Schneider Electric, Inc

The tables use company-reported figures, except EBITDA, pre-tax income, EPS, debt detail, and other balance-sheet and return measures, which come from S&P Global standardised data published by StockAnalysis. Ratios are calculated from those inputs.

Income statement

Between 2021 and 2025, revenue compounded at 8.6% a year, adjusted EBITA at 10.8%, net income at 6.8% and free cash flow at 13.4%.

Revenue and margin commentary. The period has three phases. In 2022 and 2023, pricing and supply-chain recovery did most of the work; net price contributed €1,391 million to the 2023 adjusted EBITA bridge. In 2024 and 2025, growth became volume-led and concentrated in North American data centres. In 2025 volume added €1,355 million and productivity €596 million, but net price cost €179 million after a €255 million raw-material and tariff headwind, and foreign exchange took €482 million. The gross margin fell 40 basis points organically to 42.1% because Systems grew faster than Products. Support function costs fell to 23.3% of revenue, which delivered the 50 basis points of organic margin expansion.

Net income commentary. Net income fell 2% in 2025 despite higher operating profit. Restructuring rose €146 million, financial expense rose €110 million, and impairment of associates, mainly Uplight, reached €388 million. Adjusted net income rose 14% at constant currency.

2026 inflection. H1 2026 revenue was €21,226 million, up 14.0% organically. Adjusted EBITA was €4,093 million at a 19.3% margin, with net income up 30.1% at €2,488 million. Gross margin rose 10 basis points to 42.5%, helped by €535 million of productivity, €280 million of product pricing and tariff refunds received late in the half. Nine-month revenue reached €32,686 million, up 15.0% organically.

Balance sheet

Net debt in 2021 and 2022 includes purchase commitments on non-controlling interests. The 2022 figure includes about €4.6 billion for the AVEVA minority buyout.

Commentary. The balance sheet has absorbed two large minority buyouts. Equity fell by about €6.8 billion in 2025 and net debt rose €5.6 billion, mostly from €5.8 billion of transactions with non-controlling interests, of which €5.5 billion was the SEIPL stake. Net debt reached €15,360 million at 30 June 2026, after the €2.4 billion dividend and €0.6 billion for the share buyback. The October 2026 equity and bond issues were pre-funding for PTC, which will take leverage well above recent levels once it closes.

Cash flow

Commentary. Free cash flow set a record of €4,635 million in 2025. Trade working capital absorbed €360 million, compared with €594 million in 2024, and the €207 million French competition fine was paid during the year. Adjusted for that fine and the non-cash impairment, conversion was 106%. Capex rose to about 3.7% of revenue as capacity was added, mainly in North America and India. H1 2026 free cash flow was €1,631 million, a record for a first half, with full-year conversion guided to about 100%.

Ratios

ROE, ROA and ROIC are S&P standardised. The company's own ROCE was 12.2% in 2022, 13.5% in 2023, 14.8% in 2024 and 15.1% in 2025, and the medium-term ambition is 15% to 20%.

Commentary. Returns have improved steadily, though they sit against a goodwill and intangibles balance larger than total equity. The fall in interest coverage since 2022 reflects higher coupons, and it will fall further with PTC debt. The cash conversion cycle has been stable at about 74 to 83 days despite the shift towards Systems.

Management guidance

February 2026: Revenue organic growth: 7% to 10%; Adjusted EBITA margin, organic: +50 to +80 bps; Adjusted EBITA organic growth: 10% to 15%; Implied margin: 19.1% to 19.4%

July 2026: Revenue organic growth: 10% to 13%; Adjusted EBITA margin, organic: +70 to +100 bps; Adjusted EBITA organic growth: 14% to 19%; Implied margin: 19.4% to 19.7%

October 2026: Revenue organic growth: 12% to 14%; Adjusted EBITA margin, organic: +100 to +120 bps; Adjusted EBITA organic growth: 18% to 21%; Implied margin: 19.7% to 19.9%

Guidance assumes a foreign exchange impact of €300 million to €400 million on revenue, scope of about -€50 million, a 23% to 25% tax rate and about €450 million of restructuring. On those assumptions, 2026 revenue would be about €44.6 billion to €45.4 billion, and Q4 revenue about €11.9 billion to €12.7 billion (calculated). The 2030 framework implies revenue of about €56 billion to €65 billion organically from the 2025 base (calculated).

Bull case

1. Backlog, triple-digit data-centre orders and visibility into 2027-2028 could keep growth above the 7% to 10% framework.

2. Operating leverage and pricing could drive margin well beyond the 250 basis point plan, following a 19.3% first half.

3. PTC and Cognite could create a unique design-to-operate data thread, raising recurring revenue and valuation.

Bear case

1. An AI capex pause could turn a record backlog into a slower order book while capacity is at its highest.

2. Paying 21 times 2027 EBITA for PTC, while diluting shareholders and pausing buybacks, could depress returns for years.

3. Systems mix, input inflation and competition from Vertiv and Eaton could cap the gross margin.

Catalysts and monitorables, next 12 months

By end Nov 2026: Item: €600m buyback completion; What to watch: Final execution

18 Feb 2027: Item: FY2026 results; What to watch: Delivery against 19.7% to 19.9% margin; 2027 guidance

By Q1 2027: Item: Shelly closing; What to watch: 95% acceptance threshold

Coming quarters: Item: Cognite and AiDASH closing; What to watch: Regulatory clearance

Spring 2027: Item: Annual meeting; What to watch: Liuson appointment; pay votes

12 May 2027: Item: Dividend payment; What to watch: Size of progression after dilution

H1 2027: Item: PTC shareholder vote and approvals; What to watch: Deal timing

Through 2027: Item: Remaining PTC debt issuance; What to watch: Cost and credit commentary

Quarterly: Item: Data-centre and semiconductor orders; What to watch: Durability of triple-digit trend

Quarterly: Item: Net price; What to watch: Whether price offsets inflation and tariffs

Analyst verdict

Schneider Electric enters 2027 from a position of unusual operational strength. Twice in 2026 it raised full-year targets, moving organic revenue guidance from 7%-10% to 12%-14% and adjusted EBITA growth from 10%-15% to 18%-21%. Energy Management is earning about 22% margins at scale, the backlog is at record levels, and its portfolio now touches the fastest-growing physical bottlenecks of the AI economy: power, cooling and fab infrastructure. Semiconductors are a small but telling proof point, where breadth across power, control, data and service is winning orders and references.

The harder question is capital allocation. The PTC transaction changes the equity story from a compounding electrical franchise to a combined infrastructure and software platform. The strategic logic is coherent: AVEVA covers operations, PTC covers product design and Cognite adds contextualised data. The market's reaction shows the burden of proof, as the deal arrived with a 42% premium, new shares at €240, a planned two-year buyback pause and more than €20 billion of financing in total. Management must now run a full-speed data-centre build while integrating its largest acquisition, on a stated 21 times 2027 EBITA price.

The balance of evidence is favourable but no longer simple. Near-term earnings momentum is high and ratings remain secure. Automation margins, software integration and AI-cycle concentration are the real tests. Investors should judge Schneider on three markers: order durability into 2028, Industrial Automation margin recovery towards the high teens, and evidence that PTC synergies arrive on schedule. If those are met, the post-deal decline will look like an entry point into a stronger franchise. If AI spending falters during integration, leverage and dilution will magnify the disappointment. Schneider remains a high-quality global leader, now carrying more ambition, and more execution risk, than at any point in its recent history.