IQE taking a look at 20%+ FY 2026 progress

IQE’s monetary yr 2025  noticed a lower in revenues from 2024’s £118m to £97.3n.

Photonics income of £57.1m (FY 2024: £49.9m) elevated 15% year-on-year pushed by funding releases for sure US army and defence programmes in H2 2025 and continued progress in AI and knowledge centre-related markets.

Wi-fi income of £40.1m (FY 2024: £67.3m) decreased 40% year-on-year reflecting unsure macroeconomic situations within the first half of the yr and softness in cell handset demand with some finish buyer necessities met from present stock.

Adjusted EBITDA of £3.2m (FY 2024: £8.1m), decreased 60% year-on-year, leading to an adjusted EBITDA margin of three% (FY 2024: 7%). This discount displays a decrease income base and the underutilisation of producing belongings and capability.

Reported web cashflow from operations of £8.1m (FY 2024: £1.3m) elevated within the yr, reflecting the impression of working capital actions.

Money capital expenditure (PP&E) was £5.1m (FY 2024: £11.4m) to help the Group’s strategic GaN-related capability funding into the facility electronics and superior show (microLED) markets and different excessive progress sectors.

Money and money equivalents have been £15.7m as at 31 December 2025, with adjusted web debt of £31.5m (FY 2024: £18.8m).

“We have been inspired to see market situations enhance within the second half of the yr,” mentioned CEO Jutta Meier, “ this  mirrored a constructive trajectory in key sectors together with photonics for AI and knowledge centres, aerospace and defence, and wi-fi merchandise for shopper electronics.

“The £81m fundraise from key companions is a transformational funding for IQE, giving us the steadiness sheet power to spend money on our future progress, whereas sustaining our world asset base.

“IQE is uniquely positioned as a crucial enabler of the world’s fastest-growing know-how ecosystems. Specifically, accelerating demand for our Indium Phosphide (InP) options supporting knowledge centre and AI markets is anticipated to be a cloth progress driver all through 2026 and past.

“Taken collectively, a stronger IQE, coupled with beneficial market situations immediately benefitting the enterprise, provides me nice confidence for the long run.”

FY 2025 Monetary Abstract:

Following the conclusion of the Strategic Assessment, IQE introduced a fundraise of £81m, with the online proceeds for use to repay the Group’s present Revolving Credit score Facility with HSBC Financial institution, help the Group’s working capital necessities and ongoing strategic funding. This considerably strengthens the Group’s general monetary place.

The fundraise included a £45m strategic funding from MACOM Expertise Options Inc. (“MACOM”) within the type of £30m of fairness and £15m in new non-interest bearing convertible mortgage notes. Concurrently, IQE and MACOM additionally entered into long-term provide agreements.

The rest of the fundraise comprised a £23m redemption and reinvestment of convertible mortgage notes by present noteholders, in addition to a £13m Putting and Retail Provide.

Following the completion of the fundraise and the compensation of the Group’s Revolving Credit score Facility with HSBC Financial institution, IQE will obtain web money inflows of £27.9m.

Buying and selling in Q1 2026 was consistent with administration expectations, with sturdy demand throughout all core segments.

Specifically, IQE is seeing accelerated demand for the Group’s InP options, which help optical photonics merchandise for knowledge centre and AI infrastructure, and expects this to be a cloth progress driver all through FY 2026 and past.

Alongside this, IQE is seeing ongoing power in aerospace and defence markets, in addition to VCSEL and wi-fi merchandise supporting the patron smartphone trade.

Income for FY 2026 is anticipated to exceed 20% progress year-on-year, with sturdy order guide visibility into H2. That is anticipated to lead to a high-single digit to low double-digit adjusted EBITDA place.