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1. Company Snapshot

1.a. Company Description

SEALSQ Corp develops and sells semiconductor chips for private and public sectors.The company offers semiconductors and smart card reader chips; identity provisioning services; and managed PKI for IoT solutions.It serves consumer electronics, aerospace and military, satellite and telecommunications, smart energy and smart building, smart industries, logistics, medical, and consumer industries.


SEALSQ Corp was incorporated in 2022 and is based in Cointrin, Switzerland.SEALSQ Corp is a subsidiary of WISeKey International Holding AG.

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1.b. Last Insights on LAES

SEALSQ Corp's recent performance was driven by several positive developments. The company's management team will be presenting at the Sidoti Small Cap Conference on June 11-12, providing an opportunity to showcase its growth prospects. Additionally, SEALSQ has signed a Share Purchase Agreement to acquire 100% of IC'ALPS, a leading ASIC design and supply specialist, further expanding its capabilities in the semiconductor industry. The company has also renewed its ISO 9001 and ISO 14001 certifications with zero non-conformities, demonstrating its commitment to quality and sustainability. Furthermore, SEALSQ has been chosen by Hager for matter-compliant device attestation in next-gen smart home products, and has extended its relationship with Landis+Gyr to offer utilities enhanced PKI services for AMI network and meter security.

1.c. Company Highlights

2. SealSQ Q4 2024 Earnings Analysis

SealSQ reported a challenging 2024, with full-year revenue declining to $11 million, a significant drop from $30 million in 2023. The revenue decline reflects the company's strategic pivot away from traditional semiconductors toward next-generation quantum-resistant chips, which are expected to drive future growth. Despite the revenue contraction, SealSQ demonstrated a strong commitment to innovation, investing $5 million in R&D in 2024, with plans to increase this to $7.2 million in 2025. The company also raised $80 million during the year, which will support its growth initiatives, including strategic acquisitions and the expansion of its global semiconductor personalization centers.

Publication Date: Apr -03

📋 Highlights
  • Revenue Decline in 2024:: Revenue dropped from $30 million in 2023 to $11 million in 2024 due to the transition to quantum-resistant chips, market normalization, and lower demand as customers utilized excess inventory.
  • Investment in R&D:: $5 million was invested in R&D in 2024, with $7.2 million planned for 2025, reflecting a strong focus on innovation and transitioning to next-generation technology.
  • Post-Quantum Market Growth:: The post-quantum cybersecurity market is projected to grow from $302.5 million in 2024 to $1.8 billion in 2025, presenting a significant opportunity for SealSQ to capitalize on.
  • Strong Financial Position:: The company ended 2024 with a strong balance sheet, $90 million in cash, no bank debt, and no convertible loans, positioning it well for future growth initiatives.
  • Pipeline and Growth Outlook:: The company has a pipeline valued at $93 million over three years, with a win rate starting at 50% for design wins and dropping to 20-30% for design-ins, indicating potential future revenue growth as post-quantum chips become mandatory.

Financial Performance and Margins

SealSQ's net loss for 2024 widened to $21 million, driven by the transition to post-quantum technology and reduced demand for legacy products. The company's balance sheet remains robust, with $90 million in cash as of January 6, 2025, and no bank debt or convertible loans. While the company is currently operating at a loss, management remains confident in its ability to capitalize on the growing post-quantum cybersecurity market, which is projected to expand from $302.5 million in 2024 to $1.8 billion by 2025. Analysts are forecasting a revenue growth rate of 119.7% for 2025, reflecting strong expectations for the company's transition to quantum-resistant chips.

R&D Investments and Strategic Initiatives

SealSQ's focus on R&D and strategic acquisitions underscores its long-term growth strategy. The company has allocated $20 million for certifications and acquisitions, including startups like Colibri and IC’ALPS, to integrate quantum technologies into its product portfolio. These investments are expected to accelerate the commercialization of post-quantum chips, with the first products set to launch in 2026. Additionally, SealSQ's pipeline of opportunities is valued at $93 million over three years, with a design win win rate of 50% and a design-ins win rate of 20-30%. This pipeline suggests strong growth potential as the market for quantum-resistant solutions continues to mature.

Valuation and Market Positioning

SealSQ's valuation metrics highlight its growth potential, with a price-to-sales ratio of 11.87 and an enterprise value-to-EBITDA ratio of -17.9. While these ratios indicate high expectations for future revenue growth, they also reflect the risks associated with the company's transition to a new product line. The company's strong balance sheet and significant R&D investments position it well to capitalize on the post-quantum market, but investors should remain cautious given the company's current operating losses and the risks associated with new product adoption.

Conclusion

SealSQ's 2024 results reflect the challenges of transitioning to a new product line, but the company's strategic investments and strong financial position position it well for future growth. With a projected revenue growth rate of 119.7% in 2025 and a focus on quantum-resistant solutions, SealSQ is well-positioned to become a leader in the post-quantum era. However, investors should monitor execution risks and the market adoption of the company's new products as the company works to achieve profitability and scale its operations.

3. NewsRoom

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SEALSQ, WISeKey and WISeSat.Space Successfully Launch Their New Satellite Aboard SpaceX Mission

Dec -01

Source: globenewswire.com

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WISeKey, SEALSQ and WISeSat.Space Successfully Launch Their New Satellite Aboard SpaceX Mission

Dec -01

Source: globenewswire.com

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SEALSQ Appoints Dr. Ballester Lafuente as Chief of Staff and Group AI Officer

Nov -24

Source: globenewswire.com

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SEALSQ et Quobly annoncent une collaboration pour faire progresser des technologies quantiques sécurisées et à grande échelle

Nov -21

Source: globenewswire.com

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SEALSQ and Quobly Announce Collaboration to Advance Secure and Scalable Quantum Technologies

Nov -21

Source: globenewswire.com

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Quantum Risk Turns Real for Cryptocurrencies, and SEALSQ Delivers the Roadmap to Mitigate the Risk

Nov -19

Source: globenewswire.com

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SEALSQ Launches U.S.-Based Post-Quantum Root of Trust to Deliver Quantum-Resistant PKI and Device Identity Services as part of the Made In USA strategy

Nov -14

Source: globenewswire.com

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SEALSQ Inaugurates the Grenoble Node of the SEALSQ Quantum Corridor, Advancing Quantum Sovereignty Across Europe

Nov -12

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.03%)

6. Segments

Secure Microcontrollers

Expected Growth: 12.4%

Growing demand for secure IoT devices and industrial control systems, increasing need for tamper-proof data processing and storage, and advancements in chip technology drive the growth of secure microcontrollers market.

All Other

Expected Growth: 4.5%

The 'All Other' segment from SEALSQ Corp is expected to grow steadily, driven by increasing demand for miscellaneous products and services, expansion into new markets, and strategic partnerships. This residual category is poised to benefit from the company's diversified portfolio and adaptability to emerging trends.

7. Detailed Products

Cybersecurity Solutions

Advanced threat detection and prevention systems to protect against cyber attacks

Cloud Infrastructure

Scalable and secure cloud infrastructure solutions for businesses of all sizes

Artificial Intelligence Services

Custom AI solutions for automation, predictive analytics, and process optimization

Data Analytics Platform

Comprehensive data analytics platform for business insights and decision-making

IT Consulting Services

Expert IT consulting services for strategy, implementation, and management

Cybersecurity Training

Comprehensive cybersecurity training programs for employees and organizations

8. SEALSQ Corp's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SEALSQ Corp is moderate due to the availability of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high for SEALSQ Corp due to the concentration of buyers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for SEALSQ Corp due to the availability of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for SEALSQ Corp is moderate due to the moderate barriers to entry in the market.

Intensity Of Rivalry

The intensity of rivalry for SEALSQ Corp is high due to the high competition in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 75.35%
Debt Cost 3.95%
Equity Weight 24.65%
Equity Cost 3.95%
WACC 3.95%
Leverage 305.61%

11. Quality Control: SEALSQ Corp passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Navitas Semi

A-Score: 4.3/10

Value: 6.2

Growth: 6.4

Quality: 3.8

Yield: 0.0

Momentum: 9.5

Volatility: 0.0

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Seco

A-Score: 3.9/10

Value: 4.3

Growth: 4.9

Quality: 2.8

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

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Alphawave IP

A-Score: 3.6/10

Value: 4.6

Growth: 5.1

Quality: 1.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

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SEALSQ

A-Score: 3.5/10

Value: 6.2

Growth: 1.3

Quality: 3.4

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

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Magnachip Semiconductor

A-Score: 2.7/10

Value: 9.8

Growth: 1.2

Quality: 2.9

Yield: 0.0

Momentum: 1.0

Volatility: 1.0

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IQE

A-Score: 2.3/10

Value: 9.6

Growth: 1.2

Quality: 1.7

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.86$

Current Price

4.86$

Potential

-0.00%

Expected Cash-Flows