Alphawave IP Group plc (LON:AWE) Alphawave Semi, a global leader in high-speed connectivity for the world’s technology infrastructure, has published its results for the year ended 31 December 2023.
· Technology leadership and product portfolio underpin broader customer base of 103 (FY 2022:80)
· Over 80% of FY 2023 licence and NRE bookings in advanced nodes
· Revenue up 74% year-on-year to US$322m (FY 2022: US$185m)
· Operating loss of US$19m compared to an operating profit of US$38m in FY 2022
· Adjusted EBITDA[1] of US$63m and adjusted EBITDA margin of 19% compared with US$47m and 25% in FY 2022
· EBITDA1 of US$10m, down from US$49m in FY 2022
· Cash generated from operations of US$25m (Restated FY 2022: US$1m)
· Cash and cash equivalents balance of US$101m; Net debt of US$119m
| Financial Summary and APMs1 – US$m | FY 2023 | FY 2022 | Change |
| Licence and NRE | 167.6 | 137.6 | 22% |
| Royalties and silicon | 154.2 | 47.8 | 222% |
| Total revenue | 321.7 | 185.4 | 74% |
| Operating (loss) / profit | (19.4) | 37.6 | nm |
| Operating margin | -6% | 20% | |
| EBITDA1 | 9.8 | 49.3 | (80)% |
| EBITDA margin | 3% | 27% | |
| Adjusted EBITDA1 | 62.6 | 46.8 | 34% |
| Adjusted EBITDA margin | 19% | 25% | |
| Net (loss) | (51.0) | (1.1) | nm |
| Net margin | -16% | -1% | |
| Cash generated from operations[2] | 25.5 | 1.0 | nm |
| Cash and cash equivalents | 101.3 | 186.2 | (46)% |
| Net cash/(debt) balance | (119.1) | (24.0) | 397% |
| Bookings[3] and Design Win Activity – US$m | FY 2023 | FY 2022 | Change |
| Licence and NRE | 274.0 | 131.3 | 109% |
| Royalties and silicon | 109.9 | 96.8 | 14% |
| New Bookings | 383.9 | 228.1 | 68% |
| Additional design win activity – FSA (Flexible Spending Account) drawdowns and China re-sale licences[4] | 3.8 | 23.2 | (84)% |
| Number of revenue generating end-customers | 103 | 80 | 22% |
Due to rounding, numbers presented in the table may not add up to the totals provided and percentages may not precisely reflect the absolute figures. ‘nm’ where referenced, means ‘not meaningful’.
Tony Pialis, President and Chief Executive Officer of Alphawave Semi, said: “In 2023 we delivered another year of strong revenue growth, up 74% year-on-year, while investing to support our growing pipeline and future revenue growth. Our pipeline reflects the strong momentum in the roll out of next generation AI and data centre infrastructure and our Q1 bookings reflect that momentum. Our leading connectivity portfolio combined with our talented team and a growing market opportunity give us confidence in the long-term potential of our business.”
John Lofton Holt, Executive Chair, added: “During 2023 we made significant progress on our strategic objectives. Our financial performance in 2023 was strong albeit below our outlook for the year. 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.”
Business and Technology Highlights
· In 2023, Alphawave Semi expanded its ongoing collaboration with the leading foundries in the industry
· The Company’s IP product portfolio increased to over 235 IPs (Intellectual Property) at the end of 2023, covering the full range of interfaces required in data centres
· Alphawave Semi joined Arm Total Design, an ecosystem to make specialised solutions based on Arm® Neoverse™ Compute Subsystems (CSS) widely available across the infrastructure
· The Company announced two successful tape outs on TSMC’s most advanced 3nm process of its High Bandwidth Memory 3 (HBM3) PHY and Universal Chiplet Interconnect Express™ (UCIe™) PHY IPs, paving the way for a new generation of chiplet-enabled silicon platforms, tailored for hyperscaler and data infrastructure customers
· Alphawave Semi was the first company to announce UCIe PHY IP supporting faster die-to-die data rates of 24Gbps per lane
· The Company maintained its technology leadership with 34 design wins of which six were design wins in 3nm
· During 2023, the Company expanded its revenue-generating end-customer base to 103 (FY 2022: 80 customers)
· Continued to build sales and R&D capabilities with new offices in Pune (India) and Ottawa (Canada)
· Closing headcount increased by 134 people globally, bringing the total headcount to 829 (2022: 695)
Outlook
· The Company expects FY 2024 revenue of US$345m to US$365m and adjusted EBITDA of approximately US$70m (or approximately 20% of revenue), which is at the mid-point of the revenue guidance range. This reflects the deliberate decision to de-prioritise growth in China, which will reduce materially as a proportion of revenue. We expect the revenue profile in 2024 to be back end loaded and H1 2024 revenue to be below H1 2023, which saw a significant contribution from the legacy OpenFive backlog.
· The Company expects FY 2025 revenue of approximately US$450m and adjusted EBITDA margin between 20%-25%.
Capital Markets Day
Alphawave IP Group will host a Capital Markets Day in London, on 4 June 2024. Alphawave Semi’s executives will present the Company’s long-term business strategy as it enters its next phase of technology leadership in connectivity for digital infrastructure markets.
Results Presentation and Webcast
A presentation for investors and analysts will be held today at 8.30am BST. The webcast will be accessible via: https://awavesemi.zoom.us/s/84323327486?pwd=WFdWQzArdVBsN3JJcGlFbEM5WUo3Zz09
Passcode: 802056
Or by phone:
United Kingdom: +44 203 901 7895 / +44 208 080 6591 / +44 330 088 5830
United States: +1 669 900 9128 / +1 689 278 1000 / +1 719 359 4580 or +1 253 205 0468
Webinar ID: 843 2332 7486
Passcode: 802056
International numbers available: https://awavesemi.zoom.us/u/kdbhCTHaVt
The full announcement, presentation and a replay of the webcast will be made available on the Investor Relations section of the website: https://awavesemi.com/financial-results/
