IQE (IQE) H2 2024 earnings summary

Executive summary

• Strategic review underway, prioritizing a full sale of Taiwan operations to achieve a debt-free position and enable reinvestment in growth areas.

• CEO transition completed, with Jutta Meier appointed and organizational restructuring, including a 10% headcount reduction, to drive operational efficiency and cost discipline.

• Focus on extracting value from assets, reducing costs, and targeting growth in GaN power, Display, and microLED segments.

• Expanded customer base and pipeline aligned to diversification strategy, especially in GaN Power and microLED.

Financial highlights

• Revenue for the year was £118.0m, up 2% year-over-year; adjusted EBITDA improved to £8.2m from £4.3m.

• Adjusted LBIT improved from £20.2m to £18.3m.

• Adjusted operating cash flow decreased from £15.7m to £6.1m, mainly due to increased working capital for inventory build.

• Net operating cash flow was £1.3m; CapEx for the year was £11.4m.

• Cash and cash equivalents at end of Q1 2025 were £20.6m, with an undrawn facility of £4.5m.

Outlook and guidance

• Revenue and adjusted EBITDA for FY25 expected within analyst forecast ranges (£115.1m–£123.0m revenue; £7.4m–£10.0m EBITDA), with stronger performance anticipated in H2 due to inventory destocking and seasonality.

• Strong customer pipeline, especially in AI infrastructure, aerospace, security, and optical communications, expected to drive growth in H2.

• CapEx for 2025 projected to remain in low double-digit millions, mainly for GaN expansion and maintenance.

• No direct impact from US tariffs; forecasts assume inclusion of Taiwan revenues.