SEALSQ Corp Q2 FY2025 earnings call

• Technology Milestones: Achieved progress on QUASAR Program (QS7001 engineering sample, production samples in Q3 '25), QVault TPM pilot-customer sampling, VaultIC408 secure microcontroller advance to FIPS 140-3 level 3 validation, MS6003 Secure Element launch, INeS Box deployment, and Quantum RootCA development.
• Commercial Achievements: Revenue on track to grow 59%-82% in 2025, TPM customers doubled from 35 to 82, secured multiyear supply agreements, expanded collaboration with Landis+Gyr, and advanced Card Reader business in Asia.
• Strategic Investments: Acquired IC'ALPS (100 engineers), invested in Quantix Edge Security facility, launched Quantum Investment Fund, and expanded secure quantum-ready satellite constellation.
• Outlook: 2025 revenue expected $17.5M-$20M, 2026 growth fueled by full year IC'ALPS revenue, new projects, and visibility of quantum-resistant TPM with 50%-100% revenue growth, and $170M pipeline for 2026-2028.

For the first half of 2025, revenue was $4.8 million, consistent with the first half of 2024. Gross profit was $1.6 million, with the gross profit margin increasing from 19% in 2024 to 34% in 2025. For 2025, revenue is on track to increase 59% to 82% versus 2024, with expectations to reach $17.5 million to $20 million. The first half of 2025 confirmed the company's strategy strength, operational resilience, and future opportunities, with segments like semiconductor solutions and secure digital infrastructure driving performance.

• Full year 2025 revenue expected $17.5 million to $20 million, representing 59%-82% growth year-on-year.
• 2026 expected 50%-100% revenue growth year-on-year, fueled by full year IC'ALPS revenue, new personalization center project revenue, and visibility of quantum-resistant TPM.
• Business pipeline stands at $170 million of opportunities for 2026 to 2028 across PQC, ASIC, and sovereign semiconductor markets.

Q: Clarify on full year R&D budget, specifically onetime stock-based comp under R&D in first half and R&D consolidation in second half A: John O'Hara mentioned on the underlying business down in Provence, R&D would be around $500,000 - $550,000 per month when backing out the onetime stock-based comp piece and considering second half consolidation Q: About the $170 million pipeline, process of building the pipeline estimate A: John O'Hara explained the pipeline is built by identifying opportunities, evaluating them, applying low success percentages, moving from identified to qualified, design in, and design win stages, looking 3 years into the future and not including revenues from already won clients. Carlos Moreira added the sales cycle is long (around 6 months) due to complexities in integrating new chips into existing hardware, and market education is improving but there's still a process of clients gradually adopting PQC technology