EnSilica Faces Delays in Key Contracts, Revises Guidance
Why we think this is bad
The RNS announcement indicates that EnSilica has experienced delays in two key customer contracts, which will materially reduce their NRE revenues in the current financial year. This is a disappointing development that will negatively impact the company's reported results for this year. While the anticipated revenue from these contracts is unchanged, the delays mean the company now expects lower revenues and EBITDA for FY 2025 than previously anticipated.
Key Points
- EnSilica secured six new design and supply contract wins in the first 10 months of this financial year, with NRE revenues of more than $40 million to be generated across the next 2 financial years
- The company has experienced two customer delays that will materially reduce NRE revenues in the current financial year
- The ASIC design and supply agreement with SIAE MICROELETTRONICA is now expected to be delivered over FY 2026 and FY 2027 due to customer delays
- The high-value tape-out of an Edge AI chip is now expected to commence in the first half of FY 2026, reducing expected revenue for FY 2025 by approximately £4 million and EBITDA by approximately £3 million
- 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
- The Board has revised its future guidance to reflect a more conservative outlook, now expecting revenues of between £33 million and £35 million in FY 2026
Summary
EnSilica plc has announced that it has experienced two customer delays that will materially reduce its Non-Recurring Engineering (NRE) revenues in the current financial year. 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. The Board has revised its future guidance to reflect a more conservative outlook, now expecting revenues of between £33 million and £35 million in FY 2026, with approximately 80% of FY 2026 revenue already covered by existing customer contracts.