Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- WISeKey International Holding Ltd (WKEY, Financial) ended the year with a strong cash position, exceeding $90 million, which supports future growth and investment opportunities.
- The company has made significant progress in developing post-quantum secure chips, with plans for commercial launch in Q4 2025.
- WISeKey International Holding Ltd (WKEY) has established strategic partnerships, including with the Swiss Army, to enhance secure communication and satellite technology.
- The company is focusing on a convergence strategy, integrating semiconductors, satellites, blockchain, and digital identity into a unified ecosystem.
- WISeKey International Holding Ltd (WKEY) has a robust pipeline of secured and pending business opportunities exceeding $115 million for the period 2026 to 2028.
Negative Points
- WISeKey International Holding Ltd (WKEY) reported a significant decline in revenue for 2024, down to $11.9 million from $30.1 million in 2023.
- The company is facing challenges with excess inventory accumulation from 2023, impacting current financial performance.
- There is uncertainty regarding the timing of client decisions and demand for the new post-quantum chips, which may affect future revenue projections.
- The acquisition of IC Alps is pending government approval, which could delay integration and potential revenue contributions.
- WISeKey International Holding Ltd (WKEY) is still in the early stages of development and proof of concept for several projects, which may delay revenue realization.
Q & A Highlights
Q: Can you provide more details about the pipeline number as of April 15th, and how competitive do you think it will be?
A: The pipeline is valued based on the estimated size of client opportunities, which evolves over time. We take a conservative approach, categorizing opportunities from speculative to design win stages. The TPM and post-quantum markets have significant barriers to entry, with few competitors. We aim to capture 10-20% of the TPM market over the next 3-5 years, and we believe we are competitive on price and flexibility. - John O'Hara, CFO
Q: When do you expect to have visibility into the volumes for post-quantum capable chips?
A: We are in active discussions with clients and expect to have visibility into demand by the end of the year, particularly after announcing our half-year results. Some clients may wait for certification, which depends on authorities like NIT. We expect to have a good indication of demand for the first half of 2026 by the end of Q3. - John O'Hara, CFO
Q: Can you discuss margins and inventory levels for the second half of 2025?
A: We don't anticipate significant adverse impacts on margins in 2025. The margin was affected in 2024 by one-off costs related to reducing old stock levels. We expect margins to return to 2023 levels in the second half of 2025. - John O'Hara, CFO
Q: What is the status of the Swiss Army contract, and how will it impact revenue?
A: The development contract with the Swiss Army is live, focusing on testing technologies like the seal phone and secure communications. Revenue from this contract will be relatively small in 2025 as we are still in the research and development phase. We expect more significant revenue in 2026 and beyond. - John O'Hara, CFO
Q: Can you provide insights into the IC Alps acquisition and its impact on your technology offerings?
A: The IC Alps acquisition will enhance our vertical integration and flexibility in AI design. It allows us to offer full-scale solutions, from design to supply of secure semiconductors. We are awaiting government approval, which could take 2-4 months. - John O'Hara, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
