IQE announces 2025 results and new CEO
Compound semiconductor wafer firm IQE plc has announces its results for the full year ended 31 December 2024.
Jutta Meier, CEO and CFO of IQE, commented: “IQE delivered a solid set of financials in line with our January 2025 trading update. Our focus has been on reducing costs and optimising our footprint, and I am pleased to see this has resulted in an improved adjusted EBITDA position year-on-year.
She added: "The strategic review remains ongoing and we have been encouraged by progress so far despite a challenging macro environment. IQE has a strong foundation from which to unlock value for all of our stakeholders and with a diverse customer pipeline, the continued end-market demand for our technology gives us confidence for the future. I am also delighted to be appointed as CEO as we continue to deliver on the positive progress we have made.”
Financial highlights
Revenue for FY 2024 was broadly flat at £118.0m (FY 2023: £115.3m).
Wireless revenue of £67.3m (FY 2023: £53.9m) increased 25 percent year-on-year reflecting an increase in wireless GaAs sales linked to a higher penetration of Asian markets and an increase in GaN sales for 5G infrastructure.
Photonics revenue of £49.9m (FY 2023: £59.1m) decreased 16 percent year-on-year primarily because of softness in 3D Sensing and telecoms infrastructure markets, partially offset by a strong performance in Aerospace and Security markets for infrared-related products
CMOS++ revenue of £0.8m (FY 2023: £2.3m) was down 62 percent on a reported basis which reflects a strategic rebalancing of the business’ product portfolio and a shift in focus towards diversification into GaN Power and MicroLED. In FY 2025 IQE will no longer reporting CMOS++ revenue as a standalone segment.
Adjusted EBITDA of £8.1m (FY 2023: £4.3m), shows an increase of 88 percent year-on-year primarily reflects the annualised impact of prior year cost mitigation actions and the implementation of additional cost management in the current year.
Adjusted EBITDA margin of 7 percent (FY 2023: 4 percent) reflects the impact of actions to reduce costs and align capacity with customer volumes alongside consolidation of our manufacturing sites.
Reported operating loss of £33.0m (FY 2023: £25.8m) impacted by non-cash asset impairments of £3.1m related to the group’s US Wireless assets and restructuring costs of £7.6m, including non-cash intangible and tangible asset impairments of £5.4m related to the consolidation of the Group’s manufacturing operations.
Cash and cash equivalents of £20.6m as at 31 March 2025.
Business update
The company has been developing in various areas, including launching a Quantum Dot Laser foundry service for high-efficiency optical communications in data centres with opportunity to take significant market share from incumbent laser technologies.
It has expanded the GaN RF Aerospace & Security business serving fast-growing end-market, including satellite internet constellation platforms (Low Earth Orbit Satellites – LEOS).
On the power front, it has a joint development agreement with X-FAB to create a Europe-based GaN Power device platform solution for automotive, data centres and consumer applications.
In other areas, it has developed InP and GaSb laser and detector technologies with a leading consumer OEM for healthcare sensing applications, and launched an 8inch GaN-on-Si microLED foundry service with in-house wafer cleaning, compatible with advanced Silicon CMOS manufacturing.
Board update
Jutta Meier has been appointed IQE's CEO following her successful period as Interim CEO. Jutta will continue in her dual role as CEO and CFO. Female representation on IQE’s board now stands at an above average 57 percent.
Mark Cubitt will continue to act as executive chair, providing support to Jutta and the executive leadership ream through the ongoing strategic review. The composition of the Board will be re-evaluated following the conclusion of the Strategic Review.
Cubitt said: “I would like to recognise Jutta’s success as CEO of IQE since she took on the interim role over six months ago. The Board felt she was an excellent candidate and in that time she has stabilised and refocused the business and rebuilt confidence with both customers and employees. I am pleased to continue to work alongside her as IQE’s executive hair to deliver on our strategy, and I remain encouraged by the progress of our strategic review and its potential to unlock the untapped value within the Group.
Current trading and outlook
Global markets are being impacted by macroeconomic uncertainty and as a result, some end customer demand is being fulfilled with existing inventory. This was visible in Q1 trading but is expected to correct in H2 2025. Costs and capacity continue to be optimised to improve margins and cashflow.
IQE says its customer pipeline remains strong and is predicted to grow in H2 2025, driven by new product and customer engagements. Additionally, existing segments including Aerospace and Security and optical communications are also expected to deliver growth, offsetting anticipated softness in wireless segments resulting from challenged consumer markets, particularly in Asia.
There is currently no direct impact to IQE from the implementation of US tariffs, however developments are being closely monitored and options are being explored with both suppliers and customers to mitigate any potential risk.
Revenue and adjusted EBITDA for the full year are expected to be within the range of analyst forecasts for FY 20251 , with weighting towards H2 consistent with the destocking seen in Q1 and typical industry seasonality. These forecasts assume the inclusion of IQE Taiwan revenues pending the outcome of the strategic review.
