SEALSQ Corp Q4 FY2024 earnings call

• 2024 was a transformational year with scaling post-quantum security technology, raising over $80M in funding, and expanding into high-growth markets. - Invested $5M in 2024 and plans $7.2M in 2025 in R&D for post-quantum innovation. - Allocated $20M to invest in startups in quantum computing and AI. - Entered into exclusive negotiation to acquire IC’ALPS, a leading ASIC design company. - Acquired 30% ownership of weekend group, a blockchain financial company. - Expanding semiconductor personalization facilities, with plans for a center in Spain and U.S. sales team expansion. - Strong financial position with no bank debt and over $90M in cash reserves.

In 2024, SealSQ reported revenue of $11 million, a decrease from $30 million in 2023. This reflects the company's transition from traditional semiconductors to next-generation quantum-resistant chips. The revenue reduction is also due to market normalization and customers utilizing existing inventory from the COVID-19 pandemic supply chain disruptions. The company is in the early stages of the post-quantum market potential.

• Anticipate significant revenue increase in 2025 compared to 2024, driven by chip revenue, chip personalization services, and consolidated revenue from acquisitions. - Full impact of growth expected in 2026 with commercial launch of new products in Q4 2025. - Projected contract pipeline over next three years is $93 million, with $6.8 million in confirmed bookings in 2025.

• Market normalization and customers utilizing existing inventory from COVID-19 pandemic leading to lower order volumes. - Stringent certification requirements (e.g., NIST FIPS 140-3) for new post-quantum chips, which may delay product launches. - Uncertainties in the semiconductor supply chain, particularly in the Asian region, which could impact future revenue.

Q: Should we understand that we're not going to see a lot of 2023 customers coming back into 2025 revenue? Or are we going to see some level of normalization?

A: Carlos explained that normalization is starting as clients with existing inventory from previous generations start to come back, and new customers are coming through personalization centers.

Q: The $93 million pipeline, typical duration of that contracts are being discussed is 3 years. Is that correct?

A: Carlos confirmed it's 3 years.

Q: Historically SealSQ's win rate of pipeline?

A: Carlos and John discussed pipeline stages and win rates, mentioning sticky clients and different likelihood percentages for design wins.