Raspberry Pi Holdings PLC (LSE:RPI) shares slipped lower in Tuesday's early trade, after its update for the December quarter and gave initial guidance for 2026, against a backdrop of an AI boom that's squeezing access to memory across all of the computer science sector.
The 'tiny computer' company said FY2025 earnings (adjusted EBITDA) are expected to be ahead of consensus at not less than $45 million. It highlighted unit shipments amounting to 4 million in the second half and 7.6 million for the full year.
Net cash was $28 million at the year's end after paying down $22 million of extended supplier payables in the second half, it added.
The firm noted headwinds, however, as it told investors that LPDDR4 DRAM costs have increased rapidly in recent months, and noted that some suppliers have indicated high-density supply limitations, which it said have been driven by memory vendors diverting capacity to AI data centre investment.
Potential mitigation steps include qualifying additional suppliers, it said, as well as potentially developing reduced-memory product variants and raising prices to reflect input cost increases and protect profitability.
"Despite a challenging memory supply environment, our supply chain discipline has enabled us to meet expanding customer demand," chief executive Eben Upton said.
"We enter 2026 benefiting from substantial inventory buffers, long-standing and growing industrial OEM relationships, which typically account for 70% of our demand, and a number of initiatives intended to optimise the performance of our business in the short and medium-term."
Upton, meanwhile, added: “I am delighted by our standout performance in 2025, reflecting the flexibility and resilience of the Raspberry Pi business model.”
The company expects to report FY2025 results on 31 March.
In London, Raspberry Pi shares dropped 7.45% on Tuesday, losing 21.6p to 268.4p.