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(Sharecast News) - EnSilica reported strong revenue growth and a sharp improvement in profitability in the first half of its 2026 financial year on Wednesday, supported by robust demand for design services and growing recurring revenues from chip supply contracts.
The AIM-traded fabless chipmaker reported that revenue for the six months ended 30 November were expected to rise by more than 35% on a like-for-like basis, driven by solid new business wins and strong levels of non-recurring engineering and recurring supply income from existing programmes.
As a result, the board said it was confident of reporting first-half revenue of around 12.7m, up from 9.3m a year earlier, with EBITDA profits of 1.7m, compared with an EBITDA loss of 0.2m in the prior period.
EnSilica said trading momentum during the period reflected continued focus on high-growth, technology-led end markets, with increasing traction in satellite communications across user terminals, payloads and resilient positioning, navigation and timing applications.
Demand for "safe and secure" chips also increased, driven by long-lifecycle systems, regulatory requirements and a greater emphasis on supply chain resilience, while the company's post-quantum cryptography-ready security IP and architectures were reportedly becoming more relevant across satellite, automotive, industrial and critical infrastructure markets.
Design activity and non-recurring engineering work remained robust, with new programme wins supplementing existing long-term engagements and supporting a strong pipeline of advanced ASIC programmes.
The group said the pipeline underpinned long-term growth in recurring chip supply revenues.
Cash balances at 30 November stood at 2m, unchanged from 31 May.
Looking ahead, the board reiterated its confidence in delivering a substantial increase in revenues and EBITDA profitability in the 2026 full year compared with 2025.
EnSilica reaffirmed its guidance for the year ending 31 May, targeting revenue of between 28m and 30m, with more than 95% already covered by existing customer contracts, and EBITDA profits of between 3.5m and 4.5m.
The company added that its strong non-recurring engineering order book, combined with rising chip supply profits, was expected to drive a phased reduction in cash consumption, with positive monthly cash generation anticipated by the end of calendar year 2026.
"With business already booked to support 28m to 30m of revenue in 2026, and with several customer chip tape-outs scheduled for the second half of the financial year, we expect 2026 revenues to be weighted towards the second half," said Ian Lankshear, chief executive officer.
"Looking beyond 2026, the depth, quality and duration of our contracted and pipeline programmes point to a level of long-term value that is not yet fully evident in our near-term financials.
"As these programmes progress from design through tape-out into sustained production, our highly scalable model and underlying quality of the business will become increasingly apparent."
At 1400 GMT, shares in EnSilica were up 3.86% at 53.8p.
Reporting by Josh White for Sharecast.com.