Siemens Aktiengesellschaft (ETR:SIE) reported a strong start to fiscal 2026 in its first-quarter earnings call, pointing to broad-based revenue growth, higher profitability, and record backlog levels as the company advanced its “One Tech Company” program and highlighted accelerating demand tied to data center infrastructure and industrial software.
Orders, revenue growth, and profitability
CEO Roland Busch said Siemens delivered “clear momentum” in the quarter despite geopolitical volatility, with a group book-to-bill ratio of 1.12 and an order backlog that rose to a record EUR 120 billion. Group orders increased 10% year-over-year to EUR 21.4 billion, led by Smart Infrastructure. Revenue grew 8% with growth across all businesses and all regions, though Busch noted that reported top-line growth was “materially impacted” by a stronger euro.
Smart Infrastructure powered by data center demand
CFO Ralf Thomas said Smart Infrastructure delivered an “outstanding performance,” with orders rising 22% to a record EUR 7.2 billion and book-to-bill reaching 1.30. He attributed the increase to growth of 38% in the electrification business and 22% in electrical products, supported by large data center wins across hyperscalers and colocation providers.
Data center orders reached a record EUR 1.8 billion, with “a bit more than half” of those orders larger in size. Smart Infrastructure’s backlog rose to an all-time high of EUR 20.2 billion, which Thomas said provides “excellent visibility” for fiscal 2026.
Revenue in Smart Infrastructure grew 10%, led by electrification revenue up 22%. Profit margin expanded 210 basis points year-over-year to 19%, including a +100 basis point benefit from commodity hedging tied to volatile copper and silver prices, offsetting a 60-basis-point negative currency impact.
Digital Industries: improving automation, resilient software demand
Digital Industries (DI) posted orders of EUR 4.8 billion, up 13%, with a book-to-bill of 1.07. Thomas said DI automation improved sequentially for the third consecutive quarter, though he cautioned that overall market dynamics are “only gradually improving” with limited visibility.
DI’s software business delivered orders of close to EUR 1.7 billion, with book-to-bill “slightly above one,” helped by large EDA orders. DI revenue increased 10% overall, including software revenue growth of 11% and automation revenue growth of 9% to EUR 2.9 billion. Discrete automation revenue increased 11%, while process automation was slightly higher.
DI’s profit margin reached 17.8%, which management said was higher than expected. Thomas emphasized that the quarter’s profitability was driven primarily by automation, supported by product mix and pricing and productivity measures. Integration-related costs for Altair and Dotmatics were 70 basis points in the quarter, with an expectation of about 100 basis points for the full year. DI also faced a currency burden of about 110 basis points on margin.
On the call, Busch addressed investor questions about AI’s impact on industrial software, arguing Siemens’ “physics-based” software stack can help constrain errors and “avoid hallucination” in design and operations. He also said Siemens expects monetization models to evolve as AI is embedded into offerings, with a move “in direction of tokens” because customers would be charged as they use AI-enabled capabilities.
Mobility pipeline and project timing
Mobility orders rose to EUR 2.9 billion year-over-year, though book-to-bill was 0.90. Mobility’s order backlog stood at EUR 51 billion, including EUR 15 billion in service business that management described as highly attractive. Revenue increased 9%, and the margin improved to 9%, supported by rolling stock margin expansion.
Management highlighted a recently announced contract to deliver more than 200 train sets for fully automated train operations in Copenhagen and said additional high-volume awards are in the pipeline. Thomas said Mobility’s free cash flow is expected to be “backloaded,” with a softer second quarter before a catch-up in the second half of fiscal 2026.
Portfolio actions, pricing, cash flow items, and updated outlook
Busch said Siemens continues to progress on its plan to deconsolidate Siemens Healthineers, with an update planned in calendar Q2. In the Q&A, he said Siemens is assessing items including tax impacts, services and license fees, and financial considerations, and noted that the “delta between the two options” under consideration is “six months, plus or minus.”
Thomas also noted Siemens divested its airport logistics business in the United States to Vanderlande, closing what he called the “remaining portfolio topic.” He pointed to a ~EUR 200 million gain from contributing Fluence shares to the Siemens Pension-Trust e.V. in the quarter, and he highlighted a ~EUR 400 million settlement related to the removal of nuclear waste in Hanau, Germany.
On pricing and input costs, Thomas said Siemens manages its “economic equation” by offsetting cost increases with pricing and productivity measures. He said the overall pricing impact in the first quarter was in the area of 1% to 1.5% and indicated Siemens introduced a new price list in China as of January 1, adding that the company did not plan to change it again “anytime soon.”
For capital returns, Thomas said Siemens is paying a EUR 5.35 dividend and continuing an accelerated share buyback program, with EUR 4.4 billion accumulated over the last two years under the current program. He added Siemens intends to retire 18 million treasury shares in March, reducing capital stock to 782 million shares.
Looking ahead, Siemens raised its group outlook following the first-quarter performance. Thomas said the company now expects to reach the upper half of its 6% to 8% revenue growth guidance and increased its EPS pre-PPA guidance to EUR 10.70 to EUR 11.10, up EUR 0.20 at the midpoint.
About Siemens Aktiengesellschaft (ETR:SIE)
Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform.
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