Raspberry Pi Shares Slide as H1 Earnings, Revenue Decline

Raspberry Pi Holdings (LSE: RPI) released its unaudited results for the first half of 2025 on Tuesday, revealing a mixed performance but signaling optimism for the remainder of the year.

While key financial metrics dipped compared to the exceptionally strong prior year, sequential growth and strategic shifts point towards a positive trajectory.

Headline Numbers:

• Revenue: $135.5 million, a 6% decrease year-over-year (YoY) but reflecting a 9% increase sequentially from H2 2024.
• Gross Profit: $33.2 million, down 3% YoY, with a gross margin of 25%, a 1 percentage point increase.
• Adjusted EBITDA: $19.4 million, a 7% decrease YoY, but a significant 19% increase sequentially.
• Basic Earnings Per Share (EPS): 2.79 cents, down 38% YoY. Adjusted EPS at 4.76 cents, a 33% decrease YoY.
• Cash: $34.3 million, down 15% YoY, attributed to paying off extended payables.

Despite the YoY declines in revenue and profitability, the company's focus on direct sales is paying off. Revenues from direct sales of single-board computers (SBCs) and Compute Modules surged by 21% compared to H1 2024 and 27% sequentially, indicating strengthening demand from OEM customers.

The company has been actively managing its capital structure. The decrease in cash is attributed to paying off extended payables, a move expected to normalize creditor days further in the second half of the year.

However, as expected, the shares have reacted negatively, down in early trading on Tuesday.

CEO Eben Upton stated, “We continued to build momentum in the half, with growing demand from our reseller channel and OEMs driving an 8% sequential increase in direct unit shipments and a significant customer order backlog at the end of June. Our growing pipeline of OEM opportunities, disciplined supply chain management and strong product roadmap position the business for future growth.”

Looking ahead, RPI said the second half has started well with EBITDA ahead of last year, while volumes are expected to be higher in the second half supported by strengthening demand and a substantial order backlog.

“The Group has sufficient DRAM supply on hand and on order to meet its FY2025 sales goals and has several commercial and technical options to mitigate shortages or further price rises in FY2026,” the company stated. “FY2025 is on-track to be the first full year in which semiconductor unit volumes are higher than board unit volumes.”