EnSilica PLC (AIM: ENSI), a leading provider of mixed-signal ASICs, has demonstrated robust growth and strengthened its market position according to a recent coverage initiation by Stonegate Capital Partners. The company’s performance in the second half of 2024 showcases its strategic initiatives and market strengths, particularly in automotive, industrial, healthcare, and satellite connectivity applications.
EnSilica reported a 23% increase in revenues to £25.3M for the second half of FY24, up from £20.5M in the previous year. This growth was driven by strong customer demand and strategic investments in intellectual property, ASIC NRE, and team development. The company’s EBITDA saw a slight increase to £1.7M from £1.6M, despite ongoing investments in scaling operations. Cash and cash equivalents rose significantly to £5.2M as of May 2024, up from £3.1M at the end of FY23.
The global ASIC market is projected to reach $25.0B by 2030, and EnSilica is well-positioned to capitalize on this expansion, particularly in high-demand sectors such as telecommunications, automotive, industrial, and aerospace. The company’s pursuit of expansion through consolidation and vertical integration has enhanced its market position and comprehensive service offerings.
EnSilica’s financial foundation was further strengthened by successful equity fundraisings totaling £6.5M and the refinancing of external loans with a £6.0M facility. This has enabled continued investment in intellectual property and operational capabilities, supporting the company’s growth trajectory.
The company demonstrated strong contract momentum in FY24, securing high-value contracts across various sectors. Notable achievements include a £2.5M satellite broadband chip contract, a €3.8M automotive and industrial chip contract, and a $30M telecommunications ASIC contract. EnSilica also made significant strides in Edge AI with a $7.0M supply-only contract and in factory automation with a $2.4M contract with Siemens.
Post year-end, EnSilica signed new contracts with a lifetime expected value of $65.0M, further underscoring the company’s robust market positioning. The company’s partnerships and strategic investments, such as joining the TSMC Design Centre Alliance, have bolstered its competitive edge in the industry.
Looking ahead, 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. The company is guiding to FY25 revenue of approximately £30.0M and EBITDA of around £5.0M, reflecting confidence in its growth strategy and market demand.
Stonegate Capital Partners’ valuation analysis, using P/E, DCF, and EV/EBITDA models, suggests a valuation range of £0.83 to £0.98 with a mid-point of £0.90 for EnSilica’s shares. This valuation takes into account the company’s strong financial performance, market position, and growth prospects in the expanding ASIC market.
As the demand for specialized ASICs continues to grow across various industries, EnSilica’s strong position in key sectors and its ongoing investment in research and development place it at the forefront of market opportunities. The company’s ability to secure high-value contracts and strategic partnerships indicates its potential for sustained growth and innovation in the competitive ASIC landscape.
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