SCHMID Group N.V. Class A Ordinary Shares (SHMD) | The Buildout — AI Infrastructure
The Verdict
SCHMID supplies the premium wet‑processing, electroplating, and CMP equipment that IC substrate and panel‑level packaging manufacturers depend on to turn advanced silicon into functional packages. Its machines sit inside the production flows of all major AI chip supply chains — TSMC, Intel, Samsung, NVIDIA, and AMD — making it an indirect but critical enabler of the AI infrastructure buildout.
| Market Cap | — |
| Revenue (TTM) | $127M |
| Revenue Growth | −36.6% |
| EBITDA Margin (TTM) | -37.5% |
| Net Debt | $153M |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- FY2025 order intake surpassed €90M, creating a book‑to‑bill above 1.36, and the post‑call order win of >€26M in one month signals accelerating AI‑related demand.
- The AI/optical order mix reached 60% of LTM intake and is guided to ~70% by end‑2026, structurally tying growth to the advanced‑packaging capex cycle.
- Balance sheet clean‑up executed rapidly: €31M debt reduction in weeks, pro‑forma debt ~€23M, and a $30M standby equity line for flexible capital.
- Management targets ~20% EBITDA margin medium‑term, supported by the Sprint program (≥€4M annual savings) and a mix shift toward higher‑spec C+, L+, P+ products.
- New products are approaching commercial inflection, with specific negotiations for flip‑chip BGA and glass‑core substrate tools expected to convert in H2 2026.
What We’re Watching
- Q2 2026 order intake must show a material jump from Q1’s €13.6M to keep the full‑year €114M intake guide attainable; the post‑call surge provides an early positive signal.
- The ~€20M working‑capital investment planned for 2026 could pressure liquidity if revenue arrives unevenly, though management expects working capital to normalize at 7–10% of sales.
- Tariff classification risk persists: the H1 2025 freeze demonstrated how quickly external shocks can halt orders, and the expanding China footprint may heighten that exposure.
- Customer concentration is high (top‑10 = ~60% of FY2025 revenue), so a single large‑project deferral would be felt acutely across a lumpy order book.
The thesis is strengthening — the pivot to AI packaging is real, order momentum is accelerating, and the balance sheet is no longer a distraction. Management’s swift execution on debt reduction and the post‑call order surge add early credibility. The open question is whether the commercial inflection of the C+, L+, P+ product family will arrive on schedule and translate into durable above‑market growth and margin expansion.
Earnings
In Q2 FY2024, revenue sank to $15.9 million and gross margin compressed to 19.0%. EBITDA swung to a loss of $37.0 million, reflecting a sharp demand contraction.
| Metric | Q4 FY2025 | Q2 FY2025 | Q4 FY2023 | YoY |
|---|---|---|---|---|
| Revenue | $58M | $19M | $55M | +6.2% |
| Gross margin | 35.5% | -10.2% | 27.8% | +770bps |
| EBITDA | $7M | −$13M | $4M | +69.0% |
| EPS | $-1.64 | $-0.24 | $0.04 | −3756.3% |
About 60% of our order intake of the last 12 months is AI infrastructure or optical module related, and this mix is expected to move towards about 70% by the end of the year 2026.— Roland Rettenmaier, Chief Sales Officer, 19 May 2026
Management tone: Management adopted a confident, forward‑looking tone during its first formal investor call. Executives openly addressed the H1 2025 tariff freeze, the Sprint efficiency program, and the balance‑sheet cleanup, while reaffirming FY2026 guidance and signaling that AI‑related order momentum was building.
Management Guidance
Management reaffirmed full‑year FY2026 guidance: revenue above €100 million, adjusted EBITDA margin significantly above 12%, and order intake of approximately €114 million. Orders received by July–August can convert to revenue within the same fiscal year. The CFO volunteered a medium‑term aspiration of ~20% EBITDA margin, based on historical levels, but did not commit to a specific year.
Trajectory
Revenue shrank from $55.0 million in Q4 FY2023 to $15.9 million in Q2 FY2024, while gross margin fell from 27.8% to 19.0% over the same stretch. Management subsequently disclosed an H2 2025 rebound to ~€50 million in revenue with an EBITDA margin of ~13%, indicating a sharp recovery that underpins the FY2026 guidance of >€100 million.
The Model
The model projects FY+1 revenue of $129.4 million and EBITDA of $20 million (15.1% margin), anchored by the €114 million order intake guide and the H2 2025 run‑rate. FY+2 rises to $167.0 million in revenue and $33 million in EBITDA (20.0% margin), reflecting the ramp of new C+, L+, and P+ product lines and continued AI substrate investment.
| Metric | TTM | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $127M | $129M | $167M |
| YoY Growth | — | +2.2% | +29.1% |
| EBITDA | −$48M | $20M | $33M |
| EBITDA Margin | -37.5% | 15.1% | 20.0% |
Projections are the median of 4 independent model runs.
Management reaffirmed full‑year FY2026 guidance: revenue above €100 million, adjusted EBITDA margin significantly above 12%, and order intake of approximately €114 million. Orders received by July–August can convert to revenue within the same fiscal year. The CFO volunteered a medium‑term aspiration of ~20% EBITDA margin, based on historical levels, but did not commit to a specific year.
What Could Go Right — and Wrong
- New‑product orders (C+, L+, P+) must reach commercial scale in H2 2026 and contribute meaningful revenue by 2027, validating above‑market growth.
- AI/optical order mix must rise to 70% by end‑2026, sustaining the demand surge even if the broader PCB market slows.
- Sprint savings must fully capture ≥€4M in annual cost cuts with minimal disruption, lifting EBITDA margins toward the 20% medium‑term target.
- Glass‑core substrate adoption must accelerate, with the Covington project scaling and TRUMPF TGV orders converting to revenue, extending SCHMID’s lead in next‑gen packaging.
- Working capital must normalize to 7–10% of sales without requiring dilutive draws on the standby equity line.
- A new tariff disruption could freeze orders as it did in H1 2025, especially if the China manufacturing footprint is targeted, collapsing revenue back toward depressed levels.
- Qualification of C+, L+, P+ at major chipmakers could stall, keeping these products niche and reverting growth to the ~10% mature‑electronics rate.
- Customer concentration could crystallize if a top‑10 substrate maker defers a project, causing a large‑order gap that the lumpy booking pattern cannot quickly fill.
- Sprint cost savings may prove one‑time or be absorbed by rising labour and selling costs, leaving EBITDA margins stuck in the low teens.
- Multiple draws on the $30M standby equity line at a discount could cause material dilution, undermining shareholder returns even if revenue grows.
Looking Ahead
The next twelve months will be shaped by the Q2 2026 trading update, where order‑intake must show a material jump, and by the second‑half ramp, when larger glass‑core and flip‑chip BGA tool orders are expected. Management targets a €60–70 million equipment backlog entering 2027, a level that would provide significant revenue visibility and de‑risk the following year.
- Summer 2026Q2 2026 trading update — Tests whether order intake materially exceeded Q1’s €13.6M.
- H2 2026New‑product order announcements — C+, L+, P+ orders expected; gauges commercial inflection progress.
- Q3/Q4 2026U.S. substrate investments — TTM and Intel‑driven orders test North American demand.
- End of 2026FY2026 ending backlog — Expected at €60–70M; validates 2027 revenue visibility.
- OngoingSprint savings visible in margins — ≥€4M annual savings should flow through P&L in 2026.
- 2027Glass‑core scaling — Covington project and TGV orders scale; tipping point for next‑gen packaging.
Financials
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)22.7%
- EBITDA Margin (TTM)-37.5%
- Net Margin (TTM)-104.3%
- SBC / Revenue0.0%
The Company
SCHMID is a fifth‑generation German equipment manufacturer that builds high‑end inline wet‑processing, electroplating, and chemical mechanical polishing systems. These tools are essential for producing high‑density interconnect PCBs, flip‑chip BGA substrates, and glass‑core panels — the foundational interconnect layers that carry power and signals to AI accelerators.
The company operates two assembly‑oriented facilities: headquarters in Freudenstadt, Germany, where newer products (C+, L+, P+) are assembled and tested, and a second plant in Zhongshan, China, currently being debottlenecked. With annual capex historically around €1 million, production is not capital‑intensive, but working‑capital investment (~€20 million in 2026) is required to fund growth.
Business Segments
Competitive Landscape
SCHMID competes with MKS Instruments in PCB wet‑process chemistry and with Shenzhen SC New Energy Technology in photovoltaics. Management positions the company as the premium equipment supplier for best yield output, especially in the high‑end advanced‑packaging niche where larger panel formats and glass‑core substrates demand specialized tools.
- MKS Instruments, Inc.Named in filings as a direct competitor in high‑end PCB equipment; its electronics & packaging revenue grew 27% YoY, confirming robust market demand.
- Shenzhen SC New Energy Technology CorpNamed in photovoltaic competition; not discussed in the context of AI packaging.
Supply Chain
SCHMID sits between subsystem partners like TRUMPF and the global substrate manufacturers that feed chipmakers such as TSMC, Intel, and NVIDIA. While direct customers are not publicly named, the company’s tools are embedded in all major AI chip supply chains.
More on SHMD: Earnings preview