IQE looking at 20%+ FY 2026 growth

IQE’s financial year 2025  saw a decrease in revenues from 2024’s £118m to £97.3n.

Photonics revenue of £57.1m (FY 2024: £49.9m) increased 15% year-on-year driven by funding releases for certain US military and defence programmes in H2 2025 and continued growth in AI and data centre-related markets.

Wireless revenue of £40.1m (FY 2024: £67.3m) decreased 40% year-on-year reflecting uncertain macroeconomic conditions in the first half of the year and softness in mobile handset demand with some end customer requirements met from existing inventory.

Adjusted EBITDA of £3.2m (FY 2024: £8.1m), decreased 60% year-on-year, resulting in an adjusted EBITDA margin of 3% (FY 2024: 7%). This reduction reflects a lower revenue base and the underutilisation of manufacturing assets and capacity.

Reported net cashflow from operations of £8.1m (FY 2024: £1.3m) increased in the year, reflecting the impact of working capital movements.

Cash capital expenditure (PP&E) was £5.1m (FY 2024: £11.4m) to support the Group’s strategic GaN-related capacity investment into the power electronics and advanced display (microLED) markets and other high growth sectors.

Cash and cash equivalents were £15.7m as at 31 December 2025, with adjusted net debt of £31.5m (FY 2024: £18.8m).

“We were encouraged to see market conditions improve in the second half of the year,” said CEO Jutta Meier, “ this  reflected a positive trajectory in key sectors including photonics for AI and data centres, aerospace and defence, and wireless products for consumer electronics.

“The £81m fundraise from key partners is a transformational investment for IQE, giving us the balance sheet strength to invest in our future growth, while maintaining our global asset base.

“IQE is uniquely positioned as a critical enabler of the world’s fastest-growing technology ecosystems. In particular, accelerating demand for our Indium Phosphide (InP) solutions supporting data centre and AI markets is expected to be a material growth driver throughout 2026 and beyond.

“Taken together, a stronger IQE, coupled with favourable market conditions directly benefitting the business, gives me great confidence for the future.”

FY 2025 Financial Summary:

Following the conclusion of the Strategic Review, IQE announced a fundraise of £81m, with the net proceeds to be used to repay the Group’s existing Revolving Credit Facility with HSBC Bank, support the Group’s working capital requirements and ongoing strategic investment. This significantly strengthens the Group’s overall financial position.

The fundraise included a £45m strategic investment from MACOM Technology Solutions Inc. (“MACOM”) in the form of £30m of equity and £15m in new non-interest bearing convertible loan notes. Concurrently, IQE and MACOM also entered into long-term supply agreements.

The remainder of the fundraise comprised a £23m redemption and reinvestment of convertible loan notes by existing noteholders, as well as a £13m Placing and Retail Offer.

Following the completion of the fundraise and the repayment of the Group’s Revolving Credit Facility with HSBC Bank, IQE will receive net cash inflows of £27.9m.

Trading in Q1 2026 was in line with management expectations, with strong demand across all core segments.

In particular, IQE is seeing accelerated demand for the Group’s InP solutions, which support optical photonics products for data centre and AI infrastructure, and expects this to be a material growth driver throughout FY 2026 and beyond.

Alongside this, IQE is seeing ongoing strength in aerospace and defence markets, as well as VCSEL and wireless products supporting the consumer smartphone industry.

Revenue for FY 2026 is expected to exceed 20% growth year-on-year, with strong order book visibility into H2. This is expected to result in a high-single digit to low double-digit adjusted EBITDA position.