IQE (IQE) H1 2025 earnings summary

Executive summary

• Strategic review expanded to consider a potential sale of the company or its Taiwan operations, with multiple expressions of interest and ongoing discussions.

• H1 2025 revenue declined 31% year-over-year to £45.3m, mainly due to wireless market softness, inventory overhang, and global economic volatility.

• Adjusted EBITDA turned negative at (£0.4m), reflecting underutilized capacity and high fixed costs.

• Focus on operational efficiency, cost control, and technology development in growth areas.

• Reported loss after tax widened to £26.0m, with significant non-cash impairment charges in Photonics.

Financial highlights

• H1 2025 revenue was £45.3m, down from £66.0m in H1 2024, with wireless revenue down 52% to £18.6m and photonics revenue flat at £26.6m.

• Adjusted EBITDA for H1 2025 was (£0.4m), compared to £6.6m in H1 2024.

• Adjusted net debt at period end was £23.5m; cash and equivalents stood at £17.0m.

• £18.0m raised via convertible loan notes in March 2025 to bolster liquidity.

• Gross margin fell to 1.2% from 7.6% year-over-year.

Outlook and guidance

• Wireless market softness and U.S. defense funding delays expected to persist through 2025, deferring some orders to 2026.

• Full-year 2025 revenue expected between £90.0m–£100.0m; adjusted EBITDA guidance ranges from (£5.0m) loss to £2.0m profit.

• Market conditions anticipated to improve in 2026 as inventory levels normalize and new technologies gain traction.

• Efficiency initiatives and cost controls ongoing to strengthen margins and cash generation.

• Waiver received for Q3 2025 EBITDA covenant testing from HSBC; ongoing engagement with stakeholders to improve liquidity.