Alphawave IP shares tank as first-half sales plummet
By Benjamin Chiou
Date: Monday 23 Sep 2024
(Sharecast News) - Shares in Alphawave IP dropped by almost a third on Monday after the connectivity solutions group swung to a loss in the first half while revenues halved which it blamed on the timing of specific customer programmes.
While the firm signalled a big improvement in fortunes in the second half, that didn't stop the stock from dropping to a 52-week low of 70.6p in morning trade, down 44% on the day. By 1108 BST, the share price had risen to 91.6p, still down 27% from Friday's close of 125p.
The company, which provides semiconductor IP solutions targeting the datacentre and internet of things devices markets, reported an adjusted EBITDA loss of $11.8m for the six months to 30 June.
Revenues dropped to $91 from $187.2m a year earlier, with licence and NRE revenues falling 11% to $64.8m and royalties and silicon revenues sinking 77% to $26.2m.
Alphawave IP said the decline reflected an "expected strategic change in business mix" including revenue from IP licences and silicon, and a significant reduction of the legacy business in China.
Meanwhile, the bottom line was also held back by continued research and development investment in chiplets and new silicon connectivity products, with the latter expected to begin shipping this year and ramp into production in 2025.
Looking ahead, the company said that anticipated "tape outs" - the final design stage before manufacturing - of certain application-specific integrated circuits and the timing of conversion of IP and NRE bookings into revenue is expected to help drive "significant revenue growth in H2 2024 compared to H1 2024".
Also adding to its optimism was a 20% increase in total bookings in the first half to $225.3m, due to "increased design win momentum across the vertically integrated semiconductor business".
"In the first half of the year, we have continued investing organically to support our pipeline and future revenue growth. Our leading connectivity technology and strong execution give us confidence in the prospects for our business in the second half of 2024 and beyond," said chief executive and president Tony Pialis.
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