Raspberry Pi: Profit cut in half at FTSE 250 tech firm
Raspberry Pi’s profit before tax fell 57 per cent over 2024 to just $16.3m (£12.6m) as issues with inventory correction finally hit the firm.
The FTSE 250 tech firm’s adjusted operating profit dipped 15 per cent to $37.2m (£28.8m), it revealed in its annual results.
Analysts had expected a fall in the firm’s profit, forecasting adjusted operating profit would drop to between $36m and $38m.
It explained that the sharp decline in profit reflected the growth of the firm’s resource and development expenditures and increased administrative costs from being a public company.
However, Raspberry Pi’s revenue also fell two per cent from the previous year to $259.5m (£201m), coming in at the lower end of analyst expectations.
“Since its IPO in June 2024, the shares of Raspberry Pi have been volatile, first hovering above the listing price of 280p, before shooting up to above 700p in December,” noted Deutsche Bank analyst Robert Sanders.
Raspberry Pi’s mixed performance
Initially, Raspberry Pi’s IPO was hailed as a sign that the London Stock Exchange could be set for a listing rebound after a bruising few years.
The stock initially struggled, but in December its fortunes seemed to improve. Shares in the tech company doubled as the attention of US hedge funds drove demand for the FTSE 250 company.
However, since the beginning of the year, the stock has fallen 21 per cent.
“At the current price, the shares sit on a premium valuation (38 times 2026 earnings), pointing to healthy appetite to believe in the potential of a huge opportunity ahead in edge computing, especially in industrial and embedded markets, which are 72 per cent of Raspberry Pi volumes,” added Sanders.
New product releases have ramped up since the IPO, with 22 in 2024 compared to just six in 2023, as the group aims to expand its product offering.
This is also evidenced by the number of engineers as a percentage of the firm’s total employees, which jumped from 44 per cent to 48 per cent last year.
“The IPO in June 2024 has undoubtedly extended awareness of Raspberry Pi’s value proposition from the engineering department to the C-suite at major original equipment manufacturers,” said Raspberry Pi boss Eben Upton.
“As our platforms and solutions evolve, we aspire to become the compute partner of choice for these companies.”