EnSilica - reality sets in with bad debt provision and share price reacts accordingly, now 43p

Mark Watson-Mitchell - 16.10.2025

This month has seen quite a bit of interest being shown in the shares of EnSilica (LON:ENSI).

On Wednesday and Thursday, 1st and 2nd October, there were some 2,313,855 and 2,250,424 shares traded on each of those days respectively, over ten times the previous daily volumes.

The reason for such interest was a sudden flurry in the stock on the back of the valuation given to another such company within its sector, indicating that EnSilica was worth some 13 times the then valuation.

Scary stuff!

But it was enough to help lift the group's shares from 41p to 53.60p within the week.

I published my opinion at the start of this month, that investors should be cautious and not get sucked in on the basis of absurd valuations.

The Business

EnSilica is a leading fabless design house specialising in custom ASIC design and supply for OEMs and system houses, as well as IC design services for companies with in-house design teams. 

The Company boasts world-class expertise in supplying custom RF, mmWave, mixed-signal, and digital ICs to its international customers across the automotive, industrial, healthcare, and communications markets. 

EnSilica has a track record in delivering high-quality solutions to demanding industry standards. 

The Company is headquartered near Oxford, UK and has design centres across the UK, India, Brazil and Hungary.

Today's Trading Update

This morning its Management reported various items of news, including the securing of six new design and supply contracts in FY 2025, which exceeded its target.

Annual chip supply revenues increased to £5.7m from £2.9m in FY 2024.

Booked Non-Recurring Engineering (NRE) revenue stands at over $40m for the next two financial years.

Due to delays with a customer and a cybersecurity issue, a bad-debt provision of £1.6m was made.

Consequently, FY 2025 revenue is expected to be approximately £18.2m with an EBITDA loss of approximately £1.3m.

For FY 2026, revenue is projected to be between £28m and £30m, with EBITDA between £3.5m and £4.5m.

The company anticipates over $250m in total lifetime revenue from its supply contracts.

Management Comment

CEO Ian Lankshear stated that:

"We are targeting an increase of more than 50% in revenues in the current financial year after having absorbed the impact from the challenges SIAE and our automotive client are facing, and it may well turn out that we have been too conservative.

Frustrating as the impact of these two events are, they reflect the current stage of the development of the business.

As the business continues to scale-up the individual impact of specific projects will mitigate through the growth in the breadth of our chip supply contracts.

The opportunity remains substantial.

We maintain our forecast for total lifetime revenue from supply contracts of over $250m in chip supply revenues as the reduction from SIAE has been made up by increased demand from other clients.

Our overall position has strengthened during FY2025 as we have increased our customer base and further progressed projects towards supply with the associated long-term revenue opportunity, and we anticipate further customer wins in the current year."

My View

Analysts will be marking-down their 2025 and 2026 estimates, which in due course could see the shares ease off more, before some good corporate news helps to rekindle investor interest.

The shares have been down to 39p this morning in market reaction, before edging back up to 43p as I write.

EnSilica will announce its Final Results for the 12 months to end-May 2025 on Tuesday 4th November.

EnSilica

(Profile 02.06.25 @ 34.50p set a Target Price of 43p*)

(Profile 23.07.25 @ 39p set a Target Price of 50p*)

Asterisks * denote that Target Prices have been achieved since Profile publication.