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EnSilica expects record revenues and profit growth in FY24, continued momentum in FY25

11:36, 14th May 2024
Victor Parker
Vox Newswire
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EnSilica (ENSIFollow | ENSI, a chip maker of mixed-signal ASICs, issued a pre-close trading update for the year ended May 31, 2024 (FY24).

EnSilica expects record revenues of c. £25m for the year, with profit after tax of approx. £1.9m, up from £1.8m in FY23. Likewise, EBITDA for FY24 is expected to be higher year-on-year at £1.8m from £1.6m LY. The chip maker said its new US subsidiary was "progressing well" and delivering opportunities expected to benefit from evolving relationships with US and European foundries.

EnSilica reported continued high rates of activity and strong demand, resulting in a robust combined orders and sales opportunity pipeline, currently at over US$500m. Cash was £1.3m at the end of April 2024, and net debt was £2.1m. By end of FY24, £0.9m of debt will have been repaid in line with previously established schedules.

Looking ahead, ENSI expressed confidence in delivering revenues of over £30m and EBITDA of over £5m for FY25.

 

View from Vox

EnSilica delivers strong performance with record revenues in FY24, underpinned by continued new business momentum, a growing orderbook, a maturing supply business model, and evolving relationships with strategic suppliers. The company fulfilled a number of significant contracts during the period, including a recent €3.8m ARM-based technology win with a major European semiconductor supplier, and a US$20m supply win for a new US customer.

Momentum is expected to accelerate in FY25 as start dates of several new supply contracts were moved to Q1 2025, following a change of business mix in H2 2024. At the same time, ENSI successfully taped out 3 customer chips, including devices for communications, Edge AI processing, and the industrial ARM controller - all of which should lead to long-term supply-related revenues, expected to commence in the next 9-18 months. While the change in sales mix initially led to a reduced margin, management is confident this will not persist in FY25.

Looking ahead, ENSI is set for continued growth in sales and improving margins as its revenue stream matures and relationships with suppliers develop. Overall, the company is well-positioned to capitalise on significant market opportunities present in the communications, industrial, automotive and healthcare sectors, driven by increasing use of complex mixed-signal semiconductors, machine learning, cybersecurity, and cloud connectivity.

Furthermore, as one of few companies offering cryptographic accelerators as licensable IP, ENSI is well-positioned to benefit from the industry's eventual shift to quantum computing. As well as licensing its IP, ENSI designs its own ASICs, which it supplies to technology partners, yielding significant licensing revenues.

 

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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