DALLAS, TX -- February 18th, 2025 -- EnSilica PLC (AIM: ENSI): Stonegate Capital Partners updates their coverage on EnSilica PLC (AIM: ENSI). In 1H25, EnSilica PLC continued to build on its strategic initiatives and market strengths, achieving significant milestones. The Company's strong position and intellectual property in automotive, industrial, healthcare, and satellite connectivity applications for mixed-signal ASICs continue to provide a competitive edge. We believe that ENSI is well positioned to capitalize on the global ASIC market, which is projected to reach $25.0B by 2030. EnSilica took meaningful steps towards having a more predictable revenue stream with an increase in chip supply revenue of 164% year over year. This is expected to compound as the Company won an additional five contracts in the period. Additionally, ENSI currently has 4 ASICs in production, with another 8 in the design phase. 

Company Updates:

Financial Results: ENSI reported revenue, adj EBITDA, and Net Income of £9.3M, (£0.2)M, and (£1.2), respectively. This compares to our estimates of £12.9M, £2.0M, and £1.3. In the first half of FY25, ENSI reported a 3% decrease in revenues to £9.3M, down from £9.6M year over year. This decline was primarily driven by new contract wins progressing slower than anticipated. Notably the Company saw an increase in supply of products revenue to £2.9M, growing 170.3% year over year. We view this as a strong sign of the Company’s continued path towards more reliable income streams, with growth in this segment expected to continue as contracts are stacked. EBITDA decreased to £(0.2)M from £0.5M in the previous year as ENSI continues its ongoing investments in scaling operations. Management still expects full year EBITDA to be positive in FY25.

Outlook Remains Positive: EnSilica’s outlook for FY25 is promising, with the company starting the year strong by achieving key milestones and securing new business across its target sectors. Continued investments in research and development, along with partnerships with industry leaders like TSMC, enhance its competitive edge. The Company’s strong financial foundation, supported by recent equity fundraising and loan refinancing, ensures that it is well-prepared to sustain growth. Management plans to reach £6.0M of supply revenue and still expects positive EBTIDA for the FY25 period, and we believe this is reasonable.

Contract Momentum: ENSI demonstrated strong contract momentum in 1H25, securing high-value contracts across various sectors, including £10.4M in match funding from the UK Space Agency, being selected by Oriole Networks Ltd as its ASICs partner, a follow on contract with Siemens, and a Telecommunications ASIC design and supply contract worth more than $30.0M over a ten year period. The breadth of contract end markets as well as variation between new wins and follow on contract wins demonstrates the Company’s ability to drive revenues in a variety of ways giving us confidence in the sustainability and diversification of revenue generation for the foreseeable future.

Valuation: We use several viewpoints to guide our valuation. Our P/E model results in a valuation range of £0.85 to £0.97 with a mid-point of £0.91. Our DCF analysis produces a valuation range of £0.85 to £1.03 with a mid-point of £0.93. Our EV/EBITDA valuation results in a range of £0.86 to £0.97 with a mid-point of £0.91. When combined our valuation ranges average at £0.86 to £0.99 with a mid-point of £0.92.

About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.

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