Somero Enterprises Reports H1 2025 Revenue Decline of 23% but Reaffirms Full-Year Guidance

Somero H1 2025: Tough half, steady hands, guidance intact

Somero Enterprises posted a soft first half as customers delayed projects, but management kept its nerve and reaffirmed full-year targets. Revenue fell 23% to $39.8m, with profitability following suit as adjusted EBITDA dropped 48% to $6.4m and margins compressed by 790 basis points to 15.9%.

Despite that, cash generation improved, net cash is strong, and the Board expects a better H2 helped by seasonality and new products. For 2025, guidance is unchanged: revenue of c. $90.0m, EBITDA of c. $18.0m, and year-end net cash of c. $24.0m.

Headline numbers investors should know

Metric	H1 2025	H1 2024	Change
Revenue	$39.8m	$51.8m	-23%
Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation)	$6.4m	$12.4m	-48%
Adjusted EBITDA margin	15.9%	23.8%	-790bps
Profit before tax	$4.9m	$10.6m	-54%
Adjusted net income	$3.3m	$8.0m	-59%
Operating cash flow	$4.1m	$2.9m	+41%
Net cash	$24.6m	$20.8m	+18%
Interim dividend per share	$0.04	$0.08	-50%

What dragged performance in H1 2025

The US, Somero’s biggest market, was the key headwind as customers slowed project starts amid tariffs, elevated interest rates and restrictive immigration policies. Internationally, Europe saw the sharpest drop as sentiment cooled and geopolitics weighed on activity.

Region	H1 2025 Revenue	H1 2024 Revenue	Change
North America	$31.8m	$38.8m	-18%
Europe	$3.5m	$7.1m	-51%
Australia	$2.1m	$3.2m	-34%
Rest of World	$2.4m	$2.7m	-11%

By product, Boomed screeds fell to $13.3m (-30%), Ride-on screeds to $7.1m (-35%), and 3D Profiler System to $2.7m (-37%). Parts and service dipped 14% to $8.5m. One bright spot: new products contributed $4.2m, up 36%, and SkyScreed® recorded $0.7m of sales after a blank H1 last year.

Margins, cash and inventory: resilience with caveats

Gross margin held up relatively well at 52.8% (H1 2024: 54.6%), helped by pricing and efficiencies even as lower volumes reduced absorption. Operating expenses were trimmed to $16.3m from $17.5m.

Operating cash flow improved to $4.1m, supported by the timing of collections and lower capex ($0.5m). Net cash stood at $24.6m on 30 June after paying a $7.1m dividend in May, and the business remains debt free with access to an undrawn $25.0m revolving credit line. Inventory rose to $24.4m (December 2024: $18.8m), reflecting new product builds and slower H1 sales, but management expects moderation in H2 as trading strengthens.

One technical drag this half was tax: the effective rate spiked to 47% due to a valuation allowance on foreign deferred tax assets, amplifying the drop from operating profit to earnings per share.

Dividend and buyback: prudence in a soft market

The Board declared an interim dividend of $0.04 per share (H1 2024: $0.08), a 50% cut that balances cash returns with investment through the cycle. Somero also repurchased 256,734 shares in H1 for $0.8m under ongoing programmes aimed at offsetting equity award dilution.

Guidance reaffirmed and what underpins it

Management kept full-year guidance unchanged and expects H2 to be stronger than H1 on normal seasonality and contributions from new products.

• FY25 revenue: c. $90.0m
• FY25 adjusted EBITDA: c. $18.0m
• Year-end net cash: c. $24.0m

Customers report high bidding activity and robust backlogs. Structural demand drivers remain intact: onshoring, data centres and AI infrastructure, EV and battery plants, manufacturing, warehousing and logistics, and power generation. A tight skilled labour market continues to favour automation, a direct tailwind for Somero’s kit.

Strategy, leadership and new products

There’s fresh leadership with Bob Scheuer as Chairman and Tim Averkamp as CEO. The strategy has been sharpened around three pillars: Fortify (operational excellence and customer service), Innovate (new products and technologies), and Amplify (expanding reach and channels, including potential acquisitions).

Product development is busy. The SRS-4e, Somero’s first electric-powered Boomed Laser Screed, launched in January with positive customer feedback, especially in Europe. Two more arrive in H2: the Hammerhead, targeting the mid-range contractor segment, and the S-15EZ, a next-generation mid-sized Boomed screed designed for smaller pour sizes. A virtual reality training programme for the S-22EZ launched in January to improve customer training efficiency.

Josh’s take: why this update matters

The good

• Guidance reaffirmed despite a tough H1. That signals confidence in H2 order conversion and seasonality.
• New products are selling: $4.2m, up 36%, with more launches in H2 that broaden the addressable market.
• Cash-rich and debt-free balance sheet: $24.6m net cash and an undrawn $25.0m facility provide safety and optionality.
• Cost discipline evident: opex down year on year, gross margin held above 50% even on lower volumes.

The watch-outs

• Europe remains fragile (-51%), and Australia cooled as recent growth normalised. A slower international recovery would cap upside.
• Tax rate spike to 47% depressed EPS; while driven by a valuation allowance, it’s a reminder that accounting items can skew reported profits.
• Inventory has risen to $24.4m; delivery against H2 expectations will be key to bringing this back down.
• Dividend halved to $0.04 at the interim. Sensible for now, but future payouts will likely track recovery in earnings.

What to watch into H2 2025

• Conversion of reported “healthy backlogs” into shipments as US project starts thaw.
• Adoption of the Hammerhead and S-15EZ, plus continued traction for the SRS-4e.
• Regional stabilisation in Europe and Australia after steep declines.
• Inventory unwinding and cash staying around the guided c. $24.0m by year end.
• Any updates on acquisitions or channel expansion under the Amplify pillar.

Bottom line

Somero’s H1 was clearly downbeat, but the company stayed profitable, generated more cash, protected margins above 50%, and kept guidance intact. With new products landing and backlogs reported as healthy, the set-up for a second-half improvement looks reasonable. Execution through H2 – particularly on deliveries, inventory and international stabilisation – will determine whether FY25 guidance is met and confidence carries into 2026.