Raspberry Pi Holdings plc ($RPI)

Good afternoon, ladies and gentlemen, and welcome to the Raspberry Pi Holdings plc Final Results Investor Presentation. [Operator Instructions] Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I'd now like to hand over to the management team. Good afternoon.

Good afternoon. So welcome to our results presentation for 2025. Richard and I are going to walk you through some abbreviated highlights of the year, a summary of our financial performance. We'll give an update on our progress against our strategy and conclude with some words on the outlook for the remainder of 2026. So, in summary, 2025 was an absolutely standout year for us. Shipments of boards and modules increased by 9% to 7.8 million units, and that delivered a 25% increase in EBITDA. We saw demand for our products build steadily throughout 2025. The second half was noticeably stronger than the first half. And within that, the fourth quarter stronger than the third. We saw particular strength in our two largest markets, the United States and China. As we speculated in our half year results, this was indeed the crossover year for our semiconductors business. We saw a 47% year-on-year increase in chip sales to 8.4 million units, meaning that we sold more chips than boards for the first time. Raspberry Pi is at heart a product company, and we love to launch products more than pretty much anything else. 2025 was a somewhat slower year for us in 2024 in terms of product launches, but still one of our strongest historically. We launched many new hardware products, including new microcontroller variants that, for the first time, embed nonvolatile memory alongside the RP2350 die. But I think the star of the show for us was our first software product, Raspberry Pi Connect. This was launched in beta in the middle of 2024. And we added many new features, including over-the-air firmware updates in 2025, those features really being very finely targeted on to the needs of our OEM, our paid for OEM users of Raspberry Pi Connect, Raspberry Pi Connect for organizations. We ended the year with very nearly 400,000 devices registered, and we're over 500,000 units, 500,000 devices registered today. And finally, we've been strengthening our marketing outreach. We've been increasing our presence at physical events at trade shows. We've seen strong momentum in our board-to-board program, which aims to introduce and promote Raspberry Pi to major industrial OEMs at the C-suite level. We've seen particular interest from OEMs in smart home and in aerospace and defense. And we've been refining the structure of our reseller channel. For the -- we've retired a number of underperforming partners such that for the first year in a very long time, we actually left the year with slightly fewer resellers than we started the year with. But we've made a number of targeted additions of reseller partners targeting key geographies and key sectors. So I'll hand over to Richard for the financials.

So, I think, as Eben said, 2025 was a very good year. Perhaps to understand the story, it's good to look at the shape of the unit sales over the last 24 months, essentially on a quarterly basis. Quarter 1, 2024, we came into the year of '24 really after that period of shortage through '22, '23 of electrical products. And we really had the final back order, particularly on compute modules, which caused our direct sales, as you see in blue, to be particularly strong. And also at the same time, it was really the first quarter where we were fully selling Pi 5 through Premier Farnell, our licensee partner, which is the orange. So that, that first quarter was very strong for a number of reasons. But that came into the middle of the year and really like a lot of the electronics sector, I think everybody had come out of that period of semiconductor shortage, had bought an awful lot of product, and there was a general industry-wide indigestion, which really took through quarter 2, quarter 3 and a bit into quarter 4 to really settle through, and you saw that in our sales volumes through that period. One of the bright spots in that third quarter was also we sold -- we launched our second microcontroller product, which we sell on Pico boards. So the actual number of units of boards was helped, but it's a much more low-cost product, much lower unit margin, which we'll touch on. And then gradually, as we came into the start of '25, that demand had settled. There was much more opportunity in terms of industrial sector. So we saw, which we probably regard as one of our sort of bellwether products, the Pi 3, a product that's been with us since 2016, sorry, pick up in volume again as industrial customers really came back in, I think, after the overstocks had flared. And that sort of gentle progress really took place through the first three quarters of 2025. Until then in the final quarter, we saw really that strengthening in demand quite significantly. Some of it was new products. Some of it was probably a little bit of stimulation from memory prices going up. But most strongly, it was people building in new products into their development of compute modules and purchases of Pi 5s and Pi 4s. So overall, a very good finish to the year, and that has carried on into quarter 1, which is seeing very similar volumes. I guess the day is yet young, but hopefully, by the end of the quarter tonight, will be a very similar numbers to the end of 2025, that last quarter. So overall, it was a year of 7.6 million units. That was up some 9% on 2024. Gross profit per unit. So it's one of the key metrics that we follow. So how much profit have we made on each of those boards that we've sold was $8.70, which is up on $7.40 from a year ago. A number of features there, definitely better mix. I've mentioned already, our Raspberry Pi 5 boards, Raspberry Pi 4 boards. Retail from $45 right up to over $100, which is much more substantial. Some of the other boards such as Pico, which is sort of $3, $4 in price, were essentially flat year-on-year. So that mix was a major reason for the lift in the higher margin that we make. And the other factor was the first 2 million of the Pi 5 boards we made, the chip that went into there was an early version of earlier version of the Broadcom 2712, and it was $5 more expensive. Once we cleared through that, the costs of our boards became -- of the Pi 5 boards became $5 cheaper, which is quite a significant uptick as well in terms of that margin -- gross profit per board. So overall, our gross profit was up 23% as a result of those factors as a result of more units being sold and at a better margin per unit. And our consequence of that, our costs rose similar level to the gross profit such that our EBITDA was also up about 25% year-on-year to $46.4 million. That gave us, as that flowed through an adjusted EPS, earnings per share rising 35% to $0.1450 from $0.1070 a year ago. And overall, the result of that with adjustments to working capital and things like that, we'll talk about later in terms of inflow and paying off some of the payables that we've had previously left us with cash of $28 million from the year compared to $45 million a year ago. And in addition to that, we have a revolving credit facility of $80 million. That has remained undrawn. So essentially, we've ended up with cash at the end of the year of $28 million, a clean number. So overall, I talked about the units being up. You can see the direct share rose much more significantly. Royalties were flat, such that the direct share increasing means that of the total rose to about 76%, which is similar to the numbers that we expect to see in '26. We probably believe that our share of the boards that we sell as opposed to out of total boards, the other being royalty is in the range of about 70% to 80%. I think 70% was probably in 2024, about the lowest level, and we expect to see that rise closer to 80% in the year ahead. The units at 7.6 million in total, we expect '26 to be better on that with that momentum that we saw in Q4 last year and quarter 1 of this year continuing for the year. And so numbers strengthening there. And gross profit per unit, as mentioned, $8.70. We expect that to come down in '26 really as memory prices, the cost of the memory that goes into our boards has been rising significantly. We will talk more about that later. Whilst we put up prices, then obviously, there is an effect there that means the margin on the boards in terms of dollars per board will come down, and we anticipate that to be the case. Accessories, which is in the -- you call that bright pink on the top, it was another strong performance. That rose to about $1.40 per board. Those are things like that we sell alongside there. Some of them are products that we very much design ourselves. Others are products that we have bought from other people. We have intervened quite significantly in the design of quite a few of these items, so power supplies where we have been quite fastidious in terms of the quality of those. But those overall have had a very good year in '25. So that's areas like cameras, AI hats, displays, power supplies, all stepping forward very nicely relative to the number of boards and also includes areas like SD cards and SSD memory as well, which we started to bring through into '25. We've seen significant take-up of those. It's very important for the quality of the product that the SD card is reliable. And again, it's part of this culture of engineering that the team at Raspberry Pi have really made sure that those products are -- do not diminish the overall offer of the Raspberry Pi board itself. So those have performed strongly in the period, and we'd see hopefully similar numbers into 2026 in terms of that sort of profit per unit, maybe even stepping up a little bit from there. So, in totality, we see revenue was up significantly. Increases in higher prices over the -- sorry, was up significantly, really driven by units and also slightly increased mix. We see that coming forward into 2026, where we've had to increase prices in certain boards really quite significantly to cope with memory price increases. But you would expect to see the revenue for 2026 increase substantially at the same time as units picking up, but that board cost increase going up. Gross profit rose 23% while the margin at this stage stayed pretty constant at 24%, that's that margin that I think you would expect to come down in '26. We're very focused on that profit per unit. And as the base cost of the boards is going to -- price is going to increase as we accommodate more expensive cost of sales from memory, the revenue will increase, whereas the profit per unit will stay at similar sort of levels. So we would expect that margin to come down. It's not a number that we chase. We're much more focused on that profit per unit as a measure rather than the percentage. Offset against that increase in gross profit, we saw an increase in research and development costs and in administrative costs. Research and development costs were up year-on-year. We saw the underlying salaries of people that we employ this area is essentially that line is dominated by the cost of our colleagues. That was -- their costs were up about 10%, a slight increase in the number of heads, but also increases in payroll. However, that total amount, we then deduct from that and capitalize up salaries of people and the projects they've been working on. In 2024, that was about 50% -- 56% of those salaries. That came down to about 42% in 2023, such that the net cost in that line, therefore, increased more substantially than just inflation. This is really a feature of depending on the projects that we've been working on in '26 -- '25, we had more in the way of software products, which we don't capitalize. '24 was a year when we were finishing the launch of the RP2350, our microcontroller and therefore, much more significant level of capitalization. We would think of this as being more typically about 50% into the future. Admin costs and administrative costs were up really as a function of the first full year of being listed, they were up some 19%. So we had additional heads, additional costs, be that stock exchange fees, but also just generally increases in -- we had a good year in terms of bonuses as well, driving that administrative cost up. I think going into the future, we'd expect to see that grow at a lower rate in future periods. I think there was a bit of a sort of catch-up effect in these numbers. Brings us down to an adjusted EBITDA number, as referenced of about 25%. Depreciation and amortization was essentially flat year-on-year. Similar products were being amortized in both periods. And then we did also have a slight reduction in the rate of amortization on some semiconductor products where we saw longer lives on those. We did a reassessment based on the demand for the products and the demand was of a strength where the idea that these economic lives of these products we exhausted within six years was just not practical. And so we've stretched that by another couple of years, and that's produced a slightly lower amortization charge. Our tax rate -- taxation charge at the bottom. Our effective tax rate, which is the sum of current tax and deferred tax compared to our adjusted profit before tax was down to about 18%. That was really two factors bringing that down from, I think, what we would regard as the U.K. norm of 25%, the government corporation tax rate. We have obtained a patent in respect of one of the elements of Pi 5 and also of the semiconductors. This allows us to put the profits of those businesses into what's called the patent box and attract only 10% tax. And that taken with a release of a provision that we've set up in the past, brought that tax rate down. I think in the future, we'd expect that rate to be closer to 22% to 23% in the future. So those factors taken together leads us to an adjusted earnings per share of $0.1448 per share, which is up some 35% year-on-year. Turning to the balance sheet. The key elements within here. our intangibles, which is the major part of our fixed assets, they were up to about $83 million from $73 million a year ago. That's essentially the capitalization, particularly of intangibles that we've incurred in the year normally at about sort of $20 million. This year it was about $18 million, less depreciation in the period. Our inventory, $145 million. The total amount improved. It came down slightly from about $156 million a year ago as finished goods reduced. During '24, we had a period where they increased as we were continuing to manufacture demand slowed. We started to get on top of that. We pushed back quite hard in terms of production. So that by the end of the year, it was starting to come down. That continued through into 2025. And it's probably fair to say now at the sort of levels of, I think, about sort of $30 million to $40 million, that is probably about as low as we can realistically take it at the moment. So we may expect to see some increase there, whereas components, we did increase in 2025. Memory holdings went up. And also, we had some increase in the processor chips that we use, all part of that making sure that our business is resilient as possible to these fluctuations in the key components. So overall, inventory came down slightly, but with those two factors, the finished goods coming down and components going up. On the other side, receivables increased. It was up to $59 million from $36 million a year ago. That's really a function of how strong that last quarter was when we saw significant sales volumes going out and also in truth, the increase in the prices of finished boards and such like, where you were seeing, therefore, higher value per individual units as well. So that increased. Payables did come down. At the end of '24, we had about $52 million of extended payables. It's really a function of just how soft in truth the market for components was during '24, really quite a turnaround since. But at that period, we had the ability -- the offer of paying certain suppliers over longer terms. That has unwound during '25, we were essentially paying those off as well. So that came down by about $52 million on that line, such that our payables finished at $60 million compared to $96 million previously. If you sort of look at those together, that increase in overall working capital to $144 million from just shy of $100 million previously, that outflow really driven by those extended payables being resolved. We're now free of those to all intents purposes. And so the flow over the period caused a reduction in cash through the period at $28 million. And at that point, we, I think, have started to see an improvement in the cash position. Our RCF remains undrawn at $80 million. We increased that during the year in terms of the facility, but we haven't had cause to use it, but it's there in reserve should an opportunity arise. Cash flow overall, slightly unsurprisingly is the result of the factors that we were describing on the previous page in terms of the movement in the balance sheet. Profit of $45.8 million or EBITDA, payables reducing, and therefore, we've consumed that level of payables. CapEx, as you can see on here, we spent about $18 million of cash CapEx, pretty close to the $20 million of guidance that we give. We've flagged in the past, we'd expect that to rise to circa 25% of gross profit over time. It is lumpy. There may be some periods where we spend more. We may buy IP, which you buy as a single piece in a given year. And we also, on some of the chip design programs, that final tape-out as we refer to it, where you send the designs across to TSMC typically in our case for them to turn it into full-scale production. Again, there are sometimes some significant one-off costs. But I think that overall sort of trend of 25% taken across the year should make a lot of sense. We had a tax credit. We had two lots of research and development expenditure credit received in '25 as opposed to more normally an annual amount of, say, $3 million to $4 million. That overall, I think, brought us down to the cash position referred to before. Cash conversion, which is something really for the longer-term outlook. We think of this at the operating cash flow level. So essentially EBITDA minus a movement in working capital. I think over a period, we'd expect that to run at somewhere between 60% to 80%. So a smaller consumption of cash and working capital in the future. We don't expect any more extended payables to complicate things. But it will, as the phrase that we've used a few times, be lumpy. If there is an opportunity to buy memory in significant quantity, we would take up that opportunity. So -- but generally, as a trend, I think it will be of that order. I'm going to say a little bit about memory and then hand back to Eben. Memory costs have increased significantly really since the summer of last year. We were in the situation where, as I've referred to, the level of inventory we brought into the year was substantial, and therefore, the impact on this current year has probably been slight, but it is a feature that is very much in our thinking for this year ahead. The overall trend for memory is one that you can see in the graph on the left-hand side there. And bear in mind, this is a logarithmic scale here. So the declines are radically more substantial. Since sort of the people started measuring this in 1975, I can remember buying a computer with very exciting 32,000 of RAM, which is probably.

I think mine had been 16,000. I think I may have had the same machine, but mine that started at 16,000 to 32,000. Extreme left. We are on the extreme left of this curve.

And then slowly sloping down. It's the most -- one of the best expressions, I think, of Moore's Law, you will see. It has trended down. But in the last six months, we have seen on the back of really the trend for investment in data centers who want a lot of particular category of memory called high-bandwidth memory, have been purchasing significant volumes. The key memory manufacturers have diverted a lot of their production away from computing, the general purpose computing side of memory use and from mobile phones to make this high-bandwidth memory for the hyperscalers and friends. And that has produced a significant increase in the prices of that memory, as you can see, about 7x. But it's also producing some conditions now where we're having to work hard to make sure that we can properly source the memory we need. And that's even in a situation where we're one of the largest purchasers in Europe of DRAM. So we've seen significant increase in memory. We have started to take steps to address that -- sorry, we have started -- we have been taking steps since the summer of last year. We're continuing to. We've increased the range of suppliers we're working with. Historically, we buy from really two of the major manufacturers, Micron and Samsung. We've now been talking much more widely to other people. The Raspberry Pi name is in order to be helpful with that. We find lot of places we go to. We haven't met people before, but they have used our products university or in the company. Certain pieces of technical innovation that allow us to use memory more effectively to create 4 gigabytes from 2 gigabyte pieces of memory. And we're also just having to pay more, and then we are taking more substantial purchases where possible to manage all of that. So we've increased prices of our products already. As you can see here, there is a product, the 4-gigabyte compute module 4, which actually at one stage in early '26, I think, we reduced the price to tidy up. And since then, we've seen some quite substantial increases I'm afraid there's every indication of those price increases. There will be more coming over this year, but it is a step that we've done to basically maintain that gross profit per unit at a sensible level to be positive. About 25% of our cost of boards is made up of this kind of DRAM on the boards that use it. About 1/3 of our boards, the older ones, particularly do not use this. They use what's called LPDDR2, which you may guess from the name, 2 is an older generation, of which we have ample supplies. So, in terms of outlook, I think we expect high elevated DRAM prices to continue into 2026 and probably into '27 as well. And really, the solution to that is coming from more fab capacity, more places to actually make this, which will take time. These are phenomenally sophisticated machines. Make this and require many billions to do so. And so I think the resolution by additional manufacturing is more likely to be '28 and '27. I think price increases will, however, help in that unfortunate Adam Smith's hand of the market. It will probably push some demand away. It will -- it has -- I think we're seeing a little bit of it already, some more to come where customers are revisiting the effectiveness of their software and looking for -- to use smaller amounts of memory for the purpose that they have. So again, there will be some reduction in demand there. But we're also widening our conversations to a much wider group of suppliers. So overall, we're taking and have taken significant actions. I think this will continue to be a major theme for the year. We have -- at the moment, we came into the year with significant levels of inventory into '26. We're in a good place, I think compared to many a very good place in respect of 1 gigabyte and 2 gigabyte memory at the lower end. That should see us through right up to the end of 2026, almost to the end, I think, is what we said elsewhere. On some of the higher 4 and 8, I think the doubling up the clamshell, we've referred to it. It's one of the solutions at the falls, but it is something we're having to work very hard to achieve. We think this -- we're comfortable with the numbers we have for '26, but this is an area of significant activity for us for the whole of this year. And certainly, there continues to be uncertainty that will take us through into '27. I'll pass back to Eben.

Wonderful. Thank you. So a quick update on progress against our strategy. This was another great year for product launches at Raspberry Pi. I'm just going to -- out of the 13 or 14 products we launched, I'm just going to pick out three that I think help illustrate where we feel we're going as a business. Firstly, we have Radio Module 2 launched midyear. This product delivers turnkey wireless interfacing to our microcontroller customers, and it bridges the gap between these first-class deep embedded compute platforms that we build, RP2040 and RP2350 and the network. It's a fantastic complement to those microcontroller products, and it's become a successful product in its own right. Very much a demand-led product this, a product that we could only build because over the last five years, we've become enormously better at actually listening to our customers and listening to what our customers are telling us they need in order to make their Raspberry Pi-based designs a success. Next, we have my personal favorite. This is Raspberry Pi 500+, our latest all-in-one PC. As Richard said, I think we both grew up with the same machine, both grew up with BBC Micros in our homes. So this is a love letter. This product is a love letter to our enthusiast base who still remain at the heart of the Raspberry Pi mission. And it's...

10 years. I was struggling to do things that you were doing at half my age.

Mine was a very old second beaten up secondhand of BBC Micro at the end of the 1980s. But this product is with its mechanical keyboard, with its backlit mechanical keyboard and 16 gigabytes of RAM, this is really a love letter of those machines that we grew up with. It's a wonderful demonstration for us. How does it fit in with our strategy? It's a wonderful demonstration that with the Raspberry Pi 5 platform, roughly 150x the performance of the Raspberry Pi 1 that we launched 14 years ago back in 2012, that we've now reached a performance level where this platform really can pull its weight in a modern high-performance client PC. And finally, we have AI HAT+2, an honorable mention, didn't quite make it into the year-end, launched in the middle of January. This is the second output of our successful -- our very successful long-term collaboration with accelerator vendor Hailo. It builds on the success of our first-generation AI accelerator products that we launched in 2024 and for the first time, allows accelerated execution of modern AI workloads like vision transformer models, large language models and vision language models. I'll talk in a moment about why we believe that this product and the concept of running AI workloads on Raspberry Pi is very important to the future of our platform. Of course, we can only build fantastic products because we first built a fantastic team. In 2025, we continued to hire into the engineering team. We added a number of new senior engineers into the silicon organization, and we continue to take fantastic graduates from our very successful and long-running summer internship program. And we continue to focus on retention. We had one retiree. So 2025 was a flagship year for us in another sense. It was the first year that somebody retired from the engineering workforce at the age of 71. And we have that one retiree, but otherwise, 100, we continued with our record of 100% retention rate in the engineering team. We've made some targeted investments alongside growing the engineering team. We've made some targeted investments in business development, in application engineering, in communications and in the finance and legal team. And last but very much not least, I'm incredibly excited that Tim Mamtora joined us this month in the newly created position of Chief Operating Officer. Tim was formerly the Chief Technology Officer at Imagination Technologies and is a long-time friend and former colleague of mine at Broadcom. I've known Tim for very nearly 20 years. We'll be centralizing and formalizing a lot of our operations activity into Tim's new organization, including engineering operations, manufacturing operations, supply chain, IT and cybersecurity. And really, when we make these changes to the organization, we see that as building the architecture that will support the next phase of our growth story. Now as we build the capacity to interact with our customers, we also build our capacity to learn from them. I'm not going to belabor this slide, but I thought it was worth giving you a few examples of the sectors that our OEM customers operate in from digital signage to IoT gateways, retail and point of sale, smart home and industrial automation and many more. Now it's striking when we talk to these customers that across all these sectors, our customers share both common strategic concerns. They're deeply concerned with time to market and with optimizing the transition from prototype to production. They care about gaining access to advanced technology without having to should a high fixed costs inside their organizations. And they're navigating, of course, an increasingly complex regulatory environment for IoT devices. And they also share common product aspirations. Many of these customers are working to bring existing products to smaller form factors and lower price points. They're adding intelligence and connectivity to legacy products. And they're doing both those things in a world where security for IoT devices has gone from being a nice to have to being a legal necessity if you want to be able to ship your product. And all of these customers, as they confront these challenges and try to pursue these aspirations, they're all confronting what we call the R&D air pocket. This is the challenge of recruiting and retaining the talent required to design an intelligent product. bring that product rapidly to production and keep it in production in a rapidly changing environment. We're positioning Raspberry Pi to these customers as a solution to these challenges. To our largest customers, we're doing that through our board-to-board initiative at the C-suite level. And to smaller customers, we're doing this by more traditional marketing activity and physical presence at trade shows and other events. I was at embedded world in Nuremberg a couple of weeks ago, largely to speak to DRAM vendors. But while I was there, I was struck by the hunger for solutions to these challenges among OEMs and by the growing awareness and really gratified by the growing awareness of and enthusiasm for Raspberry Pi as a supplier in this space. I'll give you a couple of examples of some of our favorite OEM customers. Firstly, Sixfab, they were a guest on our standard embedded world. They use our platform to build ruggedized industrial computers, and they build those around our compute module products. Our value proposition to companies like Sixfab is really very simple. We provide reliable, available, embeddable general purpose computing at an attractive price point, and we support those computers with world-class software and other collateral. Then we have ProGlove. They're a long-standing German industrial OEM customer who we serve through our direct-to-OEM channel model. They build wireless gateways for warehouse operations around Zero 2 W, our $15, our most cost-effective SBC product, most cost-effective modern SBC product. And again, a very, very simple proposition to customers like ProGlove. We're providing them with the perfect mix of compute interfacing and connectivity that in ProGlove's case, allow them to rapidly add new functionality to an existing platform, and we're backing that with long-term software support and long-term availability guarantees. Now a word on the edge AI opportunity for Raspberry Pi. First of all, I think we have to remember that we come to this opportunity from a position of enormous strength. We're already the most popular platform for edge computing and many of our customers' workloads already have an AI flavor to them generally because there is a lag in terms of how new technology makes its way into the OEM space. When we say an AI flavor, what we tend to mean is visual AI, vision AI, generally the recognition and classification of objects in still and video images coming into the Raspberry Pi. Some of those workloads will run on the CPU, some of them may be GPU accelerated. Some of them may be accelerated by a dedicated accelerator platform for one of our partners, notably Hailo and Sony. And we have fantastic relationships with these accelerator vendors and with the model vendors. And we leverage these relationships over time to expand the platform performance envelope to expand the range of AI workloads, which will run performantly on Raspberry Pi products. There's a cluster of megatrends, I think, that define and underpin the general edge AI opportunity. Frontier models in the cloud are hugely capable. But when we build IoT applications on those cloud models, we build in latency, we build in ongoing cost, and we build in a dependence on the reliability and availability of the network, which translates into inherent brittleness in the resulting product. In contrast, if we run -- if we are able to run AI workloads at the edge of the network, those -- that has the potential to deliver IoT applications, which are more robust, more cost effective and which deliver lower latency and address pervasive concerns around privacy and data sovereignty. Now we know that over time, AI capabilities trickle down the performance ladder. Models become smaller, they become sparser, they are more heavily quantized. -- all without sacrificing performance. We've seen this already in Vision AI. The workloads that people run our largest OEM customers today are AI customers. They are running Vision AI applications on Raspberry Pi. And the workloads that they're running today on Raspberry Pi would have required a large NVIDIA GPU a decade ago. So we've seen this happen already. We've seen the confluence of the increased performance of edge devices like Raspberry Pi and the reduction in compute intensity of models at constant quality output. We've seen those converge to enable Vision AI at scale on Raspberry Pi platforms. And we're seeing this same trend replay itself today in large language models and other generative workloads. Taken together, this confluence of expanding performance and shrinking performance requirements will gradually bring more workloads into play for Edge AI. So what's the opportunity here for Raspberry Pi? Well, quite simply, the opportunity is to leverage our existing position in edge computing to become the platform of choice for AI at the edge. We have the opportunity to serve the existing demand for edge AI compute across markets from industrial automation to defense. We have the opportunity to become the default embedded host for Agentic AI. And we've already -- we're already seeing this in the popularity of Agentic platforms like OpenClaw running on Raspberry Pi. And together, these give us the opportunity to define the future direction of AI as inference migrates to the edge over the next decade. Now 2025 was a milestone year for us in semiconductors. As I said earlier, we sold 8.4 million devices. That's up 47% year-on-year, meaning that for the first time, we sold more chips than we sold boards. And we really are just getting started. We believe that semiconductors let us make better boards and modules. And we believe that over time, they will become a valuable second franchise in their own right. Our road map for the next five years is informed by both these beliefs. I think you're going to see regular microcontroller releases aimed at expanding our TAM, whether that's by hitting new price performance points, whether it's by integrating new interfacing capabilities and new connectivity features into the platform, whether it's by qualifying our existing products at extended operating points, all of those grow the total addressable market for our microcontroller products. And then building on the success of RP1, we expect to be able to deliver differentiated features and improved margins on our boards and on our modules. So, Raspberry Pi Connect, we're less than two years into the Raspberry Pi Connect story, and it continues -- the Raspberry Pi Connect platform continues to go from strength to strength. We have 370,000 registered devices on the Connect platform at the end of 2025 and over 0.5 million registered devices today. In 2025, we launched many new features aimed at OEM customer pain points, including over-the-air firmware updates and deeper integration with our imagery utility to simplify the onboarding of devices and of users. Connect is the latest iteration, I think, of our mission to simplify the OEM product journey. And over time, it's becoming both a valuable complement to an enabler for our hardware business and an increasingly credible line of business in its own right. Finally, a word on outlook. Well, we said that in 2025, the second half was stronger than the first half and that Q4 was stronger than Q3. We brought that momentum and substantial customer backlogs with us into 2026. We're very, very confident in the short-term demand environment and in the work that we're doing to grow demand in the medium to long term and particularly in the potential of the board-to-board initiative. On supply chain, clearly, the DRAM environment remains a concern, but we're comfortable that we have the inventory and the relationships to navigate it. And we really do see this more as an opportunity to take market share and build customer loyalty than as a threat to our business. And on finances, we're expecting profitability for the year to be in line with market estimates, but we are flagging that obviously, with price increases on the product with an increase in product ASP, revenue is likely to be substantially higher than market estimates. So I'm going to leave you -- not going to belabor this slide either. I'm going to leave you with some quotes from some of our favorite OEM customers attesting to their enthusiasm for the Raspberry Pi platform, and I'll be very happy to take questions.

That's great. Eben, thank you very much indeed and Richard for updating investors. [Operator Instructions] I'd just like to remind you a recording of this presentation along with a copy of the slides and the published Q&A will be available via the Investor Meet Company dashboard. Eben, Richard, you received a number of questions from investors today. Thank you so much to everybody for your engagement this afternoon. Eben, if I may just hand back to you, if I could ask you just to read out the questions, of course, where it's appropriate to do so, and I'll pick up from you at the end.

Okay. Well, I'll start with one which is very much at the top of my mind at the moment. This is, do we have a -- we don't have a name attributed to this. But Raspberry's mission is rooted in education and accessibility. I'm concerned about reports of boards and add-on systems ending up in conflict and weapon systems via the gray marketplace. How is the company ensuring that products remain aligned with its educational mission and what safeguards are being strengthened to protect the brand and its ESG standing. So we are aware of the use of our products in particularly drone platforms, particularly Russian drone platforms in the context of the invasion of Ukraine. We -- this news has prompted us to take, I think, another look, a very detailed look at, as you say, the gray market, I would classify these under the sales under the heading diversion. We put in place -- we've put a lot of work in over the last six months, in particular, to strengthen the -- particularly for unit selling into China to strengthen the information that we require from that our resellers provide us in terms of the end use of our products. We've been very gratified by the assistance of our licensee partner, Premier Farnell and our Chinese approved reseller partners have given us in allowing us to get that extra level of detail. We do believe it's possible. I don't think this is not a council of despair. We do believe that it is possible to meaningfully limit hopefully, to very, very small numbers, but potentially to zero to limit the flow of our products into these sort of applications. Nobody is happy when they wake up in the morning and see to these stories, and we are doing our very best to get in the way of this diversion of our products into these...

Clear to our resellers in China and a few other intermediate locations unacceptability and reinforced how clearly that's set out in our terms of trade with them.

Fairly obvious question, but what is the effect of high memory prices on your sales? I think it's fair to say we've yet to see significant evidence of elasticity of overall elasticity of demand of people not buying Raspberry Pis when they would otherwise support Raspberry Pis. I think we believe that over time, we will see some density elasticity. We will see people trading down. I think we've come through an era of DRAM being incredibly expensive, incredibly cheap coming into an era of being incredibly expensive. We come through an era of it being incredibly cheap. And in that environment, both individual users and smaller volume OEMs are not heavily incentivized to trim their usage of memory. I think as we come into this more expensive era, it will be a time-limited era, but we do believe it will be with us for a while. As we come into that era, we do expect to see -- I think we've seen maybe a little evidence of enthusiast customers trading down already. I think we will see OEM customers. Obviously, there's a time lag for OEM customers because there's engineering involved in tuning a software stack to lower memory debt.

But I think taken in conjunction with, I think, an increase in boards, which we look forward to for '26, we do have higher prices. So I think the revenue line in our accounts will increase substantially on that basis. But the thing I think that we just want to stress to you, we do focus on profit per unit. Therefore, the gross profit will not rise in the same way. And there probably as a margin percentage, there will be some impact, some reduction in that margin percentage as a consequence of the maths in that.

Are there plans to bring Raspberry Pi Connect to the microcontroller family? Yes. There are plans to bring Raspberry Pi Connect to the microcontroller family. I think we are refining at the moment if you think that Raspberry Pi Connect has its roots as a remote access solution. I think we are refining what the proposition there might look like for remote access. I think the proposition for over-the-air updates, which we added to Raspberry Pi Connect at the end of last year, microcontrollers is much more straightforward. You may even imagine a world in which we ship OTA before we ship remote access in that space. Let's see. Do direct unit sales include sales to approved resellers or these B2B direct? Now when we say direct unit sales, that's the sum of the -- if you think we have three channels, we have licensee, we have direct to reseller and we have direct to OEM. So direct to reseller is mediated sales to OEMs, to industrial users and to enthusiasts. Direct for us is the sum of the latter two direct for us is everything that is licensee. That's the number that we see in this kind of 70% to 80% corridor in any given year. Can you comment on the success of the China-only compute Module 0? It seems like a nice sweet spot of price performance that the world would buy in large quantities. So 2025 was also the year that we launched our first geographic-specific product. This is the CM0 low-cost compute module that we launched to the Chinese market. I think that we are -- we have seen -- that has been a success for us. I think we have seen inquiries. We have seen interest outside of China. I think the challenge for us with that platform is we are not currently -- it is not currently clear when we launch a new product. Increasingly, we are offering 10- to 15-year windows of basically guaranteed availability. It isn't clear to us because of the chipset that we use in the compute Module 0 platform that we can meet that criterion for compute Module 0. That's important for a global market product. It's a little bit less important for a China market product. And so I think we just have to understand how we either get comfortable with the long-term availability of compute module 0 or we get comfortable that we can message the reduced availability window for that product. So it's likely to be a 5- to 10-year product rather than a 10- to 15-year product. We just need to make sure that we message this. It's an enormous gest of faith when an OEM customer designs our product in, and we want to be very clear that people aren't designing the product in on the basis of an unrealistic expectation about product availability. Let's see. Admin expenses include sales personnel, correct?

Yes, they do. Yes.

Let's have a look. How high is the risk of sourcing DRAM, et cetera, compared to bigger players like Lenovo? What is your strategy on this? There's always risk associated with sourcing components of any sort during a shortage for that component. I think that we benefit in general, I think in any -- my feeling and some of the feedback, I think we've had from vendors is that being a large player in a particular market is advantageous to us in this situation. And so just as I think Lenovo will probably benefit from being one of the largest, possibly still the largest laptop vendor. We benefit from being one of the largest vendors of modular and single-board computers. So there's always risk. But as I said, I think the formulation we've used is we're comfortable that we have the inventory levels because, of course, we did come into this year with substantial inventories of DRAM, particularly at lower densities. And then we have the relationships. And part of that is the brand equity associated with the Raspberry brand that we can leverage to secure ongoing supply. So I think we are optimistic. There is always danger there, but we are always -- we are optimistic about that. Let's have a look. How do you manage different currencies? Do you use options futures?

Essentially, all of our numbers down to gross profit are all in dollars. We take some -- we sell some products to customers in euros, but that price is actually pegged to the dollar and sort of reevaluated certainly quarterly and more often if the price moves. We have overheads in sterling. We do hedge those out into the reported dollar number using essentially forward contracts. We keep it as simple as possible just to lock in that, take one area of risk out. But certainly, we haven't looked at any more complex derivatives. And I think we've got other things to concentrate on.

There are no DRAM futures.

Sadly. That would be very good actually.

Did we see a significant increase in demand related to Agentic AI and OpenClaw? No, I don't think we saw a prompt increase in demand. I think the reason we are excited about Agentic AI is because it's a sign of things to come. Often, what we find is that our enthusiast customer base are ahead of the game. The things our enthusiasts are doing now, our OEM customers will do our industrial customers, our OEM customers we'll be doing in three, four, five years' time. The popularity there is undoubtedly substantial use of Raspberry Pi in this space is an indicator that Agentic AI, particularly in this kind of future agentic AI in which more of the computers migrated into the agent has migrated into the local client device is a powerful -- I guess it's a powerful abstraction. It's a powerful abstraction to put around the underlying AI technology. So it's more a forward-looking thing than a source of very substantial demand in here. Are we concerned about Chinese companies reverse engineering of products and competing? Obviously, we're always concerned about competition. We're very alive to the threat of competition. I think what's striking about Raspberry Pi is that we've been able to build a sustainable business around not just building the hardware, but putting high-quality software on it and building high-quality collateral around the platform. I think that's probably what distinguishes us from nominally similar Chinese competitors. We continue to be very alive to the risks of competition, continue to try and bolster the platform. You can see Raspberry Pi Connect as being an important part of this, right? We are very focused, particularly for our OEM customers on identifying their pain points and doing the engineering that's required to address those. And the more of that you do, the more compelling, there's a nonlinear benefit to being able to solve all of OEM or all of an OEM's problems rather than just a subset of them.

But then on things like Raspberry Pi 5 and compute module, it has our own silicon on it. So you would have to reverse engineer the silicon to actually produce competing product.

Let's have a look -- we have a Max B on the line. Many questions, as always, from Max. Let's have a look. Many thanks to investor for the opportunity of this meeting. A lot of us on here, I guess, would like to own the shares. However, the small free float is contributing to a highly volatile share price. What can you say publicly about the likelihood of the free float increasing? I don't think we can necessarily say anything about that. I mean, obviously, it's -- we understand why the free float for the company is limited. We have a nearly 50% shareholder in the Raspberry Pi Foundation. We have a number of other large shareholders in the business. I don't think that we have a perspective on that. That's a shareholder issue rather than a company issue, and I'm not sure we really have a valuable perspective on that. From George, what types of partnerships could accelerate your next phase of growth? I think that the partnerships, they look like customer relationships sometimes. But I think some of the companies that we're pursuing through the Board-to-Board initiative, the sort of super massive companies that we are pursuing through the Board-to-Board initiative, they do feel more like partnerships than customer relationships, both because they're large enough and deep enough to...

They run for quite a while to establish them.

Yes, that's right. So when you have a large multidivisional prospective customer, often you are interacting with that customer at the C-suite level. So you're not interacting with anybody who does, who makes anything, you're interacting with that kind of central organization. And you often find yourself, I think, in a partnership relationship with the central element of a multidivisional organization. I think the Board-to-Board engagements are working particularly well are working well because we found in that central organization, somebody who is prepared to be our partner, who is prepared to take Raspberry, take the Raspberry Pi story, take the Raspberry Pi value proposition out into the organization. I think those have been very valuable.

I think we've also -- I mean, with the help of particularly our brokers, we've actually been able to get quite a senior level access to these organizations. So perhaps something that maybe a partner in a purely sales view would provide is actually something we've been very lucky in terms of getting access at the right level in organizations in the last years.

Yes. I guess, obviously, the other -- the simplest example is what sorts of partnerships? Well, the sorts of partnerships we've been building for a long time. We run a partner event every October now. We have roughly 400 people. You look at the sorts of partners who are there, originally, it was a reseller event. I think all of these organizations are go to the Arm partner meeting every year in Cambridge in August. And that's an event that has, over time, evolved from being simply a meeting for Arm's IP licensees to being a meeting of the ecosystem that is convened around the ARM platform. I think we see that change. So we see a world where five5 years ago, the event was about resellers. Now it's about resellers. It's about ISVs, it's about IHVs. It's about the entire ecosystem that's grown up around the platform, some of our vendors as well, some of our component vendors. So we continue to try and nurture those partnerships, grow them, deliver value to our partners, whether they're upstream from us or downstream from us in the supply chain or whether they're off to one site, whether they're producing complementary products that benefit from where they benefit from the existence of Raspberry Pi and we benefit from the existence of their solutions regardless of how -- of what the business relationship is with the partners. I think that we have got better over time at understanding what their needs are and articulating an advantage to them in being involved with Raspberry Pi. Let's see who else -- let's see. What was happening throughout the year that led to more MCU units being sold in the first half versus the second half of 2025? That's a good question. Nobody has asked this yet. What's the outlook for the MCU business in 2026 and also the medium term? Will demand likely follow the product launches? Or should we expect to see continuous growth for existing products? A couple of thoughts there. I'm surprised that nobody has asked us this question before. Yes, we definitely did sell more MCUs, fractionally more MCUs in the first half of the year than the second half of the year. We had a couple of big hits in the first half. So generally, like a lot of our business, our MCU business is made up of a very large number of relatively small orders. In the first half of the year, we had a roughly 0.5 million unit order and an 800,000 unit order, the first from a Taiwanese customer, the second from a Scandinavian customer. Those were sufficient to tip the balance, even though I think we were seeing underlying month-on-month growth, those two were large enough. Our business is still small enough that our aggregate 1.3 million units is enough to tip the balance back into the first half of the year. I think we're seeing good momentum into this year. We've had some good -- yes. So I think we are -- I think we -- I would expect to see continuous growth. The interesting aspect of those sales, that 8.4 million units last year, dominated by RP2040, a real reflection. That's a product we launched in 2021, nominally superseded by RP2350 in some ways. in 2024, but the design cycles are sufficiently long and the cost structure advantage that 2040 has over 2350 is very real that we continue to see. I suspect I've said to somebody the other day in the context of amortization periods, I said these are conversations I have now. I used to be an engineer that I would not be surprised if in 2036, we sell more RP2040s than we sold in 2035. I think silicon products are -- silicon products, particularly deep embedded silicon products like these microcontrollers are weird, right?

You've been seeing that for 20 years.

Yes, that's it. That's it. I mean lots of -- these products have very -- well, you talk about them having very long tails in practice, they may continue to ramp pretty much indefinitely. So that's quite exciting. Somebody, Mark saying, I can see the advantage of getting your desktop 500-plus kits into schools in Africa, energy-efficient, low cost, obviously, solid state devices and therefore, much more durable and rugged environments. We have a couple of. One of the things we've done over the last five years is to build out in Sub-Saharan Africa, a reseller community. Some of the -- some of my favorite interactions at our partner event are with our African resellers. We've built out a reseller community in sub-Saharan Africa, very much like the reseller community we have in Europe. And certainly, the 400 series product, which remains extremely cost effective.

So the 500 has got a memory.

Yes, 500 has memory challenges, 400, we're lucky enough to have come into the situation with reasonable inventory of that product with old price DRAM in it. So we see 400, 500, 500 plus as being particularly interesting in that market. Let's see what I only have Max questions left. Let me have a look. Max has asked a bunch of technical questions about the RCF. What other types of accessories do we envisage adding to the lineup? I mean that's very interesting. We always sort of feel that we must have got to the end of accessories. And you look at the accessory sales, they're quite dominated by cameras. Displays, pass storage. Those are the kind of -- that's the heart of the -- and that's kind of the heart of the business because every device needs a -- because every device needs at least the power supply and flash storage and many of our -- certainly our OEM applications, to the extent the vision AI applications, they need a way of capturing images and sometimes a way of displaying images in the field. So -- but then we have a large number of other accessory devices. Enclosures, I suppose, is another one. We always think we're done. We have various hats. We always think we're done, but I'm sure we'll think of something. You think about the things we've not done, we've not done anything with cellular radio. We've not done anything with batteries. There's always been a little tiny squeamishness in the business about batteries. We hold ourselves to very high engineering standards. Battery engineering is extremely challenging engineering. We've not done that yet. I suspect those two, we might take a look at. But then at the same time, I suspect you're going to see more cameras, you're going to see more displays. You're going to see us doubling down on the things that really work for us in the business.

But they're all things that we actually participate in the engineering of. They're not just sticking a name on.

Let's see, what is the time -- another Max question. What is the time line for Pi 6? Has it been impacted by the memory situation? I mean we've all seen a couple of reports about PlayStation time lines? No. I mean, I think that the time line for Pi 6, if you look at our history, our products generally have four or five years in the sun. Every product has four or five years as the flagship product. That puts us about halfway through the nominal lifespan of Raspberry Pi 5. I suspect Raspberry Pi 5 has legs as a product. It's such an enormous step up. Pi 4 was a very large step up over Pi 3. To some extent, I feel that Pi 4 is [indiscernible] compute are only coming into their own [indiscernible] So to the extent that we had two successive very large steps up in performance in 2019 and 2023, I suspect that Pi 5 may have some more -- may have more life to it than a typical flagship product. So whatever happens, I will be -- even at the most optimistic schedule for that product, I will be surprised, saddened, disappointed if we're not out of the woods on DRAM by the time that product reaches its natural launch moment.

So I think we're covering the -- perhaps a few closing remarks.

Yes. Let me just jump in there, and thank you to everybody for your engagement as more questions keep coming in there. Eben, every question you answer, another one comes through. So thank you to everybody for engagement. Eben and Richard, I know investor feedback is particularly important to you both. I'll shortly redirect those on the call to provide you with their feedback. But before doing so, I wondered if I may, Eben, just ask you for a couple of closing comments.

Sure. Well, thank you all for your time today. 2025, as I said, was a remarkable year for Raspberry Pi. 2026, I think, is shaping up to be a remarkable year for us as well. So again, thank you for your time. Looking forward to seeing what the next year has in store.

That's great. Eben and Richard, thank you once again. Could I please ask investors not to conclude the session as we'll now redirect investors to provide you with their feedback. On behalf of the management team of Raspberry Pi, I'd like to thank you for attending today's presentation, and wish you all a good afternoon.