Profits narrowly beat expectations at Raspberry Pi

(Sharecast News) - Raspberry Pi Holdings posted a slide in annual profits on Wednesday, although the decline was not as steep as analysts had been expecting. Posting its first full-year numbers as a listed company, the Cambridge-based firm - a specialist in high-performance, low-cost single board computing - said revenues eased 2% in the year to 31 December, to $259.5m.

Adjusted earnings before interest, tax, depreciation and amortisation fell 15% to $37.2m, while pre-tax profits tumbled 57% at $16.3m.

However, analysts had predicted a sharper fall for EBITDA, to $36.6m.

Raspberry Pi, which debuted on the London market last June, said inventory issues in the second and third quarters had weighed heavily on profits.

However, it noted that channel inventory had how normalised, leaving it well positioned for the current year.

It currently expects to see a "steady" build up in demand throughout the year, "positioning us strongly despite ongoing macroeconomic and geopolitical uncertainties.

"The projected pace of market recovery, coupled with the timing of embedded design wins, strengthens confidence in solid and sustainable sales growth in full-year 2025."

Eben Upton, chief executive, said: "The IPO has undoubtedly extended awareness of Raspberry Pi's value proposition from the engineering department to the C-suit at major OEMs.

"As our platforms and solutions evolve, we aspire to become the compute partner of choice for these companies.

"This has been a transformative year for Raspberry Pi."

As at 1000 GMT, shares in the FTSE 250 firm were 9% stronger at 514.8p.

Russ Mould, investment director at AJ Bell, said the maiden results were "respectable enough".

He continued: "Crucially, while revenue and profit were both lower, the latter by a significant margin, the company made encouraging noises about the prospects for the current year, backed by the launch of several new products in the back end of 2024.

"Raspberry Pi's momentum in the longer term will depend on its ability to translate the promising discussions it says it is having with major prospective customers into orders, revenues, profit and cash flow."