REG - Alphawave IP Group - Interim Results
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RNS Number : 0915B Alphawave IP Group PLC 29 September 2025
ALPHAWAVE IP GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2025
LONDON, United Kingdom and TORONTO, Ontario, Canada, 29 September 2025 -
Alphawave IP Group plc (LSE: AWE, "Alphawave Semi", or the "Company" and
together with its subsidiaries, the "Group"), a global leader in high-speed
connectivity for the world's technology infrastructure, announces its interim
results for the six months ended 30 June 2025.
Tony Pialis, President and Chief Executive Officer of Alphawave Semi said:
"Since announcing the agreement for the recommended acquisition of the Group
by Qualcomm, which values the Group at an implied enterprise value of
approximately US$2.4 billion, we have continued to deliver against our
strategy and maintain strong momentum in the business. This transaction
reflects the significant progress we have made and the quality of our platform
and people, and we remain focused on executing for our customers and
stakeholders as we move through the second half of the year. We are continuing
to support Qualcomm in obtaining the approvals required to complete the
transaction and, as announced on 5 August 2025, we received clearance from the
UK government in respect of the notification made under the National Security
and Investment Act 2021."
Financial Summary and APMs 1 (#_ftn1) - US$m H1 2025 H1 2024 Change
Licence and NRE 77.3 64.8 12.5
Royalties and silicon 25.7 26.2 (0.5)
Revenue 103.0 91.0 12.0
Gross Profit 38.7 41.3 (2.6)
Gross margin 38% 45%
Operating loss (172.8) (48.3) (124.5)
Operating margin (168%) (53%)
EBITDA(1) (152.9) (31.5) (121.4)
EBITDA margin(1) (148%) (35%)
Adjusted EBITDA(1) (43.0) (11.8) (31.2)
Adjusted EBITDA margin(1) (42%) (13%)
Loss after tax(1) (172.1) (40.0) (132.1)
Loss after tax margin(1) (167%) (44%)
Adjusted (loss) after tax(1) (56.9) (13.5) (43.4)
Adjusted (loss) after tax margin(1) (55%) (15%)
Pre-tax operating cash flow (15.3) 50.4 (65.7)
Cash and cash equivalents 118.7 76.3 42.4
Net debt(1) (231.4) (141.6) (89.8)
Bookings(2) and Design Win Activity - US$m H1 2025 H1 2024 Change
Licence and NRE 107.4 203.5 (96.1)
Royalties and silicon 52.0 21.8 30.2
New Bookings 159.4 225.3 (65.9)
Number of revenue generating end-customers (end of period) 81 73 8
Interim Results Highlights
· H1 2025 revenues of US$103.0m (H1 2024: US$91.0m) reflect the
global economic uncertainty and the nature of the imposed tariff regimes
described in the 2024 Annual Report, as well as certain customers deferring or
revising their purchase decisions due to the uncertainty arising from the
announcement in early April 2025 of the recommended acquisition of the Group
by Qualcomm, as described in the Scheme Document published on 7 July 2025.
Anticipated tapeouts of customer ASICs and the timing of conversion of IP and
NRE bookings into revenue is expected to help drive significant revenue growth
in H2 2025 compared to H1 2025.
· Adjusted EBITDA in H1 2025 was a loss of US$43.0m (negative 42%
margin) compared to a loss of US$11.8m (negative 13% margin) in H1 2024.
This decrease is primarily driven by certain customer projects taking longer
to complete than expected, increased headcount, US$10.0m (H1 2024: US$nil)
impairment of a purchased intangible asset and an additional US$4.5m
commission payment due to a customer.
· H1 2025 results were impacted by certain non-recurring items
including the US$10.0m (H1 2024: US$nil) impairment of a purchased intangible
asset mentioned above, US$19.8m (H1 2024: US$nil) impairment of warrants,
US$44.1m (H1 2024: US$nil) costs related to the acquisition by Qualcomm and
a US$19.7m (H1 2024: US$nil) expected credit loss relating to a customer.
· Cash outflow from pre-tax operating activities in H1 2025 was
US$15.3m (H1 2024 cash inflow: US$50.4m), reflective of lower revenues in H1
2025, and the continued investment in leading connectivity technology
products. In line with previously flagged impacts, bookings of US$159.4m were
down 29% vs H1 2024, and the current backlog excluding royalties was US$327.7m
(H1 2024: US$486.4m)
· Working capital improvement of US$90.6m, with an increase in
contract liabilities of US$32.7m, an increase in trade and other payables of
US$28.9m, a decrease in contract assets of US$19.1m, a decrease in trade and
other receivables of US$8.4m, and a decrease in inventories of US$1.6m.
· Cash and cash equivalents held by the Group were US$118.7m with
net debt of US$231.4m. On 30 June 2025, the Group executed the Sixth Amendment
to the Credit Agreement which suspended the testing of the minimum interest
coverage ratio and secured net leverage ratio covenants.
The Group's H1 2025 Report is also available to view in the Investor Relations
section of the Company's website
(https://awavesemi.com/investors/events-announcements-and-presentations/
(https://awavesemi.com/investors/events-announcements-and-presentations/) ).
About Alphawave Semi
Alphawave Semi is a global leader in high-speed connectivity for the world's
technology infrastructure. Faced with the exponential growth of data,
Alphawave Semi's technology services a critical need: enabling data to travel
faster, more reliably and with higher performance at lower power. Alphawave
Semi is a vertically integrated semiconductor company, and our IP, custom
silicon, and connectivity products are deployed by global tier-one customers
in data centres, compute, networking, AI, 5G, autonomous vehicles, and
storage. Founded in 2017 by an expert technical team with a proven track
record in licensing semiconductor IP, its mission is to accelerate the
critical data infrastructure at the heart of the digital world. To find out
more about Alphawave Semi, visit: awavesemi.com (http://www.awaveip.com/)
Trademarks
Alphawave Semi and the Alphawave Semi logo are trademarks of Alphawave IP
Group plc. All rights reserved. All registered trademarks and other trademarks
belong to their respective owners.
Contact Information
Alphawave IP Group plc Rahul Mathur, CFO ir@awavesemi.com
+44 (0) 20 7717 5877
Grand Bridges Graham Robertson press@awavesemi.com
Marketing Limited Claudia Cano-Manuel +44 (0) 75 6218 2327
IFC Advisory (IR to the Company) Graham Herring ir@awavesemi.com
Tim Metcalfe +44 (0) 203 934 6630
Florence Straton
Cautionary statement regarding forward-looking statements
This document may contain forward-looking statements which are made in good
faith and are based on current expectations or beliefs, as well as assumptions
about future events. You can sometimes, but not always, identify these
statements by the use of a date in the future or such words as "will",
"anticipate", "estimate", "expect", "project", "intend", "plan", "should",
"may", "assume" and other similar words. By their nature, forward-looking
statements are inherently predictive and speculative and involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. You should not place undue reliance on these
forward-looking statements, which are not a guarantee of future performance
and are subject to factors that could cause our actual results to differ
materially from those expressed or implied by these statements. The Company
undertakes no obligation to update any forward-looking statements contained in
this document, whether as a result of new information, future events or
otherwise.
A. Financial, Operational and Strategic Highlights
Summary
Whilst underlying demand for the Group's technology and products remains
strong, bookings in the half year to 30 June 2025 were impacted by customer
uncertainty arising from the announcement in early April 2025 of the
recommended acquisition of the Group by Qualcomm, which resulted in certain
customers deferring some purchasing decisions. As a result, total bookings in
H1 2025 of US$159.4m, were down 29% year-on-year.
Licence and non-recurring engineering ("NRE") bookings in H1 2025 were
US$107.4m, down 47% year-on-year over H1 2024 (H1 2024: US$203.5m). North
American customers represented approximately 69% of these bookings, followed
by EMEA customers representing 13%. China represented 10%, up from 8% in H1
2024 and APAC (excluding China) represented 8%. Royalties and Silicon orders
were US$52.0m, up 139% over H1 2024 (H1 2024: US$21.8m).
At the end of H1 2025, backlog (contracted bookings not yet recognised as
revenue) excluding royalties was US$327.7m (H1 2024: US$486.4m).
Revenue in H1 2025 was US$103.0m up 13% year-on-year (H1 2024: US$91.0m). The
year-on-year increase in revenue is due to increased bookings through 2024
converting to revenue. During H1 2025 the Group recognised revenue from 81
customers compared to 73 in H1 2024 which included an increase in revenues
from the legacy custom silicon business as compared to last half year. H1 2025
revenue continued to be heavily weighted to core markets of data networking,
cloud compute, and AI.
· Customers - In H1 2025 the Group recognised revenues from 81
end-customers, compared to 73 end-customers in H1 2024 and 103 in FY 2024. The
top three customers represented 22% of H1 2025 revenues versus 32% in H1 2024.
· Regions - In H1 2025, revenues were 59% from customers in North
America, 21% from China, 13% from APAC (excluding China) and 7% from EMEA.
Gross margin in H1 2025 was 38% compared to 45% in H1 2024. The reduction in
gross margin was due to higher costs incurred in NRE projects and additional
IP commissions due to external partners. The year-on-year increase in R&D,
S&M and G&A expenses from US$70.0m to US$101.7m was primarily due to
the increase from 896 employees in H1 2024 to 1,144 in H1 2025, together with
a reduction in R&D capitalisation and a US$10.0m impairment of a purchased
intangible asset. In H1 2025 the Group capitalised US$25.5m of R&D
expenses related to the development of future products (H1 2024: US$33.8m).
Other operating expenses in H1 2025 totalled US$109.8m (H1 2024: US$19.6m),
and consisted of the following:
- Share-based compensation expense of US$22.3m (H1 2024:
US$10.7m). The increase in the share-based compensation expense was due to the
front-loaded weighting of the four-year charge relating largely to awards to a
few new senior employees who joined the business through the last 12 months
which led to a larger charge in H1 2025 relative to H1 2024. The Employee
Share Purchase Plan ('ESPP') was initiated during H2 2024 which led to an
additional US$1.1m share-based compensation expense in H1 2025.
- Acquisition related costs and expenses of US$44.1m (H1 2024:
US$6.5m). The increase in acquisition related costs was due to professional
adviser fees and other expenses associated with the recommended acquisition of
the Group by Qualcomm which comprises the total US$44.1m in H1 2025.
- Compensation element of Banias Labs deferred cash rights of
US$2.7m (H1 2024: US$3.8m) 2 (#_ftn2) .
- Impairment of warrants of US$19.8m (H1 2024: US$nil).
- Impairment of a trade receivable and contract assets balance
related to a customer of US$19.7m (H1 2024: US$nil).
Over the period the Group generated an operating loss of US$172.8m, driven
partially by continued investment in new products in IP, Silicon Products,
Connectivity Products and Chiplets and the margin profile of Silicon
Products. This margin profile is expected to improve significantly in future
periods. The operating loss is also driven by the Group incurring US$44.1m of
acquisition related costs and expenses relating to the recommended acquisition
of the Group by Qualcomm, a purchased intangible asset impairment of US$10.0m,
a total ECL provision of US$23.8m and warrants impairment of US$19.8m.
Adjusted EBITDA in H1 2025 was a loss of US$43.0m (negative 42% margin)
compared to a loss of US$11.8m (negative 13% margin) in H1 2024. This
decrease in Adjusted EBITDA is primarily driven by some lower margin revenue
projects taking longer to complete than expected, increased headcount
outpacing revenue growth, US$10.0m impairment of a purchased intangible
asset and an additional US$4.5m commission payment due to a customer.
The Group closed the period with cash and cash equivalents of US$118.7m
compared to US$180.2m and US$76.3m at the end of December 2024 and June 2024,
respectively. At the end of H1 2025, the Group had a net debt position of
US$231.4m (FY 2024: net debt position of US$171.9m; H1 2024: net debt position
of US$141.6m).
WiseWave disposal
On 7 June 2025, the Group fully disposed of its ownership interest in WiseWave
Technology Co., LTD ("WiseWave"), by transferring our equity ownership in
WiseWave to Wise Road Huazhi (Zhuhai) Equity Investment Partnership (Limited
Partnership), Wise Road Zhiguang (Zhuhai) Equity Investment Partnership
(Limited Partnership), Zhuhai Wise Road Huajin Zhiying Investment Partnership
(Limited Partnership), Wise Road Zhibo (Zhuhai) Equity Investment Partnership
(Limited Partnership), and Zhuhai Wise Road Huajin Zhisheng Investment
Partnership (Limited Partnership) for no consideration. The value of the
investment in WiseWave was reduced to US$nil in 2022, as a result of equity
accounting for losses at WiseWave to the end of 2022. As such, when the Group
disposed of WiseWave on 7 June 2025, no gain or loss on disposal was recorded.
Balance Sheet
The Group ended H1 2025 with cash and cash equivalents of US$118.7m compared
to US$180.2m at the end of December 2024. The net debt position at the end of
H1 2025 was US$231.4m, compared to US$171.9m at the end of December 2024. On
30 June 2025, the Group executed the Sixth Amendment to the Credit Agreement
which suspended the testing of the minimum interest coverage ratio and secured
net leverage ratio covenants for the period ending on the earlier of (i) the
date upon which it is determined that the recommended acquisition of the Group
by Qualcomm will not go ahead due to regulatory conditions not being satisfied
and (ii) the end of Q1 2026. During this period the Group is not required to
measure and report the secured net leverage ratio or the minimum interest
coverage ratio.
In H1 2025, current trade and other receivables and other assets decreased
from US$81.3m at 31 December 2024 to US$35.2m, largely due to a US$28.8m
decrease in trade receivables from contracts with customers and US$3.1m
decrease in restricted cash. The restricted cash balance is reduced as
payments are made to employees on a quarterly basis and is expected to be
settled over the period to August 2026. In addition, there is an increased
expected credit loss provision of US$13.7m to US$23.8m, based on an assessment
of credit risk on trade receivables and contract assets.
Total contract assets, i.e. revenue recognised but not yet billed to the
customer, decreased from US$95.7m at the end of 2024 to US$77.0m at the end
June 2025 due to project billing milestones being hit, triggering invoicing to
customers.
In the first six months of 2025, intangible assets increased from US$263.2m to
US$286.8m, largely as a result of the ongoing capitalisation of development
expenditure of US$26.1m with capitalised interest of US$8.4m, purchased IP of
US$8.3m offset by an impairment of US$10.0m and amortisation of US$9.2m.
In H1 2025 current trade and other payables increased from US$76.8m to
US$120.3m largely as a result of an increase of US$54.0m in accrued expenses,
of which US$42.2m relates to costs incurred in relation to the recommended
acquisition of the Group by Qualcomm and a decrease of US$19.0m in trade
payables due to timing of vendor payments. Contract liabilities, including the
flexible spending account ("FSA", where the Group has invoiced or received
money from customers for products or services where revenue recognition
conditions have not yet been met, increased from US$82.2m at the end of 2024
to US$114.8m at the end of H1 2025. This increase is partially due to NRE
invoicing and cash received towards the end of Q2 2025 where the revenue is
expected to be recognised in Q3 and Q4 2025. The remainder of the total
increase was driven by an increase in the FSA of US$14.4m from invoices raised
in H1 2025 against two FSA agreements.
Liquidity and Cashflow
In H1 2025 the Group generated a pre-tax operating cash outflow of US$15.3m,
compared to a pre-tax operating cash inflow of US$50.4m in H1 2024, reflective
of lower-than-expected revenues in H1 2025 where we saw some reduced customer
activities due to the uncertainty around the recommended acquisition of the
Group by Qualcomm. The cash outflow in H1 2025 was despite an improvement in
working capital of US$90.6m. The working capital improvement was the result of
an increase in contract liabilities of US$32.7m, an increase in trade and
other payables of US$28.9m, a decrease in contract assets of US$19.1m, a
decrease in trade and other receivables of US$8.4m, and a decrease in
inventories of US$1.6m.
Capital expenditure on intangible assets and property and equipment during H1
2025 totalled US$49.5m (H1 2024: US$59.2m). The decrease in capital
expenditure is due to timing differences of payments to suppliers in
comparison to H1 2024.
Investing in People
During the first six months of 2025, the Group continued to make opportunistic
investments in talent. As of 30 June 2025, total closing headcount increased
to 1,144, comprising 1,014 in R&D/engineering, 28 in sales and marketing
and 102 in general and administrative roles (from 891, 32 and 68, respectively
as at 31 December 2024). Turnover rate 3 (#_ftn3) remained broadly stable at
approximately 4% and the percentage of female employees as of 30 June 2025 was
21%, broadly in line with the ratio as at the end of 2024 (19%).
Significant Post-Interim Events
On 9 June 2025, Qualcomm Incorporated (NASDAQ: QCOM) ("Qualcomm") and
Alphawave announced that they had reached an agreement on the terms of a
recommended acquisition by Aqua Acquisition Sub LLC, an indirect wholly-owned
subsidiary of Qualcomm for the entire issued and to be issued ordinary share
capital of Alphawave, which values the Group at an implied enterprise value of
approximately US$2.4 billion. The acquisition represents a significant
milestone for Alphawave and reflects the strength of our technology, strategy,
and people.
Qualcomm is a leading wireless technology company, and the acquisition aims to
further accelerate its expansion into data centres and AI markets. Qualcomm
believes that Alphawave's high-speed wired connectivity and compute
technologies are highly complementary to Qualcomm's next generation CPU and
NPU scores, creating a stronger platform to serve customers across high growth
markets including AI, data centres, data networking, and data storage.
The Board believes that the cash offer element of the acquisition provides
Alphawave shareholders an opportunity to realise their investment at a fair
and reasonable value and wholly in cash while supporting the long-term growth
of Alphawave's platform and capabilities, and that the terms of Alternative
Offer 1 (as defined in the Scheme Document) are fair and reasonable. By
joining forces with Qualcomm, Alphawave will be well positioned to broaden its
customer reach, enhance its technological offering, and unlock new
opportunities in high-performance, low-power compute and connectivity
solutions.
On 7 July 2025, Alphawave published a Scheme Document which, amongst other
things, sets out the full terms and conditions of the acquisition. The
acquisition is conditional on the satisfaction (or waiver, where applicable)
of various conditions, including, amongst other things, the approval by the
requisite majorities of Alphawave shareholders, the sanction by the High Court
in the UK, as well as the satisfaction or waiver of various regulatory
conditions, including merger control approvals in the US, Germany, South Korea
and Canada, and foreign direct investment approval, in the UK. On 5 August
2025, Alphawave announced that the acquisition was approved by the requisite
majorities of Alphawave shareholders and that clearance from the UK government
has been received in respect of the notification made under the National
Security and Investment Act 2021.
Subject to the satisfaction (or waiver, where applicable) of the various
conditions, the acquisition is expected to be complete during the first
calendar quarter of 2026.
Principal Risks and Uncertainties
The Group faces a number of risks and uncertainties that may have an impact on
our operations and performance. These risks and uncertainties are regularly
assessed by the Directors. The principal risks and uncertainties affecting the
Group in respect of the first half of the year have not changed materially
from those set out on pages 58 to 61 of the 2024 Annual Report. In summary,
the principal risks and uncertainties are as follows:
Risk Description
Managing our growth We have a limited operating history and are growing rapidly, with increased
pressure on cash flows. If we do not manage our growth successfully, fail to
execute on our strategy, fail to meet future debt covenants or maintain
sufficient liquidity, or fail to implement or maintain governance and control
measures, our business may be adversely impacted. We have rapidly expanded our
headcount and the complexity of our business and operations, both organically
and through acquisitions.
Competition and failure to maintain our technology leadership We seek to maintain our competitive advantage by being first to market with
new IP as data speeds increase and manufacturing sizes decrease. If these
industry transitions do not materialise, or are slower than anticipated, our
competitors may be able to introduce competing IP which may diminish our
competitive advantage and selling prices. Our ability to maintain our
technology leadership is further dependent on our ability to attract R&D
and engineering talent.
Customer dependence Our products and technology target the AI, data centre and network
infrastructure markets, where there are a limited number of customers.
Further, the cost and complexity of developing semiconductors targeted by our
IP limits the number of our potential addressable customers. In any reporting
period, a substantial part of our revenues may be attributable to a small
number of customers.
Customer demand Demand for our technology is dependent on the continued global growth in
generation, storage and consumption of data across our target markets, as well
as the increasing cost and complexity of designing and manufacturing
semiconductors. We may be impacted by our customers' demand sensitivity to
broader economic and social conditions. Our potential customers may seek to
develop competitive IP or semiconductors internally or acquire IP or
semiconductors from our competitors.
Risks associated with WiseWave As we have fully disposed of our investment in our WiseWave joint venture, we
may be limited in our ability to influence strategy, operational, legal,
commercial or financial matters of WiseWave. We have also fully provided for
billed and unbilled receivables from WiseWave as it is unlikely that we will
receive any additional payments.
Dependence on licensing revenues Our financial performance is dependent on licensing revenues. If our customers
delay or cancel their development projects, our IP and support revenues may be
delayed, diminished or may not materialise. We are in the middle of a
transformation into a semiconductor product company and are making investments
in developing custom and connectivity products. Should these not develop as
expected we may not achieve the required growth in revenue or expected
margins.
The acquisition of OpenFive has materially reduced our dependency on IP
licensing revenues as we seek to monetise our IP through custom silicon.
Given the costs, time and resources involved, our customers are typically
incentivised to take their products into production. Our programme management
teams actively manage progress on development of both custom and connectivity
products.
Reliance on key personnel and ability to attract talent We rely on the senior management team and our business may be negatively
impacted if we cannot retain and motivate our key employees. Our ability to
grow the business is also dependent on attracting talent, particularly in
R&D and engineering, and if we are unable to do so, our business may be
negatively impacted.
External environment and events Semiconductors are becoming increasingly important as countries and regions
seek to guarantee supply and build domestic supply chains, as well as restrict
outside access to their domestic technologies. Our business could be impacted
by the actions of governments, political events or instability, or changes in
public policy in the countries in which we operate. The current conflict in
the Middle East potentially has wide-ranging impacts, including global
economic instability, increased geopolitical tensions and disruption to our
operations and supply chains.
IP protection and infringement We protect our technology through trade secrets, contractual provisions,
confidentiality agreements, licences and other methods. A failure to maintain
and enforce our IP could impair our competitiveness and adversely impact our
business. If other companies assert their IP rights against us, we may incur
significant costs and divert management and technical resources in defending
those claims. If we are unsuccessful in defending those claims, or we are
obliged to indemnify our customers or partners in any such claims, it could
adversely impact our business.
Reliance on third-party manufacturing foundries We rely on third-party semiconductor foundries, both as customers and as
manufacturing partners to our customers. If foundries delay the introduction
of new process nodes or customers choose not to develop silicon on those
process nodes, our ability to license new IP and our selling prices may be
adversely impacted. By pursuing a vertically integrated model and supplying
silicon products, we are reliant on the foundries' capacity for a portion of
our revenues and this reliance may increase as royalty revenues become more
material to us.
Reliance on complex IT systems We rely heavily on IT systems to support our business operations. The vast
majority of our design tools, software and IT system tools are off-the-shelf
solutions and our business would be disrupted if these components became
unavailable. If our IT systems were subject to disruption, for example,
through malfunction or security breaches, we may be prevented from developing
our IP and fulfilling our contracts with our customers.
Recommended acquisition by Qualcomm not completing We have considered that if the Acquisition does not consummate, the Group may
be at risk of not being able to meet certain financial covenants applicable to
the Term Loan and Revolving Credit Facility, and consequently may need to
either renegotiate or obtain waiver of the covenants, or undertake other
remedial actions for such time as may be necessary.
Directors' Responsibility Statement
The Directors confirm that, to the best of their knowledge:
· This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting, as adopted for the use in
the UK, and gives a true and fair view of the assets, liabilities, financial
position and profit of the Group and Company; and
· This Half-Year Report includes a fair review of the information
required by:
o DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
o DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the Group during that period.
Details of all current Directors of Alphawave IP Group plc are maintained on
www.awavesemi.com (http://www.awavesemi.com) .
By order of the Board
Tony Pialis
President and Chief Executive Officer
26 September 2025
Condensed consolidated statement of comprehensive income
Unaudited six months Unaudited Six months
ended 30 June 2025 ended 30 June 2024
Note US$'000 US$'000
Revenue 4 102,961 90,975
Cost of sales (64,228) (49,682)
Gross profit 38,733
41,293
Research and development 12 (65,052) (39,378)
of which impairment of purchased intangible (10,000) -
Sales and marketing (7,617) (6,990)
General and administration (29,016) (23,603)
of which expected credit loss (1,279) (699)
Other operating expense 5 (109,853) (19,636)
of which impairment of warrants (19,848) -
of which costs related to acquisition by Qualcomm (44,058) -
of which expected credit loss (19,707) -
Operating loss (172,805) (48,314)
Finance income 8 3,778 1,773
Finance expense 8 (8,938) (3,373)
Loss before tax (177,965) (49,914)
Income tax benefit 9 5,884 9,953
Loss after tax (172,081) (39,961)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Currency exchange gain/(loss) on translation of foreign operations 222 (1,431)
Total comprehensive loss for the period (171,859) (41,392)
Loss per ordinary share attributable to the shareholders (expressed in US$
cents per ordinary share):
Basic and Diluted earnings per share 10 (22.69) (5.48)
( )
The notes on this document form part of these financial statements.
Condensed consolidated balance sheet
Unaudited as at Audited year ended
30 June 2025 31 December 2024
Note US$'000 US$'000
Assets
Current assets
Cash and cash equivalents 15 118,663 180,159
Trade and other receivables 16 35,181 81,301
Contract assets 4 57,754 67,696
Inventories 4,375 5,989
Income tax receivables 24,537 28,999
Warrant payment to customer 4 - 484
Other current assets 17 45,964 11,812
Total current assets 286,474 376,440
Non-current assets
Goodwill 11 309,199 309,199
Other intangible assets 12 286,800 263,242
Property and equipment - owned 13 58,704 35,869
Property and equipment - leased 14,746 17,997
Other investments 1,017 1,017
Trade and other receivables 16 1,500 2,006
Contract assets 4 19,263 27,999
Other assets 17 3,248 775
Warrant payment to customer 4 - 19,364
Deferred tax assets 21,917 15,492
Total non-current assets 716,394 692,960
Total assets 1,002,868 1,069,400
Liabilities
Current liabilities
Trade and other payables 18 120,270 76,806
Contract liabilities 4 114,593 81,631
Income taxes payable 1,422 952
Lease liabilities 4,612 3,834
Loans and borrowings 19 9,375 9,375
Total current liabilities 250,272 172,598
Non-current liabilities
Trade and other payables 18 6,044 132
Contract liabilities 232 537
Warrant liability 4 13,319 13,671
Lease liabilities 12,674 15,779
Loans and borrowings 19 340,736 342,650
Deferred tax liabilities 34,312 34,280
Total non-current liabilities 407,317 407,049
Total liabilities 657,589 579,647
Net assets 345,279 489,753
Share capital and reserves
Share capital 20 10,743 10,451
Share premium account 9,238 4,474
Merger reserve (793,216) (793,216)
Share-based payment reserve 42,037 32,641
Currency translation reserve (87,344) (87,566)
Convertible bond 34,051 34,051
Retained earnings 1,129,770 1,288,918
Total equity 345,279 489,753
Condensed consolidated cash flow statement
For the period ended 30 June 2025
Unaudited six months ended Unaudited six months ended 30 June 2024
30 June 2025
Note US$'000 US$'000
Cash flows from operating activities
Net (loss) (172,081) (39,961)
Non-cash items within operating loss:
Amortisation of intangible assets 9,215 7,150
Depreciation of property and equipment - owned 8,512 6,968
Depreciation of property and equipment - leased 2,201 2,732
Share-based compensation expense 22,329 10,743
Currency translation gain on Intercompany balances (3,095) (2,257)
Impairment of R&D assets 10,000 -
Impairment of warrants 19,848 -
Deferred cash rights 2,679 3,788
Finance income (3,778) (1,773)
Finance expense 8,938 3,373
Income tax expense (10,695) (14,764)
Cash used in operations before changes in working capital (105,927) (24,001)
Changes in working capital:
Decrease in trade and other receivables 8,408 23,401
Decrease in inventories 1,614 7,200
Decrease in contract assets 4 19,078 10,407
Increase in trade and other payables 28,865 1,175
Increase in contract liabilities 4 32,657 32,247
Cash (used in) / generated from operating activities before tax (15,305) 50,429
Income tax paid (801) (3,395)
Income tax refund 14,002 -
Net cash generated from operating activities (2,104) 47,034
Cash flows from investing activities
Purchase of property and equipment (18,806) (24,346)
Purchase of intangible asset (5,165) (1,000)
Interest received 3,004 1,773
Capitalised development expenditure (25,521) (33,832)
Net cash used in investing activities (46,488) (57,405)
Cash flows from financing activities
Issuance of ordinary shares 5,056 1,351
Interest paid (11,626) (9,017)
Lease payments (2,479) (3,016)
Repayment of loans and borrowings (4,687) (2,500)
Net cash used in financing activities (13,736) (13,182)
Net decrease in cash and cash equivalents (62,328) (23,553)
Cash and cash equivalents at the beginning of the period 180,159 101,291
Currency translation gain/(loss) on cash and cash equivalents 832 (1,431)
Cash and cash equivalents at end of period 15 118,663 76,307
Condensed consolidated statement of changes in equity
Six months ended 30 June 2025
US$'000 Ordinary share capital Share premium account Merger reserve Share-based payment reserve Currency translation reserve Convertible bonds Retained earnings Total equity
Balance at 1 January 2025 10,451 4,474 (793,216) 32,641 (87,566) 34,051 1,288,918 489,753
Loss for the period - - - - - - (172,081) (172,081)
Other comprehensive income - - - - 222 - - 222
Total comprehensive loss - - - - 222 - (172,081) (171,859)
Settlement of share awards:
- Issue of ordinary shares 292 4,764 - - - - - 5,056
- Transfer of cumulative compensation expense on settled awards - - - (12,933) - - 12,933 -
Share-based compensation expense for the year - - - 22,329 - - - 22,329
Other changes in equity 292 4,764 - 9,396 - - 12,933 27,385
As at 30 June 2025 (Unaudited) 10,743 9,238 (793,216) 42,037 (87,344) 34,051 1,129,770 345,279
Six months ended 30 June 2024
Ordinary share capital Share premium account Merger reserve Share-based payment reserve Currency translation reserve Convertible bonds Retained earnings Total equity
US$'000
Balance at 1 January 2024 10,011 1,638 (793,216) 41,875 (86,546) - 1,294,686 468,448
Loss for the period - - - - - - (39,961) (39,961)
Other comprehensive income - - - - (1,431) - - (1,431)
Total comprehensive loss - - - - (1,431) - (39,961) (41,392)
Settlement of share awards:
- Issue of ordinary shares 248 1,103 - - - - - 1,351
- Transfer of cumulative compensation expense on settled awards - - - (22,808) - - 22,808 -
Share-based compensation expense for the year - - - 10,743 - - - 10,743
Other changes in equity 248 1,103 - (12,065) - - 22,808 12,094
As at 30 June 2024 (Unaudited) 10,259 2,741 (793,216) 29,810 (87,977) - 1,277,533 439,150
Notes to the unaudited interim financial statements
Six months ended 30 June 2025
1. General information
These condensed consolidated interim financial statements represent the
consolidated interim financial statements of Alphawave IP Group plc (the
'Company' or 'Alphawave' or 'Alphawave Semi') and its subsidiaries (together
'the Group').
The principal activities of the Company and its subsidiaries are described on
pages 1 to 5.
The Company is a public limited company whose shares are listed on the London
Stock Exchange and is incorporated and domiciled in the United Kingdom. The
address of its registered office changed from Central Square, 29 Wellington
Street, Leeds, United Kingdom, LS1 4DL to 19th Floor 51 Lime Street, London,
United Kingdom, EC3M 7DQ on 23 June 2025.
2. Basis of preparation
The condensed consolidated interim financial statements of the Group have been
prepared in accordance with UK-adopted international accounting standard (IAS)
34 Interim Financial Reporting and should be read in conjunction with the
Group's consolidated financial statements as of and for the year ended 31
December 2024, which have been delivered to the Registrar of Companies as per
Section 435 of the Companies Act 2006. They do not include all the information
required for a complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions that are
significant to give an understanding of the changes in the Group's financial
position and performance since the last annual consolidated financial
information as of 31 December 2024 and for the six months ended 30 June 2025.
These condensed consolidated interim financial statements do not comprise of
statutory accounts within the meaning of Section 435 of the Companies Act
2006. The comparative figures for the six months ended 30 June 2024 are not
the Group's statutory accounts for that financial period. The preparation of
these condensed consolidated interim financial statements requires the use of
certain critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group's accounting policies. The
areas involving a higher degree of judgement and complexity, or areas where
assumptions and estimates are significant to the condensed consolidated
interim financial statements are disclosed in note 3.
These condensed consolidated interim financial statements were authorised for
issue by the Company's Board of Directors on 26 September 2025. The
Independent Auditor's Report on the Annual Report and Accounts of Alphawave IP
Group plc for the year ended 31 December 2024 was unqualified and did not draw
attention to any matters by way of emphasis and did not contain statements
under s498 (2) or (3) of the Companies Act 2006. The financial information for
the periods ended 30 June 2025 and 30 June 2024 is unaudited but has been
subject to a review by the Company's auditor.
Going concern
The condensed interim financial statements have been prepared on a
going-concern basis which the Directors believe to be appropriate for the
following reasons.
At the time of approving these condensed interim financial statements, the
Directors are required to form a judgement as to whether the Group has
adequate resources to continue in operational existence for a period of at
least a year from the date of approval of the financial statements ("Going
Concern Assessment"). In their Going Concern Assessment, the Directors have
considered various factors including the Group's current financial position,
the Group's medium-term plan, its budget for the next financial year, and the
principal risks and uncertainties that it faces.
On 9 June 2025, the Boards of Qualcomm Incorporated ("Qualcomm") and the
Company announced that they had reached agreement on the terms of a
recommended offer by Qualcomm for purchase of the entire issued, and to be
issued, ordinary share capital of the Company (the " Acquisition"). On 7 July
2025, Alphawave published a Scheme Document which, amongst other things, sets
out the full terms and conditions of the Acquisition. The Acquisition is
conditional upon the satisfaction (or waiver, where applicable) of various
conditions, including, amongst other things, the approval by the requisite
majorities of Alphawave shareholders, the sanction by the High Court in the
UK, as well as the satisfaction or waiver of various regulatory conditions,
including merger control approvals in the U.S., Germany, South Korea and
Canada, and foreign direct investment approval, in the UK. On 5 August 2025,
Alphawave announced that the Acquisition was approved by the requisite
majorities of Alphawave shareholders and that clearance from the UK government
has been received in respect of the notification made under the National
Security and Investment Act 2021.
The Directors have considered the impact of certain consequences arising from
the Acquisition in their Going Concern Assessment.
On the basis of a successful completion of the Acquisition, loans and
borrowings and convertible bonds of the Group may become subject to change of
control provisions. While the Directors do not, on the date of approval of
these financial statements, have full clarity on what the exact impact of the
Acquisition may be on the Group's structure and financing, to the best of
their knowledge, the Directors expect Qualcomm to have the necessary ability
to arrange any financing that may be required to address the impact of these
change of control provisions.
The Directors have assessed a severe but plausible downside scenario that
reflects a reduction in revenues of 16% from the base case projections driven
by a range of current or emerging risks to the Group. These risks include
delays in commercialisation of the Group's own connectivity products as well
as the continued impact of the Acquisition by Qualcomm on the ability of the
Group to win new business from certain customers. The Directors have assessed
the downside scenario to be appropriately severe, whilst being plausible. In
the downside scenario, if the Acquisition does not complete by the end of Q4
2025, the Group may be at risk of not being able to meet certain financial
covenants applicable to the Term Loan and Revolving Credit Facility on
conclusion of the existing covenant waiver, and consequently may need to
either renegotiate or obtain extended waivers to the covenants, and undertake
other remedial actions for such time as may be necessary. The Directors
considered the Group's ability to undertake mitigating measures and
specifically note that the Group maintains good relationships and a regular
dialogue with each of its lenders. The Directors are confident that an
amendment or waiver to its covenants could be secured, if necessary. This is
based on the fact that the Group has, through proactive negotiations with its
lenders, secured a suspension of certain financial covenants for the period
ending on the earlier of (i) the date upon which it is determined that the
recommended acquisition of the Group by Qualcomm will not go ahead due to
regulatory conditions not being satisfied or (ii) through to and including Q4
2025 (See Note 19 for further details). However, being able to secure an
amendment or waiver of its covenants, or ability to successfully execute other
mitigating actions are not guaranteed.
The Directors have therefore deemed it appropriate to prepare the financial
statements on a going concern basis but note the existence of a material
uncertainty arising from the risks outlined above, that may cast significant
doubt on the Group's ability to continue as a going concern and, therefore,
that the Group may be unable to realise its assets or discharge its
liabilities in the normal course of business. The condensed interim financial
statements do not include any adjustments that would result from the basis of
preparation being inappropriate.
Basis of organisation
The Group's management has performed its evaluation for reporting its
reportable segments, if any, and concluded that the Group's business
constitutes only one operating segment as all its products and services are of
similar nature and focus on customers from the same industry. Its entire
revenues, expenses, assets and liabilities pertain to the one business as a
whole. This has been ratified by the chief operating decision maker (CODM),
Tony Pialis (CEO) who is deemed best placed to evaluate the entity's operating
results to assess performance and to allocate resources.
Foreign currency translation
Each entity within the Group has a functional currency, which is normally the
currency in which the entity primarily generates and expends cash.
At entity level, a foreign currency is a currency other than the entity's
functional currency. Sales, purchases and other transactions denominated in
foreign currencies are recorded in the entity's functional currency at the
exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the exchange
rate ruling at the end of the reporting period. Currency translation
differences arising at entity level are recognised in profit or loss.
Non-monetary assets and liabilities denominated in foreign currencies are not
retranslated subsequent to initial recognition.
On consolidation, the results of foreign operations are translated into US
dollars at the average exchange rate for the reporting period and their assets
and liabilities are translated into US dollars at the exchange rate ruling at
the end of the reporting period. Currency translation differences arising on
consolidation are recognised in other comprehensive income and taken to the
currency translation reserve. In the event that a foreign operation is sold,
the related cumulative currency translation difference recognised in other
comprehensive income is reclassified from equity to profit or loss and is
included in calculating the gain or loss on disposal of the foreign operation.
Accounting policies
The accounting policies that have been used in the preparation of these
consolidated interim financial statements are the same as those applied in the
last annual consolidated financial statements as of 31 December 2024. New
standards effective on or after 1 January 2025 have been reviewed and do not
have a material effect on the Group's financial statements.
3. Critical judgements and key sources of estimation uncertainty
In the application of the Group's and Company's accounting policies, the
Directors are required to make judgements (other than those involving
estimations) that have a significant impact on the amounts recognised and to
make estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods. Changes to critical judgements and key sources of estimation
uncertainty in the 6 months to 30 June 2025 include removing accounting for
WiseWave as a joint venture, share of losses in excess of interest in
WiseWave, unrealised profit on sales to WiseWave due to the disposal of
WiseWave on 7 June 2025, reassessment of the judgement over the recoverability
of accounts receivable and contract assets with Wisewave. The resultant
estimate in relation to the allowance for credit losses in respect of these
balances arising from the increased uncertainty introduced by the disposal of
Wisewave in June 2025 and resulted in an additional US$19.7m being recorded as
an expected credit loss in the period. No material estimation uncertainty over
the remaining carrying amount of US$0.2m.
In addition, as a result of the recommended acquisition of the Group by
Qualcomm, the Directors have been required to reassess or consider a number of
new judgements and estimates. The Directors have also been required to
consider whether indicators of impairment existed in relation to the carrying
amount of any of the Group's assets. This assessment led to impairment
indicators being identified in relation to certain assets and thus the
Directors were required to apply judgement in determining the recoverable
amount of these assets. Consequently, an impairment has been recorded of
US$10m against purchased IP and US$19.8m against a warrant payment to a
customer, both of which are now fully impaired. The Directors have not
identified any indicators of impairment associated with other assets at 30
June 2025. Further, in concluding on the going concern basis of preparation
of the interim financial statements, the Directors have also made a number of
estimates and judgements as set out in the basis of preparation in note 2,
Going Concern. The Directors draw attention to the critical nature of these
estimates and judgements in preparing these interim financial statements, and
note the existence of a material uncertainty arising from these risks, that
may cast doubt on the Group's ability to continue as a going concern.
4. Revenue
Revenue in the unaudited condensed consolidated statement of comprehensive
income is analysed as follows:
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
Revenue by type:
IP and NRE 75,983 61,393
IP and NRE - Reseller 1,313 318
IP and NRE - JV - 3,021
Silicon and Royalties 25,665 26,243
102,961 90,975
'IP and NRE' represents revenue from IP products licensing, along with related
support and NRE services, in addition to custom silicon NRE (which can include
internal engineering services, our IP and related support, third party IP,
tooling costs and prototypes).
'IP and NRE - Reseller' represents revenue from contracts with resellers which
allow customers to sub-license the Group's IP to third-party end-customers.
'IP and NRE - JV' represents revenue from our former joint venture, WiseWave,
which was fully disposed of on 7 June 2025. The balance at the end of June
2024 includes revenues recognised under the five-year subscription licence and
revenues recognised under the VeriSilicon reseller arrangements which were
moved under WiseWave in late 2021 but subsequently moved back to the 'IP and
NRE Reseller' for H1 2025 due to disposing of the joint venture.
'Silicon and royalties' represent revenues recognised once our customers are
in production and in the case of custom silicon are based on shipments of
physical silicon products and, for standalone IP licensing, royalties payable
on usage of our IP within silicon products.
(US$'0000) Six months ended 30 June 2025 Six months ended 30 June 2024
Revenue by region:
North America 61,262 42,044
China 21,109 18,130
APAC (ex-China) 13,157 24,147
EMEA 7,433 6,654
102,961 90,975
Where goods are delivered electronically, for example IP, the above revenue by
region analysis is determined by classifying customers based on their main
base of operations. Where goods are delivered physically, customers are
classified based on the delivery location.
US$73.5m (71% of total revenues) (H1 2024: US$64.8m, 71%) represent revenues
recognised over time. Of the US$73.5m revenue recognised over time, US$56.2m
is subject to estimation uncertainty. US$25.1m of contract assets and US$23.8m
of contract liabilities are also subject to estimation uncertainty. These
revenues require management judgements and estimates of project hours or costs
that are used in percentage of completion calculations. These revenues relate
to work done during the design phase of a customer project and include (with
the exception of a limited amount of revenue relating to our soft IP) IP
product licensing fees, together with related support and NRE, as well as
custom silicon NRE fees. We have applied a sensitivity to revenues recognised
over time in 2025 which are subject to estimates. If our estimates of total
hours or total costs had been 10% higher, these revenues would be US$49.8m,
contract assets would be US$18.8m and contract liabilities would be US$30.2m.
If our estimates of total hours or total costs had been 10% lower, these
revenues would be US$63.2m, contract assets would be US$32.3m and contract
liabilities would be US$16.7m.
US$29.5m (29% of total revenues) (H1 2024: US$26.2m, 29%) are recognised at a
point in time. These revenues are based on silicon shipments once our
customers are in production. In the case of custom silicon, this represents
revenues from shipments of physical silicon products, and for standalone IP
licensing, royalties payable on usage of our IP within silicon products.
Please see the 'Financial, Operational and Strategic Highlights' section on
page 3 for further information on revenue.
Below is a reconciliation of the movement in contract assets during the
period:
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
At the beginning of the period 95,695 65,173
Revenue accrued in the period 16,087 14,803
Accrued revenue invoiced in the period (29,514) (26,110)
Expected credit loss (5,251) 900
At the end of the period 77,017 54,766
Below is a reconciliation of the movement in contract liabilities, excluding
the flexible spending account, during the period:
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
At the beginning of the period 62,317 50,106
Revenue recognised in the period (38,382) (33,023)
Revenue deferred in the period 56,648 52,440
At the end of the period 80,583 69,523
The contract liabilities balance is all expected to be satisfied within 12
months of the balance sheet date. There has been an increase in the contract
liabilities balance since the end of December 2024 due to an increase in NRE
invoicing and cash received towards the end of Q2 2025 where the revenue is
expected to be recognised in Q3 and Q4 2025.
The flexible spending account, which is included within contract liabilities
on the balance sheet, has increased to US$34.2m at the end of June 2025 from
US$19.9m at the end of December 2024 and US$18.8m at the end of June 2024. The
increase was driven by a US$11.6m of invoices raised in H1 2025 against two
FSA agreements. These are contracts with customers who have committed to
regular periodic payments to us over the term of the contract. These payments
are not in respect of specific licences or other deliverables, but they can be
used as credit against future deliverables.
Capitalised contract costs
The balances related to costs to obtain contracts from customers are as
follows:
(US$'000) As at 30 June 2025 As at 31 December 2024
Capitalised contract costs 3,959 3,914
The costs to obtain contracts from customers include commissions. Amortisation
of US$1.2m (H1 2024: US$1.1m) was charged to the consolidated statement of
comprehensive income in the period.
Warrants
In September 2024, the Group issued 20,571,995 warrants to a customer which
were expected to vest based on total cash collected in respect of revenue over
the vesting period from the customer and its affiliates. These warrants will
also vest in full immediately upon a change in control of the Group. During H1
2025, the Group recorded a reduction in revenue in the amount of US$nil (H1
2024: US$nil and H2 2024: US$28,000) as a result of amortisation of the
warrant payment to customer. In addition, finance income of US$0.4m (H1 2024:
US$nil and H2 2024: US$6.2m) was recognised as a result of changes in the
estimated fair value of the warrant liability.
On 9 June 2025, Qualcomm announced its plans to acquire Alphawave, with an
expected closing date in Q1 2026. Under the warrant instrument, all warrants
issued will immediately vest and become exercisable upon completion of the
acquisition. At this point the related warrant liabilities will be settled. In
addition, the announcement of the acquisition necessitates an assessment of
whether the warrant payment to customer was impaired as a result.
During the year ended 31 December 2024, warrant payment to customer was
recognised with an intention of amortising on a pro-rata basis, based on the
forecast ratio of revenue from or on behalf of the customer to the Vesting
Target. Amortisation of the warrant payment to customer was to be recognised
as a reduction in revenue.
The announcement of the recommended acquisition of the Group by Qualcomm has
significantly reduced the economic benefits anticipated from the
revenue-linked vesting condition of the warrants with the value being limited
to the revenue expected to be recorded up until the acquisition close date.
After careful evaluation of these factors and exercising management's
judgement, it has been determined that the warrant asset is fully impaired as
of 30 June 2025.
The Group has recorded an impairment of US$19.8m within the 'other operating
expense' line of the condensed consolidated statement of comprehensive income.
Therefore, as at 30 June 2025, the Group had a current asset of US$nil (31
December 2024: US$0.5m) and a non-current asset of US$nil (31 December 2024:
US$19.4m) relating to the warrant.
The non-current warrant liability is US$13.3m at 30 June 2025 (31 December
2024: US$13.7m). The warrant liability's initial fair value was derived using
an option‑valuation model applied to the total number of warrants issued,
based on the strong likelihood that all warrants will vest. As
of 30 June 2025, the liability was re‑measured as a weighted average
of two scenarios: (1) the probability of acquisition completion applied to the
warrants' intrinsic value, and (2) the probability of acquisition
non‑completion applied to the value obtained from the option‑pricing
model. The inputs into the option valuation model as at 30 June 2025 include
an exercise price of the warrants of £1.4236 (31 December 2024: £1.4236),
share price of £0.935 (31 December 2024: £0.844), risk free interest rate of
3.895% (31 December 2024: 3.986%), estimated dividend yield of 0%
and expiration date of the warrants of 28 September 2034.
5. Other operating expense
Other operating expense items were as follows:
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
Acquisition-related costs - 6,459
Costs related to acquisition by Qualcomm 44,058 -
Compensation element of deferred cash rights 2,679 3,788
Share-based compensation expense 22,329 10,743
Currency translation loss / (gain) 1,232 (1,354)
Impairment of warrants 19,848 -
Expected credit loss related to a customer 19,707 -
Total other operating expenses 109,853 19,636
The increase in other operating expenses is due to costs related to the
recommended acquisition of the Group by Qualcomm, the share-based compensation
expense, the impairment of warrants and the expected credit loss related to a
customer.
6. Employee costs excluding Directors and key management personnel
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
Wages, salaries and benefits 66,928 51,068
Defined contribution pension costs 3,120 2,643
Social security costs 1,691 2,553
Share-based payments (all employees) 22,329 8,437
Investment tax credit (4,811) (4,811)
Total employee costs 89,257 59,890
The average number of employees during the period, analysed by category, was
as follows:
Six months ended 30 June 2025 Six months ended 30 June 2024
R&D/engineering 961 770
General & administration 92 63
Sales & marketing 28 34
Total employees (average) 1,081 867
The number of employees at the end of each period, analysed by category, was
as follows:
Six months ended 30 June 2025 Six months ended 30 June 2024
R&D/engineering 1,014 794
General & administration 102 69
Sales & marketing 28 33
Total employees (end of period) 1,144 896
7. Directors and key management personnel compensation
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
Directors and key management emoluments 5,512 4,400
Pension costs 83 89
Total Directors and key management remuneration 5,595 4,489
8. Finance income and expense
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
Finance income
Interest income from contracts with customers containing significant financing 400 136
components
Interest on bank deposits 3,004 1,602
Warrants income 352 -
Interest on lease deposit 22 35
3,778 1,773
Finance expense
Bank charges (708) (46)
Lease interest (701) (605)
Term loan interest (13,110) (9,093)
Term loan interest capitalised to the balance sheet 8,354 6,371
Convertible bonds related expenses (2,773) -
(8,938) (3,373)
Net finance expense (5,160) (1,600)
9. Income tax expense
During the six months ended 30 June 2025, the Group recorded a consolidated
tax credit of US$5.9m (H1 2024: US$10.0m tax credit), which represented
effective tax rates of 3% (H1 2024: 20%).
Income tax credit has been recognised based on management's estimate of the
annual actual income tax rate for the financial period applied to the reported
profits before tax of the interim reporting period for each entity in the
consolidated Group.
10. Earnings per share
Basic loss per share is calculated by dividing net loss from operations by the
weighted average number of ordinary shares in issue during the period.
Diluted loss per share is calculated by adjusting the weighted average number
of common shares outstanding during the period to assume conversion of all
potential dilutive share options and restricted share units to common shares.
(US$'000 except shares) Six months Six months ended 30 June 2024
ended 30 June 2025
Numerator:
Net loss from operations (172,081) (39,961)
Denominator:
Weighted average number of common shares outstanding for basic EPS 758,476,694 728,559,101
Weighted average number of common shares outstanding for diluted EPS 758,476,694 728,559,101
Basic EPS (US$ cents) (22.69) (5.48)
Diluted EPS (US$ cents) (22.69) (5.48)
Basic loss per share in the six months to 30 June 2025 and diluted loss per
share in the six months to 30 June 2025 are the same because the share options
and RSUs are anti-dilutive. Therefore, they have been excluded from the
calculation of diluted weighted average number of ordinary shares.
11. Goodwill
Goodwill is tested for impairment annually and whenever there is an indication
that it may be impaired, at the level of the cash-generating unit (CGU) or
group of CGUs to which it is allocated. Our business model is such that our IP
is leveraged across the channels through which we provide our products and
services to customers, i.e. IP licensing, custom silicon and own products.
Given this interdependence of the Group's operations, management considers
that the Group constitutes only one CGU because there is no asset or group of
assets within the business that generates cash inflows that are largely
independent of cash inflows generated by other assets or groups of assets.
Goodwill was tested for impairment at Group level at the end of 2024 by
comparing the Group's recoverable amount, determined from its fair value less
costs of disposal, against its carrying amount. In 2024, the Group's fair
value less costs of disposal was higher than its carrying amount and therefore
no impairment of goodwill was required. In H1 2025, we assessed whether there
were any indications that goodwill may be impaired and concluded that there
are none. Specifically, we do not expect the Group's consolidated net loss
incurred in H1 2025 to be indicative of a permanent reduction in the Group's
ability to generate cash flows.
12. Other intangible assets
(US$'000) Six months
ended 30 June 2025
As at 1 January 2025 263,242
Additions 42,773
Impairment (10,000)
Amortisation (9,215)
As at 30 June 2025 286,800
The identifiable intangible asset from the acquisition of Precise-ITC in 2022
was valued at US$7.8m, against which amortisation of US$1.0m was recorded in
H1 2025 (H1 2024: US$1.0m).
The identifiable intangible assets from the acquisition of OpenFive in 2022
were valued at US$61.0m, against which amortisation of US$5.4m was recorded in
H1 2025 (H1 2024: US$5.4m).
The identifiable intangible asset from the acquisition of Banias Labs in 2022
was valued at US$83.9m. No amortisation is recorded as the intangible asset is
not yet available for use.
The US$42.8m of additions includes US$8.3m purchased from a third-party IP
provider and US$8.4m of capitalised borrowing costs. The remaining US$26.1m is
capitalised development expenditure comprising primarily of staff costs where
staff have worked on projects that are capitalisable under the Group's
research and development capital expenditure policy.
The US$10.0m impairment relates to an internal project that has been
cancelled.
The Group incurred research and development costs, net of a SRED credit of
US$4.8m, that have been expensed in the consolidated statement of
comprehensive income, due to not meeting the criteria for capitalisation. The
amounts expensed through salaries, subscriptions, subcontracting, depreciation
of right-of-use assets, equipment rentals, and prototypes which relate to
research and development are as follows:
(US$'000) Six months ended 30 June 2025 Six months ended 30 June 2024
Research and development 65,052 39,378
13. Property and equipment - owned
The value of property and equipment has increased by US$22.8m from US$35.9m at
31 December 2024 to US$58.7m at the end of June 2025. The increase is mainly
due to purchasing US$26.8m lab equipment and US$4.2m mask sets, less US$8.5m
depreciation charge.
14. Investments
WiseWave joint venture:
On 7 June 2025, the Group fully disposed of its ownership interest in WiseWave
Technology Co., LTD ("WiseWave"), by transferring its equity ownership in
WiseWave to Wise Road Huazhi (Zhuhai) Equity Investment Partnership (Limited
Partnership), Wise Road Zhiguang (Zhuhai) Equity Investment Partnership
(Limited Partnership), Zhuhai Wise Road Huajin Zhiying Investment Partnership
(Limited Partnership), Wise Road Zhibo (Zhuhai) Equity Investment Partnership
(Limited Partnership), and Zhuhai Wise Road Huajin Zhisheng Investment
Partnership (Limited Partnership) for no consideration.
The value of the investment in WiseWave was reduced to US$nil in 2022, as a
result of equity accounting for losses at WiseWave to the end of 2022. As
such, when the Group disposed of WiseWave on 7 June 2025 and relieved
themselves of any constructive obligation, no gain or loss on disposal was
recorded.
15. Cash and cash equivalents
(US$'000) As at 30 June 2025 As at 31 December 2024
Cash at bank and in hand 118,663 162,159
Short-term deposits - 18,000
Total cash and cash equivalents 118,663 180,159
Please see the 'Financial Highlights' section on page 4 for further
information on cash, including the decrease in cash as at 30 June 2025
compared to 31 December 2024.
16. Trade and other receivables
(US$'000) As at 30 June 2025 As at 31 December 2024
Current:
Trade receivables from contracts with customers 50,080 78,903
Less: Allowance for expected credit losses (23,827) (10,107)
Trade receivables - net 26,253 68,796
Restricted cash 2,682 5,798
Other receivables 6,246 6,707
Total current 35,181 81,301
Non-current:
Restricted cash 866 626
Other receivables 634 1,380
Total non-current 1,500 2,006
Total trade and other receivables 36,681 83,307
Current trade and other receivables have decreased from US$81.3m on 31
December 2024 to US$35.2m on 30 June 2025. This reduction is due partly to
timing of invoicing and collection but also due to the US$13.7m increase in
the allowance for expected credit loss. Total restricted cash reduced by
US$2.9m due to deferred compensation payments made to employees from acquired
entities. All of this relates to a reduction in amounts held by third-party
paying agents in respect of future compensation amounts payable to employees
of Alphawave Semi Israel (formerly Banias Labs) being settled in the first
half of 2025. The payments associated with Alphawave Semi Israel deferred cash
are presented within operating activities in the condensed consolidated
statement of cash flows. The reduction of the deferred cash asset from these
transactions is included in working capital in the condensed consolidated
statement of cash flows.
Regarding the allowance for expected credit loss for both trade receivables
and contract assets, management evaluated and recorded a specific reserve of
US$5.2m for trade receivables and US$3.8m for contract assets for balances
owed / to be billed to WiseWave at 31 December 2024. These provisions were 21%
of the gross balance outstanding at the time and this was based on the fact
that all overdue invoices were at least 3 months overdue at 31 December 2024
but that the Group continued to hold a significant ownership interest and
should, over time, still be able to collect some or all of the outstanding
balances. In our H1 2025 ECL assessment of the remaining net accounts
receivable and contract assets, we considered the following factors:
1. In late May 2025, the US government imposed restrictions on the
sale of critical semiconductor design software tools to China, in response to
China's rare-earth export embargo. While these restrictions have recently been
rescinded, the situation highlights the ongoing uncertain geopolitical
relationship between the US and China, posing a risk to semiconductor
companies.
2. In 2022 we informed Wise Road (the other investor in the WiseWave
joint venture) that we would not be making any further investments in
WiseWave. WiseWave has been loss making since its incorporation, had been
operating based on capital being raised from Wise Road and its affiliates and
was continuing to actively seek additional funding to support operations. We
understand that prior to Alphawave's disposition of its investment in
WiseWave, during the first half of 2025 Wise Road made further efforts to
raise capital for WiseWave from third-party investors but failed to do so due
to a variety of reasons, including the geopolitical risks as discussed above.
On 7 June 2025, the Group disposed of its entire interest in WiseWave for
US$nil. Management believes that the disposition of the investment to Wise
Road at no cost was in the interest of the shareholders of the Group,
including in facilitating the acquisition of the Group by Qualcomm.
3. Given the challenges faced by WiseWave during Q2 2025 to raise
funding from external third-party investors and persistent continuing negative
cash flow from operations, we have concluded that it is unlikely WiseWave will
be able to make any further payments to the Group.
Based on the above considerations, as of 30 June 2025, management decided to
fully impair both the trade receivables and contract asset balances, net of
any amounts due to WiseWave which are being withheld. As at 30 June 2025, the
Group held a gross trade receivables balance of US$20.0m and a contract assets
balance of US$8.9m in relation to WiseWave. The corresponding ECL provision
for trade receivables at 30 June 2025 is US$19.8m and for contract assets is
US$8.9m. In the consolidated statement of comprehensive income, the expected
credit loss is recognised within the other operating (expense)/income line and
is therefore excluded from the Group's adjusted EBITDA calculations.
Non-current trade and other receivables have decreased from US$2.0m on 31
December 2024 to US$1.5m on 30 June 2025 due to a decrease in non-current
other receivables.
17. Other assets
(US$'000) As at 30 June 2025 As at 31 December 2024
Current:
Prepayments 42,005 7,898
Capitalised contract costs 3,959 3,914
Total current 45,964 11,812
Non-current:
Prepayments 3,248 775
Total non-current 3,248 775
Total other assets 49,212 12,587
Prepayments have increased by US$36.6m, predominantly due to a large
prepayment of US$26.8m to one of our suppliers relating to mask costs.
18. Trade and other payables
(US$'000) As at 30 June 2025 As at 31 December 2024
Current:
Trade payables 13,589 32,588
Accrued expenses(1) 81,567 27,524
Social security and other taxes 10,472 992
Other payables 14,642 15,702
Total current 120,270 76,806
Non-current:
Accrued expenses 6,043 -
Other payables 1 132
Total non-current 6,044 132
Total trade and other payables 126,314 76,938
1. Accrued expenses includes interest payable on convertible
bonds amounting to US$1.8m.
Current trade and other payables have increased from US$76.8m on 31 December
2024 to US$120.3m on 30 June 2025. Trade payables have decreased by US$19.0m
since 31 December 2024, due to paying off invoices built up with one of our
largest suppliers. Total accrued expenses have increased by US$60.1m since 31
December 2024 due to various professional adviser fees and other expenses
incurred in relation to the recommended acquisition of the Group by Qualcomm.
19. Loans and borrowings
(US$'000) As at 30 June 2025 As at 31 December 2024
Current:
Term loan 9,375 9,375
Total current loans and borrowings 9,375 9,375
Non-current:
Revolving credit facility 125,000 125,000
Term loan 98,594 103,281
Convertible loan 115,620 112,847
Israel innovation authority 1,522 1,522
Total non-current loans and borrowings 340,736 342,650
Total loans and borrowings 350,111 352,025
On 30 June 2025, the Group executed the Sixth Amendment to the Credit
Agreement which suspended the testing of the minimum interest coverage ratio
and secured net leverage ratio covenants for the period ending on the earlier
of (i) the date upon which it is determined that the recommended acquisition
of the Group by Qualcomm will not go ahead due to regulatory conditions not
being satisfied or (ii) through to and including Q4 2025. During this period
the Group is not required to measure and report the minimum interest coverage
ratio or the secured net leverage ratio. For further information on the
Group's loans and borrowings, please refer to the Group's 2024 Annual Report.
20. Share capital
Number of shares US$ '000
Balance as at 31 December 2023 715,514,567 10,011
Shares issued under employee share schemes 35,624,639 440
Balance as at 31 December 2024 751,139,206 10,451
Shares issued under employee share schemes 21,492,002 292
Balance as at 30 June 2025 772,631,208 10,743
21. Share-based payments
Six months to 30 June 2025 Six months to 30 June 2024
Number of awards Weighted average exercise price (US$) Number of awards Weighted average exercise price (US$)
Outstanding at the beginning of the period 77,724,535 0.980 86,263,963 0.834
Exercised or vested during the period (23,501,685) 0.789 (20,098,870) 1.149
Forfeited during the period (2,075,228) 1.463 (1,510,305) 1.189
Granted during the period 37,670,915 0.467 21,798,539 1.522
Outstanding at the end of the period 89,818,537 1.323 86,453,327 0.934
Vested at the end of the period 24,785,440 0.549 40,671,675 0.228
Options and RSUs granted under the Company's Long Term Incentive Plan (LTIP)
generally vest in accordance with the following schedule: (i) 25% of each
award vests on the first anniversary of issuance; and (ii) the remainder of
each award vests equally each month over the following 36 months. Options
expire within ten years of their grant.
On 29 June 2025, the Company granted LTIP awards over 6,957,179 shares under
the LTIP to Tony Pialis (4,666,667 shares) and Rahul Mathur (2,290,512
shares). The performance metrics and weightings are:
- Relative TSR vs constituents of the FTSE 250 - 35% weighting
- Relative TSR vs constituents of the FTSE All-World Technology
Index - 35% weighting
- Adjusted EPS growth (2027 figure vs 2024 base year) - 30%
weighting.
- Performance is measured over three consecutive financial years
from 1 January 2025 and vesting is expected to occur on 1 May 2028.
Of the US$22.3m (H1 2024: US$10.7m) share based payment expense recorded in
the condensed consolidated statement of comprehensive income, US$1.8m of the
expense recorded relates to LTIPs (H1 2024: US$nil).
On 21 March 2024, the Company modified 30 million share options, which had
been granted under the Company's LTIP, by extending the expiry date from 5
years to 10 years from the date of their grant. This incremental share based
payment expense recorded as a result of this modification was $3m. This
charge should have been recorded in H1 2024 at the date of the modification
but has instead been recorded as an additional charge in H1 2025.
During the current period, the Company strategic review triggered
modifications to the existing LTIPs, which represented changes in non-market
based terms. Due to this modification, the Company has calculated the fair
value on the modification date which resulted in an immaterial impact to the
fair value of the awards and LTIPs.
22. Related party transactions
During the period, Group companies entered into the following transactions
with related parties who are not members of the Group
As at and for the period ended
(US$'000) 30 June 2025 31 December 2024 30 June 2024
Transactions:
Revenue from a company on which a Director is the chairman of the board(1) 200 33 33
Revenue from VeriSilicon 674 2,056 318
Revenue from WiseWave, a joint venture, where there is common directorship(2) - 3,227 3,021
Cost of sales from a company on which a Director is the chief financial - - (1,031)
officer(3)
Operating expenses from a company on which a Director is a director (227) (3,278) (100)
Costs capitalised as intangible assets from a company on which a Director is a 0 (1,000) (1,000)
director
647 1,038 1,241
Balances:
Accounts receivable from a company on which a Director is the chairman of the 1,440 2,760 200
board(1)
Accounts receivable from VeriSilicon 441 200 893
Accounts receivable from WiseWave, a joint venture, where there is common 160 19,603 20,569
directorship(2)
Contract asset from companies on which a Director is the chairman of the 845 1,720 5,300
board(1)
Contract asset from WiseWave, a joint venture, where there is common - 14,361 31,925
directorship(2)
Prepaid expenses with a company on which a director is a director - 67 167
Prepaid expenses with a company on which a Director is a director(1) 167 - -
3,053 38,711 59,054
Contract liabilities from VeriSilicon (2,534) (2,566) (575)
Contract liabilities from WiseWave, a joint venture, where there is common (160) (326) (2,796)
directorship(2)
Accrued liabilities with a company on which a Director is a director - (500) (1,100)
Accrued liabilities with a company on which a Director is a director(1) (1,161) - -
(3,855) (3,392) (4,471)
1. Companies on which a Director is the chairman of the board are FLC
Technology Group and DreamBig Semiconductor Inc. where Sehat Sutardja was
chairman until his passing in September 2024. We have included all
transactions with FLC Technology Group and DreamBig Semiconductor Inc. for H1
2025 as his wife, Weili Dai is Co-founder and President of FLC Technology
Group and Co-founder and vice Chairwoman of DreamBig Semiconductor Inc.
Operating expenses from a company on which a Director is a director, prepaid
expenses with a company on which a Director is a director and accrued
liabilities with a company on a which a Director is a director all relate to
where Sehat Sutardja was a director of Wolley Tech Inc., until his passing in
September 2024. For completeness, we have included all transactions for H1
2025 as well as comparatives.
2. WiseWave has been included as a related party for H1 2025 even
though Alphawave fully disposed of its shareholding on 7 June 2025.
3. Director ceased to be chief financial officer of this company in
February 2024.
Sales to related parties are made at market prices and in the ordinary course
of business. Outstanding balances are unsecured and settlement occurs in cash.
This assessment is undertaken at each key reporting period through examining
the financial position of the related party and the market in which the
related party operates.
In the interests of transparency, we have opted to disclose VeriSilicon as a
related party within this note. However, we have received advice that
VeriSilicon is not a related party as defined by IAS 24 or UK Listing Rule 8.
Qualcomm is not a related party of Alphawave as defined by IAS 24 or UK
Listing Rule 8. However, given the recommended acquisition of the Group by
Qualcomm, we have decided to disclose any balances with Qualcomm. The only
balance through H1 2025 with Qualcomm is $9k support revenue and nothing on
the balance sheet at 30 June 2025.
23. Subsidiaries of the Group as at 30 June 2025
All subsidiaries have been included in the consolidated financial statements
using the equity method. Details of the Group's subsidiaries as at 30 June
2025 are as follows:
Name Registered address Country
Alphawave IP Inc. 70 University Ave, 10th Floor, Toronto, Ontario, Canada M5J 2M4 Canada
Alphawave Semi US Corp. (formerly Alphawave IP Corp.) 1730 N 1st St, Suite 650, San Jose, CA, 95112 United States
(Delaware)
Alphawave IP (BVI) Ltd.(1) Trinity Chambers, PO Box 4301, Road Town, Tortola British Virgin
Islands
Alphawave Call. Inc. (1,2) 70 University Ave, 10th Floor, Toronto, Ontario, Canada M5J 2M4 Canada
Alphawave Exchange Inc. 70 University Ave, 10th Floor, Toronto, Ontario, Canada M5J 2M4 Canada
Alphawave IP Limited(1) 21 Avenida da Praia Grande, No 409, Edificio China Law, 21 andar, em, Macau China
Precise-ITC, Inc. 170 University Avenue, 10th Floor, Toronto, Ontario, M5H 3B3 Canada
AWIPInsure Limited(1) 1st Floor, Limegrove Centre, Holetown, St. James Barbados
Alphawave Semi International Corp. (formerly Alphawave Holdings Corp.) (1) 1730 N 1st St, Suite 650, San Jose, CA, 95112 United States
(Delaware)
Alphawave Semi, Inc. (formerly Open-Silicon, Inc) 490 N McCarthy Blvd #220, Milpitas, CA 9503 United States
(Delaware)
Alphawave Semiconductor Corp. (dissolved) 1730 N 1st St, Suite 650, San Jose, CA, 95112 United States
(Delaware)
Alphawave Semi Holding Corp. (formerly Open-Silicon Holding Corp.) 3rd Floor, Les Cascades, Edith Cavell Street, Port Louis Mauritius
Open-Silicon Development Corp. (dissolved) (2) 490 N McCarthy Blvd #220, Milpitas, CA 95035 United States
(Delaware)
Open-Silicon International, 490 N McCarthy Blvd #220, Milpitas, CA 95035 United States
Inc. (2)
(Delaware)
Alphawave Semi Japan Corporation (formerly Open-Silicon Japan)(2) c/o Akia Tax Consultants, Shoei Kannai Building, 22, Sumiyoshicho 2-chrome, Japan
Naka-ku, Yokohama, Kanagawa
Awave Semiconductor India Pvt Ltd (formerly Open-Silicon Research Private Ltd) No. 11/1 & 12/1 Maruthi Infotech Centre, 2nd Floor, B-Block, Indiranagar, India
Koramangala Intermediate Ring Road, Bangalore - 560 071.
Alphawave Semi (Nanjing) Co. Ltd (formerly Yuanfang Silicon Technology Room 101, Building B, No. 300, Zhihui Road, Qilin Science and Technology China
(Nanjing) Co. Ltd) Innovation Park, Jiangning District, Nanjing
Alphawave Semi Asia Co. Ltd Room 702-703, Building 8, Lane 777, Gaoke East Road, Pudong New Area, Shanghai China
Alphawave Semi Israel Ltd (formerly Solanium Labs Ltd)(1) 24 Hanagar, Hod HaSharon 4527713 Israel
( )
All subsidiaries are wholly owned.
1. Owned directly by Alphawave IP Group plc.
2. Dormant
24. Post balance sheet events
On 7 July 2025, the Company published a Scheme Document outlining the terms
and conditions of a recommended acquisition. The transaction is subject to
various conditions, including shareholder approval, UK High Court sanction,
and regulatory clearances in the US, Germany, South Korea, Canada, and the UK.
On 5 August 2025, the Company announced that shareholder approval had been
obtained and clearance was received from the UK government under the National
Security and Investment Act 2021.
Subject to the satisfaction or waiver of the remaining conditions, the
recommended acquisition of the Company by Qualcomm is expected to complete in
Q1 2026.
Alternative Performance Measures (APMs)
Introduction
Management uses a number of measures to assess the Group's financial
performance. We consider certain of these measures to be particularly
important and identify them as 'key performance indicators' (KPIs). We have
identified the following financial measures as KPIs: revenue; bookings;
backlog (excluding royalties); adjusted EBITDA; and cash generated from
operations.
Certain of these measures are non-IFRS measures because they exclude amounts
that are included in, or include amounts that are excluded from, the
most-directly comparable measure calculated and presented in accordance with
IFRS or are calculated using financial measures that are not calculated in
accordance with IFRS. We have included reconciliations for certain of these
measures below. We do not regard non-IFRS measures as a substitute for, or
superior to, the equivalent IFRS measures. Non-IFRS measures presented by
Alphawave may not be directly comparable with similarly titled measures
presented by other companies.
Bookings and backlog
Management monitors bookings and backlog as indicators of future revenue from
contracts with customers.
Bookings
Bookings is a non‑IFRS measure and represents legally binding commitments by
customers. Bookings comprise licence fees, non-recurring engineering support,
orders for silicon products, financing components and estimated future
royalties (based on contractually committed royalty prepayments or on volume
estimates provided by customers). Our customer contracts for ASIC design
services are typically cancellable upon payment of a fee. Customer contracts
for IP licensing are typically non-cancellable. We include estimated sales for
silicon products in bookings when respective arrangements with customers
includes a minimum purchase commitment. Such commitments are typically
effective only upon completion of engineering qualification and validation of
our products.
Bookings are recorded at the point the contract has been signed by both
Alphawave and the customer. There are occasions where customers request to
cancel bookings. At the time of cancellation, these are recorded as debookings
after taking into account any pertinent cancellation charges in the backlog,
which is updated in the annual financial statements.
Bookings during the year were as follows:
Six months ended Six months ended
30 June 30 June
2025 2024
US$m US$m
Bookings (excluding royalties) 159.4 225.3
The bookings figure of US$159.4m for the six months to June 2025 is made up of
'License and NRE' bookings of US$107.4m (six months to June 2024: US$203.5m)
and 'Royalties and silicon' bookings of US$52.0m (six months to June 2024:
US$21.8m).
Backlog
Backlog is a non-IFRS measure that represents cumulative bookings (excluding
royalties) that have not yet been recognised as revenue and which we expect to
be recognised in future periods.
Backlog at the end of the year is calculated based on our backlog as at the
beginning of the year, plus new bookings during the year and backlog acquired
in business combinations, less revenue recognised during the year, less any
adjustments for debookings.
Movements on backlog during the first half of 2025 were as follows:
Six months ended Year ended
30 June 31 December
2025 2024
US$m US$m
Backlog at the beginning of the period 520.0 354.9
Add: Bookings during the period (excluding royalties) 159.4 515.4
Less: Net adjustments/debookings during the period (excluding royalties)(1) (248.8) (42.8)
Less: Revenue recognised during the period (excluding royalties)(2) (102.9) (307.5)
Backlog (end of the period) 327.7 520.0
(1)This includes customer debookings in the period of US$168.8m, a net
adjustment for legacy bookings of US$37.6m and a debooking of $42.4m related
to a customer contract that was cancelled in 2024 but was not recorded as a
debooking in that period.
During H1 2025, as part of ongoing process improvements, the Group completed a
comprehensive review of open backlog which resulted in certain legacy items
being excluded from the backlog reflected as net adjustments in the table
above. The legacy items adjusted primarily related to backlog acquired from
Open Silicon in 2022 that never resulted in any revenue being realised.
(2)There is a difference between the revenue in the statement of comprehensive
income and the above revenue figure as the above excludes $0.1m of royalty
revenue.
Earnings before interest, taxation, depreciation and amortisation (EBITDA)
Earnings before interest, taxation, depreciation and amortisation (EBITDA) is
a non-IFRS measure that we consider is useful to investors and other users of
our financial information in evaluating the sensitivity of the Group's trading
performance to changes in variable operating expenses.
Joint venture profit or loss
In 2024, we excluded the costs of our joint venture in WiseWave from EBITDA
because we consider that, as a start-up, they hinder the comparison of the
Group's trading performance from one period to another or with other
businesses. As we disposed of WiseWave on 7 June 2025, there is nothing to
exclude for the half year to 30 June 2025.
Operating profit to EBITDA reconciliation
(US$'000) Six months Six months
ended 30 June 2025 ended 30 June 2024
Operating (loss) (172,805) (48,314)
Add backs:
Depreciation and amortisation 19,928 16,850
EBITDA (152,877) (31,464)
Adjusted measures of profitability
We report adjusted measures of profitability because we believe that they
provide both management and investors with useful additional information about
the financial performance of our business. Adjusted measures of profitability
are non-IFRS measures that represent the equivalent IFRS measures adjusted for
specific items that we consider hinder comparison of the Group's financial
performance from one period to another or with other businesses. Adjusted
measures of profitability exclude items that can have a significant effect on
profit or loss. We compensate for this limitation by monitoring separately the
items that are excluded from the equivalent IFRS measures in calculating the
adjusted measures. We outline below the specific items of income and expenses
that are recognised in profit or loss in accordance with IFRS but are excluded
from the Group's adjusted results.
EBITDA to adjusted EBITDA reconciliation
(US$'000) Six months Six months
ended 30 June 2025 ended 30 June 2024
EBITDA (152,877) (31,464)
Add backs:
Acquisition-related costs - 6,459
Costs related to Qualcomm transaction 44,058 -
Compensation element of Banias Labs deferred cash rights 2,679 3,788
Share-based compensation expense 22,329 10,743
Currency translation gain/(loss) 1,232 (1,354)
Impairment of warrants 19,848 -
Expected credit loss related to a customer 19,707 -
Adjusted EBITDA (43,024) (11,828)
Business combinations
We exclude those effects of applying the acquisition method of accounting
under IFRS that we consider are not indicative of the Group's trading
performance, including the accounting for transaction costs; the recognition
of certain elements of the purchase price as compensation expense; and the
recognition of remeasurements of contingent consideration in profit or loss.
During the periods under review, we excluded from our adjusted results the
following items arising from the accounting for business combinations:
> acquisition-related costs;
> the costs incurred by Alphawave related to the recommended acquisition of
the Group by Qualcomm, which consist of legal and professional fees and
certain other expenses; and
> the element of the value of the deferred cash rights granted to employees
of Banias Labs to replace the unvested employee share awards at the
acquisition date that is accounted for as compensation expense rather than as
consideration.
We also exclude from our adjusted measures the amortisation of identifiable
intangible assets acquired in business combinations in order that the
performance of our business may be compared more fairly with that of
businesses that have developed on an organic basis.
We exclude the costs of integrating acquired businesses because we consider
that they hinder the comparison of the Group's trading performance from one
period to another or with other businesses.
Share-based payments and related expenses
We exclude the compensation expense recognised in relation to share options
and RSUs granted under the Company's LTIP because the awards are
equity-settled and their effect on shareholders' returns is already reflected
in diluted earnings per share measures. We additionally exclude the expense
for payroll taxes payable on the exercise or vesting of the awards because the
expense fluctuates according to the Company's share price at the exercise or
vesting date and the effect on profit or loss is therefore not necessarily
indicative of the Group's trading performance.
Currency translation differences
We exclude gains and losses that arise at entity level on the translation of
foreign currency-denominated net cash and borrowings into the entity's
functional currency. Such gains and losses can be significant and are not
representative of the Group's trading performance.
Expected credit loss related to a customer
We exclude the impairment of accounts receivable and contract assets from a
long-standing customer of the Group.
Impairment of warrants
We exclude the impairment of warrants as this is not representative of the
Group's trading performance.
Income tax effect of adjustments
Where relevant, we calculate the income tax effect of adjustments by
considering the specific tax treatment of each item and by applying the
relevant statutory tax rate to those items that are taxable or deductible for
tax purposes.
Loss after tax to adjusted loss after tax reconciliation
(US$'000) Six months Six months
ended 30 June 2025 ended 30 June 2024
Loss after tax (172,081) (39,961)
Add backs:
Acquisition-related costs - 6,459
Costs related to Qualcomm transaction 44,058 -
Compensation element of Banias Labs deferred cash rights 2,679 3,788
Amortisation of acquired intangibles 6,328 6,328
Share-based compensation expense 22,329 10,743
Currency translation gain/(loss) 1,232 (1,354)
Impairment of warrants 19,848 -
Expected credit loss related to a customer 19,707 -
Tax effect of above adjustments (978) 533
Adjusted loss after tax (56,878) (13,464)
Adjusted loss per ordinary share attributable to the shareholders (expressed
in cents per ordinary share)
Note Six months Six months ended
ended 30 June 2025 30 June 2024
Adjusted basic earnings per share 10 (7.50) (1.85)
Adjusted diluted earnings per share 10 (7.50) (1.85)
Adjusted basic and diluted earnings per share have been calculated by taking
the adjusted loss for the year and dividing it by the basic or diluted, as
appropriate, weighted average number of common shares outstanding. Adjusted
basic earnings per share and adjusted diluted earnings per share are the same
for the six months ended 30 June 2025 because the share options and RSUs are
anti-dilutive. Therefore, they have been excluded from the calculation of
diluted weighted average number of ordinary shares.
Net (debt)/cash
Net (debt)/cash is defined as the difference between total borrowings and cash
and cash equivalents. It is a measure that provides additional information on
the Group's financial position. Restricted cash, which cannot be accessed by
the Group, has been excluded from the net debt measure.
The net debt of US$231.4m as at 30 June 2025 (31 December 2024:US$171.9m) is
made up of the bank loan of US$233.0m (31 December 2024:US$237.8m), the IIA
loan in Israel of US$1.5m (31 December 2024:US$1.5m), convertible debt of
US$115.6m (31 December 2024:US$112.8m) less the cash and cash equivalents
balance of US$118.7m (31 December 2024:US$180.2m).
1 (#_ftnref1) See Alternative Performance Measures (APMs) section on page
30. Adjusted EBITDA and adjusted profit after tax exclude foreign exchange
adjustments, share-based payments, deferred compensation payments, Qualcomm
related expenses, expected credit loss related to a customer and M&A
transaction costs.
2 Bookings are a non-IFRS measure representing legally binding and largely
non-cancellable commitments by customers to license our technology. Bookings
comprise licence fees, non-recurring engineering, support, silicon orders,
and, in some instances, our estimates of potential future royalties.
2 (#_ftnref2) Deferred compensation payments related to acquisitions which
are expected to be settled over time until August 2026.
3 (#_ftnref3) Last twelve months turnover rate
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