Xaar (XAR) H2 2025 earnings summary

Executive summary

• Group revenue increased by 12% year-on-year to £60.1 million, driven by 22% growth in the Printhead division and a commercial breakthrough in 3D jewellery wax applications.

• Strong performance in 3D printing and advanced manufacturing, with wax printing for jewelry as a key growth area.

• Stabilization in legacy ceramics and glass markets, with a turnaround in the U.S. business under new management.

• Strategic focus on technical innovation, robust IP (147 patents), and broadening application base across 21 markets.

• Execution targets digital manufacturing, process waste reduction, and geographic/geographic expansion aligned with market demand.

Financial highlights

• Printhead revenue up 22% year-on-year to £43.0m; pure printhead sales up 27%, printbar sales up 31%.

• Group adjusted profit before tax at £0.8 million, a 179% increase, exceeding consensus by 8%.

• Gross margin in Printhead improved by 3 percentage points to 41%.

• Net cash at £4.9 million, above consensus but down 40% year-on-year; adjusted free cash flow negative at (£0.1m).

• Megnajet revenue up 2% to £2.6m, EPS revenue down 10% to £14.5m due to contract loss but expected to recover in 2026.

Outlook and guidance

• Expectation of continued growth in 3D printing and advanced manufacturing, with packaging and textiles also showing potential.

• Ceramics market not expected to recover strongly until 2027–2028; near-term growth likely in digital glaze applications.

• Technical differentiation and turnkey capabilities gaining traction in new and high-growth markets.

• No specific free cash flow targets yet, but focus on improving stock turn and operational efficiency.

• Cautious on timing of new product commercialization due to OEM-dependent sales cycles.