certus® airtime services are not included under these contracts and may be procured separately for an additional fee.

Government service revenue remained flat at $26.5 million in the fourth quarter reflecting the contractual rate in the EMSS Contract.Iridium’s U.S. government business ended the quarter with 145,000 subscribers, which compares to 139,000 for the prior-year quarter and 142,000 for the quarter ended September 30, 2023. Government voice and data subscribers increased 3% from the year-ago period to 62,000 as of December 31, 2023. Government IoT data subscribers increased 5% year-over-year and represented 57% of government subscribers at year-end.

Equipment

Equipment revenue was $15.7 million in the fourth quarter compared to $39.3 million in the prior-year quarter.Equipment revenue totaled $105.1 million in 2023, compared to $134.7 million in 2022. In 2024, the Company expects equipment sales to be lower than 2023 and be more in line with periods prior to 2022 which experienced supply chain disruptions due to the pandemic.

Engineering & Support

Engineering and support revenue was $31.1 million during the fourth quarter, compared to $17.8 million in the prior-year quarter, primarily due to a rise in activity with the U.S. government.Engineering and Support revenue totaled $101.1 million in 2023, compared to $51.6 million in 2022. In 2024, the Company expects Engineering and Support revenue to increase from 2023 with ongoing work on the Space Development Agency contract.

Capital expenditures were $16.2 million for the fourth quarter, including $1.2 million in capitalized interest. The Company ended the fourth quarter with gross debt of $1.5 billion and a cash and cash equivalents balance of $71.9 million, for a net debt balance of $1.4 billion.

Iridium paid its fourth quarter dividend of $0.13 per common share on December 29, 2023. Total dividends paid to stockholders during 2023 totaled $64.8 million. The Board of Directors plans to increase the quarterly dividend to $0.14 per share starting with the second quarter 2024 dividend, which would result in a full-year dividend increase of 5.8%.

During the quarter ended December 31, 2023, the Company repurchased approximately 1.3 million shares of its common stock under its previously announced share repurchase program at a total purchase price of $51.6 million. As of December 31, 2023, $334.0 million remained available and authorized for repurchase under this program.

2024 and Longer-Term Outlook

The Company issued its full-year 2024 outlook and updated long-term guidance on cash taxes:

Total service revenue growth between 4% and 6% for full-year 2024. Total service revenue for 2023 was $584.5 million.Full-year 2024 OEBITDA between $460 million and $470 million. OEBITDA for 2023 was $463.1 million.Cash taxes of less than $10 million per year from 2024 through 2026. We now expect that the longer-term cash tax rate will move closer to the statutory rate in 2028.Net leverage below 2.5 times OEBITDA between 2026 and 2029 and falling below 2.0 times OEBITDA by the end of the decade, assuming the completion of the Company’s share repurchase authorization and the payment of quarterly dividends. Net leverage was 3.1 times OEBITDA at December 31, 2023.

(1) Non-GAAP Financial Measures & Definitions

In addition to disclosing financial results that are determined in accordance with U.S. GAAP, the Company provides Operational EBITDA, which is a non-GAAP financial measure, as a supplemental measure to help investors evaluate the Company’s fundamental operational performance. Operational EBITDA represents earnings before interest, income taxes, depreciation and amortization, income (loss) on equity method investments, net, and share-based compensation expenses. The Company considers the loss on early extinguishment of debt to be financing-related costs associated with interest expense or amortization of financing fees, which by definition are excluded from Operational EBITDA. Such charges are incidental to, but not reflective of, the Company’s day-to-day operating performance. Operational EBITDA does not represent, and should not be considered, an alternative to U.S. GAAP measurements such as net income or loss. In addition, there is no standardized measurement of Operational EBITDA, and the Company’s calculations thereof may not be comparable to similarly titled measures reported by other companies. The Company believes Operational EBITDA is a useful measure across time in evaluating its fundamental core operating performance. Management also uses Operational EBITDA to manage the business, including in preparing its annual operating budget, debt covenant compliance, financial projections and compensation plans. The Company believes that Operational EBITDA is also useful to investors because similar measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. As indicated, Operational EBITDA does not include interest expense on borrowed money, the payment of income taxes, amortization of the Company’s definite-lived intangible assets, or depreciation expense on the Company’s capital assets, which are necessary elements of the Company’s operations. Since Operational EBITDA does not account for these and other expenses, its utility as a measure of the Company’s operating performance has material limitations. Due to these limitations, the Company’s management does not view Operational EBITDA in isolation, but also uses other measurements, such as net income (loss), revenues and operating profit, to measure operating performance. Please refer to the schedule below for a reconciliation of consolidated GAAP net income (loss) to Operational EBITDA and Iridium’s Investor Relations webpage at www.iridium.com for a discussion and reconciliation of this and other non-GAAP financial measures. We do not provide a forward-looking reconciliation of expected full-year 2024 Operational EBITDA guidance as the amount and significance of special items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts.

Iridium Communications Inc.

Supplemental Reconciliation of GAAP Net Income (Loss) to Operational EBITDA

(In thousands)

Three Months Ended December 31,

Year Ended December 31,

2023

2022

2023

2022

GAAP net income (loss)

$ 38,023

$ (808)

$ 15,415

$ 8,722

Interest expense, net

19,114

18,100

90,387

65,089

Income tax (benefit) expense

(9,578)

(721)

(26,251)

292

Depreciation and amortization

52,787

75,745

320,000

303,484

Share-based compensation

11,955

12,102

57,455

43,729

Loss on extinguishment of debt

—

1,187

—

1,187

Loss on equity method investments

1,768

1,402

6,089

1,496

Operational EBITDA

$ 114,069

$ 107,007

$ 463,095

$ 423,999

Conference Call Information

As previously announced, the Company will host a conference call to discuss its results at 8:30 a.m. Eastern Time on Thursday, February 15, 2024. Callers should dial 1-412-902-6740 to access the call. The conference call will also be simultaneously webcast on Iridium’s Investor Relations webpage at www.iridium.com. An archive of the webcast will be available following the live conference call.

About Iridium Communications Inc.

Iridium® is the only mobile voice and data satellite communications network that spans the entire globe. Iridium enables connections between people, organizations and assets to and from anywhere, in real time. Together with its ecosystem of partner companies, Iridium delivers an innovative and rich portfolio of reliable solutions for markets that require truly global communications. In 2019, the company completed a generational upgrade of its satellite network and launched its specialty broadband service, Iridium Certus. Iridium Communications Inc. is headquartered in McLean, Va., U.S.A., and its common stock trades on the Nasdaq Global Select Market under the ticker symbol IRDM. For more information about Iridium products, services and partner solutions, visit www.iridium.com.

Forward-Looking Statements

Statements in this press release that are not purely historical facts may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding Iridium’s expectations with respect to total service revenue growth, OEBITDA and cash taxes for 2024; net leverage and cash taxes over the longer-term; anticipated equipment sales and engineering and support service revenue for 2024; amount and timing of share repurchases and the payment of dividends, and expected revenues from its EMSS contract with the U.S. government. Forward-looking statements can be identified by the words “anticipates,” “may,” “can,” “believes,” “expects,” “projects,” “intends,” “likely,” “will,” “to be” and other expressions that are predictions or indicate future events, trends or prospects. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Iridium to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, uncertainties regarding customer demand for Iridium’s products and services, including demand from the U.S. government; Iridium’s ability to maintain the health, capacity and content of its satellite constellation, and the development of and market for Iridium’s products and services, as well as general industry and economic conditions, and competitive, legal, governmental and technological factors. Other factors that could cause actual results to differ materially from those indicated by the forward-looking statements include those factors listed under the caption “Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 15, 2024, as well as other filings Iridium makes with the SEC from time to time. There is no assurance that Iridium’s expectations will be realized. If one or more of these risks or uncertainties materialize, or if Iridium’s underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. Iridium’s forward-looking statements are based on information available to it as of the date of this press release and speak only as of the date of this press release, and Iridium undertakes no obligation to update forward-looking statements.

Iridium Communications Inc.

Condensed Consolidated Statements of Operations

(In thousands)

Three Months Ended December 31,

2023

2022

Revenue

Service revenue

Commercial

$ 121,513

$ 110,274

Government

26,500

Total service revenue

148,013

136,774

Subscriber equipment

15,662

39,252

Engineering and support service

31,065

17,810

Total revenue

194,740

193,836

Operating expenses

Cost of services (exclusive of depreciation and amortization)

45,279

31,341

Cost of subscriber equipment sales

10,335

25,630

Research and development

5,728

5,748

Selling, general and administrative

34,315

36,599

Depreciation and amortization

52,787

75,745

Total operating expenses

148,444

175,063

Operating income

46,296

18,773

Other expense, net

Interest expense, net

(19,114)

(18,100)

Loss on extinguishment of debt

—

(1,187)

Other income, net

3,031

387

Total other expense, net

(16,083)

(18,900)

Income (loss) before income taxes

30,213

(127)

Income tax benefit

9,578

721

Loss on equity method investments

(1,768)

(1,402)

Net income (loss)

$ 38,023

$ (808)

Operational EBITDA

$ 114,069

$ 107,007

Iridium Communications Inc.

Condensed Consolidated Statements of Operations

(In thousands)

Year Ended December 31,

2023

2022

Revenue

Service revenue

Commercial

$ 478,454

$ 428,721

Government

106,000

Total service revenue

584,454

534,721

Subscriber equipment

105,136

134,714

Engineering and support service

101,133

51,599

Total revenue

790,723

721,034

Operating expenses

Cost of services (exclusive of depreciation and amortization)

158,710

115,137

Cost of subscriber equipment sales

66,410

86,012

Research and development

20,269

16,218

Selling, general and administrative

143,706

123,504

Depreciation and amortization

320,000

303,484

Total operating expenses

709,095

644,355

Operating income

81,628

76,679

Other expense, net

Interest expense, net

(90,387)

(65,089)

Loss on extinguishment of debt

—

(1,187)

Other income, net

4,012

107

Total other expense, net

(86,375)

(66,169)

Income (loss) before income taxes

(4,747)

10,510

Income tax benefit (expense)

26,251

(292)

Loss on equity method investments

(6,089)

(1,496)

Net income

$ 15,415

$ 8,722

Operational EBITDA

$ 463,095

$ 423,999

Iridium Communications Inc.

Summary Revenue and OEBITDA Highlights

(In thousands)

Three Months Ended December 31,

Year Ended December 31,

2023

2022

% Change

2023

2022

% Change

Revenue

Service revenue(1)

Commercial service revenue

Voice and data

$ 55,649

$ 49,491

12 %

$ 219,242

$ 193,112

14 %

IoT data(2)

36,065

32,158

12 %

141,036

125,015

13 %

Broadband(3)

14,620

13,942

5 %

57,878

51,143

13 %

Hosted payload and other data service(4)

15,179

14,683

3 %

60,298

59,451

1 %

Total commercial service revenue

121,513

110,274

10 %

478,454

428,721

12 %

Government service revenue(5)

26,500

0 %

106,000

0 %

Total service revenue

148,013

136,774

8 %

584,454

534,721

9 %

Subscriber equipment

15,662

39,252

-60 %

105,136

134,714

-22 %

Engineering and support(6)

Commercial

1,746

3,553

-51 %

11,050

7,833

41 %

Government

29,319

14,257

106 %

90,083

43,766

106 %

Total engineering and support

31,065

17,810

74 %

101,133

51,599

96 %

Total revenue

$ 194,740

$ 193,836

0 %

$ 790,723

$ 721,034

10 %

Operational EBITDA

$ 114,069

$ 107,007

7 %

$ 463,095

$ 423,999

9 %

Other

Capital expenditures(7)

$ 16,202

$ 26,511

$ 73,487

$ 71,267

Net debt(8)

$ 1,428,130

$ 1,335,855

Cash and cash equivalents

$ 71,870

$ 168,770

Term Loan

$ 1,500,000

$ 1,504,625

Deferred financing costs

(17,510)

(17,440)

Term Loan, net

$ 1,482,490

$ 1,487,185

(1)

Service revenue consists of primarily subscription-based services which often generate a long-term recurring revenue stream from subscribers.

(2)

IoT data service provides a two-way short burst data transmission between Iridium Communications Inc.’s network and a telemetry unit, which may be located, for example, on a container in transit or a buoy monitoring oceanographic conditions.

(3)

Broadband is comprised of Iridium OpenPort® and Iridium Certus.

(4)

Hosted payload and other services consist primarily of services that do not have traditional billable subscribers. Hosted payload services consist of hosting and data services to our payload customers, Aireon and Harris. Other services include primarily Iridium Communications Inc.’s one-way satellite timing, location, and authentication services (STL) which provides position, navigation and timing technology.

(5)

Government service revenue consists of voice and IoT data subscription-based services provided to agencies of the U.S. government through prime contracts.

(6)

Engineering and support includes maintenance services to the U.S. government’s dedicated gateway and engineering services to assist customers in developing new technologies for use on Iridium Communications Inc.’s satellite system.

(7)

Capital expenditures based on cash spent in the respective period.

(8)

Net debt is calculated by taking the sum of the gross Term Loan B and gross drawn Revolving Facility, less cash and cash equivalents.

Iridium Communications Inc.

Subscriber Highlights

(In thousands, except ARPU)

As of December 31,

2023

2022

% Change

Billable Subscribers (1) (2)

Commercial

Voice and data, IoT data and Broadband service

Voice and data

408

397

3 %

IoT data

1,709

1,448

18 %

Broadband (4)

16.7

15.0

11 %

Total commercial voice and data, IoT data
and Broadband service

2,134

1,860

15 %

Government

Voice and data and IoT data service

Voice and data

3 %

IoT data

5 %

Total government voice and data and IoT
data service

145

139

4 %

Total billable subscribers

2,279

1,999

14 %

Three Months Ended December 31,

Year Ended December 31,

2023

2022

% Change

2023

2022

% Change

Net Billable Subscriber Additions

Commercial

Voice and data. IoT data and Broadband service

Voice and data

(2)

(4)

50 %

-59 %

IoT data

17 %

261

255

2 %

Broadband

0.2

0.3

-33 %

1.7

1.8

-6 %

Total commercial voice and data, IoT data
and Broadband service

24 %

274

284

-4 %

Government

Voice and data and IoT data service

Voice and data

(2)

150 %

(5)

140 %

IoT data

(4)

150 %

(3)

233 %

Total government voice and data and IoT
data service

(6)

150 %

(8)

175 %

Total net billable subscriber additions

64 %

280

276

2 %

Three Months Ended December 31,

Year Ended December 31,

2023

2022

% Change

2023

2022

% Change

ARPU (2) (3)

Commercial

Voice and data

$ 45

$ 41

10 %

$ 45

$ 42

7 %

IoT data

$ 7.12

$ 7.50

(5) %

$ 7.45

$ 7.89

(6) %

Broadband

$ 294

$ 313

(6) %

$ 305

$ 302

1 %

(1)

Subscribers as of the end of the respective period.

(2)

Billable subscriber and ARPU data is not applicable for Hosted payload and other data service revenue items and is excluded from presentation above.

(3)

Average monthly revenue per unit, or ARPU, is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period.

(4)

Broadband is comprised of Iridium OpenPort® and Iridium Certus.

Investor Contact:

Press Contact:

Kenneth Levy

Jordan Hassin

Iridium Communications Inc.

+1 (703) 287-7570

+1 (703) 287-7421

ken.levy@iridium.com

jordan.hassin@iridium.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/iridium-announces-2023-results-company-issues-2024-outlook-302061072.html

SOURCE Iridium Communications Inc.

Technology

UPM Half Year Financial Report 2026: Improved second quarter results in all businesses and portfolio change progressing

Published

9 minutes ago

July 23, 2026

UPM-Kymmene Corporation Stock Exchange Release (Half Year Financial Report) July 23, 2026 at 09:30 EEST

HELSINKI, July 23, 2026 /PRNewswire/ —

UPM Half Year Financial Report 2026:
Improved second quarter results in all businesses and portfolio change progressing

Q2 2026 highlights, continuing operations

Sales totaled €2,355 million (2,341 million in Q2 2025)Comparable EBIT increased by 71% to €212 million, 9.0% of sales (124 million, 5.3%)All businesses improved their results from last yearUPM and Sappi signed a definitive agreement on the graphic paper Joint VentureThe Board approved a plan to demerge the Plywood business into a new listed company. The Extraordinary General Meeting to decide on the demerger plan will be held on August 31, 2026UPM achieved a Platinum rating from EcoVadis and an A score from CDP for its supplier engagement

H1 2026 highlights, continuing operations

Sales totaled €4,781 million (4,914 million in H1 2025)Comparable EBIT increased by 17% to €471 million, 9.8 % of sales (404 million, 8.2 %)Strong performance in Decarbonization solutions businesses (UPM Energy and UPM Biofuels)Robust sales growth and performance in Advanced materials businesses (UPM Adhesive Materials and UPM Specialty Materials)Operating cash flow was €225 million (468 million)1)The first installment of the dividend for the year 2025 was paid in April, totaling €395 millionNet debt was 3,313€ million at the end of June (3,310 million) and net debt to EBITDA ratio was 2.36 (2.12)1)

1) Operating cash, net debt and net debt to EBITDA ratio include continuing and discontinued operations.

UPM Plywood is presented as discontinued operations due to the proposed demerger

On April 29, 2026, the Board of Directors of UPM approved a demerger plan for the separation of the Plywood business into an independent listed company. As a result of the proposed demerger, the Plywood business is presented as a discontinued operation in accordance with IFRS 5. Unless otherwise stated, the commentary in this report relates to UPM’s continuing operations. More information in Financial statement information Note 10 assets and liabilities classified as held for distribution to owners and discontinued operations.

Key figures, continuing operations

Q2/2026

Q2/2025

Q1/2026

Q1-Q2/2026

Q1-Q2/2025

Q1-Q4/2025

Sales, € million

2,355

2,341

2,425

4,781

4,914

9,392

Comparable EBITDA, € million

356

250

375

732

659

1,254

% of sales

15.1

10.7

15.5

15.3

13.4

Operating profit (loss), € million

208

105

245

453

296

719

Comparable EBIT, € million

212

124

259

471

404

883

% of sales

9.0

5.3

10.7

9.8

8.2

9.4

Profit (loss) before tax, € million

182

226

409

249

660

Comparable profit before tax, € million

186

103

240

426

359

825

Profit (loss) for the period, € million

163

195

358

208

466

Comparable profit for the period, € million

163

203

366

305

684

Earnings per share (EPS), €

0.29

0.13

0.36

0.65

0.38

0.86

Comparable EPS, €

0.29

0.16

0.38

0.67

0.56

1.27

Return on capital employed (ROCE), %

5.9

3.2

7.2

6.6

4.2

5.4

Comparable ROCE, %

6.0

3.7

7.6

6.9

5.7

6.5

Capital employed at the end of period, € million

13,954

14,213

14,186

13,954

14,213

13,948

Personnel at the end of period

13,665

14,764

13,347

13,665

14,764

13,676

UPM presents certain measures of performance, financial position and cash flows, which are alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definitions of alternative performance measures are presented in UPM’s » Annual Report 2025

Key figures, discontinued operations

The financial information presented for the discontinued operations is not representative of the historical or future profitability of the UPM Plywood business area as a standalone business. Information on UPM Plywood’s performance is presented in the segment information.

Q2/2026

Q2/2025

Q1/2026

Q1-Q2/2026

Q1-Q2/2025

Q1-Q4/2025

Sales, € million

164

132

264

Comparable EBITDA, € million

% of sales

23.3

11.9

24.8

24.0

14.8

21.5

Operating profit (loss), € million

Comparable EBIT, € million

% of sales

21.4

3.2

19.0

20.2

6.9

14.4

Profit (loss) before tax, € million

Comparable profit before tax, € million

Profit (loss) for the period, € million

Comparable profit for the period, € million

Return on capital employed (ROCE), %

21.7

3.9

22.0

21.9

9.8

16.4

Comparable ROCE, %

37.4

4.3

32.7

35.1

10.0

20.8

Capital employed at the end of period, € million

196

181

189

196

181

Personnel at the end of period

1,519

1,543

1,454

1,519

1,543

1,451

Key figures, UPM total

UPM total

Q2/2026

Q2/2025

Q1/2026

Q1-Q2/2026

Q1-Q2/2025

Q1-Q4/2025

Sales, € million

2,440

2,400

2,505

4,945

5,046

9,656

Comparable EBITDA, € million

376

257

395

771

678

1,311

% of sales

15.4

10.7

15.8

15.6

13.4

13.6

Operating profit (loss), € million

217

107

255

472

305

749

Comparable EBIT, € million

230

126

274

504

413

921

% of sales

9.4

5.2

10.9

10.2

8.2

9.5

Profit (loss) before tax, € million

186

236

422

258

690

Comparable profit before tax, € million

204

105

255

459

367

863

Profit (loss) for the period, € million

166

200

366

215

491

Comparable profit for the period, € million

177

213

390

312

714

Earnings per share (EPS), €

0.30

0.13

0.37

0.67

0.39

0.91

Comparable EPS, €

0.32

0.17

0.39

0.71

0.57

1.33

Return on equity (ROE), %

6.4

2.7

7.6

7.1

3.9

4.5

Comparable ROE, %

6.8

3.4

8.1

7.6

5.7

6.5

Return on capital employed (ROCE), %

6.1

3.2

7.4

6.8

4.3

5.5

Comparable ROCE, %

6.5

3.7

7.9

7.2

5.8

6.7

Operating cash flow, € million

136

179

225

468

1,405

Operating cash flow per share, €

0.26

0.34

0.17

0.43

0.88

2.66

Equity per share at the end of period, €

18.86

18.96

19.48

18.86

18.96

18.97

Capital employed at the end of period, € million

14,149

14,394

14,375

14,149

14,394

14,129

Net debt at the end of period, € million

3,313

3,310

2,962

3,313

3,310

3,004

Net debt to EBITDA (last 12 months)

2.36

2.12

2.30

2.36

2.12

2.29

Personnel at the end of period

15,184

16,307

14,801

15,184

16,307

15,127

Massimo Reynaudo, President and CEO, comments on the results:

“In the second quarter, we reached two important milestones in the transformation of UPM. We signed the definitive agreement to create the graphic paper joint venture with Sappi, and advanced the separation of the plywood business into the future WISA Group. Following these steps, UPM is positioned with stronger growth prospects and improved earnings quality.

During the quarter, all our businesses improved their results compared to the same period last year, with most also outperforming the previous quarter. Increased volumes, margin management and sustained efficiency measures supported our profitability in a business environment that turned inflationary.

In Q2, sales from our continuing operations were slightly up at €2,355 million, and comparable EBIT increased to €212 million, 71 percent higher than in the same period last year. Net debt at the end of the reporting period was €3,313 million, including both continuing and discontinued operations, and net debt to EBITDA ratio was 2.36.

In decarbonization solutions, UPM Biofuels recorded a strong quarter with good demand and healthy bio-premiums for advanced renewable fuels. Prices were further supported by higher fossil fuel reference prices. The ramp-up of our biorefinery in Leuna, Germany, continued. Customer deliveries of industrial sugars reached substantial volumes, and deliveries of renewable functional fillers and other lignin derivatives are expected to start during Q3. UPM Energy improved its results from last year, although the second quarter saw normal seasonality. Structurally, electricity consumption continued to grow year-on-year, and we are well positioned to create value by serving new large-scale consumers.

The markets for our advanced materials businesses, UPM Adhesive Materials and UPM Specialty Materials, showed robust growth in Europe and Asia. Both businesses succeeded in the markets, thanks to a focus on commercial excellence and product portfolio development, and sharpened competitiveness.

Our world-class pulp platform in Uruguay, UPM Fibres South, has consistently improved efficiency for several quarters in a row. In the second quarter, this helped us to fully offset the increases in logistics and other costs. Profitability was further improved by a moderate increase in pulp prices.

For the Fibres North platform in Finland, the business environment is challenging. Even though pulpwood prices have decreased, profitability remains low. The second quarter earnings were also impacted by the maintenance shutdown at the UPM Pietarsaari mill. We are planning temporary shutdowns of the UPM Kaukas pulp mill and potentially the UPM Pietarsaari pulp mill, to optimize production and wood sourcing, and ensure profitability.

UPM Communication Papers’ business performance was broadly stable, with slightly improved margins. Preparations for the planned graphic paper Joint Venture continued. In late May we signed the definitive agreement with Sappi, and secured financing arrangements for the Joint Venture. The EU merger control process moved to Phase II, with final resolutions expected by the end of 2026.

UPM Plywood continued to perform well as the business prepared for separation into an independent listed company, WISA Group. In April, the Board of Directors approved the demerger plan. Subject to the decision of the Extraordinary General Meeting, trading in the shares of WISA Group on Nasdaq Helsinki is currently expected to commence in early November. By separating the plywood business onto its own growth path, we are strengthening its future prospects and streamlining UPM’s business portfolio.

Following the planned graphic paper joint venture and plywood separation, UPM operates in structurally growing markets. The ongoing reshaping of UPM’s portfolio highlights our position in businesses with stronger growth characteristics, and our direction going forward is towards higher value-added products and lower cyclicality.”

Profit guidance, continuing operations

UPM’s comparable EBIT in H2 2026 from continuing operations is expected to be approximately in the range of €375-575 million (€479 million in H2 2025, and €471 million in H1 2026). These figures exclude UPM Plywood, which is classified as discontinued operations.

Outlook

There continue to be significant uncertainties in geopolitics and trade.

In H2 2026, compared with H1 2026, UPM’s performance is expected to be supported by moderately higher sales prices. Variable costs are expected to increase moderately. Energy refunds are expected to support UPM Communication Papers’ result in Q4. Maintenance activity is expected to increase from the comparison period. The production ramp-up at UPM Leuna is expected to increase costs.

In H2 2026, compared with H2 2025, UPM’s performance is expected to benefit from higher sales prices. Variable costs are expected to increase moderately. Fair value change of forest assets is expected to have a significantly smaller impact on comparable EBIT in H2 2026 than in H2 2025 (€131 million). The energy refunds to be booked in UPM Communication Papers in Q4 are anticipated to have a somewhat smaller positive impact than in 2025. Maintenance activity is expected to increase from the comparison period. The production ramp-up at UPM Leuna is expected to increase costs.

Sensitivity to pulp and electricity prices

UPM’s comparable EBIT is sensitive to pulp and electricity prices. The figures below represent group earnings sensitivities on annual level.

UPM is a large producer and consumer of chemical pulp. A €50/tonne change in average pulp price would impact annual comparable EBIT by approximately €180 million (net impact: assuming no correlation between pulp and paper prices) to approximately €270 million (gross impact: assuming paper pricing would match changes in pulp costs).

UPM is a large producer and consumer of electricity in Finland and separately hedges part of its electricity sales and purchases. Based on UPM’s estimated unhedged net electricity sales position in Finland in 2026, a €10/MWh change in average electricity market price in Finland would impact annual comparable EBIT by approximately €40 million.

Foreign exchange exposure

Fluctuations in monetary policies and economic conditions can significantly impact the value of various currencies, which in turn may affect UPM. Additionally, the escalation of global trade tensions could influence currency exchange rates. These currency fluctuations could impact UPM’s cash flow, earnings, or balance sheet, and may also affect the relative competitiveness between different currency regions.

The Group’s policy is to hedge an average of 50% of its estimated net currency cash flows on a rolling basis over the next 12-month period. At the end of Q2 2026, UPM’s estimated net currency cash flows for the next 12 months totaled approximately €1.5 billion. USD was the largest exposure at approximately €1.4 billion, followed by UYU, GBP, CNY and JPY. In addition, the earnings of UPM’s foreign subsidiaries are translated to euros in reporting. UPM has significant foreign subsidiaries in Uruguay, the U.S. and China. Foreign exchange risks are discussed in UPM’s Annual Report 2025 on pages 313-314.

Invitation to UPM’s webcast on the half-year financial report 2026

A webcast and a conference call for analysts and investors will start at 13:15 EEST. The 2026 half-year financial report will be presented in English by President and CEO Massimo Reynaudo and CFO Tapio Korpeinen. Participants can follow the webcast online via this link.

Participants wishing to ask questions after the presentation must register for the conference call. To participate in the conference call, please register here. After registering, you will be provided with telephone numbers, a user ID and a conference ID to access the conference. To ask a question, press *5 on your telephone keypad to join the queue.

The webcast will be available on the company website for 12 months after the call.

It should be noted that certain statements herein, which are not historical facts, including, without limitation, those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or similar expressions, are forward-looking statements. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein including the availability and cost of production inputs, continued success of product development, acceptance of new products or services by the Group’s targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group’s patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group’s products and the pricing pressures thereto, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group’s principal geographic markets or fluctuations in exchange and interest rates. The main earnings sensitivities and the group’s cost structure are presented on page 276 of the Annual Report 2025. Risks and opportunities are discussed on pages 31-33, and risks and risk management are presented on pages 128-132.

UPM, Media relations
Mon-Fri 9:00-16:00 EEST
tel. +358 40 588 3284
media@upm.com

UPM
UPM is a material solutions company, renewing products and entire value chains with an extensive portfolio of renewable fibres, advanced materials, decarbonization solutions, and communication papers. Our performance in sustainability has been recognized by third parties, including EcoVadis and the Dow Jones Sustainability Indices. We operate globally and employ approximately 15,100 people worldwide, with annual sales of approximately €9.7 billion. Our shares are listed on Nasdaq Helsinki Ltd.
UPM – we renew the everyday
Read more: upm.com

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/upm-kymmene-oyj/r/upm-half-year-financial-report-2026–improved-second-quarter-results-in-all-businesses-and-portfolio,c4377000

The following files are available for download:

https://mb.cision.com/Main/23100/4377000/4201405.pdf

UPM-Half-Year-Financial-Report-2026-en

View original content:https://www.prnewswire.co.uk/news-releases/upm-half-year-financial-report-2026-improved-second-quarter-results-in-all-businesses-and-portfolio-change-progressing-302833082.html

Technology

Acrab Unveils GΞLIX 1 SoC and Agent Box, Bringing State-of-the-Art AI to the Edge

Published

9 minutes ago

July 23, 2026

Built on a 5-nanometer process, the new SoC is designed to support models in the 100 billion parameter class, with full-stack software for private and responsive AI agents at the edge

SINGAPORE, July 23, 2026 /PRNewswire/ — Acrab, a technology company building agentic AI compute infrastructure for the next generation of intelligent systems, today unveiled GΞLIX 1, its first-generation edge AI system-on-chip (SoC), together with Agent Box, a personal edge AI system powered by the company’s full-stack computing platform.

As AI moves from generating answers to completing tasks, agents increasingly need to understand context, remember preferences and coordinate tools and devices in real time. Running these capabilities locally can produce faster responses, keep sensitive information under the user’s control and maintain core functions when cloud connectivity is limited.

For years, models in the 100 billion parameter class have required cloud infrastructure. GΞLIX 1 is designed to bring state-of-the-art AI models at this scale into locally operated edge systems. Powered by GΞLIX, Acrab’s Agent Box is a high-performance personal edge AI center designed to put AI agents into action in a more personal and customized way, with local large model inference, persistent memory, multimodal interactions and agent orchestration capabilities.

By replacing cloud AI’s recurring token-fees per use, Agent Box is a one-time investment with long-term value, hence relieving users’ token anxiety, and allowing AI to move from an occasional tool into an always-available assistant woven into everyday work and life.

“Generative AI helped people find answers. Agentic AI will help them get things done,” said Dr. Ken Phua, CEO of Acrab. “Running models in the 100 billion parameter class on a system small enough to sit on a desk presents a significant computing challenge. GΞLIX 1 is designed to deliver the performance, memory bandwidth and responsive local inference required, while Agent Box shows how that capability can become a complete user experience.”

A private AI center built for everyday life

Agent Box is designed as a private, always-on AI center for personal workspaces and homes. It keeps intelligence close to the people, information and physical environments it serves, while showing how device makers can turn Acrab’s computing platform into complete agentic AI experiences.

For decades, personal computing advanced in predictable steps: faster processors, larger screens, more storage. Agent Box represents something else entirely—the first system designed not to run programs, but to host intelligence.

Agent Box brings together local language and vision model inference, multimodal interaction, persistent memory and an orchestration layer that can understand goals, break tasks into steps and coordinate action across agents, systems and connected devices. Users’ data and memories remain private and stored locally on the device, while the system grows more capable and customized as the context deepens and memories accumulate. Acrab designed the compute architecture from the ground up to achieve optimal local AI performance, usability, cost efficiency, and power efficiency within one device.

A purpose-designed SoC for large model inference at the edge

GΞLIX 1 is built on a 5-nanometer process and is Acrab’s first SoC designed specifically for edge AI. Rather than relying on separate compute components, it integrates CPU, GPU and NPU resources with a unified memory architecture engineered for large AI models and agentic workloads.

The SoC features a 20-core Arm CPU, multicore NPU acceleration and 273 GB/s of unified memory bandwidth. It is designed to support local deployment of open-source models in up to the 100 billion parameter class, with coordinated execution across CPU, GPU and NPU resources. Supporting models at this scale locally places substantial demands on computing performance, memory bandwidth and power efficiency.

GΞLIX 1 is engineered for rapid responses at power levels suitable for systems that remain active throughout the day. A central design goal was reducing the delay before a model begins to respond, particularly with long prompts and large context windows.

In company testing, GΞLIX 1 achieved a prefill rate of 1416.8 tokens per second under a Gemma 26B A4B configuration with a 40K KV cache and a 10K token input, compared with 188.9 tokens per second on Mac Mini M4 Pro, representing up to 7.5X faster prefill performance. These capabilities turn a single chip into a versatile supercomputing platform for a wide range of applications.

A full-stack platform, from silicon to applications

Beyond the SoC, Acrab has built the software and system layers needed to turn local model inference into working agentic products. These include an optimized runtime and developer toolchain, agent operating system capabilities, reference designs and applications that help devices understand context, retain memory and coordinate real-world action.

Agent Box is the first expression of Acrab’s broader ambition to provide a horizontal computing foundation for agentic AI across a wide range of edge devices and intelligent systems.

Processing a substantial share of AI workloads locally can reduce dependence on metered cloud inference, lower recurring processing and data transfer costs, and avoid the delay involved in sending every interaction to a remote service. Cloud resources can still be used when a task requires them, allowing developers to choose the right balance between local and cloud execution.

Building a broader edge AI device ecosystem

Acrab plans to work with device manufacturers and developers to bring its computing platform into products including AI NAS systems, AI PCs, smart vehicles, and industrial and service robots.

Agent Box demonstrates how Acrab’s silicon and software can be integrated into a complete product experience. The company aims to provide a complete set of compute platform and agent-native infrastructure for the next generation of AI transformation across industries. By combining custom AI silicon, full-stack software, and reference designs of agents for use scenarios, Acrab enables industry partners and developers to bring intelligent AI products to market faster.

“Our goal is to give device makers and developers the foundation to bring agentic intelligence into many different products and environments,” Dr. Phua said. “Agent Box demonstrates what the technology can do today, while GΞLIX 1 and our full-stack platform are designed to support a much broader ecosystem of devices and applications.”

Product Launch Event Video Replay:

https://www.acrab.ai/https://www.youtube.com/watch?v=WdojjwucdTQ https://www.linkedin.com/events/7484797078045401088/

About Acrab

Acrab is a technology company building agentic AI compute infrastructure for the next generation of intelligent systems. Founded in 2024, the company develops high-performance AI compute architecture and integrated software platforms designed to bring AI agents into action, providing personalized assistance and real-time execution across a range of edge environments.

By combining purpose-designed silicon, advanced edge AI models, full-stack software and system orchestration, Acrab provides the computing foundation for AI agent systems across everyday life, bringing assistance, creativity, utility and value.

In June 2026, Acrab announced that it had received over US$350 million in cumulative financing from global venture capital firms and strategic industry investors, including early backers Vertex Ventures Southeast Asia & India, Vertex Growth, and K3.

For more information about Acrab, please visit https://www.acrab.ai/.

View original content to download multimedia:https://www.prnewswire.com/news-releases/acrab-unveils-glix-1-soc-and-agent-box-bringing-state-of-the-art-ai-to-the-edge-302833081.html

SOURCE Acrab

Technology

IDnow Appoints Philippe Morel as Chief Executive Officer

Published

9 minutes ago

July 23, 2026

Philippe Morel brings over 30 years of financial services and technology leadership experience, with a track record of scaling regulated platform businesses in partnership with private equity.

MUNICH, July 23, 2026 /PRNewswire/ — IDnow, Europe’s leader in digital identity and fraud prevention, today announces the appointment of Philippe Morel as Chief Executive Officer, effective today. Philippe succeeds Andreas Bodczek, who steps down after more than seven years of leadership that transformed IDnow into a leading European provider of digital identity and fraud prevention.

The IDnow Trust Platform: From KYC to Continuous Trust

In June 2026, IDnow launched the IDnow Trust Platform, marking the company’s expansion beyond traditional identity verification. Designed to help regulated organisations move from Know Your Customer (KYC) to Trust Your Customer (TYC), the platform orchestrates identity verification, fraud prevention, biometric authentication and qualified digital trust services across the full customer lifecycle. Through four modular services — Identify, Authenticate, Protect and Trust — and its Orchestrate, Observe and Decide capabilities, customers can configure workflows, monitor risk signals in real time and automate decisions through a single integration. The platform is built to help organisations adapt to the evolving European regulatory landscape, including AMLR, eIDAS 2.0 and the emergence of EU Digital Identity Wallets, while addressing increasingly sophisticated AI-driven fraud.

A New Chapter for IDnow

Philippe Morel brings more than 30 years of leadership experience spanning financial services, technology platforms and regulated environments, with a consistent track record of strategic transformation and value creation in partnership with private equity.

Most recently, Philippe served as Chief Executive Officer of Railsr, a payments and embedded finance platform, where he led strategic repositioning and commercial rebuilding before the merger with Equals Money.

Prior to that, Philippe served as CEO of SETL, a blockchain-based financial market infrastructure provider, where he repositioned the business into payments and digital settlement networks, launched the Regulated Liability Network (RLN) tested with the New York Federal Reserve, and delivered tokenisation projects for tier-one financial institutions.

Before his executive career, Philippe worked at Boston Consulting Group, rising to Senior Partner and Managing Director. He led BCG’s Global Capital Markets practice and its Private Equity EMEA business, advising boards and CEOs of major financial institutions on strategy, transformation, M&A and growth across Europe, the US and Asia. He also served for nine years as Chair of BCG’s Global Audit and Risk Committee.

Philippe holds an MBA from Harvard Business School and a degree in Finance from HEC Paris.

Board Statement

Martin McCourt, Chair of IDnow, said: “We are delighted to welcome Philippe to IDnow at a pivotal moment. IDnow has recently launched its Trust Platform, expanding beyond traditional identity verification to help regulated organisations orchestrate identity, fraud prevention and compliance across the full customer lifecycle. Philippe’s background — combining deep strategic expertise with hands-on leadership of regulated technology and financial services platforms — is ideally suited to the opportunity ahead. We are confident that he will lead IDnow into its next phase of growth.”

Philippe Morel Statement

“IDnow is a genuinely exceptional business — a European-born leader in digital identity and fraud prevention at a moment when regulation, digital identity wallets and increasingly sophisticated fraud are reshaping the market. The newly launched IDnow Trust Platform is designed to help customers move beyond one-time verification towards continuous trust across the full customer lifecycle. I am energised by what this team has achieved and by the opportunity ahead. My first priority is to listen: to our customers, our colleagues and our partners. From there, we will define and execute IDnow’s next phase of growth together.”

A Tribute to Andreas Bodczek

The Board also takes this opportunity to express its deep gratitude to Andreas Bodczek, who has led IDnow with extraordinary vision and commitment since 2018. A seasoned technology entrepreneur with a Diplom Kaufmann from LMU München, Andreas brought to IDnow the experience of building and scaling digital businesses: as co-founder and CEO of Fyber, which he grew into a globally recognised mobile technology platform, a board partner at Point Nine Capital, and chairman at JTL Software.

At IDnow, his impact was transformative. He led the company through a pivotal transition from founder-led to PE-backed under Corsair’s ownership, providing the foundation for sustained growth. He drove the acquisitions of identity Trust Management AG and ARIADNEXT — the French market leader in remote identity verification — which significantly expanded IDnow’s capabilities, brought the Rennes engineering hub into the group, and established IDnow’s presence across Europe. Most recently, he oversaw the launch of the IDnow Trust Platform, marking the company’s expansion beyond traditional identity verification and creating a unified platform for identity, fraud prevention, authentication and qualified digital trust services across the customer lifecycle. His leadership has positioned IDnow well for its next chapter, and we wish him every success in what comes next.

About IDnow

IDnow is Europe’s leader in digital identity and fraud prevention, with a mission to transform trust into a powerful asset in the digital world. Through its broad portfolio of AI-driven, SaaS-based identity and fraud prevention solutions, IDnow establishes, maintains and enriches trust throughout the customer journey, enabling businesses to operate securely while driving growth and scalability. The IDnow Trust Platform provides unified access to identity verification, fraud prevention, biometric authentication and qualified digital trust services. IDnow has offices in Germany, the United Kingdom, Romania and France and is backed by Corsair Capital.

For more information, visit idnow.io.

View original content to download multimedia:https://www.prnewswire.com/news-releases/idnow-appoints-philippe-morel-as-chief-executive-officer-302832286.html

SOURCE IDnow