Portfolio

Alphawave IP meets reduced guidance with 2023 results

By Benjamin Chiou

Date: Tuesday 23 Apr 2024

Alphawave IP meets reduced guidance with 2023 results

(Sharecast News) - Connectivity solutions group Alphawave IP has said that trading has got off to a good start in 2024 as it delivered full-year results in line with recently reduced guidance following a profit warning last week.
Revenues came in at $321.7m, up 74% on the year before but well below the $340-360m guidance given in January.

The company, which trades at Alphawave Semi, said on 16 April that as a result of its accelerated transition away from China, and changes in expected revenue recognition of long-term contracts in advanced nodes, revenues and profits would be lower than market forecasts.

The profit warning caused shares to tank last week, with the stock now standing 33% lower than 15 April.

Headline EBITDA dropped 80% to $9.8m, as the EBITDA margin fell to just 3% from 27%. On an adjusted basis, EBITDA rose by 34% to $62.8m thought margins still fell to 19% from 25%, which the company said "reflects the early stage of our migration to a combined IP licensing and silicon model through our acquisitions and the scaling of our engineering capabilities to support our pipeline of opportunities."

"During 2023 we made significant progress on our strategic objectives. Our financial performance in 2023 was strong albeit below our outlook for the year," said executive chair John Lofton Holt.

"With a full product portfolio of leading connectivity solutions, we can help our customers meet their connectivity needs across their data centres and create long-term value for our shareholders and other stakeholders."

Looking ahead, 2024 revenues are expected to come in between $345m and $365m, and adjusted EBITDA should be $70m based on the mid-point of the turnover guidance.

In a separate update, Alphawave Semi said the first quarter was the second consecutive quarter of bookings above $100m.

Licence and NRE bookings were up 75% at $108.9m, though a 75% slump in royalties and silicon orders to just $9m kept overall bookings growth to just 20%, coming in at a total of $117.9m.

The stock was down 1.1% at 110.72p, trading at its lowest level since mid-January.

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