REG - EnSilica PLC - Trading Update

EnSilicaAnnouncement

07/04/2025 07:00

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RNS Number : 8879D  EnSilica PLC  07 April 2025

The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the UK Market Abuse
Regulation.

 

7 April 2025

 

 EnSilica plc 

("EnSilica", the "Company" or the "Group") 

 

Trading Update

 

EnSilica plc (AIM:ENSI), a leading chip maker of mixed signal ASICs
(Application Specific Integrated Circuits), announces the following trading
update for the year ending 31 May 2025 ("FY 2025" or the "Period").

 

Driven by strong customer demand, the Company successfully secured six new
design and supply contract wins in the first 10 months of this financial year
with Non-Recurring Engineering ("NRE") revenues of more than $40 million to be
generated across the next 2 financial years, as well as other
multi-million-pound design and manufacturing services contracts. As a result
of these wins, the total lifetime revenue from supply contracts is now
expected to generate over $250 million in chip supply revenues.

 

Furthermore, the revenues generated from the supply of chips, that underpins
the fabless semiconductor business model, is expected to double to
approximately £6 million in FY 2025 compared to the prior year.

 

Despite these successes and as highlighted as a potential issue in the
Company's announcement on 10 February 2025, the Company has experienced two
customer delays that will materially reduce NRE revenues in the current
financial year. The NRE revenues are the fees charged to customers for the
design of their chips, including high-value costs such as tape-out fees and
other significant third-party costs.  The two contracts are:

 

·    The ASIC design and supply agreement with SIAE MICROELETTRONICA,
announced in September 2024, which was anticipated to deliver significant NRE
revenues and EBITDA in FY 2025, is now expected to be delivered over FY 2026
and FY 2027 due to customer delays beyond EnSilica's control. SIAE
MICROELETTRONICA is a global leader in wireless communication technology with
a complete range of microwave and millimeter wave radio solutions. SIAE
MICROELETTRONICA have been selected to receive €149 million in grant
funding under the European Union's IPCEI funds (Important Project of Common
European Interest). The ASIC being developed by EnSilica is a key element of a
product being developed using their grant funding.

 

·    The high-value tape-out of an Edge AI chip, announced in July 2024,
is now expected to commence in the first half of FY 2026. The large part of
the associated NRE revenue for these services are only recognised at the
tape-out of the chip, reducing the expected revenue for FY 2025 by
approximately £4 million and EBITDA by approximately £3 million. While the
delay to the development schedule is on the customer side, the tape-out is a
key project milestone and completion is a priority for them.

 

Importantly, the anticipated revenue from these contracts is unchanged,
however, the impact from the delays means the Company now anticipates revenues
of between £19 million and £20 million and EBITDA between £0.1 million and
£0.5 million for FY 2025.

 

Outlook

 

The Board is focused on scaling the business and is confident of doing so
given the strength of the forward orderbook. However, predicting the timing of
contract completions that include customer dependencies has proved difficult
as evidenced by the delays in the current financial year.  In response, the
Company has adopted a more conservative view on future guidance to allow
greater flexibility for project completions. To that end, the Board now
expects to deliver revenues of between £33 million and £35 million in FY
2026, with approximately 80% of FY 2026 revenue already covered by existing
customer contracts.

 

With a strong NRE order book coupled with increasing profits from chip supply,
the Board is confident of having sufficient capital to reach positive cash
generation at the end of financial year 2026.  Leading to this point, the
Company expects to see month-on-month increases in revenues, as customer
activities increase in line with recent contract wins, supporting the Group's
ongoing working capital requirements and improving the Group's overall
positive cash position.

 

Ian Lankshear, CEO of EnSilica, commented:

 

"Over the first ten months of the current financial year we've secured six
major new contracts, driving our total lifetime contracted supply revenues to
over $250 million. This strong booking performance underscores EnSilica's
position as a leading ASIC supplier in Europe.

 

That said, the delays to the two contracts are obviously disappointing,
particularly as these are both material projects reducing our reported results
for this year but importantly not the performance of the business over the
medium term.

 

We have revised our future guidance to reflect a more conservative outlook of
the timing of our growth trajectory and I would emphasise that we remain fully
confident that EnSilica is still strongly positioned to deliver significant
returns to our shareholders."

 

 

For further information please contact:

 

 EnSilica plc                                                        via Vigo Consulting

 Ian Lankshear, Chief Executive Officer                              +44 (0)20 7390 0233

 Kristoff Rademan, Chief Financial Officer

 www.ensilica.com (http://www.ensilica.com/)

 Allenby Capital Limited, Nominated Adviser & Joint Broker           +44 (0)20 3328 5656

 Jeremy Porter / Vivek Bhardwaj (Corporate Finance)                  info@allenbycapital.com (mailto:info@allenbycapital.com)

 Joscelin Pinnington / Tony Quirke (Sales & Corporate Broking)

 Singer Capital Markets, Joint Broker

 Rick Thompson / Asha Chotai                                         +44 (0)20 7496 3000

 Vigo Consulting (Investor & Financial Public Relations)             +44 (0)20 7390 0233 ensilica@vigoconsulting.com

                                                                   (mailto:visum@vigoconsulting.com)
 Jeremy Garcia / Kendall Hill / Anna Stacey

 

The person responsible for arranging release of this announcement on behalf of
the Company is Ian Lankshear, Chief Executive Officer.

 

About EnSilica plc

 

EnSilica is a leading fabless design house focused on custom ASIC design and
supply for OEMs and system houses, as well as IC design services for companies
with their own design teams. The company has world-class expertise in
supplying custom RF, mmWave, mixed signal and digital ICs to its international
customers in the automotive, industrial, healthcare and communications
markets. EnSilica has a track record in delivering high quality solutions to
demanding industry standards. The company is headquartered near Oxford,
UK and has design centres across the UK and in Bangalore,
India and Porto Alegre and Campinas, Brazil.  

 

 

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