Good afternoon, and welcome, everybody. Welcome to our 2026 interim results.

I'm Eben, joined today by my colleague Richard. We're going to take you through the first-half financial results for the business, give you some updates on progress against our strategy.

I think first, perhaps we could just take a quick look at some of the highlights of the half. Quite simply, this was an exceptional first half for us.

Saw record revenue, record profitability in the business. We shipped over 4 million units.

We shipped 4.2 million Raspberry Pis in the half, with our customer order backlog doubling to 2.6 million units. All of this happened despite an incredibly challenging supply chain environment.

Our diversified DRAM supplier base helped us weather the worst of that, helped us keep our products in production and in availability through the half. Despite these challenges, we kept innovating.

The half saw five new product and platform launches, improving support for AI workloads on Raspberry Pi 5, helping our OEM users through the memory crisis by giving them more memory density options on Raspberry Pi 4, and streamlining IoT deployments through improvements to our Raspberry Pi Connect platform. We kept investing in our OEM customers, too, making targeted hires into our commercial team.

Our board-to-board program continued to deliver traction in the smart home and defense sectors, with a number of meetings with members of the C-suites of UK-listed industrials. We kept investing in broader operational capacity, too.

We hired Tim Mantora in March as our first Chief Operating Officer. He and his team are already building the repeatable processes that will allow us to continue to scale our business without sacrificing the engineering-led culture which makes Raspberry Pi Raspberry Pi.

Together, these developments give us confidence in our outlook for the rest of the year. We're expecting higher volumes in the second half than in the first half, and we're expecting full-year adjusted EBITDA to be above market consensus.

Now I'll hand over to Richard for the financials.

Thank you. Let's see if I can control this thing.

Great. As Eben said, this was, I think, across almost all metrics, a very good half.

We had a strong improvement in unit volume. It continued to grow half-on-half, as you can see from the chart.

It's really progressed from actually the end of 2024. Each half, we've consistently grown, finishing at 4.2 million units.

It was particularly good to see the demand was in compute modules, Raspberry Pi 4, Raspberry Pi 5, our higher-margin, our higher-value boards, our latest boards. Indeed that demand was strong that it left us with a backlog of units at the end of June 2026, compared to 600,000 at the end of 2025, to 2.6 million now.

Simply over the period, we've had to increase prices because of memory increases, but pleased to see how the demand for products has held up through that period, and indeed the demand for our 4 GB and 8 GB versions of Pi 5, Pi 4 has continued to be very strong even though prices have had to go up. Overall, that gross profit per board improved significantly because of those price increases and also because of the benefit of memory that we had acquired at the end of 2025 at lower costs that we have used in that first half.

Overall, we ended up with gross profit up to $59 million, up from $33 million a year ago, and that dropped through to a profit of adjusted EBITDA, our key profit metric, of $40.3 million compared to $19.4 million in the first half of 2025. Is that going to work?

Sorry, forgive me. It's a slight remote-control this one.

That one. Moving on to the next slide.

Yes. 26% growth in our direct units.

Overall, the units supplied by us, manufactured in our factory with Sony in Wales, grew by some 26%. The volumes with Farnell were a bit slower.

Overall, we ended up with volumes up 17%. Again, as said earlier, particularly strong growth in compute modules and Pi 5, Pi 4.

We saw lower growth, probably slightly negative actually, in the case of Pico and Zero, which, may know, are our lower-cost boards. In the case of Zero, that volume was limited by access to supply.

Our packager of the processor chip in Taiwan was somewhat distracted by data centers. That is now resolved, and that's part of the backlog reduction that we expect to see in the second half.

Overall, strong performance on units. That translated into a strong growth in revenue.

With the increase in units and also an increase in the average selling price, as I said, we increased our prices because of needing to pass through the increased cost of memory. Our prices went up about 42%, leading to an over 90% increase in revenue through the period.

Our revenue comprises a mixture of things. It includes royalty income for Farnell, it includes the direct sales of boards, it includes the sale of accessories, and also includes the sale of memory chips and processor chips to Farnell to make Raspberry Pis.

It really does have a number of different things with quite different margin structures. When we look at the business, we focus more on gross profit, and in particular, gross profit per unit combined with the number of units that we've sold.

Gross profit overall increased by 79% due to those higher sales I've talked about, and also this improvement in gross profit per board. Gross profit per board, so that's the profit we're making from sale of boards divided by the total number of boards in the period, increased by 53% from $8.00 in the first half of last year to $12.20 in this half.

That reflected a combination of factors. It was the increase in the prices that we were selling and actually the way in which those took effect once we'd announced them, but also this benefit of inventory that we brought in to the beginning of the year where we had bought at significantly lower prices before the increase in memory costs that we've seen really in the last 6 to 9 months.

That beneficial effect has probably been largely consumed now by the time of the middle of the year. I think it's fair to say that the current cost of inventory that we are now holding, we're now putting into boards, is much closer to the price at which we would buy further inventory at the moment.

The other standout was accessories. We had a very good half for accessories.

Compared to the number of boards sold, it grew. The gross profit increased by 90% to $7.8 million compared to about half of that number a year ago, at a number of about $1.90 per board sold, which is well above our target that we set ourselves of $1.00 per board.

We saw particularly strong growth in cameras, in SD cards, displays, but also in AI HATs that we put together with our friends at Hailo and we sell as an add-on to the Raspberry Pis, giving you additional compute particularly for AI models, such as convolutional neural networks or also for large language models on the latest version with Hailo. Overall, a strong growth of gross profit in the period.

Moving on to the next slide. Just in putting those together, in terms of how did our EBITDA evolve through period, we came into first half of last year was $19.4 million.

Unit growth has given us probably nearly $5 million of additional profit, the additional units. That gross profit per board, moving from $8.00 to $12.00 for each of those boards, is probably worth nearly $18 million of additional profit.

Some of that's clearly because of the memory that we brought in, and also some orders that we had placed in the tail end of '25 at particularly good prices this year. We think the value of that was probably a one-off, if you will, of somewhere between $10 or $15 million.

Then the appreciation of accessories. Then, in terms of overheads, the research and development expenditure that we have that is not capitalized, it's research and development, it's research, it's software development, which typically we don't capitalize, that increased by about $700,000.

That's predominantly some more heads, but also inflation, salary increases. Then adjusted administrative costs, this is more of the general central team, be that sales, be it lotus-eaters like myself, that grew by about $4.6 million.

That was a combination of there were some one-off effects of foreign exchange. There are some additional bonuses reflecting this much stronger performance.

That was probably there's about a million of extra accrual, million and a half there. The remainder is really headcount increases and increases in salaries generally across the team.

Allowing for those, we ended with the half with a result of $40.3 million EBITDA. The next slide sets out the income statement, very much the matters we've just covered recently.

I'm going to skip over that one. I am going to move on to there's a description of the balance sheet here, but I think the best way to express that is in the cash flow, and how our cash flow has moved across the period.

We came into the beginning of this year with $28 million of cash. EBITDA, the profits that we've just been talking about, contributed $40 million.

We've then spent significantly on inventory. That is almost entirely that increase in inventory that we are now carrying, is $106 million of that is purchases of DRAM that we use in our boards.

I think that is the position at the end of June. That's put us into a much stronger position in terms of having nearly 3 months of inventory.

We've continued to add to that recently, such that we have good confidence that we can meet our production plans for the remainder of this year and into the first quarter of next year, but that memory obviously these days is at a significantly higher price than it was a few years ago. That inventory at the end of June was funded in part by payables.

We bought significant amounts in June itself, and therefore there was a payable at the end of the period. That has started to reduce, this is where we've seen a cash outflow continuing post the end of June, and therefore we're drawing on our bank facilities.

We increased those facilities to $140 million of committed funds. That was completed in early July, which has given us a position where we're able to buy inventory where the opportunity arises and to secure that future production, to secure good prices on the products, such that we can maintain an attractive level of profitability.

Though I think it's fair to say that in the second half, the profit per unit will come down as those memory costs now are closer to market levels rather than based on prices from very good historic purchases. Receivables also we saw some outflow in those as at the end of June.

That was really a function of just how strong trading in the month of June was. A very active month obviously compared to December, which is a quieter month by the end of the month itself, but also just generally trading has been so much stronger with real momentum coming into this second half.

We spent about $11 million on capexing in the first half, very consistent with the guidance that we've given for the last few years of about $20 million of capex for any full year, so that continues. A little bit of tax, leaving us with a closing position of about $8.4 million of tax.

As I say, I think in the second half, those payables will reduce. They were particularly high at the end of June, and we also expect to be buying and holding quite a bit of memory.

We can see the opportunity to do so. That will leave us probably with acquiring further inventory such that we would expect to see our debt levels at, say, $40 to $50 million.

I think we should flag that if opportunities arise, if there are good prices, if there is the opportunity to acquire the right memory, we will utilize some of the additional headroom we have on the bank facilities to add to that inventory to make sure that we go into next year in a particularly strong shape. Just touching on a final slide from me, memory purchases.

I think one of the things that's notable is, compared to the announcement that we made in early June about how strong trading was, a lot of the numbers I've talked about here are very much in line with that. I think to me the additional feature, the additional new news probably is the strength of our position with memory purchases.

I think Mike Buffham, our Chief Commercial Officer, has done a phenomenal job of talking to packagers, manufacturers of memory to secure that. That position, I think, is a step forwards from where we were even 2 or 3 months ago.

How have we got into that position with a stronger position on memory? We've diversified suppliers.

We now have approximately seven different companies providing memory to us compared to two a year ago. We have used our engineering skills to technically innovate to actually allow us to use two 1 GB pieces of DRAM to create a 2 GB board.

Sorry, make sure I got the maths right on that. Two lots of two to make four.

Gosh, it's all binary. How easy.

Similarly, on pricing, we have, I think, minimized the disruption to our customers' expectations of us by communicating quite clearly the reasons for price increases to be seen to be passing through price increases rather than gouging on selected products, and really also providing in terms of a Raspberry Pi 3 GB variant additional options for customers who maybe did not want to suffer the whole of a price increase that was necessary. We've continued to make strategic purchases.

We have seen the opportunity with our balance sheet, with our connections, our reputation, to make further purchases from suppliers who in some cases are keen to establish a presence elsewhere and we have been seen to be a very good partner to them in achieving that. I think overall, a lot of activity in terms of securing memory, and that's put us into a stronger position than we were, say, 3 months ago.

I think, in that good position, hand over to Eben to talk some more.

Thank you, Richard. Before we dive into the before we dive into the sort of the strategy update, just to recap about the three pillars of our growth strategy.

Firstly, obviously, to grow unit sales through investment in channel and through increasingly through our board-to-board program, through direct outreach to OEMs. Then for each of those units we sell, aiming to grow the unit profit margin.

That's both through engineering to grind cost out of the platform and over time to acquire a larger share of the silicon bill of materials in each device, and the gradual migration, and we've seen this continue this year, the gradual migration of our customers to higher-density SKUs. Even in this constrained DRAM environment, we have seen an increasing preference in many of our customers for higher-density SKUs.

Those are higher-density SKUs, they're higher-ASP SKUs, and that higher ASP brings with it a higher unit profit. Then finally, growing our margin participation, growing our participation in that margin.

Obviously, the the board-to-board initiative particularly a particularly fertile source of direct relationships with OEMs. Of our three different routes to market, the direct-to-OEM route is the route that allows us to capture the largest share of that unit profit margin in the device.

A little bit more detail about product launches. As we said, five launches in the half.

That is a relatively quiet half for us compared to recent years, but with some real strategic highlights that I think speak to the strategic direction of the business. At the start of the half, the second-generation Raspberry Pi AI HAT accessory co-developed with our friends at Hailo and bringing generative AI capabilities to the platform.

The original AI accessory very much focused on vision operations, very much focused on classical network architectures, convolutional neural network architectures. This new product bringing with it both the ability to run smaller large language models and vision-language models, and also on the vision side, then more modern architectures, transformer-based, vision-transformer-based classification algorithms.

In the middle of the period, the 3 GB variant of Raspberry Pi 4, that's in direct response to specific OEM requests for an intermediate density point. We continue to be surprised by the extent to which our OEM customers aren't trading down.

If anything, they're trading up for memory. We do have OEM customers who would who welcome the opportunity to invest fixed costs to do to make engineering investments to take memory requirements out of their software platforms, providing for if you think that 4 GB products really the heart in our modern products, Raspberry Pi 4 and Raspberry Pi 5, 4 GB really is the heart of the business.

We have an enormous number of 4 GB OEM customers. It is challenging for a 4 GB customer to come down to 2 GB.

By providing that intermediate density point on the Raspberry Pi 4 platform, we're able to serve those customers who want to trade engineering effort for unit cost. Then not quite in the half, just off the end, just in at the start of July, at the start of this half, we have the programming jig for Compute Module 5.

This is our part of our offering to our OEM customers who wish to be able to program Raspberry Pi Compute Modules in production at scale, designed to integrate with some of the work we've done around operating system assembly and imaging over the last couple of years. In parallel with all these efforts, of course, we've seen a series of upgrades to Raspberry Pi Connect, our IoT cloud platform.

Very different cadence for this from what I'm certainly used to. Certainly, if you imagine the cadence of hardware releases being on the order of years, the cadence of even of operating system software releases being on the order of months, quarters or months, this is a product which has seen multiple upgrades over with with a cadence of weeks across the half, seeing continued that is driving continued strong growth in adoption both of the baseline Raspberry Pi Connect platform, the free Raspberry Pi Connect platform, and the paid-for Raspberry Pi Connect for Organizations platform.

Now we love we love case study slides. We couldn't not feature this one, I think, in the slide deck.

Formlabs, 3D printer company, they're a long-time Raspberry Pi adopter, a very loyal adopter of Raspberry Pi technology, outsourcing, as with many of our OEM customers, outsourcing really the intelligence element, the compute element at the heart of their professional 3D printers to us, a wonderful gesture. I guess all every time an OEM makes that choice, it is a gesture of commitment, it's a gesture of faith in the Raspberry Pi organization and the Raspberry Pi platform.

It was wonderful to see the Formlabs a Formlab a Raspberry Pi-powered Formlabs 3D printer taking pride of place in one of the videos that was shown at this this month's Apple event. These these devices really do get absolutely everywhere.

Really, this has been, we talked a little bit about products, but really, I think the news about this half for us is it's been a period of organizational transformation for Raspberry Pi. We are We've been growing, we've been evolving the executive team inside the organization.

In March, we appointed Tim Mantora, a very old friend of mine, as our very first Chief Operating Officer. Then this is this is Richard's last last appearance in in a in a results presentation.

Tim Powell will be succeeding Richard as Chief Financial Officer from the end of next month. We've been making targeted hires across the rest of the organization as well, in engineering, in operations, in finance, and in enterprise sales as we enter both increase the organization's ability to develop innovative new products, and then our ability to support those to sell and support those products into our enthusiast, our industrial, and our OEM customer base.

There's been a focus in the new in the new operations organization under Tim, there's been a focus really on building the capabilities, the structures and capabilities that we need to support the next phase of Raspberry Pi's growth. This is across the organization in engineering operations, but with a particular focus on manufacturing and supply chain operations, really driving Sony, our manufacturing partner for the majority of our products, driving their production capacity out to a million units a month, which is where we believe it needs to be in order to support our growth ambitions over the next few years.

We've been expanding the commercial team as well, both colleagues who support our approved reseller and authorized distributor channel and the partners who support the growing number of direct OEM engagements within the business. As we've deepened our direct direct relationship with OEMs, particularly with the OEMs who we meet through our board-to-board program, these tend to be larger potential opportunities, but they also tend to be opportunities which may require more targeted support from our organization to get those opportunities over the line.

We've been making those investments in our application engineering team to sustain to be able to sustain those engagements even as they they require a little bit more touch, as I say, to get them over the line. A word on competitive landscape.

It really is a rapidly changing competitive environment at the moment. I think what we're seeing is we're seeing Raspberry Pi's core brand values, our very long-standing core brand values, our industry-leading cost structure, which is underpinned both by proprietary technology and by that end-to-end engineering culture we've built that really can go hunting for cost optimization opportunities throughout the entire technology stack, our commitments to the very long-term support and very long-term availability of our products, and the unmatched organic ecosystem that's grown up around Raspberry Pi.

These are our long-standing brand values. I think what we're seeing this year, and we've seen over the last couple of years, is these starting to intersect with a set of new imperatives in this more complex environment we're living in.

We're seeing a greater emphasis in many of our markets on sovereign capability. For our American customers, North America, the United States accounts for roughly a third of our business, and in that environment, our customers have a particular focus now on the tariff implications of their the the the tariff behavior of their supply chain.

There, we are building our products, building the vast majority of our products in the United Kingdom, we are differentially advantaged from a tariff perspective versus almost any other non-domestic manufacturing location for an American customer. Finally, we see a growing amount of regulatory burden, a growing regulatory burden on our customers who are building connected products.

Our customers who are building IoT products are having to comply with an increasingly strict set of requirements in order to be able to legally ship those, particularly the the EU Cyber Resilience Act is the most obvious example. It is increasingly important not just to be able to build products, but to keep those products secure over time, to have a story about how you keep them secure over time, an evidenced story about how you expect to keep those products secure over time.

You're not just generating when you build a software image for your for your system, you're not just generating software, of course, you are also generating compliance artifacts, which must be synchronized with that software build. Many of the investments that we've made over the last few years in deepening the Raspberry Pi software ecosystem are really coming to bear and are becoming increasingly salient as people, as many of our OEM customers, many of our IoT-focused OEM customers are confronting some of those challenges.

Of course, all of this is happening in a much more challenging subject supply chain environment. I think we are seeing signs this year, one of the drivers of growth in sales, one of the drivers of growth in that backlog, has been what we might call a flight to quality, that we have OEM customers We are meeting Just as our existing OEM customers continue to scale, and as the pipeline that we brought with us into the year continues to mature, we are also seeing new OEM engagements which are driven by the by OEM OEMs who have designed with other modular platforms, OEMs who have chosen to outsource compute to other vendors where those vendors are now struggling to keep their products in production, or OEMs who have chosen the in-house engineering solution, OEMs who have chosen to make rather than to buy.

Those in-house those in-house teams may also be struggling to secure the components they need. We are seeing people coming to us as a trusted partner to see them through this supply chain environment.

Of course, for us, that is an opportunity to meet new customers. It's an opportunity to gain the faith of new customers, to be of service to those customers, and hopefully many of those customers will remain with us even after the present supply chain environment has improved a little bit.

Some a a few brief words on AI. We all know that we are living in an age of AI-related disruption.

This couples into our business in numerous ways. Obviously, we've already talked about some of the supply chain impacts of competing with the AI the hyperscaler AI build-out for access to a number of components, most notably storage components, volatile and non-volatile memory.

I think the more we see so many of our customers, the applications that our IoT OEM customers are running have a very strong AI flavor to them. The more we see of how our customers are using AI, the more convinced we become that there is a significant opportunity for us here.

We believe the thesis is that there is a centrifugal tendency over time, a tendency for AI compute to migrate from the center of the network. Any given AI technology, any given AI technique may start at the center of the network, and over time, as the devices at the edge of the network become more performant and as research effort in in in AI drives down the compute requirement of a specific level of performance, that compute that starts at the center of the network will naturally migrate to the edge, bringing And as as it migrates to the edge, that that migration brings with it improvements in reliability, in cost structure, in privacy, and in security.

This does feel like a general rule. We absolutely see it today in visual AI.

Many of our largest, many of our highest-volume OEM customers today are using Raspberry Pi platforms to run visual AI algorithms which would have been inconceivable to run at the edge of the network a decade ago. We are seeing the same thing already happen in generative AI.

We are seeing a collapse in the compute requirement of a given level of generative AI performance. We believe that that transition from the center to the edge of the network, which has taken roughly 10 years in the previous in previous AI applications in visual AI applications, is likely to take place over the next two or three or four years in generative.

By the end of the decade, the vast majority of of inference operations for generative AI will happen at the edge rather than at the core of the network. These AI These trends in AI are driving demand across a very broad range of markets.

I'm going to call out two two today, those being smart home and aerospace and defense. Some words on smart home, smart environments.

Customers like Homey are using Raspberry Pi technology, another very long-standing, extremely loyal Raspberry Pi customer, they're using the Raspberry Pi platform to build intelligence into our everyday interactions with our environment. I love this quote from Emile: 'We didn't have to reinvent the wheel.'

When he says that, really what he's doing there is he's articulating the core of the Raspberry Pi value proposition to our OEM customers: that you don't have to become a computer company if you want to embed intelligence into a product at the edge of the network. You should You don't You don't have to.

You should not have to become a computer company or die. You should be able to find somebody to outsource that to.

It's our aspiration to win that argument. When we've won that argument, then to win the argument that the natural person to outsource this to is Raspberry Pi.

This outsourcing is, I think, a very long-term trend that's been to our benefit over the last few years, and it's been accelerated by the challenges around memory pricing and availability, as I've said, by some of the challenges around regulatory complexity, and of course, lastly, by the challenges associated with acquiring embedded engineering talent. Many of our OEM customers are coming to us for compute solutions in order to avoid the and not just the cost, but the administrative complexity of building and maintaining a team which can build and maintain in production the compute element at the heart of their platform.

We're allowing people to focus on their differentiating, on their value add, on their differentiating engineering, not on the non-differentiating engineering of being a computer company. Then defense, becoming an increasingly important potential market for us.

There are a number of secular demand drivers going obviously here in the background: a trend in the West towards rearmament, a recognition that we have probably wound down the size of our armed forces further than is wise, a growing recognition driven probably by some of the experiences that are happening today in Ukraine of the importance of autonomy, of advanced autonomy, of distributed decision-making in mobile platforms, a a pivot away, I think, from what we might call exquisite platforms towards high-cost, low-volume platforms with very long development times, with development times on the on the order of decades, towards lower-cost, attritable, lower-cost consumable platforms, and in enabling that transition, a move from only using military-specification electronics to a growing focus on COTS, commercial off-the-shelf technology, as I say, as an enabler both for the cost and the availability and the sustainability of these platforms. As we look more at the the defense market, really struck by the range of applications that Raspberry Pi fits very neatly into, whether that's fixed hardware back at base, whether it's driving display screens or aggregating data in a fixed location, whether they are whether it is dis- deployed static hardware, sensor platforms in the field, RF decoys in the field, or whether it's providing intelligence and autonomy for mobile unmanned platforms like UAVs, USVs, and UGVs.

All of these markets, just like our just like our commercial customers, all of these markets stand to benefit from Raspberry Pi's distinctive value proposition: industry-leading price performance, availability and long-term support, and the ability to manufacture these products and sustain them at scale. A word on silicon.

Silicon really remains at the heart of Raspberry Pi's medium-term growth strategy. It has been and it continues to be an enabler for our single-board computer and module business.

We build silicon because it allows us to build better board-level products, better modules, better SBCs than we could build otherwise. Increasingly, it's becoming a business for us in our own right in its own right.

We saw lower sales, we saw slightly lower sales in the first half of 2026 than we did in the comparable period in 2025. That was a strong comparable period, I think.

We had a number of large OEM orders in that period. Then we followed July and August this year absolutely it's absolutely fantastic months.

August in particular, a record month for sales of the RP2350 platform, the 2-year-old second-generation microcontroller platform, particularly strong sales in particularly strong and particularly broad-based sales for those products in China. We continue to develop engagements with tier-one and tier-two OEMs in the West.

That's inevitably a slower burn because of the Western engineering culture is inevitably a slower engineering culture, but we're confident that those will mature in due course into into design wins. We have taped out in the in the second half, in the last month, we have taped out our our next-generation semiconductor product.

Expect to get that back at the start of next year, and that may in due course lead to future board products, future innovative board products, and future standalone semiconductor products. Finally, a word on outlook.

We expect the second-half volumes to be higher than first-half volumes. What's going on there?

Continued extremely strong demand. The backlogs that we've both referred to earlier, at 2.6 million units at the end of the first half, those are large backlogs.

They're probably verging on unhealthily large backlogs, and there is a great focus in the organization at the moment on reducing those backlogs, not to zero, but the aspiration is to get those backlogs back towards the numbers they were at at the start of the year. To support that, we've been making a number of co-investments with our partners at Sony in order to increase their production rate, and we expect that Q4 will see the full benefit of all of those investments.

Despite this taper off We saw some exceptional unit economics in the first half of the year as some of the price increases that we've put through interacted with the low-cost inventory that we were holding that we came into the year holding. Despite the taper off of those exceptional unit economics, we do, as a result of those increased unit volumes, expect adjusted EBITDA to exceed market estimates somewhat.

We are now holding enough DRAM We have enough RAM in our hands and on secure order to meet our requirements for the remainder of this year and into next year. We're excited about what 20- 2027 and 2028 will bring for Raspberry Pi.

I'm now happy to take questions.

Let's do it. You're going to read them out?

I'm going to read them out.

I'm just trying to

Mostly I am going to familiarize myself with the order they arrived in. What new products are in development?

That's a good start,

yeah. I think

I think we I think

we share with another another fruit-named company a tendency not necessarily to talk enormously about about what products we have in development. I think we can say that, it is it's uncontroversial to say that we obviously need to be starting to think about the next generation of our two platforms.

We need to be thinking about the next generation of the big Raspberry Pi platform, the Linux-based platform, the thing which will eventually become Raspberry Pi 6, and the next generation of the smaller microcontroller platforms, the thing which will generate both Raspberry Pi Pico 3 and the next generation of RP2-series microcontroller. Obviously, we are still some distance from both of those platforms, are still fairly the 5 and 2 platforms are still fairly new, but certainly we're now reaching a point in their lifecycle where I think attention does turn to future products.

I think we've said that it's like you're likely to see more Raspberry Pi Pico 2 products. In the Raspberry Pi Pico generation, we have the Pico product and the Pico W product, the wireless and normal wireless product.

I think it's likely you will see from us over the next 12 to 18 months, you're likely to see from us Pico 2 products which have a broader range of network interfaces. We've talked about that in the past.

Pretty much all of those, you think about, one of the big-hitter accessory items, power supplies, displays, cameras, I think it's fairly likely that we will try to find ways to extend that. As we get a better understanding of what of how our various customers, our enthusiast customers, our industrial and embedded customers, as we get a better idea of what they appreciate, what they like and what they don't like about our existing offering in that space, I think you'll see us kind You'll see us broaden that broaden that offering out a little bit.

Yeah. One day there will be a Six generally follows five, doesn't it?

Yes, usually. Yeah.

Got a couple of questions here about our

relationship 1 1 + 1 is 2.

Thank you for that. Yes, I've got that right, but I had to think hard.

Going to bring my son to the next

There's a couple of questions in here about our relationship with Arm.

Yes.

How is that relationship developing? What's it like having them as a shareholder?

Arm have been an enormously supportive shareholder. Obviously, they were a pre-IPO investor.

They cornerstoned the IPO. They bought a certain amount of the foundation's

old

block in April,

and

Arm participated in that secondary sale. They've been a very supportive shareholder.

I often think of this, the sort of the substance of the questions is, what has having Arm as a shareholder done to the strategic relationship? I think I've always viewed this the other way around.

I've always seen this as the shareholding recognizing, validating being a consequence of an existing strategic relationship. Every Raspberry Pi is an Arm computer.

A huge number of Arm pieces. I, as a child of the 1980s, have great affection, the Acorn Archimedes, I have a great affection for the Arm architecture since childhood.

This is something which has always been important to us. I think that having the opportunity to have Arm as a shareholder has been very helpful for us.

It has deepened the level, I think, on which we can have these strategic discussions with them. There will be many more Arm-based Raspberry Pi products in the future.

I think they're excited about, we see the road map, we see the products we haven't announced, we're excited about the

They do engage at all levels

and

senior levels within Arm as well, which is great

insight. We get great support from them.

We're excited about the core road map, we're excited about the technology road map, we're excited about finding ways to integrate that road map with our own road map to keep building more high-performance Arm-based products. We are a very happy Arm partner,

a

very happy Arm licensee, a very happy Arm partner. The Arm partner meeting in August is an absolute highlight.

They weren't mean to you when you released a RISC-V core.

Indeed.

What steps are being taken to ensure we remain a UK public company? As a UK shareholder, it would be extremely disappointing to see us taken over by a foreign entity.

I'm not sure there is an enormous number of specific things that one can do here other than, we do our best. We are a very proud

We try to be as amusing and entertaining in meetings like this to satisfy our UK shareholders that they continue to want us to be independent rather than

Look, we're a proud UK-listed public company. We chose to list in the UK.

We design our products in the UK, we manufacture our products in the UK, we're listed in the UK. I don't think we do any of these things for patriotic reasons.

We do these things because we believe that the UK is the best place to do each of those three things. We've had a fantastic experience, I think, as a UK plc.

Our aspiration, what are we trying to grow here? We are trying to build a globally meaningful business from the UK, based in the UK, listed in the UK, manufacturing in the UK, and while we have the opportunity to, we will continue to do that.

Yeah.

We have a CRA question.

Yes, which we

Let's do the Cyber Resilience Act question. This is a couple of questions about the EU Cyber Resilience Act and the requirement for full compliance in December next year.

I think this is something we've seen coming for a long time. It drove over the kind of 5 years, I guess over the period that we were designing Raspberry Pi 5, the awareness that there was going to be increasing government action and increasing government awareness around IoT security drove the incorporation into the Raspberry Pi 5 hardware platform and the Raspberry Pi the RP2350, the second-generation microcontroller, drove the incorporation of hardware features.

It was pretty clear what hardware features would be required in order to give people at least the potential to build compliant solutions. There's then a software layer on top of that.

We have largely by, I guess, 2 years ago when we launched 2350, we had largely completed the process of delivering the underpinnings for CRA compliance. What you've seen subsequently is us then building out both the software level required, particularly some of the support for secure updates, secure firmware updates on our platform, but also then the tools that people need in order to build the regulatory artifacts, the certification artifacts that sit alongside.

It's no longer enough to build a firmware image.

Yes, I think the first bit we did because it's the right thing to do.

Yes, that's right. It's no longer sufficient to simply build the firmware image.

You have to create the certification, the regulatory artifacts,

the SBOM.

You have to be able to generate the SBOM as well. A lot of those investments that we made in automating, systematizing the process of building the software image for a Raspberry Pi IoT device the design of those systems incorporated the knowledge that people were going to have to conform to the CRA.

I think that's gone pretty well. In terms of its impact on us as a business, We already see it driving a tendency to use our software, not just to buy our hardware devices, but to use our software and to use our systems when you're assembling the firmware image.

That's extremely attractive for us because it increases the stickiness of the platform. It makes the platform more salient to our customers.

It increases the stickiness of the platform. Once you've designed Raspberry Pi in and that's working well, it increases the switching cost away from Raspberry Pi as a vendor.

I think this is something where, like many of these things, you see a difficult thing, you see a challenge, and at first you are sad that you have to do some work, and then after a little while, you realize that having done that work, that work becomes a plank, another plank in your story about competitive advantage.

Yes.

Yes,

your line I've heard a few times with investors of if you want to buy shares in Raspberry Pi, spend some money on buying a competitor's product first, and just appreciate the quality of what we've made.

The other question was about the UK government. Whether we are engaged with the UK government on this particularly around ensuring that whatever legislation is passed permits you to continue to adopt open source software development methods.

We are not specifically engaged in this. We do expect the UK government to largely be a follower here.

We don't expect the government here in the UK to diverge meaningfully from standard European practice, and we believe that it is unlikely that the European version of this will involve ways which are inimical to people's ability to use open source software development methods. I think there is a broad consensus, actually, that open source approaches are the approaches, particularly actually open source approaches allied to machine learning tools allied to AI tools, are the way to build systems which have that level of robustness that you'd be happy to deploy in the world.

Yeah.

Changing gear, what's our expectation for unit sales in semiconductor business this year and in the medium term? How quickly should we expect this business to grow?

I think in the short term, we're talking microcontroller sales.

It

would be very sad if it doesn't start with a one this year, probably in the sort of 10

to 12

scale. Yeah.

Yeah. Yeah.

I think you can put a box around it, which is this is a, let's say, on the order of 30 billion unit Just microcontrollers. On the order of a 30 billion unit business.

It's an oligopoly. It's a five-player oligopoly largely.

Roughly 75% to 80% of that goes to five vendors who I probably can name four of them on any given day. The remainder of that market is actually quite fragmented.

An aspiration to go and own 1% or 2% of that market is not outlandish at all. I think we have an aspiration to grow the business out into the high tens of hundreds of millions of units.

I think that getting into double-digit millions is an important step along the road. Obviously, we still have to sustain We've seen a great growth rate in these products since we've launched them 5 years ago.

I think we have to sustain that growth rate, and obviously it becomes easier and harder to sustain big growth. As you get bigger, it becomes easier and harder to sustain a large growth rate.

I think there is an aspiration to do that. Where do we want to be?

I think we've said very consistently, a decade after the IPO, the aspiration is to have grown the traditional business, the boards and modules business, significantly, but for semiconductors to have come up alongside that, come up underneath that, to a point where they're roughly co-equal. Now some of that heavy lifting, I think, will be done by ASP.

I'm sure some of the products

we produce in the future will have higher ASPs, but a lot of that has to be done by volume. I think there are sort of two directions in which we are saying the business really needs to find a way into at least the high tens of millions of units a year of silicon in order to meet those.

These are exceptional pieces of part. They really are.

We've seen them described as connoisseurs' microcontrollers. The better an engineer is, the more attractive they are to the Raspberry Pi silicon platform.

I think we have something that's very compelling. I think if we aren't able to get into that regime, then I would personally feel that we have somehow taking a great product and sold it short, that we won't have failed tech, we will have failed in translating that technical excellence into market share.

Yeah. Yeah.

Reference market consensus for adjusted EBITDA for the full year, I think we're seeing numbers in the sort of range of low 60s, sort of $60 to $65 million, I think, across the spread of analysts that we've talked to.

I think when we reference market consensus there, that is market consensus as of yesterday evening, I think market consensus may have moved this morning. I think we were conveying a belief that that prior consensus was a little conservative relative to how we see the business performing in the full year.

When do you expect to make a positive free cash flow? It is not something that is alien to us as an organization.

I think from 2012, true, even after I arrived, we were generating free cash flow.

It wasn't just

me. I think over the last few years, we have invested significantly in capex, but more importantly, we have ridden through a very turbulent supply chain period.

We've taken that opportunity to use our balance sheet. Yes, we've ended up with negative free cash flow.

I think the answer to this question is probably when do we think the turbulence and crisis over memory is going to stop? If we believe that is in 2028, which I think is probably now the earliest point, ideally when additional fab capacity overwhelms the demand from data centers, that is a period when we should see some scope to start to reduce inventory levels, or at least hold them steady while the business is bigger.

I think you're in a situation at the moment where you're holding quite a lot of DRAM because you want to make sure that in the event of an availability shock, you are able to make product,

and

at the same time, holding that DRAM is expensive because DRAM is expensive per piece. I think at the point where the cycle flips over, I don't think you're necessarily going to see us We're holding, let's say, in between 3 and 4 months of DRAM at the moment.

I think if the market flips over, you're not going to see us holding 3 or 4 months of DRAM, and even if we were holding 3 or 4 months of DRAM, that would be much less cash-consuming. I think well, I know that we would be generating positive free cash flow now if we had not had a memory price shock.

I'm pretty confident that once we get out the other end of this, the business will revert to what I still believe, having run the business since 2012, what I still believe is the natural behavior of Raspberry Pi, that it is a fairly cash-generative business.

Okay. Probably quick one.

Margins have been improving lately, but are below the 2021 level. Is the plan to return to those levels, or is that unrealistic?

I think when margin here, we're talking about gross profit as percentage of revenue. That is something that, I think as we've talked about before, our revenue number does include a number of different lines with really quite different margin structures.

I think in 2021 75% of our unit volume was going through Farnell near 100% margin, whereas now 75%, 80% is direct, the Farnell licensee piece is only 20%. I think it will be sometime before we think about going back to a 2021 level.

The way that we view the business, certainly I do, is based on that gross profit per unit. What dollars are we making for each board shipped?

That allows us to stand back from which route is it going to market, and really focus on what profit does it make, rather than focusing on a percentage. I think if we try to maintain a margin percentage in this most recent year, if we continue to press for that with prices going up so much, yes, we would have had a temporary boost of profit, but I think we would have opened up some quite frightening opportunities for competitors, particularly in the Far East, to come and take away our very strong presence across all customers.

It would have been a breach of faith with our OEM customers. I've referred to a couple of very loyal customers there during the presentation.

When somebody designs Raspberry Pi into their product, even without the CRA sort of enhancements, they're incredibly sticky sockets. We are constantly alive to any perception that we are exploiting the stickiness of those sockets in order to extract value from our OEM customers.

The decision to pass through DRAM cost rather than to margin and passing DRAM

cost

through both ourselves and then our channel structure has been one of the most challenging decisions that I've had to make in my time at Raspberry Pi. I think it has been the right decision.

It will have a negative effect on percentage margin. As Richard says, when we manage the business, we manage the business to units.

What do I look at every day? Units.

I'm looking at gross profit per unit. It's the composition of overall gross profit that has my attention every day.

Yeah. I think we've talked about that over many years that it's remarkable the business that you've built and talked about across the world that we've not seen a significant assault on this business by low-cost competitors in China.

A lot of that is about lower cost.

A lot of that is about that humble approach.

That's

Thank you. This has been a spectacular half.

We have had, as I said earlier, we're a proud UK-listed company. We've had a good experience as a plc.

This has been by far the best half of that two-and-a-little-bit years. This has been by far the best period.

It's been wonderful to demonstrate the business's resilience during what is an extremely challenging time. More than anything else, it has been extremely satisfying to have been able to be of service to our customers, our enthusiast customers, our embedded customers, our industrial customers, to have been able to keep our product in production, to have been able to use some of that strategic memory inventory to buffer and minimize and delay the impact of some of these cost structure changes on the platform.

We hope that people understand the effort that's gone in the organization. Sort of last words, I'd like to take the opportunity, as I said, this is Richard's last set of Raspberry Pi results.

He's been with us since 2019. He was our first full-time Chief Financial Officer, and really a measure of the extent to which the business has evolved over the last 7 years.

I would just really very much like to take this opportunity to thank Richard for his service and for his friendship as we took the business through just quite the most remarkable period of evolution. Thank you.

Thank you. I will miss you, too.