Alphawave IP Group, a U.K. wired connectivity solutions provider, has announced a pretax loss for the first half of the year, despite an increase in revenue. However, the company anticipates higher profitability in the second half.
For the six months ending June 30, Alphawave IP Group reported a pretax loss of $11.16 million, a significant drop from the $22.2 million profit recorded during the same period last year. Despite this loss, revenue grew from $57.1 million to $187.2 million, driven by the acquisition of OpenFive and organic growth.
While revenue increased, the gross margin declined to 44%, a noteworthy decrease from the previous year's 97%. This decline can be attributed to the company's expansion into custom silicon development and silicon products. Alphawave IP Group explained that they inherited contracts with gross margins below their targeted range through the acquisition of OpenFive.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $32.4 million, reflecting a change in business mix and increased research and development investment, compared to $23.2 million during the previous year.
As of 0742 GMT, shares were experiencing a 6.1% decrease, down 9.0 pence to 138.0 pence.