Weebit - 2024 and beyond, page-1774

Pitt Street Research maintaining the faith!

Valuation of A$9.56 per share reiterated

Weebit Nano Ltd (ASX:WBT): On track for more deals in 2024

Weebit Nano (ASX:WBT) published its FY24 annual report last week. The main thing that stood out for us was the A$1m in revenues from license deals.

WBT generates A$1m in revenues

The company already generated its maiden revenues to the tune of A$457k in 2Q24 (December quarter) and recorded a total of A$1m for FY24. We believe this revenue has largely been derived from license fees as the company hit technology transfer milestones with SkyWater and DB HiTek. We expect a limited amount has been derived from non-recurring engineering fees. We expect license fees from SkyWater and DB HiTek to keep coming in as Weebit Nano progresses with technology transfers and qualifications in the near and medium term.

A$63m in the bank

When it published its 4C at the end of July, Weebit Nano also reported A$62.8m in cash, which was somewhat higher than we were anticipating. CEO Hanoch indicated that the company has remained very prudent in 2HY24 in order to conserve cash. The current cash position gives the company more than 2 years of financial runway at the current cash burn rate.

More commercial deals in 2024

CEO Hanoch has also indicated that the company hopes to sign more commercial deals in calendar year 2024, i.e. within the next 4 months. The company is currently in discussions with more than a dozen IDM’s, foundries and product companies, and management expects 1 or 2 of those deals to come through soon. Of course, the timing of when new deals come through is near-impossible to predict, but we believe investors need to focus on the breadth of conversations Weebit Nano is currently having with prospects across the semiconductor spectrum.