IQE plc

IQE reported first-half revenue of GBP 64.6 million, up 43% year on year. Wireless revenue was GBP 26 million, up 40% year on year, and Photonics revenue was GBP 38.5 million, up 45% year on year. Adjusted EBITDA was GBP 6 million. Adjusted operating cash flow was affected by a working capital outflow of GBP 4 million, adjusted net cash was GBP 30.2 million, and the company said it ended the period free of bank debt with cash of GBP 41.6 million. For guidance, management reiterated upgraded full-year guidance after the July trading update and said momentum into the second half supports growth through the rest of 2026 and beyond; they also pointed to potential upside from optical communications demand, but said the outlook remains prudent.

Jutta Meier framed the quarter as evidence of a transformed IQE, emphasizing a shift from spot orders to long-term agreements that improve visibility and support capacity planning. She highlighted demand in AI/data centers, aerospace and defense, and other high-growth markets, and said the company is building a broader order book with stronger customer alignment. Her tone was upbeat but cautious, repeatedly stressing prudence, customer commitment before capacity expansion, and ongoing monitoring of substrate constraints.

No separate CFO commentary was provided in the transcript. Management’s financial comments from Jutta Meier focused on the reported numbers: GBP 64.6 million revenue, GBP 6 million adjusted EBITDA, GBP 4 million working-capital outflow, GBP 30.2 million adjusted net cash, and GBP 41.6 million cash with no bank debt. She also said margin improvement came from better utilization and a more favorable mix, and that some existing tooling will be converted in the second half to raise indium phosphide capacity, with the main cost being downtime rather than major CapEx.

Analysts focused on how the new long-term agreements differ from the old supplier-managed inventory model, and management said the key change is much better visibility on utilization and capacity needs, with prepayments likely to help fund expansion. Questions also centered on substrate shortages, 6-inch versus 4-inch indium phosphide, and when guidance might be updated further; management said 3-inch remains dominant, 4-inch is important, 6-inch is growing but not yet where demand is strongest, and the company will update when LTAs and substrate allocations give more clarity. Analysts also asked about CHIPS funding, Taiwan divestment, ULTRARAM, and pricing power; management said it is pursuing funding opportunities globally, has no plan to sell anything now, is continuing R&D, and believes it is in a better position to seek higher pricing on bespoke solutions.