How LAES (SEALSQ) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a technology company like LAES makes money is essential for investors and anyone interested in the business of semiconductors and electronics. In this post, we break down LAES's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick LAES Overview

LAES operates as a semiconductor and electronics company focused on specialized technology solutions. Revenue comes primarily from its core revenue stream without detailed segment breakdowns available in the latest filing. The business appears to be in a growth and investment phase, with significant operating expenses reflecting heavy R&D and administrative scaling.

Revenue Breakdown

• Total Revenue (Q2 2025): $5.6M (-62.1% YoY)
  • Revenue: $5.6M (100% of total)
  • Growth is powered by core operations, though facing sharp year-over-year contraction likely due to market challenges or transitional factors in the semiconductor sector.

Gross Profit and Margins

• Gross Profit: $1.9M (33.7% gross margin)
  • Cost of Revenue: $3.7M (-46.7% YoY)
  • LAES maintains moderate margins due to a mix of cost reductions in goods sold and potential pricing in its technology offerings, despite revenue pressures.
• Most costs come from cost of revenue, R&D, and SG&A categories.

Operating Income and Expenses

• Operating Income: Not specified (implied negative given expense levels)
• Operating Expenses: $28.4M (+265.7% YoY)
  • R&D: $5.5M (+267.2% YoY, 97.9% of revenue) — focused on innovation in semiconductor technologies and product development to fuel future growth.
  • SG&A: $23.2M (+265.4% YoY, 410.4% of revenue) — covering sales, general administration, and other operational overhead as the company scales.
  • LAES continues to prioritize innovation and invest in growth while navigating high expense growth amid revenue decline.

Net Income

• Pre-Tax Income: Not specified
• Income Tax: Not specified (0% effective tax rate implied)
• Net Income: $23.2K (+2551.1% YoY, 414.5% net margin)
• LAES converts a significant portion of sales into profit due to non-operating items or adjustments, despite operating losses, highlighting unusual profitability dynamics.

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What Drives LAES's Money Machine?

• Core Revenue: 100% of revenue from primary operations
• Gross Margin Stability: 33.7% margin held firm even as revenue dropped 62.1% YoY, supported by sharper cost reductions
• R&D Investment: Heavy focus with expenses at 97.9% of revenue, targeting semiconductor advancements
• Future growth areas: Expansion in electronics and tech segments, though currently unprofitable at the operating level

Visualizing LAES's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.[1][4]

• Most revenue flows into gross profit, with operating expenses (especially SG&A at $23.2M) taking the largest chunk.
• Even after significant investments, 414.5% of revenue drops to the bottom line due to exceptional net income growth.

Key Takeaways

• LAES's money comes overwhelmingly from core revenue operations
• Moderate gross margins illustrate the power of LAES's cost management in technology
• Heavy investment in R&D, balanced by efficiency challenges in operating costs
• Ongoing growth is driven by R&D scaling, despite revenue headwinds

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FAQ About LAES's Income Statement

1. What is the main source of LAES's revenue in 2025?

LAES generates over 100% of its revenue from core revenue operations. No significant additional revenue sources are broken out in the Q2 2025 filing.

2. How profitable is LAES in Q2 2025?

LAES reported net income of $23.2K in Q2 2025, with a net margin of approximately 414.5%, reflecting strong profitability driven by non-operating factors and massive YoY growth despite operating pressures.

3. What are the largest expense categories for LAES?

The biggest expenses on LAES's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $5.5M in Q2 2025, as LAES prioritizes semiconductor innovation.

4. Why does the operating segment operate at a loss?

Core operations, despite generating $5.6M in revenue, posted implied operating losses exceeding expenses of $28.4M in Q2 2025. This is because LAES aggressively invests in R&D and SG&A, believing these will drive long-term growth—even if unprofitable today.

5. How does LAES's effective tax rate compare to previous years?

LAES's effective tax rate in Q2 2025 was 0% (implied). This low rate is primarily due to limited pre-tax income reporting and potential tax benefits or structuring in its filings.