IQE (IQE) H2 2025 earnings summary

Executive summary

• Completed a strategic review, resulting in a transformative £81 million fundraising from MACOM and other investors, strengthening the balance sheet and eliminating bank debt.

• Achieved strong second-half acceleration in FY 2025, overcoming H1 headwinds from macroeconomic and tariff uncertainties, wireless market softness, and defense funding delays.

• Positioned as the only pure-play epitaxy wafer supplier with a global footprint, serving high-growth segments like AI, data centers, aerospace, and defense.

• Strategic agreements with MACOM provide revenue visibility and stability, with further LTAs under discussion with other major players.

• Operational focus on fiscal discipline, portfolio optimization, and manufacturing efficiencies, including exit from the South Wales silicon site.

Financial highlights

• Group revenue for 2025 was £97.3 million, with Photonics revenue up 15% to £57.1 million and Wireless revenue down 40% to £40.1 million year-over-year.

• Adjusted EBITDA was £3.2 million, reflecting low manufacturing utilization in the first half.

• Adjusted operating cash flow benefited from an £11.2 million working capital inflow.

• Year-end cash and equivalents stood at £15.7 million, with adjusted net debt at £31.5 million.

• Reported loss after tax was £31.5 million; Adjusted Diluted EPS: (2.46p) vs (2.82p) prior year.

Outlook and guidance

• Q1 2026 trading in line with expectations, with strong demand across all core segments.

• Full-year 2026 revenue growth expected to exceed 20% year-on-year, with adjusted EBITDA in the high single to low double digits.

• Accelerated demand for InP solutions in data centre and AI infrastructure expected to drive material growth in 2026 and beyond.

• Strong order book visibility into H2 2026.

• Long-term demand trends in AI, data centers, and defense expected to drive sustained growth.