REG - Ethernity Networks - Business Update

Ethernity NetworksAnnouncement

11/12/2025 07:00

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RNS Number : 1002L  Ethernity Networks Ltd  11 December 2025

11 December 2025

 

Ethernity Networks Ltd

("Ethernity" or the "Company")

 

Business Update

 

Ethernity Networks Limited (AIM: ENET.L; OTCMKTS: ENETF), a leading supplier
of data processing semiconductor technology for networking appliances and PON,
provides an update on its current business and plans for 2026.

 

Highlights

·      The Company is confident in its ability to secure a partnership
for the ASSP opportunity.

·      A long-standing OEM customer completed its second ASIC
development earlier this year under the $800k agreement signed in November
2023. The Company anticipates increased royalty revenues from this engagement
during 2026.

·      Tier-1 U.S. PON vendors have placed an order for an additional
2,000 unit licenses.

·      A Tier-1 U.S. defense and aerospace customer has successfully
delivered a product to market based on the Company's IP. Close development
collaboration continues, and the customer is expected to purchase additional
platform-use licenses in 2026.

·      The Company is expanding its FPGA portfolio with a new
low-latency solution targeting Defence, Mobile, and Internet-of-Things (IoT)
applications.

.

Application-specific standard product ("ASSP") Opportunity

 

The Company remains confident in securing a partnership for the development of
its planned ASSP device, which is designed to address large and diverse
markets, including wireless backhaul through the integration of the Company
patented L1 bonding, carrier ethernet, and broadband access through the
combination of the  PON functionality as a complete Optical Line Termination
("OLT")  on a chip.

 

The ASSP will be architected as a true multi-platform solution, deployable
across a wide range of systems such as cell-site routers, microwave backhaul
Indoor Units ("IDU"), PON OLTs, compact carrier Ethernet switches, enterprise
gateways, and 5G edge units. This broad applicability would create a strong
foundation for large-scale commercial opportunities for both partners and
OEMs. A growing number of leading OEMs have expressed interest in receiving
the ASSP and acting as early adopters.

 

For partners, the solution offers a compelling advantage as investment in the
ASSP can refresh a broad portfolio across multiple product lines,
significantly reducing duplicated R&D efforts while accelerating
time-to-market and improving overall return on investment.

 

Progress with Existing Customers

 

Long-standing OEM customer

 

On 29 November 2023, the Company announced an $800,000 order to expand an
existing license to cover a wide range of products, which is expected to
increase annual royalty revenues.

 

In July 2025, the Company further announced that this customer had reached a
significant milestone, having shipped over 1,000,000 units based on the
Company's IP. Building on the extended license delivered in November 2023, the
customer successfully completed fabrication of a second ASIC earlier this
year. As a result, the Company anticipates a growing royalty stream from this
customer during 2026.

 

Additionally, the Company is collaborating with this customer on a joint
proposal for a new FPGA-based product leveraging Ethernity's proven and widely
deployed technology platform.

 

U.S. Tier-1 PON OLT OEM Customer

 

As indicated in the Company's 24 July 2025 business update, this customer
surpassed deployment of several thousand Remote OLT (RoLT) units with its
leading U.S. Tier-1 OEM customer, with approximately 40% of the total volume
shipped in the preceding 12 months. This milestone satisfied the initial
contracted volume threshold.

 

The pace of deployment has continued through Q3 and Q4 of 2025. Consequently,
the Company received royalty revenues for Q3 and secured a pre-purchase order
of licenses for an additional 2,000 units, most of which are expected to be
deployed during Q4 2025.

 

The customer has indicated its intention to engage in discussions regarding
the development of two next-generation RoLT platforms, expected to incorporate
additional functionality delivered by Ethernity. These discussions are
anticipated to lead to further commercial orders, subject to entering into new
contractual arrangements.

 

U.S. Tier-1 Defence and Aerospace Customer

 

In its interim results published on 30 September 2025, the Company announced
that by the end of August 2025 it had successfully completed all deliveries
under the single-platform use license agreement and related extended order,
with a total contract value of US$1.3 million.

 

Since September, the Company has been working closely with the customer on
enhancements to the original product functionality, generating additional
revenue during Q4 2025 which is expected to continue into 2026.

 

The customer has commenced shipments of its product based on the Company's IP.
In parallel, both parties are engaged in technical discussions regarding major
product enhancements, including low-latency design improvements, anticipated
to materialise in 2026.

 

From a commercial perspective, as the original agreement was limited to a
single-platform use license, and following the success of the first platform,
the customer is now considering the purchase of an additional use license for
a new platform planned for 2026.

 

Extending product functionality for existing markets in 2026

 

Alongside ongoing work with existing customers and the ASSP program, the
Company is expanding its focus on the Defence and Aerospace markets through
new development of low-latency networking on FPGA and adaptive routing. This
initiative aligns with the U.S. Government's approval to sell this technology
to U.S. Defence and Aerospace vendors.

 

Low-latency switching is increasingly mission-critical across multiple
markets. These markets are shifting toward deterministic, time-sensitive, and
high-fidelity data flows, creating a clear business rationale for Ethernity's
investment in a new low-latency switch and higher-capacity architecture
targeting Internet of Things (IoT) industrial automation and robotics, mobile
xHaul (5G/6G Fronthaul & Midhaul), and defence aerospace. The combination
of deep buffering for secure and reliable data transmission across all
scenarios, applicable to wireless and satellite communications, together with
ultra-low latency and Layer-1 bonding, uniquely positions us to deliver highly
customized FPGA solutions for the defense, mobile, and industrial markets.

 

Defence vendors are migrating to Ethernet-based architectures with FPGAs, as
demonstrated by the Company's current defence and military business.
Low-latency switching will become part of Ethernity's secure, deterministic
communication suite, directly relevant to Tier-1 U.S. customers and applicable
to other defence companies.

 

Supporting low-latency switching is a natural extension of Ethernity's
existing capabilities, including deterministic ingress processing hardware
datapaths, low-latency LPM engines (recently patented on 19 November 2025),
and TSN-like deterministic flows. Developing a low-latency FPGA-based switch
solution addresses near-term opportunities within the existing customer base
while creating a strategic technology platform that can later be extended to
additional markets.

 

The Company also believes that the same solution developed on FPGA can later
be adapted for ASIC, enabling dual business models of FPGA-based customised
solutions and IP licensing for ASIC in markets requiring higher throughput.

 

David Levi, CEO of Ethernity Networks, commented: "The Company is pleased to
report an extended royalty stream from its long-standing OEM customer and
Tier-1 U.S. PON OLT customer, alongside the successful deployment of our
Tier-1 U.S. defence and Aerospace vendor's defence appliance. This defence
deployment has already resulted in additional customization work and is
anticipated to generate further follow-on business.

 

"Our low-latency design capabilities are expected to enable expansion of this
customer engagement into FPGA-based solutions across existing markets and
customers. Furthermore, we are confident in our ability to successfully
materialize the ASSP opportunity, which is expected to support near-term
positive cash flow and a return to profitability, representing a significant
contrast to the extended investment cycles required under the previous
business model."

 

For further information, please contact:

 

 Ethernity Networks Ltd                                         Tel: +972 3 748 9846
 David Levi, Chief Executive Officer

 Tomer Assis, Chief Financial Officer

 Allenby Capital Limited (Nominated Adviser and Joint Broker)   Tel: +44 (0)20 3328 5656
 James Reeve / Piers Shimwell (Corporate Finance)

 Amrit Nahal / Stefano Aquilino (Sales and Corporate Broking)

 CMC Markets UK plc (Joint Broker)                              Tel: +44 (0)20 3003 8632
 Douglas Crippen

 Peterhouse Capital Limited (Joint Broker)                      Tel: +44 (0)20 7562 0930
 Lucy Williams / Duncan Vasey

 

About Ethernity Networks

Ethernity Networks (AIM: ENET.L; OTCMKTS: ENETF) provides innovative and
comprehensive networking, security and PON semiconductor technology that
enhances the capacity and efficiency of telco/cloud network infrastructure.
Ethernity's silicon-proven logic provides advanced data processing
functionality for various networking applications, alongside patented wireless
access technology, patented routing technology and passive optical network
(PON) controller. These are complemented by robust control software boasting a
rich set of networking functions. Ethernity's technology adaptable solutions
accelerate time-to-market and facilitate the deployment of 5G services over
both wireless and fiber infrastructure.

 

Forward-looking statements

This document contains forward-looking statements. Those statements reflect
the current opinions, evaluations and estimations of the Company's management,
and are based on the current data regarding the Company's business as is
detailed in this document and in the Company's periodical, interim and
immediate reports. The Company does not undertake any obligation or make any
representation that actual results and events will be in line with those
statements, and stresses that they may differ materially from those
statements, due to changes in the Company's business, market, competition,
demand for the Group's products or services, general economic factors or other
factors that can influence the Company's business and results, due to the risk
factors that are detailed in the Company's communication , and due to
information and factors that are currently unknown to the Company's management
and that, if known, would affect the management's opinions, evaluations or
estimations. The Company will report the actual results and events according
to its legal, accounting and regulatory obligations, and does not undertake
any other obligation to report them or their deviations from the
forward-looking statements.

 

 

 

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