XP Power (XPP) Q4 2025 earnings summary

Executive summary

• Revenue declined year-on-year but improved sequentially, with 7% growth in H2 over H1 and a narrowing of the annual decline to 4% by year-end.

• Performance aligned with expectations, with sequential revenue and profit improvement in H2 as markets recovered.

• Order intake rose 28% in constant currency, with broad-based growth across all three market sectors.

• Profitability improved, with operating profit rising from GBP 4.8m in H1 to GBP 12.5m in H2, and strong cash conversion at 225%.

• Strategic actions included exiting the RF market and focusing on higher-return voltage markets, plus completion of the Malaysia manufacturing facility.

Financial highlights

• Full-year revenue was GBP 230.1m, down 4% in constant currency and 7% including FX impacts.

• Adjusted gross margin expanded by 170bps to 42.7%, with H2 margin at 43.9%.

• Operating profit for the year was GBP 17.3m, in line with expectations.

• Adjusted EPS was 22.5p, with most earnings generated in H2.

• Net debt at year-end was GBP 41.5m, or 1.2x EBITDA, down from 2.3x.

Outlook and guidance

• Expect profit growth in 2026, weighted to H2 due to the expiry of China semi export licenses in H1 and semi market recovery in H2.

• Operating expenses projected to grow ~5% in 2026, with effective tax rate reducing to ~25%.

• CapEx for 2026 expected at GBP 20m, including Malaysia facility fit-out.

• Confident in achieving mid-40s gross margin as volumes recover.

• Adjusted operating profit for 2026 expected to be second-half weighted (c.40:60 split).