home-icon/Home / VIGO Photonics Q3 2022 financial results – stable YoY revenues despite volatile market environment

VIGO Photonics Q3 2022 financial results – stable YoY revenues despite volatile market environment

  • stable YoY revenue, stopping trend in cost increases
  • clear reduction of operating costs on a quarter-on-quarter basis
  • steadily growing demand for semiconductors, increasing order book and consistent implementation of the strategy will support VIGO’s return to a path of dynamic growth


VIGO Photonics S.A. (WSE: VGO), a global manufacturer of the most advanced photonic mid-infrared detectors, sensing modules and semiconductor materials, has published its interim report for Q3 2022.


In the third quarter of this year, VIGO Photonics’ consolidated revenues amounted to PLN 16.8 million (+1% YoY), adjusted EBITDA after deferred tax effects stood at PLN 3.3 million (-60% YoY) and adjusted net profit at PLN 0.3 million (-96% YoY).


On a quarter-on-quarter basis, operating expenses in the third quarter of this year fell by more than 14%, of which general and administrative expenses were 30% lower. 


The order backlog as at 31 October 2022 on a YTD (year-to-date) basis amounted to PLN 67.1 million, an increase of approximately 20 per cent year-on-year, reflecting the consistently growing market for mid-infrared sources and high demand for VIGO Photonics’ products.


The Management Board upholds the target of reaching PLN 100 million in sales revenue in 2023, thanks in part to high sales dynamics in key segments and the effects of price increases.



Sales of detectors and detection modules in Q3 2022 totalled PLN 16 million (-0.4% YoY) and sales of semiconductor materials PLN 0.8 million (+41% YoY). VIGO generated revenue increases in all applications except military, which was previously communicated and was due to the execution of the contract with Safran last year. VIGO generated the largest sales increases vis-à-vis Q3 2021 in the science and medicine (+104% YoY), industrial (+40% YoY) and transport (+7%) applications. The military application recorded a 77% YoY drop in sales to PLN 1.3m. Rising revenues in the industrial segment indicate strong demand trends in this segment, especially for detectors for industrial gas analyser applications and those used in the semiconductor industry. Higher sales in the science and medicine segment were due to a growing customer base through sales activity. While growth in the transport segment was due to, among other things, increasing orders from the Chinese market. The semiconductor materials segment also recorded significantly higher sales year-on-year, up 41%. In this segment, the Company is consistently implementing its plan to develop new products for customers, which will lead to serial, repeatable production in the following years.


Industrial 63%, science and medicine 13%, transportation 10% and military 8%, respectively, accounted for the highest share of revenue in Q3 2022. The share of the semiconductor materials segment in total sales was 5%.


Following cost reductions in H1 2022 and additional savings, VIGO’s operating expenses decreased quarter-on-quarter by 14%, including general and administrative expenses in Q3 2022, which fell to PLN 4.6 million (down 30% compared to Q2 2022) and were at their lowest level since Q1 202.


Despite the difficult situation in global markets, we recorded stable year-on-year revenues in Q3 2022. What is noteworthy is the clear reduction in the level of costs, including overheads, compared to the previous quarter to the lowest level in six quarters – our cost-saving measures are thus yielding tangible results and we can already speak of a halt to the trend of rising operating costs. The fourth quarter of this year, as we announced, will still be “flat” in terms of sales growth, primarily due to the postponement of order fulfilment to 2023, which is related to the global supply chain and access to components. However, the component supply bottlenecks only affect part of the detector module production, and the production of detectors without electronics and materials for photonics is proceeding smoothly. Component shortages are primarily affecting production for transport and industrial applications. We estimate that currently the difficulties are affecting about 10-20% of our total production volume, says Adam Piotrowski, CEO of VIGO Photonics.


Demand for our products is very strong, which is evident in our order book – at the end of October this year, the value of orders acquired since the beginning of the year is over PLN 67 million and is 20% higher year-on-year, even despite the high base of the previous year, when we had large orders in the military segment. We are also implementing price increases of approximately 20-30% on our products due to rising component prices and production costs. The effects of the increases will be visible from the beginning of 2023, adds Adam Piotrowski.


In Q3 2022, the company generated a total of PLN 47.5m in sales revenue (-3% YoY),

PLN 9.5 million in adjusted EBITDA (-57% YoY), and PLN 2.9 million in adjusted net profit

(-84% YoY). Sales of detectors and detection modules in this period amounted to PLN 45 million (-4% YoY), and semiconductor materials PLN 2.7 million (+16% YoY).


The slight YoY decrease in the level of total revenues in Q3 2022 is mainly due to lower revenues from military applications and lower-than-expected revenues from industrial and transport applications as a result of lower availability of some components and disrupted supply chains. Revenues for the period are also impacted by the level of revenues in Q1 2022 due to the start-up of the cleanroom early this year.


VIGO’s sales and brand recognition are supported by numerous marketing efforts. In the third quarter of this year, VIGO representatives participated in important scientific conferences and trade fairs, including Mirsens, Quantum Structure IR Photodetectors (co-organised by NASA), IQCLSW, FLAIR, E-MRS and a trade event at the International Defence Industry Exhibition. VIGO also conducts intensive marketing activities in the US market, where, among other things, it has established cooperation with one of the largest electronic equipment wholesalers in the US and the world, Digi-Key Electronics, and participated in the SPIE Optics and Photonics trade fair. VIGO also runs online marketing campaigns targeting the US market. The company has also joined two US photonics clusters – the Society of Applied Spectroscopy and the Florida Photonics Cluster.



We are consistently pursuing our strategy, despite the volatile market environment, and maintaining our long-term strategic assumptions. Therefore, we continue to invest in marketing and the development of foreign sales, which are starting to perform very well in key markets, such as China, the USA and Western Europe. We are also working to reduce operating costs – the effects are already visible in the third quarter results. At the beginning of next year, we will launch a new epitaxial reactor, which will double our production capacity in the semiconductor materials segment and allow us to increase sales to both existing and new customers. In addition, we are proceeding unhindered with the implementation of our strategic initiatives. I am convinced that all these elements will allow VIGO to return to the path of dynamic growth in the near future, despite the continuing difficult macroeconomic environment, emphasises Adam Piotrowski.


In the medium term, we stand by our strategic goal of achieving PLN 100 million in sales revenue in 2023, thanks to maintaining high dynamics in key segments, primarily industrial and transport, and thanks to the effects of the price increases we are introducing, concludes Adam Piotrowski.



A new epitaxial reactor for the production of III-V semiconductor materials (chemical compounds from groups III and V of the periodic table of elements) was delivered to the company in September this year. Commissioning of the system is currently underway and the start of materials production in the new reactor is scheduled for early 2023. The start-up of the reactor will double the production capacity, allow us to serve more customers and start more new projects with clients.



In 2021, VIGO presented a new two-phase development strategy for 2021-2026, which singles out six development initiatives – technological areas aimed at strengthening the Company’s position as one of the most innovative and rapidly growing companies on the market. By 2023, the Company’s goal will be to continue the R&D projects it has started in the areas of photonic technology, integrated circuits, III-V material detectors, semiconductor material epitaxy and infrared source technology. The technological and technical base will be developed. Due to the current market situation, the Company is currently focusing on strategic initiatives that contribute most to revenue growth in the short term. The second phase of the strategy will run up to and including 2026 and will consist of the implementation of selected development initiatives.




Contact for media and individual investors:

Piotr Piotrowski, cc group

piotr.piotrowski@ccgroup.pl, +48 697 613 010


Contact for institutional investors:

Małgorzata Młynarska, cc group

malgorzata.mlynarska@ccgroup.pl, +48 697 613 709