Ensilica (LSE:ENSI) — Final Results for the financial year ended 31 May 2026

0:01 Good morning, ladies and gentlemen, and welcome to the ENSILICA PLC final results investor presentation. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish our responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, as usual, we will decide to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to the executive management team for their presentation. Ian, good morning, sir. Good morning. Thank you. Thank thank you, Jake, for the for the introduction. Welcome, everyone. Thanks for joining us for ENSILICA's financial year 2026 results for year ending thirty first of May twenty twenty twenty six. I said I'm I'm Ian Langshuir, the CEO, and I'm with Christoph Rademann as our CFO.

1:02 You know, you... The 2026 results have really, you know, record set of results, you know, really showing the business model in action and its ability its ability to scale. Just a normal disclaimer about forward looking statements in the presentation, please please read that at at your leisure. Just, you know, for anyone not familiar with the company, a quick introduction. I mean, in in silico, we're a fabulous semiconductor company. We're we're experts in designing and supplying mixed signal chips for high growth markets. We were founded in 2001 as a design service company and have over, you know, over the twenty five years have, you know, have built a a company with with a fabless semiconductor company.

1:54 You know, now, in in 2020, in 2021 when we started, there's an average of 300 chips per car, and now there's over 3,000 chips per car. And in that time as well, the complexity per chip has, you know, has grown more than 6,000 times according to to Moore's to Moore's law. We're focusing on, as I the space sector, but we, you know, we also service adjacent markets that require high quality, high reliability chips such as such as automotive and and industrial. We do two types of chips. One's an ASIC, which is an application specific integrated circuit.

2:43 That's a chip that we... It is funded largely by the customer and is sold to one customer. That, you know, that goes through the design cycle and then we have the long term reoccurring supply revenue. The second type of chip is called an ASSP, which is application specific standard part. These are our own chips, designed to to address a particular application. Ours are focused on, particularly the user terminal space sector. These are sold to multiple customers and funded by a combination of lead customer funding, our own our own funding, as well as as well as managing to leverage the UK space agency and European space agency funding.

3:31 We balance between the two models with ASICs funding innovation and ASSPs because they're sold for multiple customers and have high high IP contents. You know, they're much more scalable with higher gross margins. In this business model, IP is very important and as we go through designing the chips, we generate reusable IP making every every program faster and reducing the risk for the the the development risk. So if we look at our 2026 results and, you know, our key our key achievements, they they really do demonstrate the business model in action and it it working. So we had record results. So that was a step increase in in revenue leading to cash generation and, you know, really pleasingly excellent sales conversion and pipeline replenishment.

4:35 Also, the business model is showing strong visibility of future future revenue and profitability. We've got five chips now in long term supply and 14 more queuing queuing behind them. And we'll go through some of those in more more detail later. Yeah. Very importantly, we we raised 25,000,000 of new capital over two oversubscribed fundraisers. And a big thank you to all of our new and existing shareholders that support us supported us in those very successful fundraising. Those fundraisers were very much focused on on growth, and that was growth both in both in the space sector, improving our EU footprint as people may have seen through the announcement of our Milan office and allowing us also to scale the supply revenue as the as the chips move through from from design into supply and, you know, require that working capital.

5:38 And also space is now a major a major tailwind for us. We we have concentrated IP in this area. We're heavily engaged with most of the European and US space operators. So that's a key market for us and, you know, you'll you'll see us very much leading with with with space now. I mean, we we... You know, these results have shown that we have a repeatable model here. Every program we have when it reaches production, it adds chips of volume supply, improves our margins and our operational leverage without proportional increasing in costs. I'll hand over to Christoph just to go through the finances.

6:25 Thanks, Ian. So just talking through our financial momentum. We're obviously very pleased to report our results for financial year 2026. With revenues of $27,800,000 they were up 53% versus the prior year, which was a great result for us. This flowed through to EBITDA of $5,900,000 up EUR 5,900,000 from the prior year, another great result and shows great progress versus financial year 2025. Cash of EUR 7,600,000, up 280%, and that is before the July placing of EUR 14,900,000, which was oversubscribed.

7:12 Then we come to the forward looking indicators, which are of real strategic importance to us, $375,000,000 of lifetime supply visibility, that's 50% up on the prior year, and that's due to the contracts that we won during the last six months. Also looking at our pipeline, 600,000,000, that's after transferring SEK 125,000,000 into the lifetime supply. And this just shows that our opportunities are increasing as we become more established as a European player of note. As I mentioned before to other investors, we don't expect to win all of that 600,000,000, only about 25 percent to 33% over the next twelve to eighteen months.

8:08 But the main point is the opportunities are increasing and we're looking to take advantage of more of those as we grow. Thank you. Next. So just looking at the revenue split, chip supply revenues of 6,700,000 up $1,000,000 on the prior year. This was a little bit disappointing for us as we had an issue with our UK automotive customer. They had a cybersecurity issue, which impacted volumes in financial year twenty twenty six. They are now back up and running, and we are looking for volumes to go back to the pre cybersecurity issue levels and then with modest growth in 2027.

8:58 Also, our industrial chip, which started in financial year twenty twenty four, is continuing to scale up with volumes 15% ahead of the forecast, so really doing well. And for that reason, we expect growth of around 30% in financial year twenty twenty seven. And we also expect first orders from our another industrial chip, our edge AI chip and also the German automotive customers expected to go into supply in the second half of the year. So good growth expected in financial year twenty seven and then further growth in financial year twenty eight as these chips go into volume supply and we should start seeing twelve months of supply from them as they scale up. So financially, a 28,000,000 is expected to be even better than 27,000,000 in terms of supply growth.

10:06 Then moving on to the NRE, dollars 15,000,000 versus $5,900,000 a very large increase. Dollars 25,000,000 wasn't a particularly good year for us in terms of NRE, but we've bounced back really well in '26. And in 2027, we expect similar levels maybe with a 10% growth on that. So some growth, but not a huge growth. And this is built based on the four to five new contracts that we expect to win every year. So we keep that treadmill going and we see ultimately the real growth in the supply as these chips that we're developing go into supply.

10:54 Consultancy revenues, whilst the key area for the company, the employees of the business are being pulled into the NRE and development contracts, which means that the focus is not totally on consultancy. So we expect that to be stable, but really, the growth will come from the NRE and ultimately, supply revenues. Thank you. Then looking at the income statement, we spoke about the revenues. Gross profits have gone down from 40% to 35%. That is because we are investing heavily in our ASSPs as we said we would as part of the fundraise.

11:45 And effectively, the development costs relating to that go into cost of sales, whilst the income from that is sitting in both revenues from our European satellite operator customer and then also in other income for... As grant income from The UK SA. And if that grant income was included in revenues, then the gross profits would be at a similar level to what they were in financial year '25. And I guess the point we're trying to make is that we're not doing worse than we did in 2025. It's just that the income is sitting in two different lines rather than only in the revenue line. We also had a benefit from the R and D tax credit being higher than initially assessed, and that has slowed down into EBITDA of $5,900,000 which is significantly up from the prior year and a very good result for us. We're also pleased that, that has flowed down into an operating profit of EUR 2,900,000 for the business.

12:56 Looking at the balance sheet. Intangible assets have increased to EUR 27,300,000. That is as a result of our continued co investments in the development of ASICs and also our own IP and know how. And that is underpinned by the $375,000,000 of lifetime supply that we spoke about on the previous slides. So we do assessments of each one of the intangible assets every six months, And where necessary, we will impair or write down the assets if we can't we don't expect to recover the value. But as you will see, it's more than covered by the $375,000,000 So that is looking very, very positive.

13:44 Cash, we spoke about. And obviously, that is before the benefit of the second 15,000,000 placing, which came in post year end. Loans, the balance has has come down as a result of repaying the loans. We don't expect to to repay the the the the loans earlier than in... Than the repayment terms, mainly because we did the fundraise in order to fund our growth rather than to to repay our financing. So our focus will be on growing growing the business, investing in the space and satcom's ASSPs in order to really bring forward our revenue targets for the short to medium term.

14:34 You. Then looking at the cash flow, a very successful year for us with cash consumption of $1,400,000 down from $5,300,000 That was as a result of the moving forward, the development contracts, getting the upfronts and milestone payments and then moving those forward. Also, the RDEK tax credit, which increased slightly. We expect a larger increase in financial year twenty seven from the FY 2026 claim, so that should be positive. And then intangibles and CapEx investment, slightly higher than the prior year, but significantly so.

15:23 What I would say is that for financial year 2027, there will be an increase in cash consumption. This is in line with with our stated intent as part of the fundraise that we intend to invest in our our ASSPs in in order to to generate larger future revenues. So in '27, we see cash consumption go up as alongside the... Bigger investments in intangibles and CapEx investment. And then in '28, that decreases again mainly due to the increase in supply revenues that we expect in that year. So towards the end of the year, we expect to go cash flow positive on an operational basis, on a monthly basis. And then financially at '29, we expect to go full year cash flow positive and and on a on a free cash flow basis.

16:20 And that is mainly because of these chips that we are developing now that are going into supply and will be fully into supply in those years, and we should see a significant increase in the level of supply revenues from where we are today. Thank you. Thanks. Thanks, Christoph. I'll I'll walk you through the the strategy and operational review. I mean, just to remind the people what a fabulous semiconductor company is. I mean, we talk I talked about it earlier. I mean, a a fabulous company is, you know, as it sounds, a company that doesn't have a a a wafer foundry. It leverages wafer foundries such as the largest one, the TSMC and Global Foundries.

17:07 And, you know, ENSILICA is in a position where we have direct relationships with those major foundries. So, you know, it uses a capital light model. It... You know, we don't have fabs and the other parts of the supply chain is outsourced assembly and test houses that would take the would take the wafers that dice them up, package them, and test them under our under our operational team team team management. So, you know, this is... So so it's capital light. It's a fast time to market, you know, where where you... We're able to leverage the latest technology, proven technologies, and allows us to really focus on the IP and the innovation and the customer the customer requirements.

18:00 Okay. This is relatively new slide, so people may not have seen this and it's really to demonstrate, you know, the development cycle we're going through and, you know, how how much, you know, it's very much compounding. I mean, we... In the ASIC model, as I mentioned, that's largely funded the NRE by the customer. We go through the design and then we reach this key milestone of the the tape out of the device where we send the the masking information off to the foundry to fabricate the masks and then the wafers. And then we get the chip back and we go through we go through the validation of that. Then it then goes into volume supply, so we get the long term supply revenue.

18:46 And and that's that's often seven to fifteen years in the markets that we're we're addressing. But the other products of the development is we get reusable IP and know how that goes back into our toolbox, and we can reuse that from from chip to chip. So every... It's it's like a snowball effect. Every time we're going around this, we're generating IP, the next one becomes easier. We're able to increase our our gross margins as well. So on the ASSP, that's a sort of similar cycle except for the the development costs that funded by the... By ENSILICA, and, you know, we we we bring in lead customers early to to support that as well as other fundings such as European Space Agency and UK Space Agency funding.

19:41 So, you know, we go through the same cycle of developing the chip, taking it out, validation, and then that chip sold to multiple multiple customs... Customers, meaning it's much more scalable in terms of, you know, larger number of chips can be sold, higher margin. And the other advantage is once that chip's in in production, any new adopter of that chip, we can get an uptick in revenue relatively quickly. I mean, they take the chip, they evaluate it, puts it in their product. We don't have to go through the design. We don't have to go through that design cycle as we have with the with the ASICs. And also out of this, we get IP. It's often higher value IP in terms of platform level IP as well as as well as patents that go back into that that go back into that toolbox that we can use either in the ASIC model or the the ASSP model. So, you know, is that it... I mean, very much is a sort of compounding cycle we have with... When we started off in this business model in twenty twenty sixteen, you know, we've virtually had an empty toolbox there of IP, and now we, you know, we've got strong IP. We've got customer we've got customer references, and, you know, we can demonstrate that, you know, we're a reliable designer and supplier of chips at scale.

21:07 So this, you know, this portfolio here really does demonstrate the business model in action. I mean, we have five chips now in in supply generating that reoccurring revenue we we talked about with, you know, leading with the automotive one, and then we have a very strong industrial one in number four there. And they're, you know, they're in supply and ramping up... Still ramping up strongly. And then, you know, we we have another 14 chips in the in the design phase. I mean, this year, our team our design team and operations team have executed fantastically. In '26, we had two two tape outs. So far in '27, we've had three, and we have another two two scheduled. So those those chips are moving forward into the into the supply area now.

22:04 So just, you know, just just sort of, you know, talking about some of the color codes here where you see the the gray colors on the squares where you've got year year one to 10. There, we... We've got forecast from the customer and, you know, we have revenue forecast for each of the chip and the the likely lifetime of the chip. And if if you take that and and reflect that forward on the the the revenue illustration on the on the right, you see the dark blue, which is the growth in the revenue that we're seeing from the from the chips with with confirmed forecast. So although it's colored dark blue, it's not blue sky. I mean, these are, you know, real customer forecast, and that's real growth that we're we're seeing there in the in the supply in the supply revenue.

22:52 Those those orange ones that you see, which are largely the space ones are are our ASSPs, and you'll see there that eight and fifteen of the ASSPs where we've got, you know, confirmed design in slots with with our with our customers. So so just turning to the graph on the right, just explaining the other elements. So so what you see here at the bottom in the orange is the is the NRE revenue, and that's driven by the four to five ASICs that are feeding the pipeline, and they're they're not they're not actually... The the revenue from those ASICs is not shown in the supply growth there. There'll be there'll be the new design wins that you should be you should be looking out for next year where we're targeting four to five four to five ASIC design wins.

23:44 We we talked about the consultancy revenue and then there's no plan to to grow that, but we have a steady layer of consultancy revenue. And and what you see here on the light blue side at the top is the... A conservative estimate for the growth in the ASSPs and, you know, their space ASSPs for user terminals and, you know, we we see them really coming online in beyond sort of 2030, and I'll I'll cover the the space sector in in in more more detail. But you you... You'll be able to see from that there's loads of uptime upside potential on on those. So now if we turn to the space opportunity, it's very much a multi decade opportunity. You can see there. I mean, there's huge growth and, you know, one thing you can say about Elon Musk is that one positive thing is he's really proven that space based communication works, and it can be delivered at scale to a huge subscriber base. I mean, he he has over 11,000,000 subscribers now and, really shown that, resilient connectivity is is, you know, is required. And that's why there's lots of sovereign, and, other constellations coming online really to to to deliver to deliver similar services.

25:08 They're enabled by falling launch costs. The... These mega constellations require, you know, lots of satellites, so it's important that they've got the launch facilities. So it's not only, you know, SpaceX there. You've got Blue Origin. You've got Rocket Labs. So there's a number of alternative services there for launching the satellites. I mean, there's also an exploding demand for, you know, for bandwidth. This data needs to go back to the needs to go back to the cloud for processing and, you know, generally, the requirement for high bandwidth ubiquitous connectivity. And this is all driven by strong government and private investments. I mean, you would, you know, you you see that earlier earlier last week that SpaceX announced the 40,000,000,000 a 40,000,000,000 fundraise and, you know, a lot of the other satellite constellations are, you know, raising raising billions. It typically takes 5 to 15,000,000,000 to put up a to put up a constellation.

26:12 I I mean, you know, as a as a chip company, I mean, we we always look for volumes because, you know, once we ship the volumes, it keeps the foundries happy, and we we really see there the user terminal area, which is the the piece of equip... Equipment, consider it like a set top box, which is used to connect to the to connect to the satellite and give you the the connectivity to your cons... Cons... The constellation. I mean, that is that's where our IP is concentrated, and we're we're focusing our efforts in developing a family of of ASSPs, a full a full chipset, and I'll talk through that in more more detail. I said, I mean, you should be looking out over the next eighteen months for us announcing more ASSP design in wins with major with major constellations.

27:05 So as well as that user terminal chip area, I mean, we are also developing chips that go into the satellite payload. So the satellite itself carries a payload. It's called a communication payload, And within that payload, there's a a very complex chip called a beam former. We're we're experts for that beam former. I mean, we announced that back in 2020, we were developing AST SpaceMobile's payload payload chip. I mean, these are very high value very high value chips that form beams so you can change the coverage profile of this of the satellite. So for instance, as you're as you're going across the ocean, you don't really need to give coverage for for an empty ocean. You may provide a beam on a, you know, aligner or areas that would... Have poor poor coverage.

28:07 So as I said, this is a complex chip, very high value, and we've got world class expertise on that. So these ASSPs, I mean, we've... We we have four of them now in silicon form, which are being evaluated by different customers. We're engaged with three major operators. I mean, we announced a 50,000,000 design in of our user... One of our user terminal ASSPs with a major European satellite operator. And we've we've been funding this both from lead customer funding and space agency funding. So we've had over $3,030,000,000 dollars of funding to support the ASSP ASSP development in this area. So if we just zoom in a little bit more about user terminals and user terminal ASSPs.

28:55 So on the on on the left and right here, you can see some typical user terminals. There's a high end one on the left from one of our German customers, Viets, which are used for enterprise type applications, and the the one on the right is a mobile, you know, a a mobile terminal. The great thing about these, particularly for semiconductor company, is they contain many hundreds to thousands of chips. They they include RF millimeter wave chips. They include a beam former chip and also a modem chip. We are one one of the the only company that is developing a full end to end chipset with reference designs to to enable low cost, highly integrated user terminals, which are rich in rich in differentiated features. I mean, this allows our customers to have a fast time to revenue, enable them to have low cost user terminals so they can sign up the user base, which is, you know, very important in terms of getting the the the the satellite terminal revenues up.

30:08 It... I mean, it's worth it's worth saying at the moment, this is dominated by Starlink and the user terminal market for semiconductors is around 650,000,000. You... You've also got Amazon, which is rolling out. I mean, they they have an initial constellation there with with the rolling out some user bases and Eutelsat who now own one web, have a LEO constellation. But as we move through, you know, there's deployment and testing going on for, you know, additional constellations such as ViaSat and Blue Origin who's known for their rockets have one called TerraWave. Telesat is a Canadian, a a Canadian constellation. You know, they're rolling out services and be signing up for users.

30:56 And then really 2030 is when it happens where that that market grows to to over 3,000,000,000 where you've got Irish Square, which is a euro... An EU sovereign constellation and the likes of SES as well as enterprise and defense and sovereign constellations. I mean, for example, the Chinese car manufacturer, you know, Geely is putting up their own constellation. So, really, this is opening up the market of of having user terminals embedded in in cars similar to e... ECOLS and gives us a, you know, even big... A bigger automotive TAM with with something like 75 to 80,000,000 cars still still being in production. So great market. We've got differentiated IPs and, you know, developing a highly highly integrated chipset to enable those satellite operators, which are not vertically integrated to provide state of the art user terminals to rival those of Starlink.

32:05 So if we talk to you about adjacent markets, automotive and industrial is a key market. It's where we cut our teeth. It's all about high reliability, long life mixed signal chips. I mean, we're applying our our know how and ability to deliver at scale into that market into the new space area. But, you know, we're we're we're also converting very good automotive and industrial design wins. As people are, you know, aware, we we have a 40,000,000 design win for a... With The UK SEM OEM where we've shipped over 10,000,000 chips into that area now. We we recently announced a 75,000,000 design win with a a German tier one.

32:54 And, you know, there... There's other very strong design wins where we have, for instance, Siemens as a Siemens as a customer who is one of the leading industrial OEM. So a a great market that produces long term reoccurring revenue almost like an annuity scheme... State scheme. So so, you know, still still a good market, still a growth, and I talked about the the number of chips per vehicle and per production line increasing increasing massively. And if we just turn to photonics, Christophe really likes this likes this market, and I'll I'll I'll let him describe the opportunity we have here. Thanks, Ian. So photonics, as as a lot of you might know, make use of light instead of electrons, which deliver high speed, lower power, and less heat than conventional chips, so a huge opportunity there.

33:53 Where ENSILICA specializes is photonics controllers, and and these are the are the chips which which control the photonics chips and the photonics rather than being photonics chips themselves. We announced a contract in 2025 with with Aureal Networks, and that chip is progressing very well. It's for a a photonics controller. And Aureal Networks recently announced a tie up with AMD, and and that gives us a a lot of hope that their their product will be even more successful than we expected it to be and that they will go from strength to strength.

34:40 We are also seeing interest from other photonics companies and also quantum computing companies for for controllers in that area. These are quite similar and make use of the same engineers to develop those controllers. So we would hope that in the next twelve months, we'll be able to sign up further customers in this area. We see this as a high growth area and could turn into a megatrend in future, and we are looking to develop this area and grow in this area, although our main focus, as Ian highlighted, is really in the satellite and communications area where most of our development will and investment will take place. But we will do some selective investment in developing our photonics.

35:37 Thank you. Okay. Thanks, Chris. I mean, just to point out, I mean, this is an area because of the diversity of the the approach to photonics. This is an ASIC area rather than a ASSP area, but very exciting. We're really, you know, these will make a big difference to the the AI hyperscaler data centers, reducing the latency between the multiple processes they've got making them much more efficient and reducing the power. So I mean, area which really is used across all of our markets, particularly communications, industrial automotive is that of safety and cyber security and really there's a change in legislation that UK EU Cyber Resilience Act and equivalent ones in The US that really are increasing the baseline of security needed in semiconductor devices.

36:36 I mean, in SILICA, we have our own IP where we've been developing both classical and post quantum cryptography and security subsystems. You know, these are now being deployed in our ASICs and ASSP devices. And really that we're turning what is a regulatory requirement into a competitive advantage by leveraging leveraging that IP. So just to summarize, space is a key growth area for us and we see this as a megatrend. The user terminal market where we have a lot of our IP grew by five times by 2,030, and we see this as a major tailwind for ENSILICA.

37:28 We are investing heavily in order to have our chips ready for when the European satellites go up so that they can go into those terminals and support our customers. And we feel we're in a fantastic place to take advantage of this growing market. Then pipeline, we continue to target four to five design and supply contract wins annually. So please look out for new design wins over the next few months as we execute on our stated strategy and business plan. Momentum, as Ian mentioned, we've had two tape outs in financial year twenty twenty six, three in financial year twenty twenty seven and a further two tape outs expected to complete in the rest of the year. And as explained, this is a good forward indicator that these chips will go into volume supply in the next twelve to eighteen months post tape out.

38:34 So really shows that these chips have moved forward and are much closer to volume supply and good progress seen. Margins, our chips are moving into generating recurring supply. That's driving up our EBITDA margins as you will have seen from our results for financial year 2026. And we're really looking to grow to our target of 30% EBITDA margin on our revenues. And we would hope to be able to achieve that target in the short to medium term. And then guidance, we are reconfirming our target revenue of 32,000,000 to $34,000,000 and EBITDA of $5,500,000 to $6,500,000 Thank you very much.

39:28 Perfect, guys. If I may just jump back in there, thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have been submitted already, just like to remind you that a recording of this presentation, along with a copy of the slides and the published q and a, can all be accessed via your investor dashboards. Guys, as you can see there, we have received a number of questions, and thank you to all of those on the call for taking the time to submit their questions. But Ian, Christophe, at this point, if I may just hand over to you to address those where appropriate. And if I pick up from you at the end, that'd be great. Thank you. Thank you very much. So running through the questions, do you envisage a future contract for your photonics controller ASIC with either Aureal Networks or AMD?

40:18 And if so, knowing the lead up time to a volume rollout, could this be this year? We already have a contract with Orial Networks. We have no tie up to to AMD. It is Orial that announced the the tie up with AMD. And unfortunately, we're not able to discuss the detail of that specific contract in terms of when the volume rollout will be. But obviously, when it does go into production, we we will we will notify the market of that even if we're not able to to specify the the the customer. Are you in discussions with any other companies regarding your photonic controller ASIC?

41:10 I think as we as we explained before ASICs are ASICs are are products that are for specific customers, and and therefore, we are not able to sell it to another customer, but we are speaking to other customers about doing ASIC photonics controllers for for them and also potential quantum computing customers, and and we will obviously announce those should we win those those contracts. Could your photonic controller ASIC be used to switch qubits in quantum computers with minimum alterations to the blueprints? Okay. I mean, there are different types of qubits and, you know, the way the way they're excited changes. So you've got some would use sort of photonic methods, some would use RF methods.

42:05 So, you know, we've got applicable technology to, you know, to make controller chips for those types of qubits. With AST space mobile launches in full swing and FCC approval for the expansion from 48 to two zero four satellites, when do you perceive you will get a revamped order for the next a 198 payload ASICs known as the AST 5,000 ASIC? Okay. So I'll pick that one up first. Yeah. So we did an announcement back in 2020 about working with AST, but unfortunately, we can't comment on AST's launch profiles or potential orders.

42:56 Given the comments around the substantial growth opportunity for ASSPs, the intention to use part of the part of the capital raise to bring ASSPs to market and the expectation that ASSPs will be an important driver of your revenue beyond the $100,000,000 target, could you please give us a little more color on the commercial progression you expect to see? In particular, without providing formal revenue guidance, could you indicate roughly the outline pathway from a new ASSP design win to commercial production, e. G, the typical time from design win to volume shipments, the approximate number of units a successful design could represent and the sort of ASSP or revenue opportunity per design win? Okay.

43:45 Alright. A very detailed question, I think we sort of demonstrated before with that previous slide on slide 14 about the growth of the the ASSPs and the fact is that, you know, the growth will start in 2030, and that's really to do with when the the the satellites are up and they're building the subscriber base. That means they'll be ordering the the, you know, the the the user terminals. I mean, you can... You know, I I talked about as many many chips that you have per user terminal and really a new constellation. As I mentioned, they're gonna be between 5 and, you know, 15,000,000,000 to to do a full blown LEO or MEO constellation.

44:33 So they will have many, you know, tens of thousands to to, you know, to... Could be up to millions of subscribers, and each one of those would need a u... A user terminal. So, I mean, we, you know, we we saw an announcement pre... Previously of designing of one of our chips, which was which was 50,000,000. I mean, we we we see that such design ins will be worth, you know, similar amounts if not, you know, they they could be in the hundreds of millions. But really, you know, I said that will all come when the when the launch started... Starts and the the service the service services production in... The the services online. So really, you know, this is longer term revenue out there. You know, we'll be getting some in terms of test terminals into '29, but really it'd be 2030 and beyond.

45:32 Satellite networks are increasingly exploring optical links between spacecraft and between satellites and ground infrastructure. As ENSILICA identifies photonics as a strategic growth area and bearing in mind the investment made in the photonics controller program, do you see space based optical communications as a potential future revenue stream? So so I mean, very good observation there, and I I mean, satellites are increasingly new... You know, using optics to link satellites together. That reduces the number of the number of ground stations because they can have a fast link between them and they they then beam the they they then beam the data down. And, you know, very... You know, again, you know, good good observation is that, you know, the the technology we're dealing in can be applied to those...

46:25 To to those optical links. So as well as being able to use our millimeter wave experience for these... For the... For those high frequency links, we can also we can also apply that to the to the optical links and the chips that are used to control those to control those links. Of the chips that have reached or are expected to reach tape out in financial year 2027, what is the typical elapsed time from tape out to first customer revenue and then to volume production? So it's normally around twelve months, but could even be as long as eighteen months. This is because the chip types out and goes comes back to us, we assess it. It also goes to the customer. They have to assess and make sure it's fully built into their products, which takes some time, but normally, there's push from both sides to get it in as quickly as possible.

47:32 So could you please provide an update on the SIA micro contract given that SIA entered extraordinary administration in Italy in May 2026? In particular, has ENSILICA had any further engagement with SIA or the appointed administrator regarding the outstanding $1,600,000 provision in financial year 2025, the status of the EU Ipkai funding and the potential resumption or transfer of the ASIC program to another party. How do you assess the prospects of recovering the outstanding debt and any future revenue from the contract given the change in Sia's financial and legal circumstances? We fully provided for the date.

48:21 We've taken Sia out of our forecast. We don't, at this point, expect the program to restart in the short or medium term. So... And we can't really comment on how likely it is that we will recover the date that we've provided against. So the best to say here is that we've moved on to other customer programs, and we're not currently engaging on a regular basis with SEA. Okay. I refer to your EZ Crystal's three in one PQC accelerator in a single hardware block.

49:13 Given that NIST is now actively encouraging migration to PQC, how significant do you believe that the architectural advantage of your implementation is versus competing PQC IP? Do you see potential for the EZ Crystal's architecture to become broadly adopted IP implementation across multiple semiconductor designs? And are you seeking evidence of that in customer evaluations or licensing discussions? Okay. Thanks, sir. Very good day. Very good good observation there. So the ENSI crystals basically takes the PQ algorithms and sets three and one and has them integrated together so they can save save silicon resources, save silicon area.

50:00 And, you know, see we that very differentiated in terms of allowing you to put PQ in your, know, in your chip without, you know, without massively increasing the cost of the chip or allowing you to target at a more more mature more mature nodes. So we're building that IP into a number of our own ASICs and ASSPs and, you know, we consider that to be a real differentiator for us. You know, we we do offer it for for licensing and, I mean, we announced one license for the IP and we have some evaluating it. But, you know, the the prime purpose of the IP is to, you know, is to differentiate our products and, you know, use it internally.

50:49 With regard to the PQC IP Cherry and RISC V capability, together with the 5,000,000 UK government funded secure processor program, could you please explain how you expect this to translate into commercial revenues over the next three to five years? Do you see Cherry PQC as a differentiator that helps win larger ASIC contracts or as a potentially significant stand alone IP product business? When do you expect the first meaningful revenues from it? Okay. Thanks. Another, yeah, another very detailed question. So this Innovate UK contract, we we we did for 5,000,000. I mean, we're we're actually developing a a post quantum cryptography cherry security subsystem and and then a microcontroller including that including that subsystem.

51:47 So so we're we're actually deploying that that subsystem on on number of ASICs and ASSPs that we have in the pipeline. So really, it's it's already been deployed, but not not not as a standard cost part. I mean, we have the once we have the part, which is fully funded by the Innovate UK contract, we can we can start seeing the traction we have with that as a a a standalone a standalone security device. Now that the fully funded health care chip feasibility study announced in March this year has concluded, what further milestones would shareholders expect to see before ENSILICA can assess the project's potential for further development or commercialization, insofar as these can be publicly disclosed.

52:38 Okay. So that... I mean, that study is now complete, and we're discussing with the customer the next stage in terms of, you know, developing a full chip for their for their products. So, I mean, you know, look out for some news in the in the coming months, you know, should the... Should that customer move ahead with the with the full ASIC development. What are the opportunities for ENSILICA in the telecoms area? Does the news of SpaceX investing in US mobile spectrum potentially change the landscape at all? Thank you. Okay. So so in terms of, you know, where we're in the telecom sector, I mean, you you...

53:25 We've we've talked about space a lot, but there's there's obviously a combining terrestrial and non terrestrial communications where, you know, we've talked about the millimeter wave expertise we have and also the optical side. So there's a lot of opportunities for us in the in the general telecom side and there's there's very much a emerging of standards between space space and terrestrial. I mean, it's a good observation as well on the, you know, the fact is that these satellite operators are buying spectrum. I mean, there there is SpaceX, but, you know, others have been buying spectrum as well. And, you know, I I think the the the conventional terrestrial operator probably needs to needs to look out as these satellite operators will be starting to eat their lunch.

54:17 The pipeline figure of $600,000,000 is meaningless unless it is qualified and weighted. What is the qualified and weighted pipeline? We do qualify and weighted for internal purposes, but it does change very substantially over time. Essentially, as we mentioned, we expect to between 2533% of the pipeline, and that provides the best long term average that we can assess in terms of providing guidance to the market. Okay. I mean, I'll just add to that. I mean, it is a good forward looking indicator. I mean, for the large opportunities, we I mean, we do cap them, so they don't distort the pipeline, but we very much see that as an indicator that we drive to keep driving that up and monitoring our conversion rate against that pipeline. So I think it's a good KPI.

55:26 You referenced the post year end placing of $15,000,000 How does that now leave your current cash position of the year end cash of $7,000,000 As mentioned, as part of the fund raise, are looking to invest in our ASSPs and also in working capital as part of the increase in supply. So whilst we can't comment specifically on the cash balance, we would say that we are fully funded for our existing products up to the point that we get to operational cash flow positivity. So we believe we have sufficient funding to get us to the point where the company becomes cash flow positive.

56:13 Thank you. Are we able... Are we going to be able to be profitable enough to have organic growth so as not to come back for another fundraise placing again, which year would you consider dividend? I think I answered that as part of the previous question that based on the current funding, we expect this to be able to take us to cash flow positivity. We have not, at this point, considered at which point we will be able to provide a dividend. But once we reach a significant free cash flow positivity, that is something that we will take into consideration.

57:07 How do you measure your satellite beam former performance against STM's beam formers and how do you win such contracts? I mean, in terms of the as as I've looked at the the, you know, the the actual beamform was made up of a a different type of different different chips. You've got the RF chip. You've got the digital beamformer chip when you're forming hybrid arrays. And and in terms of the, yeah, the... There there are a number of elements that you look at when when comparing, you know, comparing performance on on them. Power is one of them. I mean, we we consider we're very... We're we're competitive in terms of power and things like noise figure. So, you know, we we we believe that we, you know, we're able to produce something of equal performance for those satellite operators, which you know, which aren't vertically integrated.

58:12 What competition do you see in the photonic space currently? I mean, in terms of, you know, we see a number of RFQs. We're not really sure who else is playing in this in this space. I mean, I I think the the real interesting bit is there's a lot of UK companies and European companies there who are focusing on the photonics and really looking for a strong partner to work on the photonics controllers. In such fast moving markets, how are you coping with staff training and retention? Mean, we have very, very low leaving rates, think five percent or less, which we are very pleased with.

59:10 We also make sure that our engineers are involved in a variety of different projects and do interesting works, which we think helps a lot. We have a good sized engineering base and we have a good program of training and support as part of that, which we think helps very well in bringing engineers up to speed quickly and also providing support. I understand you would need to fund or find funding for ASSPs, but I thought you suggested 6,500,000 investment for customer ASICs. Can you explain this, please? So so I think the the the fundraise that we did was to to give us the funding in order to be able to do that in that increased investment in ASSPs, which we are currently investing in and will continue in financial year twenty seven and also a portion of financial year twenty eight. So we are funded for that currently.

1:00:25 And then two, could a customer engage you for a chip development and then take the production elsewhere? No. If we engage them contractually, one of our requirements is that the customer must buy the chip from us. We do do consultancy work as we showed in our slides. But if we do consultancy, we would look for a higher price and a good margin if we are not going to get the future supply. But our strategic focus is on the NRE and supply both in ASICs and in ASSPs.

1:01:16 Can you describe your terminal beamformer and how it compares with Smokey Wave from Qorvo and Renaissance? Where do you view demand and competitive differentiation in Ku band versus Ka band? Okay. So, I mean, in terms of our beam former architecture, we... I mean, we have the full chipset, so, you know, the RF, the digital beam former, and and the modem. So we we have a sort of full fully integrated solution where we're leveraging hybrid hybrid beam forming that, you know, allows us to do calibration as well as support multiple beams and puts in smart features in there such as interference mitigation, jamming mitigation.

1:02:02 So so, you know, that hybrid beam forming option, which interfaces to our to our RFICs as well as other people's RFICs is one of our one of our key differentiators along with the, you know, along with the the modem chip that we're we're developing. So it's a level of, you know, it's it's a level of integration and the smarts we're putting into the to the chipset itself. I think if we do a last question, which part received the $50,000,000 award? I'm assuming that refers to the contract that we announced with the European satellite operator. So the contract was with the European satellite operator, and it relates to our ASSP modem, which is part funded by the European satellite operator and and part funded by the UK space agency.

1:03:01 Great. Yes. Yeah. So so... Yeah. I mean, that was... The answer to that, that was the modem chip in in terms of the that which I said was part part funding. So that was the modem ASSP. Right. Okay. I think we're done with the questions. Perfect, guys. If I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors. But Ian, perhaps before really now, just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Okay. Thank thank you very much. Thanks again for everyone for for joining us and the interest in the company. I mean, as you would have seen, financial year 2026 was a record year for us.

1:03:48 More importantly, it's really showing the business model and how we're able to scale it. I mean, we've had that increase of revenue profitability and the strong sales pipeline conversion and replenishment. So I mean, now, you know, we've we've we've built a platform for for growth now over the next the next few years. Perfect, Ian. That's great. And thank you both once again for updating investors this morning. I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback. On behalf of the management team of ENSILICA PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon To You