Ethernity Networks Reports 2025 Results: Revenue Down, Strategic Shift to IP Licensing Amid Funding Challenges

Ethernity Networks losses, impairment charges and cost cutting: the good and bad underneath the headline

There is one genuinely encouraging point in these results – underlying cost discipline improved. EBITDA loss fell by 37% to US$2.20 million, mainly because operating expenses were cut by US$1.23 million.

Research and development costs, stripped of certain non-cash items, fell by 33%. General and administrative costs fell by 22%, and sales and marketing costs fell by 20%. That tells you management has moved fast to shrink the business to fit reality.

The bad bit is the operating loss still got worse because of non-cash charges tied to intangible assets. Ethernity booked US$961,380 of amortisation and a further US$1.58 million impairment charge. An impairment is an accounting write-down – basically management admitting the book value of an asset is too high relative to expected future returns.

That charge does not directly drain cash today, but it matters. It signals lower expectations for how much value the company can extract from its past development work.

Ethernity Networks cash position and going concern risk: this is the section that really matters

Here is the blunt read: the balance sheet is weak and the auditor’s going concern warning is serious. At 31 December 2025, Ethernity had an accumulated deficit of US$54.5 million, negative working capital of US$3.5 million, and total equity of negative US$1.54 million.

The company also said it was in arrears on certain liabilities. That includes overdue lease payments of US$0.72 million at 31 December 2025, rising to US$1.13 million by the date the financial statements were approved, plus an outstanding supplier liability of about US$0.83 million under a settlement agreement that it did not fully keep to during 2025.

Management says current resources are not sufficient to fund current obligations. That is about as clear as it gets. The rescue plan is to secure more design work, monetise patents, pursue licensing deals, and potentially complete a strategic transaction – but none of that is assured.

There were some short-term cash positives after year end. In Q1 2026, Ethernity collected US$0.25 million from customers and raised net cash funds of US$0.76 million. It also paid US$0.67 million of trade payables and other current liabilities in the first half of 2026. Helpful, yes. Problem solved, no.

Ethernity Networks strategic shift to IP licensing after ASSP funding failure

The most important strategic change is that Ethernity could not fund its planned move into an ASSP business. ASSP stands for application-specific standard product – essentially a standardised chip platform aimed at a wider market rather than a one-off custom design.

Management says leading OEMs had shown strong interest in building an ASSP from Ethernity’s Universal Edge Platform and patented networking technology. That could have been the big pivot into a proper semiconductor growth story. But without external funding, the plan stalled.

So the company has gone back to what it can realistically support: IP licensing, engineering services, recurring royalties and support for existing customers. Current trading is mainly tied to royalty income and engineering work, with most services provided to a Tier-1 US defence customer. That programme completed its current phase in the first half of 2026, with further work dependent on the customer’s integration timetable.

Ethernity has also hired a patent monetisation broker to explore licensing opportunities. The portfolio includes seven US patents that the company says are relevant to AI infrastructure, memory processing, networking and 5G wireless backhaul. That could create value, but at this stage it is still opportunity rather than signed revenue.

Ethernity Networks dilution and fundraising: existing shareholders have paid a heavy price

If you owned the shares through this period, dilution is impossible to ignore. Issued shares rose to 10,031,828,493 from 1,000,000,000 in 2024. The weighted average number of shares for loss per share jumped to 4,179,048,317 from 550,797,251.

The company completed four fundraises during 2025 for gross proceeds of £0.09 million, £0.80 million, £0.16 million and £0.18 million. Then, after year end, it raised another £597,500 in February 2026 by issuing 14,937,500,000 shares and 14,937,500,000 warrants.

That is the trade-off here. Ethernity has kept the lights on, but it has done so by issuing huge numbers of shares at very low prices. Survival has come first, and shareholder dilution has been the bill.

What Ethernity Networks shareholders should watch next

My view is that this RNS is mixed at best, and high risk overall. The positive case rests on a cleaned-up cost base, completed creditor settlement, ongoing royalty and engineering income, and the possibility that patent licensing or a strategic deal unlocks value.

The negative case is more immediate. Revenue is tiny, customer concentration is high, cash remains wafer-thin, liabilities are pressing, and the going concern warning is real. Add in the scale of dilution, and this is clearly not a comfortable hold for cautious investors.

From here, the key things to watch are simple:

• Whether Ethernity can turn patent monetisation into actual licensing revenue
• Whether the Tier-1 US defence customer restarts development work
• Whether further strategic transactions are announced
• Whether the company needs yet more equity funding

In short, Ethernity Networks has bought itself time, not certainty. For investors, that is the real takeaway from these 2025 results.