Good afternoon, ladies and gentlemen. Welcome to the EnSilica PLC four-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged; they can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it's appropriate to do so on the Investor Meet Company platform. Before we begin, we would just like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from EnSilica PLC. Ian, good afternoon, sir.
Good afternoon. Welcome, everyone. Thanks for joining us for the audited results presentation for the year ending 31st of May 2025. I mean, this has been a year of strategic progress defined by robust contract conversion. We converted six contracts, and this really shows that we're positioned well in the semiconductor value chain. We've also had great growth of chip supply. Disappointingly, the total revenue is down, and this is due to customer-induced delays. Resilience to this is being built up through the strong supply revenue, which means in future years we won't be so susceptible to the variation in revenue. Just the normal disclaimer for the forward-looking statements. Please read at your leisure. Just for those that are not familiar with the company, I'm a co-founder. I started my career as a solar electronics engineer at Plessey, moved into semiconductors in the mid-1990s, working for Hitachi, and then Nokia. I set up EnSilica in 2001, originally as a design consultancy. In 2016, we started the transition to be one of a fabless ASIC company, and we'll explain more about what that means in the slides and our progress. I'll ask Kristoff to introduce himself.
Good afternoon. I'm Kristoff Rademacher, Chief Financial Officer. Originally from South Africa. I spent my first formative years working as an auditor with KPMG. I then left for the pharma and biotech industry, first working for Archimedes Pharma and then subsequently as Group Financial Controller at Oxford Biomedica PLC, a company listed on the main market of the London Stock Exchange. I've been with EnSilica now for 18 months. Thank you.
Thanks. As I mentioned, EnSilica, we're a fabless chip maker. We don't have a fab ourselves. We use the same business model as NVIDIA, Broadcom, Marvell. We focus on mixed-signal chips. These are high-value, high-margin chips. These are the same type of chips the likes of Cambridge Silicon Radio, Wolfson, Dialog Semiconductor, Nordic, all scaled on the back of. The highly differentiated silicon chips. I mean, our assets are our people, IP, customers, and suppliers. We have nearly 200 staff in three continents. They're a highly skilled team with a track record of developing chips and getting them into production. Chip designing chips and getting them into production is very much a team sport. It's not about individuals, i t's about having competent teams.
IP is also very key in developing chips. These are blocks that you reuse from chip to chip. We have IP, which addresses all of our key markets, as well as things like post-quantum cryptography IP, which is cryptographic IP that is resistant to attack from quantum computers. Actually, really the latest type of cryptographic IP. We have a global customer base, including well-known companies like Siemens to scale-ups like AST SpaceMobile. Suppliers are important. Building strong supplier relationships with wafer fabs such as TSMC and GlobalFoundries, and we have direct relationships with those. Also the OSATs, which is an outsourced assembly and test company. These are the people that chop up the wafers and test them. We have a direct relationship with those, which takes time to build. I mean, we're focused on three markets, and I'll talk about those markets as we go through the slides.
Our revenue comes from designing the chips, and that's either the chips that we have future supply on. That's called the NRE, non-recurring engineering fees, where we co-invest with the customer to design the chip, and we later supply it. The other area is consultancy, which is where we really started the business, and it's still a key area for us. In that model, we don't supply the chip, t he customer looks after the supply chain. The supply revenue is around about selling the chip or a royalty per chip. I mean, one investor described this as the easy revenue, and it's a bit like an annuity stream where good high margins, good visibility, and we have a reoccurring revenue stream from that. I mean, our business model, it takes two to three years to design the chip where we have the NRE revenue.
The markets that we address are all sort of high-value, long-lifetime markets where we have seven to ten years of chip supply. You build a portfolio of chips, and some of those chips will over-deliver. Some may under-deliver, but that causes natural hedging in there. I said this portfolio of chips will protect us from ups and downs in the NRE revenue. Strong IP. I talked about IP at the top, but it's important to have IP. Makes you more efficient in the design, but also leads to higher gross margins and allows you to differentiate your position. Our ambitions and objectives, I mean, we're approaching a really key phase now, o ne, where our supply revenue will support our future investments and overheads before sort of non-cash charges. We're targeting as a company to be cash flow positive on a month-by-month basis during 2026.
Our ambition is to have revenues of GBP 60 million in the short- term. Through this, Kristoff goes to the side, he'll show you an illustration of how we can get there just with the current bookings we have. Longer- term, we have ambitions of greater than GBP 100 million. Certainly, one of our space user terminal side can exceed that revenue aspiration. Our objective is to capitalize on the growing European opportunities driven by the need for geographical resilient supply chain. I mean, some of these geopolitical uncertainties have really played to our favor in terms of European companies wanting European-sourced chips. Our objective is to keep attracting qualified and talented engineers to deliver on our growing opportunity pipeline. We're doing very well there. We've got excellent people, and they attract good people.
I'm pleased to present our financial year 2025 financial results. We were disappointed with the outcome of our revenues, where we achieved GBP 18.2 million. This is a decrease from the prior year. In financial year 2024, we had a large takeout that did not recur in financial year 2025. We were expecting to deliver growth, but we're impacted by the edge AI takeout moving into financial year 2026 and also the halting of the SIAE project, which impacted our revenue generation. We are seeing significant progress in financial year 2026, where our revenues year- to- date are significantly ahead of those achieved in financial year 2025. Gross profit margins have come up by 4% from the 36% achieved in 2024. This is also due to the non-recurrence of the low-margin takeout in financial year 2024. We expect a small increase in margins in financial year 2026, but not greatly. It should be more or less the same levels.
Included within other income is our audit tax credit. Due to the change from the SME scheme to the new merged scheme, there is a requirement under the financial accounting standards to present the audit tax credit under other income, which we have done. The expected credit loss of GBP 1.8 million is almost entirely the SIAE provision for bad debt, which the company prudently decided to take and also remove SIAE from our forecasts. We are still in discussions with SIAE at present and would hope that the project will restart in financial year 2026 or in 2026, but that does depend on SIAE being able to manage its commitments and meet its commitments. We achieved a break-even EBITDA, which was a good result considering the headwinds we s uffered during the year, but we are looking to significantly improve on that in financial year 2026.
Next slide. Just looking at the revenue split. We were very pleased to announce that chip supply revenues have increased by 97%, almost doubling i n financial year 2025. That shows that our business model is working. Our chips in supply have increased, both in volumes and in number of chips, and we're looking to increase that further in financial year 2026 and beyond. As I mentioned before, we were disappointed with the NRE revenues achieved, which is mainly the takeout in financial year 2024, which did not recur, and also the SIAE revenues, which were generated. Consultancy revenues are slightly down from the prior year. The reason for that is that s ome of the employees working on the consultancy side were pulled into the NRE side, but the consultancy remains a key pillar of our future growth, and we are looking to slowly grow that in future back again to normal levels.
Next slide. Balance sheet. The main balance sheet items, intangible assets increased due to our co-investment in our customer development, in our E projects, and also our own internal IP, which we then look to use in future development projects or to license out or achieve royalties on. During the year, we capitalized GBP 5.8 million, and this was offset by amortization and impairment. The impairment is mainly related to the SIAE asset, which we had to impair at the same time as providing for the intangible. Cash, the movement will explain further in the cash flow statement. External loans i ncreased due to the refinancing with Lloyds Bank of Scotland of the GBP 6 million facility, which increased the loans. We have also repaid some of the balance during the year.
Next slide. Coming on to cash flow, we achieved a break-even EBITDA. We had positive working capital, which was driven by the new NRE contracts for which we achieved favorable payment terms, which allowed us to invoice upfront for the work that is being performed. The tax credit of GBP 1.2 million was achieved. This is down from the prior year, mainly due to the change in schemes by the government, meaning that the tax credit was not as favorable as it has been in prior years. It was not really due to a lowering in activity because our activities were at more or less the same levels.
Intangibles and CapEx investment, we spoke about GBP 5.8 million and then GBP 0.7 million of IT and manufacturing equipment. Interest paid, more or less the same level. There was a piece of one-off interest due to the refinancing, which is not expected to recur in financial year 2026. We should see a lowering of the increased cost. Our cash consumption was GBP 5.3 million. I would point out that GBP 5.1 million of that was in the first half, and then the second half, that slowed to GBP 0.2 million. We're definitely not saying that that will continue exactly at that level, but we will and have seen a significant decrease in cash consumption across the last few months. The net proceeds from financing, it included GBP 1.2 million of the tail end of the equity raised at the start of the last financial year, and then also the net GBP 1 million from refinancing of the loans. We received GBP 2 million of new equity and then repaid about GBP 1 million during the year, which gives us that net. Thank you.
Just to give you an overview of how the company is doing in terms of the chips that we have in our portfolio, we have five chips in supply. One additional one, or sorry, two additional ones were added during the year, being one industrial one, which is ramping up nicely. One space one for which we've received the first royalties and is expected to slowly increase in 2026 and then really ramp up in 2027. We've also got the o ther 12 chips in development, which are scheduled to take out quite a few of these d uring the next 6- 12 months. So they are progressing very nicely. We've got GBP 40 million contracted NRE from our new contracts, which is being generated between financial year 2025 and financial year 2027, giving us good visibility over revenues. And then we've got GBP 250 million of lifetime supply values revenues, which is from our existing portfolio. We do not include chips where there isn't a final customer identified yet. This could increase as we generate new customers for our current chips in supply. Thank you.
And then just looking at our growth platform. We've tried to show an illustration of the potential revenue evolution that the company could experience. This is not meant to be a forecast. This is to give an indication of if t he supply revenues continue as for the existing chips as they currently are going and the chips in development for which we have customers. If these are completed successfully and go into chip supply as expected and the customer is successful in selling it, then we would expect our future revenues to increase as shown here. Some of the chips could do worse. Some of the chips could do better. One of the things that gives us comfort is the fact that we've now got a portfolio of chips, which means we are not wholly reliant on only one or two chips. Also, we have some potential space chips that are not factored in yet because they do not have a final customer. If these are very successful, then we could do even better than this illustration suggests. Thank you.
Okay. Thanks, Kristoff. I'll talk you through the markets. One of those is the space communication sector. There's a lot of investment going into this sector, both private investment and also through government contracts and government funding. It's a high-growth sector. I think Starlink can prove that r esilient space connectivity is a requirement, and everyone is looking for an alternative to Starlink's service. Chips are a key enabler for the space communication sector. They reduce power, size, and deliver the required performance. It's a bit like saying they're sort of the picks and shovels of this gold rush. They're used in four areas within the space sector. They're used in the satellite, it's called the payload, and there are ASICs, beamformers, processing units. They're used in the user terminal, which is the piece of equipment the actual subscriber has to connect to the i nternet and there they have millimeter wave chips, digital beamforming chips, modem chips.
The other area where they're used is the gateway. This actually connects the internet to the satellite. It's sometimes called a ground station, and they tend to be high-performance pipes or optical links. The other important area is that one called position navigation and timing. People might know it as GPS or GNSS. This is around getting positioning and timing information that, I mean, the user terminal needs that so it knows its position and where to point at the satellite. It's also used in drones, defense applications, and resilient to jam-proof GNSS is very important now. Here's a sort of list of the sort of European, U.S. constellations. I said everyone's heard of Starlink, but there's lots of other ones in there. Iris 2 is the European constellation, t here's one from Amazon.
Six months ago, we only had one of these as a customer, and now we've actually got feasibility contracts or chip evaluations going on with four on here. Real progress has been made. We talked about the payload, and there's one particular chip in the payload, a very complex one called a beamformer. This goes in the satellite, and the satellite has a phased array, and it controls the footprint of the coverage as the satellite goes over the Earth. We had a contract with AST SpaceMobile back in 2021. We did a joint release with them, and we were supporting them in developing their payload ASIC, which gives us sort of tenfold improvement in processing power. I mean, we've built some unique experience and expertise in this and currently have t hree new feasibility studies for beamforming ASICs, two with satellite operators and one with a satellite sort of supplier manufacturer. These engagements, when they progress, will lead to multi-year, multi-million ASIC contracts. I'm not saying that all of those will convert into contracts, but I would expect one or two of them to convert.
Interestingly, we did say this in an R&S where we announced the first royalty payment. One of those contracts, we have a what you might call a chip-as-a-service type model where we get a monthly revenue from every satellite using the chips in service. I think that's an indication of the real unique value that we're demonstrating to the satellite operators through our chips that they're giving us a piece of their revenue pie. We are strategically positioned here to capitalize on these opportunities. We've got proven experience in w hat they call advanced node mixed signal and digital beamforming, and we are one of the few trusted independent European suppliers. I mean, it should be noted that one of our competitors in this area, SatixFy , that were also doing payload beamforming chips, were acquired by MDA Space. Acquired for a pretty sum, and they really are now an internal resource of that company and not independent anymore.
The user terminal, I said you could think of this a bit like a sort of a set-top box that you'd use to pick up satellite TV, but it's a lot more complicated. It's got to both receive and transmit, and the satellite's moving, so it needs a thing in there called a phased array, which uses a beamformer to track the satellite. We've been working in this area since 2018. We've secured GBP 20 million of funding from lead customers. European Space Agency and U.K. Space Agency. We have four chips now which are sampling. We have the physical prototypes of those chips out with customers and three more in development. All of that IP is owned by EnSilica. They are what they call ASSPs, application-specific standard parts.
We have got multiple funded engagements with satellite operators to support the adoption of these chipsets. There are a number of chips per user terminal, different types of chips. We are the only provider who has all of the key ICs that go into a user terminal. That means we can provide a highly differentiated, integrated solution rather than using bits of Lego from other places. We have added novel features, and we have a sort of patent-pending architecture with strong IP in this area. It accelerates our customers' time to market and gives them better performance.
We are using mainly a European supply chain on this, so that's very attractive to the European satellite service providers, u sing our chips rather than chips from other regions. The automotive and industrial area, I mean, they're very similar in ways, t hey're all about high-quality longevity of supply, i t requires cybersecurity, functional safety features. The combined automotive industrial market is worth just over USD 160 billion. We'd say about 5% of chips are actually ASICs, so designed for one particular customer. Really, that's a USD 8 billion market. There's a high barrier to entry to getting into this market. We've been working on that for some time. Those customers are looking for high-reliability quality and a supply chain, so y ou need to build up those systems to supply.
What you also need in all of this is you need to sort of carve out your k ey niche in this area. Our niches are around cybersecurity, functional safety, things like motor actuator controllers, and sensor interfaces. It is important to have those niches, to have the IP which you can reuse from one chip to the next. We started off with our first win in 2016, an automotive with an industrial, then a win in 2018 with an automotive one, very highest functional safety rating. Recently, we have had two wins with Siemens, who are the market leader. We have major automotive Tier 1s as our customers, which I said there is a very high barrier to get on the customer list of these companies. We talked about those six projects that we converted. I mean, we are working on those, and probably the R&S we released on Monday, the 3rd of November. We are progressing well with those projects. We also have a new wave of projects which start off with feasibility studies for various chips, both in the space sector and in the automotive and industrial sector that will lead to our next wave of design wins. We're really making great progress there.
In summary, we had six excellent new NRE design wins during financial year 2025. One of the key highlights for me is that these are progressing as planned, with some of them expected to tape out in this financial year 2026, after which they'll hopefully go into production about 6-12 months after that. Good progress is being made. Because of the contracts and our success in our supply chain revenues, we're seeing good visibility of revenues for financial year 2026 and beyond, as I've mentioned before. We've got a strong pipeline of opportunities there is about GBP 400 million at the moment in the sales and opportunities pipeline. We will not win all of that, but hopefully, we will win a portion of that. Our supply revenue is building strongly, doubling this year, and we hope to see significant growth again in financial year 2026. We have strong relationships with major semiconductor fabs and OSAT companies. Thank you.
Perfect, guys. If I may just jump back in there, thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that is situated on the right-hand corner of your screen. Just while the team take a few moments to review those questions that have been submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboards. Guys, as you can see there, we have received a number of questions throughout your presentation this afternoon. Thank you to all of those on the call for taking the time to submit their questions. Ian, Kristoff, at this point, if I may just hand back to you to read out those questions and give your responses where it's appropriate to do so. If I pick up from you at the end, that'd be great. Thank you.
Thank you. Running on to the questions. First one, is there any particular reason why the new joint broker has not yet issued a research note? We expect the research note will be published by the end of this week to coincide with our year-end results. Can you please update us on developments relating to the new satellite user terminal chips and their potential in terms of value to the company?
Okay. I mean, I covered the progress on that, on the user terminal chips. So as I said, there's good progress there. We've got those four chips, with samples being released and the evaluations going on. I mean, in terms of the value, I mean, I don't think the real value of the design win is reflected in our illustration there, but user terminals are sold in the hundreds of thousands to many millions. Starlink has 8 million subscribers. One design win itself could be in the hundreds of millions. We are looking to get, I showed those constellations there, we are looking to get some design wins in those constellations.
What expectations do you have for the PQC three-in-one IP block in terms of value to the company? Does the company plan to see further opportunities in the quantum computing space?
Okay. I mean, just to be clear, post-quantum cryptography is not quantum computers. What it is, it is a cryptography which is resistant to attack by quantum computers. The three-in-one IP was designed to be a very low area, so it could be deployed in both mature ASICs as well as using the latest nodes. As you may have noted, we licensed that original PQC in 5 nm . We see this as a basic building block, e very chip needs strong cybersecurity to stop it being hacked, and that's driven by the Cyber Resilience Act and lots of legislation. We've got a great piece of IP there that we see deploying in lots of chips, including our satellite communications chips.
Provided all criteria are met in terms of margins and creditworthiness of the customer, does the company have the scope within the next 12 months to take on a contract in excess of GBP 100 million? The answer is yes. Normally, the structure of the contract would be something like GBP 15 illion-GBP 20 million would be the NRE development income, and probably GBP 80 million-GBP 85 million would be the supply. We've done this level of contracts before, so yes, we would be able to do another one of these contracts. What benefits to date have been gained since joining the TSMC Design Center Alliance?
Okay. Okay. I mean, in terms of that, we've done joint marketing, including going to TSMC symposiums, which is only open to TSMC partners. We get enhanced support from them as well, as well as actually being listed on their website. So we've had referrals coming in through that program. There's also a lot of prestige that goes with it. I mean, TSMC do a very strong audit on your IT facilities and the security of that, as well as make sure that they take references with customers. Just the prestige that goes with that is worth it.
What benefits can be expected from the strategic partnership with CODASIP? Do you envisage forming similar relationships with other companies from now on?
Okay. So CODASIP have quite a unique piece of IP. They have a RISC-V, which is a type of processor core IP that uses a Cherry instruction set, which i s something that both the U.K. government and U.S. government have been promoting because of its strength in cybersecurity and reducing memory leakages. We see that as a building block for developing the hardware security element within our chip. We also have a similar partnership with ARM. You can go to ARM's website, and you can find information on EnSilica there. We have less formal partnerships with many of the other IP providers, such as Cadence and Synopsys.
Can you please update us on the partnership with Oriole with regards to future supply of chips and expected revenue flows?
Okay. Okay. Just for the audience, Oriole Networks are a U.K.-based, well-funded start-up. They're doing photonic switches, and we announced we're developing their chip. I can't say anything about their volumes, but I expect them to be very successful. They've got a very strong management team with a good track record and some very good people funding them. Very exciting there. We're really pleased to be supporting a U.K. start-up like that.
How many contracts are you expecting to announce before the end of financial year 2026? We are still targeting three to four contracts. We've signed a number of feasibility studies, which we are working on at the moment. We expect that some of those will turn into longer-term partnerships and contracts. We're also looking at other contracts with potential customers. In which niche area of the EV market does EnSilica operate? What is the current demand for these chips, and can we expect to see any contracts signed in financial year 2026?
I mean, anything for the automotive sector now has to be EV-compatible. EVs themselves often require redesigning o f the chips because of the different voltage levels and also that EVs have a different set of actuators and motors in there, not just to drive the drive chain, but for things like the cooling system and other things. Our focus in this area is around motor actuator controllers called H-bridge controllers, but also sort of sensors. I would expect to see another automotive design win, which will be EV-related because everything is going in that direction.
What is the growth in employee numbers over the past 12 months in both technical and admin categories?
Okay. On the technical side, we've added 28, which takes us to 185. On the admin side, we've added 2, which takes us to 14. You may have seen we took on a team in Budapest. I mean, that was 18 altogether, which was o ne admin and the rest engineers, very skilled engineers with functional safety and automotive expertise, very related to EV. And we also took on a team in Cambridge with millimeter wave IC expertise to support people that come in the user terminals. All those people are busy on funded projects.
What is EnSilica Adas Limited? EnSilica Adas Limited is a dormant subsidiary that was set up a number of years ago. It's currently dormant, as we mentioned, and you may activate it in future, but at the moment, it's expected to stay like that. Double bubbler. Firstly, thanks again to all EnSilica staff for their hard work in financial year 2025. Thank you. As well as the very positive progress and new contracts update on Monday this week. My question is, there has been speculation in that British firms cannot be involved in the EU's IRIS2 project even as subcontractors. Does this correlate with your understanding?
It's an EU project, and we would come in as a component provider and not a prime. There's nothing that would produce a non-EU component going into that. I mean, as it happens, as I mentioned, we focus on a European-based supply chain for our chips as much as we can, which really would put them ahead of, say, U.S. or Asian-based. I mean, particularly with U.S.-based technology, there's a thing called ITAR, where they don't really want those ITAR components in there. We're classed A, I think it's a Class B subcomponent. We see we stand a good chance of getting a design slot in the IRIS2 constellation of some form, user terminals or beamformers, etc.
What is the growth in employee numbers over the past 12 months in both technical and admin categories?
I think we've done that. Yeah. Have we done that? Oh, yeah. Okay. Sorry. Oh, yeah, yeah.
Okay. How rigorous is your valuation of future chip sales? So effectively, when we sign a contract with a customer, we look at the customer forecast, where the customer has a history of successfully bringing online chips and products. We would take that customer's valuation. Where the customer is newer or a start-up, we may adjust those forecasts downwards in order to take that into consideration. Every half year and year-end, we reassess those future forecasts and assess whether there is a need to impair the asset or whether the volumes are still appropriate. What proportion of your revenues come from end-to-end ASIC services, i.e. design through to supply? I think that would be both the NRE and the supply. Probably currently about two-thirds, I would say, are coming from those areas, whereas a third is just pure consultancy. Obviously, in future, we're looking to really increase the supply and also partly the NRE side. Those proportions are expected to grow. Why did you favor and select Budapest as your new design center?
Okay. I mean, we've been looking for a place in one of the EU 27 countries with a good cost base and talented people, and we were lucky to actually find a group of engineers. It had been something that had been on our radar for some time, and we're very pleased to have taken on this team.
What is the latest situation with SIAE? I think, what is causing the delay in chip development if they have funding available? SIAE is undergoing a restructuring based on c orrespondence that we've received from them. They're actually making really good progress on that, and I think they're looking to get new investment into the group and have signed, I believe, or almost signed an agreement relating to that. That does not impact the project and the grant funding, as the question alluded to. The grant covers the largest portion of that. I think they do need to complete their restructuring and get all their affairs in order before the European or the Italian government will allow them to access the funds and progress the project. They've indicated that they should be able to do that in 2026, and we are getting regular updates from them. Okay. Do you develop proprietary IP as part of revenue-generating contracts? It says, "Build it and they will come."
Yes. Yes. I mean, yes, we do. I mean, we've got a large portfolio of IP, and we often modify that for customer chips, and the modification of that still belongs to us. I mean, there are specific cases where we implement something designed by, architected by the customer, where that doesn't go into our IP portfolio. From project to project, we're building up that IP portfolio, which is sort of a snowball effect. Makes each project easier, increases the amount of design reuse.
What is the latest situation with JLR volumes in automotive? Has the disruption with Nexperia chips created any new opportunities for you? Perhaps if I do the first part and you do the second. JLR is not a customer of EnSilica. We supply chips into the automotive industry, and we have experienced some disruption. As I think I mentioned, we've taken that disruption into consideration into our forecast. Those are included in the forecast for financial 2026. We do not expect any further impact.
Yeah. I mean, the Nexperia one. I mean, Nexperia, my understanding is they do sort of what they call MOSFETs, transistor switches in the compound semiconductor side. That is not our business. That is not the type of chips we do, t hese are simple power switches. I mean, as I said, it seems to be some disruption, but these are commodity parts. You do not just get them from Nexperia. You can get them from Infineon and other ones. o bviously, Nexperia must sell them very cheaply, and people need to go out and find other sources and build additional capacity while this is going on. As I said, it is not an area where we play.
What is your current customer revenue concentration, e.g., top five, and how has it changed in recent years? The honest answer is it fluctuates year on year, mainly because the customers for which the chip was in development last year might not still be in development this year if that's completed and moved on. What we've seen is that it's diversified a lot in that we don't have one customer that's more than 15% of the overall revenues. Looking at financial year 2025 and then also 2026. It comes really from a number of sources. Again, that can change. If we win a really large contract, then that could become a larger portion. What we are seeing is diversification. Okay. Debt repayable within one year is GBP 3.86 million. Will this require refinancing? The answer is no. This is debt and leasehold payments that we will be r epaying within the next year or so. We do not expect any refinancing as a result of that.
Trade creditors include GBP 5.9 million contract liabilities. What does this present, and over what period are they payable? Contract liabilities is a term that under IFRS accounting standards was created and is the old deferred income. What it entails is this is where we have received money upfront or we have invoiced the customer and received the money upfront, and we need to meet our performance obligations under the contract. These contract liabilities would be expected to unwind over the next 12 months. Basically, as we do the work, they unwind, and then if we invoice more, then it goes up again, and then it unwinds. We have seen it unwind partially at this point in the financial 2026 year, but it does fluctuate depending on invoicing and activity. How fungible are your professional employees, i.e., can they work across several projects, and do they, or are their skills very specific to a particular technical area or capability?
I mean, it depends on the type of skills. I mean, we have skills like millimeter wave chip design, where people have specific expertise in that, and that's the area with a focus on. Then we have other areas where people can, on the digital domain, where they can work on industrial automotive satcoms type stuff. It's there, w e do have focused people with really world-class expertise in those sort of niche areas, and then people with broader expertise to deal with the range of projects we get in.
What is your capitalized R&D investment expectation for 2026? Financial year 2025 was GBP 5.8 million. We expect it to be similar in financial year 2026. In 2025, there was a larger portion of internal IP that we capitalized relating to a specific project that we're actually currently using on our commercial project. We don't currently foresee having something similar in 2026. Of course, we see our level of NRE and our co-investment to increase. The two are expected to offset each other. We expect it to be broadly the same as financial year 2025. Would you please clarify how cash consumption reduced so much in H2 financial year 2025? Has the trend continued into H1 of 2026? The cash consumption improvement was mainly driven by new contracts that we signed, and then we really started the work and were able to invoice a large upfront for the work. That's also what's driving the increase in contract liabilities that we saw.
Also, for example, the R&D tax credit was received in the second half. That drove the real improvement. I think I mentioned we do not expect that to improve that much during this year across the 12 months, as we will get to the period where these contracts get into their last 15%, and usually the invoicing is then towards the end rather than upfront. We do expect cash consumption to increase again from the GBP 0.2 million, but not obviously to the levels that were seen in the first half of financial year 2025. How close will the company get to its GBP 6 million credit facility limit in financial year 2026? Is the company expecting to issue further equity in the short term? The company has drawn down the full GBP 6 million of the facility that was available, and we are obviously also repaying t he term loan portion of that o ver the next three years, of which one year is almost complete.
It is another GBP 3 million accordion facility, depending on meeting certain requirements and the bank's approval e ffectively, as our going concern forecast and cash flows indicate, we don't expect to need to raise further funds to fund our normal operations. There may be cases where we would like to increase the speed at which we move forward some of our key ASSP and strategic projects, and that might require further financing in order to progress those more quickly. For our normal operations, we don't expect to need additional funding at this point. Do you measure customer profitability? The answer is yes. We do look at it across the whole period of the contract, including the supply. For the NRE stage, as you will know from the co-investment, we need to also invest a portion ourselves, and then in the future we get that money back and more in terms of the margins on the supply revenues. What proportion of your business comes from repeat customers? It's a difficult one. Again, it differs from year to year.
I mean, most of the service revenue is repeat customers. I mean, obviously, the supply revenue, we get an order every month, t hat's repeat. We have had repeat business from Siemens in terms of the ASIC development, yes.
And then another one or two other ones probably that we can't name at this point. Most of the new contracts that we signed in financial year 2025 are new customers. Hopefully, they will turn into repeat customers, but it's difficult to say at this point. In the latest update, you referred to the number of definition and feasibility studies. Previously, these have not been mentioned prior to announcing NRE supply contracts. Has something changed in your approach, or is this just a different presentation?
Sometimes we have the feasibility study as part of the main contract. We do it where we go straight on with the feasibility. In this case, we had a number of very large feasibility studies, high-value ones. We felt that we should announce those. I mean, we actually received orders for two of them on the Friday before the announcement. These were a few hundred thousand each. I mean, they were announced there, and we thought that the market would like to know that we've got that next phase of projects coming up through these studies.
Probably the last question as we've come on to the hour. Is there a concern about China-Taiwan troubles, and how reliant are you on Taiwan's supply?
I mean, TSMC is one of our major foundries. Most of the satellite technology stuff we're actually running through GlobalFoundries, so we have a focus on doing that in Europe. They will be putting a, or they're currently building a fab in Germany to run some of the technology nodes. Like the whole electronic industry, there is a big dependence on Taiwan, as they have 80% of the world's advanced node chip capacity.
Ian, Kristoff, if I may just jump back in there, and thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. Of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review. Ian, perhaps before really now just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that'd be great.
Okay. All right. I mean, thanks very much. Thanks, everyone, for joining us. Thanks for the excellent questions. We've got a lot of followers there. I mean, I think for us, it's a really interesting time, w e're very pleased with the fact is we're booking high-value ASIC projects and moving those forward into production and supply. As we said in our IPO in 2022, we're building that portfolio of chips, and the supply revenue is coming through. In 2024, it doubled. In 2025, it doubled. I mean, that's all coming through nicely. As you were seeing, we're addressing some very high-growth, exciting markets, and we're very well positioned to capitalize on them. Thanks for your time.
Thank you very much. Bye.
Perfect, guys. Thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations? This won't take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team within EnSilica PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you all.
Thank you.
Thank you.