Redeye notes that Sivers’ Q4 2024 report was strong, with record net sales of SEK76.7m driven by accelerating SATCOM deployments and new contracts. Management indicates a new baseline for revenue going into 2025, setting up the stage for a transformative 2025 when SATCOM volumes are expected to ramp by the end of the year. We keep our Base Case of SEK6.2 intact and provide additional comments about our view of the company, its future prospects, and how our long-term estimates are derived.

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Sivers Semiconductors

* Currently unprofitable with negative cash flow, requiring access to capital markets for funding through debt or equity issuance.
* Operating in a fragmented market with numerous competitors, making it challenging to establish clear market dominance.
* Difficulty in identifying sustainable competitive advantages at this early stage of market development.
* Potential for high customer concentration if a few large clients transition from evaluation to commercial orders, which could increase business risk.

* Strong positioning in high-growth markets driven by AI acceleration and millimeter wave adoption, with a serviceable addressable market of USD2bn by 2028.
* Asset-light business model using a "hybrid fabless" approach in Photonics and fully fabless in Wireless, enabling efficient scaling without heavy reinvestment.
* Products aligned with long-term secular trends in data centers, 5G networks, and satellite communication, reducing risk of disruption.
* Active collaboration with customers for innovation, as evidenced by strategic partnerships like the one with Ayar Labs.

* Operating margin (EBIT) below 20%, indicating potential challenges in maintaining profitability.
* Weak financial health indicators, including low current ratio and high debt levels relative to cash flows.
* Likely need to raise capital through debt or equity within 12 months, potentially diluting existing shareholders.

* Strong gross profit margin exceeding 40%, indicating profitable product mix and pricing power.
* Operating margin (EBIT) has improved for three consecutive years, suggesting improved cost management and operational efficiency.
* Efficient inventory and accounts receivable management, with both ratios below 20% and their 5-year averages.

* Recent appointment of CEO and CFO (both in 2023-2024) means limited track record in delivering on promises and executing strategy within Sivers specifically.
* Company is still in scale-up phase and loss-making, unable to demonstrate attractive returns on capital or pay dividends, potentially limiting investor appeal.
* Continuous share dilution without corresponding EPS growth, increasing from 126m to 235m shares between 2019 and 2024, potentially concerning for long-term shareholders.

* Strong visionary leadership from new CEO Vickram Vathulya, with 25+ years of industry experience and a focus on long-term growth in AI acceleration and millimeter wave adoption.
* Commitment to innovation demonstrated through partnerships with industry leaders and successful grant acquisitions, positioning Sivers at the forefront of technological advancements.
* Transparent and focused communication strategy, emphasizing long-term value creation and clear market share ambitions, fostering investor trust and understanding.
* Significant insider ownership (28%) and board member stakes, indicating strong alignment with shareholder interests and confidence in the company's future.
* Diverse and experienced board of directors with expertise well-aligned to Sivers' business strategy and growth ambitions in SATCOM and AI datacenter markets.

Key Financials
SEKm	2023	2024	2025e	2026e	2027e
Net Sales	235.6	243.7	327.8	515.0	1,001.6
Sales Growth	77.7%	3.4%	34.5%	57.1%	94.5%
EBITDA	-34.4	-31.3	-12.4	18.5	199.6
EBITDA Margin	-14.6%	-12.9%	-3.8%	3.6%	19.9%
EBIT	-159.4	-127.1	-116.4	-77.1	107.5
Net Income	-158.1	-116.3	-140.8	-81.9	81.6
EV/Sales	6.4	3.2	3.1	2.1	0.9
EV/EBITDA	-43.8	-25.2	-82.7	57.5	4.6
EV/EBIT	-9.4	-6.2	-8.8	-13.8	8.6
P/E	-9.5	-6.5	-6.8	-11.6	11.7

Solid underlying development

Change of analyst - updated view

Maintaining our Base Case at SEK6.2

Don't miss the forest for the trees