Canatu H1’25 flash comment: Softer-than-expected H1 figures, lack of new reactor orders overshadows short-term outlook

Source: Inderes

Translation: Original published in Finnish on 8/29/2025 at 9:52 am EEST.

Canatu reported weak H1 figures in line with our expectations, as semiconductor sector revenue declined without new reactor deliveries. The company’s outlook for this year anticipates a decline in revenue, and the slope of the decline depends on the timing of potential new reactor orders, which is not within the company’s control. Canatu’s long-term potential still exists and is gradually building, but things seem to be taking longer than previously expected. The share’s valuation does not currently price in development in line with targets, but the soft short-term business development may keep the share under pressure going forward. However, this may offer interesting buying opportunities for investors who believe in the company's growth story.

Revenue sharply down as expected

Canatu’s H1 revenue decreased by 34% to 7.3 MEUR, which, considering the significant forecast risks, was practically in line with our 7.8 MEUR estimate. Semiconductor sector revenue decreased by 42% to 5.7 MEUR, while our estimate was 6.7 MEUR. The decline was expected, as the company was delivering its first reactors during the comparison period. At the same time, the delayed adoption of high-power scanners in the semiconductor industry has slowed down new reactor deals. The customer acceptance processes for the first reactors have also progressed slower than expected, which naturally delays the start of mass production, and subsequently the continuous revenue streams from royalties and consumables for Canatu. In addition, sales of inspection supplies were stable, whereas we expected growth.

Automotive revenue grew by 31% to 1.6 MEUR, exceeding our 1.1 MEUR estimate. The joint development agreement with DENSO generated more revenue than we expected already early in the year.

Earnings weakened with revenue as anticipated

Canatu’s EBITDA in H1 was -4.0 MEUR (H1’24: -1.7 MEUR), which was fully in line with our estimate (-4.1 MEUR). The adjusted EBIT (-4.8 MEUR) was slightly better than our estimates, but the reported EBIT was fully in line with our estimate (-5.1 MEUR). The weakening of the result was expected, as Canatu has significantly increased its investments over the past year, and at the same time, early-year revenue remained low without new reactor deliveries. The gross margin (H1’25: 67.3%) improved year-on-year (62.1%), which was influenced by the product mix in the early part of the year. Overall, Canatu's gross margins are at a good level.

Outlook anticipates softness also in H2

Canatu has now issued its outlook for this year and estimates that its 2025 financial year revenue will decrease compared to the 2024 unaudited pro forma revenue (22 MEUR). If the company does not receive new CNT100 SEMI reactor orders during H2, 2025 revenue is expected to decrease significantly compared to the previous year. According to the company, the adoption of finished carbon nanotube-based pellicle membranes ultimately depends on Canatu's customers and their processes. In addition, the timeline for receiving customer acceptance (Site Acceptance Test, SAT) for the second CNT100 SEMI reactor is not entirely within Canatu's control, and therefore the risk of delays cannot be ruled out. Canatu’s primary goal this year is to focus on supporting the first two reactor customers in achieving readiness for mass production of pellicle membranes. The company is also negotiating with new customers for new reactor orders. However, the adoption of ASML's high-power EUV tools has been slower than expected in the market, which naturally delays demand for Canatu's carbon nanotube-based pellicles. Canatu, however, estimates that the company's competitive position in this nascent market has strengthened over the past year, as evidenced by significant progress with the company's major reactor customers. The company is therefore well-positioned to capture a significant share of this market once the latest high-power equipment deployments begin from 2027 onwards. Overall, Canatu believes that the company's long-term potential in its three business focus areas remains unchanged.

Our pre-report forecast anticipated revenue of 22.8 MEUR (+4%) for this year, which would require new reactor deliveries. Based on the outlook, the risk of these materializing is clear, and there is downward pressure on the current year's forecast. Also, comments on the market development rate suggest that the financial targets set for 2027 (revenue >100 MEUR and EBIT >30%) will not be met. Our forecast has not assumed this at any point, but we have predicted that the targets will be reached a year later in 2028. Naturally, there is uncertainty regarding the realization of this as well at this point. Canatu’s share, which has been under pressure recently, still has clear growth expectations priced into it, but in our view, it is nowhere near pricing in development in line with the targets.