Raspberry Pi overcomes tariff challenges and shines in 2024

Raspberry Pi has not faced negative impacts from U.S. tariffs, with analysts suggesting that its manufacturing facility in Pencoed, Wales, gives it an advantage over other single-board computer makers, many of whom rely on production in China. In the last year, Raspberry Pi experienced a channel inventory correction that affected sales, leading to a two percent revenue drop, totaling $260 million and a significant decline in pre-tax profits to $16 million for the year ending December 31, 2024. With demand from manufacturers now rising again, the company has seen increased orders as stockpiles are exhausted. 2024 was marked as a transformative year, primarily due to the company's public offering, raising $180 million for the Raspberry Pi Foundation and providing $31 million for the company's operational needs. Eben Upton, the CEO, emphasized that the IPO has expanded awareness of the company's products among major original equipment manufacturers (OEMs), which could lead to more engagements in the industrial sectors. Furthermore, the company launched 22 new products, including several enhancements in microcontrollers and other hardware. This strategy has been effective in facilitating direct engagement with OEMs, contributing to gradual improvements in demand. Despite the promising outlook, Jefferies Research warns that due to the nature of product cycles, significant contributions to revenue from the new direct-to-OEM contracts may not materialize until 2026 or later. Still, Upton expressed confidence in the company's ability to recover by diversifying its strategies and maintaining relationships with resellers and licensees. Moreover, the stability of demand in markets outside of the U.S. tariffs will be crucial for the company’s longer-term success. Moving forward, Raspberry Pi plans to continue its direct-to-OEM marketing approach while simultaneously leveraging its existing reseller and licensee partnerships. The combination of these strategies seeks to enhance overall revenue and broaden the company’s market reach, ensuring its competitive edge persists in the fast-evolving technology landscape.