Release Date: January 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ilika PLC (ILIKF, Financial) has a strong patent portfolio with 62 patents, providing robust protection for its intellectual property.
- The company has a diversified market approach, targeting both medical devices and automotive sectors, which reduces execution risk.
- Ilika PLC (ILIKF) has a licensing and royalty agreement with Cirtec, validating its Stereax technology and enabling scale-up for production.
- The company has completed the commissioning of equipment at Cirtec Medical, paving the way for product release and revenue generation.
- Ilika PLC (ILIKF) has received positive feedback on its Goliath batteries, which have been tested by automotive customers and show promising safety and performance benefits.
Negative Points
- The company is still in the early stages of revenue generation, with initial revenues expected to be low as products undergo lab-based trials.
- Ilika PLC (ILIKF) faces challenges in providing forward guidance due to the nascent stage of its production and commercialization efforts.
- The company is reliant on grant funding, which has seen a hiatus, impacting its financial planning and cash flow management.
- There is uncertainty around the timeline for Goliath battery commercialization, as it depends on licensing discussions over the next 18 to 24 months.
- Ilika PLC (ILIKF) has experienced a decrease in turnover, primarily due to the winding down of major grant funding projects.
Q & A Highlights
Q: In which financial year do you anticipate starting potentially profitable production of a first commercial battery product?
A: Stereax production is expected to commence in 2025, with batteries being dispatched to customers by mid-year. Goliath batteries will continue development, with timelines dictated by licensing discussions over the next 18 to 24 months. - Jason Stewart, CFO
Q: Will your miniaturized battery also have a use in robotics?
A: Stereax miniature batteries could power sensors in robotics, especially where hardwiring is difficult. However, they are too small for primary power supply in most robotics, where Goliath batteries could be more suitable. - Graeme Purdy, CEO
Q: Would licensing to a Chinese manufacturer ever be an option?
A: There is no legal barrier to licensing a Chinese manufacturer, but we would need assurance of an attractive return on investment and IP protection. - Graeme Purdy, CEO
Q: Why is nonrecurring engineering revenue larger than royalty revenue in a company that seeks to replicate Arm's IP business model?
A: In the early years, Arm also relied more on nonrecurring engineering and license fees. As we are at the beginning of our licensing journey, NRE is an important revenue component. - Graeme Purdy, CEO
Q: What chemical do Ilika batteries use?
A: Stereax batteries use an LCO cathode with a silicon anode, while Goliath batteries use NMC cathodes with silicon anodes. The oxide electrolytes are the secret sauce for both, chosen for ionic conductivity and chemical compatibility. - Graeme Purdy, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
