Alphawave IP Group plc | Annual report and financial statements 2024
Leading connectivity and
compute technology for
data centres and AI
Annual report and financial statements 2024
Our offices
San Jose
Hod HaSharon
Pune
Bengaluru
Shanghai
Kaohsiung City
Zhubei City
Ottawa
Toronto
London
Visit us online
www.awavesemi.com
Headquarters
Highlights Contents
Strategic report
Highlights 1
Our purpose, strategy and values 2
2024 in review 3
Our business model 8
Strategy 15
Stakeholder engagement
and S172 statement 16
ESG 20
Non-financial information
and sustainability statement 46
KPIs 48
Financial review 50
Viability statement 56
Principal risks and uncertainties 58
Governance
Board of Directors 62
Management team 63
Board leadership and Company purpose 64
Nomination Committee report 68
Audit Committee report 72
Directors’ remuneration report 77
Directors’ report 94
Financials
Statement of Directors’ responsibilities 97
Independent auditor’s report 98
Consolidated statement of
comprehensive income 108
Consolidated balance sheet 109
Consolidated cash flow statement 110
Consolidated statement of
changes in equity 111
Notes to the consolidated
financial statements 112
Alternative performance measures 151
Company balance sheet 154
Company statement of changes in equity 155
Notes to the Company financial statement 156
Additional information
Appendix 162
Shareholder information 166
Glossary 168
Financial
Sustainability
Non-financial
Revenue and
revenue growth (US$)
307.6m (4)%
FY 2023: 321.7m +74%
GHG emissions
6,864.96 tCO
2
e
FY 2023: 4,942.8 tCO
2
e
Bookings
1
(US$)
515.5m
FY 2023: 383.9m
Adjusted EBITDA
1
(US$)
andmargin (%)
51.1m +17%
FY 2023: 62.6m +19%
Employee turnover
9%
FY 2023: 7%
R&D employees
2
and % of total
891 +90%
FY 2023: 741 +89%
Operating loss
(US$)
(32.8)m
FY 2023: (19.4)m
Gender diversity
19%
FY 2023: 19%
Number of employees
2
(closing)
991
FY 2023: 829
Cash generated
fromoperations (US$)
13.5m
FY 2023: 16.0m (restated)
On-time delivery
99%
FY 2023: 100%
Number of end‑customers
103
FY 2023: 103
1. For definitions of non-IFRS measures see KPIs section and Alternative performance
measures section.
2. FY 2024 and FY 2023 headcount numbers throughout the report exclude interns.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
1
Our connectivity semiconductor technology is at the core of the rollout
of AI technology and the ongoing upgrade of digital infrastructure,
enabling data to travel faster, more reliably and at lower power.
Our purpose, strategy and values
Purpose
Ambition
Sustainability
Strategy
Culture and values
Pioneering connectivity technology to enable a
new era of accelerated computing, unlocking its
potential to create economic and social value.
To become the leading semiconductor company in
wired connectivity and compute technologies for AI
and digital infrastructure markets.
Sustainability underpins our core values, drives our
business strategy and influences the way we engage
with our stakeholders.
Our strategy is built on three pillars:
Our culture and values underpin the way we
workandhow we engage with our stakeholders.
Our culture is based on collaboration, innovation, openness and an
awareness of our impact on society and on the environment.
As an organisation, we remain focused on delivering exceptional
results for our customers through a relentless focus on innovation,
collaboration and agility while maintaining the highest levels
of integrity and inclusivity. In support of this we continue to
strengthen our workforce with people that will maintain and evolve
our culture, enabling us to deliver ongoing success.
Financial review
On page 50
Non-financial information
and sustainability statement
On page 46
Technology
leadership
Expansion Innovation
>
Further details on our strategy on page 15
>
Further details on our end-markets on page 15
>
Further details on page 20
Responsible
business
Sustainable digital
infrastructure
Work
smarter
Responsible
value chain
Alphawave IP Group plc
Annual report and financial statements 2024
2
2024 in review
2024 has been another year
of significant progress.
Dear shareholder,
2024 was our third year as a publicly listed company and saw
significant progress in the pursuit of our single long-term ambition:
to be the leader in wired connectivity solutions for next generation
AI and digital infrastructure.
Alphawave Semi works across the complete AI data centre and
hyperscaler ecosystem to address their specific needs, which is
expected to create value for our stakeholders on a sustained basis.
Furthermore, our customers are having to cope with an
unprecedented rate of growth in the data they handle. The boom in
AI services means the global datasphere is set to grow by 15x during
the next decade (source: Statista Digital Market Outlook – IDC,
Kleiner Perkins – and UBS) and all the associated infrastructure
and end applications need our connectivity technology in the form
of IP, custom silicon and connectivity products.
The ability to add connectivity bandwidth to AI accelerators (xPUs)
and high-performance computing is encountering a physical
limit, with networking becoming a bottleneck in the growth of AI.
The investments made by Alphawave Semi place us in a unique
position to solve this problem through our IP, custom silicon,
connectivity products and through our chiplet business announced
during 2024, which provides smaller, very specialised chips that
integrate like building blocks into a larger, more powerful SoC.
To enable Alphawave Semi to solve these issues, the business has
fostered and strengthened partnerships with foundries such as
TSMC and Samsung, as well as compute IP developers such as
Arm, and is working in leading roles at consortiums such as UALink
and OIF, and has launched several industry-first chiplets and IPs.
Whilst we remain mindful of the challenging global macro and
geopolitical environment, we continue to lay and build on our
foundations in order to deliver growth in all four areas of our business:
IP licensing, custom silicon, connectivity products and chiplets.
Finally, our ability to expand our reach is demonstrated through
the partnership we signed with Siemens EDA in December 2024,
which was publicly announced in February 2025. This dramatically
expands the reach of our sales force and supports our strategy
and delivers on our long-term targets. This partnership contributed
significant revenue in 2024.
Financial performance
While 2024 revenue was comparable to what was reported in 2023,
the Group has seen significant growth in its core semiconductor
business, replacing almost US$103m of lower-margin legacy
shipments that were from the acquisition ofOpenFive as well
as nearly $50m of revenue from the WiseWave subscription
licenceagreement.
In 2024 we made significant organic investments in future revenue
growth through hiring and businessinfrastructureinvestment.
Bookings for the full year were US$515.5m, 34% above the prior
year (FY 2023: US$383.9m). Alongside the strong growth in
bookings, we delivered another year of robust revenue, down 4%
on the prior year, but with a more positive revenue mix, albeit below
our guidance for the year. Adjusted EBITDA was US$51.1m, 18%
below the prior year (FY2023: US$62.6m), although above our
guidance for the year ofapproximately US$50.0m.
Adjusted EBITDA margin of 17% was below 2023 (FY 2023: 19%).
EBITDA in 2024 was US$1.4m compared to US$9.8m in 2023.
In 2024, the business incurred a net loss of US$42.5m compared
to a net loss of US$51.0m in 2023. The cash position at the end
of 2024 was US$180.2m. This was higher than the prior year,
reflecting the increase in financing arrangements for our ongoing
investment in future revenue growth, including the development of
our new opto-electronic products.
People, culture and values
Our employees have embodied our customer focus, with their
commitment and passion at the core of our success. On behalf
of the Board, I would like to express our sincere gratitude for their
hard work during the year.
Our culture and values inform the way we conduct our business,
ensuring we are mindful of the impact we have on society and the
environment, helping us to build strong relationships with all our
stakeholders. Throughout this report are examples of how we live
these values, achieving results and maintaining a strong customer
focus with an unwavering commitment to collaboration, honesty,
transparency and accountability.
A strengthened senior management team
Following his appointment as CFO in 2023, Rahul Mathur has
been appointed to COO, with his extensive experience in listed
semiconductor companies helping to ensure the Group maintains
its focus on R&D that will deliver strong financial results and
shareholder value.
The Group has also welcomed Suzan Barghash as Senior Vice
President and Head of Global HR. Suzan is an accomplished
executive with a vast experience of HR leadership in publicly traded
companies from across the semiconductor and technology sector.
Also of note is the appointment of Charlie Roach to Chief
Revenue Officer. Charlie brings over 20 years of experience as a
sales executive for publicly traded companies from across the
semiconductor industry.
Stakeholder relationships
As a business we seek to establish strong and responsible
relationships with customers, partners and the communities in
the regions in which we operate. Our values extend to the way we
engage with all our stakeholders.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
3
2024 in review continued
The integrated businesses began to work with a single long-term ambition:
tobe the leader in wired connectivity solutions for next generation AI and digital
infrastructure, and to create value for our stakeholders in pursuit of our goal.
Stakeholder relationships continued
We contribute to society by promoting diversity, fostering the next
wave of innovation and innovators, promoting responsible business
practices and playing our role in tackling climate change. We do
this both through our own activities and in collaboration with our
customers and other stakeholders, for shared success.
We are a fabless business, i.e. we do not own any manufacturing
facilities, and we partner with multiple stakeholders in the supply
chain, playing our role in promoting responsible business practices
(see Supply chain section on page 35). As the business grows and
matures, we will continue to enhance our policies and practices
inthis area.
Sustainability
During the year we made further progress on our sustainability
strategy with an update on our materiality assessment. The ESG
Steering Committee met during the year and the outcome ofthe
materiality assessment will be presented at the first meeting
of 2025. The assessment informs our ESG strategy and having
up-to-date information helps us prioritise our key sustainability
areas. In 2025 we will review and consider the implementation
ofits detailed recommendations (see ESG section on page 20).
Outlook 2025 and beyond
In 2025, we will complete our business integration and expect to
start delivering silicon for AI and data centres. We are executing
on our strategy and remain excited about the growth potential of
our business. Due to current global economic uncertainty and the
rapidly developing nature of the recently imposed tariff regimes,
we are not in a position to provide guidance for full year 2025 or
beyond at this point in the financial year. While timing of customer
programmes is currently uncertain, we remain optimistic about
the future growth opportunities of the business and will manage
investments carefully through thisperiod.
High-speed connectivity IP is the DNA of our business, and we
have been recognised by the world’s largest foundries as the
premier leader in this space. Most importantly, we are building on
these strengths to deliver long-term value for our shareholders and
other stakeholders.
Business performance highlights in 2024
During 2024 we signed a record US$515.5m of bookings (FY2023:
US$383.9m), up 34% over the prior year. Of the US$397.2m of
licence and NRE bookings signed in 2024, over 75% were in
advanced nodes, 7nm and below. Given the complexity of this
market, our success reflects the strength of our technology
leadership and the business potential of the acquisitions we
made in 2022. Our backlog of US$520.0m at the end of 2024
was 47% above the prior year. In 2024 we reduced our backlog by
approximately US$42.8m of net adjustments. Our backlog is now
enriched by more business in advanced nodes from which we
expect to extract higher profitability over the long term.
We continued to integrate the business operations of prior
acquisitions and delivered strong revenue; however, our financial
results were at the bottom end of our revised guidance for the year.
This was mainly as a result of our accelerated transition away from
our legacy custom silicon business and differences in the timing of
the revenue recognition of long-term contracts in advanced nodes.
We continued to investin advanced interconnect technologies for
data centres, as well as in our new semiconductor company, and
this saw the first products launch in 2025.
R&D, maintaining our technology leadership
As a result, adjusted EBITDA at US$51.1m was 18% below the
prior year and adjusted EBITDA margin was below 2023 at 17%
(FY 2023: 19%). In 2024 the business generated a loss before tax
ofUS$32.9m (FY 2023: loss before tax of US$39.5m).
During the year our cash and cash equivalents balance increased
to US$180.2m (FY 2023: US$101.3m), as cash from operations
of US$13.5m and proceeds from the US$150.0m convertible debt
we issued in December was offset by capitalised investment for
the development of new products and the necessary equipment to
support future growth. We continue to review our capital allocation
as well as available sources of capital to support our long-term
growth strategy.
With an enhanced product portfolio of connectivity technology for
data centres and AI, our partnership with Arm to implement their
latest Neoverse cores for advanced AI and data centre compute
products, plus our enhanced partnerships with Samsung and
TSMC, we can further monetise our investments in the form of
custom silicon, connectivity products and chiplets.
Alphawave IP Group plc
Annual report and financial statements 2024
4
Alphawave Semi’s position in the industry
High-speed connectivity IP and advanced Arm compute are the DNA
of the business. We have been recognised by the world’s largest
foundries as the premier leader in high-speed connectivity. But we
don’t just develop great connectivity, we also do it in the world’s
most advanced nodes. Our portfolio now stands at more than
240 silicon IPs, and we can pull from it key ingredients to meet our
customers’ needs.
In 2024 we established ourselves as a leader in the chiplet space,
which will be critical to providing the connectivity demanded by AI
and hyperscale data centres.
Our competitive positioning is built on our technology leadership
and a full product portfolio of leading connectivity solutions
coupled with our partnership delivering Arm compute to the
world’s most advanced AI processors. This is what differentiates
us from many of our competitors that are more focused on certain
products or segments. We have been part of the TSMC IP Alliance
Programme, a key component of the Open Innovation Platform®,
for six consecutive years. We are a founding partner of the TSMC
3DFabric™ Alliance, and in 2024 we strengthened our commitment
to a robust chiplet ecosystem, announcing multiple industry-first
chiplet products.
With a unique portfolio of leading-edge connectivity technology,
we are working with our customers to meet their connectivity
needs across their data centres and create long-term business
relationships.
This is allowing us to access a larger addressable market focused
on AI, gain greater scale and enhance our competitive position.
The combined custom silicon design wins in 2024 will support our
mid and long-term revenue targets as we start to generate revenue
from the production phase. The potential lifetime revenue from
silicon production of these wins is not reflected in our bookings or
backlog. The first silicon production orders are expected in 2025,
which is when they will start contributing to revenue.
The world is changing to enable the increased
adoption of AI
By 2035, the world’s datasphere will exceed 2100 ZB (up from
c.180ZB in 2025 and 12 ZB in 2015). This trend can also be seen
in the amount of compute being pointed at AI models, which has
continued its exponential growth during the deep learning era (from
2010). At the start of this era, John Hopkin’s 5.4 e16 FLOPS neural
network was a significant outlier; as of December 2024, 13models
deploy a compute power in excess of 10
25
FLOPS, with Anthropic’s
Claude 3.5 Sonnet model implementing 5·10
25
FLOPS.
As we scale the amount of compute, we need to build a faster
network using leading electrical and optical connectivity solutions
that can deliver the increased compute capacity with a lower
energy footprint. Given that connectivity and compute scale with
chip size, and that monolithic ICs cannot grow beyond the reticle
limit, scaling performance demands a shift to a chiplet model.
Hyperscalers are designing and implementing their own AI engines,
commonly alongside Arm processors, in addition to industry
standard GPUs. These engines are optimised for their specific
models and deliver higher performance using lower power. As a
result, the custom silicon and chiplet markets are expected to grow
at a healthy double-digit rate over the next few years.
AI and machine learning (ML) increase the bandwidth performance
requirements on the network and are therefore among the major
growth drivers for data centre switching over the next five years.
With bandwidth in AI growing, the use of Ethernet and PCI-Express
switches in AI/ML and accelerated computing hardware is already
migrating from being a niche application to becoming a significant
portion of the market. Our connectivity technology plays a central
role in building the network connecting the switches, optics
andGPUs.
Alphawave Semi’s main sustainability priorities
Following our joining of the United Nations Global Compact in
2023, 2024 saw us submit our first Communication on Progress
describing our efforts to implement the Ten Principles. In addition,
we became members of the Responsible Business Alliance
(RBA) and undertook an update for our sustainability materiality
assessment, which is informing our sustainability strategy and
helping us prioritise what is most critical to the long-term success
of the business. The outcome of the assessment was shared with
theBoard.
As a provider of leading connectivity technology, our products
contribute towards the deployment of a more efficient digital
infrastructure, enabling the transmission of data faster, more
efficiently and consuming less energy (see IP section on page10).
Our commitment to sustainability extends to our ongoing
operations, as we seek to maintain high standards of business
conduct across our value chain. As such, we became members
of the RBA which will allow us to collaborate to improve working
and environmental conditions and business performance through
leading standards and practices.
We have delivered ongoing progress with our sustainability
reporting (see ESG section on page 20) and we will continue to
doso over the coming years.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
5
2024 in review continued
Alphawave Semi’s performance in connectivity
IPand products
Our broad portfolio of high-speed connectivity IP and newly
introduced industry’s first flexible and composable chiplet portfolio
is what sets usapart. We can bundle our IP and expertise to
win larger and more complex custom silicon opportunities at
leading-edge process nodes.
We have transformed our custom silicon business from a
low-margin business to a highly scalable AI and data centre
business, and our pipeline is built on opportunities in advanced
nodes, 5nm and below.
Our custom silicon team deploys the necessary IP and chiplets
from our portfolio, working closely with our customers, taking their
specifications and transforming them into silicon. In 2024, we
achieved key wins in next generation 800G/1.6T solutions for data
centres, including multiple 3nm IP high-speed licensing deals for
AI/ HPC and networking applications. We also registered I/O chiplet
design wins, leveraging our industry-leading portfolio of UCIe, PCIe,
112G and 224G IP for AI accelerators for LLMs. These wins were
the result of our leading connectivity IP, our partnership with Arm
and our design capability in advance nodes.
The Connectivity Products business unit has also developed
next-generation PAM4 and Coherent-lite DSPs to deliver
bandwidths of 800G and 1.6T via electrical and optical cabling
overdistances of up to 20km (launched March 2025).
Furthermore, our chiplet group was launched in 2024 and
Alphawave Semi has become a leader in this space, taping out
anddemonstrating the industry’s first multi-protocol I/O chiplet.
With a unique portfolio of leading-edge connectivity technology,
we are working with our customers to meet their connectivity
needs across their data centres and create long-term
businessrelationships.
Chiplets
Chiplets (dedicated function system-in-package building
blocks) will play a critical role in enabling the connectivity
required by AI and hyperscale data centres. Alphawave
Semi has emerged as a leader within this field. It is a
respected voice at industry showcases and standards and
has developed products based on its UCIe, PCIe, Ethernet
and CXL connectivity IP, and has strengthened relationships
with Samsung and TSMC to help foster a robust chiplet
ecosystem.
Chiplets
See page 13
Alphawave IP Group plc
Annual report and financial statements 2024
6
Investing in future revenue growth
In 2024 we consolidated and strengthened the teams and technologies we acquired in 2022, enabling Alphawave Semi to become one of the
few companies in the world bringing a full portfolio of connectivity IP for AI and digital infrastructure.
Building on the strength of our technology portfolio, we have successfully transformed our custom silicon pipeline to a higher-margin
business focused on AI and data centre solutions in advanced nodes. Our connectivity solutions meet the increasingly complex
bandwidth, latency and power requirements critical to support the adoption of AI. With our enhanced product portfolio –including
custom silicon, connectivity products and chiplets – and silicon expertise, we can access a larger and high-growth addressable market
ofapproximately US$32.5bn by 2027, gaining greater scale and enhancing our competitive position.
Revenues
Revenues for 2024 reached US$307.6m, a 4% decrease compared to US$321.7m in 2023:
>
Customers – in 2024, we recognised revenues from 103 end-customers of which over 20 were new customers in FY 2024, compared
to 103 end-customers in 2023. This included new tier-one customers licensing our IP, replacing legacy lower-margin business from
customers acquired in 2022.
>
End-customer revenue concentration marginally decreased during the year. Our top five end-customers generated 36% of our 2024
revenues (2023: 46%).
>
Regions – revenue from North America was 40% of revenue, reflecting our transition to data centre solutions in advanced nodes.
Revenue from China was 18% of the total, as we successfully transitioned away from our legacy business.
>
Over the long term, as silicon product revenues ramp with hyperscalers and other large, predominantly North American, customers,
weexpect the mix of China revenues to gradually decrease to 15% of sales or lower.
Income statement
IFRS Adjusted
2024
US$m
Restated
2023
US$m
2024
US$m
2023
US$m
Revenue 307.6 321.7 n/a n/a
Cost of sales (126.5) (156.4) n/a n/a
Gross profit 181.1 165.3 n/a n/a
Gross margin 59% 51% n/a n/a
EBITDA 1.4 9.8 51.1 62.6
EBITDA margin 0% 3% 17% 19%
Operating loss (32.8) (19.4) n/a n/a
Operating margin (11%) (6%) n/a n/a
Loss before tax (32.9) (39.5) n/a n/a
Net (loss)/profit (42.5) (51.0) 18.4 11.9
Basic EPS (US $ cents) (5.78) ( 7.23) 2.51 1.69
Diluted EPS (US $ cents) (5.78) ( 7.23) 2.51 1.69
Cash generated from operations 13.5 16.0 n/a n/a
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
7
2010 2015 2020
2025
2030 2035
2,500
2,000
1,500
1,000
Zettabytes
500
0
2
12
33
47
181
660
2,310
15x
To put this figure in context, it has been said that from the dawn
of civilisation until the turn of the millennium, less than five
exabytes were created; today this volume of data is generated
every 15 minutes. And in just ten years, this volume of data will
be produced every single minute.
The world’s networks, notably AI and hyperscale data centres,
but also HPC, 5G backhaul and automotive networks, are
therefore under intense pressure to keep up.
The challenge is now networking, not processing
To meet this challenge, data centres and similar industries have
invested hundreds of billions of dollars to develop GPU-based
architectures that can process information as quickly and
efficiently as possible. Capital expenditure – including
investments in data centres and servers – by the top five
hyperscalers (AWS, Microsoft, Google, Meta and Oracle) is
expected to reach US$185bn. But the throughput and capacity
of the GPUs have outpaced the connectivity bandwidth links
and, as a result, the key bottleneck that limits AI’s growth is
nolonger in the processing domain.
A significant bottleneck for deploying AI at scale is connectivity.
Insufficient bandwidth chokes the amount of processing that
can happen in AI and hyperscale data centres. Data presented by
Meta shows that, for its large language models, it is common for
networking time to take up more than a third of the total time that
data resides within a data centre. For one language model Meta
presented, networking time represented nearly 60% of the total.
Physical limits preventing increased bandwidth
Advances in the underlying SerDes technologies such as
Ethernet and PCIe, and the move from PCIe Gen 5 to Gen 6 (and
soon Gen 7) does enable greater bandwidth per I/O, but as the
industry continues to invest in GPUs for AI networks, it has hit
a wall and generational technology advances will not come
quickly enough to solve the bottleneck. The reticle limit (the
maximum size that a chip can be manufactured as dictated by
the photomask) of 858 mm
2
has been reached for these chips.
Moreover, a design that pushes up against this limit suffers
from vastly increased costs and significantly decreased yields,
and therefore does not offer a sustainable path to scale AI.
This means there is no additional space on the SoC for extra
compute, with no additional shoreline to increase the number
of I/O ports and the only path to affordably scale AI is through
chiplet architectures.
Solving this challenge
To solve this, and deliver increased bandwidth that meets the
needs of these AI data centres, requires several ingredients.
First, both a breadth and depth of expertise on IP is needed to
deliver the highest and most energy-efficient bandwidth for the
custom needs of each data centre. Second, SoC development
with a holistic approach enables I/O to be optimised alongside
every element on the SoC. Finally, an understanding of
advanced packaging techniques and industry ecosystems
enables chiplet-based designs to be implemented beyond the
reticle limit.
Networking is the bottleneck preventing AI’s growth
Our business model
A key inflection point for the world happened in 2017, with machines overtaking
humans in terms of the volume of data produced. The global datasphere is now
growing at an exponential rate and is forecast to exceed 180 zettabytes in 2025.
Global datasphere over 2,000 ZB by 2035
1
Time spent in networking
2
M1 M2 M3 M4
35%
57%
18%
38%
1. Growth from 147 ZB in 2024 to 2,142 ZB–2,310 ZB in 2035 based on Statista Digital Market Outlook (IDC, Kleiner Perkins) and UBS.
2. Source: Meta.
Alphawave IP Group plc
Annual report and financial statements 2024
8
Founded
Acquired
Acquired
Acquired
IPO
Alphawave Semi is uniquely positioned to address this challenge
for hyperscale and AI data centres.
We are uniquely positioned to address this challenge
Our business model
Continued growth with hyperscalers
Our foundation as a silicon IP company, with an extensive
understanding of the most advanced interconnect standards,
has underpinned everything we do. In 2022, Alphawave Semi
acquired Precise-ITC, OpenFive and the coherent company
Banias Labs. Our continued investment in our IP along with
these acquisitions extended Alphawave Semi’s established
pool of expertise in custom silicon and connectivity products.
In 2024, the collective combination of expertise and IP enabled
us to create the final piece of the puzzle, with Alphawave Semi’s
chiplet business being unveiled and launching its first products.
Alphawave Semi’s portfolio, from silicon IP to chiplets, represents
a US$35bn opportunity for the Group with a 26% CAGR.
Partnerships and ecosystems
Alphawave Semi has invested significantly to develop the
technologies and the strategic partnerships that have
positioned us as a leader across multiple industry ecosystems,
each vital to solving the connectivity bottleneck. These
partnerships include the compute IP specialist Arm, with
Alphawave Semi entering the Arm Total Design Platform in
2023and building on this relationship in 2024 to collaborate
onthe development of an Arm Neoverse chiplet.
Additionally, highly strategic partnerships include major
advanced node foundries – TSMC and Samsung and major
OSATs – ASE, Amkor, Kyocera, JCET and SPIL. Furthermore,
toensure supply chain continuities around advanced
packagingtechnologies, we have launched a special initiative
in 2024 to prove our alternate options, providing flexibility to
ourcustomers.
The chiplet ecosystem
Alphawave Semi has played a leading role in the chiplet ecosystem,
not only fostering relationships, but developing products to
simplify and underpin the development of chiplet-based SoCs.
Of particular note is the world’s first silicon-proven IP for UCIe
on the 3nm processes with TSMC CoWoS (Chip on Wafer on
Silicon) packaging. UCIe ensures each chiplet within the SoC can
communicate as one and, being an open standard, is critical in
enabling multi-vendor, multi-process SoCs.
Alphawave Semi also announced the industry’s first 7nm
multi-standard I/O chiplet. This delivers a standards-compliant
IP portfolio of Ethernet, PCIe, CXL and UCIe.
Advanced process technologies
Alphawave Semi is building IP for the most advanced process
nodes: from 7nm to 2nm. This gives our customers a significant
advantage when developing SoCs for AI data centres to handle
the ever-increasing volume of data flowing through their servers.
Beyond IP, the Group is already in mass production for our
custom silicon and connectivity products at 7nm, with 5nm and
4nm beginning to ramp. We have taped out SoCs at 3nm for our
lead customers, and are in the enablement phase, including the
design of IP test chips, at 2nm.
Testing to lower risk
Alphawave Semi continues to invest and develop its portfolio of
IP to enable advanced ICs. Trust in our technology is also critical
and each high-speed IP is silicon-proven before customer use.
We therefore develop and test each IP on dedicated test chips,
which are manufactured on leading-edge nodes. During 2024,
wehave begun the migration from having all of our IP proven
at 3nm to being silicon-proven in processes at 2nm and below
across multiple foundries.
Silicon IP
>
PCIe®/CXL®
>
224G/112G Ethernet
>
UCIe
TM
/HBM
Custom silicon
>
7, 5, 4, 3 and 2nm nodes
>
2.5D and 3D advanced packaging
>
Arm Total Design Partner
Connectivity products
>
PAM4, coherent DSPs for
800G/1.6T Ethernet
>
112G, 224G in silicon
>
Going to 400G
Chiplets
>
I/O multi-protocol chiplets
>
Arm Neoverse compute chiplets
>
Memory chiplets
2017 2021 2022 2023 2024 2026
Chiplets
Custom
silicon
Silicon IP
Connectivity
products
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
9
Everything Alphawave Semi does is built on its heritage of leading-edge
connectivity IP, and our proven silicon IP subsystems lower both the risk and
engineering efforts in implementing leading-edge networking SoC technologies.
World-leading connectivity IP
Our business model
The custom workloads required in AI and other high-performance computing
applications demand continuous advances in chip designs and the industry’s most
cutting-edge IP. Given the significant capital investment in data centres, there is a
strong need for the smallest possible process nodes to maximise performance,
minimise power consumption and reduce SoC area.
Since 2017, Alphawave Semi has built a world-class team, investing heavily in
breakthrough technologies and developing a comprehensive suite of connectivity
IP subsystems to serve our markets. Our portfolio now includes over 240 silicon
IPs, each designed to improve our customers’ performance-to-TCO (total cost
of ownership) ratio. This IP drives revenue both through direct licensing and by
powering custom ASICs, connectivity products and chiplets.
To ensure each high-speed IP is silicon-proven before customer use, we develop
andvalidate each IP on dedicated test chips, manufactured on leading-edge nodes.
In 2023, our IP suite was ready for production in 3nm. Throughout 2024, we have
undertaken the task of migrating these to the most advanced processes, with a
significant proportion of our IPs now available on 2nm nodes.
The strength of our IP portfolio can be seen in the eye diagrams for Ethernet, PCIe,
UCIe and HBM memory, each showcasing an open eye, which indicates good signal
quality with low bit-error rates and potential for higher bandwidth; a high eye height,
representing strong noise immunity; and a wide eye width, signifying reduced clock
jitter and better timing margins.
224 Gbps
112 Gbps
128 Gbps/PCIe Gen 7
PCIe Gen 6/CXL 3.x
UCIe/D2D 32 Gbps+
HBM 3e 9.6 Gbps
Revenue China vs
Rest of World (USD)
2023 2024
$190.4
$131.3
$54.5
$253.1
China N. America, EMEA, ROW
Alphawave IP Group plc
Annual report and financial statements 2024
10
Custom Silicon Team with silicon specification to service
capabilities
Our business model
Each AI implementation comes with its own demands, with an AI SoC
developed for a data centre specialising in video being very different to
one for search, or social media.
Advanced packaging techniques
For packaging, not only has Alphawave Semi invested to ensure it is a key player within the foundries’ advanced packaging
ecosystems, but we have also invested in building what is among the industry’s leading teams in terms of expertise. As a business,
we understand how to manage mechanical stress and control thermals that come with advanced packaging techniques and are
working in close collaboration with TSMC and Samsung on this.
By combining these five elements, Alphawave Semi has a fully developed platform that is uniquely capable of delivering theright AI
experience that matches exactly our customers’ specific and demanding needs.
Process technology
Alphawave Semi is building on the most advanced processes. Our IP has been
developed to run across a wide range of nodes from 7nm to 2mn, enabling our
customers to develop the most cutting-edge SoCs and manage ever-increasing
volume of data passing through their servers.
For custom silicon, we are already shipping in production at 7nm and ramping
production for custom chips at 5nm and 4nm. At 3nm, Alphawave Semi has taped
out SoCs for our lead customers. And for 2nm, Alphawave Semi has already entered
the enablement phase, building IP test chips.
Building the ecosystem
The ecosystems we have developed are critical to Alphawave Semi’s success and
the centrepiece of our strategy. Across the Group we have fostered relationships
with an array of companies. We are a partner in the Arm Total Design Platform,
creating the CPU Technology Center of Excellence in 2023. In 2024, we have
strengthened this partnership with jointly developed Arm Neoverse technologies.
Foundry partners include Samsung and TSMC, with multi-geographical assembly
and test facilities (OSATs) for greater supply chain stability as well as a raft of testing
and development partners, for example with Teledyne LeCroy on PCIe 7 signal
generation and measurement.
Leveraging proven IP
Alphawave Semi’s portfolio of
IP encompasses a vast array of
industry-leading technologies
including 200G per lane Ethernet,
PCIe, CXL, UCIe and HBM. It is at
the heart of every custom design we
implement with our partners.
Pre-built chiplets
See page 13 for additional
information. Chiplets are an
extension of the IP model, with
pre-built components that can be
assembled at the foundry using 2.5D
and 3D technologies. They enable
faster times to market, reduced
costs and lower risks. The move to
chiplet architectures is also critical
in enabling silicon systems that
exceed the reticle limit with greater
shoreline and increased aggregate
I/O bandwidth.
Alphawave Semi’s custom silicon, which is based on its extensive portfolio of IP, is crucial in helping our customers manage this.
Alphawave Semi’s custom silicon design platform for AI and hyperscale data centres stands on five pillars.
Leading process
>
7nm – production
>
5nm – ramping
>
3nm – taping out
>
2nm – enablement
Proven silicon IP
>
224G/112G
Ethernet
>
PCIe/CXL
>
HBM/UCIe
>
Subsystems
Ecosystem
>
Arm Total Design
>
Leading foundries
>
Design flows
>
Multi-geo OSATs
Pre-built chiplets
>
Fast TTM
>
Lower risk
>
Cost savings
Adv. packaging
>
2.5D/3D IC
>
SI/PI
>
Mechanical/
thermals
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
11
In 2024, the new connectivity products group saw its first revenue
fromshipments.
Connectivity products for advanced data centre campuses
Our business model
Through its connectivity products, Alphawave Semi
is combining itsmost advanced technologies to
address amulti‑billion‑dollar market at scale by
enabling hyperscale and AI data centre campuses to
communicate data at high speed over manykilometres.
Generative AI has fundamentally shifted how compute capacity is being used within
the data centre setting. The throughput and capacity of the xPUs are outpacing their
connectivity bandwidth.
Throughout 2024, Alphawave Semi’s connectivity products business has focused
on the silicon that provides connectivity links that are the lifeblood of the modern AI
data centre, with particular focus on pluggable optical transceivers.
Typically, each GPU added to the network requires approximately three times
as many optical transceivers, a demand that continues to grow as network
demands and compute capacities increase. As data rates climb, optics will play
an increasingly critical role in network infrastructure, supporting the high-speed
connections that electrical solutions can no longer maintain.
Hyperscalers require high bandwidth connections spanning distances up to
20kilometres to link AI clusters across data centre buildings. To address this need,
Alphawave Semi has strategically invested in coherent-lite technology, optimised
forapplications where PAM4 modulation cannot achieve the necessary distance
and bandwidth.
Additionally, as demand for compute silicon in networks intensifies, Alphawave Semi
has accelerated its technology roadmap in 2025 moving from 3nm to 2nm process
nodes to deliver scalable, sustainable solutions.
High-speed SerDes
>
112G
>
224G
>
400G
>
On 4, 3 and 2nm
processes
SoC
>
Optics with analog
anddigital
>
SoC with firmware
DSP
>
PAM4
>
Coherent
Precision analogue
>
ADC
>
DAC
>
>120G baud
Opto-electronics connectivity
LightCounting, Alphawave estimates
2024 2027
1.7
3.8
31%
CAGR
Alphawave IP Group plc
Annual report and financial statements 2024
12
As data centres process exponentially growing volumes of data,
thesemiconductor industry servicing this sector needs to adapt to keep up.
UCIe and a chiplets offering to address SoC design challenges
Our business model
The use of monolithic SoCs for compute, memory and networking has become
increasingly costly, delivering poor yields, and is limited in scalability by the reticle limit.
To service this need, Alphawave Semi has developed a chiplet business, creating
functional building blocks based on our leading-edge IP to be packaged into highly
advanced data centre systems-in-package (SiPs) that can integrate more compute, more
memory and more I/Os.
The move from monolithic designs to chiplet-based architectures linked through die-to-die
interconnect standards such as UCIe also brings several benefits. Chiplet architectures
enable both multi-process SiPs (where each function on the chip can be developed and
manufactured using the optimal process) and multi-vendor SiPs (allowing developers
to choose the best supplier for each function). As a result, chiplet architectures reduce
non-recurring engineering (NRE) costs, cut manufacturing expenses and accelerate
time-to-market.
Alphawave Semi is at the forefront of this sector, establishing partnerships with Arm,
TSMC and Samsung to foster a robust chiplet ecosystem that delivers greater value to
our customers. We have also introduced the industry’s first portfolio of interchangeable,
customisable and scalable chiplets.
As of 2024, we have three major families of chiplets for AI xPUs:
I/O extender chiplets
These chiplets separate the core and I/O functionalities,
enabling continued scaling of main dies to lower geometries
while maintaining essential I/O features on separate
pre-validated process nodes. Variants include chiplets for
co-packaged optics. This approach allows for advanced
scalability in design and function.
Arm compute chiplets
These utilise the latest Arm Neoverse cores to provide the
high-performance general-purpose processing to communicate
with, configure and orchestrate accelerators, much like the
interaction between an NVIDIA Blackwell system’s CPU and
GPU components.
Our first chiplet within this category was announced in
June2024: a Neoverse CSS-based CPU chiplet that includes
ultra-high-speed interfaces for AI and HPC data centres.
Memory chiplets
These offer flexibility for creating custom silicon solutions with
memory tailored to specific needs. For applications prioritising
bandwidth, high-bandwidth memory (HBM) chiplets can be
used, whereas cost-focused designs may opt for DDR-based
chiplets. This customisation empowers a range of performance
and cost options for AI and data-intensive applications.
In June 2024, Alphawave Semi announced its 9.2 Gbps HBM3E
subsystem that enables a chiplet-enabled memory bandwidth
of 1.2 Tbps and reduces xPU-to-memory bottlenecks in
AIapplications.
Arm compute
chiplet
High-performance
Arm-based compute
enables data
acceleration
Custom expansion
I/O chiplet
Customised
SerDes I/O count or
application-specific
memory interface
Foundational
I/O chiplet
Multi-standard
SerDes I/O with
integrated protocol
controllers and low-
latency, high-speed
DDR5 and memory
controller
PCIe Gen 6/CXL 3.0/
112 Gbps memory
LPDDR and DDR
UCIe custom powered Arm processor
AI xPU
chiplets
Co‑package
optics chiplets
Memory
chiplets
Arm compute
chiplets
I/O Multi-protocol
chiplets
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
13
Alphawave Semi is dedicated to addressing the full spectrum of connectivity
challenges across the data ecosystem, from die-to-die and rack-to-rack
connections, to data centre to data centre links.
Alphawave Semi is working with the entire hyperscaler ecosystem
Our business model
As the connectivity company, we support hyperscalers in implementing advanced
andscalable connectivity solutions.
One size does not fit all
While on the surface the functions undertaken by hyperscalers
and the challenges they face are universal, if we dig deeper we
can see that each is solving a different problem. Amazon Web
Services’ data centres have been designed for e-commerce and
for use by anyone. Meta’s are designed for the needs of social
media. This means some of the problems they face will be very
different from each other and different again from those of
Microsoft, or Google.
We understand that entry points into hyperscalers therefore
vary significantly. Where one hyperscaler might engage and
license Alphawave Semi’s advanced silicon IP to be deployed
as part of an xPU and AI inference machine, another might
collaborate to integrate our cutting-edge connectivity product
into their servers and leverage our coherent technology to
enhance their network infrastructure.
Taking a multifaceted ‘trains, planes and automobiles’ approach
to provide four distinct entry points – silicon IP, custom silicon,
connectivity products, chiplets – into hyperscaler environments
enables Alphawave Semi to support the development of our
hyperscale customers’ architectures from AI and data centres
to new inference xPUs.
The hyperscaler ecosystem
By offering tailored connectivity interfaces, coupled with a
structure that is easy for hyperscalers to engage with, and
by closely collaborating with the broader ecosystem, we
can enable hyperscalers to solve their unique connectivity
challenges without the need for them to develop chips
fromscratch.
We therefore work across the entire hyperscaler ecosystem.
From transceiver module and cable vendors, through data
centre compute to foundries such as TSMC and Samsung,
aswell as compute architecture partners, such as Arm.
Silicon IP
>
PCIe®/CXL®
>
224G/112G Ethernet
>
UCIe
TM
/HBM
Custom silicon
>
7, 5, 4, 3 and 2nm nodes
>
2.5D and 3D advanced
packaging
>
Arm Total Design Partner
Connectivity products
>
PAM4, coherent DSPs for
800G/1.6T Ethernet
>
112G, 224G in silicon
>
Going to 400G
Chiplets
>
I/O multi-protocol chiplets
>
Arm Neoverse compute
chiplets
>
Memory chiplets
Hyperscalers require industry-leading standard technology that is customisable
Module/cable vendors
>
Copper and optical module vendors
Data centre compute
>
AI, speciality processors and
connectivity solutions
Silicon fabs
>
TSMC, Samsung and Intel
Compute architecture
>
Compute architecture partners
including Arm
Alphawave IP Group plc
Annual report and financial statements 2024
14
Strategy
We are leveraging our technology and expertise to build a leading
connectivitycompany for AI and digital infrastructure markets and
investinginanenhanced productportfolio and engineering expertise.
Market leadership
Maintain pace of innovation and
marketleadership by attracting
andretaining talent
Progress in 2024
>
Collaborated with Arm as part of its Total
Design Platform to develop chiplets for
high-performance compute solutions
based on the Neoverse
TM
compute
sub-systems (CSS).
>
Strengthened relationship with TSMC,
with a collaborative development of
the industry’s first 3nm UCIe IP for
TSMC CoWoS packaging. Additionally,
AlphawaveSemi was declared TSMC
2024 OIP Partner of the Year Award for
High-Speed SerDes IP.
>
Strengthened relationship with Samsung
Foundry, with an expanded agreement
encompassing leading-edge IP for PCIe
7.0,112G and 224G Ethernet and the UCIe
die-to-die interconnect standard for AI
andHPC systems.
>
Number of employees in R&D increased
from 741 to 891.
>
Certified ‘Great Place To Work’ in all our
main locations.
KPIs/metrics
90%
of employees in R&D functionas %
of total
>240
number of IP products
9%
employee turnover
Risk
>
Competition and failure to maintain
ourmarket leadership.
>
Reliance on key personnel and ability
toattract talent.
>
IP protection and infringement.
Sustainability
>
Continued investment in a skilled and
inclusive workforce
>
Innovation: close R&D collaborations
inecosystem.
2025 initiatives
>
Ongoing selective hiring in R&D.
>
Continued effort to support talent with
enhanced HR policies and compensation
framework.
>
Expand foundry partnerships with further
design wins at 3nmand beyond.
Expansion
Land and expand: broader and deeper
customer base
>
Expand our customer base in our
target end‑markets.
>
Deepen our customer base by winning
new designs with existing customers.
Progress in 2024
>
Maintained the number of end-customers
generating revenue at103 in FY 2024.
>
New customers in North America, which
represents 40% of our 2024 revenue.
>
Expanded collaboration with Samsung.
KPIs/metrics
90%
of licence and NRE bookings
from North American, APAC
andEuropean customers
103
revenue-generating end-customers
in 2024
Risk
>
Customer demand.
>
Dependence on licensing revenues.
>
Reliance on third-party manufacturing
foundries.
>
External environment and events.
Sustainability
>
Innovation: close R&D collaborations
inecosystem.
>
Efficient and responsible value chain.
2025 initiatives
>
Focus on custom silicon opportunities
inadvanced nodes.
>
Start of the ramp of new products for
aleading North American hyperscaler.
>
Convert pipeline of opportunities in
advanced nodes to revenue.
>
Partnership we signed with Siemens
EDAinDecember 2024 dramatically
expands the reach of our sales force and
supports our strategy and delivers on our
long-term targets.
Innovation
>
Leverage our IP to expand our
product portfolio and grow our
custom silicon and connectivity
product business.
>
Create chiplet business unit to
enable the next generation of AI
anddata centre connectivity.
Progress in 2024
>
Unveiled industry’s first 3nm 24 Gbps
UCIe IP subsystem with TSMCCoWoS
technology.
>
Unlocked 1.2 Tbps connectivity for
high-performance compute andAI
infrastructure with 9.2 Gbps HBM3E
subsystem.
>
Taped out the industry’s first
multi-protocol I/O connectivity
chipletforhigh-performance compute
andAI infrastructure.
KPIs/metrics
US$308m
FY 2024 revenue
3nm
custom silicon tapeouts
Risk
>
Competition and failure to maintain
ourtechnology leadership.
>
Reliance on key personnel and ability
toattract talent.
>
IP protection and infringement.
Sustainability
>
Continued investment in a skilled and
inclusive workforce
>
Innovation: close R&D collaborations
inecosystem.
2025 initiatives
>
Continued focus on advanced IP enabling
the rollout of AI technologies.
>
Expand product roadmap including PAM4
and coherent DSP building on IP portfolio
and IP subsystems.
>
Continued focus on high-value custom
silicon opportunities.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
15
We aim to embed sustainable and responsible business
practicesinto the way we act internally and how we engage with
external stakeholders. Our Code of Ethics and Business Conduct
sets out how we maintain a high standard of integrity across all
engagements.
The Board and our stakeholders
Our commitment to stakeholder engagement lies at the heart of
our strategy formulation and execution. It plays a pivotal role in
our achievement of sustainable long-term success. The Board
meticulously considers the needs of our diverse stakeholders and
carefully weighs the consequences of every decision over the long
term. Byconsidering our stakeholders in key business decisions
we ensure that we continue to build trust and maintain their
ongoing support. Whilst it is not always possible to provide positive
outcomes for all stakeholders, the principal decisions made by
theBoard as a whole have met the expectations of investors and
the market.
Our long-term ambition is to lead in connectivity solutions for next
generation AI and digital infrastructure. Our unwavering focus is on
creating value for stakeholders as we pursue our goal.
The Board continues to act responsibly in line with our purpose,
values and strategy, helping the Company and Group create
ongoing economic, social and stakeholder value.
The Directors confirm that they have acted in a way they consider,
in good faith, to be the most likely to promote the success of the
Company for the benefit of its members as a whole, and in doing
so have had regard, amongst other matters, to the matters set out
in section 172 (1) of the Companies Act 2006. In doing so, however,
they must have regard to the interests of all of our stakeholders, to
ensure the long-term sustainability of the Company.
An introduction to our stakeholders can be found in the preceding
pages of the strategic report. Further information on how Directors
have had regard to their section 172 duty can be found throughout
the strategic and governance reports.
Our customers
The Board continues to receive reports on the customer pipeline
as well as existing customers as part of the CEO report at Board
meetings. This has helped the Board to understand the evolving
industry trends and who our customers are. The Senior Vice
Presidents present to the Board on a regular basis on the role
that the major business groups play in the future strategy of the
Group. In 2024, the Board was briefed on strategic initiatives by
the business groups leaders at our November strategy session
inToronto.
Our suppliers
Suppliers have a key role in allowing us to deliver a full product
portfolio of leading connectivity solutions. We collaborate
with multiple suppliers in the value chain. The Board delegates
manufacturing-related activities, including the management of
ourfoundry, to the Senior Vice President of Silicon Operations
withoversight from the CEO. The Board, through the Audit
Committee, is kept up to date on any risks that may cause major
disruption to the supply chain and the mitigating actions taken to
reduce this risk.
Our shareholders
The Board receives regular data on changes to the share register
andon the level of engagement with shareholders, presents
feedback on investor sentiment at each Board meeting and
highlights any trends. Whilst the CFO and the CEO regularly meet
with investors, it is a shared responsibility for all Directors. The
Chairs of the Remuneration and Audit Committees engage with
investors on specific topics and the AGM provides the main forum
for interaction between the Board and the shareholders.
Our employees
The Board delegates the management of overall workforce
rewards, incentives and conditions, along with executive pay, to
the Remuneration Committee. The Board, through the Nomination
Committee, considers succession plans for key employees. Both
the Executive Directors and Non-Executive Directors have taken
part in numerous Alphawave University meetings, which gives all
Alphawave Semi employees an opportunity to ask questions and
tohear from the Board.
This section of the strategic report, along with the referenced pages, includes
the Company’s section 172(1) statement. It also outlines how the Directors have
interacted with employees, considered their interests, and managed the Group’s
business relationships with customers, suppliers and other external stakeholders.
Stakeholder engagement and S172 statement
Alphawave IP Group plc
Annual report and financial statements 2024
16
Customers Employees
Our customers include some of the largest
technology companies globally, who trust us
to provide technology that may be critical to
the future of their businesses.
Our success is entirely dependent on
our ability to attract, retain and motivate
talentedstaff.
Relationship with our stakeholders
Our technology enables our customers to develop, use and sell the
next generation of connectivity solutions.
We benefit from our customers’ feedback both at service level and
in terms of informing business development opportunities.
Relationship with our stakeholders
We seek to create an entrepreneurial and dynamic culture
wherethe best in our sector want to work.
We create an inclusive environment where we reward
performance,develop talent and care for the wellbeing
ofouremployees.
Partners and suppliers Investors
Our partners and suppliers, such as TSMC
and Samsung, are major players in our
industry. Our access to their production
technology and capabilities is vital to our
success and our ability to deliver to our
customers.
We maintain a regular and open
dialoguewith our current and
prospectiveshareholders.
Relationship with our stakeholders
We foster strong, collaborative and responsible working
relationships with our partners and suppliers over time.
Our CEO and SVPs meet our main partners and suppliers
atleastannually.
There are also regular face-to-face meetings with our key partners.
Relationship with our stakeholders
We engage with investors to help them understand our technology,
business model and strategy and how these can generate
long-term and sustainable value.
Our Board also engages with shareholders, including at the AGM,
and receives regular updates from our Chief Financial Officer.
Community Governments and regulators
We seek to benefit the communities we
operate in. This includes collaboration with
universities and professional bodies, as well
as local and national organisations.
There are countries and regions that seek
to build domestic supply chains, guarantee
their supply of technical products and
restrict outside access to their domestic
technologies.
Relationship with our stakeholders
We aim to make a positive contribution through the advancement
of technological training and education, as well as the
enhancement of local skills pools.
See more about our internship and STEM programmes in the
Ourpeople section.
Relationship with our stakeholders
We maintain good relations with regulatory agencies in the regions
in which we operate, including through industry bodies and trade
associations.
We engage with industry and sector groups to support the
development of industry standards.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
17
Stakeholder engagement and S172 statement continued
Customers Employees
Engagement
>
Customer service feedback
>
Regular project meetings
>
Industry and commercial events
>
Discussion of new business opportunities
Frequency
>
Regular contact with customers (new and existing)
What do they care about?
>
Innovation and investment in R&D
>
Product quality, performance and price
>
Project schedules
>
Sustainability and governance
Sharing value created
>
Pushing the boundaries in wired connectivity technology
(manufacturing node, reliability and low power consumption)
>
Meeting project schedules
Engagement
>
Annual employee survey
>
Employee reviews and monthly employee focus groups
>
All-staff calls
>
Mentoring programme
>
Senior management presentations
>
Designated workforce engagement Board Director
>
Training and development
>
Internship and trainee programmes
Frequency
>
Monthly, quarterly and annual basis
What do they care about?
>
Company strategy and performance
>
Turnover and terms of employment
>
Innovative projects and team culture
>
Learning and development
>
Working environment
>
Flexible working practices and spaces
>
Salaries and benefits
Sharing value created
>
US$150.9m expensed in salaries and performance incentive
programmes in 2024
>
Employee benefits
>
Training and development programmes
Partners and suppliers
$
Investors
Engagement
>
Regular project meetings
>
Annual/quarterly reviews
>
Annual audits
Frequency
>
Ongoing
What do they care about?
>
Price
>
Company strategy and performance
>
Innovation and technical specification
>
Contract terms
>
Sustainability topics such as human rights and labour rights,
conflict minerals and quality
Sharing value created
>
Creating long-lasting partnerships built upon innovation, respect
for human and labour rights, quality standards andhealth
andsafety
Engagement
>
AGM
>
Financial reporting
>
Capital Markets Day, investor roadshows and conferences
>
Ongoing investor relations engagement
>
Investor survey (bi-annual or when considered necessary)
Frequency
>
Ongoing
What do they care about?
>
Technological trends
>
Company strategy and performance
>
Cash flow trends and capital allocation
>
Competition for talent and diversity
>
Governance, particularly financial oversight
>
Key drivers of business sustainability, including innovation,
remuneration, diversity and talent management
Sharing value created
>
Delivering on our strategy which supports long-term
appreciation of our share price
Alphawave IP Group plc
Annual report and financial statements 2024
18
Community
Engagement
>
Community projects and fundraising
>
University relations
>
Programmes with the University of Toronto, the IEEE Student
Branch and several additionaluniversities in India
>
Publication of our annual report
Frequency
>
Monthly to annual contact with local communities
What do they care about?
>
Sponsorships and volunteering
>
Donations and additional support
>
Contribution to research and the advancement of technology
Sharing value created
>
Contributed approximately USD$78,828 towards community
projects in North America.
>
68 interns as of 31 December 2024
>
Creating stable and high-quality jobs
Governments and regulators
Engagement
>
Government consultations
>
Regulatory enquiries
>
Industry/sector groups including standard setting groups
Frequency
>
Ad hoc
>
Ongoing collaboration with standard setting groups
What do they care about?
>
Sector-wide issues
>
Geopolitical risks
>
Compliance and regulation
>
Environmental regulation
Sharing value created
>
US$9.6m in tax expenses
>
Active engagement with regulators and other bodies to
understand their requirements and educate them on industry
impacts of regulatory changes
Women in technology
At Alphawave Semi, we are committed to
empowering women in technology and fostering
an inclusive workplace where everyone can
thrive.
Internally, we have hosted several sessions for women at Alphawave
Semi, providing platforms for professional development, mentorship
and open dialogue. Our employees also had the opportunity to
participate in the prestigious Women’s Leadership Conferences,
gaining valuable insights and inspiration from industry leaders.
Several of our team members attended the Global Semiconductor
Alliance’s 2024 Women in Semiconductor Hardware (WISH)
Conference, and The Art of Leadership 2024, both events dedicated
to supporting women in STEM fields and driving innovation. These
initiatives reflect our ongoing dedication to creating opportunities,
breaking barriers and celebrating the achievements of women
intechnology.
Read more on our website at
https://awavesemi.com/company/leadership/
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
19
A sustainable business model
Vision
Embed sustainable and responsible business practices into the
way we act internally and engage with external stakeholders
to create and preserve long-term value for a wide range of
stakeholders.
Applicable external standards
We participate in, are committed to and apply the following:
>
United Nations Global Compact (since July 2023).
>
ISO 9001 Quality Management System Standard for our
custom silicon operations.
>
Sustainability Accounting Standards – SASB Semiconductor
Standard version 2023-12.
In addition, we are committed to the UN Guiding Principles
on Business and Human Rights and aim to contribute to the
achievement of the UN SDGs.
Management approach
The ESG Steering Committee is a multidisciplinary group
chaired by the SVP of HR, with representatives from Human
Resources, Executive Office, Facilities, Governance, IT, Risk
Management, Supply Chain and NED. The purpose of the ESG
Steering Committee is to:
>
Ensure all relevant sustainability issues are identified,
managed and reported upon, externally and internally.
>
Co-ordinate overall ESG strategy and identify areas of
improvement across the Group.
>
Ensure consistency between consideration of ESG issues
and the Group’s main strategic decisions.
The ESG Steering Committee met three times in 2024,
reviewing ESGratings and completed actions, and proposing
new initiatives. It also assessed risks, monitored KPIs, and in
December 2024 reviewed the results of our first human rights
risk assessment, committing to follow-up actions.
Sustainability issues are managed by Human Resources,
Operations, Manufacturing and IT under the oversight of the
ESG Steering Committee, with critical matters escalated to the
Board as needed. The Committee will continue to meet in 2025
to guide progress and strategy.
Update of our materiality assessment
Approach
In 2024 and early 2025, we worked with third-party
specialiststo update our materiality assessment. This was
with the aim of guiding both our ESG reporting and our
broadermanagement approach.
The update built on the findings of our first formal materiality
assessment (carried out in 2023) and was based on
threephases:
>
Baseline research: The review of Alphawave documentation
(e.g. risk register, employee engagement survey, customer
ESG enquiries, etc.) and publicly available information
(e.g. media reports, ESG regulations and voluntary ESG
standards, etc.) to update our dashboard of ESG issues and
adjust the 2023 prioritisation scores upwards or downwards,
where relevant.
>
Internal engagement: A remote workshop with ten senior
executives from across the business to discuss and
interrogate the initial updated results, which were then
subject to further adjustment to reflect their feedback.
>
Verification and finalisation: The delivery of the outputs to
the Alphawave project team to verify and finalise the results,
as well as the provision of recommendations to inform
future ESG reporting and management action.
Managing our resources and relationships
ESG
We are managing our resources and relationships to create a sustainable business
model,aiming to preserve and create long‑term value for a wide range of stakeholders.
Our success depends on the close collaboration of a range of stakeholders.
Working together and acting responsibly can positively impact our business, while
creating long-term value for our shareholders, employees, customers, partners and
the communities where we live and work.
Alphawave IP Group plc
Annual report and financial statements 2024
20
Our ESG issues were scored on a 1-5 scale and prioritised based
on a ‘double materiality’ concept which focused on:
>
Outwards materiality: i.e. Alphawave’s actual or potential,
positive or negative, direct or indirect impacts on people
ortheenvironment.
>
Inwards materiality: i.e. ESG matters that present actual
orpotential risks or opportunities to Alphawave.
An issue is considered ‘material’ if it meets our threshold score of
3.5 or above, either in terms of inwards materiality, or outwards
materiality
1
. Issues that appear as‘non-material’ are nonetheless
still relevant and are being actively managed.
Results
In the graphic below we set out the final list of ESG issues,
which we have prioritised based on their inwards and outwards
materiality impacts.
Managing our resources and relationships
In 2024, the ESG Steering Committee continued its work to advance its sustainability
and materiality assessments following its joining of the United Nations Global
Compact 2023. The Group supports the UN SDGs and through our existing
programmes and technologies, we contribute to progress against five of the 17 goals.
Material issues
Relevant issues
>3.50 threshold
Materiality matrix
5.00
Outward
4.00
3.00
2.00
1.00
0.00 1.00 2.00 3.00 4.00 5.00
Inward
Business Environment People Value chain
1
Carbon emissions
2
Climate risks and opportunities
3 Community engagement
4
Compliance, business ethics
and transparency
5
Cybersecurity
6 Diversity, equity and inclusion
7
Employee engagement
and wellbeing
8
Employment practices
9
Meeting customer standards
(incl. sustainability standards)
10 Product sustainability impacts
11
R&D and innovation
12
Resource use
13
Responsible supply chains
14
Talent attraction,
development and retention
15
Value chain disruption
(incl. geopolitical risk)
16
Value generation and distribution
17 Waste management
17
1
2
3
4
6
7
8
9
10
12
15
16
13
14
11
5
1. In 2023, the materiality of each issue was determined by an ‘average’ of the inwards and outwards score. The methodology has been updated
inthisregard to bring it closer in line with emerging best practice.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
21
Material sustainability issues
These are the sustainability issues that are most important to
our business and key stakeholders. Although our sustainability
activities cover a wide range of topics, our efforts are
particularly focused on these areas:
Focus areas in 2025
>
ESG Steering Committee functional leads to review
recommendations coming out of the HRRA.
>
Continue to action recommendations from our first/baseline
materiality assessment relating to product sustainability
impacts, value-chain disruption, and responsible
supplychains.
>
Agree carbon emissions baseline based on 2024 data,
identify actionable targets and develop a plan for 2025.
>
Focus on optimising our operations to improve efficiency.
>
Focus on retaining top talent with competitive compensation
and career growth opportunities.
How we support the UN Sustainable Development
Goals (SDGs)
As a participant in the UN Global Compact, we support
thefollowing UN SDGs through our existing programmes
andtechnologies:
Highly engaged and
diverseworkforce
Quality education
Alphawave Semi fosters future innovators through our support
for science, technology, engineering and maths (STEM)
subjects, particularly amongst female students. This includes
our community engagement activities, internship programme,
collaboration with universities, our partnerships with Camp
Engies to provide STEM-based camps in Canada for girls in
grades 5 through 8, and the Shavuot-community programme that
encourages girls aged between 12–15 to go into STEM studies in
Israel. We also continue to partner with Canada’s Let’s Talk Science
and have committed CA$250,000 over five years to 2028 (as well
as the time and expertise of our employees) to support STEM
learning programmes in Canada through this educational initiative.
Gender equality
Alphawave Semi takes equality and equal opportunities for all
employees very seriously. In line with our corporate values, we
conduct business ethically, honestly and in full compliance with
applicable laws and regulations – including in relation to gender.
Our Equal Opportunities and Dignity at Work Policy and Code of
Ethics and Business Conduct provide a solid framework to ensure
all related activities are fully compliant.
We are working to raise awareness of the engineering career
opportunities that exist both within and outside the Group.
Currently, the electronic engineering workforce has a gender
imbalance, with a male-to-female ratio of 11:1 in the US
1
. This trend
is similarly seen in other regions, such as the UK, where the ratio
is 7:1
2
, with university enrolments there showing a 4:1 ratio across
all engineering and technology subjects
3
. While these figures
have shown gradual improvement, there is still ongoing effort to
foster greater diversity in the field, ensuring that opportunities are
accessible to a wider range of talent.
Decent work and economic growth
As a business built on innovation and leading-edge technology,
we recognise the importance of investing in the development of
our employees. Alphawave Semi is committed to employing and
developing those people who have the necessary skills, experience
and values to excel in their roles. The Group is also making efforts
to develop the talent of the future and our internship programme
and learning and development activities are key to this.
Managing our resources and relationships continued
ESG continued
1. 8.2% of electrical and electronics engineering workforce are women – US Department of Labour, April 2024.
2. Women make up just 12% of the engineering workforce in the UK and only 24% of girls report that they would consider pursuing a career in the
sector – EngineeringUK, August 2020.
3. 19% of students in electrical engineering and information technology are female, which is fewer than in all other STEM degree programmes
–VDEAssociation for Electrical, Electronic & Information Technologies – November 2024.
Alphawave IP Group plc
Annual report and financial statements 2024
22
Leading wired connectivity
IPand products
Industry, innovation and infrastructure
Innovation is at the core of our business and we seek to sustain
a healthy level of investment in the development of leading-edge
connectivity technology and products. Our technologies support
infrastructure development and value creation from the adoption
of AI. Our R&D approach and close collaboration with foundry
partners, customers and ODMs ensure we remain at the forefront
of connectivity technology.
Climate action
Our connectivity technology helps to reduce the power
consumption of data centres and minimises the number
ofchipsrequired (see pages 38 and 39).
Although fabless, we seek to reduce our carbon footprint
using renewable energy in those locations where it is available
and offset all travel-related CO
2
emissions. We use the below
organisations and all projects are VERRA certified:
>
Bullfrog Power.
>
GreenPerk is TravelPerk’s carbon-neutral business travel
programme. We’ve partnered with carbon calculation and
offset providers to let you compensate your CO₂ emissions
directly through our platform.
$
Increasing long-term returns
and investment in high-margin
revenue with strong cash flow
generation
Industry, innovation and infrastructure
As part of our strategic objectives, we reinvest cash in the organic
development of new connectivity technologies and products.
Weseek to maintain a focused and sustained investment in the
R&D of leading and lower power connectivity technologies aimed
at solving the hardest problems.
Responsible and long-standing
relationships
Decent work and economic growth
We expect all of our major suppliers to comply with minimum
standards relating to impacts on human and labour rights, health
and safety, and the environment. The Group is committed to fair
wages, healthy and safe working conditions, respect for human
and labour rights, and honest relationships with both customers
and partners in the supply chain.
This is in addition to our support of the Ten Principles of the
United Nations Global Compact on human rights, labour,
environment and anti-corruption.
Managing our resources and relationships continued
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
23
In 2024, we completed the integration of our acquired teams and
are in the process of growing our chiplet business. This includes
an ongoing focus on the promotion of cohesion, productivity
and innovation across the organisation. During the year, our
headcount increased further to 991 (2023: 829) as we continued
to pursue our growth strategy.
Management approach: nurturing excellence
through people-centric values
We believe our people are the cornerstone of our success. Led by
the Senior Vice President of Human Resources and supported by
regional teams, our management approach prioritises employee
wellbeing, development and engagement.
We promote open communication, fostering an environment
where employees can freely share ideas and concerns without
fear of reprisal. Our employee policies reflect our commitment to
a supportive, inclusive workplace.
Our approach is based on the following pillars:
Customised human resource policies
Our HR team applies human resource policies tailored to
reflect local legal requirements, business priorities and labour
market dynamics. This means promoting universal principles,
while adapting to the unique needs of different locations and
employees.
Code of Ethics and Business Conduct
Our Code of Ethics and Business Conduct sets out the
fundamental standards governing our behaviour. Among other
things, this includes a strong commitment to labour and human
rights, seeking to ensure that our employees work in an ethical
and respectful environment.
Talent planning and development
Recognising that our people are our most valuable asset, we
invest in talent planning and development initiatives such as
training and paid internships, as well as the provision of additional
training, mentorship and the identification of talented employees.
By doing so, we seek to ensure that both our employees and our
business are equipped with the skills and knowledge needed to
thrive in a fast-evolving technological landscape. In 2024, we
held our first focused leadership and manager training globally
in which all managers and individual contributors in a leadership
role received this customised training provided by the external
adviser Fierce.
Diversity and inclusion
We recognise the benefits that a diverse workforce can offer.
We actively seek to create an environment where different
perspectives are not only welcomed but celebrated. Our
commitment to diversity is broad, encompassing various
dimensions, with emphasis on the diversity of experiences and
thought. This approach is fundamental to attracting the right
talent, fostering innovation and creativity within our workforce
(see further information on page 70).
Our people
ESG continued
North America 41%
EMEA 9%
APAC 50%
Closing
headcount by
region
Alphawave IP Group plc
Annual report and financial statements 2024
24
Employee engagement and communication
To align our workforce with our business objectives, we implement
robust engagement and communication strategies designed to
ensure employees are well-informed, motivated andconnected to
the Group’s wider vision.
Each business leader holds regular update meetings to foster
open communication, improve transparency and strengthen
collaboration. Additionally, we have launched a monthly newsletter
to keep employees updated on key initiatives, achievements and
organisational news.
We conduct annual employee satisfaction surveys to gather
feedback and identify opportunities for improvement, with the
most recent one presented to the Board in November 2024;
our HRteam is implementing actions from this across the
business. The CEO regularly participates in virtual meetings with
all employees, providing updates on business performance and
addressing questions on a wide range of topics. These initiatives
help ensure we maintain a motivated and engaged workforce
(seefurther information on page 29).
Knowledge sharing and collaboration
We foster a culture of knowledge sharing and collaboration,
recognising that collective intelligence drives innovation and
continuous improvement. To support this, we have launched
an internal intranet site, providing employees with a centralised
platform to share ideas, access resources and stay informed.
Additionally, employees have access to modern collaboration
tools, enabling seamless teamwork across departments and
geographies. We also host monthly Alphawave University sessions,
where team members can share expertise, explore newideas and
collaborate on innovative solutions. Collectively, these initiatives
empower our workforce to contribute meaningfully to our
operations and to our business success.
Employee wellbeing
We strive to create a supportive environment that prioritises the
physical and mental health of our workforce. This is with the aim
of fostering a workplace where our employees can thrive both
personally and professionally.
Reward and recognition
We recognise high performance through targeted compensation,
benefits programmes and our newly launched recognition
platform, which celebrates individual and team contributions.
Our entrepreneurial culture attracts top talent, fostering our
abilityto develop advanced technologies.
Our people
Diversity
Total employees gender diversity
Male 81%|81%
Female 19%|19%
2024 2023
Senior management gender diversity
Male 90%| 92%
Female 10%|8%
2024 2023
Board gender diversity
Male 67%|60%
Female 33%|40%
2024 2023
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
25
Our people continued
ESG continued
Diversity continued
Working conditions and employment rights
Our workspaces are designed to provide the highest standards
of safety, comfort, technology and accessibility, with strong
measures in place to support remote work as needed.
We are deeply committed to upholding and promoting
internationally recognised human rights, as outlined in the
Universal Declaration of Human Rights and related international
human rights instruments. This includes unequivocal support
for labour rights, including those relating to freedom of
association/collective bargaining, freedom from discrimination,
the elimination of forced labour and the elimination of
child labour. Across all geographies, we strive to ensure
our employees are treated fairly and ethically, and benefit
fromexcellent working conditions.
To reinforce these commitments, we have launched a
whistleblower portal, providing a secure and confidential
platform for employees to report concerns, including potential
human rights violations. Employees are trained on the
Whistleblower Policy and provided with access to local phone
numbers and an anonymous online reporting site, which is
run by a third party to ensure issues can be reported with
confidence. Our formal grievance escalation procedure, outlined
in our Workplace Violence and Harassment Policy and Code
of Ethics and Business Conduct, ensures that all concerns are
addressed swiftly, transparently and in alignment with our core
values. (seepolicies at awavesemi.com/company/esg).
Number of employees
FY 2024 Female Male Total
Board 2 4 6
Total employees
1
191 796 991
Senior management
2
1 9 10
FY 2023 Female Male Total
Board 4 6 10
Total employees 160 669 829
Senior management
2
1 10 11
1. An additional four employees did not complete gender in their profile.
2. Senior management diversity reflects the composition of the
leadership team, including the CEO.
Key initiatives
Employee wellbeing
The wellbeing of our employees – many of whom work under a
hybrid model (i.e. remotely and in-office) – is inherently tied to
the wellbeing of our business.
Number of employees (closing)
991
FY 2023: 829
Employee turnover
9%
FY 2023: 7%
Gender diversity
19%
FY 2023: 19%
Alphawave IP Group plc
Annual report and financial statements 2024
26
Our people continued
We want to make sure our employees get the most out of their time
in our offices, can interact with their colleagues and enjoy a healthy
and supportive environment. To this end, we implement health
check days, provide employee assistance programmes and offer
wellness activities such as yoga and meditation. We also make it a
point to hold in-office events to enable real-time collaboration, such
as for Canada’s anti-bullying Pink Shirt Day campaign, for which an
event is held at our Toronto HQ.
We apply a Right to Disconnect Policy (see www.awavesemi.com),
under which every employee has the right to (and should)
disconnect from work outside of their normal working hours –
unless there is an agreement to do so, an emergency or another
legitimate reason (examples of which are provided in the policy).
Talent attraction and referral
We believe our employees are our best ambassadors. This is
why we maintain an internal referral programme through which
employees who refer successful candidates receive a reward. In
parallel, we have social media campaigns targeting specific skills
and roles.
Community
Outreach with
SHNFoundation.
Alphawave Semi donated
CA$97,500 to Toronto’s
Scarborough Health
NetworkFoundation with
the money to be used to help
support people undergoing
physical and mental health
challenges.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
27
Our people continued
ESG continued
Key initiatives continued
Employee learning and development
Learning and collaboration are key aspects of employee
development. Alphawave University aims to give employees
theopportunity to learn about different aspects of our business
and our technology. The programme consists of regular
sessions held by Board members and the management team
(amongst others) where a range of technical and non-technical
topics arediscussed.
We also apply an employee education programme that
reimburses our employees upon their successful completion
of relevant courses. Employees identify their learning and
development needs on a regular basis (both technical and
non-technical) and agree these with their line manager.
In 2024, we added Udemy to our global HR system in addition to
the existing IEEE Explore resource. These cover a broad range
of competencies and technical training needs and in 2024,
20,000 Udemy courses were added for employees.
Leadership development
Our Board mentoring programme aims to cultivate leadership
excellence within our business. This pairs experienced Board
members with the next generation of leaders, fostering a unique
mentorship dynamic that transcends traditional hierarchical
structures. This provides a platform for seasoned leaders to
impart strategic insights, industry knowledge and leadership
skills to mentees, contributing to their professional growth and
development.
The mentorship programme continues to play a key role in
developing and maintaining a robust leadership pipeline by
instilling a strong sense of organisational culture, values and
strategic vision, and transferring expertise and experience. The
programme is supporting the next generation of leaders, while
promoting a collaborative and forward-thinking leadership
ethos that benefits our business.
Diversity and inclusion
We believe in fostering an inclusive environment where every
individual, regardless of gender, background or ethnicity,
can thrive. We are committed to supporting community
programmes aimed at encouraging children (including, in the
context of female underrepresentation in the sector, girls)
to explore and pursue STEM careers. By investing in these
initiatives, we hope to contribute to the development of a
diverse talent pipeline that we can recruit from – and inspire
thenext generation of leaders.
In 2024, we:
>
Continued to partner with the Let’s Talk Science educational
initiative in Canada.
>
Extended our outreach efforts by sponsoring Camp Engies
in Canada and the Shavuot STEM education programme in
Israel – both of which aim to promote female participation
inthe STEM field.
>
Launched a women’s mentoring programme within our
organisation, recognising the importance of empowering
women to excel in their careers.
In addition:
>
Our two largest locations – India and Canada – have
dedicated gender diversity initiatives in place.
>
We closely monitor our salary systems, regular performance
reviews and processes, which have been designed to avoid
any gender-based discrimination
1
.
>
33% of our Board members, and 19% of employees,
arewomen (FY 2023: 19%)
Collectively, our efforts reflect our dedication to fostering
diversity, equity and inclusion. Our Diversity and Inclusion Policy
is available on our website at www. awavesemi.com.
Alphawave University:
A session with our independent
Non-Executive Director David Reeder
David Reeder presented to the business virtually and gave
attendees a run through of his background and some
perspective on how his career developed, and described
some unique ways in which employees can think about
their careers, especially for those that have a technical
background. He gave a run through of his start in the
industry, which enabled his growth, and the benefit of
having a mentor who can push you to do more, to think of
your career as a toolbox, to not think of the position, but
the skills you obtain and develop along the way.
1. Alphawave Semi is not legally required to submit gender pay gap data as it does not have the minimum required number of employees in the UK.
Alphawave IP Group plc
Annual report and financial statements 2024
28
Internship programme
Alphawave Semi has paid internship programmes in Canada
and India, the two countries with the highest number of
employees. The main objective of our internship programmes is
to identify high potential students in their final semester or year
of their undergraduate or masters degree, with a view to future
employment within the Group. Similarly, we aim to encourage
the next generation of engineers and innovators, giving them
insight into the wide range of engineering careers and illustrating
the valuable contribution they can make to the advancement
oftechnology.
At the end of 2024, we had 68 interns in the Group (FY2023:12),
with the increase a result of scaling within the business. Of
theseinterns:
>
22 were in Canada (FY 2023: 11), with interns typically taken
from the Universities of Toronto and Ottawa for periods of
twelveto 16 months.
>
46 were in India (FY 2023: 1), with interns typically taken from
universities such as KLE Tech University, the University of
Burdwan and the CVR College of Engineering in Hyderabad.
As in previously years, we hired many of our previous interns
during 2024.
Reward and recognition
We offer market-competitive pay and employee benefits, along
with opportunities for individual and team recognition, all within
a supportive working environment. We regularly benchmark
our pay and benefits against the employment markets in which
weoperate.
Our compensation programmes include short-term cash-based
bonuses and long-term share plans that allow us to differentiate
levels of reward, based on critical skills and performance levels.
These are informed by our annual performance appraisal
process, which sets clear objectives aligned with the objectives
ofour business.
The majority of our employees participate in our long-term
incentive programme, which helps to promote a shared sense
of ownership. Similarly, in 2024 we rolled out the Equity Stock
Purchase Plan (ESPP) and the majority of hires made this year
were given equity incentivisation through our long-term employee
share programme.
Non‑financial benefits
All employees have access to a variety of non-financial benefits
that contribute to their overall job satisfaction and wellbeing.
These benefits include, amongst others:
>
Flexible work arrangements, such as telecommuting and
flexible hours.
>
Professional development opportunities, such as training
programmes and educational assistance.
>
Health initiatives, including health insurance, access to
gymmemberships and on-site health check days using
visiting doctors.
>
Mental health initiatives, including employee
assistanceprogrammes.
>
Access to financial counselling.
In addition, we also promote a positive, holistic and supportive
work environment and culture, including through:
>
The provision of team-building activities and workshops.
>
The offering of work amenities, such as libraries, quiet rooms
and massage chairs, as well as support for remote working.
>
The organisation of volunteering and community
supportprogrammes.
These benefits and activities reflect geographic location, regional
cultures and regulatory requirements.
Employee engagement and
communicationstrategies
We engage with our employees through town halls,
employeeforums and local events, with the participation of
the senior management team. Key areas of focus include the
strategic progress of the Group, our financial results and our
businesspriorities.
In 2024, we undertook our third annual employee satisfaction
survey, which was conducted by ‘Great Place to Work’ and had
aresponse rate of 86% (2023: 76%). Feedback remained positive,
with employees continuing to feel they can make a difference
and be committed to going the extra mile to get the job done.
Itsresults were presented to the Board in November, with the
survey suggesting the need for further action around enhanced
work/life balance and employee development.
The Group has, once again, been certified as a ‘Great Place
toWork’ in all its main locations.
Focus areas in 2025
>
Continue to foster a workplace where our team members feel
valued, motivated and empowered through our Employee
Engagement Committees. These are responsible for
organising initiatives that promote satisfaction, wellbeing
andcollaboration among employees. Ultimately, these
committees ensure employeeshave a voice in decisions
thataffect their work life.
>
Securewellness certifications at larger global sites, which
include minimum air quality standards be met, and a
requirement for the availability of healthy food options.
>
Implement Group-wide job architecture and compensation
strategy that aligns and supports our business objectives.
This includes a comprehensive review of global benefit
programmes, to maximise the impact on employee wellbeing,
culturalalignment and engagement.
Our people continued
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
29
ESG continued
Climate strategy, risks and opportunities
Context
As a fabless semiconductor company, we have a limited carbon
footprint relative to companies in other segments of the value
chain. Alongside the benefit our products bring to the overall
energy consumption in digital infrastructure applications
(suchas data centres, 5G base stations and AI), we are working
towards further minimising and reducing our carbon footprint
over time.
As a fabless business, this inherently involves engagement with
our (largely Asia-based) foundry and OSAT partners, which we
rely upon for the fabrication, testing, assembly and distribution
of our products.
For this, data from 2024 forms the baseline for our carbon
footprint and enables us to identify opportunities to reduce
carbon emissions further.
Management approach
Environmental responsibility is managed through the
application of our ESG Policy, which was approved in early 2023
and addresses our key priorities such as:
>
Our commitment to carbon neutrality.
>
Our commitment to reduce our carbon impact.
>
Responsible supply chains.
The Group has committed to achieving carbon neutrality,
mostly through the offset of GHG emissions in the short term.
Although as a fabless business our environmental impact is
relatively low, the Group is actively putting measures in place
towards reducing its carbon footprint, such as investing in
efficient and sustainable premises or carefully considering
corporate travel.
Governance
Responsibility for environmental performance sits with
the Board, which also has overall accountability for the
management of climate-related risks and opportunities
(pages32 to 34).
Our Chief Financial Officer is responsible for our risk
management framework, including the assessment and
management of climate-related risks. The ESG Steering
Committee supports and guides the execution of our
climate-related and environmental activities.
Our SVP of Human Resources is also responsible for leading
our climate change agenda and managing our policies
and practices across sustainability and ESG matters. Our
ExecutiveOffice has overall responsibility for carbon reporting
and our IT Director is responsible for our IT resilience and IT
end-of-life policies.
Strategy
The delivery of our technology to customers is, in most
instances, through virtual and not physical means. Our
value chain has worked effectively through exceptional
circumstances, such as the COVID-19 pandemic, to operate
remotely and from alternative locations. Therefore, we regard
our exposure to direct physical climate-related risks as low.
Further, the negative impact of any transitional changes upon
the Group and its operations is considered to be low compared
to those businesses that have more direct dependencies.
However, carbon pricing policies and the cost of energy can
have some impact on the running costs of our business.
In preparing the consolidated financial statements, the Directors
have considered the impact of climate-related risks on the
Group and have concluded that there is no material impact on
financial reporting judgements and estimates (as discussed
in note 3 to the financial statements). This is consistent with
the assertion that risks associated with climate change did not
affect the business, its strategy and financial performance in
2024, and are not expected to have a material impact on the
longer-term viability of the Group.
Furthermore, the Directors do not consider there to be a
material impact on the carrying value of goodwill, other
intangibles or on property and equipment.
Environmental responsibility
Alphawave IP Group plc
Annual report and financial statements 2024
30
Metrics and targets
For 2024, the Group once again appointed Carbon Footprint Ltd,
a carbon and energy management company, to independently
assess its greenhouse gas (GHG) emissions in accordance
with the UK Government’s ‘Environmental reporting guidelines:
including Streamlined Energy and Carbon Reporting
requirements’. Our GHG emissions have been assessed following
the ISO 14064-1:2018 standard using the 2024 emission
conversion factors published by the Department for Environment,
Food and Rural Affairs and the Department for Business, Energy
and Industrial Strategy.
We use Scope 1, Scope 2 and partial Scope 3 emissions as our
metrics. As a fabless business, we outsource the production
of semiconductors to leading foundries. In line with our fabless
peers, we do not currently gather data from the foundries on the
emissions relating to the manufacturing of our products; nor
our IP when embedded in products, and these therefore cannot
currently be calculated within the footprint. We report both the
intensity ratio per employee and ratio per US$m revenue, as
defined in the table below.
The assessment follows the location-based approach
forassessing Scope 2 emissions from electricity usage.
Thefinancial control approach has been used.
The table below summarises the GHG emissions for the 2024
reporting year and includes all our locations in 2024. In the
2022assessment year, the Israel site was not included, and
during 2023, we moved to larger offices in both Pune and Ottawa,
which means these new operations and larger facilities were not
reported for a full year in the 2023 comparisons.
Scope 1 includes emissions associated with gas consumption
and refrigerant gas/A/C usage. Scope 2 includes emissions
associated with site electricity consumption. The increase
in Scope 1 and Scope 2 emissions was mainly driven by the
increase in our headcount and the square footage of our
offices. Scope 3 includes those emissions associated with
business travel and electricity consumption attributable to our
utilisation of servers at our third-party data centre provider. As
in 2023, our2024 Scope 3 emissions also include those from
outsourcedlogistics, commuting and computing. FY 2024 data
will form the baseline of our carbon footprint and this will be
analysed to identify opportunities to reduce carbon emissions
further. Note, this has been delayed from 2024 due to a change
inrelevant personnel.
Streamlined Energy and Carbon Reporting
2022
2023 2024
In metric tonnes CO
2
e
Total Scope 1 emissions (natural gas) 208.9 378.7 330.19
Total Scope 2 emissions (electricity consumption) 341.5 1,111.5 2,441.64
Total Scope 3 emissions (transmissions and distribution, non-controlled
electricity, hotel stays, homeworkers, computing, upstream logistics air and road,
well to tank, commuting, flights, hire car, taxi and grey fleet travel) 601.7 3,452.6 4,123.12
Total gross (Scope 1, 2 and 3) location-based emissions 1,152.1 4,942.8 6,864.96
Intensity ratios
tCO
2
e (gross Scope 1, 2 and 3) per employee 1.78 5.96 7.53
tCO
2
e (gross Scope 1, 2 and 3) per US$m revenue
1
nm 15.3 22.36
Underlying energy consumption (kWh)
Total global energy consumed 2,618,460 5,685,827 7,454,501
Total UK energy consumed
2
n/a n/a 3,312
UK-based emissions nm nm nm
UK-based energy consumption nm nm nm
1. tCO
2
e (gross Scope 1, 2 and 3) per US$m revenue reported as nm in 2024, 2023 and 2022. Group FY 2022 revenue includes revenue from the
acquisition of OpenFive from 31 August 2022 (closing date), but FY 2022 emissions baseline includes annualised contribution from the related
locations in India and the US. Considering the annualised contribution of these locations allowed for a more meaningful tCO
2
e (gross Scope 1,
2and3) per employee comparison.
2. UK energy consumed in 2024, 2023 and 2022 was calculated based on the kWh for Scope 3 home-working only, representing an immaterial portion
of the total energy consumed (<0.01% of total emissions). As such, this has not been extracted from the total footprint for reporting in previous
assessment years.
Environmental responsibility
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
31
Environmental responsibility continued
ESG continued
Climate strategy, risks and opportunities continued
Metrics and targets continued
We are gradually rolling out activities to reduce our GHG
emissions. These include:
>
Active management of e-waste with robust productlifecycle
management programmes for our computer and ITresources.
>
Monitoring business travel, as well as the offsetting of
associated emissions. Please see page 23 climate action for
more information.
>
The location of our offices in energy-efficient buildings.
>
Where possible, the sourcing of renewable energy.
In 2024, we transitioned from a 24,000 sq. ft. office to a 70,000
sq. ft. space in Bengaluru, located within the EcoWorld campus.
This state-of-the-art campus is a leader in sustainability,
recognised as Asia’s first net-zero development. It operates
as a zero water discharge campus and ensures 100% of
organic waste is recycled through composting, reinforcing our
commitment to environmental responsibility.
Alongside our Bengaluru expansion, we also upgraded our
Toronto and San Jose sites, enhancing workspaces to foster
collaboration and employee wellbeing. All three locations are
currently undergoing certification for LEED, WELL and other
sustainability and wellness standards, reflecting our dedication
to creating healthy, high-performance workplaces.
Our reporting is consistent with the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD).
We provide information on our approach to assessing and
disclosing climate-related risks and opportunities in accordance
with Listing Rule 6.6.6R(8) and the recommendations of the
TCFD, except for the following matters: disclosure (‘strategyc’);
we have not performed a quantitative risk assessment or
climate-related scenario analysis. The Directors believe this is
not necessary for an understanding of the Group’s business at
this stage and the risk assessment process has not identified
any significant risks related to climate. In 2025, we will evaluate
the additional requirements and associated costs to assess the
resilience of the organisation under different climate-related
scenarios.
Following this evaluation, we will make a decision on whether
a quantitative risk assessment should be prioritised and the
timing if appropriate.
See our full compliance statement in the Appendix.
Risk management
Our process for identifying and assessing climate-related risks
and opportunities follows our Group-wide risk assessment and
management process. These risks, together with mitigations,
are discussed by the executive management team and the
Board. Given our fabless business model, the Group’s exposure
to climate-related risks is considered to be limited and is
not currently classified as a significant risk. Our overall risk
management process is described on page 75.
The Group has not identified any short-term climate-related risks
that are likely to have a material and direct impact on our
operations. We are potentially exposed to medium and
longer-term climate-related risks of a global/macro nature that
impact society in general, together with risks which may impact
our end-customers and the broader semiconductor supply chain.
Short, medium and long‑term time periods
205020402030
Short term
Medium term
Long term
2025
Years 10 20 30
Climate-related risks and opportunities related to the transition to a low-carbon economy
Risks Opportunities
Policy and legal
Medium to long term
Resource efficiency
Medium to long term
In 2024, we updated our materiality assessment (see page 20).
This found climate risks and opportunities to be relevant but
notmaterial.
As a fabless business with low capital intensity, we do not have
a significant amount of assets at risk of impairment or early
retirement as a result of changes in environmental legislation.
We are actively managing e-waste, reducing unnecessary
businesstravel and, when necessary, relocating our offices into
energy-efficient buildings, which creates an opportunity for the
Group to reduce its environmental impact.
Low Medium High
Alphawave IP Group plc
Annual report and financial statements 2024
32
Environmental responsibility continued
Risks Opportunities
Technology
Medium to long term
Energy source
Medium to long term
Alphawave Semi is at the forefront of wired connectivity
technology.
Our leading-edge technology advances push the boundaries of
wired connectivity capabilities, enabling data to travel faster, more
reliably and using lower power.
Our focus on connectivity and R&D investment seeks to ensurewe
remain ahead of our competitors.
Alphawave is a fabless business, meaning we design and sell
semiconductor chips but outsource manufacturing to specialised
foundries. This model allows us to focus on innovation and
efficiency, but it also introduces technology risks related to supply
chain disruptions, quality control, and dependency on external
partners. To mitigate these risks, we work closely with our supply
chain to minimize its environmental impact and ensure the
reliability and sustainability of our operations.
Energy from renewables is not available in all our locations,
butwhere possible, we try to improve the mix of purchased
energy towards renewables.
All of our premises are leased. Our offices in Canada (Toronto
and Ottawa) and the US (San Jose) are based in modern,
smart buildings equipped with energy-saving systems and
advanced HVAC systems. In 2024, we transitioned to larger
facilities in Bengaluru’s EcoWorld campus, Asia’s first net-zero
development, featuring zero water discharge and 100% organic
waste recycling. All three locations are undergoing certification
for LEED, WELL, and other sustainability and wellness
standards.
In compliance with Streamlined Energy and Carbon Reporting
(SECR) requirements, we are committed to disclosing our
energy use and carbon emissions. This includes reporting
on the environmental impact of our leased premises and the
sustainability measures implemented across our global offices.
Market
Medium to long term
Products and services
Medium to long term
As a fabless business, energy costs are not a major direct
costdriver.
Higher energy costs could potentially impact the direct costs of
ourmanufacturing partners and result in higher cost of goods sold.
Our foundry partners are the leading manufacturing companies
in the industry and continuously invest in the adoption of next
generation manufacturing technologies.
The semiconductor industry is well placed to support the
transition to a lower-carbon emission economy. Our technology
enables semiconductors with lower power consumption,
contributing to a more energy-efficient digital infrastructure,
such as in AI data centres, 5G base stations and other highly
data-intensive applications.
Our technology contributes in different ways to reduce the
power consumption of data centres (see pages 38 and 39).
Reputation
Long term
Markets
Long term
Although our direct carbon footprint is relatively small compared
to other business activities, we seek to reduce our carbon footprint
and undertake appropriate efforts to not fall short of best practice
amongst fabless semiconductor companies in our sector and our
largest customers.
We plan to use our FY 2024 carbon emissions data as a baseline for
the setting of carbon emissions targets in FY 2025.
We work with leading semiconductor, telecommunications,
technology and hyperscaler businesses. Many of these
companies are focused on reducing their carbon footprint and
are investing in new, related technologies. Our opto-electronics,
AI and data centre IP, custom silicon and chiplet business
means we are well-placed to benefit from new revenue
opportunities linked to low power technology. This includes
a particular focus on reducing the power demands of data
centres and AI infrastructure (see pages 38 and 39).
Low Medium High
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
33
Environmental responsibility continued
Climate strategy, risks and opportunities continued
Climate‑related risks and opportunities related to the physical impact of climate change
Risks
Acute risk (event driven)
to
Medium to long term
As a fabless semiconductor company, our own operations are
unlikely to face any specific material risks as a result of the
physical impacts of climate change, such as property damage
due to extreme weather events (i.e. changes in temperature,
wind patterns or water-related).
In 2025 we intend to evaluate the requirements and costs
involved in such an assessment. Please refer to page 22 for
additional details on our goals for 2025.
All our employees can work remotely and the majority of our
offices are located in modern buildings in city centres located
inmajor cities.
Our manufacturing partners have implemented multiple initiatives
to understand and manage the effects of climate change on their
own operations. We work with leading companies such as TSMC,
Samsung and Intel which follow the recommendations of the TCFD
and have initiatives in place to manage these risks.
Chronic risk (long‑term
shifts in climate patterns)
to
Long term
In the longer term, changes in greenhouse gas emissions
regulations could result in increased costs in our supply chain
due to higher compliance, raw materials or energy costs for
oursuppliers.
ESG continued
Low Medium High
Dependency on natural, human and social capital
Climate change would not create any new direct dependencies on
our natural, human or social capital.
Focus areas in 2025
>
Enhance our data collection and reporting processes to
support collection and monitoring across Group locations.
>
Establish carbon reduction targets and supporting carbon
reduction plans at our main locations, using our FY 2024
emissions data as a baseline.
>
Evaluate additional requirements and costs involved in the
development of climate-related scenarios.
Alphawave IP Group plc
Annual report and financial statements 2024
34
Supply chain
Context
We outsource the production of our semiconductors to
the leading companies in the industry, such as TSMC.
These companies provide high-quality products, share our
commitments to environmental stewardship and labour rights,
and have the ability to meet both our stringent qualification
requirements and tight deadlines.
Assembly and test functions are also outsourced to
leading companies in the sector, such as ASE. Our main
foundry and OSAT partners are leading companies in their
sectors and much larger organisations than Alphawave
Semi. Assuch, theyhave long-standing environmental and
labourmanagementprogrammes in place.
As a fabless business, our commercial success is reliant on
our ability to manage our supply chain. As such, we are not only
focused on minimising disruption risks (including any associated
reputational, commercial or contractual harm), but also on
identifying and proactively managing related sustainability
impacts. These include:
>
Impacts on human and labour rights (in line with
nationallegislation).
>
Health and safety impacts.
>
Environmental impacts.
We still retain advanced packaging expertise in-house,
such as 2.5D and 3D technologies, as this is an area of vital
importance in the development of new architectures, such as
system-in-package and chiplets.
Our manufacturing operations, along with those of our suppliers,
are certified to ISO 9001:2015.
Management approach
Our Vice President of Custom Silicon Group is responsible for
all manufacturing-related activities, including the management
of our foundry, assembly and test partners. They are assisted in
this role by our Silicon Operations team, which is responsible for
managing the manufacturing process. Board-level responsibility
for our supply chain lies with our CEO.
We manage our supply chain by:
>
Requiring all our fabrication, assembly and test partners to be
ISO 9001 certified.
>
Categorising partners as critical or non-critical to support a
risk-based approach to supply chain management.
>
Screening all partners against our manufacturing partner
assessment survey and undertaking annual on-site audits for
critical suppliers.
>
Carrying out annual audits (audit-light approach) of our major
partners using a remote, self-assessment survey checklist.
This includes a focus on training and development of staff,
working conditions and the traceability of materials, as well as
a range of topics directly related to the quality and control of
suppliers’ activities.
>
Jointly reviewing the annual audit results with our partners,
including any recommended corrective actions. Major
discrepancies may require a reassessment to verify that the
required corrective actions have been implemented.
>
Issuing corrective action requests (CARs) in the event of
significant quality non-compliance events. These identify root
causes, require permanent corrective actions and are subject
to follow-up monitoring.
>
Engaging with those suppliers that have not met our
requirements to resolve issues and to raise their level of
performance to acceptable levels.
>
Carrying out weekly business and performance reviews with
our regular partners, as well as in-person bi-monthly business
reviews and annual meetings with our major vendors.
In addition, certain customers carry out due diligence on
Alphawave Semi and our suppliers to ensure adequate systems
are in place to monitor ongoing performance. This helps ensure
it is in line with expectations and that the products supplied meet
all requirements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
35
Supply chain continued
Performance
In 2024, we performed a total of 16 audits (FY 2023: 14),
covering the majority of our manufacturing partners as well
as our main foundry partner. The average score of the audits
undertaken in2024 was 99% (FY 2023: 99%). The lowest score
achieved was 95% (FY 2023: 95%). Three of the 16 audits
were undertaken onsite and the remaining through remote
self-assessment.
During the year, we raised two Corrective Action Requests
(CARs) and sought to obtain full resolution for each. CARs
provide a structured approach to problem-solving, focusing on
root cause analysis and continual improvement. In one of the
cases, we successfully achieved resolution through enhanced
part marking, additional training, and improved instructions.
This process not only mitigated risks but also ensured
compliance, transparency, and enhanced customer satisfaction.
On-time delivery (OTD)
The OTD metric measures supply chain efficiency, i.e.
whether or not the Group is meeting its goals in regard to
agreed delivery times. It is also important for maintaining
customer satisfaction. In 2024, our average OTD was 99%
(FY2023:100%).
Conflict minerals
We support international efforts to ensure that the mining and
trading of tin, tungsten, tantalum and gold (known as 3TG) do
not contribute to conflict and/or serious human rights abuses
including, but not limited to, the Democratic Republic of the
Congo (DRC) and the Great Lakes region of Africa. We have
a Conflict Minerals Policy in place which is available on our
website: awavesemi.com/wp-content/uploads/2024/10/QAP-
0019-02_Responsible-Minerals-Sourcing-Policy.pdf.
Alphawave Semi extends this obligation to our suppliers,
requiring them to reasonably assure that the tin, tungsten,
tantalum and gold in the products they manufacture are
conflictfree. The Group also expects its suppliers to establish
their own due diligence programmes to achieve conflict-free
supply chains.
In 2024, we did not identify any instances where tin, tungsten,
tantalum and gold that are integrated into our products have
supported armed groups in the DRC or adjoining countries
(2022 and 2023: zero). All our 3TG minerals are from conflict
minerals compliant smelters.
Environmental management
It is important that our fabrication partners demonstrate
responsible environmental standards. This is why, in line with
our Environmental Compliance Policy, we only work with
suppliers who are committed to environmental stewardship,
and who comply fully with environmental laws, regulations
and industry environmental guidelines. We continue to work
with our manufacturing partners to adopt advanced process
technologies that aim to have an ever-decreasing impact on
theenvironment.
It is vital that we can identify and safely manage hazardous
materials. This includes the provision of relevant materials
declarations under EU Directive 2011/65/EU (Restriction of
Hazardous Substances or ‘RoHS3’) and the amendment to EU
Directive 2015/863. Our products are halide free, containing
very low concentrations of halogens (fluorine, chlorine,
bromineand iodine) that are well below the internationally
suggested limits.
Our products are also fully compliant with EU Regulation
(EC) 1907/2006 (Registration, Evaluation, Authorisation and
Restriction of Chemicals, or ‘REACH’).
Focus areas in 2025
>
Continue to deliver high levels of operational performance
and maintain our average OTD.
ESG continued
Alphawave IP Group plc
Annual report and financial statements 2024
36
Context
The protection of intellectual property is vital for any business
focused on the creation of innovative and high-value
technological solutions. Any failure in this regard could have
profound consequences for the value of our inventions, products
and our business.
Furthermore, we have access to and work with our customers’
intellectual property and/or commercial and technological
secrets. We recognise the high degree of trust that this requires
on the part of our customers, and this reflects the value we seek
to add in these relationships, which we work hard to maintain.
Management approach
We are advancing wired connectivity technology for digital
infrastructure. Given the rapid evolution of technology
and increasingly demanding customer requirements, the
sustainability of our business relies on us staying at the cutting
edge. Our engineering teams seek to innovate in ways that
grow the business, help our customers and keep the Group at
the forefront of the connectivity market. As a result, we invest
asignificant amount into R&D. In 2024, we expensed US$97.1m
of R&D activities or 32% of revenue (FY 2023: US$78.2m of R&D
activities or 24% of revenue).
Our Chief Technology Officer (CTO) works with Alphawave
Semi innovators to define our technology vision and roadmap,
and to drive innovation across the Group. The CTO chairs the
Intellectual Property (IP) Committee, and its members include
representatives from our engineering, marketing and legal teams.
The IP Committee, which meets on a monthly basis, is
responsible for:
>
Advising the CTO on how to best combine trade secrets,
patents and public disclosures to lead in a competitive
environment.
>
Reviewing and ensuring the correct implementation of
applicable policies and procedures.
We ensure that all intellectual property is safeguarded through
the application of:
>
A dedicated Invention Disclosure Policy, as well as related
procedures. The Invention Disclosure Policy is intended to
ensure all innovation is recognised and properly managed.
>
An Incentive Policy for innovations submitted to the IP
Committee, as well as recognition awards.
>
A Public Technical Disclosure Policy, covering the regulation
of public technical disclosures to standards bodies, consortia,
customers, vendors, partners and other public venues.
>
Related restrictive provisions in our contracts of employment.
>
Robust information technology systems to prevent data
leakage.
>
Access controls to project-specific data for employees and
third parties.
Intellectual property
Alphawave Semi
innovation award
In line with our commitment to fostering innovation
and supporting the next generation of innovators, each
innovation disclosure submitted to the IP Committee
by employees is considered for an innovation award.
Recipients of these awards are recognised at an all-hands
event with a commemorative plaque and rewards shared
equally among the inventors.
In 2024, we awarded seven innovation awards.
Theserelated to high-performance clocking, digital
signalprocessing techniques, and system integration.
As a result, the inventors were awarded a total of
US$13,000.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
37
Intellectual property continued
Key issues and initiatives
Reducing data centre energy use and emissions
The technology that we develop and market can be optimised
to our customers’ precise design needs, helping to bring
applications to market faster. Our multi-standard silicon IP
solutions enable faster, more reliable and lower power data
transmission, helping address many of the world’s most
complex connectivity challenges. They are also playing a key
role in reducing the energy use and GHG emissions associated
with global digitalisation.
The data centre industry consumes (according to International
Energy Agency figures
1,2
) almost 2% of global electricity
produced (4% of US, 3% of China). Indeed, the annual electricity
collectively used by data centres is greater than all except
nine countries. Consumption is set to more than double, from
460TWh in 2022 to 1,000 TWh by 2026, partly driven by the
rise of AI and the cryptocurrency sector. At this point, the
industry would collectively exceed the energy demands of
all countries bar five – and be equivalent to the total energy
consumption of Japan. In 2020, the data centres and data
transmission networks that underpin digitalisation accounted
for around 330Mt CO
2
e, equivalent to 0.9% of energy-related
GHG emissions or 0.6% of total GHG emissions
3
. Connectivity
accounts for 20% to 40% of the power used in data centres,
andour technology is helping to reduce it by approximately
25%to 40%.
As noted by the Global Semiconductor Mobile Association
in its State of the Industry on Climate Action 2022 report, AI,
ML and virtualisation are helping to optimise power use in
equipment, centralising network resources (enabling synergies)
and avoiding unnecessary heating or air conditioning
4
.
Ourtechnology supports the flow of data necessary to
enablethis.
In particular, our technology reduces the number of
components needed in data centres and helps reduce power
consumption in multiple ways, for example:
>
The required reach (or distance of data transmission)
enabled by our transceivers eliminates the need for
additional receivers or re-transmitters.
>
Our technology helps reduce the power requirements of
transceivers, reducing data centres’ overall power demands.
>
The achievement of higher per-lane data rates (e.g. from
112G to 224G) as well as more advanced technology nodes
(e.g. from 5nm to 3nm) significantly reduces the energy-
per-bit transmitted. On average, the adoption of a smaller
manufacturing node achieves power savings of between
25% to over 40%
5, 6
compared to the previous node.
>
The use of chiplet architectures that allow for new, low
power computing architectures that can achieve power
savings of approximately 40% compared to monolithic
products (HBM is a less power-intensive memory standard
than DDR; more in-package integrated compute replaces
chip to-chip communication with ultra low-power die-to-die
communication).
>
Our CXL and higher-speed PCIe interconnect protocol
IP allows for the aggregation or sharing of memory or
storage, reducing the amount of memory required for data
centre computing by approximately 30%, lowering the
environmental footprint of memory manufacturing.
ESG continued
1. IEA (2024), Electricity 2024, www.iea.org/reports/electricity-2024.
2. IEA (2025), Electricity 2025, www.iea.org/reports/electricity-2025.
3. IEA (2022), Data Centres and Data Transmission Networks, IEA, Paris https://www.iea.org/energy-system/buildings/data-centres-and-data-
transmission-networks, License: CC BY 4.0.
4. GSMA (2022) Mobile Net Zero, www.gsma.com/betterfuture/wp-content/uploads/2022/05/Moble-Net-Zero-State-of-the-Industry-on-Climate-
Action-2022.pdf.
5. TSMC focuses on power and efficiency with the new 2nm node | Digital Trends.
6. Samsung’s 3nm chips reduce power consumption by up to 45% | Inceptive Mind.
Alphawave IP Group plc
Annual report and financial statements 2024
38
Intellectual property continued
Minimising the lifecycle environmental impacts
ofour products
The nature of our integrated circuits means that their actual and
potential negative physical environmental impacts are relatively
limited. Nonetheless, we design our products in a way that helps to
minimise any negative impacts they might have over their lifecycle.
This includes efforts to reduce the size of our integrated circuits,
thus reducing the amount of input materials required.
Focus areas in 2025
>
Ongoing development of technologies that enable AI and
remove connectivity bottlenecks for data centres.
>
Implement SVP of HR’s plan to further improve collaboration
across teams to foster more innovation.
Investing in the future
of AI compute
In 2024, we continued to invest in key
connectivity technologies for AI compute.
This included significant R&D into PAM4 and coherent-lite
technologies for mid-range data transmission over AI
campuses. It has also included R&D into interconnect
protocols such as PCIe6 and PCIe7, CXL and UCIe
(Universal Chiplet Interconnect Express), for which
we have launched advanced IP during the year. These
investments, in combination with our work as part of the
Arm Total Design Platform (see page 13), position us to
be one of very few companies able to deliver optimised
custom silicon for AI compute.
20%-40%
of data centre power consumption relates toconnectivity.
25%-40% savings
Our connectivity technology enables power savings of
between 25%–40%. This can support overall data centre
power savings of up to 10%.
Power consumption breakdown in data centre
_
_
Servers (20% connectivity)
Power consumption associated with connectivity
Networking and storage
At least
Cooling
50%
10%
20%15%
10%
35%30%
10%
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
39
Business ethics
Context
We work with leading-edge technologies and seek to establish
long-lasting relationships with our customers, partners and
suppliers.
Any breach of our legal obligations or our customers’ and
partners’ trust has the potential to compromise our business,
either in terms of the loss of valuable commercial relationships,
damage to our reputation or the application of official
sanctions.
Management approach
Our Code of Ethics and Business Conduct (the ‘Code’) guides
our adherence to relevant technical, ethical and commercial
requirements; our protection of our intellectual property;
and our strict compliance with the national legislation of our
host societies, including relevant anti-bribery and corruption
laws. The Code, which is directly informed by international,
industry and customer standards, addresses a range of issues,
including:
>
Respect for the individual.
>
Creating a culture of open and honest communication.
>
Ethical and fair competition.
>
Proprietary information.
>
Conflicts of interest.
>
Corporate record keeping.
>
Protection of the Group’s reputation.
>
Selective disclosure.
Responsibility for reviewing and updating the Code of Ethics
and Business Conduct sits with our Senior Vice President of
Human Resources.
For further details, see our Code of Ethics and Business
Conduct at:
awavesemi.com/wp-content/uploads/2023/04/Business-
Code-of-Conduct-v2.pdf.
Below we set out some of the additional issues we actively
manage, in line with our corresponding policies.
Human and labour rights
Given the highly specialised nature of our industry, we believe
our supply chain poses relatively low levels of slavery and
human trafficking risk. Our Policy Against Trafficking of Persons
and Slavery reflects our ongoing commitment to a work
environment that is free from human trafficking and slavery,
including forced labour and child labour. The Group seeks to
remain vigilant through compliance monitoring and verification,
especially in selecting new suppliers.
For further details, see our Policy Against Trafficking of Persons
and Slavery at:
awavesemi.com/wp-content/uploads/2024/01/Policy-
Against-Trafficking-of-Persons-and-Slavery-v.1.2.pdf.
Anti-bribery and corruption
Compliance with global anti-bribery and corruption (ABC)
legislation is vital to our business dealings and forms the
basis of our Anti-Bribery and Corruption Policy. We uphold all
laws relevant to countering bribery and corruption in all the
jurisdictions in which we operate. In addition, we are bound by
the laws of the UK, including the Bribery Act 2010, in respect of
our conduct both in the UK and abroad. Training on this policy
forms part of the induction process for all new employees. All
employees are asked to formally confirm their conformance to
the policy on an annual basis.
Responsibility for the implementation of this policy sits with our
Chief Financial Officer.
For further details, see our Anti-Bribery and Corruption Policy at:
awavesemi.com/wp-content/uploads/2023/04/Anti-Bribery-
Policy-v.1.1.pdf.
Anti‑fraud and dishonesty
Compliance with our Anti-Fraud and Dishonesty Policy ensures
our administrative processes and decisions are carried out with
transparency and accountability. This policy covers topics such
as fraud, theft and abuse of position.
The Group seeks to foster honesty and integrity across its
entire workforce. Directors and staff are expected to lead
by example in adhering to relevant policies, procedures and
practices. Equally, external organisations such as suppliers,
contractors and customers are expected to act with integrity
and without intent to commit fraud against the Group. The
Group provides clear routes by which concerns may be raised
by Directors, employees and associates. For further details see
our Anti-Fraud and Dishonesty Policy at:
awavesemi.com/wp-content/uploads/2023/04/Anti-Fraud-
and-Dishonesty-policy-v1.1.pdf.
ESG continued
Alphawave IP Group plc
Annual report and financial statements 2024
40
Business ethics
Whistleblowing
Employees, associates, suppliers, customers and third parties are
strongly encouraged to report any suspicious activities, including
bribery, facilitation of tax evasion, fraud, or other criminal activity.
Reports can be made confidentially via a 24/7 independent
whistleblowing hotline, accessible through a secure website or by
calling one of the associated regional phone numbers. Reports
can be made on an anonymous basis and are handled with the
highest level of confidentiality. We proactively communicate our
Whistleblowing Policy to employees, make it available to third
parties and ensure it is accessible in local languages to ensure
widespread understanding and inclusivity.
The Group maintains a zero tolerance stance on misconduct. Our
Whistleblowing Policy means that individuals reporting concerns
in good faith are protected from any form of retaliation or
detrimental treatment, which is treated as a serious disciplinary
offence if it occurs. Robust structures are in place to process
whistleblower reports efficiently, ensuring swift action and
resolution.
In 2024, zero incidents were reported through our whistleblowing
channels (2023: one incident).
To further bolster integrity, the Group is implementing enhanced
background checks for contractors and third-party vendors to
mitigate future risks.
The Board, along with the Chief Financial Officer, have overall
responsibility for ensuring all policies comply with our legal and
ethical obligations, and that all those under our control comply
with them. Finance has primary and day-to-day responsibility
for implementing the Whistleblowing Policy, and for monitoring
its use and effectiveness and dealing with any queries on its
interpretation. Full details are available in our Anti-Bribery
and Whistleblowing Policy, which reflects our unwavering
commitment to ethical practices and operational integrity.
For further details, see our Whistleblowing Policy at:
awavesemi.com/wp-content/uploads/2024/05/
Whistleblowing-Policy-1.4.pdf.
Performance
In 2024, the Code was covered in the induction process for all
new employees. In addition, all employees were required to read
and acknowledge our key policies.
Focus areas in 2025
>
Annual review of relevant policies.
>
Review of additional training requirements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
41
Key areas of focus in 2024
Our IT and cybersecurity activities are managed by our IT
Director, who oversees a comprehensive, multidisciplinary
programme involving information security, IT and physical
security. The IT Director reports directly to the Senior Vice
President, Engineering and regularly updates our Board of
Directors on our cybersecurity performance and risk profile.
We apply a detailed set of policies for information security
management, aligned with the ISO/IEC 27001 standards.
In addition, our cloud-based Software-as-a-Service (SaaS)
applications are regularly audited to ensure adherence
to various standards covering aspects such as security,
availability, processing integrity, confidentiality and privacy.
We also engage in annual third-party penetration testing of
our business and customer networks, along with continuous
vulnerability scans of servers, applications, endpoints and
network equipment. Any vulnerabilities categorised as critical,
high or medium risks are addressed promptly. Moreover, we
play an active role in global and professional groups focused
on shaping future standards for a more secure, safe and
privacy-conscious digital environment, such as the Institute of
Electrical and Electronics Engineers.
Group-wide security policies and IT controls are regularly
reviewed and updated by the Security Council, which is chaired
by our IT Director. Our policies seek to address the regulatory
environment, including data privacy regulations, and to mitigate
the evolving cybersecurity threat.
All our existing policies and procedures are assessed regularly
by our external auditors, as well as third-party consultants.
Wemaintain cyber-liability insurance that covers certain
liabilities in connection with security breaches or related
incidents.
In 2024, Alphawave Semi experienced zero material
information security breaches (2023: zero). We also
addressed cybersecurity scenarios in our resiliency planning
and documented them through business continuity plans.
OurIncident Response Programme facilitates an integrated
response to potential cybersecurity events.
Following our 2024 report, we have formalised a dedicated
security team and implemented the Microsoft Sentinel SIEM:
Security Incident Event Management System. We believe
that these enhancements in our cybersecurity framework will
significantly contribute to the resilience and success of our
organisation in the digital era.
IT and cybersecurity
ESG continued
Alphawave IP Group plc
Annual report and financial statements 2024
42
Security training and awareness
We are committed to regularly improving our employees’
understanding and awareness of data security and privacy
matters. This is in the context of a rising number of significant
cyber attacks that take place globally each year. We are focused
on safeguarding the confidentiality and security of our employees,
customers and other interested parties. We do this by:
>
Implementing quarterly email phishing exercises that
encompass a large portion of our workforce, equipping them
with essential skills for cyber self-defence.
>
Providing mandatory training sessions for all employees on data
security and privacy. These sessions include comprehensive
coverage on topics such as cybersecurity, phishing, data
protection and privacy concerns.
Focus areas in 2025
>
Rollout and integration of enhanced security systems on
non-issued company devices – including mobile devices.
>
Continue to expand and incorporate training into new
employees’ onboarding, including increased training for
phishing.
>
Undertake third-party cyber risk assessments for vendors.
IT and cybersecurity
Raising cybersecurity
awareness
In 2024, we conducted four comprehensive
cybersecurity awareness training sessions
to bolster employees’ ability to identify and
mitigate cyber threats.
These sessions focused on key areas such as phishing,
ransomware and spoofing. Specifically, the training
included:
>
Phishing – Six Clues That Should Raise
YourSuspicion.
>
Phishing Awareness.
>
Ransomware.
>
Spoofing – How to Avoid Becoming a Victim.
A total of 1,074 employees participated in these sessions.
Employees who failed phishing tests were required
to undergo additional phishing awareness training to
reinforce their knowledge.
To further enhance cybersecurity vigilance, we also
conducted four phishing simulation campaigns
throughout the year. Employees who failed these tests
were assigned four additional reinforcement training
sessions on phishing awareness.
Looking ahead to 2025, we plan to expand our cybersecurity
awareness initiatives by rolling out six training sessions for
all employees. These sessions will cover a broader range
of cybersecurity threats and best practices, ensuring our
workforce remains vigilant and well-prepared.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
43
Context
Our community engagement activities seek to improve the
welfare of the communities where we work and live, while
our corporate giving programme provides additional support
by matching employee donations to local charities and
organisations. This creates a platform for our employees
to donate their time and support to a range of local and
not-for-profit organisations that are important to them.
The goal of our community engagement programme is to
support local and not-for-profit organisations identified by our
employees and promote the wellbeing of local residents – while
also aligning with our values, such as inclusivity, integrity and
collaboration (more information on our culture is on page 66).
Management approach
Our Community Involvement Global Council includes local
representatives from all our locations, who meet remotely on a
bi-monthly basis. The purpose of the Council is to ensure that
local engagement is aligned with our principles and values, to
co-ordinate Group-wide initiatives and to share experiences.
Responsibility at Group level sits with the CEO’s Executive
Admin, who is part of the Executive Office.
Key areas of focus in 2024
In 2024, the Group donated approximately US$78,828 globally
to support local organisations and charities (FY2023:
US$37,000). We also continued to implement internship
programmes with local universities and organisations in India
and Canada to promote science, technology, engineering
and mathematics (STEM) education, as well as careers in
engineering. This is with the aim of supporting the next wave
of innovators and expanding our own talent pipeline. For more
information see theOur people section.
In 2024, we continued to engage with Keen to Help, an external
platform through which our employees can request and search
for volunteering opportunities that are aligned with our values
and community engagement goals.
For the first time in 2024, we expanded our global initiatives
to include Israel through a partnership with Israeli Girl
Week–Shavuot. Through this programme, Alphawave
Semiwillsupport two groups of 15 girls in Tel Aviv.
Other activities include participation in Israeli Girl’s Week,
GoodDeeds Day and the programme graduation event.
Community engagement
ESG continued
Alphawave IP Group plc
Annual report and financial statements 2024
44
Community engagement
Introducing the
Bengaluru office
tostudents
Alphawave’s corporate social responsibility
(CSR) team was excited to welcome
approximately 25 undergraduate
engineering students to its Bengaluru office
for an introduction and insight into the
semiconductor industry in October 2024.
Anurag Gupta, VP, CSG SoC Design Engineering; Ashish
Deshpande, Director, ASIC Design; and Muralidharan
Viswanathan, Senior Director, ASIC Design, guided
the students through an overview of Alphawave, the
products we produce, ourdesign engineer portfolios
andeverything in between.
There was a tour of the office and labs, followed by a
lively Q&A session, where the students asked Deepak
Bharuka, Characterisation Lead, CR&D, a variety of
interesting questions that included, “What electronics
and communication engineering and computer science
skills and concepts are required to be successful in
an engineering role at Alphawave?”, “How can we
best prepare ourselves to get jobs at very large-scale
integration (VLSI) companies?”, plus manymore.
This tour was organised in collaboration with the Dream
School Foundation (DSF). India is home to millions
of ‘out-of-school’ children, with girls accounting for a
majority of the dropouts. Girls, children with special
needs, children from low-income families and slums and
rural areas, are most likely to be denied an education.
The DSF strives to break the cycle of socio-economic
vulnerability and help children through the power
ofknowledge and education.
Events like this show aspiring young minds the incredible
work they can do in the STEM field, and help them forge
professional relationships that will place them on the road
to success.
Focus areas in 2025
>
Increase employee volunteering participation.
>
Expand our use of the Keen to Help platform to track
employee volunteering hours across the Group.
>
Broaden our positive impact to new operating regions,
including via local partnerships and support for
internationalinitiatives.
>
Establish partnerships with schools and universities by
expanding our STEM mentorship, scholarships and internship
programmes, particularly in regions with limited access to
technology education.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
45
Reporting
requirements
Relevant policies
and standards
Outcomes
ofthe policies
Environmental matters
>
Environmental Compliance Policy (supply chain)
>
TCFD framework
>
Companies Act climate-related financial
disclosures
Pages 30 to 34
Employees
>
Code of Ethics and Business Conduct
>
Our culture and values
>
Country-specific HR policies
Our people and culture, pages 24 to 29
Human rights
>
Code of Ethics and Business Conduct
>
Equal Opportunities and Dignity at Work Policy
>
Right to Disconnect Policy
>
Workplace Violence, Harassment and
Discrimination Policy
>
Accessibility Plan (Canada)
>
Policy Against Trafficking of Persons and Slavery
>
Conflict Free Minerals Sourcing Policy (website)
>
ISO 9001:2015 (supply chain; website)
Our people, pages 24 to 29
Supply chain, pages 35 and 36
Social matters
>
ESG Policy Societal benefits including community
engagement on pages 44 and 45
The Group complies with the non-financial reporting requirements in sections
414CA and 414CB of the Companies Act 2006. In 2023, we joined the UNGC.
Non-financial information and sustainability statement
Alphawave IP Group plc
Annual report and financial statements 2024
46
Reporting
requirements
Relevant policies
and standards
Outcomes
ofthe policies
Anti-corruption and
anti-bribery
>
Code of Ethics and Business Conduct
>
Policy Against Trafficking of Persons and Slavery
>
Anti-Bribery Policy
>
Anti-Fraud and Dishonesty Policy
>
Anti-Money Laundering Policy
>
Whistleblowing Policy
>
Conflict Free Minerals Sourcing Policy (website)
Business ethics, pages 40 and 41
Business model
>
N/A Business model, pages 8 to 14
Principal risks and
uncertainties
>
Confidential Information and IP Policy
>
IT Disaster Recovery Plan
>
IT Incident Management Policy
>
Risk Management Policy
Pages 58 to 61
Non-financial KPIs
>
SASB
>
UNGC
>
UN SDGs
Managing our resources and relationships,
pages 20 to 23
Tax strategy
We recognise our social responsibility to pay tax in the jurisdictions in which we operate. We act with
full transparency and integrity in all of our tax matters and our tax planning supports our commercial
activities. We are committed to remaining compliant with all applicable tax laws and practices.
In this report we have mapped our business outputs and efforts to the United
Nations Sustainable Development Goals (UN SDGs) and we aim to continue
tofocus our efforts on those goals. Our approach to SDG mapping is set out
onpages 20 to 22.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
47
Non-financial
1
Employee turnover
(%)
Engineering R&D
1
(%)
Bookings
2
(US$m)
2024
2023
2022
9%
7%
10%
2024
2023
2022
90%
89%
89%
2024
2023
2022
US$515.5m
US$383.9m
US$228.1m
Link to strategy:
Link to strategy: Link to strategy:
Description: Number of voluntary leavers in
the last twelve months divided by the average
headcount during that period expressed as a
percentage. Monitoring our ability to recruit and
retain experienced engineering and commercial
professionals is vital given the strong competition
for skills in the sector, ageing population and our
business growth ambitions.
Description: Number of employees working
in research and development and related
functions as a percentage of total employees
as of the end of the reporting period expressed
as a percentage. This KPI provides a snapshot
of our engineering talent and our capacity for
innovation, which is a key component of our
strategy.
Description: Bookings are a non-IFRS measure
representing legally binding commitments
by customers to license our technology. Our
bookings comprise licence fees, non-recurring
engineering support, orders for silicon products,
financing components and, in some instances,
estimated future royalties. A portion of our
bookings may not convert to revenue if those
royalties do not materialise or customers are
unable to pay us.
Performance: Turnover in 2024 was 9%
compared to 7% in 2023 and 10% in 2022. Due to
the acquisitions in 2022, data for India and Israel
was included from 1 September and 13 October
2022, respectively. Our ability to recruit and retain
engineering professionals remained high. The
Group has a performance management system
to ensure we reward our best employees through
appropriate mechanisms.
Performance: In 2024, the percentage of
employees working in research and development
remained constant at 90% (FY 2023: 89%). FY
2022 included R&D employees who joined the
business through the acquisitions of Precise-ITC,
OpenFive and Banias Labs.
Performance: In 2024, bookings were up
34%over the prior year (2023: US$383.9m).
The combined bookings from North American,
EMEA and APAC customers represented 90%
ofthe Group bookings in 2024 (2023: 75%).
Chinarepresented 10% of the licence and NRE
bookings in 2024 (2023: 7%).
Backlog excluding
royalties (US$m)
End-customers
2024
2023
2022
US$520.0m
US$354.9m
US$379.7m
2024
2023
2022
103
103
80
Link to strategy: Link to strategy:
Description: Backlog is a non-IFRS measure
representing our bookings less revenues
recognised to date. It represents the revenue that
we expect to collect in future years based only on
our existing and legally binding orders. As new
bookings are secured, our backlog will increase,
and as existing bookings are recognised as
revenue, our backlog will decrease.
Description: End-customers is a non-IFRS
measure representing the number of unique
end-customers that we recognise revenue
from, and are therefore actively engaged with,
during the year. Winning new customers reflects
our ability to execute against our strategy and
continue to innovate.
Performance: Backlog, excluding royalties,
increased by 47%. This was driven by increased
quarterly bookings which were over US$100m
for each quarter in 2024 and over US$185m in
Q4 2024.
Performance: Through organic growth and
acquisitions we significantly increased the
number of revenue-generating customers
over the last three years. The number of
revenue-generating end-customers maintained
at 103 in 2024 compared to 103 in 2023. During
the year we also won repeat business from many
of our customers.
KPIs
The following KPIs allow us to track our performance against our
long-termobjectives.
1. See Alternative performance measures
section in the back half of the annual report
for a full definition of each of the non-financial
KPIs from page 152.
2. Including estimates of potential future
royalties totalling US$15.1m in 2022.
Royaltiesare estimated based on
contractually committed royalty
pre-payments on commencement of
customer silicon shipments or, in limited
instances, on sensitised volume estimates
provided by customers.
Alphawave IP Group plc
Annual report and financial statements 2024
48
Financial
Revenue
(US$m)
Adjusted EBITDA
1
(US$m) and margin (%)
Cash generated from
operations
2
(US$m)
2024
2023
2022
US$307.6m
US$321.7m
US$185.4m
2024
2023
2022
US$51.1m|17%
US$62.6m|19%
US$46.8m|25%
2024
2023
2022
US$13.5m
US$16.0m
US$1.0m
Link to strategy: Link to strategy: Link to strategy:
Description: Revenue is an IFRS financial
measure and demonstrates our ability to execute
against our bookings. For our licence and NRE
bookings, our revenue is primarily recognised on
a percentage of completion basis as we execute
against contractual milestones. Our contracts
are highly negotiated and invoicing and cash
collection may lead or lag revenue recognition.
Description: Adjusted EBITDA is a non-IFRS
financial measure defined as the Group’s
earnings before interest, taxation, depreciation
and amortisation, adjusted to remove
share-based payment charges and non-recurring
operating expenses such as advisory costs
associated with acquisitions. Adjusted EBITDA
is reconciled in the Alternative performance
measures section.
Description: Cash generated from operations
is an IFRS financial measure and demonstrates
our ability to convert operating profit into cash.
Pre-tax operating cash flow is based on our
pre-tax profit or loss, adding back non-cash
items, suchas depreciation, and reflecting
changes in our working capital.
Performance: Revenue decreased by 4%
in FY2024, driven largely by the reduction
in Chinasilicon revenue and revenues from
WiseWave and VeriSilicon.
Performance: Adjusted EBITDA decreased by
2% in FY 2024, driven mainly by the decrease in
revenue and higher operating expenses related
to the higher headcount and scale-up of our
operations to support future revenue growth.
Adjusted EBITDA margin was lower in FY 2024
at 17%.
Performance: In FY 2024 cash generated from
operations was US$13.5m compared to restated
US$16.0m in FY 2023. Restated working capital
in 2023 decreased by US$51.3m, compared to a
decrease of US$14.9m in 2024. The decrease in
working capital in 2024 was primarily due to an
increase in trade and other receivables and an
increase in contract assets, offset by an increase
in contract liabilities.
Our key performance indicators seek to ensure performance is aligned
withourstrategy as well as the key interests of our stakeholders.
Additionally,theGroup works with a wide range of metrics covering
differentaspects of our business activities.
1. See Alternative performance measures
section for a full definition of adjusted EBITDA
on page 152.
2. FY 2022 has been restated to reflect the
finalisation of the purchase price allocation
on the acquisition of OpenFive (see notes 12
and 30). FY 2023 has been restated to reflect
the correct categorisation of the capitalised
borrowing costs figure.
Technology leadership Expansion Innovation
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
49
Financial review
In 2024, we transitioned to
higher-margin IP and custom
siliconengagements at
advancednodes.
Rahul Mathur
Chief Operating & Financial Officer
Investing in future revenue growth
In 2024 we continued to invest in order to enable Alphawave Semi
to be one of the few companies in the world bringing a full portfolio
of connectivity IP and silicon that will enable the next generation of
AI and cloud infrastructure.
Building on the strength of our technology portfolio, we have
a custom silicon pipeline focused on AI and data centre
solutions in advanced nodes. Our connectivity solutions are
expected to meet the increasinglycomplex bandwidth, latency
and power requirements critical to support the adoption of
AI. With our enhanced product portfolio and silicon expertise,
wecan access a larger and high-growth addressable market of
approximately US$35bn, gaining greater scale and enhancing our
competitiveposition.
During the year, we achieved record bookings of US$515.5m.
90%of these bookings came from IP licensing and advanced node
custom silicon NRE contracts with North American, European
and APAC (non-China) customers. The remaining 10% came from
the legacy lower-margin custom silicon business we acquired in
2022. The custom silicon contracts that we signed in 2024 give
us visibility to potential long-term revenue from silicon production,
most of which is not yet reflected in our bookings or backlog.
Firstsilicon production orders from these contracts are expected
in 2025.
Our financial performance was substantially in line with our revised
guidance for the year both on revenue and adjusted EBITDA
1
.
Revenue guidance in the year was reduced primarily due to the
timing of revenue recognition on long-term contracts in advanced
nodes and consolidation among our customer base. Revenue
reduced by 4% year-on-year from US$321.7m to US$307.6m and
we delivered an adjusted EBITDA margin of 17%, compared to 19%
in 2023. Revenue in 2023 included US$49.6m of license revenue
from WiseWave as we fulfilled our remaining obligations under the
subscription license agreement and US$102.8m of silicon revenue
from our legacy OpenFive agreements. Excluding WiseWave and
the legacy OpenFive agreements, revenue in 2024 would have
grown 82% year-on-year, reflecting the shift from legacy business
to new licensing and custom chip development agreements at
more advanced technology nodes.
In 2024 we expensed US$97.1m in the development of products
which will go into production in future years and will contribute to
accelerated revenue growth over the medium term.
The increased loans and borrowings balance at the end of 2024
of US$352.0m (compared with US$220.4m at the end of 2023)
reflects the US$150.0m convertible debt instrument we executed
in December to reduce balance sheet risk and enable critical
investments.
Contracted order book and backlog
2024 bookings totalled US$515.5m excluding royalties, of
which US$397.2m represented IP licensing and NRE orders and
US$118.3m represented royalty and silicon orders. This compares
to US$383.9m of total bookings in 2023. Bookings grew 34%
year-on-year, comprising 46% growth in licensing and NRE
orders and 6% growth in royalty and silicon orders, with bookings
exceeding over US$100.0m each quarter during 2024.
North America was the largest contributor to bookings in 2024,
representing 51% of the total. It was followed by 29% from APAC
excluding China, 10% from China and 4% from EMEA.
Backlog represents the value of contracted bookings over
the life of the Group not yet recognised as revenue, excluding
potential royalties. At the end of 2024, our backlog was
US$520.0m, 47%higher than the backlog at the end of 2023 of
US$354.9m. Dueto changes in the product roadmap plans of
certain customers, approximately 10% of backlog was cancelled
subsequent to the year end.
1. For definitions of non-IFRS measures see KPIs on page 49 and Alternative performance measures section on pages 151 to 153.
Alphawave IP Group plc
Annual report and financial statements 2024
50
We are well-positioned to benefit fromthelong-term investment
inAIanddigitalinfrastructure.
Revenues
Revenues for 2024 reached US$307.6m, a 4% decrease compared
to US$321.7m in 2023:
>
Customers – in 2024, we recognised revenues from 103
end-customers, consistent to 103 end-customers in 2023.
Thisincluded new tier-one customers licensing our IP.
End-customer revenue concentration remained consistent
during the year. Our top five end-customers generated 36%
ofour 2024 revenues (2023: 46%).
>
Regions – revenues from North American customers grew 51%
from US$82.2m in 2023 to US$123.8m in 2024, and revenues
from APAC (excluding China) customers grew 142% from
US$33.5m in 2023 to US$81.2m in 2024. We also saw EMEA
revenue grow 206% from US$15.7m in 2023 to US$48.1m
in2024.
Revenue from China was 18% of the total, as we successfully
transitioned away from our legacy business. This decrease in
revenues from Chinese customers aligns with our strategy of
increasing silicon product revenues from hyperscalers and other
large, predominantly North American, customers and we expect
the mix of China revenues to gradually decrease to 15% or less of
total revenue.
Income statement
IFRS Adjusted
US$m 2024 2023 2024 2023
Revenue 307.6 321.7 n/a n/a
Cost of sales (126.5) (156.4) n/a n/a
Gross profit 181.1 165.3 n/a n/a
Gross margin 59% 51% n/a n/a
EBITDA
1
1.4 9.8 51.1 62.6
EBITDA margin 0% 3% 17% 19%
Operating loss (32.8) (19.4) n/a n/a
Operating margin (11%) (6%) n/a n/a
Loss before tax (32.9) (39.5) n/a n/a
Net (loss)/profit (42.5) (51.0) 18.4 11.9
Basic EPS (US$ cents) (5.78) ( 7.23) 2.51 1.69
Diluted EPS (US$ cents) (5.78) ( 7.23) 2.51 1.69
Cash generated from operations 13.5 16.0 n/a n/a
1. For definitions of non-IFRS measures see KPIs on page 49 and Alternative performance measures section on pages 151 to 153.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
51
Financial review continued
Adjusted EBITDA
Year ended 31 December
US$m 2024 2023
Net loss (42.5) (51.0)
Add/(deduct):
Finance income (9.4) (3.4)
Finance expense 9.5 8.8
Loss from joint venture — 14.7
Income tax expense 9.6 11.5
Depreciation and amortisation 34.2 29.2
EBITDA 1.4 9.8
Add/(deduct):
Acquisition-related costs 0.3 0.7
Compensation element of Banias deferred cash rights 7.6 8.4
Leadership reorganisation 0.7 —
Compensation element payable for Precise-ITC 6.2 —
Share-based compensation expense 27.9 40.7
Currency translation (gain)/loss (2.0) 3.0
Impairment of receivable and contract assets related to customers 9.0 —
Adjusted EBITDA 51.1 62.6
Operating expenses and profitability
Gross margin in 2024 was 59%, with cost of sales primarily
reflecting silicon manufacturing costs and custom silicon
development costs, as well as sales and reseller commissions on
IP sales. In 2023, gross margin was 51% and the increase in gross
margin in 2024 reflects lower revenues from contracts we inherited
through the acquisition of OpenFive, where gross margins are
below our Group targets.
EBITDA
1
in 2024 was US$1.4m (0% margin) compared to US$9.8m
in 2023 (3% margin). On an adjusted basis, EBITDA in 2024 was
US$51.1m (17% margin) compared to US$62.6m (19% margin)
in 2023. The decrease in adjusted EBITDA margin reflects the
increase in operating expenditures from US$184.7m in 2023
to US$213.9m in 2024 as we continue to scale our engineering
capabilities and supporting infrastructure.
Research and development (R&D) expenses in 2024 were
US$97.1m (32% of revenue) compared to US$78.2m (24% of
revenue) in 2023. In 2024, R&D expenses included US$12.7m
amortisation of acquired intangibles (US$12.7m in 2023). In 2024
we capitalised US$76.0m related to our own product development
activities, compared to US$54.5m in 2023, the increase reflecting
the growth in investment in our own product development.
Sales and marketing (S&M) expenses in 2024 were US$13.8m
(4%of revenue) compared to US$12.8m (4% of revenue) in 2023.
General and administrative (G&A) expenses in 2024 were
US$53.3m (17% of revenue) compared to US$40.8m (13% of
revenue) in 2023. G&A expenses in 2024 included an expected
credit loss release (credit) of US$1.0m based on our assessment
of our potential credit loss on overdue invoices and contract assets
(loss of US$7.3m in 2023). Excluding this, our G&A expenses for
2024 were US$52.3m, or 17% of revenue (US$33.5m, or 10% of
revenue in 2023).
The year-on-year increase in R&D, S&M and G&A expenses was
primarily due to the increase in headcount from 829 full-time
employees at the end of 2023 to 991 at the end of 2024. In addition,
we invested in our support functions and continue to scale our
finance, HR, legal and corporate marketing teams, reflecting the
increased complexity and geographical spread of the Group to
support our transition to a vertically integrated semiconductor
company.
In the medium term, we anticipate modest growth in our headcount
as we address the opportunities ahead.
Other expenses in 2024 totalled US$49.7m. Share-based
payment costs of US$27.9m in 2024 were lower than 2023
(US$40.7m). Thehigher share-based payment charge in 2023
reflected one-time grants awarded to new members of the senior
management team who joined us in 2023 and the payment of the
2023 employee bonus in shares rather than in cash. Exchange
gains in 2024 were US$2.0m compared to an exchange loss of
US$3.0m in 2023. US$7.6m of other expenses in 2024 related to
deferred cash rights for the former Banias Labs employees (2023:
US$8.4m). Impairment of receivable and contract assets related to
customer was US$9.0m in 2024 and US$nil in 2023.
Operating loss was US$32.8m in 2024, compared to an
operating loss of US$19.4m in 2023. The higher operating loss
is commensurate with lower revenues and higher operating
expenditures in 2024.
Finance income in 2024 was US$9.4m, compared to US$3.4m
in 2023. Finance income in 2024 included a credit of US$6.2m
relating to customer warrants.
1. For definitions of non-IFRS measures see KPIs on page 49 and Alternative performance measures section on pages 151 to 153.
Alphawave IP Group plc
Annual report and financial statements 2024
52
Finance expense in 2024 was US$9.5m, higher than the US$8.8m
in 2023 due to higher borrowings. US$13.4m of finance expense
was capitalised in 2024, compared to US$9.5m in 2023 as it related
to qualifying intangible assets.
Share of post-tax loss of equity-accounted joint ventures was
US$nil in 2024, compared to US$14.7m in 2023.
At the end of 2024, the Group owned 35.15% of WiseWave
(compared to 42.5% at the end of 2023), a company established in
China in Q4 2021 to develop and sell silicon products incorporating
silicon IP licensed from the Group. Our shareholding was diluted
following a capital raise in 2024 that the Group didn’t participate
in. We equity account for the investment as a joint venture and
we do not recognise our share of further losses if the Group’s
share of losses of WiseWave equals or exceeds our interest in the
joint venture. Consequently, we recognised a US$nil loss in 2024
(US$14.7m in 2023).
Tax expense in 2024 was US$9.6m, being 29% of loss before
taxofUS$32.9m.
In 2024, we incurred a net loss of US$42.5m compared to
US$51.0m loss for the year in 2023.
On an adjusted basis, net profit in 2024 was US$18.4m,
comparedtoUS$11.9m in 2023.
The exchange gain of US$1.0m in other comprehensive
income is predominantly a result of translating the net assets
of the non-USD-denominated entities in the Group to USD, our
functionalcurrency.
Balance sheet, liquidity and cash flow
At the end of 2024, we held US$180.2m in cash and cash
equivalents and had borrowings of US$352.0m, comprising a
Revolving Credit Facility of US$125.0m, a Term Loan of US$112.7m,
convertible debt of US$112.8m and other long-term borrowings
of US$1.5m. During 2024, our net debt position increased from
US$119.1m to a net debt position of US$171.9m following the
issuance of US$150.0m of senior unsecured convertible bonds
in December. The proceeds from the bonds will finance the
Group’s ongoing growth plans through investment in research and
development and capital expenditures.
During 2024 current trade and other receivables increased from
US$78.1m to US$81.3m. This change was primarily due to an
increase in trade receivables from contracts with customers,
following strong bookings at the end of 2024.
Contract assets, where revenue recognition conditions are met
under IFRS 15, but we have not billed or collected any amount,
increased from US$65.2m at the end of 2023 to US$95.7m at the
end of 2024. This increase was a function of the timing of invoicing
milestones on specific contracts, primarily for our IP sales.
WiseWave accounted for US$14.4m of the contract asset balance
at the end of 2024 (2023: US$42.4m).
At the end of 2024, we held physical inventory of silicon devices
with a value of US$6.0m (2023: US$11.6m). The decrease reflects
the timing of customer orders and fulfilment of those orders.
Current income tax receivables increased from US$23.5m in 2023
to US$29.0m in 2024 and other current assets decreased from
US$19.0m in 2023 to US$11.8m in 2024. The decrease in other
current assets was primarily a result of a reduction in prepayments
to foundries to reserve manufacturing capacity due to the timing of
project tapeouts.
Goodwill of US$309.2m from the acquisitions of Precise-ITC,
OpenFive and Banias Labs was unchanged.
At the end of 2024, the carrying amount of other intangible assets
was US$263.2m (2023: US$203.3m). This balance is primarily due
to the capitalisation of our own development expenditure.
Owned property and equipment increased from US$20.7m at the
end of 2023 to US$35.9m at the end of 2024 due to increased
expenditure on mask sets and prototyping. Leased property
and equipment increased from US$15.3m at the end of 2023 to
US$18.0m at the end of 2024.
Investments in equity-accounted associates, namely the value of
the investment in WiseWave, remains US$nil, as a result of equity
accounting for losses at WiseWave during the period. Thevalue
of the cumulative losses incurred by WiseWave exceeds the
cumulative value of our investment in the business. The Israeli
semiconductor company investment made by the Group in 2023
isvalued at US$1.0m as at the end of 2024 (2023: US$1.0m).
During 2024, current trade and other payables increased from
US$69.3m to US$76.8m. This increase was predominantly due to
timing differences of payments to vendors.
Contract liabilities, where we have invoiced or received money for
products or services where revenue recognition conditions are not
met, increased from US$56.0m at the end of 2023 to US$81.6m
at the end of 2024. This increase was due to the high level of
bookings at the end of the year, where invoices were raised at the
point of customer signature, but performance obligations were not
yet completed.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
53
Financial review continued
Summary balance sheet
US$m
31 December
2024
31 December
2023
Assets
Cash and cash equivalents 180.2 101.3
Other current assets 196.2 197.4
Total current assets 376.4 298.7
Goodwill 309.2 309.2
Other intangible assets 263.2 203.3
Other non-current assets 105.1 43.3
Deferred tax assets 15.5 12.1
Total non-current assets 693.0 567.9
Total assets 1,069.4 866.6
Liabilities and equity
Total current liabilities 172.6 136.6
Loans and borrowings (non-current) 342.7 214.8
Other non-current liabilities 64.3 46.7
Total non-current liabilities 407.0 261.5
Total liabilities 579.6 398.1
Total equity 489.8 468.5
Total liabilities and equity 1,069.4 866.6
Balance sheet, liquidity and cash flow continued
At the end of 2024, our current and non-current loans and
borrowings were US$352.0m, an increase of US$131.7m from
2023 as a result of an additional US$175.0m debt offset by debt
repayments made during the year. The additional debt in 2024
consists of US$150.0m of convertible bonds and an additional
drawdown of US$25.0m against the Term Loan
In 2024, we generated cash from operations of US$13.5m
compared with cash from operations of US$16.0m in 2023.
Restated working capital in 2023 decreased by US$51.3m,
compared to a decrease of US$17.0m in 2024. The decrease in
working capital in 2024 was primarily due to an increase in trade
and other receivables and an increase in contract assets, offset by
anincrease in contract liabilities.
Income tax paid in 2024 was US$3.3m, compared to US$9.7m
in2023.
In 2024, the Group generated a cash inflow from operating
activities of US$10.2m, compared to a restated cash inflow
of US$6.3m in 2023, due to increased cash generation from
operations and lower tax payments in 2024.
Capital expenditure during 2024 totalled US$90.4m (2023:
US$64.1m), comprising US$30.6m of property and equipment
(2023: US$18.7m), US$1.0m of intangible assets (2023: US$1.8m)
and US$58.7m of capitalised development expenditure (2023:
US$43.7m). US$17.6m of property and equipment relates to mask
sets and prototype, compared to US$nil in 2023, as we continue to
ramp our own product development capabilities.
In 2024, we made no further equity investments into WiseWave
(2023: additional investment of US$14.7m) and our ownership of
WiseWave was reduced from 42.5% to 35.15% following a funding
round in 2024 in which the Group did not participate. As disclosed
in our IPO Prospectus, Alphawave Semi has the ability to invest up
to US$170.0m in total into WiseWave, although our expectation is
that the Group will not make any future investment. We are seeking
to exit our equity investment in WiseWave in the medium term,
but we will time this exit based on market conditions to maximise
return to shareholders.
During the second quarter of 2024, the Group’s net leverage ratio,
one of the covenants in its borrowing arrangements, was above the
maximum allowed ratio of 3.00x, principally due to low adjusted
EBITDA in the first half of 2024. On 19 July 2024, the Group
signed an amendment to the Credit Agreement with the lenders to
increase the maximum permissible net leverage ratio applicable to
Q2 2024 to 4.50x. From Q3 2024, the net leverage ratio covenant
has been amended to measure net secured leverage, with a
maximum permissible ratio of 3.00x for the remainder of the term
of the loan. In addition to the above changes, the amendment
also replaced the fixed charges coverage ratio covenant, that was
due to resume in Q3 2024, with a minimum interest coverage
ratio covenant, being the ratio of the last twelve months’ interest
expense to the last twelve months’ consolidated adjusted EBITDA.
The revised covenants are more closely aligned to the Group’s
operational metrics.
Alphawave IP Group plc
Annual report and financial statements 2024
54
In December 2024, the Group issued US$150.0m of senior unsecured
convertible bonds, due in 2030. The bonds were issued at par and
carry a coupon of 3.75% per annum payable semi-annually in
arrears in equal instalments in March and September, commencing
on 18 March 2025. The bonds will be convertible into ordinary
shares of the Company. The proceeds from the convertible bonds
will be used to finance our ongoing growth plans and may also
include some repayment of debt obligations in the future.
The Group’s capital allocation policy remains focused on
investment in own product development and prototyping,
critical hires and expertise to support growth opportunities,
andmanagement of our debt position in a changing interest rate
environment. We do not intend to pay dividends or make significant
acquisitions in the short or medium term. We continue to review
our capital allocation framework and available sources of capital
tosupport our long-term growth strategy.
Finally, as further detailed on page 76, the Directors have adopted
the going concern basis of accounting.
Summary cash flow
US$m
31 December
2024
Restated¹
31 December
2023
Cash generated from operations before changes in working capital 32.5 67.3
Changes in working capital (19.0) (51.3)
Cash generated from operations 13.5 16.0
Taxes paid (3.3) (9.7)
Cash flow from operating activities 10.2 6.3
Capital expenditure (90.4) (64.1)
Investment in joint venture — (14.7)
Purchase of businesses 12.4 (7.4)
Drawdown of loans and borrowings 25.0 15.0
Issue of convertible debt 150.0 —
Repayment of loans and borrowings (6.1) (5.0)
Interest paid (19.2) (18.4)
Interest received 3.2 3.1
Other cash flows (6.0) (3.6)
Net decrease in cash and cash equivalents 79.1 (88.8)
Cash and cash equivalents at the beginning of the year 101.3 186.2
Currency translation (loss)/gain on cash and cash equivalents (0.2) 3.9
Cash and cash equivalents at the end of the year 180.2 101.3
1. The 2023 cash generated from operations and cash outflow from investing activities has been restated in relation to the capitalisation of borrowing
costs amount for FY 2023 of US$9.5m (see cash flow statement on page 110 for more information).
Rahul Mathur
Chief Operating & Financial Officer
17 April 2025
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
55
In assessing the Group’s prospects, the Directors have considered
the recent financial performance, the current financial position
and the Group’s strategy, business model and principal risks
and uncertainties. The Group’s viability and prospects are
primarily assessed on the basis of the Group’s strategic planning
process, which includes a bi-annual review of quarterly revenues,
profitability and cash flow over three years. The budgeting and
planning process is led by the Chief Executive Officer and the Chief
Financial Officer along with the relevant Group function leads.
Estimates for financial year 2025 are based upon the Group’s
budget. Estimates for financial years 2026 and 2027 are based
on extrapolation of operating expenses and key balance sheet
and cash flow ratios, with revenue estimates based on the same
methodology as our budgeting process. Our revenue forecasting is
based on order intake across different product lines and contract
types with revenue recognition assumptions based on a range of
sensitivities including:
>
Timing of IP delivery.
>
Key ASIC development milestones in the non-recurring
engineering projects for customers.
>
Timing, volume of and average selling price for silicon
product orders, which includes both custom ASIC as well as
connectivity products.
Our funding position is considered in terms of our liquidity
headroom and compliance with debt covenants. In considering the
viability prospects of the Group, the Directors have had regard to
the following characteristics of the business:
>
Alphawave is a fast-growing semiconductor business, which
requires significant on-going investment in research and
development as well as capital equipment, tools and mask sets
expected to be used to facilitate production of silicon products.
>
The business is undergoing a transformation from an IP
business to an integrated semiconductor company and is
transitioning its acquired ASIC business to chip designs in
leading-edge manufacturing nodes.
>
Our customers include companies ranging from large
technology and semiconductor companies to privately held
start-ups.
>
customer contracts for ASIC design services while requiring
significant financial commitment from our customers are
typically cancelable upon payment of a cancellation fee,
customer contracts for IP licensing are typically non-cancelable
and arrangements for the sale of silicon products typically do
not include binding volume commitments.
Viability assessment period
The Directors have determined that a period of three years over
which to assess the Group’s longer-term viability is appropriate
andreasonable based on the following:
>
It aligns with the Group’s internal strategic planning process.
>
It sufficiently accommodates the Group’s evolving
financialprofile.
>
A period in excess of three years is regarded as less meaningful
in view of the rapid evolution of the Group, nascency of the
Group’s own product offering and the fast pace of the market
environment.
Assessment of viability and scenarios modelled
The Directors’ assessment of viability builds upon the analysis
performed to support the going concern assessment and
incorporates additional scenarios, regarded as severe but plausible,
that may be encountered over the three-year assessment period.
These scenarios are intended to quantify the potential impact
of one or more of the Group’s principal risks and uncertainties,
as setout on pages 58 to 61, materialising over the three-year
assessment period.
As required by the UK Corporate Governance Code, the Directors have assessed
the viability and prospects of the Group over an appropriate period, significantly
longer than twelve months from approval of these financial statements.
Viability statement
Alphawave IP Group plc
Annual report and financial statements 2024
56
We have modelled the two stress test scenarios below. Our scenario modelling does not consider a range of additional measures,
including further reductions in operating expenses or additional financing, which management could implement to mitigate against a
severe reduction in revenues. Both scenarios assume that our Term Loan and Revolving Credit Facility would be renegotiated and not
settled in full on their maturity in 2027.
Scenario modelled Principal risks included
1. Reduced revenue and non-payment of WiseWave receivables
We have modelled the following revenue reductions over the assessment period:
(a) Group IP licensing revenue from new bookings forecasts are reduced by 27%.
(b) Group custom silicon NRE revenue forecasts are reduced by 5%.
(c) Own products revenue forecasts are reduced by 70%.
(d) Connectivity product revenues moved out by one quarter.
(e) Group reduces revenues from Chinese customers for custom silicon NRE
agreements and silicon sales by US$20m in 2025.
We have further assumed that WiseWave are unable to settle their outstanding
accounts receivable and contract assets.
We assume no discretionary staff bonuses relating to 2025.
We assume no further investment in WiseWave and no sale of our stake in WiseWave.
>
Managing our growth.
>
Competition and failure to maintain
ourtechnology leadership.
>
Customer dependence.
>
Customer demand.
>
Risks associated with WiseWave.
>
External environment and events.
In each of these scenarios, the Group is forecast to have sufficient resources to continue to meet its liabilities as they fall due without
recourse to further cost saving actions. In reality, as highlighted above, the Group would have numerous additional options available
to maintain its financial position. When the scenarios are combined, Group revenues would almost halve from 2025 to 2027. In such
asituation, it would be reasonable to assume the Group would take further actions to reduce costs, commensurate with the reduction
inrevenues.
Confirmation of longer-term viability
Based on the assessments above and in accordance with the UK Corporate Governance Code, the Directors confirm that they have
assessed the prospects and viability of the Group over a three-year period and have a reasonable expectation that the Group will continue
in operation and meet its liabilities as they fall due over this period.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
57
Risk Mitigation Change in year
Managing our growth
We have a limited operating history and are growing
rapidly with increased pressure on cash flows. If we
do not manage our growth successfully, fail to execute
on our strategy, fail to meet future debt covenants or
maintain sufficient liquidity, or fail to implement or
maintain governance and control measures, our business
may be adversely impacted. We have rapidly expanded
our headcount and the complexity of our business and
operations, both organically and through acquisitions.
The executive management team meets formally on
a weekly basis to review current and future resourcing
needs and priorities. During 2024, we continued to
strengthen our administrative and operational functions.
We continued to proactively manage our commitments,
payables and receivables to ensure timing aligns with our
minimum liquidity requirement covenant. The successful
execution of 2030 Convertible Bonds has strengthened
the Group’s liquidity and will support the Group’s ability to
achieve its strategic objectives.
Decrease
Competition and failure to maintain ourtechnologyleadership
We seek to maintain our competitive advantage by being
first to market with new IP as data speeds increase
and manufacturing sizes decrease. If these industry
transitions do not materialise, or are slower than
anticipated, our competitors may be able to introduce
competing IP which may diminish our competitive
advantage and selling prices. Our ability to maintain our
technology leadership is further dependent on our ability
to attract R&D and engineeringtalent.
We offer competitive employment packages to retain
and incentivise our employees, as well as providing the
opportunity to work in a dynamic and entrepreneurial
culture. Our ability to compete is also driven by our track
record as a trusted partner and the continued addition
of new products and new functionality to our existing
portfolio.
Our sales and marketing team regularly monitor the
competitive landscape to identify any new or potential
technology developments or products that may directly
orindirectly impact our business.
No change
Customer dependence
Our products and technology target AI, data centre and
network infrastructure markets, where there are a limited
number of customers. Further, the cost and complexity of
developing semiconductors targeted by our IP limits the
number of our potential addressable customers. In any
reporting period, a substantial part of our revenues may
beattributable to a small number of customers.
To date, we have been successful in both expanding our
customer base and winning repeat business from many
of our customers. We strive to maintain best-in-class
execution capabilities and technology to retain our
customers and win new customers. As we expand our
product offering by pursuing a vertically integrated model,
we expand our total addressable customer base.
In 2024, revenue concentration from our top three
end-customers was 31%, which was below theprior year
(FY 2023: 33%).
No change
Principal risks and uncertainties
Alphawave IP Group plc
Annual report and financial statements 2024
58
Risk Mitigation Change in year
Customer demand
Demand for our technology is dependent on the continued
global growth in generation, storage and consumption of
data across our target markets, as well as the increasing
cost and complexity of designing and manufacturing
semiconductors. We may be impacted by our customers’
demand sensitivity to broader economic and social
conditions. Our potential customers may seek to develop
competitive IP or semiconductors internally or acquire IP
or semiconductors from our competitors.
We believe there is continued global appetite for data.
As speeds become faster and manufacturing processes
smaller, the ability of our customers to develop competing
technology in-house diminishes. Increasing costs and
complexity are an opportunity to drive our custom silicon
and standard product offerings, including chiplets.
Hyperscalers and carrier networks continue to invest in
leading technology through the economic cycles.
No change
Risks associated with WiseWave
As at 31 December 2024, WiseWave owed the Group an
amount of US$30.3m in accounts receivable (US$6.4m as
at 31 December 2023). Additionally, contract assets as at
31 December 2024 related to WiseWave were US$14.4m
(US$40.8m as at 31December 2023). WiseWave may
need to raise incremental capital to continue their
operations. Additionally, adverse economic or market
conditions impacting WiseWave may impact their ability
tosettle these balances.
The legal agreements governing WiseWave give us a
degree of oversight over WiseWave. Our President &
Chief Executive Officer and COO & CFO are currently on
the board of WiseWave. The senior team of WiseWave
comprises a number of established industry professionals
with a proven track record at large US and global
semiconductor companies. The Group obtains regular
updates on the financial performance of WiseWave.
Increase
Dependence on licensing and silicon revenue growth
Our financial performance is dependent on licensing
revenues. If our customers delay or cancel their
development projects, our IP and support revenues may
be delayed, diminished or may not materialise. We are
in the middle of a transformation into a semiconductor
product company and are making investments in
developing custom and connectivity products. Should
these not develop as expected we may not achieve the
required growth in revenue or expected margins.
The acquisition of OpenFive has materially reduced
our dependency on IP licensing revenues as we seek to
monetise our IP through custom silicon.
Given the costs, time and resources involved, our
customers are typically incentivised to take their products
into production. Our programme management teams
actively manage progress on development of both custom
and connectivity products.
No change
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
59
Risk Mitigation Change in year
Reliance on key personnel and ability to attract talent
We rely on the senior management team and our
business could be negatively impacted if we cannot
retain and motivate our key employees. Our ability to
grow the business is also dependent on attracting talent,
particularly in R&D and engineering, and if we are unable
to do so our business may be negatively impacted.
Our senior management team and our employee base are
incentivised with equity and also the opportunity to work
within a fast-growing and dynamic environment at the
leading-edge of chip technology. In 2024, our headcount
increased from 829 to 991 as a result of organic growth.
See Our people section for further information.
Decrease
External environment and events
Semiconductors are becoming increasingly important as
countries and regions seek to guarantee supply and build
domestic supply chains, as well as restrict outside access
to their domestic technologies. Our business could be
impacted by the actions of governments, political events
or instability, or changes in public policy in the countries in
which we operate, particularly our exposure to increasing
economic and non-economic trade barriers between
the US and China, as well as other countries including
Canada. These challenges, including the threat of a new
tariff regime in the US, potentially have wide-ranging
impacts, including global economic instability, increased
geopolitical tensions and disruption to our operations and
supply chains.
We are seeing an increasing weighting of North American
customers in our sales pipeline. We plan to engage with
external experts to get advice on the impact of and
mitigation strategies for the tariffs.
No change
IP protection and infringement
We protect our technology through trade secrets,
contractual provisions, confidentiality agreements,
licences and other methods. A failure to maintain and
enforce our IP could impair our competitiveness and
adversely impact our business. If other companies
assert their IP rights against us, we may incur significant
costs and divert management and technical resources
in defending those claims. If we are unsuccessful in
defending those claims, or we are obliged to indemnify
our customers or partners in any such claims, it could
adversely impact our business.
Our designs can only be manufactured on leading-edge
processes by a small number of foundry partners. Our IP
embeds tagging layers, which prevent unauthorised use.
We manage our R&D capabilities and seek to structure our
contracts with customers to minimise the risk and impact
of IP infringement claims by third parties.
No change
Principal risks and uncertainties continued
Alphawave IP Group plc
Annual report and financial statements 2024
60
Risk Mitigation Change in year
Reliance on third-party manufacturing foundries
We rely on third-party semiconductor foundries, both
as customers and as manufacturing partners to our
customers. If foundries delay the introduction of new
process nodes or customers choose not to develop silicon
on those process nodes, our ability to license new IP and
our selling prices may be adversely impacted. By pursuing
a vertically integrated model and supplying silicon
products, we are reliant on the foundries’ capacity for a
portion of our revenues and this reliance may increase as
royalty revenues become more material to us.
A significant part of the semiconductor industry is reliant
on a small number of foundry partners with leading-edge
manufacturing capabilities (TSMC, Samsung and Intel).
Beyond diversifying our business and continuing to work
with all leading foundry providers, our ability to mitigate
this risk is limited. As we pursue a vertically integrated
business model, we become more reliant on third-party
foundries and if their ability to supply us with silicon
products is constrained, we will be impacted more quickly
and more severely.
No change
Reliance on complex IT systems
We rely heavily on IT systems to support our business
operations. The vast majority of our design tools, software
and IT system components are off-the-shelf solutions
and our business would be disrupted if these components
became unavailable. If our IT systems were subject to
disruption, for example through malfunction or security
breaches, we may be prevented from developing our IP
and fulfilling our contracts with our customers.
In 2024, we continued to make further improvements
to our IT systems. This included conducting network
penetration testing and strengthening end-user
accesscontrols.
As with much of the semiconductor industry, we are
reliant on design automation tools from Cadence,
Synopsys and Siemens and our ability to source
alternative suppliers is limited.
No change
The strategic report on pages 1 to 61 was approved by the Board of Directors and signed on its behalf by:
Tony Pialis
President & Chief Executive Officer
17 April 2025
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
61
Board of Directors
Jan Frykhammar joined the Board in April 2021 as Senior Independent
Non-Executive Director and became Non-Executive Chair in December
2024. He has extensive experience as a senior executive, chair and adviser
to various companies. Jan was EVP and CFO at Ericsson Group and interim
CEO until 2017. He advises Zinkworks Ltd, Sweepr Technologies Ltd, Telavox
AB and ng-voice GmbH. He has chaired boards and audit committees
of multiple companies and holds a BSc in Business Administration and
Economics from the University of Uppsala.
Weili Dai joined the Board as Interim Director in September 2024. She co-
founded Marvell Technology, serving as President and Director until 2016.
In 2018, she co-founded MeetKai, Inc., where she is Executive Chairwoman.
She also chairs the board at Lark Health and is a director of Astrana Health
Inc. Honored on Forbes’ ‘World’s Most Powerful Women’ list and named
an EY Entrepreneur of the Year, she is recognised for her work at Marvell
and advocacy for women and minorities. Ms. Dai holds a BSc in Computer
Science from UC Berkeley.
Tony Pialis co-founded Alphawave Semi in 2017 and serves as its
President & CEO. He has co-founded three semiconductor IP companies,
including Snowbush Microelectronics (sold to Gennum/Semtech) and
VSemiconductor (acquired by Intel). At Intel, he was VP of Analog and
Mixed-Signal IP, winning the Intel Achievement Award. Tony holds a BSc
andMEng in Electrical Engineering from the University of Toronto.
Michelle Senecal de Fonseca joined the Board in April 2021. She has
expertise in international telecommunications and technology sectors.
Michelle was Global VP for Cloud Innovation Partnerships at Citrix Systems
and Global Director of Cloud and Hosting Services at Vodafone. She also led
the Telecom, Media, and Technology banking team at the European Bank for
Reconstruction and Development. Michelle joined the FDM Group Board in
2016 and co-founded Women in Telecoms and Technology. She holds a BSc
in Business and Political Science and an MBA.
Rahul Mathur joined Alphawave IP Group plc as CFO in October 2023 and
was appointed to the Board in December 2024. He was CFO of Avantus
(2021-2023) and CFO/SVP of Finance at Rambus (2016-2021), playing a
key role in its transformation. Previously, he was SVP of Finance at Cypress
Semiconductor and VP of Finance at Spansion. Rahul has extensive
experience in M&A, corporate finance, strategic planning and investor
relations. He holds a BA in Applied Mathematics from Dartmouth College
and an MBA from Wharton.
David Reeder joined the Board in September 2023. He has extensive
experience in the semiconductor industry, corporate finance, strategic
planning and more. David has held senior roles at GlobalFoundries, Texas
Instruments, Broadcom, Cisco and Lexmark. He was on the board of
Milacron Holdings until its 2019 acquisition and served as CEO of Tower Hill
Insurance Group (2017-2020) and Lexmark (2015-2017). David holds a BSc
in Chemical Engineering from the University of Arkansas and an MBA from
Southern Methodist University.
Michelle Senecal de Fonseca
Senior Independent Non‑Executive Director
Tony Pialis
President and Chief Executive Officer
Weili Dai
Interim Executive Director
Jan Frykhammar
Independent Non‑Executive Chair
Rahul Mathur
Chief Operating and Chief Financial Officer
David Reeder
Independent Non‑Executive Director
R AA R
N R
Key
Committee Chair
R
Remuneration Committee
A
Audit Committee
N
Nomination Committee
Read more online
You can read full biographies for all of our
Board members on our website by scanning
this QR code or by visiting
awavesemi.com/company/leadership/
N N
Alphawave IP Group plc
Annual report and financial statements 2024
62
Management team
Raj Mahadevan
SVP, Operations
John Hou
General Counsel
Tony Pialis
President &
Chief Executive Officer
Babak Samimi
SVP and General Manager,
Connectivity Products
Jonathan Rogers
SVP, Engineering
Tony Chan Carusone
Chief Technology Officer
Charlie Roach
Chief Revenue Officer
Suzan Barghash
SVP, Human Resources
Rahul Mathur
Chief Operating and Chief Financial Officer
Mohit Gupta
SVP and General Manager,
Custom Silicon
Read more online
You can read full biographies for all of our
management team members on our website
by scanning this QR code or by visiting
awavesemi.com/company/leadership/
Our management team nurtures
an engineering-focused culture
that enables us to drive innovation
for next generation technologies
under the direction of some of the
best engineering talent inwired
connectivityIP.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
63
Dear shareholder
On behalf of the Board, I am pleased to present the Company’s
corporate governance report for the financial year ended
31December 2024.
I would like to extend my deepest gratitude to Paul Boudre,
Victoria Hull, Rosalind Singleton and Susan Buttsworth for their
exceptional service and dedication to the Board, following their
retirements on 25 June 2024. I also want to acknowledge the
significant contributions of John Lofton Holt, who stepped down as
Executive Chair and as an Executive Director of the Board effective
6 December 2024. It is an honour to have assumed the role of
independent Non-Executive Chair of the Board. Additionally, we are
pleased to welcome Rahul Mathur, our Chief Financial and Chief
Operating Officer, who was appointed to the Board on the same
date. We also remember the late Sehat Sutardja, whose passing
was a great loss to us all, and we appreciate Weili Dai for stepping
in as Interim Executive Director in September 2024. Their collective
expertise and leadership have been invaluable to our organisation.
The Board has continued to be highly engaged this year, being
flexible with their time, and I would like to thank my colleagues
fortheir considerable commitment and support duringthe year.
Corporate governance
This corporate governance report sets out how the Company has
complied with the UK Corporate Governance Code published by the
FRC (www.frc.org.uk) (the "Code"). The Board believes that good
governance is fundamental to supporting the sound management
and long-term success of the Group. This can only be achieved if
the Board is supported by appropriate governance processes to
ensure that the Group is managed responsibly and with integrity,
fairness, transparency and accountability.
The Board is firmly committed to the highest standards of
corporate governance. Given that the Company has a listing on
the Equity Shares (Transitional) Category, the Board voluntarily
complies and intends to continue to comply with the requirements
of the Code. The Board will also voluntarily report to its
shareholders on its compliance with the Code in accordance with
the requirements for Equity Shares (Transition) category listed
companies under the Listing Rules.
The Code recommends that at least half the board of directors
of a UK company with an equity shares (commercial companies)
category listing, excluding the chair, should comprise of
non-executive directors determined by the board to be independent
in character and judgement and free from relationships or
circumstances which may affect, or could appearto affect, the
director’s judgement.
The Company regardsall Non-Executive Directors as independent
within the meaning of the Code and free from any business or
other relationship that could materially interfere with the exercise
oftheirindependent judgement.
The Code also recommends that, on appointment, the chair of a
UK listed company should meet the independence criteria set out
in the UK Corporate Governance Code. As of 6 December 2024,
theCompany is now compliant withthis criterion.
The Board further believes that the current Directors bring to
the Company a desirable range of skills and experience while
at the same time ensuring that no individual (or small group of
individuals) can dominate the Board’s decision-making. The Code
recommends that the board of directors of a company with an
equity shares (commercial companies) category listing should
appoint one of the independent non-executive directors to be the
senior independent director to provide a sounding board for the
chair and to serve as an intermediary forthe other directors when
necessary. The Company appointed me as its Senior Independent
Director and upon my appointment as independent Non-Executive
Chair I have relinquished this role. Weare delighted that Michelle
Senecal de Fonseca is now our Senior Independent Director.
In March 2025 the Board announced several changes to the
composition of the Audit Committee, Nomination Committee and
Remuneration Committee as a consequence of the recent changes
to the Board. Details of the changes to the Board Committees
are detailed elsewhere in this annual report. In compliance with
the Code, the Board has established three committees: an Audit
Committee, a Nomination Committee and a Remuneration
Committee, and has also established a separate Market Disclosure
Committee. If the need should arise, the Board may set up
additional committees as appropriate.
Compliance with the Code and Listing Rules
A new Corporate Governance Code became effective from
1January 2025 and therefore our next annual report will be
reporting against that Code. During 2025 we will be taking steps to
ensure compliance with the new code.
This statement, together with the various Board Committee reports
and relevant sections of the strategic report included in this annual
report, describes the Board’s application of and compliance with
the Code.
This corporate governance statement, together with the rest of
thecorporate governance report and Committee reports, provides
information on how the Group has applied the principles and
complied with all relevant provisions of the Code, except as otherwise
disclosed, and meets other applicable requirements, including
provisions of the Listing Rules and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority.
The Board’s dedication to
governancehas been instrumental
in driving the Group’s ongoing
transformation and success.
Jan Frykhammar
Independent Non-Executive Chair
Board leadership and Company purpose
Alphawave IP Group plc
Annual report and financial statements 2024
64
The requirements under the Disclosure Guidance and Transparency
Rules DTR 7.2 are covered in greater detail throughout the annual
report, for which we provide a reference as follows:
>
Directors’ statement with regard to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified is set out on page 76.
>
The viability statement is set out on pages 56 and 57.
>
Information with regard to significant share holdings is
presented in the Directors’ report on page 95.
>
Information on Board and Committee composition and
divisionof responsibilities is on pages 66 and 67.
>
The Board’s approach to workforce and stakeholder
engagement is in the section 172(1) statement on
pages16to19.
>
The Executive Chair’s and the more comprehensive Board’s
performance as part of the Board evaluation are discussed
inthe Nomination Committee report on pages 68 and 69.
>
Board diversity is discussed in the section on the Nomination
Committee’s activities on page 70.
>
The section describing the work of the Audit Committee is set
out on pages 72 to 74.
>
The Directors’ statement on fair, balanced and understandable
isset out on page 97.
Jan Frykhammar
Non-Executive Chair
17 April 2025
Our governance framework
The Board
The Board is responsible for the overall leadership of the Group and setting the Group’s values and
standards, with the overall aim of delivering shareholder value. Principally, we achieve this through:
>
Approving the Group’s business strategy proposed by management, as well as setting its purpose,
values, standards and culture and ensuring that these are aligned.
>
Oversight of effective Group risk management and internal control processes including a robust
assessment of the Group’s emerging and principal risks.
>
The approval of any changes relating to the Group’s capital, corporate and/or listing structure.
>
Oversight of the Group’s ESG strategy.
Board
See page 62
Division of responsibilities
See page 66
Board activities
See page 66
Audit Committee
>
Responsible for the integrity of the
Group’s financial reporting, including
scrutinising accounting policies, and
reporting to the Board on significant
reporting issues and judgements.
>
Monitors the effectiveness of internal
control and risk management systems
and the effectiveness and objectivity of
internal and external auditors.
>
Approves the internal audit plan and
recommends the appointment of the
external auditor.
Read the Audit Committee report on pages
72 to 76.
Remuneration Committee
>
Ensures there is a formal and
transparent process for establishing
theDirectors’ Remuneration Policy.
>
Approves individual remuneration
packages of the independent Non-
Executive Chair, Executive Directors
and the wider workforce.
>
Approves the overall Remuneration
Policy for the Group including reviewing
the design and development of share
plans operated for Executive Directors
and others requiring shareholder
approval, and approves and assesses
performance targets where applicable.
>
Reviews workforce remuneration
practices and policies when setting
executive remuneration, as well as the
alignment of incentives and awards
with culture.
Read the Remuneration Committee report
on pages 77 to 93.
Nomination Committee
>
Facilitates the Board in meeting its
responsibilities to plan and execute
timely Chief Executive Officer
succession and works with the Chief
Executive Officer to plan and execute
Executive Director succession.
>
Ensures suitable succession plans
are in place for the Board and senior
executives to achieve the Group’s
strategic objectives, ensuring plans are
based on merit and against objective
criteria.
>
Recommends appointments to the
Board and its principal Committees.
>
Oversees development of a diverse
pipeline in the executive succession
plan and talent management.
>
Assists the Board in the development of
a Group-wide approach to all forms of
diversity and inclusion.
Read the Nomination Committee report on
pages 68 to 71.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
65
Roles and responsibilities of the Board
The Board is the body responsible for the overall management
and conduct of the Group’s business. The Group’s governance
framework is designed to encourage a clear understanding
and delivery of its strategy. The Board has accountability for
the oversight, governance, direction, long-term sustainability
and success of the business and affairs of the Group and
is responsibleto stakeholders for creating and delivering
sustainableshareholder value.
The Board has delegated certain responsibilities to its Committees
and, in compliance with the Code, has established an Audit
Committee, a Nomination Committee and a Remuneration
Committee. The terms of reference for each of the Board’s
Committees were most recently updated and approved in
November2024 and are available to view on the Group’s website:
www. awavesemi.com/en/investors/corporate-governance/.
The Committee Chairs are responsible for reporting to the Board
on the Committees’ activities.
Board activities in FY 2024
During the year, the Board held five scheduled meetings, together
with a separate dedicated strategy day. The Board’s strategy
sessions centred around the financial performance of the Group,
scaling the business and expanding product offerings, along with
afocus on workplace engagement.
The Board makes decisions with a view to ensuring the long-term
success of the Group whilst taking into consideration the interests
of wider stakeholders as required under section 172(1) of the
Companies Act 2006. Board meetings are one of the mechanisms
through which the Board discharges this duty.
Further information about Board decisions is included in the
strategic report.
Culture
The Board remains deeply committed to fostering and nurturing
the Group’s collaborative and innovative culture, rooted in values
of integrity, inclusivity and agility. Together with the management
team, we firmly believe that the ingenuity and adaptability of our
engineering talent are paramount to the Group’s achievements.
Our company boasts a highly technical and proficient management
team that has cultivated an engineering-centric environment,
emphasising results orientation and customer focus. This
approach has empowered us to attract and retain some of the
finest engineering minds in the interconnected world. Research
and development/engineering comprise a significant 89% of
our workforce, highlighting our dedication to innovation and
forwardthinking.
Our culture and values serve as the bedrock of our operations,
guiding our interactions internally and externally. The Board takes
on the crucial responsibility of championing and monitoring our
culture as we evolve and expand.
We gather employee feedback through engagement surveys,
fostering a collaborative environment where every voice is valued.
This commitment drives progress, inclusivity, and exceptional
outcomes for our customers and stakeholders.
2024 Annual General Meeting
The Company’s Annual General Meeting (AGM) was held on
25June 2024. All resolutions put to the meeting were passed but
the Board did note that Resolution 16 to approve the Rule 9 waiver
received less than 67% in favour.
Resolution 16 sought to approve the Rule 9 waiver obtained
fromthe Takeover Panel which was originally obtained upon IPO.
Under Rule 9 of the Takeover Code, if someone acquires control
of30% or more of the voting rights of a Code-governed company
(or someone already holding more than 30% (but less than 50%)
ofthe voting rights acquires additional shares carrying voting
rights), Rule 9 requires that person to make a mandatory offer
to all of the Company’s shareholders. This resolution waives the
requirement for the founders to make a mandatory offer if their
shareholding in the Company increases as a result of any buyback
of shares by the Company.
The Independent Non-Executive Chair, CEO and CFO continue to
engage with investors to understand their views and concerns.
Board site visits
The September 2024 Board programme was held at the
Alphawave’s San Jose (California, USA) offices. The two-day visit
incorporated the scheduled Board and Committee meetings and
also provided the Board the opportunity to meet with staff over
breakfast as part of our workforce engagement. Additionally,
the two-day November 2024 Board programme was held in
Alphawave’s Toronto (Canada) headquarters facilitating in-person
engagement between Board members and senior management
and the Board also participated in opening the new office floor in
the Toronto office.
Board reserved matters
To safeguard the areas material to the purpose, strategy and values
of Alphawave, the Board retains a schedule of matters reserved for
its decision.
Board composition
The Board consists of six Directors: an independent Non-Executive
Chair, the CEO, two Executive Directors and two independent
Non-Executive Directors. Jan Frykhammar has continued his role
as independent Non-Executive Chair beyond the end of the financial
year, having assumed the position following the succession of
John Lofton Holt. He served as both Non-Executive Chair and
Audit Committee Chair until 22 March 2025. Victoria Hull retired as
Remuneration Committee Chair in June 2024, succeeded by David
Reeder. Susan Buttsworth retired as Nomination Committee Chair in
June 2024, succeeded by Michelle Senecal de Fonseca.
The Code recommends that at least half the board of directors of a
company with an equity shares (commercial companies) category
listing, excluding the chair, should comprise non-executive
directors determined by the board to be independent in character
and judgement and free from relationships or circumstances
whichmay affect, or could appear to affect, the director’s
judgement. The Company regards all of the Non-Executive
Directors as ‘independent Non-Executive Directors’ within
the meaning of the Code and free from any business or other
relationship that could materially interfere with the exercise
oftheirindependent judgement.
Board leadership and Company purpose continued
Alphawave IP Group plc
Annual report and financial statements 2024
66
The Board also considers that it has complied with the
requirements of the Code in relation to the balance of Executive
and independent Non-Executive Directors on the Board, and the
composition of the Company’s Audit Committee, Remuneration
Committee and Nomination Committee.
The roles of the independent Non-Executive Chair
and the ChiefExecutive Officer
The roles of the Non-Executive Chair and the Chief Executive
Officer are separately held, with the division of responsibilities
clearly defined. The Non-Executive Chair leads the Board,
facilitating engagement at meetings by drawing on members’
skills, experience and knowledge, and is responsible for the Board’s
overall effectiveness and oversight of the management of the
Group. The Non-Executive Chair, in his executive capacity, provides
management support on key strategic, operational and financial
activities, and plays a pivotal role in stakeholder management and
investor relations. The Chief Executive Officer is responsible for all
executive management matters of the Group within the authority
delegated by the Board and for the implementation of Board strategy.
Company Secretary
The Company Secretary acts as the Secretary to the Board and all
Company Committees, and attends all Board and Committee
meetings. The Company Secretary supports the Chair and ensures
that the Board and Committee members receive all the information
needed to perform their roles, including receiving papers in a timely
manner. The Company Secretary advises the Board on legal and
corporate governance matters, including the Code, UK Listing Rules
and other statutory and regulatory requirements. Additionally, the
Company Secretary facilitates the Directors’ induction programmes,
assists with their professional development, and provides advice
and support to the Directors when required.
Non-Executive Director for Workplace Engagement
Michelle Senecal de Fonseca as Non-Executive Director for
Workplace Engagement serves as a crucial link between the
Board and the workforce. She ensures employee perspectives are
represented in the boardroom, develops and oversees employee
engagement initiatives and communicates Board decisions to
the workforce. She also collaborates with relevant stakeholders
on strategic workforce issues, ensuring that employee interests
are considered in all strategic decisions. This role is integral to
fostering a positive and inclusive workplace culture, promoting
employee satisfaction and productivity, and driving overall
business success.
Meeting attendance
The names of the Directors who were in place at the end of FY
2024 are set out in the table below together with their attendance
at Board and Committee meetings held. All meetings are able to be
held virtually to allow greater participation but at least one meeting
per year is held in person.
Each Director’s attendance at Board and Committee meetings
is considered as part of the formal annual review of their
performance. Directors are encouraged to attend all Board and
Committee meetings but sometimes due to time differences
or prior business activities a Director may not always be able to
attend. When this happens and a Director is unable to attend a
Board or Committee meeting, they continue to receive all papers.
They can communicate their comments and observations on
the matters to be considered at the meeting in advance via the
Non-Executive Chair, the Company Secretary or the relevant Board
Committee’s Chair for raising, as appropriate, during the meeting.
The absent Director is kept up to date after the meeting on any
decisions taken and feedback provided when appropriate.
In addition to the scheduled Board and Committee meetings, the
Board has regular contact to ensure comprehensive coverage of
critical business developments, emerging issues and opportunities.
Contingency arrangements are also in place to address any Board
decisions or approvals needed outside of these regular meetings.
The Non-Executive Chair holds regular meetings with each of the
Non-Executive Directors.
Details of our business model, strategy and key risks for the
business can be found in our strategic report.
The table below shows the number of scheduled Board and
Committee meetings attended by each Director during the
yearagainst the total number of possible meetings in respect
ofeach Director.
1. The composition of the Board and its Committees is shown as at 31 December 2024 and remains unchanged as at the date of this document.
2. The Market Disclosure Committee has been omitted from the above table as it meets on an ad hoc basis, rather than a scheduled basis. It met
15times during the period under review.
3. The Board held several additional ad hoc and sub-committee meetings during the period to deal with urgent matters. All Board members who were
able to attend did so.
4. Weili Dai joined the Board as Alternate Director to Sehat Sutardja in June 2024. In September 2024 Weili Dai became Interim Executive Director
upon the passing of Sehat Sutardja.
5. Jan Frykhammar became independent Non-Executive Chair of the Board of Directors on 6 December 2024.
6. Rahul Mathur, the Chief Financial and Chief Operating Officer, was appointed to the Board of Directors on 6 December 2024.
Board and Committee meeting attendance
Board member
1,2
Board
3
Audit
Committee
Remuneration
Committee
Nomination
Committee
Tony Pialis
Weili Dai
4
Jan Frykhammar
5
Michelle Senecal de Fonseca
David Reeder
Rahul Mathur
6
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
67
Attended meeting Did not attend meeting Not required to attended meeting
Dear shareholder
I am pleased to present our fourth Nomination Committee report,
covering the year ended 31 December 2024. In March 2025, we
announced that effective 22 March 2025, Jan Frykhammar would
become Chair of the Nomination Committee. A strong Nomination
Committee ensures effective governance and long-term success
by identifying and recruiting talented leaders, planning for future
leadership transitions, evaluating Board performance and
upholding high governance standards. This helps the organisation
adapt to changes and achieve sustained growth.
During 2024, the Committee diligently managed changes to the
Board by ensuring orderly succession plans were in place for
key members of the executive team. Additionally, the Committee
conducted a thorough review of the independence, experience, and
diversity of the independent Non-Executive Directors, ultimately
recommending their re-election to the Board. The Nomination
Committee affirmed that these Directors were independent in
character and judgement, with no relationships or circumstances
likely to affect their impartiality.
Purpose and role
The Committee is an important component of the Company’s
governance framework and the Group’s strategy. The Nomination
Committee is responsible for ensuring that the Company has
the executive and non-executive Board leadership it requires,
both nowand for the future. It reviews, and challenges gaps
in, succession plans for all key senior roles to ensure the
organisation’s long-term stability. It also seeks to ensure that
talented individuals are provided with opportunities to develop.
Committee composition
For the period up until 22 March 2025, the Committee comprised
myself as Chair, Jan Frykhammar and David Reeder. The current
members are Jan Frykhammar who chairs the Committee, David
Reeder and myself; all independent Non-Executive Directors. The
biographies of eachmember of the Committee are set out on the
Board of Directors pages.
The UK Corporate Governance Code 2018 (the ‘Code’)
recommends that a majority of the members of a nomination
committee should comprise independent non-executive directors.
The Board considers that the Company complies with the
recommendations of the Code in this respect.
Meetings and attendance
Three scheduled meetings were held in 2024. The Nomination
Committee Chair reported to the Board on the key matters
discussed.
Committee evaluation
The Committee’s performance and effectiveness were reviewed
as part of the wider Board evaluation. The review stated that the
Committee was performing well. All members allocated sufficient
time to the Committee with quality discussion and debate.
Focus and key activities in 2024
During 2024, the Nomination Committee ensured the Board’s
composition remained effective and aligned with the Group’s
strategy and values. This included reviewing the Board’s structure
and identifying potential candidates. We extend our heartfelt
gratitude to Susan Buttsworth, Victoria Hull, Rosalind Singleton
and Paul Boudre, who retired on 25 June 2024, for their exceptional
service. Their contributions have been invaluable. We also
acknowledge John Lofton Holt, who stepped down as Executive
Chair and Executive Director on 6 December 2024. We have
welcomed Rahul Mathur, our Chief Financial and Chief Operating
Officer, appointed to the Board on the same date. His expertise
will be a great asset. We remember the late Sehat Sutardja, whose
passing in September 2024 was a great loss to the semiconductor
world. We appreciate Weili Dai for stepping in as Interim Executive
Director, ensuring continuity and stability.
Looking ahead, the Board is committed to driving strategic growth,
enhancing governance practices and fostering innovation. We aim
to strengthen our leadership team, promote diversity and ensure
our Board composition continues to support the Group’s long-term
objectives.
The Committee reviewed the training needs of the Directors
and ensured there was suitable time on the Board agenda for
Company-appropriate training.
Director independence and time commitment
The Nomination Committee considers that the independent
Non-Executive Directors continue to demonstrate effective
performance, enthusiasm and commitment to the role and have
sufficient time to meet their responsibilities.
The Nomination Committee is satisfied that the Board has
the appropriate range of skills, experience, independence and
knowledge of the Group to enable it to discharge its duties and
responsibilities effectively.
The Committee supports the Board’s
efforts in fostering growth and ensuring
long-term success by adapting to the
organisation’s evolving needs.
Michelle Senecal de Fonseca
Chair of the Nomination Committee until 22 March 2025
Composition, succession and evaluation
Nomination Committee report
Alphawave IP Group plc
Annual report and financial statements 2024
68
Focus areas for 2025
As part of the Nomination Committee’s remit, it will look at the
following key tasks:
>
Full annual evaluation of effectiveness of the Board and its
Committees.
>
A review of the Board composition, skills matrix and succession
planning, for the Board and senior management team.
>
Setting the agenda for diversity strategies for the Group, and
monitoring the outcome of such strategies.
>
Evaluating the CEO’s effectiveness within the Group.
>
Evaluations will be carried out as the Company matures, to
ensure that the composition of the Board continues to be
appropriate for the needs of the Group and its long-term
success.
>
People continue to be the heart of our business and the
Committee will prioritise the development of the Group’s talent,
succession and development offering and look to implement
any further improvements that can be made. The Committee
will also seek to drive forward further progress towards our
diversity goals.
External Board evaluation
The Code recommends that listed companies conduct an external
board evaluation at least every three years. The third annual
evaluation of the operation and effectiveness of the Board, its
Committees and individual Directors took place in October 2024.
The external evaluation was facilitated by BoardClic AB, using
a tailored questionnaire structured to provide Directors with an
opportunity to express their opinions on the efficiency of the Board
and its Committees, the focus and functionality of meetings and
answering specific questions. TheBoard completed evaluation
questionnaires split into eight sections with an additional separate
section each covering Directors’ self-appraisal, and fellow
Directors’ appraisal. Theresponses were collated and analysed by
BoardClic AB.
Board evaluation summary
As part of the external evaluation, the results have been
benchmarked against over 1,000 board evaluations across 400
organisations and 3,000 board members. The results of the survey
were encouraging, indicating progress across several critical areas.
Noteworthy achievements include:
Strategic alignment:
>
The forward meeting plan and individual agendas effectively
mirror the Board’s strategic priorities.
>
The Board responds well to swiftly changing business
conditions.
Effective governance:
>
The relationship between Non-Executive Directors and the
ChiefExecutive Officer remains robust.
>
Oversight of strategic implementation has been diligent.
>
The Board actively contributes to strategy development.
>
The Company Secretary and training programmes provide
essential support.
Board composition:
>
The evaluation affirmed a well-balanced Board composition.
>
Discussions centred on attributes crucial for future
appointments and succession planning.
While the findings were positive, there’s always room for
improvement and the Committee is focused on improving diversity.
As part of a balanced process, we will look to refine our practices.
Looking ahead, the Chair’s priorities for the coming year will align
with the evaluation outcomes.
The Board intends to comply with the Code guidance that an
externally facilitated evaluation should take place at least every
three years.
Our approach to election and re-election
The Board has opted to comply with provision 18 of the Code
where all Directors stand for re-election at each Annual General
Meeting. Accordingly, all Directors will stand for re-appointment
atthe Company’s 2025 AGM.
The Board considers that all the current Directors continue to be
effective, are committed to their roles, and have sufficient time
available to perform their duties. The Board therefore recommends
the election of all Directors.
Board training
The Directors receive training and development throughout their
tenure. The Board and its Committees receive regular updates on
relevant legal, regulatory and financial developments, changes in
best practice and environmental, social and governance matters
from subject experts, including the Company’s external lawyers
and Company Secretary.
The training needs of the Directors are periodically discussed at
Board meetings. A corporate governance update is a standing item
at all Board meetings. Additional training is available on request, so
that Directors can update their skills and knowledge as applicable.
The Board plans training on a forward-looking basis, and upon
collecting feedback from Non-Executive Directors on topics of
interest. Board members receive formal papers a week ahead of
each Board or Committee meeting, which enables them to make
informed decisions on the issues under consideration. In addition
to formal Board meetings, the Non-Executive Chair maintains
regular contact throughout the year with the Chief Executive
Officer, Chief Financial Officer and Group management team to
discuss specific issues. The Company Secretary acts as an adviser
to the Board on matters concerning governance and ensures
compliance with Board procedures. All Directors had access to the
Company Secretary’s advice throughout 2024. Directors may also
take independent professional advice at the Company’s expense
if required. In the event that any Director has concerns about the
running of the Group, or a proposed action, that cannot be resolved
within the Board forum, these may be reflected in the Board
minutes. The Company Secretary circulates minutes of each Board
and Committee meeting following the meeting for comment and
approval to ensure an accurate record is captured.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
69
Composition, succession and evaluation continued
Nomination Committee report
Diversity
At Alphawave Semi, we take diverse representation and the bold
ideas it fosters seriously from the top down. Diversity is one of
our strongest assets, and we are committed to recognising and
appreciating our rich culture. Promoting freedom of thought and
opinion in a respectful environment is critical to our success.
Our decisions are rooted in considering each other’s thoughts
and opinions respectfully and working towards a greater common
goal. We recognise the importance of having a diverse Board,
including in terms of gender and ethnicity. Board members with a
broad range of social, educational and professional backgrounds,
alongwith different skills, experiences and cognitive strengths,
contribute to a high-performing business.
Management believes that our engineering-focused workforce,
management teams, and diverse and experienced Board of
Directors differentiate us from the competition and are critical to
our success in the marketplace.
The Company has met the following FCA diversity targets
(asrequired by Listing Rule 6.6.6 R(9):
>
At least one member of the Board being from an ethnic minority
background (2024: two).
>
At least one senior Board position being held by a woman (SID).
Due to changes at Board level in 2024, we have not met the
requirement for having 40% of the Board being women, but note
that gender diversity in leadership is crucial for fostering inclusive
decision-making and driving innovation. I have been appointed
as Senior Independent Director, a milestone that underscores
our commitment to promoting diversity and strengthening our
leadership team.
Men 4
Women 2
Not specified/
prefer not to say
—
Men 67%
Women 33%
Not specified/
prefer not to say
—
Men 3
Women 0
Not specified/
prefer not to say
—
Men 9
Women 1
Not specified/
prefer not to say
—
Men 90%
Women 10%
Not specified/
prefer not to say
—
Number of
Board members
Percentage of
the Board
Number of senior
positions on the Board
(Chair, CEO and CFO)
Number in executive
management
Percentage in
executive management
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(Chair, CEO and CFO)
Number in
executive
management
Percentage in
executive
management
White British or other
White (including
minority-white groups) 4 67% 2 4 40%
Mixed/Multiple
ethnic groups — — — — —
Asian/Asian British 2 33% 1 6 60%
Black/African/
Caribbean/Black British — — — — —
Other ethnic group,
including Arab — — — — —
Not specified/
prefer not to say — — — — —
Board gender diversity
As of 31 December 2024, for the purposes of FCA disclosures, ‘executive management’ is defined as the most senior executive
body below the Board and the Company Secretary, in accordance with Listing Rule 6.6.6 R(10).
However, the Company Secretary is not a member of the management team; therefore, as set out earlier in this report,
themanagement team currently comprises one female and nine male colleagues.
Alphawave IP Group plc
Annual report and financial statements 2024
70
Approach to data collection
Disclosures are collected based on the company’s financial
year-end. At Alphawave Semi, gender and ethnicity data for the
Board and senior management are compiled from information
heldby the Company Secretary and individual confirmations.
These confirmations are gathered annually as part of our
Directoryear-end process.
Board experience
Financial M&A Strategy
Semi-
conductors Telecoms
Data
networking
Tony Pialis
Weili Dai
Jan
Frykhammar
Michelle
Senecal de
Fonseca
David Reeder
Rahul Mathur
Board geographic diversity
Tony Pialis
Weili Dai
Jan Frykhammar
Michelle Senecal de Fonseca
David Reeder
Rahul Mathur
When considering Board appointments and internal promotions at
a senior level, the Group will continue to adhere to the Company’s
Equal Opportunities and Dignity at Work Policy. This ensures
that all decisions are made with a commitment to diversity
and inclusion, while strictly offering each post on merit against
objective criteria to the best available candidate. The Group will
also take into account relevant voluntary guidelines in fulfilling their
role regarding diversity.
The Nomination Committee will continue to evaluate the structure,
size, and composition of the Board and its Committees when
contemplating new appointments and succession planning for
the year ahead. A range of diversity factors will be considered to
determine the optimal composition, alongside the need to balance
and progressively refresh the Board’s makeup over time.
awavesemi.com/wp-content/uploads/2025/01/Equal-
Opportunities-and-Dignity-V.1.pdf.
Succession planning, Board independence
andtenure of service
New Directors will typically be appointed by the Board and then
putforward for election by shareholders at the subsequent AGM.
All Non-Executive Directors are appointed for initial terms of
two three-year terms and may be terminated by either party
upon one month’s written notice or by shareholder vote at the
AGM. The Non-Executive Directors do not have any entitlement
to compensation (or payment in lieu of notice) if they are not
re-elected by shareholders following any retirement.
Full details of the remuneration of the Non-Executive Directors
canbe found in the Directors’ remuneration report.
Michelle Senecal de Fonseca
Chair of the Nomination Committee
17 April 2025
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
71
Dear shareholder
I am presenting this report as I was Chair of the Committee until
22 March 2025 when I stood down as a member of the Committee
as a consequence of my taking on the role as Independent
Non-Executive Chair of the Board. The report provides a summary
of the Audit Committee’s role and activities for the year ended
31December 2024, and is intended to provide an understanding
of the work the Committee has done and to provide an insight into
how the Committee has discharged its responsibilities. I trust you
will find this report to be informative and that you take assurance
from the work we have undertaken.
Over the course of the year, the Committee and I have
concentrated on ensuring consistency and continued accuracy
of financial reporting, compliance with our debt covenants,
monitoring the performance of the external auditors, monitoring
the progress on implementation of the ERP system and discussing
with management the treatment of complex transactions such as
the 2030 Convertible Bonds issued in December 2024. Further, the
Committee reviewed management’s roadmap for improvements in
financial controls, noting progress made during 2024. The Group
will continue to make investments to improve the controls over
financial reporting consistent with its planned roadmap.
On 24 June 2024, management received a preliminary inquiry
from the Financial Conduct Authority (FCA) following their review
of the trading updates released in January and April 2024. The
FCA raised concerns about (i) issuing the updates to guidance
for 2023 in the January 2024 trading update, and (ii) controls over
financial reporting. We provided a response in July 2024, and
in December2024 FCA closed this preliminary enquiry without
further action required. We integrated the valuable feedback
we received from the FCA into trading updates starting in
January2025 to provide additional clarity to our investors.
Whilst this Audit Committee report contains some of the matters
addressed during the year, it should be read in conjunction with the
external auditor’s report and the financial statements of the Group
and Company in general.
The Audit Committee reviewed significant accounting and other
related matters with robust challenge and debate. The Audit
Committee has reviewed the content in the annual report and
believes that this explains our strategic objectives and is fair,
balanced and understandable.
Purpose and role
The role of the Audit Committee is to assist with the Board’s
oversight responsibilities in relation to the Group’s financial and
narrative reporting, the effectiveness of the internal control and
risk management framework, internal audit (where appropriate)
and the independence and effectiveness of the external auditor.
The following sections of this report describe the key activities of
the Audit Committee in each of these areas. The Board reviewed
and approved the terms of reference of the Audit Committee.
Formore information on the Committee’s terms of reference visit:
awavesemi.com/investors/corporate-governance/.
Committee composition
Since 22 March 2025, the Committee has comprised of
independent Non-Executive Directors. During the year
the Committee was chaired by myself; its other members
being Michelle Senecal de Fonseca and David Reeder.
Asof22March2025 the members of the Committee are now
David Reeder (Chair) and Michelle Senecal de Fonseca; both
independent Directors. TheBoard considers that given the size of
the Board and the status of the Company, it is sufficient to have just
two members of the Committee. The Committee acknowledges
that if the Company was a constituent of the FTSE 350 we would
not be compliant with the Code. The Board considers that the Audit
Committee as a whole complies with the requirements of the Code
in these respects. On 5 December 2024, we announced that our
Executive Chair had decided to leave the Company, and I assumed
the role of Independent Non-Executive Board Chair. Despite the
transition, I continued my responsibilities as Audit Committee Chair
through to our first Board Meeting of 2025. Although this dual role
was temporary, various changes to the Board at the time made an
immediate change impractical. This period of adjustment allowed
us to ensure a smooth transition and maintain stability within our
leadership team.
In 2024 the Group made investments in
people and infrastructure to strengthen
controls, improve predictable financial
execution and enable future growth.
Jan Frykhammar
Chair of the Audit Committee until 22 March 2025
Audit, risk and internal control
Audit Committee report
Alphawave IP Group plc
Annual report and financial statements 2024
72
Meetings and attendance
The Committee has a structured forward-looking planner
which reflects the financial cycle of the Company. This planner
drives the business to be considered at each meeting and is
regularly reviewed in conjunction with the Company Secretary
and management to ensure that it adequately reflects any areas
identified for additional focus.
Five scheduled meetings were held in 2024. The Executive Chair,
Chief Executive Officer, Chief Financial Officer and KPMG as
external auditor regularly attended the meetings.
Before each meeting, the Committee Chair meets with the CFO
and the external auditor to ensure there is a shared understanding
of the key issues to be discussed. Committee meetings are held
in advance of Board meetings to facilitate an effective and timely
reporting process. The Committee Chair provides a report to the
Board following each meeting.
The Committee meets privately without management present,
asnecessary, and also privately with the CFO after each scheduled
meeting. Private meetings are also held at least once a year with
the external auditor to allow any issues of concern to be raised.
Committee evaluation
This year, we conducted an internally facilitated evaluation of Board
effectiveness. As part of this assessment, our performance as
a Committee was thoroughly examined. I am delighted to report
that the evaluation affirmed our effective operation, and the Board
draws assurance from the quality of our work.
The Committee members possess a diverse and substantial
background in recent and relevant financial and commercial
experience across various industries. Furthermore, each
memberbrings competence that is directly applicable to our
sector. For additional insights, you can explore their biographies.
Focus and key areas in 2024
Key areas of focus for the Committee were the need for
a continued improvement of the finance systems and
improvementsin internal controls over financial reporting.
TheGroup made progress during 2024 on its ongoing
implementation of an Enterprise Resource Planning (ERP) system
and expects implementation to be completed in 2025. The Group
has outlined a roadmap which includes continued investment in
implementing additional financial systems and resources as well
as enhancing financial controls in key business cycles. In August,
the Group announced the appointment of Sameer Ladiwala as
Chief Accounting Officer, significantly improving the capabilities
ofthe management team.
The Committee also had deep-dive sessions on talent, capabilities
and organisational structure in finance. In addition, the Committee
continues to monitor the need for a permanent internal audit
function.
Focus areas for 2025
The Audit Committee will monitor progress of the implementation
of the ERP solution during the course of the year. We will also
assist management with the review of ongoing internal control
improvements.
The Committee will ensure that the relevant provisions of the new
UK Corporate Governance Code are implemented. It will also be
taking steps to comply with Provision 29 of the new Code which
is effective from 1 January 2026, requiring the Board to make
a declaration of effectiveness of the material controls as at the
balance sheet date, together with a focus on how it manages
emerging risks
Financial reporting
The primary role of the Audit Committee in relation to financial
reporting is to review and monitor the integrity of the financial
statements, including annual and half-year reports, results
announcements and any other formal announcements relating
tothe Group’s financial performance.
In considering the Group’s half-year report for the six months
ended 30 June 2024, the Committee conducted a page turn of
the report at its meeting in September 2024 and subsequently
recommended the report to the Board for approval.
The Audit Committee approved the planned scope of the audit
of the Company’s and Group’s 2024 annual financial statements
in November 2024, including materiality, the audit cycle and the
proposed timetable.
This Audit Committee report will show how the Group’s financial
reporting process is monitored and reviewed.
In the preparation of the Company’s and Group’s 2024 annual
financial statements, the Audit Committee has assessed
the accounting principles and policies adopted, and whether
management had made appropriate estimates and judgements.
The Audit Committee also reviewed and challenged the alternative
performance measures used by the Group. This review included
evaluating our accounting policies as they relate to the alternative
performance measures, the selection and overall presentation
of the alternative performance measures and the clarity and
consistency of the reconciliations to IFRS measures.
In doing so, the Audit Committee discussed management
reportsand enquired into judgements made. The Audit
Committeereviewed the reports prepared by the external
auditoron the 2024 annual report.
Jan Frykhammar
Chair of the Audit Committee
17 April 2025
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
73
Audit, risk and internal control continued
Audit Committee report
The Audit Committee, together with management, identified significant areas of financial statement risk and judgement as described below.
Description of
significant area
Work undertaken by the Audit Committee
andoutcomes
Revenue recognition
Revenue recognition for the Group’s revenue streams is
complex. This is an area of focus due to the nature of the
licensing transactions requiring management to exercise
significant judgement.
The Committee reviewed the assumptions and disclosures
around revenue recognition made by management including
critical judgements required in recording revenue from licensing
of IP, non-recurring engineering projects and the sale of silicon
products.
The Committee was satisfied with the explanations provided and
conclusions reached in relation to revenue recognition and the
Group’s compliance with IFRS 15.
Capitalisation of R&D expenses
The Group has capitalised a significant amount of expense
related to investments in products expected to have revenue in
the future, and therefore accounting for R&D capitalisation is a
key area of focus due to the level of judgement involved.
For capitalised development expenditure, the Committee
considered the key judgements made in determining project
costs eligible for capitalisation under the Group’s R&D capital
expenditure policy. This includes judgements made for future
cost estimates and future revenue expectations. The Committee
noted that the projects had been extensively reviewed, including
key forecast assumptions, by the management team.
Key forecast assumptions included estimated future internal
and external expenditure, including external capital expenditure,
progress to date and expected cash flow from future sales.
The Committee subsequently approved the amount of R&D
capitalised for2024.
Going concern
The Group’s going concern assessment assumes that there
will be no further investment in WiseWave and that WiseWave
will be adequately funded by external financing sources to
continue to discharge its liabilities with the Group.
In December 2024, the Company raised US$146.7m in net
proceeds from issuance of the 2030 Convertible Bonds.
TheGroup had US$180.1m in cash and cash equivalents as
at 31 December 2024. Management prepared a stress case
analysis to assess the Group’s andCompany’s ability to continue
as a going concern. The Committee reviewed this analysis and
challenged management on the assumptions used in the going
concern assessment. The Committee was provided satisfactory
responses and agreed with the conclusions reached in the going
concern assessment.
WiseWave contract asset recoverability
Having fulfilled the IP licence performance obligations in the
five-year subscription licence agreement with WiseWave at the
end of 2024, the Group has recognised all IP licence revenue
in the agreement and has also recognised a contract asset of
US$14.4m, which is due to be settled by WiseWave over the
remainder of the term of the agreement. Judgement has been
used in determining the likely recoverability of this contract
asset and the level ofanycredit loss provision required.
Management has visibility of the operations and prospects
of WiseWave through the directorships Alphawave holds
on WiseWave’s board. Management have explained to the
Committee WiseWave’s historic payment pattern, itsnear-term
funding plans (including the prospects of securing funding from
external parties other than Alphawave) and the actions available
to Alphawave in the event of non-payment by WiseWave. The
Committee is satisfied with management’s assessment that no
additional expected loss provision is required for the WiseWave
contract asset and that it is appropriate to deem it recoverable.
Alphawave IP Group plc
Annual report and financial statements 2024
74
Fair, balanced and understandable
At the request of the Board, the Audit Committee has reviewed the
content of the 2024 annual report and considered whether, taken
as a whole, in its opinion it is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Group’s position, performance, business model and strategy.
The Committee was provided with an early draft of the annual
report and provided feedback on areas where further clarity or
information was required in order to provide a complete picture
of the Group’s performance. The final draft was then presented
to the Audit Committee for review before being recommended
for approval by the Board. When forming its opinion, the Audit
Committee reflected on discussions held during the period and
reports received from the external auditor, and the following
measures were adopted to ensure that this annual report meets
that requirement:
>
Factual content was verified by management.
>
Members of senior management undertook a comprehensive
review of the document to consider messaging and balance.
>
The Audit Committee reviewed a full draft of the document,
together with a summary of management’s approach to the
preparation of the narrative sections and the annual financial
statements.
>
The Audit Committee considered whether there was
consistency between the key messages in this annual report
and the Group’s position, performance and strategy, and
between the narrative sections and the Group’s annual financial
statements.
>
It also considered whether all key events reported to the Board
and its Committees during the year, both positive and negative,
were adequately reflected, together with reporting by the
external auditor of any material inconsistencies.
>
The Audit Committee reviewed and challenged the use of
alternative performance measures by the Group as described
inthe financial review.
>
A comprehensive review of the entire annual report was carried
out by the Directors.
>
Feedback from the Audit Committee and other Directors on
areas that would benefit from further clarity was incorporated
into this annual report ahead of final approval.
Following the Committee’s review, the Directors confirm that,
in their opinion, the 2024 annual report, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position
andperformance, business model and strategy.
Risk management and internal control
The Audit Committee’s responsibilities include a review of the risk
management systems and internal controls to ensure that they
remain effective and that any identified weaknesses are properly
dealt with. The Audit Committee:
>
Reviews annually the effectiveness of the Group’s internal
control framework.
>
Reviews reports from the external auditor on any issues
identified in the course of their work, including any internal
control reports received on control weaknesses, and ensures
that there are appropriate responses, from management.
The Audit Committee’s responsibilities include a review of the risk
management systems and internal controls to ensure that they
remain effective and that any identified weaknesses are properly
dealt with. The Group has internal controls and risk management
systems in place in relation to its financial reporting processes and
preparation of consolidated accounts.The internal control systems
include the elements described below.
Element Approach and basis for assurance
Control
environment
The Group is committed to the highest standards of business conduct and seeks to maintain these standards across all of its
operations. The Group has adopted a Code of Business Conduct which provides practical guidance for all staff. There are also
supporting Group policies and employee procedures in place for the reporting and resolution of suspected fraudulent activities.
The Group has an appropriate organisational structure for planning, executing, controlling and monitoring business operations
in order to achieve Group objectives. Lines of responsibility and delegations of authority are documented.
Risk
assessment
Whilst risk management is a matter for the Board as a whole, the day-to-day management of the Group’s key risks resides
with the senior management team and is documented in a risk register. The Executive Risk Committee is responsible for
reviewing the risk register. A review and update of the risk register is undertaken by the Audit Committee on an annual basis.
The management of identified risks is delegated to the senior management team, and regular updates are given to executive
management at monthly meetings.
Control
activities
The Group and its operating units are continuing to improve the control procedures designed to ensure complete and accurate
accounting for financial transactions. Measures taken during 2024 include expanding the finance team capabilities and improved
management reviews. The Group continues to make investments to strengthen its internal controls over financial reporting,
including implementation of a new ERP system scheduled to go live in 2025, hiring additional finance talent, building a shared
services centre, reorganising the accounting team and formalising controls over key activities in certain business processes.
Monitoring and
corrective action
The Audit Committee meets at least four times a year and, within its remit, reviews progress with improvements and the
effectiveness of the Group’s system of internal controls.
In addition to these internal assurances, the Audit Committee took into account the findings from the external auditor’s
evaluation of the internal control environment performed during the audit and feedback from the work of a specialist internal
controls consultant, as well as its own observations throughout the period under review. The Audit Committee acknowledged
the findings of the external auditor in relation to the Group’s risk management and internal control systems and where areas
for improvement were identified, there were processes in place to ensure that the necessary actions would be taken by
management and that these outcomes would be monitored.
The Board considered the Audit Committee’s findings in relation to the effectiveness of the Group’s systems of risk
management and internal control, and was satisfied that throughout the year under review and up to the Last Practicable
Date,the Group’s risk management and internal control environment continued to be effective.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
75
Audit, risk and internal control continued
Audit Committee report
Going concern and viability statement
The Audit Committee reviewed management’s schedules
supporting the going concern assessment and viability
statements.These included the Group’s medium-term plan
andcash flow forecasts for the period to the end of 2027.
The Audit Committee discussed with management the
appropriateness of the three-year period to the end of 2027 and
discussed the correlation with the Group’s principal risks and
uncertainties as disclosed on pages 58 to 61. This three-year
period aligns with the Group’s internal forecasting framework,
reflects the Group’s high growth and evolving financial profile and
aligns with the Group’s external financial guidance.
The feasibility of mitigating actions and the potential speed of
implementation to achieve any flexibility required were discussed.
Scenarios covering events that could adversely impact the Group
were considered.
The Audit Committee evaluated the conclusions over going
concern and viability and the disclosures in the financial
statements and satisfied itself that the financial statements
appropriately reflect the conclusions.
For additional detail, please refer to the external auditor’s report
and strategic report contained in this annual report.
External auditor
During 2024, the Audit Committee approved the audit plan
and fee for the period ended 31 December 2024 and reviewed
KPMG’s findings regarding the audit of the financial statements
for the period ended 31 December 2023. The Audit Committee
regularly met separately with representatives from KPMG
without management present, and with management without
representatives of KPMG present, to ensure there were no issues
in the relationship between management and the external auditor
that needed addressing.
The Committee conducted a thorough assessment of KPMG LLP’s
independence and effectiveness as the external auditor. After
reviewing their performance and adherence to ethical standards,
the Committee is satisfied with KPMG LLP’s independence and
effectiveness in fulfilling their audit responsibilities.
Non-audit services provided by the external auditor
The external auditor is primarily engaged to carry out statutory
audit work. There may be other services where the external auditor
is considered to be the most suitable supplier by reference to
their skills and experience. It is the Group’s practice that it will
seek quotes from several firms, which may include KPMG, before
engagements for non-audit projects are awarded.
Contracts are awarded based on individual merits. The Audit
Committee oversaw the application of a formal policy on the
procurement of non-audit services. This policy is in place for the
provision of non-audit services by the external auditor, to ensure
that the provision of such services does not impair the external
auditor’s independence or objectivity and will be assessed going
forward in line with the FRC’s Ethical and Auditing Standards.
The review of the half-year report, an assurance-related non-audit
service, was approved as part of the Audit Committee approval
of the external audit plan. All permitted non-audit services require
approval in advance by either the Audit Committee Chair, the Audit
Committee or the Board, subject to the cap of 70% of the fees paid
for the audit in the last three consecutive financial years.
Approved and signed on behalf of the Audit Committee.
Jan Frykhammar
Chair of the Audit Committee
17 April 2025
Alphawave IP Group plc
Annual report and financial statements 2024
76
Dear shareholder
As Chair of the Remuneration Committee, I am pleased to present
our fourth report on Directors’ remuneration.
This report is divided into three sections:
>
This introductory letter, which describes the main decisions
made in respect of and during the year, as well as detail on the
context in which these decisions were made.
>
The Remuneration Policy outlines the Remuneration
Committee’s approach to Directors’ pay and will be presented
for shareholder approval at this year’s AGM.
>
The annual report on remuneration details Directors’ pay for
2024 and outlines the proposed implementation of the Policy
for 2025, pending approval of the new Policy.
This year, the Committee focused on reviewing the Policy to align
with the Group’s long-term business strategy while upholding high
standards of corporate governance.
Purpose and role
The Remuneration Committee is a formal committee
ofthe Boardand its remit is set out in its terms of
reference, which canbefound on the Company’s
website awavesemi. com/ investors/corporate-governance/.
The Committee’s performance against these terms of reference is
reviewed on an annual basis and the Committee is satisfied that it
has acted in accordance with its terms of reference during the year.
The primary purposes of the Committee, as set out in its terms of
reference, are:
>
To make recommendations to the Board on the Group’s
framework of executive remuneration.
>
To determine individual remuneration packages within that
framework for the Executive Directors and certain senior
executives.
>
To oversee the operation of the Group’s share schemes.
The Committee is authorised to seek information from any Director
and employee of the Group and to obtain external advice.
The Committee is solely responsible for the appointment of
external remuneration advisers and for the approval of their fees
and other terms.
No Director or other attendee takes part in any discussion
regarding his or her personal remuneration.
Committee composition
The Remuneration Committee is comprised entirely of independent
Non-Executive Directors. Until 22 March 2025, I was Chair of the
Committee, at which point Michelle Senecal de Fonseca took
on that role, I remain a member of the Committee and its other
members are Jan Frykhammar and Michelle Senecal de Fonseca.
Thebiographies of each member of the Committee are set out on
the Board of Directors pages.
Meetings and attendance
Four scheduled meetings were held in 2024, with three ad hoc
meetings. The Committee asked the Executive Directors and
the VP of People, Places and Culture to attend meetings and
assist its discussions. This excluded matters connected to their
own remuneration, service agreements or terms and conditions
of employment. The Committee takes care to recognise and
manage conflicts ofinterest when receiving views from Executive
Directors or seniormanagement. The Committee reserves the
right to conductin full or start its meetings without executive
managementpresent when it wishes to do so. The Committee
andthe Chair also engage regularly with the remuneration
consultants and Head of Governance.
Committee evaluation
The Committee’s performance and effectiveness were reviewed
as part of the wider Board evaluation. The review stated that
the Committee was well chaired and that all members allocated
sufficient time to the Committee with quality discussion and debate.
Focus and key activities in 2024
The following matters were considered and discussed in 2024:
>
The Committee oversaw the leadership transition announced
on 5 December 2024 whereby, effective 6 December 2024,
John Lofton Holt retired and stepped down as Executive Chair
and anExecutive Director; Jan Frykhammar assumed the role
of Non-Executive Chair of the Board; and Rahul Mathur took on
the role of Chief Operating Officer alongside his existing role
asChief Financial Officer and joined the Board of Directors.
>
Aon were brought onboard to assess our compensation
programme. This work will continue into 2025.
>
We ensured our compensation philosophy supports the growth
of the business while prioritising employee engagement and
wellbeing.
The strategic importance of our
employees is reflected in our
remuneration philosophy and
implementation across theGroup.
David Reeder
Chair of the Remuneration Committee until 22 March 2025
Remuneration
Directors’ remuneration report
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
77
Remuneration continued
Directors’ remuneration report
Remuneration in context
The Committee’s approach to governing executive pay at
Alphawave Semi is to ensure a clear and rigorous focus on aligning
pay with performance, but equally to give due consideration to all
our key stakeholders.
With that in mind, this report contains the key drivers of our
decisions in relation to the Executive Directors’ remuneration
outcomes for the financial year.
This year we have operated under the current Remuneration Policy,
which was approved by shareholders at the AGM in June 2022.
Corporate performance
Strategic priorities
>
As highlighted at our Capital Markets Day in early
June2024, continued technology leadership in connectivity
andcompute solutions remains an important area of focus
forAlphawaveSemi.
>
We continue to increase scale and diversification with new
and existing customers who are leaders in connectivity and
compute. Over the course of the year we demonstrated
technology leadership through our announcements of:
>
First multi-protocol I/O connectivity chiplet for
high-performance compute and AI infrastructure (13 June).
>
1.2 Tbps connectivity for high-performance compute and AI
infrastructure with 9.2 Gbps HBM3E subsystem (20 June).
>
Launch of the first 3nm UCIe IP subsystem with TSMC
CoWoS Technology (30 July).
>
Scaling of UCIe to 64 Gbps to exceed 20 Tbps per mm
bandwidth density for chiplet connectivity (20 December).
>
We grew engineering and operational capabilities, scaling
headcount from 829 to 991 by 31 December 2024.
Financial performance
>
Annual bookings exceeded US$515.0m, up 34% (FY 2023:
US$383.9m), underpinning long-term growth targets.
>
Revenues of US$307.6m (FY 2023: US$ 321.7m), as we replaced
approximately US$152.4m of revenue from legacyChina
business (OpenFive and WiseWave) with our core offerings.
>
Adjusted EBITDA of US$51.1m (FY 2023: US$62.6m) and
adjusted EBITDA margin of 17% (FY 2023: 19%), as we improved
our profitprofile.
>
Successful execution of a US$150.0m Convertible Bonds
offering strengthens the balance sheet and supports the
Group’s ability to achieve its strategic objectives.
Stakeholder experience
Our shareholders
>
We are committed to take wider stakeholder experience into
account when making decisions on executive pay and we
have noted the performance of the shares and the factors
contributing to that performance.
>
Promoting share ownership is a key principle of Alphawave
Semi’s approach to remuneration across the Group. We want
all employees to be aligned with shareholders so they can
share in the success of the Group and be invested in its growth
story. The Chief Executive Officer, as founder of the business,
embodies this philosophy, having retained significant stock
ownership in the Company on IPO, to ensure he is aligned to the
experience of new (and indeed, old) investors intheCompany.
Our employees
>
In 2024, the average annual salary increase for the wider
workforce was 11%. All employees are eligible for a bonus, with
Q1 and Q4 bonuses paid in cash. There was no bonus in Q2 due
to business performance, and Q3 bonuses paid in RSUs.
>
Our compensation programme supports the Group’s mission
and values, aligning with our business strategy and goals
for growth and profitability. We communicate openly about
business goals and ensure the programme is consistent,
non-discriminatory and equitable for all employees,
regardlessof personal characteristics.
>
As a Canada-originated semiconductor business, we are
present in Canada, the United States, India and the APAC region.
To drive our success, it’s essential to competitively remunerate
our talent. Therefore, we benchmark our pay against the global
high-tech talent market to attract and retain top professionals.
>
In collaboration with our Workforce Engagement NED, the
Committee is dedicated to maintaining robust oversight of pay
practices and policies across the wider workforce. We ensure
that decisions regarding executive remuneration are made with
careful consideration of the broader workforce context.
2024 remuneration
The current Remuneration Policy was approved by a shareholder
vote of 99.97% at the AGM in 2022 and was designed to ensure
a strong link between remuneration, strategic priorities and the
delivery of objectives.
The Policy includes provision for Executive Directors to participate
in a Short-Term Incentive Plan (STIP) and Long-Term Incentive
Plan (LTIP). In the first two years of the Policy, the Executive
Directors chose to waive participation in these arrangements given
the early stage of the Group’s development. However, given the
swift evolution of the business, for 2024 the Committee believed
that it was appropriate to recast the Executive Director packages
and offer market-competitive remuneration to the CEO, including
market rate salary, bonus and equity incentives.
As noted in last year’s remuneration report, although Alphawave
IP Group plc is a UK listed company, in practical terms the talent
market in which we compete for senior executive talent is made up
of companies within the semiconductor sector, primarily based in
North America. The levels of remuneration including the long-term
incentives offered by these companies are significantly above
typical levels in the UK. Notably, such companies commonly award
a percentage of restricted stock units with no performance criteria
and annual vesting. However, in 2024 arrangements were within
the limits of the 2022 shareholder-approved Policy.
The Committee consulted with our largest shareholders before
making these changes and we were happy that the remuneration
report was strongly supported with a vote of 98.43% at the
2024AGM.
Alphawave IP Group plc
Annual report and financial statements 2024
78
Base salary
At the time of the IPO, Tony Pialis’ salary level was deliberately
positioned at the lower end of salaries for CEOs in the FTSE 250.
In 2024, the salary level was adjusted from £450,000 to £680,000.
The Committee’s intention is that this represented a one-time
‘right-sizing’ adjustment to a market-competitive level and that
future increases will be modest and generally no greater than
increases for our wider workforce while the Group remains at the
current scale.
STIP
The 2024 annual bonus for the Chief Executive Officer was based
on achievement of stretching targets against revenue (60%),
adjusted EBITDA (20%) and operating cash flow (20%), and the
maximum opportunity level was 150% of base salary.
Please see page 83 for full details of the targets and achievement
againstthem.
The formulaic outcome, based on the performance metrics, is
that the performance targets were not achieved and so no bonus
payout was due. Considering the underlying business performance
and other relevant factors, and to ensure alignment with long-term
goals and shareholder and stakeholder experience, the Committee
deemed this outcome fair and appropriate, and thus, no discretion
was exercised.
LTIP
An LTIP award was made to the CEO in 2024 with a face value
of 300% of salary, subject to stretching EPS growth and relative
TSRperformance conditions. Please see page 83 for details of
theaward.
2025 Remuneration Policy and implementation
>
During 2024, the Committee conducted a thorough review of
the Remuneration Policy to ensure it continues to meet the
business’ needs. The Committee concluded that the Policy’s
structure remains appropriate. However, given the competitive
talent market in the North American semiconductor sector, the
Committee believes it is essential to review and adjust incentive
opportunity levels to enhance competitiveness. Therefore, the
following changes to the Policy will be proposed for shareholder
approval at the 2025 AGM:
>
Adjustment of incentive levels: Revising incentive
opportunitylevels to better align with industry standards
andattract top talent.
>
Performance metrics: Each year, the Company will look at
the performance metrics to ensure they accurately reflect
the Group’s strategic goals and operational priorities.
>
These changes aim to ensure Alphawave remains
competitive in attracting and retaining high-caliber
professionals while supporting the Group’s growth and
profitability.
>
STIP: Proposed maximum opportunity increase from 150%
to 200% of base salary.
>
LTIP: Proposed maximum award level increase from 300%
to1,000% of salary.
These opportunity levels will only be realised by the Executive
Directors if ambitious performance targets are achieved and a
significant amount of value created for our shareholders. Incentive
arrangements in 2025 will be subject to stretching targets for the
following metrics:
>
STIP: Revenue (60%), adjusted EBITDA (20%), operating cash
flow (20%).
>
LTIP: Relative TSR (35% each vs constituents of the FTSE
250 and FTSE All-World Technology Indices), adjusted EPS
growth(30%).
The Committee carried out a consultation exercise with our largest
external shareholders, to explain the proposed changes and their
rationale. Shareholders consulted with were broadly supportive of
the proposed new Policy. Topics discussed during the consultation
included the Committee’s perspective on the relevant talent
market for executives, the CEO’s alignment with investors due to
his substantial shareholding as a founder and the rationale for the
selection of the two relative TSR peer groups.
By implementing these changes, the Committee is confident
that Alphawave Semi will continue to offer a compelling and
competitive compensation package, helping us attract and retain
the best talent while ensuring our leadership team remains aligned
with the long-term interests of our shareholders.
I hope you find that this report clearly explains the remuneration
approach we have taken and how we will implement the proposed
Policy in 2025. I look forward to your support at the 2025 AGM in
respect of the resolution relating to the Policy and this report.
David Reeder
Chair of the Remuneration Committee
17 April 2025
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
79
Remuneration continued
Directors’ remuneration report
Elements of the Directors’ remuneration
Short term Long term
Salary
Pension
and other
benefits
Bonus
Cash
Bonus
One‑third of any
bonus will be
deferred into
shares for a period
of two years
LTIP
Total
remuneration
Fixed Variable
How remuneration links to our strategy
Strategy
in action
Market leadership
Maintain pace of innovation and market leadership
by attracting andretaining talent
Expansion
Land and expand: broader and deeper
customerbase
Innovation
Leverage our IP to expand our product portfolio and
grow our custom silicon business
Measuring outcomes
2025
Annual bonus
2025‑26
LTIP
>
Revenue.
>
Adjusted
EBITDA.
>
Operating cash
flow before
working capital
changes.
> TSR
> EPS
Year ended 31 December
Component 2024 2025
Fixed pay
Base salary level
>
Tony Pialis, President & Chief Executive Officer:
£680,000
>
Sehat Sutardja, Executive Director: £85,000
(part-time working arrangement) until his passing
inSeptember 2024.
>
Weili Dai, Executive Director: £5,000 (part-time working
arrangement)
>
Rahul Mathur, Chief Financial Officer: £363,062
>
Tony Pialis, President & Chief Executive Officer:
£714,000
>
Weili Dai, Executive Director: £5,000 (part-time working
arrangement)
>
Rahul Mathur, Chief Financial Officer & Chief Operating
Officer: £389,387
Benefits
>
Private medical cover for the President & Chief
Executive Officer, and Chief Financial Officer
>
No change from 2024
Pension
>
No Executive Directors participated in 2024
>
The Chief Financial Officer is the only Executive
Director to participate in 2025
Variable pay
Annual bonus
>
President & Chief Executive Officer participated in 2024
STIP with a maximum opportunity level of 150% of
base salary
>
President & Chief Executive Officer and CFO are both
eligible to participate in 2025 STIP with a maximum
opportunity level of 200% of base salary, subject to
approval of the proposed Remuneration Policy
Long-term incentives
>
President & Chief Executive Officer participated in 2024
with an award level of 300% of base salary
>
President & Chief Executive Officer and Chief Financial
Officer & Chief Operating Officer will participate in 2025
with a maximum opportunity award level of 1,000%
of base salary, subject to approval of the proposed
Remuneration Policy
Alphawave IP Group plc
Annual report and financial statements 2024
80
Our governance
Our link between remuneration and strategy
Alphawave Semi’s strategic priorities as detailed on page 78 are
designed to maintain our leading technology position, enabling
it to expand its position at its existing customers and win new
customers, generating profitable growth whilst retaining and
motivating employees.
The current Remuneration Policy (the ‘2022’ Policy’), which was
approved by a vote of 99.97% at the AGM in 2022, is designed to
ensure a strong link between remuneration, strategic priorities and
delivery of objectives. An updated Policy will be put to shareholders
for approval at the 2025 AGM and follows the same principles,
updated to meet the evolving needs of the business. The details of
the proposed policy, including changes from the 2022 Policy, are
set out below.
Incentive scheme targets are carefully considered by the
Committee to ensure they reward performance and are correctly
calibrated. Targets used in the incentive schemes are then
monitored and progress measured by reference to many of the
reported KPIs. With the continuing development of the Group’s
approach to sustainability, we are committed to understanding
the most material ESG factors to Alphawave Semi as a business,
with a view to embedding these into the executive remuneration
framework, to align with the Group’s strategy, in future years.
For further details on how our Policy links to strategy, see the
Policy table on pages 82 to 84.
UK Corporate Governance Code 2018 (the ‘Code’)
–Provision 40 alignment
The table below explains how the Remuneration Committee
addressed the factors set out in Provision 40 of the Code when
determining the Remuneration Policy. As a founder of the
Company, the CEO retains a significant shareholding and, as a
result, is highly aligned with the Group’s financial performance and
the interests of our investors.
Clarity
Remuneration arrangements should be
transparent and promote effective engagement
with shareholders and the workforce.
The Remuneration Committee has aimed to incorporate simplicity and transparency into the design
and delivery of our Remuneration Policy. The remuneration structure is simple to understand for both
participants and shareholders and is aligned to the strategic priorities of the business.
We aim for disclosure of the Policy and how it is implemented to be in a clear and succinct format.
Simplicity
Remuneration structures should avoid
complexity and their rationale and operation
should be easy to understand.
Our remuneration arrangements for Executive Directors are purposefully simple, comprising of fixed
pay(salary, benefits), a Short-Term Incentive Plan (annual bonus scheme) and a Long-Term Incentive
Plan (LTIP).
Risk
Remuneration arrangements should ensure
reputational and other risks from excessive
rewards, and behavioural risks that can
arise from target-based incentive plans,
areidentifiedand mitigated.
The Policy includes a number of points to mitigate potential risk:
>
Defined limits on the maximum opportunity levels under incentive plans.
>
Provisions to allow malus and clawback to be applied, where appropriate.
>
Performance targets calibrated at appropriately stretching but sustainable levels.
>
Bonus deferral, LTIP holding periods, in-employment and post-employment shareholding requirements
ensuring alignment of interests between Executive Directors and shareholders and encouraging
sustainable performance. For the CEO, as a founder, actual shareholding level is far in excess of
these requirements, providing a strong alignment between individual and investor interests.
Predictability
The range of possible values of rewards to
individual Directors and any other limits or
discretions should be identified and explained
atthe time of approving the policy.
We aim for our disclosure to be clear to allow shareholders to understand the range of potential values
which may be earned under the remuneration arrangements.
Proportionality
The link between individual awards, the delivery
of strategy and the long-term performance of
the Group should be clear. Outcomes should
notreward poor performance.
A significant part of an Executive Director’s reward is linked to performance with a clear line of sight
between business performance and the delivery of shareholder value. For the CEO, as a founder, actual
shareholding level is a strong alignment between individual and investor interests.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
81
Remuneration continued
Directors’ remuneration report
Our governance continued
UK Corporate Governance Code 2018 (the ‘Code’) –Provision 40 alignment continued
Alignment to culture
Incentive schemes should drive behaviours
consistent with the Group’s purpose, values
andstrategy.
The incentive arrangements and the performance measures used are strongly aligned to those that the
Board considers when determining the success of the implementation of the Group’s purpose, values and
strategy. In determining that success, the Board has regard to the impact of the Group’s purpose, values
and strategy on the financial performance of the business, including revenues and profitability, and how
that performance is reflected in the Company’s share price over the medium and long term. The Board is
able to review targets, measures and weightings for both the short-term and long-term incentive plans on
an annual basis to ensure that they continue to be aligned with the Group’s purpose, values and strategy.
Purpose and link
to strategy Operation Maximum opportunity
Performance
measures
Change compared to
2022 Remuneration
Policy
Fixed remuneration
Base salary
To attract and
retain executives
of the right calibre
to successfully
develop and execute
on an intensive and
ambitious emerging
markets business
strategy aimed at
driving shareholder
returns over time.
Base salaries will typically be
reviewed annually, with any increases
normally effective from 1 January.
Base salary levels take account of:
>
The individual’s role,
performance and experience.
>
Business performance, individual
track record and the external
environment.
>
Salary increases for senior
management and other
employees.
>
Salary levels for comparable
roles at relevant global
businesses.
No recovery or withholding applies.
Whilst there is no prescribed
maximum, salary increases will
generally be in line with those of
the wider workforce.
Increases may be made above this
level where the Committee
considers it
appropriate, including
(but not limited to) a significant
increase in the scale, scope, market
comparability or responsibilities of
the role, bearing in mind potential
growth and increased complexity
of the business.
Where an individual has been
appointed on a salary lower than
market levels, increases above the
wider workforce may be made to
recognise experience gained and
performance in the role.
Such increases will be explained
in the relevant year’s annual report
on remuneration.
None. No change.
Benefits
To provide
market-competitive
benefits.
Benefits typically include participation
in private health insurance, disability
insurance, travel insurance and life
insurance. Where appropriate, other
benefits may be offered, including,
but not limited to, allowances for
relocation.
Executive Directors will be eligible
to participate in all-employee share
schemes, including the ESPP and
any which may be established in the
future, on the same terms as other
employees and subject to the limits
defined in the plan rules.
No recovery or withholding applies.
Benefits provided may vary by role
and individual circumstance and
are reviewed periodically.
There is no overall maximum.
None.
No change.
Remuneration Policy
This section sets out the proposed Directors’ Remuneration
Policy which has been prepared in accordance with the Large and
Medium-sized Companies and Groups (Accounts and Reports)
Regulations. The Policy will be subject to a binding shareholder vote
at the 2025 AGM and is intended to become effective from the date
of the AGM.
The Company is committed to maintaining high standards
of corporate governance and to making consistent annual
improvements in its corporate governance practices in order to
reflect evolving legal requirements, critical ESG themes, investor
expectations and wider stakeholder considerations.
Therefore, the principles of the Code were taken into account when
developing this Policy. The Committee will also seek to develop and
maintain an open and constructive dialogue with current and future
investors on the approach it takes to Director remuneration. In the
event that any material changes to the Policy or its implementation
are proposed, the Committee will engage in a consultation with
shareholders as appropriate.
Alphawave IP Group plc
Annual report and financial statements 2024
82
Purpose and link
to strategy Operation Maximum opportunity
Performance
measures
Change compared to
2022 Remuneration
Policy
Pension (or cash
allowance)
To provide
market-competitive
retirement benefits
in line with the global
workforce.
Executive Directors may participate
in a defined contribution scheme.
Individuals may receive a cash
allowance in lieu of some or all of
their pension contribution.
No recovery or withholding applies.
Pension contribution or cash
payment is equal to the maximum
employer contribution available
to employees under the defined
contribution scheme (currently
10% of salary) in line with the
wider workforce.
None. No change.
Performance-related variable remuneration
Short-Term
Incentive Plan
(STIP)
To provide alignment
between the
successful delivery
of annual strategic
business priorities
and reward.
The bonus is earned based on
the achievement of one-year
performance targets and is delivered
in cash or a combination of cash and
deferred shares.
At least one-third of gross bonus
will be deferred into shares, typically
for a period of two years. Dividend
equivalents may be accrued on
deferred shares.
Such deferral may be waived at
the discretion of the Remuneration
Committee for founder Executive
Directors with a high level of
shareholding if it would (absent a
waiver) result in a requirement for
a member of the Founder Concert
Party to make a general offer to
shareholders.
The overall policy maximum for
Executive Directors is 200% of
base salary.
The bonus pays out from
threshold at 25% to target at
50% and 100% at maximum
performance.
Performance measures,
weightings and targets are
reviewed annually and set at
the beginning of the year to
ensure they are stretching and
they continue to support the
achievement of the Group’s
key strategic priorities. The
bonus will be based on a
combination of financial,
operational, strategic and
individual measures. At least
60% of the bonus will be based
on financial measures, which
may include (but are not limited
to) revenue and adjusted
EBITDA. The Committee has
the discretion to adjust the
bonus outcomes to ensure
they are reflective of underlying
business performance and
any other relevant factors. The
Committee will consult with
major shareholders where
appropriate before the use
of discretion to increase the
outcome.
The overall policy
maximum will
increase from 150%
to 200% of base
salary.
Discretion for the
Committee to waive
the requirement
to defer bonus for
founder Executive
Directors with high
shareholdings where
otherwise this might
result in a requirement
to make a general
offer.
Long-Term
Incentive Plan
(LTIP)
To incentivise and
reward participants
over the long term
for sustained
performance and
delivery of the
business strategy
and shareholder
value.
Provides longer-
term alignment with
the shareholder
experience.
LTIP awards will typically be made
annually and consist of rights to
shares (or a cash equivalent) subject
to performance conditions. Awards
will normally vest no less than three
years after the respective award
grant date, based on satisfaction of
the defined performance metrics.
Vested shares are subject to a
holding period of two years (shares
may be sold at vesting to satisfy
any tax-related liabilities). Dividend
equivalents may be accrued on LTIP
awards to the extent that they vest
and would be paid out at the time of
vesting.
Malus and clawback provisions
may be applied in exceptional
circumstances as detailed in the
notes to this table.
The overall policy maximum for
Executive Directors is 1,000% of
base salary.
For threshold performance,
payment starts at 25%.
The targets, measures and
weightings will be determined
annually by the Committee
prior tothe grant of the award.
This is likely to include a market
measure (such as relative
TSR) and an internal financial
measure.
The Committee will set the
measures and weightings
each year, and has discretion
to adjust the number of
shares vesting from the
formulaic application of the
performance conditions based
on a review of the underlying
performance of the Group.
The Committee will consult
with major shareholders
where appropriate before the
use of any material discretion
to increase the formulaic
outcome.
The overall policy
maximum will
increase from 300% to
1,000% of base salary.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
83
Remuneration continued
Directors’ remuneration report
Purpose and link
to strategy Operation Maximum opportunity
Performance
measures
Change compared to
2022 Remuneration
Policy
Performance-related variable remuneration
Shareholding policy
To provide
alignment between
the interests of
Executive Directors
and shareholders
over the longer term.
Shareholding guidelines will be
200% of base salary for all Executive
Directors, to be built up over a
five-year period from their date of
appointment to the Board. For the
purposes of the Policy, shares which
are beneficially owned will count,
as will unvested shares which are
not subject to any performance
conditions (on a net of tax basis).
Post-cessation shareholding policy
All Executive Directors will be
required to maintain the lesser of
the in-employment guideline or their
actual shareholding at the point of
leaving for two years post-cessation.
Not applicable. Not applicable. No change.
Notes to the Policy table
Operation of incentive plans
The incentive plans will be operated within the Policy at all times
and in accordance with the relevant plan rules and the Listing
Rules. There are a number of areas over which the Committee
retains flexibility, as detailed below:
>
Who participates in each plan.
>
The timing and size of an award and/or payment (subject to any
maximums indicated in the table above).
>
The performance measures, weightings and targets that will
apply each year and any intra-period adjustments thereof.
>
The treatment of leavers.
>
Amendments of plan rules in accordance with their terms.
Where appropriate, any use of discretion by the Committee will be
disclosed in the relevant annual report on remuneration and may
be subject to consultation with the Company’s shareholders.
Malus and clawback provisions
Consistent with best practice, malus and clawback provisions
will be operated at the discretion of the Committee in respect
of both the annual bonus and LTIP where it considers that there
are exceptional circumstances. Such exceptional circumstances
include those relating to material misstatement of accounts, errors
in calculating the LTIP award, corporate failure and a participant’s
conduct resulting in material reputational damage.
Clawback may be applied from the point of payment for the bonus
for a period of up to three years and, for the LTIP, from vesting until
the fifth anniversary of the award (or two years from vesting, for a
three-year award).
Discretion
The Committee recognises the importance of ensuring that pay
reflects performance aligned with the Group’s strategy, ambitions
and risk appetite.
Consequently, and in line with the Code, the Committee
expects to review formulaic outcomes to ensure alignment
with Alphawave Semi’s long-term goals and shareholder and
stakeholder experience, and may apply appropriate judgement and
adjustments, upwards or downwards. In addition, the Committee
may amend formulae, performance metrics and targets to
reflect changes in Group strategy, acquisitions or disposals or
other exceptional circumstances. Such exercise of judgement
ordiscretion shall be disclosed in the remuneration report.
Existing arrangements
Payments may be made to satisfy commitments made prior to the
approval of this Policy. This may include, for example, but without
limitation, payments made to satisfy legacy arrangements agreed
prior to an employee (and not in contemplation of) being promoted
to the Board. All such outstanding obligations may be honoured,
and payment will be permitted under this Policy.
Minor amendments
The Committee may make minor amendments to the Policy
(forexample for tax, regulatory, exchange control or administrative
purposes) without obtaining shareholder approval.
Illustrations of application of the Policy
The graphs on page 85 provide estimates of the potential reward
opportunity for the current Executive Directors and the split
between the three different elements of remuneration under
three different performance scenarios: ‘Minimum’, ‘Target’ and
‘Maximum’. In line with the reporting regulations, a scenario
assuming 50% share price growth over the three-year LTIP
performance period is also shown on page 85. The assumptions
usedfor these charts are set out in the table on page 85.
Weili Dai is not entitled to participate in any incentive
arrangements.
Remuneration Policy continued
Alphawave IP Group plc
Annual report and financial statements 2024
84
Illustrative scenario analysis (2025)
Minimum
On-target
Maximum
Maximum with 50%
share price growth
Minimum
On-target
Maximum
Maximum with 50%
share price growth
Minimum
On-target
Maximum
Maximum with 50%
share price growth
Rahul MathurTony Pialis Weili Dai
Fixed remuneration
Annual bonus
Long-term incentives
£0
£1,000,000
£2,000,000
£3,000,000
£4,000,000
£5,000,000
£6,000,000
£7,000,000
£8,000,000
£9,000,000
£10,000,000
£11,000,000
£12,000,000
£13,000,000
£14,000,000
£5k
£714k
£3.2m
£9.3m
£13.1m
£389k
£1.7m
£4.7m
£6.6m
100%
56%
8% 5%
100% 24% 9% 6%
14%
80%
17%
74%
23%
53%
13%
82%
15%
77%
22%
22%
100%
£5k
100%
£5k
100%
£5k
100%
The charts above are based on notional bonus opportunity of 200% of salary, LTIP award level of 1,000%, and assume a one-third
bonusdeferral.
Other than the ‘Maximum scenario with 50% share price growth’, no share price growth has been included in the charts above and
itisassumed that no dividends or dividend equivalents are paid.
Minimum Fixed remuneration (salary and benefits) only
No payout under the STIP or LTIP vesting
Target Fixed remuneration
50% of maximum payout under the STIP
25% of maximum vesting under the LTIP
Maximum Fixed remuneration
100% of maximum payout under the STIP
100% of maximum vesting under the LTIP
Maximum
+ 50% share pricegrowth
Fixed remuneration
100% of maximum payout under the STIP
100% of maximum vesting under the LTIP
50% assumed share price growth over the three-year LTIP performance period
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
85
Remuneration continued
Directors’ remuneration report
Recruitment remuneration
In agreeing a remuneration package for a new Executive Director,
the structure and quantum of variable pay elements would reflect
those set out in the Policy table above. Salary would reflect the
skills and experience of the individual, and may be set at a level
to allow future progression to reflect performance in the role.
Onrecruitment, relocation benefits may be paid as appropriate.
This overall approach would also apply to internal appointments,
with the provision that any commitments entered into before
promotion, which are inconsistent with this Policy, can continue
to be honoured under the Policy. Similarly, if an Executive Director
is appointed following the Group’s acquisition of or merger with
another company, legacy terms and conditions would be honoured.
An Executive Director may initially be hired on a contract requiring
24 months’ notice which then reduces pro rata over the first year
ofthe contract to requiring twelve months’ notice.
The Committee may award compensation for the forfeiture of
awards from a previous employer in such form as the Committee
considers appropriate taking account of all relevant factors
including the expected value of the award, performance achieved
or likely to be achieved, the proportion of the performance period
remaining and the form of the award.
There is no specific limit on the value of such awards, but the
Committee’s intention is that the value awarded would be similar
tothe value forfeited.
Maximum variable pay will be in line with the maximum set out
in the Policy table (excluding buy-outs). The Committee retains
discretion in exceptional circumstances to make appropriate
remuneration decisions outside the standard Remuneration Policy
to meet the individual circumstances when:
i. An interim appointment is made to a fill an Executive Director
role on a short-term basis.
ii. Exceptional circumstances require that the Non-Executive Chair
or a Non-Executive Director takes on an executive function on a
short-term basis.
For Non-Executive Directors, the Board would consider the
appropriate fees for a new appointment taking into account
theexisting level of fees paid to the Non-Executive Directors,
theexperience and ability of the new Non-Executive Director
andthe time commitment and responsibility of the role.
Directors’ service contracts and letters
ofappointment
Executive Directors’ contracts have rolling terms and are
terminable on no more than twelve months’ notice, with the
exception of Weili Dai, whose contractual notice period is one
month. The key elements of the service contract for Executive
Directors relate to remuneration, payments on loss of office and
restrictions during active employment (and for twelve months
thereafter). These restrictions include non-competition and
non-solicitation of customers and employees.
Non-Executive Directors do not have service contracts but each
has a letter of appointment. In accordance with the Company’s
Articles, following their appointment, all Directors must retire at
each AGM and may present themselves for re-election. The Board
may terminate their appointment at any time, on one month’s
notice. None of the Non-Executive Directors has any provision in
their letters of appointment giving them a right to compensation
upon early termination of appointment.
Executive Directors’ service contracts and Non-Executive Directors’
letters of appointment are available to inspect at the Company’s
registered office.
Treatment of corporate events
The plan rules contain provisions relating to change of control.
In general, outstanding awards would normally vest and become
exercisable on a change of control, to the extent that the
Committee determines that any applicable performance conditions
have been satisfied at that time or are likely to be satisfied. Unless
the Committee decides otherwise (or the award is a bonus
deferral award), the number of shares vesting will also be reduced,
reflecting the time period to the date of the event. Alternatively,
awards may be exchanged for equivalent awards over shares in the
acquiring company. Any holding period will come to an end on the
date of the change of control.
The Committee can decide that similar treatment will apply on a
demerger, delisting, distribution (other than an ordinary dividend)
or other transaction which could affect the value of an award. The
Committee can adjust the number or type of shares subject to an
award and/or any exercise price to take account of any rights issue,
demerger, special dividend or other variation of capital or similar
corporate event.
Payments for departing Executive Directors
Notice period and compensation for loss of office
inservice contracts
The Company can make payments in lieu of notice which is limited
(except in the case of Tony Pialis) to base salary and contractual
benefits. Any such payments can be made on a monthly basis with
payments reduced by the amount of earnings from any alternative
employment.
The employment agreement of Tony Pialis is governed by Canadian
law and any payment in lieu of notice would only include anything
other than cash and benefits if required to do so by Canadian law.
Annual bonus
Upon termination, the annual bonus is only payable if the
participant is considered to be a good leaver as determined by
the Committee (which would include ill health, injury, disability,
retirement, the employing company ceasing to be a member of the
Group and redundancy, or in other circumstances if the Committee
so decides).
In these circumstances, the payment will be pro-rated for the
period of service during the financial year and will reflect the
extent to which Group performance has been achieved (subject
toCommittee discretion).
Bonus deferral awards that have not yet vested will not lapse on
the leave date but will continue in effect until they vest or lapse
according to the terms of the plan. However, if a participant leaves
because of misconduct or otherwise in circumstances in which
their employment could have been terminated without notice,
theaward will lapse.
Alphawave IP Group plc
Annual report and financial statements 2024
86
LTIP
An LTIP award which has not vested will automatically lapse on
the date the participant leaves employment, except if they leave in
circumstances detailed in the plan rules, such as ill health, injury,
disability, retirement, the employing company ceasing to be a
member of the Group and redundancy or in other circumstances,
if the Committee so decides, the award will continue in effect (or
may vest on or after leaving). Vesting of the award will be subject
to the extent that performance conditions have been or are likely to
be satisfied (as determined by the Committee), and any additional
conditions as the Committee may impose. Unless the Committee
decides otherwise, the number of shares that vest will be reduced
to reflect the proportion of the period up to the vesting date which
has elapsed by the date the participant left employment. The
normal vesting date will apply, unless the Committee exercises
its discretion to allow an award to vest on the date the participant
leaves employment or any later date it chooses. If a participant
dies, any outstanding awards will vest on the date of death in full.
Pension and benefits
Generally pension and benefit provisions will continue to apply until
the termination date. Where appropriate, other benefits may be
receivable, such as (but not limited to) payments in lieu of accrued
holiday, legal fees or tax advice costs in relation to the termination,
settlement of any potential legal claims and repatriation.
Pay and conditions throughout the Group
The pay and conditions of employees are considered by the
Committee in setting policy for the Executive Directors and senior
management.
The Committee is kept regularly informed on the pay and benefits
provided to employees and base salary increase data from the
annual salary review for the wider employee population general
staff is considered when reviewing Executive Directors’ salaries
and those of senior management. The Committee did not consult
with employees when setting the Policy.
Remuneration Policy table for Non-Executive Directors
Purpose and link
tostrategy Operation Maximum opportunity Performance measures
Change compared to
2022 Remuneration
Policy
Fees
The Company
offers competitive
fee arrangements
to attract and
retain high calibre
and experienced
individuals to serve
on the Board.
Non-Executive Directors receive
an annual base fee. They may
receive further fees for additional
responsibilities such as being the
Senior Independent Director or
chairing a Board Committee and
also for membership of a Board
Committee. Fees are subject to
review taking into account time
commitment, responsibilities and
market practice. Non-Executive
Directors are entitled to be
reimbursed for reasonable expenses
incurred during the performance of
their duties, including any tax due on
these benefits.
Total fees paid will be within the
limit stated in the Articles of
Association.
None. No change.
Benefits. Non-Executive Directors do not
participate in incentive schemes
or receive a pension provision.
The Company reimburses travel
expenditure and provides travel
insurance when on Company
business and provides professional
advice in respect of Company
business. Generally there are no
other benefits but the Company
may offer other benefits reflecting
the requirements of the role, or
changingmarket.
Not applicable. Not applicable. No change.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
87
Annual report on remuneration
This section of the Directors’ remuneration report provides detailsof:
>
How Directors were paid for the year ended 31 December 2024.
>
How we propose to implement our Policy for 2025.
This section of the report will be subject to an advisory vote at the 2025 AGM.
Remuneration paid to Executive Directors in respect of 2024
Single figure of remuneration for the 2024 financial year (audited)
The tables below set out the total remuneration to ExecutiveDirectors for the years ended 31 December 2024 and31December2023.
31 December 2024
Director
Salary
and fees Benefits
4
Pension/cash in
lieu of pension Bonus LTIP award
Total
remuneration
Total fixed
remuneration
Total variable
remuneration
John Lofton Holt
1
£421,154 £156 — — — £421,310 £421,310 —
Tony Pialis £609,827 £3,385 — — — £613,212 £613,212 —
Rahul Mathur
2
£25,846 £2,358 — — — £28,204 £28,204 —
Sehat Sutardja
3
£63,750 — — — — £63,750 £63,750 —
1. John Lofton Holt received an additional £450,000, being payment in lieu of notice as set out in the loss of office section below.
2. Rahul Mathur was appointed to the Board on 6 December 2024 and his salary for this period is shown from 6 - 31 December 2024.
3. Sehat Sutardja was an Executive Director until his passing in September 2024.
4. Benefits represent the taxable value of benefits paid and include private family health insurance.
31 December 2023
Director
Salary
and fees Benefits
1
Pension/cash
in lieu
on pension
2
Bonus LTIP award
Total
remuneration
Total fixed
remuneration
Total variable
remuneration
John Lofton Holt £450,000 — — — — £450,000 £450,000 —
Tony Pialis
3
£450,000 £3,148 — — — £453,148 £453,148 —
Sehat Sutardja £85,000 — — — — £85,000 £85,000 —
Daniel Aharoni £139,328 £3,068 £14,150 — — £156,546 £156,546 —
1. Benefits represent the taxable value of benefits paid and include private family health insurance.
2. Pension contribution.
3. The increase in benefit costs is directly correlated to the changes in benefits made for all employees in this region for the CEO.
Annual bonus for the year ended 31 December 2024
1
Details of the performance against the financial targets for the 2024 annual bonus are as follows:
Measure Weighting
Threshold
($m)
Target
($m)
Maximum
($m)
Actual
performance
($m)
Achievement
against measure
(% maximum
opportunity for
this measure)
Revenue 60% 361.8 411 442.2 307.6 0
Adjusted EBITDA 20% 93.6 103.9 114.0 51.1 0
Operating Cash Flow 20% 74.0 — 87.5 13.5 0
Overall bonus (% max) 0 0 0 0 0
1. Financial targets are shown in USD as presented to market. Exchange rate of 1 GBP = 1.27941 USD.
Remuneration continued
Directors’ remuneration report
Alphawave IP Group plc
Annual report and financial statements 2024
88
2024 Bonus outcome
Annual bonus payout
Maximum bonus
opportunity
Bonus formulaic
outcome
(% of maximum)
Actual bonus
received
as cash (£)
Actual bonus
deferred into
shares (£)
Tony Pialis 150% 0 £0 £0
LTIP award during the year
On 25 June 2024, an award under the LTIP with a face value of 300% of base salary was made to the CEO. The award was subject to the
following performance conditions:
Measure Weighting
Threshold
(25% vesting)
Maximum
(100% vesting)
Relative TSR vs constituents of the FTSE 250 measured over three financial years
2024-2026 35% Median Upper quartile
Relative TSR vs constituents of the FTSE All-World Technology Index 35% Median Upper quartile
Adjusted EPS growth 30% 10% CAGR 40% CAGR
These performance metrics were selected as they align with the Group’s focus on ambitious growth and profitability. The targets were
set at a level the Committee believes to be appropriately stretching, taking into account both internal performance expectations and
external analyst forecasts. The targets also reflect the transformation of the business from a single >90% gross margin revenue stream,
to a business with three revenue streams, each having very different scales and margin profiles, which is typical of a multinational
vertically integrated semiconductor company. The Committee has chosen to use TSR as an important measure of value created for
our shareholders and measure against the constituents of the FTSE 250, reflecting our UK listing, and against those of the All-World
Technology Index, reflecting our sector. Stretching EPS targets reflect our focus on ambitious growth and profitability. CAGR targets
approximated analyst growth targets at the time of grant and reflect the transition from a standalone IP business to a vertically integrated
semiconductor business.
Non-Executive Directors’ single figure of remuneration (audited)
The remuneration of the Non-Executive Directors for 2024 is set out below.
Non-Executive Directors
Fees
2023
Fees
2024
Benefits
2024
Total
2024
Jan Frykhammar £119,000 £119,000 — £119,000
Michelle Senecal de Fonseca £ 87,8 3 3 £101,885 — £101,885
Rosalind Singleton
1
£65,000 £36,154 — £36,154
Victoria Hull
1
£90,000 £43,385 — £43,385
Susan Buttsworth
1
£75,000 £38,564 — £38,564
Paul Boudre
1
£75,000 £36,154 — £36,154
David Reeder £28,333 £92,731 — £92,731
Total £540,166 £467,873 — £467,873
1. On 25 June 2024, Rosalind Singleton, Victoria Hull, Susan Buttsworth and Paul Boudre retired from the Board of Directors and their salaries are for the
period of their appointment.
No changes to fees are being proposed for 2025, except where additional appointments have been undertaken.
Details of Directors’ service contracts and letters of appointment
Detail of the service, employment contracts and letters of appointment in place as at 31 December 2024 for Directors are as follows:
Name
Date of
appointment
Date of current
service contract
or letter of
appointment Unexpired term at 31 December 2024
Tony Pialis 16 April 2021 22 April 2021 Executive Directors are subject to a 12-month
notice period, with the exception of Weili Dai,
whosecontractual notice period is one month.
Rahul Mathur 6 December 2024 9 April 2025
Weili Dai 14 September 2024 9 April 2025
Jan Frykhammar 16 April 2021 4 April 2025 Letters of appointment for the Non-Executive
Directors do not contain fixed-term periods;
however, they are appointed in the expectation
that they will serve two three-year terms subject to
satisfactory performance and re-election at AGMs.
See page 86 for details.
Michelle Senecal de Fonseca 16 April 2021 24 March 2025
David Reeder 1 September 2023 24 March 2025
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
89
Remuneration continued
Directors’ remuneration report
% Year-on-year change in pay 2024
Salary change
in 2023 (%)
Benefits change
in 2023 (%)
Bonuses change
in 2023 (%)
Salary change
in 2024 (%)
Benefits change
in 2024 (%)
Bonuses change
in 2024 (%)
Directors
Tony Pialis
1
0% 21% 0% 36% 8% 0%
Weili Dai
5
N/A N/A N/A N/A N/A N/A
Rahul Mathur
2
N/A N/A N/A N/A N/A N/A
Sehat Sutardja
6
0% 0% 0% (25)% 0% 0%
Non-Executive Directors
1
Jan Frykhammar 0% 0% 0% 0% 0% 0%
Michelle Senecal de Fonseca 0% 0% 0% 16% 0% 0%
Rosalind Singleton
3
0% 0% 0% (44)% 0% 0%
Victoria Hull
3
0% 0% 0% (52)% 0% 0%
Susan Buttsworth
3
0% 0% 0% (49)% 0% 0%
Paul Boudre
3
0% 0% 0% (52)% 0% 0%
David Reeder
7
N/A N/A N/A 227% 0% 0%
Employees
4
10% 613% (100%) 11% 58% 69%
1. The increase in benefits for Tony Pialis is directly correlated to the changes in benefits made for all employees in this region.
2. Rahul Mathur was appointed to the Board on 6 December 2024, therefore salary change information not currently available.
3. Salary changes relates to the Directors retiring.
4. The increase in general employee salaries and bonuses has been calculated by taking the figures per employee in 2023, and comparing with the figures
in 2024 (for those still in employment).
5. Weili Dai was appointed to the Board on 14 September 2024, therefore salary change information is not available.
6. The decrease for Sehat Sutardja is due to the proportionate salary paid to him in FY24, due to his passing in September 2024.
7. The increase in salary for David Reeder is due to his salary in FY23 only being paid for 4 months, and his salary in FY24 being paid for the full year.
Payments to past Directors (audited)
There were no payments made to past Directors.
Payments for loss of office (audited)
As announced on 5 December 2024, John Lofton Holt stepped down as Executive Chair and as an Executive Director of the Board on
6December 2024. In accordance with the approved Directors’ Remuneration Policy, Mr Holt was paid, subject to statutory deductions:
>
His outstanding basic salary and contractual benefits up to the termination date together with a payment in lieu of accrued but untaken
annual leave as at that date.
>
£450,000 being payment in lieu of the twelve months’ notice of termination to which he wouldotherwise be entitled, based on his basic
salary only.
Director Salary Benefits
Accrued holiday
not taken Bonus Pension Total payment
Daniel Aharoni
1
£139,917 — — — — £139,917
John Lofton Holt £450,000 — £29,423 — — £479,423
1. Daniel Aharoni stepped down as CFO on 19 May 2023. Payments of £139,917 were made to him during 2024 in respect of the remaining notice period
that he was entitled to be paid for. These payments were based on his basic salary only.
Directors’ interests in the shares of the Company (audited)
A summary of interests in shares and scheme interests of the Directors who served during the year and their connected persons is given
below, as at 31 December 2024.
Executive Directors
Total number of
interests in shares
(31 December 2024)
Vested without
performance
conditions
Unvested with
performance
conditions
Unvested without
performance
conditions
Shares held as %
of salary
1
Total number of
interests in shares
(31 March 2025)
Tony Pialis 88,963,452 — 1,165,968 — 14,242% 88,963,452
Weili Dai
2
96,275,358 — — — 2,096,084% 96,275,358
Rahul Mathur 920,949 820,949 — — 276% 1,037,617
Total 186,159,759 820,949 1,165,968 — 186,276,427
1. Shares held as % of salary based upon Alphawave IP Group plc one-month volume-weighted average share price of £1.09 as at 31 December 2024.
2. Upon Sehat Sutardja’s passing the shareholding was passed to Weili Dai.
Alphawave IP Group plc
Annual report and financial statements 2024
90
Non-Executive Directors
Total number of
interests in shares
(31 December 2024)
Total number of
interests in shares
(31 March 2025)
Jan Frykhammar 48,780 48,780
Michelle Senecal de Fonseca 44,316 44,316
David Reeder — —
Total 93,096 93,096
Alignment to shareholder interests
Current levels of ownership by the Executive Directors, and the date by which the goal should be achieved, are shown on the next page.
Based on a one-month volume-weighted average share price of £1.09 as at 31 December 2024, Tony Pialis and Weili Dai far exceed their
shareholding requirement (% of salary). By virtue of Tony Pialis being a founder and Weili Dai a significant shareholder in the Company,
they are inherently aligned to the experience of other shareholders.
Director
Requirement
as a % of salary
Current % of
salary held
Number of
shares owned
% of issued
share capital
1
Date of
requirement
to be achieved
Tony Pialis 200% 14,242% 88,963,452 11.84% n/a
Weili Dai 200% 2,096,084% 96,275,358 12.82% n/a
Rahul Mathur 200% 276% 920,949 0.12% n/a
1. Note: % of issued share capital based on issued shares as at 31 December 2024.
TSR performance chart (2025)
Jul ‘23 Nov ‘23Sep ‘23
0
50
25
125
100
75
200
175
150
May ‘22 May ‘23Nov ‘22 Jan ‘23 Mar ‘23 Jul ‘24 Nov ‘24Sep ‘24May ‘24Jan ‘24 Mar ‘24 May ‘25Jan ‘25 Mar ‘25Jul ‘22 Sep ‘22
Alphawave
FTSE 250
FTSE All World Technology Index
Share Value
Single figure of remuneration for the CEO 2022 2023 2024
President & Chief Executive Officer – Tony Pialis £452,600 £453,148 £613,212
Annual bonus payout (% of maximum) n/a n/a n/a
LTIP payout (% of maximum) n/a n/a n/a
The graph above shows the value, as at 31 December 2024, of £100 invested at the IPO date (13 May 2021) in Alphawave IP Group plc
compared with the value of £100 invested in the comparative indices. We have compared against the FTSE 250 and FTSE All-World
Technology indices as these are reflective of our UK listing and our sector, respectively, and are also the comparisons used for the TSR
conditions under the LTIP.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
91
Remuneration continued
Directors’ remuneration report
Relative importance of spend on pay
The table below shows the total expenditure on employee remuneration compared to distributions to shareholders in 2024 and the
prioryear.
2023 2024
Employee remuneration US$90.8m US$123.0m
Distributions to shareholders n/a
1
n/a
1
1. Our policy is to reinvest any profits back into the business and we do not intend to pay dividends for the foreseeable future.
CEO pay ratio
Although we do not currently have a large enough UK employee population to meet the threshold under the UK regulations for CEO
payratio figures to be robust, the Remuneration Committee is satisfied that relativities between employees and Executive Directors
areappropriate. We have a highly skilled and competitively rewarded employee population. As a fast-growing business, we are
recruitingrapidly and expect to report CEO pay ratio figures in the annual report once the population is sufficient for this to be done
onarobust basis.
Engagement with colleagues
Michelle Senecal de Fonseca continues to act as the Group’s Workforce Engagement NED. Her responsibilities include understanding the
concerns of the workforce, representing those views and concerns in Board meetings, and ensuring the Board takes appropriate steps to
evaluate the impact of proposals and developments on the workforce and considers what steps should be taken to mitigate any adverse
impact. Michelle has driven a number of workforce engagement activities as outlined in this annual report.
Application of Policy in 2025
Base salary and benefits
The table below shows the 2024 salary levels for each Executive Director and 2025 proposed salary levels.
Director
2024
Salary level
2025
Salary level
Proposed change
for 2025 (%)
Tony Pialis £680,000 £714,000 5%
Weili Dai £5,000 £5,000 0%
Rahul Mathur
£363,062
1
£389,387
2
5%
1. Rahul Mathur’s salary for 2024 of USD $464,850 is shown as an annualised figure however he was appointed to the Board on 6th December 2024. It has
been converted from USD to GBP using an FX rate of 1.28036 which is the average for 2024
2. Base salary for Rahul Mathur with the 5% uplift is USD $488,093. The rate of Rahul Mathur’s salary has been converted from USD to GBP at a rate of
1.25349 on 1st January 2025.
Benefit provision will be unchanged in 2025.
Annual bonus and long-term incentives
As described in the Chair’s letter, the Committee believes that, given the development of the business since the IPO, that it is now
appropriate to recast the Executive Director packages and offer market-competitive remuneration, including participation in annual
bonusand equity incentives. The President & Chief Executive Officer and Chief Financial & Chief Operating Officer will therefore
participate in the annual bonus scheme in 2025, with a maximum opportunity level of 200% of base salary (subject to approval of
theproposed Remuneration Policy). Weili Dai as Interim Executive Director is not eligible to participate.
The payout of STIP will be subject to the achievement of stretching performance targets, as follows:
Measure Weighting
Revenue 60%
Adjusted EBITDA 20%
Operating cash flow 20%
Revenue and adjusted EBITDA have been selected as the performance measures as they are two strategically critical financial measures
for the Group. Operating cash flow was included as a metric for 2025, both in response to feedback received from shareholders during the
consultation exercise and our ongoing focus on optimising operational efficiency and enhancing liquidity alongside sustainable growth.
The weighting distribution is based on the business’ continued focus on generating revenue, while equally balancing profitability and
operating cash flow.
The Committee considers that the targets are commercially sensitive on a forward-looking basis but commits to disclosing the full details
of these, as well as performance against them on a retrospective basis in next year’s remuneration report.
One-third of any bonus will be deferred into shares for a period of two years.
Alphawave IP Group plc
Annual report and financial statements 2024
92
As outlined in the Chair’s letter, the Committee intends to grant the President & Chief Executive Officer and Chief Financial &
ChiefOperating Officer a 2025 LTIP award with a face value equivalent to 1,000% of salary. Weili Dai is not eligible to participate.
Theperformance measures, weightings and targets for 2025 are as follows:
Measure Weighting
Threshold
(25% vesting)
Maximum
(100% vesting)
Relative TSR vs constituents of the FTSE 250 35% Median Upper Quartile
Relative TSR vs constituents of the FTSE All-World Technology Index 35% Median Upper Quartile
Adjusted EPS growth 30% TBC
1
TBC
1
1. The EPS growth targets had not been finalised as at the date of this report but will be disclosed in the RNS announcement at the time of grant (which will
be after the AGM, subject to shareholder approval of the proposed Remuneration Policy).
These performance metrics have been selected as they align with the Group’s focus on ambitious growth and profitability. The Committee
has chosen to use TSR as an important measure of value created for our shareholders and measure against the constituents of the FTSE
250, reflecting our UK listing, and against those of the All-World Technology Index, reflecting our sector. Stretching EPS targets will reflect
our focus on ambitious growth and profitability.
External advisers
Willis Towers Watson (WTW) were appointed advisers to the Company prior to IPO, to advise the Company on remuneration matters
in the context of UK listed company best practice corporate governance expectations and regulatory requirements. WTW now provide
independent advice to the Committee on allaspects of executive remuneration and attend Remuneration Committee meetings. The
Committee reviews the advice, challenges conclusions and assesses responses from its advisersto ensure objectivity and independence.
WTW is a founder member of the Remuneration Consultants Group and, as such, voluntarily operates under the Remuneration
Consultants Group Code of Conduct in relation to executive remuneration consulting in the UK. This is based upon principles of
transparency, integrity, objectivity, competence, due care and confidentiality by executive remuneration consultants. WTW has
confirmed that it adheres to that Code of Conduct for all remuneration services provided to Alphawave Semi and therefore the
Committee is satisfied that it is independent and objective. The Remuneration Consultants Group Code of Conduct is available at
www. remunerationconsultantsgroup.com. The fees payable to WTW forservices to the Committee during the year were £101,304.
Shareholder voting
The table below sets out the actual voting in respect of the resolution regarding the remuneration report at the 2022, 2023 and 2024 AGM.
Resolution For Against Total Withheld
To approve the Directors’ remuneration report 2022
635,783,146
(99.98%)
115,061
(0.02%)
635,898,207 100,058
To approve the Directors’ remuneration report 2023
592,461,946
(99.72%)
1,650,592
(0.28%)
594,112,538 28,471
To approve the Directors’ remuneration report 2024
569,908,708
(98.43%)
9,106,163
(1.57%)
579,014,871 161,172
David Reeder
Chair of the Remuneration Committee
17 April 2025
This Directors’ remuneration report has been prepared in accordance with the requirements of Schedule 8 to the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). The report also meets the relevant requirements of the
Listing Rules of the Financial Conduct Authority, and describes how the Board has complied with the principles and provisions of the UK
Corporate Governance Code relating to remuneration matters. Remuneration tables are subject to audit in accordance with the relevant
statutory requirements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
93
The Directors present their report, together with the
audited financial statements, for the period ended 31December 2024.
Directors’ report
The Directors’ report, together with the strategic report, represent the management report for the purposes of compliance with the
Disclosure Guidance and Transparency Rules 4.1.8R.
In accordance with section 414C(11) of the Companies Act 2006 and the Companies (Miscellaneous Reporting) Regulations 2018,
theBoard has included certain disclosures in the strategic report set out below:
Disclosure Page
Future business developments Market opportunities, pages 8 to 11
Risk management Principal risks and uncertainties, pages 58 to 61
Going concern and viability statement Viability statement, pages 56 and 57
Disabled employees ESG, Our people section, pages 24 to 29
Business relationship with suppliers, customers and
other stakeholder engagement
Stakeholder engagement, pages 16 to 19
Climate-related financial disclosures, greenhouse gas consumption,
energy consumption and energy efficiency action
ESG, pages 32 to 34 and appendix
Climate-related disclosures
Workforce engagement ESG, Our people section, pages 24 to 29
Compliance with the UK Corporate
GovernanceCode 2018
Alphawave IP Group plc was admitted to the standard listing
segment of the FCA’s Official List and to trading on the London
Stock Exchange’s main market on 18 May 2021 (‘Admission’).
Save as set out in the corporate governance statement, the Board
voluntarily complies with the requirements of the UK Corporate
Governance Code (the ‘Code’). Under the new UKLR, Companies
that previously had a Standard Listing are now considered part of
the Equity Shares (Transition) Category until they ‘step up’ to the
Equity Shares (Commercial Companies) Category. Prior to 18 May
2021, the Group was not required to comply with the principles and
provisions of the Code. Since Admission, the Group has complied
with all provisions of the Code, except as noted below.
The annual external evaluation of the operation and effectiveness
of the Board, its Committees and individual Directors was
undertaken in 2024. The Board intends to comply with the Code
guidance that an externally facilitated evaluation should take place
at least every three years.
Whilst the Group did not have an internal audit function during
the period under review, the Company has complied with the
requirement in Provision 25 for the Audit Committee to consider
annually whether there is a need for one. During the period under
review, the Group did not have an internal audit function as it had
been agreed that the Group’s size and activities were such that
internal assurance was achievable through other means.
The Audit Committee continue to evaluate the need for an internal
audit function and recommended to the Board to keep this area
under review. In addition, the annual evaluation of the Group’s risk
management and internal control systems (in accordance with
Provision 29 of the Code) took place in 2024.
During 2024, the Audit Committee undertook a review of the
effectiveness of the external audit process (in accordance with
Provision 25 of the Code). The process began soon after the
publication of the FY 2023 results in May 2024 and this continues.
The Executive Chair of the Company, John Lofton Holt, was not
independent on Admission. Together with the other founders, John
guided the Group’s growth through its early stages. John Lofton
Holt left the company on 6 December 2024, and since his departure,
the Group has appointed an independent Chair of the Company.
The Board considers that John’s continued leadership ensured that
the Group was best placed to continue its growth trajectory.
Further information on the Company’s application of the principles
and provisions of the Code can be found in the corporate
governance report.
Corporate governance statement
The information that fulfils the requirements of the corporate
governance statement for the purposes of the FCA’s Disclosure
Guidance and Transparency Rules can be found in the corporate
governance report and in this Directors’ report.
Disclosure of information to auditors
The Directors confirm that, so far as they are each aware, there is
no relevant audit information of which the Company’s auditors are
unaware. Each Director has taken all the steps that they ought to
have taken as a Director to make themselves aware of any relevant
audit information and to establish that the Company’s auditors are
aware of that information.
Insurance and indemnities
The Group has maintained Directors’ and Officers’ liability
insurance cover throughout the reporting period. The Directors are
able to obtain legal or other relevant advice at the expense of the
Company in their capacity as Directors. The Company has also
provided a qualifying third-party indemnity to each Director as
permitted by section 234 of the Companies Act 2006 and by the
Articles, which remain in force at the date of this report.
The Directors’ and Officers’ liability insurance cover also extends
tothe directors of Group subsidiaries.
Political and charitable donations
The Group did not make any political or charitable donations
orincur political expenditure during the reporting period.
Alphawave IP Group plc
Annual report and financial statements 2024
94
Subsidiaries and branches
The Company acts as a holding company for the Group of
subsidiaries. The Group’s subsidiaries are set out on page 161
ofthefinancial statements.
Share capital
Details of the Company’s share capital, together with details of
the movements in the share capital during the year, are shown
on page 144 of the financial statements. The Company has one
class of ordinary shares which carry no right to fixed income.
Each share carries the right to one vote at a general meeting of
the Company. Restrictions on share transfers are set out in the
Company’s Articles of Association. The Company is not aware of
any agreements between shareholders that restrict the transfer of
shares or voting rights attached to the shares. As approved by the
IPO Committee of the Board on 12 May 2021 and the High Court
of Justice Business and Property Court of England and Wales on
16 November 2021, the nominal value of the Company’s ordinary
shares reduced from £1.00 to £0.01 on 17 November 2021.
Exchangeable shareholders
As set out in the Company’s Prospectus, a portion of the interests
of The Tony Pialis (2017) Family Trust, The Rajeevan Mahadevan
(2017) Family Trust, 2641239 Ontario Inc. and certain other pre-IPO
shareholders in the Company immediately prior to Admission
(‘exchangeable shareholders’) are held through ordinary shares
that were issued to Project AuroraIP Limited (JerseyCo) on
14May2021. These ordinary shares (referred to as underlying
shares) are legally and beneficially owned by JerseyCo, except
that (i) the exchangeable shareholders will have a right to direct
the voting rights attaching to such shares, and (ii) JerseyCo will
irrevocably waive its rights to distributions declared on such
sharesfor as long as it holds them.
Each of the exchangeable shareholders have also been issued
with exchangeable shares on a one-for-one basis for each ordinary
share that will be held by JerseyCo. The exchangeable shares can
be redeemed at any time for a cash price that can be satisfied by
the transfer to such exchangeable shareholder of an underlying
share. Each exchangeable share also carries a right to receive,
upon redemption, a cash payment that is equal to all dividends
anddistributions declared on an ordinary share from time to time.
The total number of underlying shares that are issued to JerseyCo
as of 31 December 2024 was 264,544,700 representing 35.22% of
the Company’s issued ordinary share capital.
Substantial shareholdings
As at 31 December 2024 and at 31 March 2025, the following
persons were directly or indirectly interested (within the meaning
ofthe Companies Act 2006) in 3% or more of the Company’s
issued share capital or voting rights. Further, as at the date of this
report, the following contains information received, in accordance
with Rule 5 of the FCA’s Disclosure Guidance and Transparency
Rules, from holders of notifiable interest in the Company’s issued
share capital.
The information provided below is correct at the date of notification.
As at 31 December 2024 As at 31 March 2025
Holder Number of shares Voting rights (%) Number of shares Voting rights (%)
The Tony Pialis (2017) Family Trust
1
88,963,452 11.84% 88,963,452 11.75%
The Rajeevan Mahadevan (2017) Family Trust
2
88,963,452 11.84% 88,963,452 11.75%
2641239 Ontario Inc.
3
88,963,432 11.84% 88,963,432 11.75%
Sutardja Family LLC
4
96,275,358 12.82% 96,275,358 12.72%
Fidelity International 51,756,381 6.89% 51,756,381 6.84%
Capital Group 35,483,010 4.72% 48,314,244 6.38%
Mak Capital Management 25,565,356 3.40% 31,461,244 4.16%
Zedra Trust Company (UK) 26,803,405 3.57% 28,115,247 3.71%
Columbia Management Investment Advisers 23,253,566 3.10% 27,6 33,115 3.65%
Artisan Partners 25,718,113 3.42% 21,507,509 2.84%
1. This includes interests held by Pitech Investments Inc., a discretionary beneficiary of The Tony Pialis (2017) Family Trust and a person closely associated
with Tony Pialis (within the meaning of the Market Abuse Regulation). Tony Pialis is the trustee of The Tony Pialis (2017) Family Trust and he is also a
discretionary beneficiary.
2. This includes interests held by Jeevan Capital Inc., a discretionary beneficiary of The Rajeevan Mahadevan (2017) Family Trust and a person closely
associated with Rajeevan Mahadevan (within the meaning of the Market Abuse Regulation). Rajeevan Mahadevan is the trustee of The Rajeevan
Mahadevan (2017) Family Trust and (through a wholly owned company) he is also a discretionary beneficiary.
3. The shares of 2641239 Ontario Inc. are wholly owned by The Jonathan Rogers (2018) Family Trust. Jonathan Rogers is the trustee of The Jonathan
Rogers (2018) Family Trust.
4. Weili Dai holds 10% of the shares in Sutardja Family LLC. The remaining shares are held by her family members.
Information provided to the Company pursuant to Rule 5 of the FCA’s Disclosure Guidance and Transparency Rules is published
onaRegulatory Information Service.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
95
Directors’ report continued
Dividend policy
In the near term, the Group currently intends to retain any future
earnings to finance the operation and expansion of its business,
and to drive continued growth. The Company will review its
dividend policy on an ongoing basis, with respect to the cash
position of the Group, the growth of the Group’s businesses and
the macroeconomic environment, but does not expect to declare
orpay any dividends for the foreseeable future.
Articles of Association and powers of the Directors
The Company’s Articles of Association (the ‘Articles’) contain
the rules relating to the powers of the Company’s Directors and
their appointment and replacement mechanisms. The Articles
may only be amended by special resolution at a general meeting
of the shareholders. Subject to the Group’s Articles and relevant
regulatory measures, including the Companies Act 2006, the
day-to-day business of the Group is managed by the Board who
may exercise all the powers of the Company.
Authority to purchase own shares
At a general meeting held on 25 June 2024, shareholders passed
a special resolution in accordance with the Companies Act 2006
to authorise the Company to purchase in the market a maximum
of 73,090,317 ordinary shares, representing 10% of the Company’s
issued ordinary share capital (excluding treasury shares) as at the
Last Practicable Date prior to the publication of the 2024 Notice
ofAGM. No shares have been purchased under this authority.
Theauthoritywill expire at the forthcoming Annual General
Meeting. The Directors are seeking renewal of the authority,
inaccordance with relevant institutional guidelines.
Significant agreements and change of control
The Group has a number of contractual arrangements which
itconsiders essential to the business of the Group. A change
ofcontrol of the Company may cause some agreements to
whichtheGroup is a party to alter or terminate.
The Company has a Long-Term Incentive Plan in place, which
contains provisions relating to a change of control.
Compensation for loss of office
There are no agreements between the Company and its Directors
or employees providing for compensation for loss of office or
employment that occurs because of a takeover bid, except that
provisions of the Company’s share plans may allow options and
awards granted to Directors and employees to vest on a takeover.
Additional disclosures
The following information can be found elsewhere in this
document, as indicated in the table below, and is incorporated
intothis report by reference.
Disclosure Page
Directors’ interests Directors’ remuneration report,
page 90
Directors of the Company Board of Directors,
page 62
Dividends Financial review,
pages 55, 85, 96 and 144
Financial instruments Financial statements,
pages 138 to 143
Important events since the
financial year end
Events after the balance sheet
date, page 150
Statement of Directors’
responsibilities
Directors’ responsibilities,
page 97
Appointment of auditor
On the recommendation of the Audit Committee, resolutions will
be proposed at the 2025 AGM to re-appoint KPMG LLP as auditor
of the Company and to authorise the Audit Committee to set the
auditor’s remuneration.
Annual General Meeting
The Company’s AGM will be held on 17 June 2025. Details of the
resolutions to be proposed at the AGM are set out in the Notice of
Meeting, which is provided to all shareholders.
The Directors’ report, which has been prepared in accordance with
the requirements of the Companies Act 2006, has been approved
by the Board and signed on its behalf by:
Tony Pialis
Chief Executive Officer
17 April 2025
Alphawave IP Group plc
Annual report and financial statements 2024
96
The Directors are responsible for preparing the annual report and
the Group and Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards
and applicable law and have elected to prepare the parent
Company financial statements in accordance with UK accounting
standards and applicable law, including FRS 101 Reduced
Disclosure Framework.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
Group’s profit or loss for that period. In preparing each of the Group
and Company financial statements, the Directors are required to:
>
Select suitable accounting policies and then apply them
consistently.
>
Make judgements and estimates that are reasonable, relevant
and reliable.
>
For the Group financial statements, state whether they have
been prepared in accordance with UK-adopted international
accounting standards.
>
For the parent Company financial statements, state whether
applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained
inthe parent Company financial statements.
>
Assess the Group and Company’s ability to continue as a going
concern, disclosing, as applicable, matters related togoing
concern.
>
Use the going concern basis of accounting unless they either
intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to doso.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Group and enable them to ensure that
its financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they determine
is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and
to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, Directors’ report,
Directors’ remuneration report and corporate governance
statement that complies with that law and those regulations.
In accordance with Disclosure Guidance and Transparency
Rule (DTR) 4.1.16R, the financial statements will form part of the
annual financial report prepared under DTR 4.1.17R and 4.1.18R.
The auditor’s report on these financial statements provides no
assurance over whether the annual financial report has been
prepared in accordance with those requirements.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Group’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
inother jurisdictions.
Responsibility statement of the Directors in respect
of the annual financial report
We confirm that to the best of our knowledge:
>
The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole.
>
The management report includes a fair review of the
development and performance of the business and the position
of the issuer and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
>
We consider the annual report and accounts, taken as a
whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
Chief Executive Officer
17 April 2025
Alphawave IP Group plc
Central Square
29, Wellington Street
Leeds
LS1 4DL
United Kingdom
Statement of Directors’ responsibilities
In respect of the annual report and financial statements
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
97
Independent auditor’s report
to the members of Alphawave IP Group plc
1. Our opinion is unmodified
We have audited the financial statements of Alphawave
IP Group plc (“the Company”) for the year ended 31
December 2024 which comprise the Consolidated
statement of comprehensive income, Consolidated
statement of financial position, Company statement of
financial position, Consolidated statement of cash flows,
Consolidated statement of changes in equity and
Company statement of changes in equity, and the
related notes, including the accounting policies in note
2.
In our opinion:
— the financial statements give a true and fair view of
the state of the Group’s and of the parent
Company’s affairs as at 31 December 2024 and of
the Group’s loss for the year then ended;
— the Group financial statements have been properly
prepared in accordance with UK-adopted
international accounting standards;
— the parent Company financial statements have
been properly prepared in accordance with UK
accounting standards, including FRS 101 Reduced
Disclosure Framework; and
— the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs (UK)”)
and applicable law. Our responsibilities are described
below. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our
opinion. Our audit opinion is consistent with our report
to the audit committee.
Independent
auditor’s report
to the members of Alphawave IP Group plc
We were first appointed as auditor by the directors on 16
December 2021. The period of total uninterrupted
engagement is for the four financial years ended 31 December
2024. We have fulfilled our ethical responsibilities under, and
we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as
applied to listed public interest entities. No non-audit services
prohibited by that standard were provided.
Overview
$3.0m (2023:$3.3m)
1.0% (2023: 1.0%) of Revenue
Materiality: Group
financial
statements as a
whole
Key audit matters vs 2023
◄►
Revenue recognitionRecurring risks
◄►
Development costs
capitalisation
◄►
Recoverability of
parent company’s
investments in
subsidiaries
◄►
Going ConcernEvent driven
Alphawave IP Group plc
Annual report and financial statements 2024
98
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in ar
riving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the co
ntext of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
99
Independent auditor’s report continued
to the members of Alphawave IP Group plc
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our audit procedures included:
— Inquiries: Challenged the Group on their
assessment of the criteria for capitalisation of
costs for all projects where costs were
capitalised during FY24 through performing
specific enquiries with project managers and
finance team and corroborating to other
internal information;
— Tests of detail: Agreed underlying costs on
sample basis that had been capitalised to
intangibles back to source documentation
(expenses, payroll);
— Increased sample size for our substantive testing
performed in respect of the engineer hours
capitalised on projects due to the identification
of variances in the hours recorded on projects in
the initial sample tested;
— Recalculated the borrowing cost that had been
capitalised to confirm it was in line with our
expectations;
— We evaluated management’s allocation of
internal costs to the asset and assessed whether
the methodology of allocation was appropriate;
— Assessing transparency: Considered the
adequacy of the Group’s disclosures in respect
of research and development cost capitalisation
and the judgements involved in determining the
amount of cost to capitalise.
Our results
— We found the capitalisation of development
costs to be acceptable (2023: acceptable).
This capitalised development expenditure
consists primarily of staff costs where staff
have worked on projects that are eligible for
capitalisation under the Group’s research
and development accounting policy.
There is a risk that additions to internally
generated intangible assets are recorded
inappropriately when:
• the expenditure is not eligible for
capitalisation,
• the assets are not accurately recorded,
• the entity does not have the rights to
the assets, or
• the assets do not exist.
We also identified a fraud risk related to
inappropriate capitalisation of development
costs in response to potential incentives to
capitalise these costs.
Development costs capitalisation
($ 77.1 million; 2023: $ 54.5 million)
Refer to page 74 (Audit Committee
Report), page 118 (accounting policy)
and page 130 (financial disclosures).
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Alphawave IP Group plc
Annual report and financial statements 2024
100
Our responseThe risk
We considered whether these risks could plausibly
affect the liquidity or covenant compliance in the
going concern period by assessing the directors’
sensitivities over the level of available financial
resources and covenant thresholds indicated by the
Group’s financial forecasts taking account of severe,
but plausible, adverse effects that could arise from
these risks individually and collectively.
Our procedures also included:
— Funding assessment: We assessed the forecast
cash position, available committed facilities and
the directors’ assessment of the Group’s ability
to comply with its covenants for a period of at
least 12 months from the date of approval of
the financial statements (‘forecast period)’, to
understand the financial resources available to
the Group during the forecast period;
— Historical comparisons: We assessed the ability
of the Group to forecast accurately by
comparing the most recent financial year’s
performance against budget and challenged the
assumptions over the going concern period
based on historical performance. We also
compared the actual performance in recent
years versus base case and downside case to
challenge the quantum of risks applied in the
forecasts;
— Key dependency assessment: We evaluated
how the cash flow model captures events and
conditions that may cast significant doubt on
the ability to continue as a going concern and
evaluated whether key assumption of group
revenue forecast was within a reasonable
range;
— Sensitivity analysis: We assessed the Group’s
downside sensitivities to determine whether
this represented a severe but plausible scenario
based on our knowledge of the business, the
sector and the results of the Group subsequent
to balance sheet date;
— Evaluating directors’ intent: We evaluated the
achievability of the actions the directors
consider they would take to improve the
position should the risks materialise, taking into
account the extent to which the directors can
control the timing and outcome of these;
— Assessing transparency: We considered
whether the going concern disclosure in note 1
to the financial statements gives a full and
accurate description of the directors’
assessment of going concern, including the
identified risks and, dependencies, and related
sensitivities.
Our results
— We found the going concern disclosure in note
1 to be acceptable (2023: acceptable).
Disclosure quality
The financial statements explain how the
Board has formed a judgement that it is
appropriate to adopt the going concern
basis of preparation for the Group and
parent Company.
That judgement is based on an evaluation
of the inherent risks to the Group’s and
Company’s business model and how those
risks might affect the Group’s and
Company’s financial resources or ability to
continue operations over a period of at
least a year from the date of approval of
the financial statements.
The risk most likely to affect the Group’s
and Company’s available financial resources
adversely and metrics relevant to debt
covenants over this period was
maintenance of sales growth in the face of
rapidly changing technology in the industry
in which the group operates.
There are also less predictable but realistic
second order impacts, such as the impact of
global political developments.
The risk for our audit was whether or not
those risks were such that they amounted
to a material uncertainty that may have
cast significant doubt about the ability of
the Company and the Group to continue as
a going concern. Had they been such, then
that fact would have been required to have
been disclosed.
Going Concern
see Note 1 to the group financial
statements
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
101
Independent auditor’s report continued
to the members of Alphawave IP Group plc
Our responseThe risk
We performed the tests below rather than seeking
to rely on any of the Parent Company’s controls
because the nature of the balance is such that we
would expect to obtain audit evidence primarily
through the detailed procedures described.
Our procedures included:
— Test of details: We compared the carrying
amount of the investments in subsidiaries, with
the relevant subsidiaries’ draft balance sheet, to
identify whether their net assets, being an
approximation of the minimum recoverable
amount of the related investments were in
excess of their carrying amount.
Our results
— We found the parent Company’s conclusion that
there is no impairment of its investments in
subsidiaries to be acceptable (2023: acceptable)
Low risk, high value
The carrying amount of the Parent
Company’s investments in subsidiaries
represents 39.0% (2023: 44.8%) of the
Company’s total assets. The recoverability is
not at high risk of significant misstatement
or subject to significant judgement.
However, due to their materiality in the
context of the Parent Company financial
statements, this is considered to be the area
that had the greatest effect on our audit of
the Parent Company
Recoverability of parent company’s
investments in subsidiaries
($379.3 million; 2023: $346.2 million)
Report), page 157 (accounting policy)
and page 159 (financial disclosures).
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Alphawave IP Group plc
Annual report and financial statements 2024
102
3. Our application of materiality and an overview of
the scope of our audit
Our application of materiality
Materiality for the Group financial statements as a whole
was set at $3,000,000 (2023: $ 3,300,000), determined
with reference to a benchmark of Group revenue, of
which it represents 1.0% (2023: 1.0%).
Materiality for the parent Company financial
statements as a whole was set at $2,500,000 (2023: $
2,650,000), determined with reference to a benchmark
of Company total assets, of which it represents 0.3%
(2023: 0.3%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were
performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level the
risk that individually immaterial misstatements in
individual account balances add up to a material
amount across the financial statements as a whole.
Performance materiality was set at 65.0% (2023:
64.9%) of materiality for the financial statements as a
whole, which equates to $1,950,000 (2023: $2,140,000)
for the Group and $1,620,000 (2023: $1,720,000) for
the parent Company. We applied this percentage in our
determination of performance materiality based on the
level of identified misstatements, control deficiencies
and changes in the control environment during the
prior period.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding $150,000 (2023: $165,000), in addition to
other identified misstatements that warranted
reporting on qualitative grounds.
Overview of the scope of our audit
This year, we applied the revised group auditing
standard in our audit of the consolidated financial
statements. The revised standard changes how an
auditor approaches the identification of components,
and how the audit procedures are planned and
executed across components.
In particular, the definition of a component has
changed, shifting the focus from how the entity
prepares financial information to how we, as the group
auditor, plan to perform audit procedures to address
group risks of material misstatement (“RMMs”).
Similarly, the group auditor has an increased role in
designing the audit procedures as well as making
decisions on where these procedures are performed
(centrally and/or at component level) and how these
procedures are executed and supervised. As a result,
we assess scoping and coverage in a different way and
comparisons to prior period coverage figures are not
meaningful. In this report we provide an indication of
scope coverage on the new basis.
We performed risk assessment procedures to
determine which of the Group’s components are likely
to include risks of material misstatement to the Group
financial statements and which procedures to perform
at these components to address those risks.
Group revenue
$307.6m (2023: $321.7m)
Group materiality
$3m (2023: $3.3m)
Group revenue
Group materiality
$3m
Whole financial
statements materiality (2023:
$3m)
$2.0m
Whole financial
statements performance
materiality (2023: $2.14m)
$2.5m
Range of materiality at 11
components ($0.9-$2.5m)
(2023: $0.7m to $2.7m)
$150,000
Misstatements reported to the
audit committee (2023: $165,000)
Overview of the scope of our audit (cont.)
We visited two (2023: two) component locations in Canada and
the United States of America to assess the audit risk and develop
our audit strategy.
In total, we identified 16 components, having considered our
evaluation of the Group's legal and operational structure and our
ability to perform audit procedures centrally.
Of those, we identified 2 quantitatively significant components
which contained the largest percentages of either total revenue
or total assets of the Group, for which we performed audit
procedures.
We also identified 2 components as requiring special audit
consideration, owing to Group risks relating to Going concern or
Development costs capitalisation residing in these components.
Additionally, having considered qualitative and quantitative
factors, we selected 7 components with accounts and/or
disclosures contributing to the specific RMMs of the Group
financial statements.
Accordingly, we performed audit procedures on 11 components,
of which we involved component auditors in performing the
audit work on 1 component. We performed the audit of the
parent Company.
We set the component materialities, ranging from $850,000 to
$2,500,000 , having regard to the mix of size and risk profile of
the Group across the components.
Our audit procedures covered 91.6% of Group revenue. We
performed audit procedures in relation to components that
account for 85.9% of Group profit before tax and 99.7% of Group
total assets.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
103
Independent auditor’s report continued
to the members of Alphawave IP Group plc
92
8
Group revenue
92%
3. Our application of materiality and an overview of the
scope of our audit (cont.)
Impact of controls on our group audit
As noted by the Audit Committee on page 73, the Group’s
control environment is undergoing a programme of
transformation and improvement. The Group’s financial
reporting process is supported by multiple ERP systems and
applications. We obtained an understanding of the relevant IT
systems for the purposes of the audit and noted that the
Group’s general IT controls are informal. As a result, we did
not plan to rely on the Group’s general IT controls in our audit
and instead performed additional testing over information
and data used in our substantive testing that was extracted
from the systems. As we were not able to rely on automated
controls over journal entries, our work to respond to the risk
of management override of controls considered both
automated and manual journals.
Overall, considering the developing nature of the overall
control environment, we concluded that a fully substantive
audit approach was appropriate in all aspects of the audit for
the year ended 31 December 2024, including revenue
recognition, as detailed in our key audit matter in section 2 of
our report. As we did not rely on controls in any areas of the
audit, we increased the extent of our substantive procedures
more than we otherwise would have done if we were able to
place reliance on the Group's internal control over financial
reporting.
Group auditor oversight
As part of establishing the overall Group audit strategy and plan,
we conducted the risk assessment and planning discussion
meeting with the component auditor to discuss Group audit risks
relevant to the components.
We held Video and telephone conference meetings with the
component auditor in China and inspection of key work papers
took place in person to evaluate the quality of execution of audit
of the component. At these meetings, the results of further audit
procedures communicated to us were discussed in more detail,
and any further work required by us was then performed by the
component auditor.
We inspected the work performed by the component auditor for
the purpose of the Group audit and evaluated the
appropriateness of conclusions drawn from the audit evidence
obtained and consistencies between communicated findings and
work performed.
86
14
86%
Group profit before tax
100
0
Group total assets
100%
We performed audit procedures in relation to components that
accounted for the following percentages of Group profit before tax and
Group total assets:
Our audit procedures covered the following percentage of Group
revenue:
4. Going concern
The Directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded
that the Group and the Company’s financial position means that
this is realistic. They have also concluded that there are no
material uncertainties that could have cast significant doubt over
their ability to continue as a going concern for at least a year from
the date of approval of the financial statements (“the going
concern period”). An explanation of how we evaluated
management’s assessment of going concern is set out in the
related key audit matter in section 2 of this report.
Our conclusions based on this work:
— we consider that the directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate; and
— we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty related
to events or conditions that, individually or collectively,
may cast significant doubt on the Group’s or Company's
ability to continue as a going concern for the going concern
period.
— we have nothing material to add or draw attention to in
relation to the directors’ statement in Note 1 to the
financial statements on the use of the going concern basis
of accounting with no material uncertainties that may cast
significant doubt over the Group and Company’s use of
that basis for the going concern period.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were
made, the above conclusions are not a guarantee that the Group
or the Company will continue in operation.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Alphawave IP Group plc
Annual report and financial statements 2024
104
5. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to
fraud
To identify risks of material misstatement due to fraud (“fraud
risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
—Enquiring of directors, the audit committee, and inspection of
policy documentation as to the Group’s high-level policies and
procedures to prevent and detect fraud, including the Group’s
channel for “whistleblowing”, as well as whether they have
knowledge of any actual, suspected or alleged fraud.
—Reading Board and audit committee minutes.
—Considering remuneration incentive schemes and performance
targets for management, directors and sales staff.
—Using analytical procedures to identify any unusual or unexpected
relationships.
We communicated identified fraud risks throughout the audit
team and remained alert to any indications of fraud throughout
the audit . This included communication from the Group audit
team to component auditors of relevant fraud risks identified at the
Group level and requesting component auditors performing
procedures at the component level to report to the Group auditor
any identified fraud risk factors or identified or suspected instances
of fraud.
As required by auditing standards, and taking into account
possible pressures to meet profit targets, we perform procedures
to address the risk of management override of controls and the
risk of fraudulent revenue recognition, in particular:
—the risk that Group and component management may be in a
position to make inappropriate accounting entries;
—the risk of bias in accounting estimates underpinning revenue
recognition; and
—the risk that revenue is overstated through recording revenues in
the wrong period.
Further detail in respect of revenue recognition is set out in the
key audit matter disclosures in section 2 of this report.
We also identified a fraud risk related to inappropriate
capitalisation of development costs in response to potential
incentives to capitalise these costs. Further detail in respect of
capitalisation of development costs is set out in the key audit
matter disclosures in section 2 of this report.
We also performed procedures including:
— Identifying journal entries and other adjustments to test at
Group level and for selected components based on risk criteria and
comparing the identified entries to supporting documentation.
These included unexpected journals posted to certain accounts, for
example revenue, development costs, project specific COGs, journal
entries containing certain key words and movements between
certain accounts.
—Evaluated the business purpose of significant unusual
transactions.
—Assessing whether the judgements made in making accounting
estimates are indicative of a potential bias.
Identifying and responding to risks of material misstatement related to
compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be
expected to have a material effect on the financial statements from our
general commercial and sector experience, and through discussion with
the directors and other management (as required by auditing
standards), and discussed with the directors and other management the
policies and procedures regarding compliance with laws and
regulations.
As the Group is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team
and remained alert to any indications of noncompliance throughout the
audit. This included communication from the Group auditor to
component auditor of relevant laws and regulations identified at the
Group level, and a request for component auditor to report to the
Group auditor any instances of non-compliance with laws and
regulations that could give rise to a material misstatement at the Group
level.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect
the financial statements including financial reporting legislation
(including related companies legislation), distributable profits
legislation, and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our procedures
on the related financial statement items.
Secondly , the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation. We identified the
following areas as those most likely to have such an effect: health and
safety, data protection laws, anti-bribery, employment law, export law,
and certain aspects of company legislation recognising the financial and
regulated nature of the Group’s activities and its legal form. Auditing
standards limit the required audit procedures to identify
noncompliance with these laws and regulations to enquiry of the
directors and other management and inspection of regulatory
and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or
regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For
example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required
by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-
detection of fraud, as these may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our
audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be
expected to detect non-compliance with all laws and regulations.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
105
Independent auditor’s report continued
to the members of Alphawave IP Group plc
6. We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not
cover the other information and, accordingly, we do not express
an audit opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified
material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
— we have not identified material misstatements in the
strategic report and the directors’ report;
— in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
— in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term
viability
We are required to perform procedures to identify whether there
is a material inconsistency between the directors’ disclosures in
respect of emerging and principal risks and the viability
statement, and the financial statements and our audit
knowledge.
Based on those procedures, we have nothing material to add or
draw attention to in relation to:
— the directors’ confirmation within the viability statement
page 56 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those
that would threaten its business model, future performance,
solvency and liquidity;
— the Principal risks and uncertainties disclosures describing
these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated; and
— the directors’ explanation in the viability statement of how they
have assessed the prospects of the Group, over what period
they have done so and why they considered that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue
in operation and meet its liabilities as they fall due over the
period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or
assumptions.
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements
audit. As we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were
made, the absence of anything to report on these statements is
not a guarantee as to the Group’s and Company’s longer-term
viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there
is a material inconsistency between the directors’ corporate
governance disclosures and the financial statements and our
audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements
and our audit knowledge:
— the directors’ statement that they consider that the annual
report and financial statements taken as a whole is fair,
balanced and understandable, and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy;
— the section of the annual report describing the work of the
Audit Committee, including the significant issues that the
audit committee considered in relation to the financial
statements, and how these issues were addressed; and
— the section of the annual report that describes the review of
the effectiveness of the Group’s risk management and
internal control systems.
We have nothing to report in these respects.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Alphawave IP Group plc
Annual report and financial statements 2024
106
7. We have nothing to report on the other matters on which
we are required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
— adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
— the parent Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
— certain disclosures of directors’ remuneration specified by
law are not made; or
— we have not received all the information and explanations
we require for our audit.
We have nothing to report in these respects.
8. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 97, the
directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing
the Group and parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but to do
so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in
an annual financial report prepared under Disclosure Guidance
and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report
provides no assurance over whether the annual financial report
has been prepared in accordance with those requirements.
9. The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the
Company’s members, as a body, for our audit work, for this
report, or for the opinions we have formed.
Andrew Campbell-Orde
(Senior Statutory Auditor)
for and on behalf of KPMG LLP , Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
17 April 2025
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters unchanged from 2023, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities,
our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
Our responseThe risk
We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls
because our knowledge of the design of these
controls indicated that we would not be able to
obtain the required evidence to support reliance on
controls.
Our procedures included:
— Test of details: We assessed whether the
Group’s revenue recognition policy is in line
with the requirements of the accounting
standards, which includes consideration of
alternative accounting treatment;
— We assessed the Group’s determination of
distinct performance obligations contained
within their contracts by selecting a sample of
the contracts and considering the terms
together with the requirements of the
accounting standards including whether any
alternative treatment existed;
— We agreed samples of invoices raised in the year
on reaching contractual milestones to cash
receipts for those paid;
— Independent recalculation : We recalculated
the stage of completion based on the costs
incurred as at year end and the Group’s
estimate of future costs to complete contracts,
which included assessment of the historical
accuracy of the Group’s estimates, to assess the
appropriate amount of revenue to recognise
and compare this to the amounts recorded by
the Group;
— Assessing transparency: We considered the
adequacy of the Group’s disclosures in respect
of revenue recognition and the judgements and
estimates made in determining the revenue
recognised.
Our results
— We found the revenue recognition to be
acceptable (2023: acceptable).
Accounting application:
The Group enters into contracts with
customers that include various
combinations of products. Each contract,
including the IP reseller licensing contract is
bespoke with varying options and terms and
the application of accounting standards to
these terms is complex and involves
judgement.
There is a risk that the individual
performance obligations are not correctly
identified. Revenue includes subjective
measurements requiring management to
exercise significant judgement with respect
to estimated total costs to complete the
contract which has the potential for
management bias. The effect of these
matters is that, as part of our risk
assessment, we determined that revenue
recognition has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole.
The financial statements (note 4) disclose
the sensitivity estimated by the Group.
Revenue recognition
($258.8 million; 2023: $167.6 million)
(IP and NRE, IP Reseller licensing, IP
and NRE –JV)
Refer to page 74 (Audit Committee
Report), page 116 (accounting policy)
and page 124 (financial disclosures).
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
107
| Year ended 31 December | |||
| 2024 | 2023 | ||
Continuing operations | Note | US$’000 | US$’000 |
Revenue | 4 | ||
Cost of sales | ( | ( | |
Gross profit | |||
Research and development expenses | 5 | ( | ( |
Sales and marketing expenses | ( | ( | |
General and administration expenses | ( | ( | |
of which expected credit loss | 18 | ( | |
Other operating (expense)/income | 6 | ( | ( |
of which expected credit loss | 18 | ( | |
Operating (loss) | ( | ( | |
Finance income | 9 | ||
Finance expense | 9 | ( | ( |
Loss from joint venture | 16 | ( | |
Loss before tax | ( | ( | |
Income tax expense | 10 | ( | ( |
Net (loss) | ( | ( | |
| Other comprehensive (expense)/income | |||
| Items that may be reclassified subsequently to profit or loss: | |||
Currency exchange (loss)/gain on translation of foreign operations | ( | ||
( | |||
| Items that will not be reclassified to profit or loss: | |||
Currency exchange remeasurements of defined benefit obligation | 25 | ( | ( |
Related income tax credit | |||
( | ( | ||
Other comprehensive income/(expense) | ( | ||
Total comprehensive loss | ( | ( | |
Loss per share (US$ cents) | 11 | ||
Basic | ( | ( | |
Diluted | ( | ( |
Consolidated statement of comprehensive income
The notes on pages 112 to 150 form part of these financial statements.
Alphawave IP Group plc
Annual report and financial statements 2024
108
Consolidated balance sheet
| As at 31 December | |||
| 2024 | 2023 | ||
| Note | US$’000 | US$’000 | |
| Assets | |||
Cash and cash equivalents | 17 | ||
Trade and other receivables | 18 | ||
Contract assets | 4 | ||
Inventories | 19 | ||
Income tax receivables | 10 | ||
Warrant payment to customer | 4 | ||
Other current assets | 20 | ||
Total current assets | |||
Goodwill | 12 | ||
Other intangible assets | 13 | ||
Property and equipment – owned | 14 | ||
Property and equipment – leased | 15 | ||
Other investments | |||
Trade and other receivables | 18 | ||
Contract assets | 4 | ||
Other assets | 20 | ||
Warrant payment to customer | 4 | ||
Deferred tax assets | 10 | ||
Total non-current assets | |||
Total assets | |||
| Liabilities and equity | |||
Trade and other payables | 21 | ||
Contract liabilities | 4 | ||
Income taxes payable | 10 | ||
Lease liabilities | 15 | ||
Loans and borrowings | 22 | ||
Total current liabilities | |||
Trade and other payables | 21 | ||
Contract liabilities | 4 | ||
Warrant liability | 4 | ||
Lease liabilities | 15 | ||
Loans and borrowings | 22 | ||
Deferred tax liabilities | 10 | ||
Total non-current liabilities | |||
Total liabilities | |||
Ordinary shares | 26 | ||
Share premium account | 26 | ||
Merger reserve | 26 | ( | ( |
Share-based payment reserve | 26 | ||
Currency translation reserve | 26 | ( | ( |
Convertible bonds | 26 | ||
Retained earnings | |||
Total equity | |||
Total liabilities and equity |
The financial statements on pages 108 to 111 were approved and authorised for issue by the Board of Directors on 17April2025 and were
signed on its behalf by:
Tony Pialis
Director
The notes on pages 112 to 150 form part of these financial statements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
109
| Year ended 31 December | |||
Restated 1 | |||
| 2024 | 2023 | ||
| Note | US$’000 | US$’000 | |
| Cash flows from operating activities | |||
Net (loss) | ( | ( | |
| Non-cash items within operating profit: | |||
– Amortisation of intangible assets | 13 | ||
– Depreciation of property and equipment – owned | 14 | ||
– Depreciation of property and equipment – leased | 15 | ||
– Share-based compensation expense | 27 | ||
– Currency translation (gain)/loss on intercompany balances | ( | ||
– Disposal of PPE loss | |||
Deferred cash rights | |||
Finance income | 9 | ( | ( |
Finance expense | 9 | ||
Loss from joint venture | 16 | ||
Income tax expense | |||
Cash generated from operations before changes in working capital | |||
| Changes in working capital: | |||
(Increase) in trade and other receivables and warrant payment to customer | ( | ( | |
Decrease in inventories | |||
(Increase) in contract assets | ( | ( | |
Increase in trade and other payables, R&D credit, accruals and warrant liability | |||
Increase/(decrease) in contract liabilities | ( | ||
Cash generated from operations | |||
Income taxes paid (net) | ( | ( | |
Cash inflow from operating activities | |||
| Cash flows from investing activities | |||
Purchase of intangible assets | 13 | ( | ( |
Purchase of property and equipment | 14 | ( | ( |
Capitalised development expenditure | ( | ( | |
Investment in joint venture | 16 | ( | |
Purchase of businesses, net of acquired cash | ( | ||
Purchase price adjustment for Open Five acquisition | |||
Interest received | |||
Cash outflow from investing activities | ( | ( | |
| Cash flows from financing activities | |||
Issue of ordinary shares | 26 | ||
Interest paid | ( | ( | |
Lease payments | 15 | ( | ( |
Issue of convertible debt | 22 | ||
Drawdown of loans and borrowings | 22 | ||
Transaction costs related to convertible debt | ( | ||
Repayment of loans and borrowings | ( | ( | |
Cash inflow/(outflow) from financing activities | ( | ||
Net decrease in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the year | |||
Currency translation (loss)/gain on cash and cash equivalents | ( | ||
Cash and cash equivalents at the end of the year | 17 |
1. The 2023 cash generated from operations and cash outflow from investing activities has been restated in relation to the capitalisation of borrowing costs amount for FY 2023
of US$9,534,000. Paragraph 32 of IAS 7 requires the total amount of interest paid on the loan to be disclosed in the statement of cash flow whether recognised in either the
statement of profit and loss, or capitalised in the statement of financial position in accordance with IAS 23-Borrowing costs. However, in FY 2023, this capitalised borrowing
costs amount of US$9, 5 3 4, 0 0 0 was included within both the “interest paid” line in financing activities and the “Capitalised development expenditure” line within investing
activities with the balancing amount included in cash generated from operations. Although paragraph 33 of IAS 7 specifies that interest paid may be classified as a cash flow
from operating or financing activities, paragraph 16 of IAS 7 permits expenditure that results in a recognised asset to be classified as investing activities. We should only have
shown this amount in either investing activities or financing activities and not both. We made the decision to flow this figure through financing activities, as this kept it consistent
with our H1 2024 cash flow in our interim report release. Therefore, FY 2023 has been corrected by reducing the cash outflow from capitalised development expenditure within
investing activities by US$9,5 3 4 , 0 0 0 and reducing the “increase in trade and other payables” line within operating activities by US$9, 5 3 4 ,0 0 0 , also resulting in a reduction in cash
inflow from operating activities of US$9, 5 3 4, 0 0 0 .
Consolidated cash flow statement
A reconciliation of changes in liabilities arising from financing activities is presented in note 22. The notes on pages 112 to 150 form part
of these financial statements.
Alphawave IP Group plc
Annual report and financial statements 2024
110
Consolidated statement of changes in equity
| Ordinary | Share | Share-based | Currency | ||||||
| share | premium | Merger | payment | translation | Convertible | Retained | |||
| capital | account | reserve | reserve | reserve | bonds | earnings | Total | ||
| Note | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | |
As at 1 January 2023 | ( | ( | |||||||
Net loss | ( | ( | |||||||
| Other comprehensive | |||||||||
expense | ( | ||||||||
Total comprehensive loss | ( | ( | |||||||
| Settlement of share awards: | |||||||||
– Issue of ordinary shares | 26 | ||||||||
| – Transfer of cumulative | |||||||||
compensation expense on settled awards | 26 | ( | |||||||
| – Share-based | |||||||||
compensation expense for the year | 27 | ||||||||
Other changes in equity | |||||||||
As at 31 December 2023 | ( | ( | |||||||
Net loss for the year | ( | ( | |||||||
| Other comprehensive | |||||||||
expense | ( | ( | ( | ||||||
Total comprehensive loss for the year | ( | ( | ( | ||||||
| Settlement of share awards: | |||||||||
– Issue of ordinary shares | 26 | ||||||||
| – Transfer of cumulative | |||||||||
compensation expense on settled awards | 26 | ( | |||||||
| Share-based compensation | |||||||||
expense for the year | 27 | ||||||||
| Recognition of convertible | |||||||||
bond | 22 | ||||||||
Other changes in equity | ( | ||||||||
As at | ( | ( |
The notes on pages 112 to 150 form part of these financial statements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
111
1 Background
Reporting entity
and whose shares are listed on the main market of the London
Stock Exchange. The address of the Company’s registered office
is Central Square, 29 Wellington Street, Leeds, United Kingdom .
The principal activities of the Company and its subsidiaries (together,
the ‘Group’) are the development and marketing of high-speed
connectivity solutions for application in data centres, data networking,
data storage, AI, 5G wireless infrastructure and autonomous vehicles.
Statement of compliance
Notes to the consolidated financial statements
For the year ended 31 December 2024
Alphawave IP Group plc
Annual report and financial statements 2024
112
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
113
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
1 Background continued
Accounting standards adopted during the year
continued
Alphawave IP Group plc
Annual report and financial statements 2024
114
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
115
2 Material accounting policies continued
Revenue recognition continued
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
Alphawave IP Group plc
Annual report and financial statements 2024
116
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
117
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
2 Material accounting policies continued
Revenue recognition continued
Alphawave IP Group plc
Annual report and financial statements 2024
118
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
119
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
2 Material accounting policies continued
Financial instruments continued
Alphawave IP Group plc
Annual report and financial statements 2024
120
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
121
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
Alphawave IP Group plc
Annual report and financial statements 2024
122
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
123
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
3 Critical judgements and key sources of
estimationuncertainty continued
Key sources of estimation uncertainty continued
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Revenue by type: | ||
IP and NRE | 214,453 | 100,676 |
IP reseller licensing | 41,118 | — |
IP and NRE – JV | 3,227 | 66,891 |
Silicon and royalties | 48,792 | 154,157 |
307,590 | 321,724 |
Alphawave IP Group plc
Annual report and financial statements 2024
124
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Revenue by region: | ||
North America | 123,770 | 82,160 |
China | 54,546 | 190,376 |
APAC (ex-China) | 81,178 | 33,459 |
EMEA | 48,096 | 15,729 |
307,590 | 321,724 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| APAC (ex-China) based | ||
customer | 37,916 | — |
EMEA based customer | 31,295 | — |
China based customer | — | 78,226 |
China based customer | — | 66,891 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
At the beginning of the year | 65,173 | 58,534 |
Revenue accrued in the period | 75,360 | 61,182 |
Accrued revenue invoiced in the period | (43,577) | (50,681) |
Expected credit loss | (1,261) | (3,862) |
At the end of the year | 95,695 | 65,173 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
At the beginning of the year | 50,106 | 91,733 |
Revenue recognised in the period | (45,448) | (90,346) |
Revenue deferred in the period | 57,659 | 48,743 |
Currency translation differences | — | (24) |
At the end of the year | 62,317 | 50,106 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Capitalised contract costs | 3,914 | 1,920 |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
125
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
4 Revenue continued
Contract assets and liabilities continued
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Research and development | ||
costs incurred | 166,385 | 131,441 |
| Research and development | ||
expenditure credits | (7,673) | (6,999) |
Development costs capitalised 1 | (61,600) | (46,226) |
Total | 97,112 | 78,216 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Acquisition-related costs | (236) | (831) |
Compensation element of Banias Labs deferred cash | ||
rights (note 30) | (7,618) | (8,352) |
Leadership reorganisation | (748) | — |
| Compensation element payable | ||
for Precise-ITC (note 30) | (6,215) | — |
| Share-based compensation | ||
expense (note 27) | (27,896) | (40,691) |
Currency translation gain/(loss) | 2,022 | (2,983) |
| Impairment of accounts | ||
| receivable and contract assets | ||
related to a customer | (9,000) | — |
Other operating (expense) | (49,691) | (52,857) |
7 Employee benefit costs
Employee benefit costs incurred (before deducting R&D
expenditure credits and including costs that were subsequently
capitalised) were as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Wages and salaries | 115,318 | 84,784 |
Social security costs | 2,674 | 2,033 |
| Defined contribution pension | ||
costs | 5,035 | 4,115 |
| Share-based compensation | ||
expense | 27,896 | 40,691 |
Total | 150,923 | 131,623 |
The average number of employees during the period, analysed by
category, was as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| Number | Number | |
| Research and development/ | ||
engineering | 808 | 675 |
General and administration | 66 | 55 |
Sales and marketing | 33 | 28 |
Total | 758 |
The number of employees at the period end, analysed by category,
was as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| Number | Number | |
| Research and development/ | ||
engineering | 891 | 741 |
General and administration | 68 | 58 |
Sales and marketing | 32 | 30 |
Total | 991 | 829 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Audit of the financial | ||
statements | 3,838 | 3,472 |
| Audit-related assurance | ||
services | 422 | 268 |
4,260 | 3,740 |
Alphawave IP Group plc
Annual report and financial statements 2024
126
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Finance income | ||
Interest income from contracts with customers | ||
| containing significant financing | ||
components | 340 | 275 |
Interest on bank deposits | 2,688 | 3,173 |
Interest on lease deposits | 60 | — |
IIA interest | 104 | — |
Warrants income | 6,205 | — |
9,397 | 3,448 | |
| Finance expense | ||
Bank charges | (1,283) | (65) |
Lease interest | (1,725) | (1,581) |
Term Loan interest | (19,275) | (16,489) |
| Term Loan interest capitalised | ||
to the balance sheet | 13,378 | 9,534 |
| Convertible bonds related | ||
expenses | (392) | — |
Interest under IAS 19 | (210) | (61) |
IIA interest | — | (174) |
(9,507) | (8,836) | |
Net finance expense | (110) | (5,388) |
10 Income taxes
Income tax recognised in profit or loss
The components of the Group’s income tax expense for the year
were as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Current tax | ||
UK corporation tax | 79 | (2,642) |
Adjustments to prior periods | (607) | 3,167 |
Overseas tax | 12,053 | 126 |
Total current tax | 11,525 | 651 |
| Deferred tax | ||
Origination and reversal of timing differences | (1,940) | 10,881 |
Total deferred tax | (1,940) | 10,881 |
Income tax expense | 9,585 | 11,532 |
Factors affecting the income tax expense for
the year
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the profit and loss account
except to the extent that it relates to items recognised directly
in equity or other comprehensive income, in which case it is
recognised directly in equity or other comprehensive income.
For income tax arising on dividends, the related tax is recognised in
the income statement, statement of other comprehensive income,
or in equity, consistent with the transactions that generated the
distributable profits.
The Group’s income tax expense differed from the amount
that would have resulted from applying the standard rate of UK
corporation tax to the Group’s loss before income taxes for the
following reasons:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Loss before tax | (32,934) | (39,470) |
| Loss before tax at the UK | ||
| corporation tax rate of 25% | ||
(2023: 23.52%) | (8,234) | (9,283) |
| Effects of: | ||
Share-based compensation | 4,524 | 7, 267 |
| Expenses not deductible for tax | ||
purposes | 3,186 | 3,171 |
| (Over)/under accrual of prior | ||
year provision | (607) | 3,167 |
Different tax rates applied in overseas jurisdictions | 1,054 | 667 |
Share of joint venture’s loss | — | 3,465 |
| Movement in unrecognised | ||
deferred tax assets | 8,614 | 2,146 |
Future tax rate change | (46) | — |
Other tax items | 1,094 | 932 |
Income tax expense | 9,585 | 11,532 |
Factors affecting the income tax expense in
future years
A UK corporation tax rate of 25% is used for 31 December 2024.
For 2023, a blended UK corporation tax rate of 23.52% was used
due to the change in the UK corporation tax rate to 25% from
1 April 2023, from the previously enacted 19%, announced at the
Budget on 3 March 2021, and substantively enacted on 24 May
2021. The deferred taxation balances have been measured using
the rates expected to apply in the reporting periods when the
timing differences reverse.
There have been no legislative changes announced in 2024 in
relation to UK, Canadian or US tax rates which will affect the Group.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
127
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
10 Income taxes continued
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
At the beginning of the year | 20,859 | 11,110 |
Charge to profit or loss | (1,940) | 10,881 |
Credit to OCI | (126) | (409) |
Currency translation differences | (4) | (2) |
Other | — | (721) |
At the end of the year | 18,789 | 20,859 |
| Year ended 31 December | |||
| 2024 | 2023 | ||
| US$’000 | US$’000 | ||
Accelerated capital allowances | 14,794 | 5,720 | |
Leases | (301) | (334) | |
Intangibles | 24,693 | 22,429 | |
Non-capital loss | (9,837) | (7,19 | 3) |
Undeducted R&D expenditures | (6,240) | 1,001 | |
| Allowance for expected | |||
credit loss | (2,385) | — | |
Other temporary differences | (1,935) | (764) | |
Total | 18,789 | 20,859 | |
11 Loss per share
Basic loss per share is calculated by dividing net loss for the period
by the weighted average number of ordinary shares in issue during
the period.
Diluted loss per share is calculated after adjusting the weighted
average number of ordinary shares used in the calculation of
basic loss per share to include the weighted average number
of ordinary shares that would be issued on conversion of all
dilutive potential ordinary shares. Potential ordinary shares
comprise share options, RSUs outstanding under the Company’s
share-based compensation plans, convertible bonds and warrants
issued to a customer.
| Year ended 31 December | ||
| (US$ thousands except number of | ||
shares) | 2024 | 2023 |
| Numerator: | ||
Net loss for the year | (42,519) | (51,002) |
| Denominator: | ||
Weighted average number of ordinary shares for basic loss | ||
per share | 735,053,019 | 705,550,299 |
Weighted average number of ordinary shares for diluted loss | ||
per share | 735,053,019 | 705,550,299 |
| Basic loss per share | ||
(US$ cents) | (5.78) | ( 7.23) |
| Diluted loss per share | ||
(US$ cents) | (5.78) | ( 7.23) |
Potential ordinary shares are not treated as dilutive if their
conversion to ordinary shares would decrease a loss per share
from continuing operations. Consequently, in both 2024 and 2023,
basic loss per share and diluted loss per share were the same.
Alphawave IP Group plc
Annual report and financial statements 2024
128
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Carrying amount | ||
At the beginning of the year | 309,199 | 309,199 |
At the end of the year | 309,199 | 309,199 |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
129
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
| Purchased | Internally | Developed | Customer | RISC-V | ||
| IP | developed IP | technology | relationships | licences | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | |
| Cost | ||||||
As at 1 January 2023 | 48,481 | 4,255 | 83,900 | 25,700 | 5,200 | 167,536 |
Additions | 1,825 | 54,539 | — | — | — | 56,364 |
| Re-classify to property | ||||||
and equipment | (1,162) | — | — | — | — | (1,162) |
Re-classification of intangibles | (2,947) | 2,947 | — | — | — | — |
As at 31 December 2023 | 46,197 | 61,741 | 83,900 | 25,700 | 5,200 | 222,738 |
Re-classify to PPE | — | (1,598) | — | — | — | (1,598) |
| Re-classification within | ||||||
Intangibles | 800 | (800) | — | — | — | — |
Additions | 1,038 | 74,978 | — | — | — | 76,016 |
As at 31 December 2024 | 48,035 | 134,321 | 83,900 | 25,700 | 5,200 | 297,156 |
| Accumulated amortisation | ||||||
As at 1 January 2023 | 5,069 | — | — | 714 | 347 | 6,130 |
Amortisation charge for the year | 10,112 | — | — | 2,142 | 1,040 | 13,294 |
As at 31 December 2023 | 15,181 | — | — | 2,856 | 1,387 | 19,424 |
Amortisation charge for the year | 10,902 | 406 | — | 2,142 | 1,040 | 14,490 |
As at 31 December 2024 | 26,083 | 406 | — | 4,998 | 2,427 | 33,914 |
| Carrying amount | ||||||
As at 31 December 2023 | 31,016 | 61,741 | 83,900 | 22,844 | 3,813 | 203,314 |
As at 31 December 2024 | 21,952 | 133,915 | 83,900 | 20,702 | 2,773 | 263,242 |
Alphawave IP Group plc
Annual report and financial statements 2024
130
| Computer and | |||||
| laboratory | Furniture | Leasehold | Mask sets | ||
| equipment | and fixtures | improvements | and prototypes | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | |
| Cost | |||||
As at 1 January 2023 | 14,496 | 458 | 1,923 | — | 16,877 |
Additions | 15,395 | 824 | 2,349 | — | 18,568 |
Re-classify from intangible assets | 1,162 | — | — | — | 1,162 |
As at 31 December 2023 | 31,053 | 1,282 | 4,272 | — | 36,607 |
Re-classify within PPE | (5,577) | — | — | 5,577 | — |
Re-classification from Intangibles | 723 | — | — | 875 | 1,598 |
Additions | 8,063 | 2,806 | 5,006 | 17,604 | 33,479 |
Disposals | (1) | — | (11) | (4,415) | (4,427) |
As at 31 December 2024 | 34,261 | 4,088 | 9,267 | 19,641 | 67,257 |
| Accumulated depreciation | |||||
As at 1 January 2023 | 2,740 | 98 | 618 | — | 3,456 |
Depreciation charge for the year | 10,143 | 259 | 810 | — | 11,212 |
Depreciation charged to the P&L then capitalised | 1,285 | — | — | — | 1,285 |
As at 31 December 2023 | 14,168 | 357 | 1,428 | — | 15,953 |
Re-classify within PPE | (726) | — | — | 726 | — |
Depreciation charge for the year | 10,724 | 465 | 2,524 | 436 | 14,149 |
Depreciation charged to the P&L then capitalised | 1,276 | — | — | — | 1,276 |
Disposals | (1) | — | (4) | — | (5) |
Currency translation differences | 15 | — | — | — | 15 |
As at 31 December 2024 | 25,456 | 822 | 3,948 | 1,162 | 31,388 |
| Carrying amount | |||||
As at 31 December 2023 | 16,885 | 925 | 2,844 | — | 20,654 |
As at 31 December 2024 | 8,805 | 3,266 | 5,319 | 18,479 | 35,869 |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
131
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
15 Property and equipment – leased
| Buildings | Equipment | Total | |
| US$’000 | US$’000 | US$’000 | |
| Cost | |||
As at 1 January 2023 | 15,306 | 5,498 | 20,804 |
Additions | 5,265 | 608 | 5,873 |
Disposals | (551) | — | (551) |
Currency translation differences | (3) | — | (3) |
As at 31 December 2023 | 20,017 | 6,106 | 26,123 |
Additions | 7,807 | 644 | 8,451 |
Disposals | (1,967) | — | (1,967) |
Currency translation differences | (10) | — | (10) |
As at 31 December 2024 | 25,847 | 6,750 | 32,597 |
| Accumulated depreciation | |||
As at 1 January 2023 | 3,468 | 2,783 | 6,251 |
Depreciation charge for the year | 3,006 | 1,606 | 4,612 |
Currency translation differences | (2) | — | (2) |
As at 31 December 2023 | 6,472 | 4,389 | 10,861 |
Depreciation charge for the year | 4,013 | 1,535 | 5,548 |
Disposals | (1,804) | — | (1,804) |
Currency translation differences | (5) | — | (5) |
As at 31 December 2024 | 8,676 | 5,924 | 14,600 |
| Carrying amount | |||
As at 31 December 2023 | 13,545 | 1,717 | 15,262 |
As at 31 December 2024 | 17,171 | 826 | 17,997 |
| US$’000 | |
As at 1 January 2023 | 14,933 |
Additions | 5,385 |
Interest expense | 1,581 |
Lease payments | (4,740) |
Currency translation differences | (479) |
As at 31 December 2023 | 16,680 |
Additions | 8,066 |
Disposals | — |
Interest expense | 1,725 |
Lease payments | (6,642) |
Currency translation differences | (114) |
Termination | (102) |
As at 31 December 2024 | 19,613 |
Alphawave IP Group plc
Annual report and financial statements 2024
132
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Current | 3,834 | 3,953 |
Non-current | 15,779 | 12,727 |
Total lease liabilities | 19,613 | 16,680 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Expense relating to short-term leases and low-value lease expense | 730 | 716 |
Expense relating to variable lease payments not included in lease liabilities | — | — |
730 | 716 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Cash flow from financing activities | ||
Lease payments included in lease liabilities | 6,642 | 4,740 |
| Cash flow from operating activities | ||
Variable lease payments not included in lease liabilities | — | — |
Lease payments on short-term leases and leases of low-value assets | 730 | 716 |
Total cash outflow on lease payments | 7,372 | 5,456 |
| US$’000 | |
| Carrying amount | |
As at 1 January 2023 | — |
Additional investment | 14,730 |
Loss from joint venture | (14,730) |
As at 31 December 2023 | — |
Additional investment | — |
Loss from joint venture | — |
As at 31 December 2024 | — |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
133
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
16 Investment in joint venture continued
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Current assets | 28,067 | 23,766 |
Property and equipment | 3,922 | 5,043 |
Intangible assets | 33,583 | 53,774 |
Other non-current assets | 1,456 | 2,176 |
Current liabilities | 44,085 | 34,411 |
Non-current liabilities | 11,193 | 24,588 |
| Included in the above amounts | ||
| are: | ||
Cash and cash equivalents | 5,224 | 13,700 |
| Current financial liabilities | ||
(excluding trade payables) | 580 | — |
| Non-current financial liabilities | ||
(excluding trade payables) | — | — |
Net assets (100%) | 11,750 | 25,759 |
| Group share of net assets | ||
(35.15%) | 4,130 | 10,948 |
| Share of losses of joint venture | ||
recognised as a liability | — | — |
Share of unrealised profits on IP licences to joint venture not recognised | — | 11,910 |
Carrying amount of liability in joint venture | — | — |
| As at 31 December | |||
| 2024 | 2023 | ||
| US$’000 | US$’000 | ||
Revenue | 6,380 | 19,826 | |
Loss from continuing operations | (41,987) | (35,930) | |
Included in loss from continuing operations are: | |||
Depreciation and amortisation | (21,313) | (20,730) | |
Interest expense | (1,393) | (2,171) | |
Other comprehensive income | — | — | |
| Total comprehensive expense | |||
(100%) | (41,987) | (35,930) | |
| Group share of total | |||
| comprehensive expense | |||
| (42.5% until 15 September | |||
202 | 4, 35.15% thereafter) | (16,682) | (15,270) |
| Reversal of share of unrealised | |||
| profits on IP licences to joint | |||
venture | 16,682 | 540 | |
Loss from joint venture | — | (14,730) |
Alphawave IP Group plc
Annual report and financial statements 2024
134
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Cash at bank and in hand | 162,159 | 101,291 |
Short-term deposits | 18,000 | — |
| Total cash and cash | ||
equivalents | 180,159 | 101,291 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Current | ||
Trade receivables from contracts with customers | 78,903 | 49,214 |
| Less: Allowance for expected | ||
credit losses | (10,107) | (5,635) |
Trade receivables – net | 68,796 | 43,579 |
Restricted cash | 5,798 | 17, 8 4 3 |
Other receivables | 6,707 | 16,667 |
Total current | 81,301 | 78,089 |
| Non-current | ||
Restricted cash | 626 | 6,392 |
Other receivables | 1,380 | — |
Total non-current | 2,006 | 6,392 |
Total trade and other receivables | 83,307 | 84,481 |
19 Inventories
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Finished goods | 1,371 | 4,248 |
Work in progress | 4,486 | 5,737 |
Raw materials | 132 | 1,637 |
Total inventories | 5,989 | 11,622 |
During 2024, an expense of US$0.7m (2023: US$0.6m) was
recognised in respect of the write-down of inventories to net
realisable value.
| As at 31 December | |||
| 2024 | 2023 | ||
| US$’000 | US$’000 | ||
| Current | |||
Prepayments | 7,898 | 17,09 | 4 |
Capitalised contract costs | 3,914 | 1,923 | |
Total current | 11,812 | 19,017 | |
| Non-current | |||
Prepayments | 775 | — | |
Total non-current | 775 | — | |
Total other assets | 12,587 | 19,017 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Current | ||
Trade payables | 32,588 | 18,098 |
Accrued expenses 1 | 27,524 | 33,553 |
Social security and other taxes | 992 | 195 |
Other payables | 15,702 | 17, 4 39 |
Total current | 76,806 | 69,285 |
| Non-current | ||
Other payables | 132 | 1,775 |
Total non-current | 132 | 1,775 |
Total trade and other payables | 76,938 | 71,060 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Current | ||
Term Loan | 9,375 | 5,625 |
Total current loans and borrowings | 9,375 | 5,625 |
| Non-current | ||
Revolving Credit Facility | 125,000 | 125,000 |
Term Loan | 103,281 | 88,125 |
Convertible Loan | 112,847 | — |
Israel Innovation Authority | 1,522 | 1,625 |
Total non-current loans and borrowings | 342,650 | 214,750 |
Total loans and borrowings | 352,025 | 220,375 |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
135
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
22 Loans and borrowings continued
Alphawave IP Group plc
Annual report and financial statements 2024
136
| Loans and | Warrant | Interest | Lease | ||
| borrowings | liability | payable | liabilities | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | |
As at 1 January 2023 | 210,201 | — | 2,484 | 14,933 | 227,618 |
Financing cash inflow/(outflow) | 10,000 | — | (18,390) | (4,740) | (13,130) |
Currency translation differences | 174 | — | — | (40) | 134 |
Other movements | — | — | 16,053 | 6,527 | 22,580 |
As at 31 December 2023 | 220,375 | — | 147 | 16,680 | 237, 202 |
Financing cash inflow/(outflow) 2 | 166,288 | — | (19,227) | (6,642) | 140,419 |
Less: equity component related to convertible bond | (34,051) | — | — | — | (34,051) |
Financing cash inflows related to liabilities | 132,237 | — | (19,227) | (6,642) | 106,368 |
| Non-cash-related items: | |||||
Unpaid transaction costs relating to convertible bonds | (681) | — | — | — | (681) |
Other movements¹ | 94 | — | 19,542 | 10,081 | 29,717 |
Currency translation differences | — | — | — | (114) | (114) |
Initial recognition of warrant liability | — | 13,671 | — | — | 13,671 |
As at 31 December 2024 | 352,025 | 13,671 | 462 | 20,005 | 386,163 |
| As at 31 December 2024 | |||
| Carrying amount | |||
| Amortised | Fair | ||
| cost | value | ||
| US$’000 | US$’000 | ||
| Financial assets | |||
Cash and cash equivalents | 180,159 | 180,159 | |
Trade and other receivables | 95,894 | 95,894 | |
Contract assets | 95,695 | 95,695 | |
Warrant payment to customer | 19,848 | 19,848 | |
Total financial assets | 391,596 | 391,596 | |
| Financial liabilities | |||
Trade and other payables | (76,938) | (76,938) | |
Lease liabilities | (19,613) | (19,613) | |
Loans and borrowings | (352,025) | (331,213) | |
Total financial liabilities | (448,576) | (427,76 | 4) |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
137
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
23 Measurement of financial instruments continued
Analysis by class and category continued
| As at 31 December 2023 | ||
| Carrying amount | ||
| Amortised | Fair | |
| cost | value | |
| US$’000 | US$’000 | |
| Financial assets | ||
Cash and cash equivalents | 101,291 | 101,291 |
Trade and other receivables | 103,498 | 103,498 |
Contract assets | 65,173 | 65,173 |
Total financial assets | 269,962 | 269,962 |
| Financial liabilities | ||
Trade and other payables | (71,060) | (71,060) |
Lease liabilities | (16,680) | (16,680) |
Loans and borrowings | (220,375) | (220,375) |
Total financial liabilities | (308,115) | (308,115) |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Contingent consideration | ||
At the beginning of the year | — | (5,000) |
Settlements | — | 5,000 |
At the end of the year | — | — |
Alphawave IP Group plc
Annual report and financial statements 2024
138
As at 31 December 2024 | As at 31 December 2023 | |||||
| Weighted | Gross carrying | Loss | Weighted | Gross carrying | Loss | |
| average | amount | allowance | average | amount | allowance | |
| loss rate | US$’000 | US$’000 | loss rate | US$’000 | US$’000 | |
Start-up company based in developing country | 21% | 47,504 | 9,903 | 12% | 45,311 | 5,620 |
Other start-up companies | 13% | 22,268 | 2,858 | 0% | 21,658 | 85 |
Established company based in developing country | 10% | 11,588 | 1,209 | 25% | 11,261 | 2,772 |
Other established companies | 1% | 98,361 | 1,260 | 3% | 40,019 | 1,020 |
179,721 | 15,230 | 118,249 | 9,497 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
At the beginning of the year | 9,497 | 2,184 |
Net remeasurement of loss allowance | 8,005 | 7,3 37 |
Written-off in the year | (2,272) | — |
Foreign exchange difference | — | (24) |
At the end of the year | 15,230 | 9,497 |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
139
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
24 Financial risk management continued
| As at 31 December 2024 | ||||
| Interest bearing | ||||
| Non-interest | ||||
| Floating rate | Fixed rate | bearing | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | |
Cash and cash equivalents | 107,661 | 18,000 | 54,498 | 180,159 |
Trade and other receivables and other assets | — | — | 95,894 | 95,894 |
Contract assets | — | — | 95,695 | 95,695 |
Total financial assets | 107,661 | 18,000 | 246,087 | 371,748 |
Trade and other payables | — | — | (76,938) | (76,938) |
Lease liabilities | — | (19,613) | — | (19,613) |
Loans and borrowings | (239,179) | (112,846) | — | (352,025) |
Total financial liabilities | (239,179) | (132,459) | (76,938) | (448,576) |
| As at 31 December 2023 | ||||
| Interest bearing | ||||
| Non-interest | ||||
| Floating rate | Fixed rate | bearing | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | |
Cash and cash equivalents | 65,443 | 1,457 | 34,391 | 101,291 |
Trade and other receivables and other assets | — | — | 103,498 | 103,498 |
Contract assets | — | — | 65,173 | 65,173 |
Total financial assets | 65,443 | 1,457 | 203,062 | 269,962 |
Trade and other payables | — | — | (71,060) | (71,060) |
Lease liabilities | — | — | (16,680) | (16,680) |
Loans and borrowings | (220,375) | — | — | (220,375) |
Total financial liabilities | (220,375) | — | (87,740) | (308,115) |
Alphawave IP Group plc
Annual report and financial statements 2024
140
| As at 31 December 2024 | |||||||||
| CAD | GBP | ILS | INR | RMB | TWD | EUR | USD | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | |
| Cash | |||||||||
| and cash | |||||||||
equivalents | 596 | 3,373 | 315 | 1,955 | 2,386 | 34 | 253 | 171,247 | 180,159 |
| Trade | |||||||||
and other receivables | |||||||||
and other assets | — | 459 | 950 | 3,186 | 54 | — | 94 | 91,151 | 95,894 |
| Contract | |||||||||
assets | — | — | — | — | — | — | — | 95,695 | 95,695 |
| Trade | |||||||||
and other payables | (1,716) | (6,991) | (4,993) | (8,541) | (166) | — | (210) | (54,321) | (76,938) |
| Lease | |||||||||
liabilities | (9,513) | — | (527) | (4,163) | (114) | — | — | (5,296) | (19,613) |
Loans and borrowings | — | — | (1,522) | — | — | — | — | (350,503) | (352,025) |
(10,633) | (3,159) | (5,777) | (7,563) | 2,160 | 34 | 137 | (52,027) | (76,828) |
| As at 31 December 2023 | |||||||||
| CAD | GBP | ILS | INR | RMB | TWD | EUR | USD | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | US$’000 | |
| Cash | |||||||||
| and cash | |||||||||
equivalents | 632 | 41,957 | 133 | 473 | 2,756 | 210 | — | 55,130 | 101,291 |
| Trade | |||||||||
and other receivables | |||||||||
and other assets | 20,376 | 902 | 596 | 1,055 | 6,211 | 72 | — | 74,286 | 103,498 |
| Contract | |||||||||
assets | — | — | — | — | 66 | — | — | 65,107 | 65,173 |
| Trade | |||||||||
and other payables | (26,829) | (4,969) | (2,266) | (3,954) | (393) | (21) | — | (32,628) | (71,060) |
| Lease | |||||||||
liabilities | (14,949) | — | (832) | (890) | (9) | — | — | — | (16,680) |
Loans and borrowings | — | — | (1,625) | — | — | — | — | (218,750) | (220,375) |
(20,770) | 37, 890 | (3,994) | (3,316) | 8,631 | 261 | — | (56,855) | (38,153) |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
141
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
24 Financial risk management continued
Market risk continued
Currency risk continued
| As at 31 December | ||
| 2024 | 2023 | |
| Foreign currency | US$’000 | US$’000 |
CAD | (1,020)/1,020 | (834)/834 |
GBP | 463/(463) | 778/(778) |
ILS | 627/(627) | 498/(498) |
INR | — | 26/(26) |
RMB | 283/(283) | 632/(632) |
USD | 1,295/(1,295) | 899/(899) |
| As at 31 December 2024 | ||||
| Due within | Due between | Due > | ||
| 1 year | 1 and 5 years | 5 years | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | |
Trade and other payables | 76,806 | 132 | — | 76,938 |
Lease liabilities | 5,767 | 17,469 | 2,312 | 25,548 |
Loans and borrowings | 32,102 | 316,797 | 150,925 | 499,824 |
114,675 | 334,398 | 153,237 | 602,310 |
| As at 31 December 2023 | ||||
| Due within | Due between | Due > | ||
| 1 year | 1 and 5 years | 5 years | Total | |
| US$’000 | US$’000 | US$’000 | US$’000 | |
Trade and other payables | 69,285 | 1,775 | — | 71,060 |
Lease liabilities | 3,953 | 7,660 | 5,067 | 16,680 |
Loans and borrowings | 5,625 | 214,750 | — | 220,375 |
78,863 | 224,185 | 5,067 | 308,115 |
Alphawave IP Group plc
Annual report and financial statements 2024
142
| As at 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Total equity | 489,753 | 468,448 |
Loans and borrowings | 352,025 | 220,375 |
Cash and cash equivalents | (180,159) | (101,291) |
Net debt | 171,866 | 119,084 |
Lease liabilities | 19,613 | 16,680 |
Total capital | 298,274 | 332,684 |
25 Post-employment benefits
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
At the beginning of the year | 2,476 | 821 |
| Recognised in profit or loss: | ||
Current service cost | 920 | 489 |
Interest expense | 210 | 60 |
Recognised in other comprehensive income: | ||
Experience adjustments | 18 | 472 |
| Change in Financial | ||
| Assumptions in relation | ||
to prior year | 406 | — |
| Change in Financial | ||
| Assumptions in relation | ||
to current year | 487 | 735 |
Benefits paid by employer | (191) | (59) |
Currency translation differences | (108) | (42) |
At the end of the year | 4,218 | 2,476 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Staff attrition rate – age less | ||
than 30 years | 10% p.a. | 10% p.a. |
Staff attrition rate – 31-44 years | 5% p.a. | 5% p.a. |
| Staff attrition rate – 45 years | ||
and above | 3% p.a. | 3% p.a. |
Mortality rate | IALM 2012-14 | IALM 2012-14 |
| Rate of increase in salaries | ||
year 1 | 20.0% p.a. | 22.0% p.a. |
| Rate of increase in salaries | ||
year 2 | 15% p.a. | 15% p.a. |
| Rate of increase in salaries year | ||
3 onwards | 10% p.a. | 10% p.a. |
Discount rate | 7.1% p.a. | 7.4% p.a. |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
143
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
| Nominal | ||
| Number | value | |
| of shares | US$’000 | |
As at 1 January 2023 | 695,068,200 | 9,751 |
Shares issued under employee share schemes | 20,446,367 | 260 |
As at 31 December 2023 | 715,514,567 | 10,011 |
Shares issued under employee share schemes | 35,624,639 | 440 |
As at 31 December 2024 | 751,139,206 | 10,451 |
Alphawave IP Group plc
Annual report and financial statements 2024
144
27 Share-based payment
Prior to the Company’s IPO in July 2021, options and restricted stock units (RSUs) were granted to employees of and consultants to
the Company and its subsidiaries under the Equity Incentive Plan (EIP). Following the IPO, no further awards were granted under the
EIP and it was replaced by the Long-Term Incentive Plan (LTIP). Awards under the LTIP may take the form of RSUs, options or restricted
ordinary shares.
While the specific terms of awards may vary according to individual grant agreements, options and RSUs granted under the EIP and
the LTIP typically vest over four years with 25% vesting on the first anniversary of the grant date and the remaining 75% vesting in equal
monthly instalments thereafter until the fourth anniversary of the grant date conditional on the participant remaining in the Group’s
employment during the vesting period and any performance conditions having been met. Unexercised options granted under the EIP and
the LTIP expire on the fifth and tenth anniversary of the grant date, respectively. On exercise or vesting, each option and RSU issued under
the plans converts into one ordinary share in the Company. Unexercised options and unvested RSUs carry neither rights to dividends nor
voting rights. No amounts are paid or payable by the recipient on receipt of an RSU, however, there are exercise costs paid or payable by
the recipient on receipt of an option.
From 1 July 2024, the Company initiated an employee share purchase plan (ESPP). This plan allows employees of the Group to acquire
shares in the Company. The plan qualifies under Section 423 of the Code (US Internal Revenue Code of 1986) and the offering period runs
quarterly, allowing employees to put up to 15% of their gross salary into the plan each month. At the end of the offering period, employees
can purchase shares at a 15% discount from the share price. The share price has a look-back feature, which means the 15% discount is
applied to the lower of the share price on the first day of the offering period or the last day of the offering period. The shares vest at the
end of the offering period.
In 2024, the Company granted Tony Pialis, Chief Executive Officer, 1,165,968 share-based awards that vest upon certain targets being hit
by the Group over a three-year period. Further detail on this can be seen in the Directors’ remuneration report on page 90.
All options and RSUs outstanding under the plans are equity-settled awards.
During 2024, 30,158,836 (2023: 24,810,455) RSUs were granted under the LTIP. Since the Company does not expect to pay dividends
during the vesting period, the grant date fair value of the awards was the market price of the Company’s ordinary shares on the grant date.
The weighted average grant date fair value of the RSUs granted during the year was US$1.54 (2023: US$1.38). During the periods under
review, no options were granted under the LTIP.
The number of options and RSUs outstanding and the weighted average price of the options and RSUs on the grant date were as follows:
Year ended 31 December 2024 | Year ended 31 December 2023 | |||
| Weighted | Weighted | |||
| average | average | |||
| Number | exercise price 1 | Number | exercise price 1 | |
| of awards | (US$) | of awards | (US$) | |
Outstanding at the beginning of the year | 86,263,963 | 0.842 | 85,692,153 | 0.712 |
Granted | 30,158,836 | 1.548 | 24,810,455 | 1.387 |
Exercised or vested | (34,585,080) | 1.083 | (20,446,367) | 0.808 |
Forfeited | (4,113,184) | 1.302 | (3,792,278) | 1.002 |
Outstanding at the end of the year | 77,724,535 | 0.980 | 86,263,963 | 0.842 |
Vested at the end of the year | 39,703,803 | 0.455 | 43,669,961 | 0.339 |
1. The weighted average exercise price relates to options only.
The price payable by participants on exercise or vesting of option awards outstanding at the end of the year was in the range US$0.01
to US$1.04 (2023: US$0.01 to US$1.04).
The weighted average market price of the Company’s ordinary shares on the dates that options and RSUs vested during 2024 was
US$1.70 (2023: US$1.45).
During 2024, the total share-based compensation expense recognised by the Group was US$27,896,000 (2023: US$40,691,000).
The primary reason for this decrease is due to the 2023 share-based compensation charge including an annual bonus amount of
US$11.7m compared to just US$3.0m in 2024, as one quarter’s bonus was paid in RSUs for all employees.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
145
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Payable: | ||
Within one year | 42,659 | 32,602 |
Between one and two years | 45,678 | 11,132 |
Between two and five years | 43,902 | 1,369 |
After more than five years | — | — |
Total | 132,239 | 45,103 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
Short-term employee benefits | 7,998 | 5,898 |
Post-employment benefits | 137 | 162 |
Termination benefits | 817 | 344 |
Share-based payments | 6,882 | 4,774 |
15,834 | 11,178 |
Alphawave IP Group plc
Annual report and financial statements 2024
146
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Transactions | ||
Revenue from companies on which a Director is the chairman of the board 1 | 33 | 429 |
Revenue from VeriSilicon | 2,056 | — |
Revenue from WiseWave, a joint venture, where there is common directorship | 3,227 | 66,879 |
Operating expenses from a company on which a Director is a director | (3,278) | (133) |
Costs capitalised as intangible assets from a company on which a Director is a director | (1,000) | (1,000) |
1,038 | 66,175 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$’000 | US$’000 | |
| Balances | ||
Accounts receivable from a company on which a Director is the chairman of the board 1 | 2,760 | 1,650 |
Accounts receivable from VeriSilicon | 200 | — |
Accounts receivable from WiseWave, a joint venture, where there is common directorship | 19,603 | 6,364 |
Contract asset from companies on which a Director is the chairman of the board 1 | 1,720 | 2,567 |
Contract asset from WiseWave, a joint venture, where there is common directorship | 14,361 | 40,785 |
Prepaid expenses with a company on which a Director is a director | 67 | 67 |
38,711 | 51,433 | |
Contract liabilities from VeriSilicon | (2,566) | — |
Contract liabilities from WiseWave, a joint venture, where there is common directorship | (326) | — |
Accrued liabilities with a company on which a Director is a director | (500) | (600) |
(3,392) | (600) |
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
147
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
Alphawave IP Group plc
Annual report and financial statements 2024
148
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
149
Notes to the consolidated financial statements continued
For the year ended 31 December 2024
31 Events after the reporting period
On 12 February 2025 Alphawave Semiconductor Corp was dissolved.
Alphawave IP Group plc
Annual report and financial statements 2024
150
Introduction
Management uses a number of measures to assess the Group’s
financial performance. We consider certain of these measures to
be particularly important and identify them as ‘key performance
indicators’ (KPIs). We have identified the following financial
measures as KPIs: revenue; bookings; backlog (excluding royalties);
adjusted EBITDA; and cash generated from operations.
Certain of these measures are non-IFRS measures because they
exclude amounts that are included in, or include amounts that are
excluded from, the most-directly comparable measure calculated
and presented in accordance with IFRS or are calculated using
financial measures that are not calculated in accordance with
IFRS. We do not regard non-IFRS measures as a substitute for, or
superior to, the equivalent IFRS measures. Non-IFRS measures
presented by Alphawave may not be directly comparable with
similarly titled measures presented by other companies.
Bookings and backlog
Management monitors bookings and backlog as indicators of
future revenue from contracts with customers.
Bookings
Bookings is a non-IFRS measure and represents legally binding
commitments by customers. Bookings comprise licence fees,
non-recurring engineering support, orders for silicon products,
financing components and estimated future royalties (based
on contractually committed royalty prepayments or on volume
estimates provided by customers) and any cancellation fees not
already included in de-bookings. Our customer contracts for ASIC
design services are typically cancellable upon payment of a fee.
Customer contracts for IP licensing are typically non-cancellable.
We include estimated sales for silicon products in bookings when
respective arrangements with customers includes a minimum
purchase commitment. Such commitments are typically effective
only upon completion of engineering qualification and validation of
our products.
Bookings are recorded at the point the contract has been signed
by both Alphawave and the customer. These are released to
the market each quarter within our quarterly trading update.
Infrequently, customers request to cancel bookings. At the time of
cancellation, these are recorded as debookings after taking into
account any pertinent cancellation charges in the backlog, which
is updated in the annual financial statements. Quarterly bookings
included in our trading updates do not reflect debookings.
Bookings during the year were as follows:
Year ended 31 December
2024
US$m
2023
US$m
Preliminary bookings
(including royalties) 515.5 364.4
Adjustment — 19.5
Bookings
1
515.5 383.9
Royalties (0.1) —
Bookings (excluding royalties) 515.4 383.9
1. 2023 bookings include a contract of US$19.5m that was signed by the
acquired OpenFive business in 2022, but not considered a booking until
2023 when project viability was established.
Backlog
Backlog is a non-IFRS measure that represents cumulative
bookings (excluding royalties) that have not yet been recognised as
revenue and which we expect to be recognised in future periods.
Backlog at the end of the year is calculated based on our backlog
as at the beginning of the year, plus new bookings during the year
and backlog acquired in business combinations, less revenue
recognised during the year, less any adjustments for debookings.
Movements on backlog (excluding royalties) during the year were
as follows:
Year ended 31 December
2024
US$m
2023
US$m
Backlog at the beginning of the
year 354.9 379.7
Add: Bookings during the year 515.4 383.9
Less: Net debookings/other
adjustments during the year (42.8) (87.3)
Less: Revenue recognised
during the year (307.5) (321.4)
Backlog at the end of the year 520.0 354.9
Our closing backlog at the end of 2024 is US$520.0m (2023:
US$354.9m) and includes US$42.8m of net adjustments/
debookings.
EBITDA
Earnings before interest, taxation, depreciation and amortisation
(EBITDA) is a non-IFRS measure that we consider useful to
investors and other users of our financial information in evaluating
the sensitivity of the Group’s trading performance to changes in
variable operating expenses.
Joint venture profit or loss
We also exclude the costs of our joint venture in WiseWave from
EBITDA because we consider that, as a start-up, they hinder the
comparison of the Group’s trading performance from one period to
another or with other businesses.
EBITDA may be reconciled to net loss for the period determined in
accordance with IFRS as follows:
Year ended 31 December
2024
US$’000
2023
US$’000
Net loss (42,519) (51,002)
Add/(deduct):
Finance income (9,397) (3,448)
Finance expense 9,507 8,836
Loss from joint venture — 14,730
Income tax expense 9,585 11,532
Depreciation of property and
equipment – owned 14,149 11,212
Depreciation of property and
equipment – leased 5,548 4,612
Amortisation of intangible
assets 14,490 13,294
EBITDA 1,363 9,766
Alternative performance measures
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
151
Alternative performance measures continued
Adjusted measures of profitability
We report adjusted measures of profitability because we believe that they provide both management and investors with useful additional
information about the financial performance of our business. Adjusted measures of profitability are non-IFRS measures that represent the
equivalent IFRS measures adjusted for specific items that we consider hinder comparison of theGroup’s financial performance from one
period to another or with other businesses.
Adjusted measures of profitability exclude items that can have a significant effect on profit or loss. We compensate for this limitation by
monitoring separately the items that are excluded from the equivalent IFRS measures in calculating the adjusted measures.
We outline below the specific items of income and expense that are recognised in profit or loss in accordance with IFRS but are excluded
from the Group’s adjusted results.
Business combinations
We exclude those effects of applying the acquisition method of accounting under IFRS that we consider are not indicative of the Group’s
trading performance, including the accounting for transaction costs; the recognition of certain elements of the purchase price as
compensation expense; and the recognition of remeasurements of contingent consideration in profit or loss.
During the periods under review, we excluded from our adjusted results the following items arising from the accounting for business
combinations:
>
Acquisition-related costs.
>
The element of the value of the deferred cash rights granted to employees of Banias Labs to replace the unvested employee share
options at the acquisition date that is accounted for as compensation expense rather than as consideration.
>
The compensation element of Precise-ITC acquisition.
We also exclude from our adjusted measures the amortisation of identifiable intangible assets acquired in business combinations in order
that the performance of our business may be compared more fairly with that of businesses that have developed on an organic basis.
Integration costs
We exclude the costs of integrating acquired businesses because we consider that they hinder the comparison of the Group’s trading
performance from one period to another or with other businesses.
Leadership reorganisation
We exclude reorganisation costs relating to members of our leadership team as we believe these costs hinder the comparison of the
Group’s trading performance from one period to another or with businesses.
Share-based payments and related expenses
We exclude the compensation expense recognised in relation to options and RSUs granted under the Company’s share-based payment
plans because the awards are equity-settled and their effect on shareholders’ returns is already reflected in diluted earnings per share
measures. We additionally exclude the expense for payroll taxes payable on the exercise or vesting of the awards because the expense
fluctuates according to the Company’s share price at the exercise or vesting date and the effect on profit or loss is therefore not
necessarily indicative of the Group’s trading performance.
Currency translation differences
We exclude gains and losses that arise at entity level on the translation of foreign currency-denominated net cash and borrowings into the
entity’s functional currency. Such gains and losses can be significant and are not representative of the Group’s trading performance.
Expected credit loss related to a customer
We exclude the impairment of accounts receivable and contract assets from a long-standing customer of the Group.
Income tax effect of adjustments
Where relevant, we calculate the income tax effect of adjustments by considering the specific tax treatment of each item and by applying
the relevant statutory tax rate to those items that are taxable or deductible for tax purposes.
Alphawave IP Group plc
Annual report and financial statements 2024
152
Adjusted EBITDA
Adjusted EBITDA may be reconciled to EBITDA as follows:
Year ended 31 December
2024
US$’000
2023
US$’000
EBITDA 1,363 9,766
Add/(deduct):
Acquisition-related costs 236 831
Compensation element of Banias Labs deferred cash rights (note 30) 7,618 8,352
Leadership reorganisation 748 —
Compensation element payable for Precise-ITC (note 30) 6,215 —
Share-based compensation expense (note 27) 27,896 40,691
Currency translation gain/(loss) (2,022) 2,983
Expected credit loss related to a customer 9,000 —
Adjusted EBITDA 51,054 62,623
Adjusted earnings per share
We monitor basic and diluted earnings per share (EPS) on an IFRS basis and on an adjusted basis. We consider that adjusted EPS
measures are useful to investors in assessing our ability to generate earnings and provide a basis for assessing the value of the
Company’s shares (for example, by way of price earnings multiples).
Adjusted net income for calculating adjusted EPS measures may be reconciled to net loss determined in accordance with IFRS as follows:
Year ended 31 December
2024
US$’000
2023
US$’000
Net loss (42,519) (51,002)
Add/(deduct):
Acquisition-related costs 236 831
Compensation element of Banias Labs deferred cash rights (note 6) 7,618 8,352
Leadership reorganisation 748 —
Compensation element payable for Precise-ITC (note 30) 6,215 —
Share-based compensation expense (note 27) 27,896 40,691
Currency translation gain/(loss) (2,022) 2,983
Impairment of accounts receivable and contract assets related to a customer 9,000 —
Amortisation of acquired intangibles 12,657 12,657
Tax effect of above adjustments (1,399) (2,623)
Adjusted net income 18,430 11,889
Adjusted basic and diluted earnings per share were as follows:
Year ended 31 December
2024
US$ cents
2023
US$ cents
Adjusted basic earnings per share 2.51 1.69
Adjusted diluted earnings per share 2.51 1.69
Adjusted basic and diluted earnings per share have been calculated by taking the adjusted net income for the year and dividing it by the
weighted average number of common shares that are used in calculating the equivalent measures under IFRS as presented in note 11 to
the consolidated financial statements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
153
Company balance sheet
As at 31 December
Note
2024
US$’000
2023
US$’000
Assets
Current assets
Cash and cash equivalents 5 120,097 16,911
Amounts owed by Group undertakings 6 — 21,404
Income tax receivables 5,986 2,417
Warrant payment to customer 484 —
Other receivables 7 6,077 11,888
Total current assets 132,644 52,620
Non-current assets
Investments in subsidiaries 8 379,275 346,163
Other investments 1,017 1,019
Amounts owed by Group undertakings 6 440,585 366,304
Warrant payment to customer 19,364 —
Other receivables 7 626 6,392
Total non-current assets 840,867 719,878
Total assets 973,511 772,498
Liabilities and equity
Current liabilities
Trade and other payables 9 8,659 8,940
Amounts owed to Group undertakings 798 —
Loans and borrowings 10 9,375 5,625
Total current liabilities 18,832 14,565
Non-current liabilities
Trade and other payables 9 132 1,775
Warrant liability 13,671 —
Loans and borrowings 10 341,128 213,125
Total non-current liabilities 354,931 214,900
Total liabilities 373,763 229,465
Share capital 11 10,451 10,011
Share premium account 11 4,474 1,638
Merger reserve 11 (777,751) (777,751)
Share-based payment reserve 11 32,361 41,595
Convertible bonds 11 34,051 —
Currency translation reserve 11 (54,207) (52,087)
Retained earnings 1,350,369 1,319,627
Total equity 599,748 543,033
Total liabilities and equity 973,511 772,498
As permitted by section 408 of the Companies Act 2006, the Company’s income statement is not presented in these financial statements.
The Company’s loss for the financial year was US$6 , 3 8 8, 3 9 4 (2023: loss of US$1 3 , 21 3 ,0 0 0 ).
The financial statements on pages 108 to 111 were approved and authorised for issue by the Board of Directors on 17April2025 and were
signed on its behalf by:
Tony Pialis
Director
Company registered number: 13073661
The notes on pages 156 to 160 form part of these financial statements.
Alphawave IP Group plc
Annual report and financial statements 2024
154
Note
Ordinary
share
capital
US$’000
Share
premium
account
US$’000
Merger
reserve
US$’000
Share-based
payment
reserve
US$’000
Currency
translation
reserve
US$’000
Convertible
bonds
US$’000
Retained
earnings
US$’000
Total
equity
US$’000
As at 1 January 2023 9,751 775 (777,751) 17,909 (79,706) — 1,315,835 486,813
Loss for the year — — — — — — (13,213) (13,213)
Other comprehensive
income — — — — 27,619 — — 27,619
Total comprehensive
income for the year — — — — 27,619 — (13,213) 14,406
Settlement of share
awards:
– Issue of ordinary shares 11 260 863 — — — — — 1,123
– Effect of proceeds below
nominal value — — — — — — — —
– Transfer of cumulative
compensation expense
on settled awards — — — (17,005 ) — — 17,005 —
Share-based
compensation recognised
in the year 12 — — — 40,691 — — — 40,691
Other changes in equity 260 863 — 23,686 — — 17,0 05 41,814
As at 31 December 2023 10,011 1,638 (777,751) 41,595 (52,087) — 1,319,627 543,033
Loss for the year — — — — — — (6,388) (6,388)
Other comprehensive
expense — — — — (2,120) — — (2,120)
Total comprehensive
income for the year — — — — (2,120) — (6,388) (8,508)
Settlement of share
awards:
– Issue of ordinary shares 11 440 2,836 — — — — — 3,276
– Transfer of cumulative
compensation expense on
settled awards — — — (37,130) — — 37,130 —
Share-based
compensation recognised
in the year 12 — — — 27,896 — — — 27,896
Issue of convertible bond — — — — — 34,051 — 34,051
Other changes in equity 440 2,836 — (9,234) — 34,051 37,130 65,223
As at 31 December 2024 10,451 4,474 (777,751) 32,361 (54,207) 34,051 1,350,369 599,748
Company statement of changes in equity
The notes on pages 156 to 160 form part of these financial statements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
155
Notes to the Company financial statements
For the year ended 31 December 2024
1 Background
Reporting entity
Alphawave IP Group plc (the ‘Company’) is a public limited
company that is incorporated and domiciled in England and Wales
and whose shares are listed on the main market of the London
Stock Exchange. The address of the Company’s registered office
is Central Square, 29 Wellington Street, Leeds, LS1 4DL, United
Kingdom.
The Company is the ultimate parent of a group of companies
that develops and markets high-speed connectivity solutions for
application in data centres, data networking, data storage, AI, 5G
wireless infrastructure andautonomous vehicles.
Statement of compliance
The Company’s separate financial statements on pages 154 and
155 have been prepared in accordance with FRS 101 Reduced
Disclosure Framework and those parts of the Companies Act
2006 that are applicable to companies reporting under FRS 101.
Accordingly, the Company’s separate financial statements comply
with the recognition and measurement requirements of IFRS as
adopted for use in the United Kingdom as at 31December 2024
but they exclude certain disclosures that would otherwise be
required under that body of accounting standards.
Basis of preparation
The Company’s separate financial statements have been prepared
on a going concern basis and in accordance with the historical cost
convention.
The Company’s material accounting policies are set out in note2.
Going concern
At the time of approving the financial statements, the Directors
are required to form a judgement as to whether the Group and
the Company have adequate resources to continue in operational
existence for the foreseeable future. In forming their judgement,
the Directors consider the Group’s current financial position, the
Group’s medium-term plan and its budget for the next financial
year, and the principal risks and uncertainties that it faces.
On 1 April 2025, Qualcomm Inc. made an announcement
confirming its intent to make an offer to acquire the entire issued
and to be issued share capital of the Company. Should the
Company and Group become subject to an acquisition, loans and
borrowings and convertible bonds may be subject to change of
control provisions. The Directors do not, at the date of approval
of these financial statements, have full clarity on what the exact
impact of such an acquisition may have on the Group’s structure
and financing. However, after considering whether, to the best of
their knowledge, the potential acquirer has the necessary ability
to address the impact of any change of control provisions through
arranging any financing that would be required, the Directors are
confident that the Group would be able to continue as a going
concern for at least the next 12 months from the date of approval
of the financial statements.
As at 31 December 2024, the Group had cash and cash equivalents
of US$180.2m and had loans and borrowings totalling US$352.0m,
comprised of a Term Loan of US$112.7m, US$125.0m drawn
against a US$125.0m Revolving Credit Facility, US$112.8m of
convertible debt and a US$1.5m loan from the Israel Innovation
Authority. Both the Term Loan and the Revolving Credit Facility are
scheduled to mature in the fourth quarter of 2027.
During the second quarter of 2024, the Group’s net leverage ratio
was above 3.00x which technically represented a breach of the
bank covenant as at 30 June 2024 and resulted in the debt being
presented as current as at 30 June 2024. This was principally due
to low adjusted EBITDA in the first half of 2024.
On 19 July 2024, the Group signed an amendment to the Credit
Agreement with the lenders to increase the maximum permissible
net leverage ratio applicable to Q2 2024 to 4.50x. From Q3 2024,
the net leverage ratio covenant has been amended to measure
net secured leverage, with a maximum permissible ratio of 3.00x
for the remainder of the term of the loan. In addition to the above
changes, the amendment also replaced the fixed charges coverage
ratio covenant, that was due to resume in Q3 2024, with a minimum
interest coverage ratio covenant, being the ratio of the last twelve
months’ interest expense to the last twelve months’ consolidated
adjusted EBITDA. This ratio is set at a minimum of 2.50x for Q3
2024, then stepping up to 2.75x for Q4 2024 and Q1 2025, with
a further step up to 3.00x from Q2 2025 for the remainder of the
Term Loan. The amendment also gives the Group the option to
draw an additional US$45.0m from the existing lender consortium.
The Directors based their going concern assessment on a ‘base
case’ covering the period of at least twelve months from the date
on which they approved the financial statements. The base case is
derived from the updated 2025 forecast and mid-term plan.
The Directors also considered a severe but plausible downside
scenario relative to the base case over the going concern period as
follows:
>
Group IP licensing revenue from new bookings forecasts are
reduced by 27%.
>
Group custom silicon NRE revenue forecasts are reduced by 5%.
>
Own products revenue forecasts are reduced by 70%.
Under both the base and downside scenarios, there are no further
investments forecast to be made in WiseWave. Under the base
case and the downside scenario, the analysis demonstrates the
Group can continue to maintain sufficient liquidity headroom with
no default on debt covenants.
In the downside scenario, we would have the following mitigations
available to ensure covenant compliance, if required:
>
Reduction in discretionary operating expenditures leading
to a reduction in total operating expenditures of 9%, which
would increase adjusted EBITDA headroom in the net secured
leverage ratio and the interest cover ratio covenants.
>
Repayment of a portion of the Term Loan or the Revolving
Credit Facility to increase headroom in the interest cover ratio
covenant.
Following consideration of the Group’s liquidity position and
prospects for the year ahead, the Directors are confident that
the Group has adequate resources for a period of at least twelve
months from the date of approval of the consolidated financial
statements and have therefore assessed that the going concern
basis of accounting is appropriate in preparing the consolidated
financial statements.
Use of estimates
The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, as well as disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual outcomes could differ from those estimates and
assumptions and affect the Company’s results in future periods.
Alphawave IP Group plc
Annual report and financial statements 2024
156
Functional and Presentation currency
Upon issuance of the 2030 Convertible Bonds on 18 December
2024, it was determined that the functional currency of the Company
had changed from pound sterling to US dollar based on the currency
in which the Company is primarily expected to incur cash flows.
The consolidated financial statements are presented in US dollars
because substantially all of the Group’s revenues and a significant
part of its expenses are denominated in US dollars. US dollar is the
presentation currency used by the majority of companies in the
semiconductor industry and its use by the Group therefore assists
investors in making comparisons with its peers.
All US dollar amounts are rounded to the nearest thousand, unless
stated otherwise.
Disclosure exemptions utilised under FRS 101
In preparing the Company’s separate financial statements,
theDirectors utilised the following exemptions from the disclosure
requirements of IFRS adopted for use in the United Kingdom that
are available to them under FRS 101:
>
Paragraphs 45(b) (number and weighted average exercise
prices of share options) and 46 to 52 (determination of fair
value of options and awards granted and financial effect of
share-based compensation) of IFRS 2 Share-based Payment.
>
The requirements of IFRS 7 Financial Instruments — Disclosures.
>
Paragraphs 91 to 99 (disclosure requirements) of IFRS 13 Fair
Value Measurement.
>
Paragraph 38 of IAS 1 Presentation of Financial Statements
with regard to comparative information requirements in respect
of paragraph 79(a)(iv) of IAS 1 (reconciliation of the number of
the Company’s shares outstanding at the beginning and end of
the period).
>
Paragraphs 10(d) (statement of cash flows), 16 (statement of
compliance with IFRS), 38 (A to D) (comparative information),
111 (statement of cash flows) and 134 to 136 (disclosures about
capital) of IAS 1 Presentation of Financial Statements.
>
IAS 7 Statement of Cash Flows.
>
Paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors (discussion of IFRSs issued
but not yet adopted by the Company).
>
Paragraphs 17 and 18A (compensation of key management
personnel) and paragraph 19 (disclosure of transactions
with wholly owned subsidiaries) of IAS 24 Related Party
Transactions.
Accounting standards adopted during the year
During the year, the Company adopted the following new and
amended accounting standards, none of which had a material
impact on its results or financial position:
>
IFRS 17 Insurance Contracts.
>
International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12).
>
Definition of Accounting Estimates (Amendments to IAS 8).
>
Disclosure of Accounting Policies (Amendments to IAS 1 and
IFRS Practice Statement 2).
>
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
An outline of the changes introduced is provided in note 1 to the
consolidated financial statements.
2 Material accounting policies
Investments in subsidiaries
A subsidiary is an entity that is controlled, either directly or
indirectly, by the Company. Control exists when the Company is
exposed, or has rights, to variable returns from its involvement with
the entity and has the ability to affect those returns through its
power to direct the activities of the entity that significantly affect
its returns. Generally, such power exists where theCompany holds
a majority of the voting rights of an entity. Each of the Company’s
subsidiaries is wholly owned.
Investments in subsidiaries represents the Company’s directly
owned interests in its subsidiaries, i.e. does not include any
interests that are owned by intermediate holding companies.
Investments in subsidiaries are carried at cost, less impairment
losses, if any.
Foreign currency translation
Translation into the Company’s functional currency
Transactions denominated in foreign currencies are recorded
in pounds sterling at the exchange rate ruling at the date of
the transaction. Monetary assets and liabilities denominated
in foreign currencies are translated into pounds sterling at the
exchange rate ruling at the end of the reporting period. Allresulting
currency translation differences are recognised in profit or loss.
Non-monetary assets and liabilities denominated in foreign
currencies are not retranslated subsequent to initial recognition.
Translation into the Company’s
presentationcurrency
Income and expenses presented in profit or loss or other
comprehensive income are translated from pounds sterling into
US dollars at the average exchange rate for the reporting period.
Assets and liabilities are translated from pounds sterling into
US dollars at the exchange rate ruling at the end of the reporting
period. All resulting currency translation differences are recognised
in other comprehensive income and taken to the currency
translation reserve.
Financial instruments
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand
and bank deposits with an original maturity of 90 days or less.
Cash and cash equivalents are measured at fair value on initial
recognition, less an allowance for expected credit losses, and
subsequently measured at amortised cost using the effective
interest method.
Amounts owed by Group undertakings
Amounts owed by Group undertakings are initially measured at
fair value, less an allowance for expected credit losses, and are
subsequently measured at amortised cost using the effective
interest method.
Other receivables
Other receivables are measured at fair value on initial recognition,
less an allowance for expected credit losses, andsubsequently
measured at amortised cost.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
157
Notes to the Company financial statements continued
For the year ended 31 December 2024
2 Material accounting policies continued
Financial instruments continued
Impairment of financial assets
We recognise an allowance for credit losses in respect of financial
assets that is measured as the amount of expected credit losses
over the next twelve months. If, however, the risk of default has
increased significantly since initial recognition, wemeasure the
allowance as the amount of lifetime expected credit losses.
If a financial asset has no realistic prospect of recovery, it is written
off, firstly against any allowance made and then directly to profit
or loss. We consider that a financial asset is not recoverable if
the balance owing is one year past due and information obtained
from the counterparty and other external factors indicate that the
counterparty is unlikely to pay its creditors in full. Any subsequent
recoveries are credited to profit or loss.
Trade and other payables
Trade payables represent the value of goods and services
purchased from suppliers for which payment has not been made.
Trade and other payables are measured at fair value oninitial
recognition and subsequently measured at amortised cost.
Loans and borrowings
Bank and other loans are measured at fair value on initial
recognition, less any directly attributable transaction costs, and
are subsequently measured at amortised cost using the effective
interest method.
If a loan or borrowing is subject to covenants and the Company
is in breach of one or more of the covenants at the end of the
reporting period, the carrying amount of the liability is classified
wholly as a current liability, irrespective of any element that would
otherwise be payable more than one year after the end of the
reporting period.
Facility arrangement costs are amortised as a finance expense
over the term of the facility.
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net
amount presented in the balance sheet where there is a currently
enforceable legal right to offset the recognised amounts and
management intends either to settle on a net basis or to realise
theasset and settle the liability simultaneously.
Income taxes
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the profit and loss account
except to the extent that it relates to items recognised directly
in equity or other comprehensive income, in which case it is
recognised directly in equity or other comprehensive income.
TheCompany has determined that the global minimum top-up
tax – which is required to pay under Pillar Two legislation – is
an income tax in the scope of IAS 12. The Company has applied
a temporary mandatory relief from deferred tax accounting for
the impacts of the top-up tax and accounts for it as a current tax
whenit is incurred.
Deferred tax is tax expected to be payable or recoverable on
temporary differences between the carrying amount of an asset
or liability in the financial statements and its tax base used in the
computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax
assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits
willbe available in the future against which they can be utilised.
Where there is uncertainty concerning the tax treatment of an
item or a group of items, the amount of current and deferred tax
recognised is based on management’s expectation of the likely
outcome of the examination of the uncertain tax treatment by
therelevant tax authorities.
Current tax and deferred tax is recognised in profit or loss unless
it relates to an item that is recognised in the same or a different
period outside profit or loss, in which case the related tax is also
recognised outside profit or loss, either in other comprehensive
income or directly in equity.
Share-based payments
As described in note 27 to the consolidated financial statements,
the Company operates share-based compensation plans under
which it grants options and RSUs over its ordinary shares to certain
of its own employees and those of its subsidiaries. Awards granted
under the existing plans are classified as equity-settled awards.
For awards granted to its own employees, the Company recognises
a compensation expense that is based on the fair value of the
awards measured at the grant date using an appropriate valuation
model. For awards granted to the employees of a subsidiary, the
Company recognises the compensation expense recognised by
the subsidiary, less any amounts charged to the subsidiary, as a
capital contribution to the subsidiary. In either case, the Company
recognises a corresponding credit to the share-based payments
reserve within equity.
In the event of the cancellation of an award by the Company or by
the participating employee, the compensation expense that would
have been recognised over the remainder of the vesting period is
recognised immediately in profit or loss or as a capital contribution
to the relevant subsidiary.
3 Directors and employees
The average number of people employed by the Company during
the year was eleven (2023: ten).
Statutory information about Directors’ remuneration is set out in
the Directors’ remuneration report on pages 88 to 90.
4 Auditor’s remuneration
Fees payable to the Company’s auditor, KPMG LLP, are set out in
note 8 to the consolidated financial statements.
Alphawave IP Group plc
Annual report and financial statements 2024
158
5 Cash and cash equivalents
As at 31 December
2024
US$’000
2023
US$’000
Cash at bank and in hand 102,097 16,911
Short-term deposits 18,000 —
Total 120,097 16,911
6 Amounts owed by Group undertakings
Current amounts owed by Group undertakings represent balances
arising from normal course trading activities that are expected to
be recovered within a year. The companies expected credit loss is
immaterial for both 2024 and 2023.
Non-current amounts owed by Group undertakings represent
balances arising from normal course trading activities and loans
to non-trading entities in respect of our acquisition of OpenFive
and equity investment in WiseWave that are not expected to be
recovered within a year.
7 Other receivables and other assets
As at 31 December
2024
US$’000
2023
US$’000
Current
Restricted cash 5,617 11,611
Other receivables 309 —
Prepayments 151 277
6,077 11,888
Non-current
Restricted cash 626 6,392
626 6,392
Restricted cash comprises amounts held by third-party
paying agents in respect of deferred consideration and future
compensation amounts payable to employees of Banias Labs
conditional on their remaining in the Group’s employment during
the respective vesting periods, the last of which expires during
2026. Cash held by the paying agent in relation to amounts that are
forfeited by the employees will be returned to the Company.
8 Investments in subsidiaries
Movements in the carrying amount of interests in subsidiaries
owned directly by the Company were as follows:
US$’000
As at 1 January 2023 280,373
Capital contributions – Share-based payments 39,757
Deferred cash rights 8,352
Foreign exchange 17,681
As at 31 December 2023 346,163
Capital contributions – Share-based payments 26,829
Deferred cash rights 7,618
Foreign exchange (1,335)
As at 31 December 2024 379,275
Details of the Company’s subsidiaries as at 31 December 2024 are
set out on page 161.
9 Trade and other payables
As at 31 December
2024
US$’000
2023
US$’000
Current
Trade payables 1,755 1,888
Other payables 2,463 4,823
Accrued expenses 4,441 2,321
Social security and other taxes — (92)
8,659 8,940
Non-current
Other payables 132 1,775
132 1,775
Other payables include US$1.7m (2023: US$4.5m) deferred
consideration and compensation payable to employees of
BaniasLabs.
10 Loans and borrowings
As at 31 December
2024
US$’000
2023
US$’000
Current
Term Loan 9,375 5,625
9,375 5,625
Non-current
Revolving Credit Facility 125,000 125,000
Term Loan 103,281 88,125
Convertible Loan 112,847 —
341,128 213,125
Details of the facilities, including the repayment schedule attaching
to the Term Loan and the applicable financial covenants, the
increased revolver and the new convertible debt, areset out in
note22 to the consolidated financial statements.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
159
Notes to the Company financial statements continued
For the year ended 31 December 2024
11 Share capital and reserves
Share capital and share premium account
Details of the Company’s share capital are set out in note 26 tothe consolidated financial statements.
Share capital represents the nominal value of shares in issue.
The share premium account represents the difference between the nominal value of shares in issue and the fair value of the consideration
received. For 2024 the amount allocated to the sharepremium account is US$2,836,000 (2023: US$863,000). Theshare premium
account is not distributable but may be used for certain purposes specified by United Kingdom law, including to write off expenses on any
issue ofshares and to pay up fully paid bonus shares.
Other reserves
Merger reserve
In May 2021, the Company purchased the entire issued share capital of Alphawave IP Inc., the Group’s former parentCompany, by way
of an exchange of shares in a Group reorganisation that was accounted for as a merger. Themerger reserve represents the excess of
the nominal value of the Company’s ordinary shares issued over the carrying amount of Alphawave IP Inc’s net assets at the dateof the
reorganisation.
Share-based payment reserve
The share-based payment reserve represents the cost recognised to date in respect of share-based payment awards that have not been
exercised.
Currency translation reserve
The currency translation reserve comprises gains and losses arising on the translation of the Company’s results and financial position
from its functional currency to its presentational currency.
Distributable profits
Profits available for distribution by the Company comprise itsaccumulated realised profits less its accumulated realised losses, subject
to the restriction that a distribution may not reduce the Company’s net assets below the aggregate of its called up share capital and its
undistributable reserves.
The Directors consider that the Company’s loss as at 31December 2024 amounted to US$6.4m (2023: US$13.2m loss).
12 Share-based compensation
Details of the share-based compensation plans operated by the Company, together with information about share options exercised and
outstanding, is presented in note 27 to the consolidated financial statements.
During 2024, the Company recognised an expense of US$1.1m (2023: US$0.9m) in respect of awards granted to itsown employees.
13 Events after the reporting period
On 12 February 2025 Alphawave Semiconductor Corp wasdissolved.
Alphawave IP Group plc
Annual report and financial statements 2024
160
Related undertakings
Details of the Company’s related undertakings as at 31 December 2024 are as follows:
Name Registered address Country
Subsidiaries
Alphawave IP Inc. 70 University Ave, 10th Floor, Toronto, Ontario, Canada M5J 2M4 Canada
Alphawave Semi US Corp.
(formerly Alphawave IP Corp.)
1730 N 1st St, Suite 650, San Jose, CA, 95112 United States
(Delaware)
Alphawave IP (BVI) Ltd.
1, 2
Trinity Chambers, PO Box 4301, Road Town, Tortola British Virgin
Islands
Alphawave Call. Inc.
1, 2
70 University Ave, 10th Floor, Toronto, Ontario, Canada M5J 2M4 Canada
Alphawave Exchange Inc. 70 University Ave, 10th Floor, Toronto, Ontario, Canada M5J 2M4 Canada
Alphawave IP Limited
1
21 Avenida da Praia Grande, No 409, Edificio China Law, 21 andar, em, Macau China
Precise-ITC, Inc. 170 University Avenue, 10th Floor, Toronto, Ontario, M5H 3B3 Canada
AWIPInsure Limited
1
1st Floor, Limegrove Centre, Holetown, St. James Barbados
Alphawave Semi International
Corp. (formerly Alphawave
Holdings Corp.)
1
1730 N 1st St, Suite 650, San Jose, CA, 95112 United States
(Delaware)
Alphawave Semi Inc. (formerly
Open-Silicon, Inc.)
490 N McCarthy Blvd #220, Milpitas, CA 95035 United States
(Delaware)
Alphawave Semiconductor
Corp (dissolved)
2
1730 N 1st St, Suite 650, San Jose, CA, 95112 United States
(Delaware)
Alphawave Semi Holding Corp
(formerly Open-Silicon Holding
Corp.)
3rd Floor, Les Cascades, Edith Cavell Street, Port Louis Mauritius
Open-Silicon Development
Corp.
2
490 N McCarthy Blvd #220, Milpitas, CA 95035 United States
(Delaware)
Open-Silicon Engineering, Inc.
2
490 N McCarthy Blvd #220, Milpitas, CA 95035 United States
(Delaware)
Open-Silicon International,
Inc.
2
490 N McCarthy Blvd #220, Milpitas, CA 95035 United States
(Delaware)
Open-Silicon Japan
2
c/o Akia Tax Consultants, Shoei Kannai Building, 22, Sumiyoshicho 2-chrome, Naka-ku,
Yokohama, Kanagawa
Japan
Alphawave Semi India Pvt Ltd
(formerly Open-Silicon
Research Private Ltd)
No. 11/1 & 12/1 Maruthi Infotech Centre, 2nd Floor, B-Block, Indiranagar, Koramangala
Intermediate Ring Road, Bengaluru — 560 071.
India
Alphawave Semi Nanjing Co
Ltd (formerly Yuanfang Silicon
Technology (Nanjing) Co. Ltd)
Room 101, Building B, No. 300, Zhihui Road, Qilin Science and Technology Innovation
Park, Jiangning District, Nanjing
China
Alphawave Semi Asia Co. Ltd Room 702-703, Building 8, Lane 777, Gaoke East Road, Pudong New Area, Shanghai China
Alphawave Semi Israel Ltd.
(formerly Solanium Labs Ltd)
1
24 Hanagar, Hod HaSharon 4527713 Israel
Joint venture
WiseWave Technology Co.,
LTD
1,3
Room 105, No. 6, Baohua Road, Hengqin New District, Zhuhai China
All subsidiaries are wholly owned.
1. Owned directly by Alphawave IP Group plc.
2. Dormant.
3. Joint venture in which the Group has a 35.2% ownership interest and voting rights.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
161
TCFD Compliance Table
Disclosure Response
Governance – Compliant
a. Describe the Board’s oversight of climate-related risks and
opportunities.
Page 32, Governance – page 30
b. Describe management’s role in assessing and managing
climate-related risks and opportunities.
Page 34, Governance – page 30
Strategy – Partially compliant
a. Describe the climate-related risks and opportunities the
organisation has identified over the short, medium and longterm.
See Risks and Opportunities tables on pages 32 to 34
b. Describe the impact of climate-related risks and opportunities on
the organisation’s business, strategy and financial planning.
Dependency on natural, social and human capital – page 32
Strategy – page 30
c. Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2ºC
or lower scenario.
We have not performed a quantitative risk assessment or
climate-related scenario analysis. In 2025 we will prioritise this and
evaluate the additional requirements and associated costs to assess
the resilience of the organisation under different climate-related
scenarios. Following this evaluation we will make a decision on
whether a quantitative risk assessment should be prioritised and
the timing if appropriate. However, at this time believe the business
causes a very limited impact on climate change.
Risk Management – Compliant
a. Describe the organisation’s processes for identifying and
assessing climate-related risks.
Risk Management – page 32
b. Describe the organisation’s processes for managing
climate-related risks.
See Risks and Opportunities tables on pages 32 to 34
c. Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s overall
risk management.
Risk Management – page 32
Metrics and Targets – Compliant
a. Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
andrisk management process.
Metrics and Targets – pages 31 and 32
b. Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse
gas (GHG) emissions, and the related risks.
Table – page 31
c. Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
againsttargets.
Metrics and Targets – pages 31 and 32
Appendix
Alphawave IP Group plc
Annual report and financial statements 2024
162
SASB Table
SASB Topic SASB Code SASB Accounting Metric Disclosure Details Page Number of URL
Greenhouse Gas
Emissions
TC-SC-110a.1 (1) Gross global Scope 1
emissions and (2) amount
of total emissions from
perfluorinated compound
Metric tonnes (t)
CO
2
e
Page 31, 2024
Annualreport
TC-SC-110a.2 Discussion of long-term
and short-term strategy
or plan to manage Scope
1 emissions, emissions
reduction targets, and an
analysis of performance
against those targets
The Group is putting
in place mitigating
actions toreduce its
environmental impact,
such as avoiding
unnecessary business
travel and purchasing
energy from certified
renewable sources,
wherepossible.
Pages 31, 2024
Annualreport
Energy
Management in
Manufacturing
TC-SC-130a.1 (1) Total energy
consumed,
(2) percentage grid
electricity,
(3) percentage renewable
Gigajoules (GJ),
Percentage (%)
We are a fabless
business and outsource
the manufacturing of
semiconductors to the
leading foundries in
the industry. Therefore,
energy management in
manufacturing is not
considered a material
sustainability topic for
ourCompany.
Energy consumed in our
office buildings is reported
on page 31 of this report.
Water Management TC-SC-140a.1 (1) Total water withdrawn,
(2) total water consumed,
percentage of each in
regions with High or
Extremely High Baseline
Water Stress
Thousand cubic
metres (m³),
Percentage (%)
We are a fabless
business and outsource
the manufacturing of
semiconductors to the
leading foundries in the
industry. The use of water
is limited to our office
buildings. Therefore,
water management is
not considered a material
sustainability topic for our
Company.
Index only.
Waste Management TC-SC-150a.1 (1) Amount of
hazardous waste
frommanufacturing,
(2)percentage recycled
Metric tonnes (t),
Percentage (%)
We are a fabless
business and outsource
the manufacturing of
semiconductors to the
leading foundries in
the industry. Therefore,
hazardous waste from
manufacturing is not
considered a material
sustainability topic for
ourCompany.
Index only.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
163
Appendix continued
SASB Table continued
SASB Topic SASB Code SASB Accounting Metric Disclosure Details Page Number of URL
Employee Health and
Safety
TC-SC-320a.1 Description of efforts
to assess, monitor and
reduce exposure of
workforce to human health
hazards
D&A Our H&S rules and
procedures are in strict
compliance with national,
regional and/or local
legislation.
TC-SC-320a.2 Total amount of monetary
losses as a result of legal
proceedings associated
with employee health and
safety violations
Reporting
currency
In 2024, there were
no legal proceedings
associated with
employee health and
safety violations.
Index only.
Recruiting & Managing a
Global & Skilled Workforce
TC-SC-330a.1 Percentage of employees
that require a work visa
Percentage (%) 3.3%
Product Lifecycle
Management
TC-SC-410a.1 Percentage of products
by revenue that contain
IEC 62474 declarable
substance
Percentage (%) The Company provides
material declaration in IPC-
1752 or supplier standard
format upon email request.
Index only.
TC-SC-410a.2 Processor energy
efficiency at a system
levelfor:
(1) servers,
(2) desktops, and
(3) laptops
Various, by product
category
We do not disclose
energy efficiency at a
system-level as our IP
and semiconductors
are embedded in our
customers’ products
together with a multitude
of other components of
which we have no control.
Materials Sourcing TC-SC-440a.1 Description of the
management of risks
associated with the use of
critical materials
D&A See page 36 of this report.
Conflict Mineral Policy
available on our website.
Intellectual Property
Protection & Competitive
Behaviour
TC-SC-520a.1 Total amount of monetary
losses as a result of legal
proceedings associated
with anti-competitive
behaviour regulations
Reporting currency In 2024, there were
no legal proceedings
associated with
anti-competitive
behaviour regulations.
Index only.
Recruiting & Managing a
Global & Skilled Workforce
TC-SI-330a.2. Employee engagement as
a percentage
Percentage (%) 86% response rate to our
third annual employee
survey. The survey was
conducted by Best Places
to Work across the Group.
Alphawave IP Group plc
Annual report and financial statements 2024
164
Companies Act climate-related reporting requirements
1. A description of the company’s governance arrangements in
relation to assessing and managing climate-related risks and
opportunities;
See page 30 – Governance
2. A description of how the company identifies, assesses and
manages climate-related risks and opportunities;
See page 32 – Risk Management
3. A description of how processes for identifying, assessing and
managing climate-related risks are integrated into the company’s
overall risk management process;
See page 32 – Risk Management
4. A description of:
i. the principal climate-related risks and opportunities arising
inconnection with the company’s operations; and
ii. the time periods by reference to which those risks and
opportunities are assessed;
See Risks and Opportunities tables on pages 32 to 34
5. A description of the actual and potential impacts of the principal
climate-related risks and opportunities on the company’s business
model and strategy;
See page 30 – Strategy
6. An analysis of the resilience of the company’s business model
and strategy, taking into consideration different climate-related
scenarios;
See pages 31 and 32 – Metrics and Targets
7. A description of the targets used by the company to manage
climate-related risks and to realise climate-related opportunities
and of performance against those targets; and
See pages 31 and 32 – Metrics and Targets
8. A description of the key performance indicators used to assess
progress against targets used to manage climate-related risks and
realise climate-related opportunities and of the calculations on
which those key performance indicators arebased.
See pages 31 and 32 – Metrics and Targets
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
165
Shareholder information
Registered office
Alphawave IP Group plc
Central Square,
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
Registered number: 13073661
Web: www.awavesemi.com
Investor relations: ir@awavesemi.com
Media: press@awavesemi.com
Company Secretary: alphawave@cm.mpms.mufg.com
Company Secretary
MUFG Corporate Markets
A division of MUFG Pension & Market Services
Central Square,
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
Joint corporate brokers
Barclays PLC
1 Churchill Place
London
E14 5RB
United Kingdom
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
United Kingdom
Independent auditor
KPMG LLP
15 Canada Square
London
E14 5GL
United Kingdom
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
United Kingdom
Shareholder helpline: +44 (0)371 384 2030
Website: www.shareview.co.uk
Lines are open from 8.30am to 5.30pm Monday to Friday
(excluding public holidays in England and Wales).
Legal counsel
Linklaters LLP
1 Silk Street
London
EC2Y 8HQ
United Kingdom
Public relations
Grand Bridges
6 St. Colme Street
Edinburgh
EH3 6AD
United Kingdom
Alphawave IP Group plc
Annual report and financial statements 2024
166
Financial calendar 2025-2026
2024 Full-year results 17 April 2025
Q1 2025 Trading Statement w/c 22 April 2025
Annual General Meeting 17 June 2025
Q2 2025 Trading Statement w/c 21 July 2025
2025 Half-year results w/c 29 September 2025
Q3 2025 Trading Statement w/c 20 October 2025
Q4 2025 Trading Statement w/c 19 January 2026
Shareholder enquiries
Our registrars will be pleased to deal with any questions regarding your shareholdings (see contact details on previous page). Alternatively,
you can contact the Company Secretary at cm-alphawave@linkgroup.co.uk.
Investor relations website
The investor relations section of our website, www.awavesemi.com/investors, provides further information for anyone interested in
Alphawave IP Group plc. In addition to the annual report and accounts and share price, Company announcements including the full-year
results announcements and associated presentations are also published there.
Strategic report Governance Financials
Additional Information
Alphawave IP Group plc
Annual report and financial statements 2024
167
Glossary
112G 112 gigabit per second connectivity transmission
speed for transmission of data
ASIC application-specific integrated circuit (or system on
chip (SoC)) that integrates all or most components of
a computer or other electronic system
CAD Canadian dollars
CEO President & Chief Executive Officer
CFO Chief Financial Officer
chiplet smaller modular pieces of silicon, utilised in a
design technique to break integrated circuits into
smaller pieces that can be individually designed and
integrated together using die-to-die interfaces
Coherent Coherent Modulation is a technique that uses
modulation of Amplitude and Phase of light, as well
as transmission across two polarisations to enable
transport of more information across the optical fiber
Company Alphawave IP Group plc
CPU central processing unit
DSP digital signal processing capabilities, enabled
to perform a wide variety of signal processing
operations
Form factor design aspect that defines and prescribes the size,
shape and other physical specifications of hardware
components
Gb gigabyte, which is equivalent to 1,000,000,000 bytes
GBP Pounds sterling
GPU graphics processing unit
Group Alphawave IP Group plc and each of its consolidated
subsidiaries
HBM High bandwidth memory
IEEE Institute of Electrical and Electronics Engineers,
an electronics industry body, including educational
and technical advancement of electrical and
electronic engineering, telecommunications,
computer engineering and allied disciplines, and
standardisation
IP/silicon IP intellectual property core, IP core, or IP block is
areusable unit of logic, cell or integrated circuit
layout design
NED Non-Executive Director
node technology nodes, or process technologies, referring
to the specific semiconductor manufacturing
process and its design rules, generally designated by
the process’ minimum feature size (in nanometres)
NRE non-recurring engineering, in reference to revenue
earned in respect of one-time early-stage customer
services including for research, design, development
and testing
PAM4 Pulse Amplitude Modulation with Four Levels, or
PAM4, is a signal encoding technique that uses four
voltage levels to represent four combinations of two
bits logic (00, 01, 10, and 11)
PCIe PCI-Express, a high-speed serial computer expansion
bus standard
PPC People, Places and Culture
R&D Research and development
RSU Restricted stock unit
SerDes serialiser/deserialiser, a wired connectivity
component to interface between integrated circuits,
which converts parallel streams of data (used as
connectivity within integrated circuits) to serial
streams (used in longer-distance transmission
outside chips) and vice versa
SoC system on chip (or ASIC) that integrates all
or mostcomponents of a computer or other
electronicsystem
Tapeout refers to the completion of the design phase
of an IC and transfer of the design into a digital
format suitable for creation of ‘masks’ used in the
semiconductor wafer manufacturing process
wafer in the fabrication of integrated circuits, the thin slice
of semiconductor material (such as a crystalline
silicon) in and upon which microelectronic devices
are built
Alphawave IP Group plc
Annual report and financial statements 2024
168
Designed and produced by
www.lyonsbennett.com
This report is printed on Nautilus which is made from 100% FSC® recycled certified
post‑consumer waste pulp which is PCF (Process Chlorine Free). The FSC® label
on this report ensures responsible use of the world’s forest resources. Printed
sustainably in the UK by Pureprint, a CarbonNeutral® company with FSC® chain
ofcustody who recycle 100% of all dry waste. Both the mill and Pureprint are ISO
14001 certified (environmental management system). If you have finished with
this document and no longer wish to retain it, please pass it on to other interested
readers or dispose of it in your recycled waste.
Alphawave IP Group plc
awavesemi.com
Alphawave IP Group plc | Annual report and financial statements 2024