Earnings call transcript: 4iG posts strong H1 2026 revenue growth as margins soften

4iG's first-half 2026 earnings report revealed strong revenue growth of 17% year over year, reaching 409 billion HUF. However, profitability faced slower growth, with normalized EBITDA increasing only 3% on a reported basis, but down 3.6% on a normalized basis. The mixed results highlight the impact of newly acquired businesses, which carried lower margins and higher costs, weighing on earnings.

Despite the weaker EBITDA trend, revenue contributed from various segments showed robust growth. Telecommunications remained the main earnings engine, while Space and Defence experienced significant expansion due to acquisitions and a backlog above EUR 8 billion. IT business also performed well, benefiting from stronger demand and improved competitiveness.

The company's performance demonstrated a clear split between sales growth and earnings growth, indicating that 4iG is still in a phase of integration and expansion rather than full margin enhancement. Management noted that the group has become more diversified, with operations in Hungary, Albania, Montenegro, and other markets. Net debt stood at 1.09 trillion HUF, with a debt-to-EBITDA ratio of 3.7 times, showing controlled leverage levels.

The stock experienced a sharp decline, falling 1.65% to 1,605 HUF, leaving it below its 52-week high and above its 52-week low. This reaction suggests cautious investor sentiment, likely influenced by the mixed earnings picture. Despite the weaker EBITDA trend, analysts predict a return to profitability this year, and net income is expected to grow, indicating potential margin improvement ahead.