Financial Data and Key Metrics Changes - For the full year 2024, WISeKey reported revenue of $11.9 million, down from $30.1 million in 2023, reflecting a transitional year as semiconductor customers shifted to next-generation quantum-resistant solutions [33] - The company ended the year with a cash balance exceeding $90 million, significantly reducing convertible debt and traditional debt, resulting in a cleaner balance sheet [34] Business Line Data and Key Metrics Changes - SEALSQ, the semiconductor subsidiary, is targeting the commercial launch of new post-quantum chips in Q4 2025, with expectations to capture 20% of the trusted platform model market over the next five years [16][28] - WISeSat is deploying low orbit ecosystems to enhance global IoT connectivity, with plans to launch up to 88 new generation satellites over the next three years [22][23] Market Data and Key Metrics Changes - The company has a robust pipeline of secured and pending business opportunities exceeding $150 million for the period 2026 to 2028, supported by growing public sector and defense partnerships [27][36] - The semiconductor revenue has been the main contributor in 2024, with expectations for substantial returns from the full-scale commercial deployment of quantum-resistant chips starting in 2026 [28][29] Company Strategy and Development Direction - WISeKey is focusing on a convergence strategy that integrates semiconductors, satellites, blockchain, and digital identity into a unified ecosystem, aiming for exponential innovation and resilience [10][12] - The company is pursuing targeted acquisitions, investments, and joint ventures to enhance its capabilities, including the acquisition of IC'ALPS, which will strengthen its ASIC design capabilities [18][69] Management's Comments on Operating Environment and Future Outlook - Management expects 2025 to be a year of execution and scale, with significant improvements in performance compared to 2024, supported by a solid cash position and ongoing technology investments [26][27] - The company is well-positioned to benefit from the European rearmament trend and increased NATO spending on secure communications and encryption [94][95] Other Important Information - The SEALPhone, an ultra-secure smartphone, is currently in testing mode and integrates WISeID and SEALCOIN enabled security features [26] - The company is developing a transactional-based service leveraging blockchain technology for secure transactions in smart city applications [81] Q&A Session Summary Question: Can you provide more detail about the pipeline number and its competitiveness? - The pipeline is valued based on estimated client opportunities, with a conservative approach taken. The market for TPM and post-quantum solutions has significant barriers to entry, and the company is confident in its competitive position [39][42] Question: When will visibility into volumes for post-quantum chips be available? - Active discussions are ongoing with clients, and visibility into demand is expected by the end of the year, particularly after the half-year results [45][50] Question: What are the expectations for margins and inventory levels in 2025? - Margins are expected to improve in the second half of 2025, with legacy product pricing remaining stable despite reduced demand [52][54] Question: How is the Swiss Army contract progressing and expected revenue? - The contract is live, but revenue will be small initially as the project is still in the R&D phase, with more significant contributions expected in 2026 and beyond [60][62] Question: What is the status of the IC'ALPS acquisition and its expected contribution? - The acquisition is pending government approval, with a focus on enhancing ASIC design capabilities. Revenue guidance will be provided upon closing the deal [69][72]
WISeKey International (WKEY) - 2024 Q4 - Earnings Call Transcript