IQE reports 40% H1 revenue growth
Company shows year-on year growth, driving a step-change in profitability
Compound semiconductor wafer company IQE has announced unaudited results for the six months ended 30 June 2026, including plans to move to the Main Market of the London Stock Exchange next year.
Jutta Meier, CEO of IQE, commented: "I am pleased to report a strong first half performance, with more than 40 percent revenue growth year-on-year across our core markets driving profitability. This reflects the strong momentum we are seeing across AI-driven data centre infrastructure, advanced sensing, wireless and defence applications, alongside improved operational execution and a more favourable product mix.
"During the period, we have demonstrated our ability to capture long-term growth opportunities across these critical markets, underpinned by a number of key supply agreements. IQE is uniquely positioned to meet customer needs and will be converting existing capacity in H2 to support the increasing demand for InP solutions.
"Looking ahead, we have initiated a move to the Main Market of the London Stock Exchange, marking an important next step in IQE's development and reflecting the Board's ambition to broaden support for the business and position IQE for the future."
H1 2026 financial summary
Revenue for H1 2026 increased 43 percent year-on-year at £64.6m (H1 2025: £45.3m). Of this, wireless revenue of £26.0m (H1 2025: £18.6m) increased 40 percent year-on-year, reflecting market share gains and increased sales of wireless mobile connectivity solutions across newly qualified customer platforms. Photonics revenue of £38.5m (H1 2025: £26.6m) increased 45 percent year-on-year driven by a combination of funding releases for certain US military and defence programmes and continued growth in AI and data centre related markets.
Adjusted EBITDA of £6.0m (H1 2025: (£0.4m) LBITDA) reflects the combination of a higher revenue base and improved gross margins, according to the company. Margin expansion was driven by increased utilisation of manufacturing assets and capacity across the group, together with a more favourable product mix resulting from a higher proportion of Photonics sales.
Reported net cashflow from operations of £1.2m (H1 2025: £3.6m) as a result of an increase in revenues and adjusted EBITDA, partially offset by a working capital outflow of £4.0m and restructuring and strategic review costs of £2.4m. Cash capital expenditure (PP&E) of £1.1m (H1 2025: £1.0m) reflects a continued prudent approach to capital expenditure.
Cash and cash equivalents of £41.6m as at 30 June 2026, with adjusted net cash of £30.2m (H1 2025: adjusted net debt of £23.5m) following the conclusion of the group's strategic review and receipt of fundraising proceeds.
Market update
AI and data centres - IQE says that strong InP demand is driving volume growth, complemented by qualifications in GaAs-based new optical interconnect technologies for AI and data centre markets. It is sampling of GaN-on-Si microLED epitaxy with partners serving hyperscalers for high-bandwith, energy-efficient data transfer in AI data centres. It has qualified GaN-on-Si power epitaxy for use in high-efficiency AI and data centre power supply units.
Consumer electronics - IQE has launched next-generation 3D sensing VCSEL technologies for future premium consumer devices, enabling enhanced sensing capabilities and supporting new smartphone form factors. It reports making continued strong progress in multiple microLED epitaxy programmes, achieving key development milestones and supporting future customer qualification activities for augmented reality and next-generation display applications. The company is aso advancing programmes for wearable sensing applications through collaboration, supporting progression from development towards future production opportunities.
It also continued to expand its GaN RF pipeline through new product qualifications and design-in activity across terrestrial, satellite including Low Earth Orbit (LEO), and defence radar platforms. And has expanded the IR customer base by securing multiple production orders and qualification opportunities across new geographies.
Communications infrastructure - The company has made progress with GaN-on-SiC qualifications for mobile base station infrastructure. And diversified HBT technology into high-frequency consumer connectivity applications, including WiFi 7.
Automotive and industrial - IQE reports achieving qualification and full-rate production of long-wavelength IR and dual-band products for multiple Tier 1 customers, for autonomous vehicles, defence and advanced sensing applications. The compamy is also actively expanding its US-based foundry partner ecosystem, broadening supply chains for 100V & 650V technology nodes.
Operational highlights
Matthew Geen was appointed as Chief operating officer in order to drive further progress and strengthen operational oversight. Change in customer engagement model resulting in high volume of supply agreements signed since the conclusion of the group's strategic review, Existing tooling to be converted to increase InP capacity in H2 and meet demand for AI and data centre markets.
Current trading and outlook
Trading in H1 2026 exceeded management expectations, supported by strong demand across all of the group's core segments. Following the July trading update and upgraded guidance, the group has continued to see strong momentum in the second half, which is expected to support growth through the remainder of 2026 and beyond.
IQE says it remains confident in achieving its FY 2026 guidance of revenue growth in excess of 30 percent year-on-year, resulting in low-teens £m adjusted EBITDA. The group also sees potential for upside opportunities in optical communications for data centre and AI infrastructure, underpinned by recently signed supply agreements.
Finally, the company has announced its intention to apply for the company's ordinary shares to be admitted in H1 2027 to trading on the Main Market of the London Stock Exchange. The board believes this is the natural progression in IQE's development as a global semiconductor materials business. The board expects the move to enhance the IQE's investor profile, broaden access to institutional capital, improve liquidity in the company's shares and support inclusion in FTSE indices.
