Xaar PLC 2025 results: profit turns positive on an adjusted basis and printheads power ahead
Xaar’s 2025 numbers show a tidy step forward. Revenue from continuing operations rose 12% to £60.1 million, gross margin moved up to 40%, and adjusted profit before tax nudged into the black at £0.8 million. The star of the show was printheads, up 22% to £43.0 million, helped by a commercial breakthrough in jewellery wax 3D printing.
The reported bottom line still shows a loss after adjusting items, but operationally this is a cleaner, higher-margin business than a year ago. Early 2026 trading is said to be in line with expectations and the order book is described as healthy.
Key numbers investors should know
| Metric (continuing operations unless stated) | 2025 | 2024 (restated) |
|---|---|---|
| Revenue | £60.1 million | £53.8 million |
| Gross margin | 40% | 37% |
| Adjusted EBITDA | £3.5 million | £2.2 million |
| Adjusted operating profit | £1.1 million | £0.6 million |
| Adjusted profit before tax | £0.8 million | £(1.0) million |
| Reported loss for the period (total) | £(3.4) million | £(10.8) million |
| Adjusted EPS | 1.1p | 0.7p |
| Basic loss per share | (4.3)p | (13.7)p |
| Net cash at year-end | £4.9 million | £8.2 million |
| Printhead revenue | £43.0 million | £35.2 million |
Note: “Adjusted” strips out items like restructuring, share-based payments and certain FX or fair value movements to show underlying trading. It is a common approach for industrial tech firms where one-offs can obscure core progress.
Printheads deliver the growth while new markets open up
Xaar’s printhead business did the heavy lifting. Revenue jumped 22% to £43.0 million with gross margin at 41% and adjusted operating profit of £5.7 million. The ceramics market – a long-standing headwind due to China’s property slowdown – stabilised, while growth came from new customers and applications.
The standout was a “commercial breakthrough” in jewellery wax 3D printing. Why this matters: Xaar’s technology handles high-viscosity fluids and higher pigment loads, enabling precise deposition where rivals struggle. Once an OEM (original equipment manufacturer) designs in a printhead, replacements over time can create annuity-like revenue. That is the strategic prize.
Other divisions: mixed year but improving set-up
- Megnajet: Revenue rose 2% to £2.6 million. While margins dipped to 44%, intra-group sales jumped 38%, underscoring its role in fluid management and platform reliability.
- Engineered Printing Systems (EPS): Revenue fell 10% to £14.5 million after a multi-year programme ended and customers delayed new kit purchases. Despite that, gross margin improved to 36% and adjusted operating profit edged up to £1.3 million after a management change and refocus.
Margins move up, cash steps down
Group gross margin improved to 40% thanks to better yields, efficiencies and a more favourable mix. That fed through to a £3.5 million adjusted EBITDA and the adjusted profit turnaround.
Net cash reduced to £4.9 million from £8.2 million, reflecting £2.0 million of capex, £1.6 million of lease payments and £0.9 million spent on purchasing own shares. Inventories ticked down to £26.6 million and receivables were £9.3 million, with an explicit push to improve stock turns in 2026.
Adjusted vs reported: why there is still a statutory loss
The group posted a reported loss of £3.4 million, mainly due to adjusting items of £4.0 million hitting operating profit. These included restructuring and transaction expenses (£2.2 million), system implementation costs, share-based payments and FX on intra-group loans. There is also an historic overseas indirect tax issue of approximately £2.7 million identified earlier, to be settled over two years. Management categorises this as non-recurring and it has been handled through provisions and restatements.
Strategic progress: Asian footprint and application pipeline
Xaar opened a new facility in Dongguan, China to manufacture ink delivery systems for Asian OEMs, speed up customer qualification and tighten the supply chain. Core IP-linked production remains in the UK. This should improve responsiveness and resilience, particularly in fast-adopting markets like corrugated packaging, textiles, wax and PCB conformal coating.
R&D investment totalled £4.7 million, or 8% of revenue at Group level, with Printhead and Megnajet maintaining roughly 10% R&D intensity. The focus is application-led development where high viscosity or pigment loading provides a clear advantage – think 3D printing, automotive coatings, EV battery coating, packaging, textiles and labelling.
Financing, dividend and guidance
- Revolving Credit Facility enlarged from £5 million to £10 million post year-end, with an uncommitted £5 million accordion, approved on 19 March 2026. Covenants apply, but liquidity headroom improves.
- No dividend declared for 2025 as the group prioritises investment in technology and capacity.
- Early 2026 trading is in line with expectations and the order book is “healthy for this time of year”.
My take: why this update matters
This is a cleaner, more confident Xaar. The engine room – printheads – is growing at a double-digit clip with better margins, and there is tangible proof that the high-viscosity thesis opens doors in new markets. Jewellery wax 3D printing is a credible commercial beachhead, not just a lab demo.
Cash is lower, which is the main blemish, but the enlarged RCF provides flexibility while operational cash generation improves. The EPS unit had a tough year on revenue, yet margins and discipline improved, setting 2026 up better. The lingering tax clean-up is annoying, but it is disclosed, provided for, and time-bound.
Positives I like
- 22% printhead growth to £43.0 million with new OEM wins and stabilising ceramics.
- Gross margin up 3 percentage points to 40% – evidence of mix and efficiency doing their job.
- Adjusted profit before tax back in the black at £0.8 million after a £1.0 million loss last year.
- Commercial traction in 3D wax printing plus a broader pipeline across coatings, packaging and textiles.
- Dongguan facility adds regional speed and supply-chain resilience.
Things to watch
- Cash discipline: net cash at £4.9 million leaves less room for error until growth scales further.
- Timing risk: new application revenues require multi-layer customer qualification, so phasing can be lumpy.
- EPS recovery: encouraging margin gains, but revenue needs to re-accelerate to contribute meaningfully.
- Adjusting items: ensure restructuring and system implementation costs trend down through 2026.
Glossary in brief
- Adjusted profit: management’s underlying measure that excludes certain one-offs to show core trading.
- OEM: original equipment manufacturer that builds Xaar printheads into its machines.
- Annuity revenue: repeat sales over time, for example replacement printheads in installed machines.
- Capex: capital expenditure on equipment and facilities.
- EBITDA: earnings before interest, tax, depreciation and amortisation, a proxy for cash earnings.
Bottom line
Xaar has delivered what it promised: better margins, a return to adjusted profitability and real progress in strategically chosen niches where its high-viscosity jetting stands out. The balance sheet is still fine, albeit with lower cash, and the enlarged credit facility adds comfort. If the new application pipeline converts on schedule, 2026 should see further momentum and improved consistency of earnings.
For investors, this remains a patient growth story with a higher-quality core, clear competitive angles and improving execution. Keep an eye on cash, EPS momentum and the cadence of new design wins through the year.
