Q2 2025 SEALSQ Corp Earnings Call

September 10, 2025

Operator: Statements involve certain known and unknown risks, uncertainties, and other factors which could cause actual results, financial condition, performance, or achievements of SEALSQ to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. SEALSQ is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events, or otherwise. These risks are also discussed in our filings made with the Securities and Exchange Commission. Please be advised that our first half 2025 earnings release was issued on Tuesday, 9 September 2025. Also, our Form 6-K for the six-month period ended 30 June 2025, which was filed with the SEC on Tuesday, 9 September 2025, can be found by visiting the investor section of SEALSQ website at investors.sealsq.com.

Operator: At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce Carlos Moreira, Founder and Chief Executive Officer of CLSQ. Mr. Moreira, you may begin.

Carlos Moreira: Thank you very much, Kevin. Good afternoon to those joining us from Europe and good morning to those joining us from the United States. I will begin today the call by discussing our business milestone for the first half of 2025. I will provide our growth initiatives and outlook for the second half of 2025 and beyond and hand over to John to provide our financial performances of the year for the half the year. 2025 was a transformative year. It has been a pivotal year for SEALSQ as we accelerated our mission to deliver quantum-resistant semiconductor solutions and secure digital infrastructure for our rapidly evolving global market. The first half of the year confirmed the strength of our strategy, the resilience of our operations, and the scale of opportunities ahead.

Carlos Moreira: As a fabless semiconductor innovator, SEALSQ design and market secure microcontrollers, both off-the-shelf and custom design, integrated within a vertical trust service ecosystem featuring a post-quantum root of trust managed by public key infrastructure services and secure chip personalization. Our solutions protect industries such as IoT, energy, automobile, and smart homes, as well as sensitive application in healthcare, government, and defense. While the global embedded security chip market is projected to reach nearly 10 billion by 2028, suppliers offering certified secure products remain scarce. This create a significant opportunity for SEALSQ, uniquely positioned to deliver both regulatory compliance and resilience against emerging threats such as quantum computers. Our strength market recognition, bolstered by the urgent need for secure microcontrollers to defend against post-quantum threat, has attracted a strong investors' confidence.

Carlos Moreira: Since November 2024, we have raised over $140 million in additional capital to accelerate our product roadmap, execute strategic investments, and expand our growth pipeline. In terms of the product and technology milestones, in the first half of 2025, we achieved tangible progress on innovation and commercialization. The first one is with QUASAR program, engineering sample of the QS7001, which is a post-quantum microcontroller delivered to initial partners in Q2 2025 for testing. Production samples and development kits are scheduled for Q3 2025, with initial revenue expected in 2026. It is important to mention here that we are one of the first companies in the world with that type of aggressive roadmap. This can be transformed into a very important business opportunity and revenue generation in 2026.

Carlos Moreira: The QVault TPM, which is a pilot customer sampling for QVault TPM V183. It is expected in Q4 2025, followed by V185 in Q1 2026. Initial revenues are projected for 2026. The VaultIC408 secure microcontroller, which is an advance to FIPS 140-3 Level 3 validation, has been confirmed by UL independent lab test, which is NIST review ongoing now. The MS6003 secure element launched with FIDO2 passwordless authentication to meet demand in the fast-growing authentication market. Also INeS Box, which is deployed for factory IoT identification injection and in larger scale projects, ensuring compliance with Matter, which is the homeland certification for home appliances in the United States and the US Cyber Trust Mark.

Carlos Moreira: The Quantum RootCA, very important development achieved during the first year, introduced by the OISTE.ORG Foundation as the first PQC integrated PKI system to safeguard IoT, financial, and defense infrastructure against quantum encryption. Commercial achievements. The commercial momentum mirror our technology progress. Revenue is on track to increase 59% to 82% in 2025 versus 2024, supported by strong demand for PKI services, secure hardware, and custom ASICs. Our TPM engagement more than double from 35 customer at the end of 2024 to 82 customers by mid-2025, validating the relevance of a roadmap. We also secure multi-year supply agreements with global leaders such as the Hager Group, Dyson, MIWA, and Delta Bore.

Carlos Moreira: Expanding collaboration with Landis+Gyr, which is one of the leading provider of smart meters in the world, including PKI deployment for 30 million utilities users in Asia and for the development for the US market. Smart meters is one of the potential hardware that can be in real trouble if they are not post-quantum ready, and this company is taking the right step to make resilient at the product level with our technology. Advanced on card reader business in Asia with new customer committing to several hundred thousand annual units. Expanding our global footprint by opening a sales office in India and appointing distribution in Asia, Europe, and Turkey. Now talking about the strategic investment and partnership. 2025 has also marked a transformational phase in our growth strategy. The IC'ALPS acquisition, bringing 100 engineers to our staff force.

Carlos Moreira: In August 2025, we completed the acquisition 100% of IC'ALPS, a French company located in Grenoble, which are ASIC design specialists, bringing, as I mentioned, 100 skilled engineers into the SEALSQ force. This strengthens our common and custom post-quantum ASIC capability for medical, automobile, and IoT industry as this company has been provided this technology to leading health companies and automobile companies in Europe, all of them requiring new specialized generation of chips. Quantix Edge Security facility, which executed a $40 million investment in Murcia, Spain, with $20 million from the Spanish government, which is sitting now in $18 billion of investment in semiconductor in Spain.

Carlos Moreira: We were one of the first projects authorized by them with a $10 million investment from WISeKey and SEALSQ and $10 million investment from partners localized in Spain, like OdinS and TProtege. This facility, aligned with the European Chips Act, will focus on post-quantum RISC-V chip design and secure semiconductor personalization, with revenue expected already in 2026. Quantum Investment Fund was launched, initially launched at $20 million in late 2024, which has been expanded to $35 million in March 2025. The first investment was ColibriTD, a French quantum-as-a-service company with whom we are co-developing a quantum simulation approach to improve semiconductor wafer yields, potentially increase yields from 50% to 80% and reducing per chip costs by up to 50% in order to be more competitive in the market.

Carlos Moreira: This Quantum Investment Fund is now looking into other companies as our vision is that post-quantum technologies will merge very soon with quantum capability and quantum computer companies creating major leaders in this sector. The requirement of this aggressive roadmap and Investment Fund that has been created within the company. We also invested, as has been discussed in the last call, in space technology. We, in cooperation with WISeSat, we have been deploying a constellation which is now sitting on 22 satellites, and SEALSQ has invested $10 million to expand our secure quantum-ready satellite constellation.

Carlos Moreira: From the next launch of the satellites in November this year, we will have the capability of securing post-quantum connections from the space all the way down to objects on Earth, in what is gonna be one of the first ever secure post-quantum communication connecting mobile phones with our satellites. With 2 launches completed already in 25, CLCQ now has one of the largest constellations in Europe with 22 operational satellites with plans to scale to 100 to satellite by 2027. A strategic project with the Swiss army has been signed, and we are in fully deployment with their own requirements for the use of those satellites. Very strong year also in terms of research and development.

Carlos Moreira: In order to maintain the leading edge, we continue to invest heavily in research and development, allocating $4.7 million in the first half of 2025 as part of the $7.2 billion full year budget. This underscores our commitment to leadership in post-quantum innovation and the commercialization of next generation chips. Also, on the financial strength with a robust cash reserve of $121 million as 30 June 2025, and actually $150 million as 09 September 2025. The company is sitting now $150 million that combined with a strong balance sheet positions SEALSQ to capitalize on growing demand for post-quantum resilient technology, potentially look into acquisitions and strategic investment in the post-quantum roadmap.

Carlos Moreira: We are all placed to drive commercialization to our new technologies while funding strategies growth initiative becomes available. In August 25, SEALSQ unveiled Convergence, a forward-looking initiative integrating AI quantum technologies and next generation solution. The market is converging. All technologies are getting exponential, and they are creating synergies between themselves. There is a huge market opportunity to develop business model around this convergent opportunity. Convergence unify PQC, align with NIST standard tokenization, advanced encryption, WISeSat satellite constellation, decentralized physical infrastructure network, DPIN, and machine-to-machine, M2M communication. Its goal is to build a robust digital trust architecture for the group, protecting over 1.6 billion devices that is already in the market across healthcare, IoT, financial services, smart cities, and space in infrastructure. The outlook for 2025 is also promising.

Carlos Moreira: Revenue is expecting to be in the range of $17.5 million to 20 million, representing already a growth of 59% to 82% year-on. As you all know, the revenue on quantum computers is still small because the market is not yet ready, and people are now taking decision in investing in quantum technology. One of the things coming first, even in quantum, is the post-quantum, and you need to build their own resilience at the enterprise level, government level, hospital level, airport level, so you are ready when those quantums computer arrive in 3 to 5 years to be able to defend their attacks. This includes contribution from ICL following the August acquisition, the Quantix Edge Security project, and renewed demand for traditional products.

Carlos Moreira: 2023, sorry, 2026, the growth will be fueled by a full year of IC'ALPS revenue, new personalization center project revenue, including Quantix Edge Security, and the launch, and this is the most important part for the year visibility of our quantum-resistant TPM. Initial estimate reflects 50% to 100% revenue growth year-on-year, which is unseen in this sector for the moment. Pipeline. We have a very strong pipeline or business pipeline. It stands $170 million in opportunities for 2026 to 2028, reflecting a surge in demand for quantum-resistant security solution and sovereign semiconductor expertise.

Carlos Moreira: I will now turn the call to John O'Hara, our CFO, who will discuss in detail the financial results for the first half 2025 and our guidance for the second half of the year as a complement of my information provided so far. Please, John, go ahead.

John O'Hara: Carlos, good morning, good afternoon, everybody. For the half one 2025 revenue, our revenue of $4.8 million, which was consistent with the first half of 2024, was entirely in line with our expectations. It reflects the anticipated continued strategic transition period ahead of the launch of our new post-quantum technologies. We expect the second half of the year to start to grow, as we'll come onto shortly. The gross profit was $1.6 million, and the gross profit margin increased by 15 percentage points from 19% last year to 34% this year.

John O'Hara: We do expect when the revenues return to a more steady state level and we grow further, that that will settle somewhere around the 45% to 50% margin on our legacy on our chip products, and with the margin from IC'ALPS is expected to be somewhat higher due to the nature of their revenue and their services. We have cash reserves of $121 million as at 30 June 2025, which was up from $19 million at the same point last year and up from $85 million at the end of 2024. Our current estimate is that, well, this gives us sufficient cash for a long time now on our cash burn rate.

John O'Hara: You know, we therefore believe we've got a strong war chest to also take advantage of any investment opportunities, any M&A activity that might come our way. We invested $4.7 million in research and development in the first half of the year, and we continue to have over $7 million allocated as a budget for this area for 2025, which is up from $5 million in the prior year. That's before we take into account the research and development activities of IC'ALPS, which will also be consolidated in our second half results.

John O'Hara: As Carlos has already mentioned, for the full year 2025, we expect our revenue to be between 17 and a half and $20 million, representing between 59% and 82% growth year-over-year, therefore, noting a return to growth in demand for our current semiconductor products, as well as consolidating the revenue of IC'ALPS since acquisition. We also look forward for a strong 2026, as Carlos has also highlighted with some very early guidance, which will be supported by a new business pipeline of $170 million of identified opportunities for 2026 to 2028 across PQC, ASIC, and sovereign semiconductor markets. With that, we are finalizing the prepared remarks. I will pass back to Carlos so we can open up the call for Q&A. Thank you for your attention.

Carlos Moreira: Thank you, John. Just as end of the call remarks before we move into Q&A, just to mention that 2026 is gonna be a very important year for the quantum industry, and particularly post-quantum, as the regulatory and technology landscape is moving in our favor with frameworks such as the EU Cyber Resilience Act, the US Cyber Trust Mark, and the UK PSTI Act, mandating secure identities, encryption, and lifecycle management. Governments and strategic institutions worldwide have published roadmap requiring PQC adoption within the decade. As I mentioned before, this industry is a emerging industry.

Carlos Moreira: We are in quantum world, we were on the web in the year 2000. Major players that they have developed technologies and positions such as CLCQ will become automatically high demanded companies as they bring a concrete solution for a concrete problem. Insurance companies are already announcing that they will increase their insurance premium if you are not yet PQC compliant. Government regulations are putting regulations, bringing companies and other government institutions to be PQC compliant. That will be reflected obviously on valuations of companies as the entry level to become a PQC compliant and Quantum company is still very high and requires hundreds of millions of dollars on investment.

Carlos Moreira: With the strong financial resources that we have, the proven innovation and a strategic investment in place, SEALSQ enters the second half of 2025 with a very strong momentum and confidence. Our vision is clear: to lead the world in quantum-resilient cybersecurity and semiconductor innovation while we have a very proven quantum roadmap in place. We thank our shareholders, employee partners, and customers for their continued trust and support as we scale SEALSQ into the next phase of growth. With that, we are finalizing the remark. I will like to open now the call for Q&A. Thank you very much for your attention.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment please while we pull for questions. Our first question today is coming from Matthew Galinko from Maxim Group. Your line is now live.

Matt Galinko: Hi, thank you for taking my questions. Firstly, just if we could clarify a little bit on the full year R&D budget. I think you mentioned it was around $7 million. I think, you know, for the first half reported $4.7 million, which seems that you're tracking ahead of that. Was there anything unusual in the first half spending that, you know, would not repeat in the second half? Just, you know, kind of ignoring the impact of the consolidation of the acquisition that we might expect.

Matthew Galinko: Hi, thank you for taking my questions. Firstly, just if we could clarify a little bit on the full year R&D budget. I think you mentioned it was around $7 million. I think, you know, for the first half reported $4.7 million, which seems that you're tracking ahead of that. Was there anything unusual in the first half spending that, you know, would not repeat in the second half? Just, you know, kind of ignoring the impact of the consolidation of the acquisition that we might expect.

John O'Hara: Yeah. Hi, Matt. I hope you're well. Yeah. Within the first half of the year, there was a bit of an expense, a one-off expense for some stock-based compensation that falls under R&D. That was the main.

Matt Galinko: Got it. Okay. Could you venture a guess for what kind of the annual, R&D run rate taking that out would be, when you layer in the acquisition?

Matthew Galinko: Got it. Okay. Could you venture a guess for what kind of the annual, R&D run rate taking that out would be, when you layer in the acquisition?

Operator: Please stand by. We appear to be having some technical difficulties. Please go ahead. I do not hear your line.

Matt Galinko: Hi. Sorry. Can you hear me now?

Matthew Galinko: Hi. Sorry. Can you hear me now?

Operator: No, Matthew, I hear you, my friend. Carlos, would you mind saying a few words as you're gonna hear the speaker line? We do apologize for the inconvenience, everyone. Please stand by. Once again, ladies and gentlemen, we do apologize for the inconvenience. Please stand by. In the meantime, I'm gonna play some music while we connect the speaker line. Just do not disconnect, everyone. We will be connected shortly. We'll continue the Q&A session. Okay? Please stand by. Now rejoining the speaker line.

Carlos Moreira: So-

Operator: Carlos, you're back on with Matthew. Go ahead. Please go ahead.

Carlos Moreira: Okay. Matthew, sorry we were disconnected. Did you got the answer from John?

Matt Galinko: I'm not sure if you got my second question or not.

Matthew Galinko: I'm not sure if you got my second question or not.

Carlos Moreira: No, I didn't. No, no, we didn't. Sorry.

John O'Hara: Did you get the answer to the first one on the research and development, though, Matt? Did you get that answer?

Matt Galinko: Yeah, yeah. I appreciate the follow-up. The, I guess the question is what the run rate or if you could offer a run rate on the revenue, on the R&D line, if you kind of back out that one-time stock-based comp piece under R&D in the first half and later on the R&D consolidation in the second half, what would kind of the annual rate of R&D be?

Matthew Galinko: Yeah, yeah. I appreciate the follow-up. The, I guess the question is what the run rate or if you could offer a run rate on the revenue, on the R&D line, if you kind of back out that one-time stock-based comp piece under R&D in the first half and later on the R&D consolidation in the second half, what would kind of the annual rate of R&D be?

John O'Hara: On the underlying business down in Provence, we would probably put that round about, sort of $500,000, $550,000 per month.

Matt Galinko: Got it. Okay. I also wanted to ask about the pipeline. I think you shared $170 million. As far as the prospective customers and prospective pipe numbers in that pipeline, is that... How do you build the pipeline estimate, I guess? Can you provide a little bit more of the process for how you include stuff in the pipeline?

Matthew Galinko: Got it. Okay. I also wanted to ask about the pipeline. I think you shared $170 million. As far as the prospective customers and prospective pipe numbers in that pipeline, is that... How do you build the pipeline estimate, I guess? Can you provide a little bit more of the process for how you include stuff in the pipeline?

John O'Hara: Yeah, sure. Essentially, my understanding is it's a relatively standard process where we go from, certainly in the industry, I believe, where we go from kind of identifying an opportunity and evaluating that to the best of our ability, but then applying a relatively low success percentage to that. Obviously when we've just identified it, we haven't really got very far. Then we go through the phase of identified, then qualified when we've kind of ratified the opportunity, and we've made at least first contact with the potential client. Then comes into design in, which is usually when we've signed up to provide them with a kind of a test kit and actually spec out and create a potential solution for said client.

John O'Hara: Design win at the end, which is the point where we believe that where we've been mandated to go ahead and produce the product and are in the final stage with that client. Obviously by the time we get to design win, we apply a much heavier percentage because at that point we're the only people in the game. You know, we generally expect at that point to get an order unless there is a technical limitation to the product or the client cancels their own internal project. Yeah. We put all that together, apply the weightings, and then we tend to look 3 years into the future. That $170 million will include revenues over 2026, 2027, and 2028.

John O'Hara: What it does not include is the revenues for the clients that we've already won. Once we actually have received our first major purchase order of a significant volume, and therefore we've gone into production, we move that out the pipeline and then we're kind of operating on a backlog where it's based on them sending and giving us orders.

Carlos Moreira: Yeah. Just to add on that, the sales cycle is long on the hardware part, it's around 6 months. The reason, I mean, there's a lot of complexities to introduce those new generation chips into existing hardware, that their electronics are now being designed to introduce the chip, and that requires engineering. That means that you have to first understanding the problem, let's say a smart meter or let's say a connected car or a drone. You have to understand the electronics. You have to redesign some of those components. You insert the chip, then you have to, you know, check the connectivity of the chip with electronics in order to create the post-quantum capability. All that takes a long time, right?

Carlos Moreira: Normally companies, the way they act on that is as I mentioned on my presentation, post-quantum technology is emerging technology in terms of many customers don't realize the need of moving PQC yet. You know, some of them, they're saying, Oh, quantum computers will be in 30 years, why we should bother now? This has been slowly, gradually, the education in the market has been improved by even companies that they have this type of thinking before. That creates some kind of urgency in our clients. Now they are saying, Okay, let's just start with 1 generation of products. They don't immediately wants to PQC enable all their products.

Carlos Moreira: They start with one type of product they test, and then they go to the next cycle of expansion internally in the company. As you not only need to modify the security of the products, which is the hardware component, but also the software part. That needs to be integrated into their back end, right? That process as we move forward, it will be a more automated process. Actually, AI is helping a lot to create more efficiencies on that cycle so we can reduce the time and we can increase the numbers. This is the present situation.

Carlos Moreira: That's why we believe that the revenue these type of companies make now is not that important because what we are addressing is a much bigger problem in the future, which is when regulation arrives and regulation says, Company, you need to have PQC enablement in your products, otherwise you cannot sell them anymore because your products will not be authorized to enter into a specific territory. There is the inflation point, we believe, the big opportunity is for us.

Matt Galinko: Great. Thanks, Carlos. I'll jump back in the queue.

Matthew Galinko: Great. Thanks, Carlos. I'll jump back in the queue.

Carlos Moreira: Thank you.

John O'Hara: Thank you, Matt.

Matt Galinko: Thanks a lot.

Matthew Galinko: Thanks a lot.

Operator: Thank you. As a reminder, that's star one to be placed into question queue. If you'd like to be placed into question queue at this time, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. One moment please while we pull for questions. That's star one to be placed into question queue. We've reached the end of our question and answer session. I'd like to turn the floor back to Carlos for any further or closing comments.

Carlos Moreira: Just to, again, to recapitulate on what we say, a huge opportunity ahead of us. 2026 is gonna be a critical year, especially once this post-quantum chip will be available in the market. I know that some investors have been disappointed by the latest price of the share. I always say that 26 is the year where everybody needs to be betting on and not 25. 25 was a transitional year. Despite that, we managed to end the first semester of the year with a very strong position and a very strong cash position, which is essential in this industry. We are available for any further discussions.

Carlos Moreira: website documentation is available, or investment relation contacts in New York are available to set up one-to-one meetings. John and I, we're gonna be doing a non-deal roadshow starting the second week of October. It will culminate in New York in a event, the Quantum AI Event, where we are providing the keynote and where we're gonna be bringing more results. We will also be discussing, which we didn't discuss on this call, our US strategy. We have been informing in the past, CLCQ is looking to personalize semiconductors in US territory, and this is something that is top priority. We were looking into different locations such as Arizona and others.

Carlos Moreira: We will be giving in few weeks a full update on that. I'm sure everybody will be very satisfied to see the progress also in that area. We'd like to thank our shareholders, employee partners, and customer, and all the participant on this call for their support as we scale SQ into the next phase of growth. Thank you very much for your attention. Have a great day.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Statements, involve certain known and unknown risks uncertainties and other factors which could cause the actual results of financial condition performance, or achievements of CLS Q to be materially different from any future results performance, or achievements expressed or implied by such forward-looking statements.

Cosq is providing this communication as of a state and does not undertake to update, any forward-looking statements contained herein as a result of new information, future events or otherwise. These risks are also discussed in our filings made with Securities and Exchange Commission.

Please be advised that our first half 2025 earnings release was issued on Tuesday, September 9th, 2025

Also our form 6K for the 6-month period ended June 30th 2025 which was filed with the SEC on Tuesday, September 9th. 2025 can be found by visiting the investor section of cosq website at investors.c.the.

At this time, all participants when you listen only mode, a brief question and answer session will follow the formal presentation.

If anyone should require operator assistance, please press star zero on your telephone keypad. You may be placed into the question Queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. It's not my pleasure to introduce Carlos, Moran. Founder and chief executive officer of csq. Mr. Mayor. You may begin.

Thank you very much, giving good afternoon to those joining us from Europe and good morning to those joining us from the United States. I will begin today. The call by discussing or business milestone for the first half of 2025, then I will provide or growth initiatives and outlook for the second half of 25 and Beyond and hand over to John to provide our financial performances of the year for the half of the year.

So 2025 was a transformative year, it has been a pivotal year for csq as we accelerated our mission to deliver Quantum resistance, semiconductor Solutions and secure digital infrastructure for our rapidly evolving Global Market.

The first half of the Year confirmed, the strength of our strategy, the resilience of our operations, and the scale of opportunities ahead as a fabulous semiconductor innovator. Cosq design and Market, secure MCO controllers, both of the shell and Custom Design integrated within a vertical truss service, ecosystem, featuring a post-quantum. Root of trust, managed by public infrastructure services on secure cheap personalization.

Or Solutions protect Industries such as iot energy, automobile, and Smart Homes, as well as sensitive application in healthcare government and defense.

While the global embedded security chip Market is projected to reach nearly 10 billion by 2028 suppliers offering certified secure products. Remain as cars, this create a significant opportunity for CLS Q uniquely positioned to deliver both Regulatory Compliance and resilience against emerging threats such as quantum computers.

Or strength Market recognition Buster by the urgent. Need for secure maker controllers to defend against post-quantum. Threat has a attracted strong investors confidence science.

November 2024.

We have raised over 140 million dollars in additional Capital to accelerate, our product roadmap, executed a Strategic investment, and expand our growth pipeline.

So, in terms of the product and Technology, milestones, in the first half of 25, we achieved tangible progress on Innovation and commercialization. The first 1 is with Quasar program, engineering sample of the qs700, which is a post-quantum Miko controller, delivered to initial Partners in Q2 2025 for testing production, samples and development kits are excited for

Revenue expected in 2026. It is important to mention here that we are 1 of the first companies in the world with that type of aggressive road map. And this can be transformed into a very important business opportunity and revenue generation in 2026.

The key volt TPM, which is a pilot customer sampling for Q volt TPM, V 183. It is expected in Q4 25. Followed by v385 in q1 26, initial revenues. Uh are projected for 26.

Advanced to 543 level 3, validation has been confirmed by UL independent lab tests which is nist, review ongoing now.

The uh MSS Ms. 60003 secure element launched with Fido 2 passwordless authentication to meet demand in the fast growing authentication Market.

also in F box which is deployed for factory iot identification injection and in largest scale projects ensuring compliance with matter which is the Homeland certification for home appliances in the United States and the US server trust mark

Also, the quantum root CA very important development achieved during the first year introduced by the foundation. As the first, pqc integrated Pi system to soft safe. Gu iot financial and defense infrastructure against Quantum encryption.

Commercial achievements. So the commercial momentum mirror or technology progressed revenue is on track to increase 59% to 82% in 2025 versus 2 2024, supported by a strong demand for pi Services. Secure hardware, and Co custom A6.

Or tpf engagement more than double from 35. Customer at the end of 2024 to 82 customers by mid 25, valid in the relevance of a road map. We also secure a multi-year supply agreements with global leaders. So such as the Ager group Dyson, me me miwa and Delta door expanding collaboration with Landis and gear, which is 1 of the leading provider of a smart meters in the world, including Pi deployment for 30 million utilities users in Asia. And for the development for the US market, a smart meters, is 1 of the potential, uh, Hardware. That can be uh, in real trouble. If they are not post-quantum ready and this company is taking the right step to make resilient at the product level, with our technology advanced on car reader business in Asia, with new customer committing to several hundred thousand annual units.

Expanding our Global fruit footprint by opening a sales office in India and appointing distribution in Asia, Europe and turkey.

So now talking about the Strategic investment and partnership. So 2025

As also Mark a transformational phase in our growth strategy. The IC Ops acquisition bringing hundred Engineers to our staff force in August 2025. We completed the acquisition 100% of IC Ops a French, uh, company located in Granola which are Asic design Specialists bringing. Uh, as I mentioned, hundreds skill Engineers into the csq force. This is transit or common and custom post Quantum, AC capability for medical, automobile and iot Industry. As this company has been provided, this technology to Leading Health, uh, companies and automobile companies in Europe. All of them, requiring new specialized generation of chips,

Quantix age security facility, which executed a 40 million investment in Mia is paying with 20 million from the Spanish government. Uh, which is sitting now in 18 billion dollars, uh, of investment in Semiconductor in Spain and we were 1 of the first projects, authorized by them with a 10 million investment from Wise ski, and cosq and 10, million investment from Partners in localizing in Spain, like, Odin and pritesh. This facility. Align with the EU chip act will focus on post-quantum risk. V risk 5, chip design and secure semiconductor personalization with Revenue, expected already in 2026.

Quantum investment fund was launched, initially launched at 20 million, in late 2024, which has been expanded to 35 million in March 25.

The first investment, I was calling for TD, a French Quantum as a service company with whom we are co-developing a Quantum simulation approach to improve semiconductor wafer yields potentially increase yields from 50 to 80% and reducing per chip caused by up to 50%. In order to be more competitive in the market.

This, uh, Quantum Investment phone is now looking into other companies as or vision is that post Quantum. Uh, technologies will merge very soon with Quantum capability and quantum. Computer companies, creating major leaders in this sector. Therefore, the requirement of this aggressive, uh, road map and investment fund that has been created within the company.

Technology. So we uh in cooperation with Yad uh we have been deploy a constellation which is now sitting on 22 satellite and CLS. Q has invested 10 million to expand or secure Quantum, very satellite constellations. So from the next launch of the satellites in November this year, we will have the capability of securing post-quantum connections from the space, all the way down to objects on Earth in, in what is going to be 1 of the first ever, uh, secure post-quantum communication. Connecting mobile phones with, uh, or Satellites with 2. Launches completed already in 25 CL skq now has a 1 of the largest constellations in Europe with 22, operational Satellites with plans to scale to 100 to Satellite by 2027. I strategic project with a Swiss Army has been uh signed and we are full and fully deployment uh with their own requirements of the use of those satellites.

Very strong year. Also in terms of research and development, in order to maintain the Leading Age, we continue to invest heavily in research and development and allocating 4.7 million in the first. First half of 25 as part of the 7.2 billion full year budget, the under this underscores or commitment to leadership in post Quantum Innovation and the commercialization on Next Generation chips

also on the financial strength with a a, with a, uh,

A robust catch reserve of 121 million as June 3025 and actually, 150 million at September. 9257 Coq to, to capitalize on growing demand for post-quantum resilient technology. Potentially look into, uh, Acquisitions and Strategic investment in the post-quantum road map. We are all placed to drive commercialization to our new technologies while funding strategies growth initiative becomes available.

In August 25, CL SQ. Uh unveil conversion a forward-looking initiative integrating AI Quantum technology and Next Generation solution.

The market is converging. All Technologies are getting exponential and they are creating synergies between themselves and there is a huge Market opportunity to develop business model. Around this conversion opportunity convergence UniFi pqc aligned with knee nist, standard tokenization, Advanced encryption why is that 22? Satellite constellation, decentralized, physical infrastructure, Network deepen, and machine to machine, M2M communication. Its goal is to build a robust digital trust architecture for the group protecting over 1.6 billion devices that is already in the market.

Market across Healthcare iot Financial Services, smart cities and space in infrastructure.

So the outlook for 2025 is also from my promising Revenue, suspecting to be in the range of 17.5 million to 20 million representing already a growth of 59% to 82% year round. As you all know, the revenue on quantum computers is still a small because the market is not yet. Ready and people are now taking decision in investing in Quantum technology, but 1 of the thing is coming first even than Quantum is the post-quantum, and you need to build their own resilience at the Enterprise level government, level Hospital, level airport, level. So you are ready when those quantum computer arrived in 3 to 5 years to be able to defend their attacks.

This is this includes contribution from, it helps following the August acquisition, the quantix age security project and renewed demand for traditional products.

So 2023, sorry 2026. The growth will be fueled by a full year of its Revenue. New personalization Center project Revenue, including quantix age security and the launch and this is the most important part for the year visibility of the or Quantum resistant, TPM initial estimate, reflects 50 to 100% Revenue growth year on year, which is unseen in this sector for the moment.

Son. Good morning. Good afternoon, everybody.

For the half 12025 Revenue. Um our revenue of 4.8 million which was consistent with the first half of 2024 uh was entirely in line with our expectations. It reflects. The anticipated continued strategic transition, period ahead of the launch of our new post-quantum technologies.

Um, and we we expect the second half of the year to start to grow as we'll come on to shortly.

The growth profit was 1.6 million and the growth profit margin increase by 15% percentage points from 19% last year to 34% this year.

We do expect when the revenues return to a more steady state level and we grow further that that will settle somewhere around the 45 to 50% margin on our Legacy. Um, humble on our chip products and with the margin from icl's expected to be somewhat higher due to the nature of their, their, their revenue, and their services.

We had cash reserves of 121 million as of June 30th, 2025, which was up from 19 million at the same point last year, and up from 85 million. At the end of 2024, our our current estimate is the of this, our cash burn. This gives us sufficient cash for

For a long time now on our on our cash burn rate um and you know we therefore believe we've got a strong War chest to also take advantage of any investment opportunities. Any m&a activity, that might come our way.

We invested 4.7 million in research and development in the first half of the year and we continue to have over 7 million allocated as a budget for this area for 2025, which is up from 5 million in the prior year. And that's before we take into account, the research and development activities of ICS, which will also be Consolidated in our second, second half results.

Carlos has already mentioned for the full year 2025. We expect our Revenue to be between 17 and a half and plus million dollars representing between 59 and 82 growth year on year. Um, which is therefore

No noting a return to growth in demand for our current semiconductor products as well as consolidating, the revenue of icy out since acquisition.

We also look forward to a strong 2026. As Carlos has also highlighted with some very early guidance, which will be supported by our new business pipeline, um, of 170 million of identified opportunities for 2026 to 2028 across pqc ASA, and Sovereign, semiconductor markets.

With that we are finalizing the prepared marks. Um, I will pass back to Carlos so we can open up the call for Q&A. Thank you for your attention.

So thank you, John. Just uh, uh, as a end of the call remarks, before we move into Q&A, just to mention that, uh, 20126 is going to be a very important year for the quantum industry and particularly post-quantum as the Regulatory and Technology landscape is moving in our favor with Frameworks such as the European Union or cyber resilient act. The US government cyber trust Mark and the UK psti act mandating security identities, encryption on life cycle management. So governments and strategic institutions worldwide have published road map, requiring pqc adoption within the day decade. So, as I mentioned before, this industry is uh, emerging in Industry. We are in Quantum, what we wear on the uh web in the year 2000. Uh, major players than they have developed uh Technologies and positions, such as CLS. Q will become automatically High demanded companies as they bring a concrete solution for our concrete problem, uh, insurance companies.

Are already announcing that they will increase their insurance premium. If you are not yet, pqc compliant, government regulations are putting regulations. So bringing uh, companies and other government institutions, to pick P pqc compliant and that will be reflected obviously, on valuations of companies as the entry-level to become a pqc compliant and quantum.

Company is still very high and requires hundreds of million of dollars on investment. So with the strong financial resources, then we have proven Innovation and Strategic investment in place csq. Enters the second half of 2025 with a very strong momentum and confidence or vision is clear to lead the world in Quantum, resilient cyber security and semiconductor Innovation while we have a very proven Quantum road map in place. So we thank our shareholders employee partners and customer for their continued trust and support as we scale csq into the next phase of growth. So with that we are finalizing, the remark I will like to open now the call for Q&A, thank you very much for your attention.

Confirmation tone will indicate your line is in the question queue? You may press star 2. If you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1 1 moment, please while we pull for questions.

Our first question today is coming from Matthew Kinko from Maxim. Your line is now live

Hi uh thank you for taking my questions. Um, firstly just if we could clarify a little bit on the full year R&D budget, I think you mentioned. It was around 7 million and I think, you know, for the first half, reported 4.7 million, it seemed that you're tracking ahead of that. Um, so was there anything unusual in the first half spending that? Um, you know, would not repeat in the second half. Um, just, you know, kind of ignoring the impact of the, um, consolidation of the acquisition that we might expect.

Yeah. Hi, Matt. I hope you hope you're well, um, so yeah. So, within the first half of the Year there was, um, a, a bit of a, an expense of 1-off expense, for some stock, based compensation that falls under R&D. So that that was the main. Um,

Got it. Okay. And could you venture a guess for what kind of the annual, uh, R&D run rate taking that out would be when you layer in the the acquisition?

Please do, but we appear to be having some technical difficulties.

Because of that, you not hear your line.

I sorry. Can you hear me now?

No, Matthew. I hear you my friend. Uh, Carlos. Uh, would you mind saying a few words that you're not hear the speaker line?

We do apologize for the inconvenience everyone. Please stand by.

once again, the gentlemen, we do apologize for the inconvenience, please stand by

In the meantime, I'm going to play some music while we're connected to the speaker line, just do not disconnect everyone. We will be connected shortly and we'll continue the Q&A session. Okay, please stand by

now, rejoining the speaker line,

So, tell us your back on with Matthew. Go ahead. Please, go ahead. Okay. So so Matthew, so sorry, we were disconnected. So, uh, uh, did you got the answer from John?

Um, I'm not sure if you got my second question or or not. No, I didn't know. No, we didn't. Sorry to get the answer. The first 1 on the research and development though. Matt. Did you get that answer? Yeah yeah. So I want I appreciate uh the the follow-up. So so the um I guess the question is what the Run rate or if you could offer a run rate on the revenue uh on the R&D line. If you kind of back out that 1 time, stack based on piece under R&D in the first half and later on the R&D consolidation and the second half, what would kind of the annual rate of R&D rate?

Um,

So on the underlying, uh, business down in Provence. Um, we would probably put that round about, um, sort of 500k, 550k per month.

All right, and then I also wanted to ask about the pipeline. I think you shared 170 million it

As far as the, um, perspective, customers and perspective, uh, like numbers in that pipeline. Is that how do you build the, the pipeline estimate, I guess, can you provide a little bit more of the the process for how you include stuff in the pipeline?

Yeah, sure. Um, so essentially

I my understanding is the relatively standard process, where we go from um, certainly in in the industry, I believe, where we go from, kind of identifying an opportunity and evaluating that to the best of our ability, um, but then applying a relatively low success percentage.

Um, to that because obviously when we've just identified it we haven't really got very far. And then we go through the phase of identified, then qualified when we've kind of ratified the opportunity. And we've made at least first contact with the with the potential client.

um then comes into design in which is usually when we've when we've um signed up to provide them with a, with a kind of a test kit and actually

Speck out and and create a potential.

solution for said, client, and then design win at the end, which is the point where we

Where we believe that that where where we've been mandated to, to go ahead and produce the product and are in the final stage with that client. So obviously by the time we get to design win, we apply a much heavier percentage because at that point, we're the only people in the game. So you know, we generally expect at that point to

To get an order. Unless there is a technical limitation to the product or the client cancels.

Their own internal project. So, yes. So we put all that together, apply the weightings, and then we we tend to look free is into the future so that 170 million will will include revenues over 26/27 and 28. Um, what it does not include is

the revenues for the clients that we've already.

Won. So once once we actually have received our first major purchase order of a of a significant volume and therefore, we've gone into production, we moved that out the pipeline and and then we're kind of operating on a backlog where it's based on them, sending a given us orders.

Yeah, just to add on that. The, uh, the, the sales cycle is, is long on the hardware part is around 6 months.

And the reason, I mean, there's a lot of complexities to introduce those new generation chips into existing Hardware that they are electronics, are now being designed to, to introduce the chip, uh, and that requires engineering. So, so that means that you, you have to first understanding the problem. Let's say a smart meter or let's say, a connected car, or a drone. So you have to, uh, understand the electronics. You have to redesign, uh, some of those components. So you insert, the chip, then you have to, you know, check the connectivity of the chip with the electronics in order to create the post Quantum capability. So so all that takes a long time, right? And normally companies, the way they act on that is is as as, as I mentioned on my presentation post Quantum technology is is is emerging technology in terms of uh, many customers, don't realize the uh, the need of moving pqc yet. You know, there's some of them. There are several quantum computers will be in 30 years so we why we should bother now. So this is been slowly run.

Gradually the education in the market has been improved by even companies that they have this type of thinking before. So that that that that that creates some kind of urgency uh in our clients. And now they are saying, okay. Uh let's start with 1 generation of products, so they don't immediately wants to pick. You see enable all their products. So they start with 1

The big opportunity is for us.

Great. Thanks Carlos and I'll jump back in the queue.

Thank you. Thank you much. Thanks a lot.

Thank you as a reminder that star 1 to be placed into question queue. If you'd like to be placed into question Queue at this time, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question Q 1 moment, please while we pull up for questions and that star 1 to be placed into question Q.

Let me reach the end of our question and answer session. I'd like to turn the floor back to Carlos for any further or closing comments.

So so just to again to recap. You too later on what we say, a huge opportunity ahead of us. 2026 is going to be a critical year. Especially once this post Quantum chip will be available in the market. Uh, I know that son investors have been disappointed by the, um, the, the, the latest price of the share I always say that 26 is the year where you everybody needs to be betting on and not 25. To 25 was a transitional year, despite that we managed to uh and end the first quarter, the first semester of the year with a very strong position on a very strong cash position which is essentially in this industry and um we we are available for any further discussions. Uh, website documentation is available.

And um or investment relation uh, contacts in New York are available to set up, um, 1 to 1 meetings. John and I, we're going to be doing a non Diehl Road show, uh, studying, uh, the third week of, um, sorry the the second week of of October and uh, it will culminate in New York in a event. The quantum AI event where, uh, we are providing the keynote, uh, and where we're going to be bringing more results. And we will also be discussing which within the discussion and this call or us strategy. Uh, so we have been, uh, informing in the past, uh, csq is looking to personalize, uh, semiconductors in the US Territory and this is something that is top priority. Uh, we were looking into a different locations such as Arizona and others. Uh, so we will be giving, um, a few weeks, a full update on that. And, uh, I'm sure everybody will be very satisfied to see the progress, also, in that area. So we would like to thank our shareholders employee partners. And

Customer and all the participants on this call for their support as uh we scale SQ into the next phase of growth. Thank you very much for your attention. Have a great day.

Thank you that does conclude today's teleconferencing webcast, you may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Q2 2025 SEALSQ Corp Earnings Call

Request a DemoDemo

LAES

SEALSQ

Earnings