Xaar Reports H1 Growth with Focus on EV and Automotive Markets

• Progress: Partnerships with major automation players Shifang, Omijia, and Sokan are key. These OEMs supply the battery production lines for leading manufacturers. Revenue is already in the “single-digit millions” from initial orders, with significant ramp-up anticipated.
• Scale: The potential is vast. Converting just the existing ~1,300 battery lines in China could mean £100m+ initial revenue for Xaar, plus recurring revenue from printhead replacements every 2-3 years. They are the clear tech leader here.

2. Automotive Coating: Beyond Decals

Forget cheap stickers prone to damage. Xaar’s tech enables high-quality, durable graphics applied directly on the production line, even on complex surfaces. Collaborators Axalta (coatings) and Dürr (robotics, paints 50% of global cars) are demonstrating the tech to premium manufacturers.

• Milestone: Received first inbound quote requests from a luxury carmaker in Q2 2025 – a concrete sign of interest.
• Model Shift: Crucially, Xaar’s revenue here would be tied to the *number of cars painted*, not just printhead sales. Every 1% of the 90m-car global market (900k cars) using their tech would be materially lucrative.

3. Desktop 3D Printing: Democratising Colour

Xaar aims to bridge the gap between cheap, monochrome hobbyist printers and prohibitively expensive (£50k+) professional colour systems. Partner Flashforge launched the world’s first full-colour, high-resolution desktop printer using Xaar tech last November at an accessible price point.

• Validation: A competitor’s similarly priced 2.5D printer saw “sales a multiple of that initially expected,” boosting confidence in the market. Flashforge is refining its go-to-market strategy for a year-end push.
• Potential: Tapping just 1% of the ~1 million unit annual market translates to multi-million pound revenue for Xaar, plus recurring printhead sales.

Jewellery Wax: The Proof of Concept

This market is Xaar’s current success story, proving their disruptive potential. From zero just two years ago, they now supply 4 of the top 5 OEMs. Revenue rocketed to £3.3m (H1 2024: £0.6m), significantly ahead of plan. Flashforge’s Waxjet 530 launch in April 2025 saw demand almost double expectations.

Navigating the Headwinds

It’s not all smooth jetting:

• EPS Drag: Tariff-induced uncertainty and a weak historic pipeline hit EPS revenue. New management is focused on rebuilding the order book for 2026 recovery.
• Cash Deployment: The net cash reduction (£3.1m outflow) reflects investment in capital equipment and R&D – necessary but noteworthy. The undrawn £5m RCF provides flexibility.
• Macro Jitters: Global geopolitical tensions and tariffs remain persistent risks, acknowledged by management.

Outlook: Confidence in the Trajectory

Management reaffirms 2025 expectations. Revenue is anticipated to be H2-weighted, with Printhead leading the charge while EPS recovers. The core message is clear: the foundations are being laid now in EV, automotive, and 3D printing for substantial medium-term growth at attractive margins. The jewellery wax success is a tangible example of how quickly Xaar’s technology can scale once adopted by key players in a market.

The Investor Lens

Xaar presents a compelling, albeit nuanced, picture. Near-term profitability remains elusive, and cash is being deployed aggressively. However, the strategic pivot towards large, high-growth industrial markets (EV, auto) leveraging their unique viscous fluid tech is demonstrably progressing. The explosive growth in jewellery wax validates their market disruption model. For investors with a medium-term horizon, Xaar offers exposure to potentially transformative industrial technology plays. The key will be watching the conversion of partnerships (Sokan, Shifang, Omijia, Axalta/Dürr) and Flashforge’s 3D launch into sustained, scalable revenue streams. The ambition is clear; the next 12-18 months are critical for execution.