IQE (IQE) H1 2024 earnings summary

Executive summary

• Revenue grew 27% year-over-year to £66 million in H1 2024, driven by strong wireless segment performance and ongoing market recovery, though growth was more moderate than forecast due to regional and segment variability.

• Adjusted EBITDA improved to £6.6 million, swinging from a £5.7 million loss in H1 2023, reflecting improved manufacturing utilization, cost optimization, and operational efficiencies.

• Strategic focus remains on diversification into high-value markets such as GaN power and microLED displays, with ongoing investment in R&D and production capacity.

• Proposed IPO of the Taiwan subsidiary aims to accelerate growth initiatives and provide additional cash resources, with listing targeted for H1 2025.

Financial highlights

• H1 2024 revenue reached £66 million, up £14 million or 27% year-over-year, and up 53% on a constant currency basis.

• Adjusted EBITDA improved by £12.3 million year-over-year, reaching £6.6 million.

• Adjusted EBIT loss narrowed to £7.2 million, a £10.2 million improvement from H1 2023.

• Adjusted net debt increased to £17.0 million as of June 30, 2024, with £7.8 million in cash equivalents.

• Reported diluted EPS was (1.57p), improved from (2.57p) in H1 2023.

Outlook and guidance

• Year-on-year growth in revenue and Adjusted EBITDA is expected for the full year, but both are anticipated to be at the lower end of earlier forecasts (£130.0m–£153.7m revenue, £11.1m–£16.6m EBITDA) due to the pace of industry recovery.

• The company remains confident in continued industry recovery but expects ongoing variability in H2 2024, with full recovery anticipated in 2025.

• Commitment to diversification and growth strategy, with focus on technology roadmap and customer partnerships.

• Taiwan IPO on track for H1 2025.