Kalray Unveiled 2024 Revenue and Sale of its Data Acceleration Platform Subsidiary

Kalray, a leader in hardware and software technologies dedicated to the management and intensive processing of data, provides its 2024 annual revenue and an update on the progress of its strategic plan.

Eric Baissus, chairman, board of directors, Kalray, stated “While the storage and AI sectors generate immense interest and hold significant potential, the current economic environment and the high market concentration in the hands of a few major players – whose resources far exceed ours – remained key challenges for our company’s growth and its development. In this context, Kalray had to reassess its strategy and secure financing solutions. The disposal of our software services business unit, recently signed with DataCore Software, a major player in storage technologies, allows us to continue exploring opportunities to unlock the full value of our semiconductor business and determine the most suitable legal framework for its implementation. Although our financial outlook remains constrained, we are actively engaged in discussions with our suppliers and partners to extend our financial visibility.”

2024 Revenue
At the end of fiscal year 2024, Kalray reported consolidated revenue of €24.825k, compared to €25.829k in the previous year (exchange rate €/£:1.20. unaudited data). The group nearly caught up in the 2nd half of the year after a slow start in the 1st half.

The revenue breakdown for 2024 is as follows: 85% from the enterprise segment (Ngenea offering) and 15% from the acceleration card segment (sales of acceleration cards)

Geographically, revenue distribution was 42% from Europe (including the UK), 49% from the United States and 9% from the rest of the world (ROW).

While revenue remained stable compared to last year, Kalray anticipates a significant decline in EBITDA, expected at approximately -€8M for the year. This decline is primarily due to lower margins caused by the economic environment and substantial investments made at the beginning of 2024, particularly for the development of the latest-gen Dolomites processor. These impacts were partially offset by the initial effects of the cost reduction plan implemented in September 2024.

Disposal of the Data Acceleration Platform activity to DataCore Software
In this context, Kalray reminds that it announced in December a review of the company’s strategic options, including potential asset disposals.

In a press release dated January 2, 2025, Kalray announced it had received a non-binding letter of intent for the acquisition of the assets of its Data Acceleration Platform activity (comprising the Ngenea product line, marketed to large corporations).

Kalray now confirms that it has completed the sale of this business unit – including all assets related to its Ngenea offering and associated staff (approximately 80 employees) – to the US-based DataCore Software Corp., a player in storage and data protection technologies.

The transaction amounts to total of up to $20M, structured as follows:

• Immediate gross payment of $12.5M,
• $2.5M service contract, to be invoiced in fiscal year 2025,
• Potential earn-out of up to $5M, contingent on DataCore’s commercial performance on the Ngenea product line in fiscal year 2025, payable in the 1st half of 2026.

Continued discussions to extend liquidity horizon
The proceeds from this transaction will allow Kalray to repay the €3M credit line granted by BNP Paribas and cover restructuring costs related to the disposal of the Data Acceleration Platform business unit, transaction fees, and other liabilities of the divested entity (amounting to €1.5M).

As of today, the company’s financing horizon remains unchanged until March 1, 2025 (refer to press releases dated September 19^th, 2024 and October 31^st, 2024 for further details). Kalray is actively working to extend its liquidity horizon by pursuing discussions with strategic partners and suppliers and evaluating the most appropriate legal framework for their implementation. The company will provide an update to the market at the end of February 2025.

Ongoing discussion to unlock the value of semiconductors business
Kalray continues to explore partnership opportunities as part of its strategic repositioning towards its core business: the development of processors and acceleration cards for AI and data center infrastructure optimization. The company is actively evaluating 2 options to maximize the value of its semiconductor business:

1. Selling the business to a strategic player, or
2. Launching a service offering to develop hardware acceleration solutions for third parties.

These options were first outlined in Kalray’s press releases on September 19, 2024, and December 4, 2024.

Kalray recalls that it has mandated Woodside Capital Partners International LLC, an independent US-based investment bank specializing in semiconductors and high-growth companies, to assist in analyzing capital market opportunities for its Data Acceleration and DPU Design business while continuing to promote its Kalray AXL design offering to industry players (refer to the press release dated December 4th, 2024).

Discussions are currently underway for both strategic options; however, there is no certainty that these efforts will result in a positive outcome. The company will keep its shareholders informed of any significant developments.