Transense Posts Mixed H1 2025 Results: Core Business Growth Offset by Royalty Rate Cut

In electric motors and drives (EMD), there are 7 funded development projects with 7 customers spanning high-performance passenger cars, medium-duty commercial vehicles and electrified trailers – all due before 2030. SAW technology has been validated in customer systems for torque, force and temperature sensing, aimed at performance and safety gains. Each project is expected to generate £3 million-£5 million by 2028-2030.

Robotics: four funded projects with blue-chip names

Four customer-funded robotics programmes are underway – three with recognised global leaders and one with an innovative European start-up – each expected to deliver £2 million-£10 million by 2028-2030. Early-stage discussions are ongoing with several more potential partners. This is an encouraging read-across from SAWsense’s production work in e-drives.

Scaling up: pilot line, ASIC and component investments

Transense is midway through a roughly £2.8 million capex plan to build a pilot production line and upgrade key components. About £0.8 million of the £1.25 million equipment budget has been spent, with £0.4 million to go. Major line elements are on-site; the die bonding station is due this month. The company has a £1.00 million asset-backed loan facility, with £0.40 million drawn at period end and more expected in H2.

On technology, the next-generation ASIC is moving into prototype testing this month; a new current sensing element (AQP) has its supply chain secured; and work has begun on size/cost reductions. Total spend on next-generation components stands at approximately £0.9 million to date, with a further £0.7 million anticipated through FY26-FY27.

Translogik: steady growth and a sharpened go-to-market

Translogik revenue rose 13% to £0.59 million despite a 24% decline in sales to global tyre majors (£0.25 million vs £0.32 million) as mature markets faced pressure from low-cost challengers. Growth instead came from a more diversified sales approach – direct to fleets and service providers, via software resellers, and through overseas distributors.

Three UK hardware + SaaS subscription customers were onboarded, and French market penetration improved via a software reseller. A UK fleet pipeline is being built, helped by the appointment of an external SDR consultancy to accelerate lead generation. The TLGi smart inflation product launched in November, with sales due in H2 and an additional product slated for launch later in the year. Three further reseller partnerships are close to signature. Management also flags an EU regulation requiring a digital passport for life-cycle management as a structural adoption driver.

iTrack royalties: rate reset and FX headwind weigh on the top line

Bridgestone iTrack royalties fell 35% to £1.01 million. The per-installation rate dropped 40% from 1 July 2025, partly offset by roughly 10% growth in installed volumes. A 5% adverse FX effect made it worse, compared with prior guidance that had assumed 15% volume growth and neutral FX (which would have meant an overall 25% reduction).

Context: Transense sold iTrack’s sales/support infrastructure to Bridgestone in 2020 and now earns residual royalties under a 10-year licence expiring in 2030. Management says the installation outlook for H2 and into FY27 remains positive.

Margins, cash and investment: quality intact, costs rising by design

Gross margin held at a premium 90%, and at 83% excluding iTrack. Operating expenses rose to £2.04 million (from £1.66 million) as Transense invested in engineering, commercial and operational capability – the right thing if the order book converts. Cash from operations improved to £0.41 million, even as capex and R&D stepped up.

Available cash stood at £1.33 million at 31 December 2025, increasing to £1.77 million by 31 January 2026 after the quarterly royalty. Net cash was £0.92 million at period end, reflecting a £0.40 million draw on the £1.00 million asset loan. The Board reaffirmed going concern and expects to finance up to £0.59 million of tangible capex in H2, with about £0.7 million of R&D spend over the next 18 months to secure the supply chain.

What this means for investors

• Core health improving: SAWsense and Translogik grew 39% combined, with richer pipelines, better product breadth, and more routes to market.
• High-quality gross margins: 90% blended margin underlines the value of the IP and royalty model – even as the royalty rate steps down.
• Royalty reset is the drag: iTrack remains a cash contributor but will be volatile with FX and installation growth. The rate cut was known; volumes and FX now matter.
• Execution risk and timing: Translogik customer ramp-up is slower than hoped, and SAWsense’s biggest aerospace prizes come with 10-year lead times. Patience is required.
• Funding and investment: Cash generation plus the asset-backed facility provide headroom to complete the pilot line and component upgrades – key to scaling.

Positives, drawbacks and my take

Positives

• SAWsense growth, order book up to £0.55m, and 23 funded projects across marquee names in aerospace, motorsport, EMD and robotics.
• Translogik’s multi-channel strategy is working, with SaaS-attached hardware deals, a new smart inflation product (TLGi), and reseller momentum.
• 90% gross margin sustained; cash from operations up to £0.41m; cash balance higher post-quarterly royalty.

Drawbacks

• Group revenue down 8% and EPS at 0.02p as the iTrack rate reset and FX headwind bite.
• Operating costs up to £2.04m as the company invests ahead of scale – necessary, but it suppresses near-term profit.
• Translogik adoption taking longer than expected, and aerospace design-ins push cash flows to the right.

Josh’s view

This is a “doing the right things, just not as fast as hoped” update. The quality of the pipeline, the sticky nature of design-ins, and the decision to build a pilot line and upgrade components all support a credible path to scale. Near term, results will continue to be shaped by iTrack royalties and the pace of Translogik conversions. If order momentum translates in H2 and beyond, the operational gearing should become visible.

What to watch next

• SAWsense: commissioning of the die bonding station and first outputs from the pilot line; test results from the next-gen ASIC; updates on robotics and EMD contract wins.
• Translogik: conversion of the larger UK fleet pipeline, first revenues from TLGi in H2, and finalisation of the three reseller partnerships.
• iTrack: installation growth versus FX – quarterly royalty receipts will remain a swing factor.
• Cash and capex: remaining drawdown of the £1.00m asset loan, H2 capex profile, and working capital discipline.

Bottom line

Transense’s core engines are revving faster, but the iTrack rate reset has taken the edge off the headline numbers. The investment case is increasingly about SAWsense and Translogik maturing into scalable, high-margin businesses. The pieces are lining up; now it’s about execution velocity and customer ramp timing. Management says the plan is right – the next couple of quarters should show whether the flywheel is starting to spin.