Raspberry Pi H1 Earnings Call Highlights

Key Points

• Record first-half performance: Raspberry Pi shipped 4.2 million units, with revenue up more than 90%, gross profit rising to £59 million and adjusted EBITDA reaching £40.3 million. Growth was driven by higher volumes, price increases reflecting memory costs, and stronger demand for higher-value products.
• Supply-chain investment supports growth: The company more than doubled its backlog to 2.6 million units and invested £106 million in DRAM inventory, expanding its supplier base to about seven companies. Management expects secured memory supplies to cover production through 2026 and into early 2027.
• Positive outlook despite margin pressure: Second-half unit volumes are expected to exceed first-half levels, and full-year adjusted EBITDA is projected to beat market expectations. However, per-unit profitability is likely to decline as lower-cost memory inventory is consumed and costs move closer to current market prices.

Raspberry Pi LON: RPI reported record first-half revenue and profitability for 2026, supported by higher unit shipments, price increases tied to memory costs and demand for higher-value products. The company shipped 4.2 million units during the period, while its customer order backlog more than doubled to 2.6 million units at the end of June from 600,000 at the end of 2025.

Chief Executive Officer Eben Upton described the period as “an exceptional first half,” saying the company maintained product availability despite a difficult supply-chain environment. He said Raspberry Pi’s diversified DRAM supplier base helped it keep products in production, while the business also released five new products and platform updates during the half.

Profitability rises on pricing and inventory benefits

Chief Financial Officer Richard Boult said overall unit volumes rose 17%, including 26% growth in direct units manufactured through the company’s factory partnership with Sony in Wales. Demand was particularly strong for Compute Modules and Raspberry Pi 4 and Raspberry Pi 5 boards, which Boult characterized as higher-margin and higher-value products.

Revenue increased by more than 90%, helped by both volume growth and a roughly 42% increase in average selling prices. Raspberry Pi raised prices to reflect increased memory costs, though Boult said demand remained strong for 4GB and 8GB versions of Raspberry Pi 4 and Raspberry Pi 5.

Gross profit rose 79% year over year to £59 million from £33 million, while adjusted EBITDA increased to £40.3 million from £19.4 million in the first half of 2025. Gross profit per board climbed 53% to $12.20 from $8, which Boult attributed to price increases, the sales mix and the use of memory inventory acquired at lower prices near the end of 2025.

However, Boult said the benefit of lower-cost inventory had “probably been largely consumed” by the middle of the year. He said profit per unit is expected to decline in the second half as the cost of inventory moves closer to prevailing market prices.

Accessories also contributed to the performance. Gross profit from accessories rose 90% to £7.8 million, or about $1.90 per board sold, above the company’s target of $1 per board. The company cited demand for cameras, SD cards, displays and AI HAT products developed with Hailo.

Memory purchases support production plans

Raspberry Pi increased investment in inventory, with £106 million of inventory purchases related to DRAM at the end of June. The company said it had nearly three months of inventory at that point and has continued to add to its holdings, giving it confidence that it can meet production plans through the remainder of 2026 and into the first quarter of 2027.

The company expanded committed banking facilities to £140 million in early July. Boult said the additional funding gives Raspberry Pi flexibility to purchase inventory when opportunities arise, including to secure supply and favorable pricing. The company expects debt levels of roughly £40 million to £50 million in the second half, though it may use further available facility headroom for additional strategic inventory purchases.

Raspberry Pi has expanded its memory supplier base to approximately seven companies from two a year ago. It has also used engineering changes to support additional memory configurations, including a 3GB Raspberry Pi 4 variant aimed at OEM customers seeking an intermediate-density option.

Product, commercial and operational investments continue

During the half, Raspberry Pi introduced the second-generation AI HAT+ 2 accessory, which Upton said adds support for generative AI capabilities, including smaller language models, vision-language models and newer vision architectures. The company also continued to update its Raspberry Pi Connect IoT cloud platform, with Upton saying adoption has grown for both its free service and paid Raspberry Pi Connect for Organizations offering.

The company appointed Tim Mamtora as its first chief operating officer in March. Upton said Mamtora’s team is developing repeatable processes intended to support growth while maintaining Raspberry Pi’s engineering-led culture. The company has also made targeted hires in engineering, operations, finance, enterprise sales and application engineering.

Raspberry Pi is working with Sony to increase manufacturing capacity to 1 million units per month. Upton said the company expects to see the full benefit of related co-investments during the fourth quarter.

The company also highlighted expanding OEM opportunities in smart-home, aerospace and defense markets. Upton said supply-chain constraints have prompted some prospective customers to approach Raspberry Pi after other modular-platform suppliers or internal engineering teams struggled to secure components.

Outlook calls for higher second-half volumes

Management expects second-half unit volumes to exceed those of the first half as it works to reduce the 2.6 million-unit backlog toward levels seen at the beginning of the year. Upton said the backlog was “verging on unhealthily large,” and the company is focused on improving fulfillment rather than eliminating the backlog entirely.

Raspberry Pi expects full-year adjusted EBITDA to exceed market estimates despite the anticipated moderation in unit economics. In the question-and-answer session, Boult said analyst consensus before the presentation appeared to be in a range of roughly £60 million to £65 million.

The company said it has enough DRAM in hand and on secure order to meet requirements for the rest of 2026 and into 2027. Boult added that positive free cash flow is likely to depend on an easing in the memory market, as current inventory levels remain cash-intensive.

Upton also said the semiconductor business is a key part of Raspberry Pi’s longer-term strategy. Following a strong July and a record August for RP2350 microcontroller sales, he said the company aims eventually to build silicon volumes into the hundreds of millions of units annually. Raspberry Pi taped out its next-generation semiconductor product during the second half and expects to receive it back at the start of next year.

Separately, Boult said he will be succeeded as CFO by Tim Powell at the end of the following month.

About Raspberry Pi (LON:RPI)

Our mission is to put high-performance, low-cost, general-purpose computing platforms in the hands of engineers and enthusiasts all over the world. Since 2012, we've been designing single-board and modular computers, built on the Arm architecture, and running the Linux operating system. Whether you're an educator looking to excite the next generation of computer scientists; an enthusiast searching for inspiration for your next project; or an OEM who needs a proven rock-solid foundation for your next generation of smart products, there's a Raspberry Pi computer for you. That's not all we do.

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