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Interim results for the six months ended 30 June 2022

Daniel Nenni

Admin
Staff member
• Technology leadership and product portfolio underpin broader customer base
• Revenue doubled year-on-year to US$57.1m
• H1 2022 operating profit of US$29.9m compared to restated H1 2021 US$1.3m • Adjusted EBITDA1 up 67% year-on-year to US$23.2m
• Adjusted EBITDA1 margin at 41%, below H1 2021, as we continue to expand our R&D capability to support a growing pipeline and future revenue growth
• EBITDA significantly above H1 2021 at US$32.7m
• Significant revenue growth expected in H2 2022, with medium-term outlook unchanged and continued confidence in growth prospects LONDON, United Kingdom and

TORONTO, Ontario, Canada 21 September 2022 - Alphawave IP Group plc (LSE: AWE, “Alphawave IP”, “Alphawave”, the “Company”), a global leader in high-speed connectivity for the world’s technology infrastructure, has published its interim results for the six months ended 30 June 2022. Financial Summary and APMs1 – US$m H1 2022 Restated H1 20212 Change Revenue 57.1 27.6 107% EBITDA2 32.7 2.6 nm EBITDA margin 57% 9% Adjusted EBITDA1 23.2 13.9 67% Adjusted EBITDA margin 41% 50% Profit after Tax2 16.3 0.1 nm PAT margin 28% nm Adjusted Profit after Tax1 6.7 11.4 (41%) Adjusted PAT margin 12% 41% Pre-tax operating cash flow2 32.2 4.7 578% Net cash and cash equivalents (end of period) 451.8 519.1 (13%) Bookings3 and Design Win Activity – US$m H1 2022 H1 2021 Change Licence and related 38.5 33.0 17%

Potential future royalties 14.9 15.2 (2%) New Bookings (excluding VeriSilicon and WiseWave multi-year subscription licences) 53.4 48.3 11% Additional design win activity – FSA drawdowns and China re-sale licences4 14.7 - nm WiseWave and VeriSilicon multi-year subscription licences - 147.8 nm Number of end-customers (end of period) 28 16 Due to rounding, numbers presented in the table may not add up to the totals provided and percentages may not precisely reflect the absolutely figures. ‘nm’, where referenced, means ‘not meaningful’.

1 See note 4 Alternative Performance Measures (APMs) on page 21. Adjusted EBITDA and Adjusted Profit after Tax exclude IPOrelated non-recurring costs, foreign exchange adjustments, share-based payments, M&A transaction costs and one-time fees associated with WiseWave.

2 H1 2021 operating expenses have been restated by US$2.6m from share premium to non-recurring IPO costs. FY 2021 remains unchanged. This restatement had no impact on H1 2021 APMs. See note 23 for further information.

3 Bookings are a non-IFRS measure representing legally binding and largely non-cancellable commitments by customers to license our technology. Bookings comprise licence fees, non-recurring engineering, support and, in some instances, our estimates of potential future royalties.

4 Both FSA (Flexible Spending Account) drawdowns and China re-sale licences convert previously announced contractual commitments included within bookings reported in prior periods to new product design wins which will be recognised as revenue over time.

Tony Pialis, President and Chief Executive Officer of Alphawave IP said:

“We delivered another set of strong results, doubling our revenue over H1 2021 while continuing to invest both organically, through R&D, as well as through M&A to support our growing pipeline and future revenue growth. The strong results are a testament to our technology and the solid execution by our talented people. Following the closing of the acquisition of OpenFive on 1 September 2022, we welcomed over 330 employees to Alphawave and over 50 new customers. We expect customer traction to gain momentum in the second half of the year and we are excited about the long-term prospects for growth.”

John Lofton Holt, Executive Chairman of Alphawave IP, added: “Alongside this strong set of results, the completion of OpenFive represents an important milestone in the evolution of our business. Through an uncertain economic environment our customers in digital infrastructure markets continue to invest in leading connectivity technology, and this is the reason we are excited about the long-term potential of the business.” Interim Results Highlights

• H1 2022 revenues of US$57.1m, representing 107% growth year-on-year driven by mix of repeat business and new customers

• WiseWave revenues of US$18.3m (excluding re-seller revenue5 ), of which US$12.9m relate to the multi-year subscription licence

• Adjusted EBITDA1 of US$23.2m and margin of 41% (H1 2021 US$13.9m and 50%), reflecting accelerated investment in R&D

• US$19.3m exchange gain due to the weakening of GBP against USD on USD cash balances held at Alphawave IP Group plc level denominated in GBP • Net cash generated from operating activities in H1 2022 was US$18.8m, US$17.2m higher than in H1 2021 (H1 2021 restated: US$1.6m) Business and Technology Highlights

• Alphawave IP maintained its technology leadership with a new design win in 3nm • The Company added to its product portfolio two new interconnect IPs, AresCORE16 and OptiCORE100

• During H1 2022, the Company expanded its customer base to 28 (FY 2021: 20 customers; H1 2021: 16 customers), including two top 20 North American semiconductor companies

• Microchip Technology selected Alphawave’s low-power and high-performance 112Gbps IP, AlphaCore100, for its next-generation META-DX2 1.6Tbps Ethernet retimer family

• Cumulative bookings over the life of the Company since its inception in 2017, exceeded US$400m, of which over 50% represents customers outside of China

• Continued to build sales and R&D capabilities with new offices in San Jose, California and Ottawa, Canada

• In H1 2022, the Company headcount increased by 97 people globally, bringing the total headcount from 154 (as of 31 December 2021) to 251 (132 as of 30 June 2021)

• After the end of the reporting period, on 31 August 2022,the Company completed the acquisition of OpenFive, extending Alphawave’s product offerings and customer base while driving greater scale and revenue growth from an expanded total addressable market.
 
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