Valens Semiconductor Reports First Quarter 2025 Results

Key Financial Highlights: Q1 revenues: $16.8 million, exceeding the top end of our guidance. Q1 gross margin: 62.9% GAAP; 66.7% non-GAAP. Cash, cash equivalents and short-term deposits: $112.5 million. , /PRNewswire/ -- Valens Semiconductor Ltd. (NYSE: VLN), a leader in high-performance connectivity, today reported financial results for the first quarter ended March 31, 2025. Valens Semiconductor Ltd. (NYSE: VLN), a leader in high-performance connectivity, reported financial results for the first quarter of 2025. "Valens had a positive start to 2025," said Gideon Ben-Zvi, CEO of Valens Semiconductor. "In ProAV, we're beginning to emerge from the bottom of the sales cycle, and we're seeing increasing interest in our solutions from our customers. In the high-growth-potential machine vision market, we showcased our chips at major trade conferences while announcing partnerships with a variety of leading companies in this space. In automotive, the interest in the MIPI A-PHY standard continued to build; after announcing our partnership with Mobileye on our three design wins, we held successful interoperability testing with seven A-PHY silicon vendors. We're eager to use this momentum to spur us to greater heights in Q2." "We've rounded out the first quarter of 2025 having, once again, exceeded the top end of our revenue guidance," said Guy Nathanzon, CFO of Valens Semiconductor. "We believe we are now well positioned to capitalize on the significant business opportunities that lie ahead, across the variety of industries we serve. We have also recently announced another share repurchase program of up to $15 million, reflecting the confidence we have in the company's long-term growth. Regarding the new tariffs – while it looks like semiconductors are currently exempt, it is still too early to estimate the direct impact on our operations and the impact on our customers' end-market demand. We are monitoring developments closely and will communicate once we have better visibility." Q1 2025 Financial Highlights: Q1 revenues reached $16.8 million, exceeding our guidance of $16.3-$16.6 million, compared to $16.7 million in Q4 2024 and $11.6 million in Q1 2024.- Q1 Cross-Industry Business ("CIB") revenues, accounted for approximately 70% of total revenues at $11.7 million compared to $11.7 million dollars in Q4 2024 and $7.2 million in Q1 2024.- Q1 Automotive revenues accounted for approximately 30% of total revenues at $5.1 million, compared to $5.0 million dollars in Q4 2024 and $4.4 million in Q1 2024. Q1 GAAP gross margin was 62.9% (non-GAAP gross margin was 66.7%), above the guidance. This is compared to a GAAP gross margin of 60.4% for Q4 2024 and 59.0% for Q1 2024 (non-GAAP gross margin of 64.5% in Q4 2024 and 62.0% in Q1 2024). On a segment basis, Q1 gross margin from the CIB was 69.1% and gross margin from Automotive was 48.4%. This compares to a Q4 2024 gross margin of 64.7% and 50.5%, respectively, and a Q1 2024 gross margin of 77.2% and 29.1%, respectively. The increase in Q1 automotive gross margin compared to Q1 2024 was due to an optimization of our product cost. The increase in gross margin of the CIB compared to Q4 2024 was due to an inventory adjustment in Q4 2024. Q1 GAAP net loss amounted to $(8.3) million, compared to a net loss of $(7.3) million dollars in Q4 2024 and a net loss of $(10.0) million dollars in Q1 2024. Q1 adjusted EBITDA was a loss of $(4.3) million, within the guidance range of $(4.5)-$(4.2) million EBITDA loss. This compares to an adjusted EBITDA loss of $(3.7) million dollars in Q4 2024 and an adjusted EBITDA loss of $(7.1) million dollars in Q1 2024. Cash balance as of March 31, 2025, was $112.5 million. This compares to a cash balance of $131.0 million as of December 31, 2024. During the first quarter of 2025 the company used $9.6 million for the share repurchase programs, announced in December 2024 and in February 2025. Q1 2025 Business Highlights: Received endorsement from Sennheiser for our extension technology to use with the company's TeamConnect Bar solutions Partnered with RGo Robotics and CHERRY Embedded Solutions to design optimized AI robotic systems In April, announced that Valens' VA7000 MIPI A-PHY-compliant chipsets will form the in-car, sensor to compute connectivity infrastructure for Mobileye EyeQ™6 High automated and autonomous production programs underway with a group of global automotive brands Successfully completed product interoperability testing with seven MIPI A-PHY silicon vendors to advance the standard ecosystem in China and globally Announced a new share repurchase program of $15 million, which was launched on March 17, 2025. During the first quarter of 2025 the company completed the first repurchase program of $10 million announced in December 2024 Financial Outlook for Q2 2025For Q2 2025, Valens Semiconductor expects revenues to range between $16.5 million and $16.8 million, gross margin to range between 63.0% and 64.0%, and adjusted EBITDA loss to range between $(4.9) million and $(4.4) million.Disclaimer: Valens Semiconductor does not provide GAAP net profit (loss) guidance as certain elements of net profit (loss), including share-based compensation expenses and warrant valuations, are not predictable due to the high variability and difficulty of making accurate forecasts. Adjusted EBITDA is a non-GAAP measure. See the tables below for additional information regarding this and other non-GAAP metrics used in this release.Conference Call Information Valens Semiconductor will host a conference call today, Wednesday, May 7, 2025, at 8:30 a.m. Eastern Time (ET) to discuss its first quarter 2025 financial results and business outlook. To access this call, dial (at least 10 minutes before the scheduled time) +1 (888) 281-1167 (U.S.), 0 (808) 101-2717 (UK), 03 918 0610 (Israel) or +972 3 918 0610 (all other locations). A live webcast of the conference call will be available via the investor relations section of Valens Semiconductor's website at Valens - Financials - Quarterly Results. The live webcast can also be accessed by clicking here. A replay of the conference call will be available on Valens Semiconductor's website shortly after the call concludes.NYSE Rule 203.01 Annual Financial Report AnnouncementPursuant to Rule 203.01 of the New York Stock Exchange Manual, Valens Semiconductor Ltd. hereby announces to holders of its ordinary shares that its Annual Report on Form 20-F for 2024 (including its full year 2024 audited financial statements), filed with the U.S. Securities and Exchange Commission on February 26, 2025, is available in the investor relations section of its website at https://investors.valens.com/financials/secfilings/default.aspx. While the company encourages the sustainable approach of downloading and reading the report online, hard copies of the 2024 Annual Report will be provided free of charge, upon request, as follows: Valens Semiconductor Ltd., 8 Hanagar St. POB 7152, Hod Hasharon 4501309, Israel, or by emailing: [email protected].Forward-Looking StatementsThis press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding our anticipated future results, including financial results, our five-year plan, currency exchange rates, and contract wins, and future economic and market conditions. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Valens Semiconductor's ("Valens") management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Valens Semiconductor. These forward-looking statements are subject to a number of risks and uncertainties, including the cyclicality of the semiconductor industry; the effect of inflation and a rising interest rate environment on our customers and industry; the ability of our customers to absorb inventory; competition in the semiconductor industry, and the failure to introduce new technologies and products in a timely manner to compete successfully against competitors; if Valens fails to adjust its supply chain volume due to changing market conditions or fails to estimate its customers' demand; disruptions in relationships with any one of Valens' key customers; any difficulty selling Valens' products if customers do not design its products into their product offerings; Valens' dependence on winning selection processes; even if Valens succeeds in winning selection processes for its products, Valens may not generate timely or sufficient net sales or margins from those wins; sustained yield problems or other delays or quality events in the manufacturing process of products; our ability to effectively manage, invest in, grow, and retain our sales force, research and development capabilities, marketing team and other key personnel; our ability to timely adjust product prices to customers following price increase by the supply chain; our ability to adjust our inventory level due to reduction in demand due to inventory buffers accrued by customers; our expectations regarding the outcome of any future litigation in which we are named as a party; our ability to adequately protect and defend our intellectual property and other proprietary rights; our ability to successfully integrate or otherwise achieve anticipated benefits from acquired businesses; the market price and trading volume of the Valens ordinary shares may be volatile and could decline significantly; further deterioration of macroeconomic conditions due to ongoing global political and economic uncertainty, including with respect to China-Taiwan relations and increasing trade and other tariff-related tensions (as our current guidance assumes the estimated production and/or demand impact on us of current tariff conditions); political, economic, governmental and tax consequences associated with our incorporation and location in Israel; and those factors discussed in Valens' Form 20-F filed with the SEC on February 26, 2025 under the heading "Risk Factors," and other documents of Valens filed, or to be filed, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Valens does not presently know or that Valens currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Valens' expectations, plans or forecasts of future events and views as of the date of this press release. Valens anticipates that subsequent events and developments may cause Valens' assessments to change. However, while Valens may elect to update these forward-looking statements at some point in the future, Valens specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Valens' assessment as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.About Valens SemiconductorValens Semiconductor is a leader in high-performance connectivity, enabling customers to transform the digital experiences of people worldwide. Valens' chipsets are integrated into countless devices from leading customers, powering state-of-the-art audio-video installations, next-generation videoconferencing, and enabling the evolution of ADAS and autonomous driving. Pushing the boundaries of connectivity, Valens sets the standard everywhere it operates, and its technology forms the basis for the leading industry standards such as HDBaseT® and MIPI A-PHY. For more information, visit https://www.valens.com/. VALENS SEMICONDUCTOR LTD.SUMMARY OF FINANCIAL RESULTS(U.S. Dollars in thousands, except per share amounts) Three Months Ended March 31, 2025 2024 Revenues 16,828 11,559 Gross Profit 10,582 6,815 Gross Margin 62.9 % 59.0 % Net Loss (8,308) (10,042) Working Capital[1] 119,820 153,272 Cash, Cash Equivalents and Short-Term Deposits[2] 112,540 139,787 Net Cash Used in Operating Activities (7,611) (1,390) Non-GAAP Financial Data Non-GAAP Gross Margin[3] 66.7 % 62.0 % Adjusted EBITDA Loss[4] (4,346) (7,069) Non-GAAP Loss Per Share[5] (in U.S. Dollars) $(0.03) $(0.06) VALENS SEMICONDUCTOR LTD.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(U.S. Dollars in thousands, except share and per share amounts) Three Months Ended March 31, 2025 2024 REVENUES 16,828 11,559 COST OF REVENUES (6,246) (4,744) GROSS PROFIT 10,582 6,815 OPERATING EXPENSES: Research and development expenses (10,590) (10,145) Sales and marketing expenses (5,607) (4,388) General and administrative expenses (3,667) (3,571) Change in earnout liability (174) - TOTAL OPERATING EXPENSES (20,038) (18,104) OPERATING LOSS (9,456) (11,289) Change in fair value of Forfeiture Shares - 25 Financial income, net 1,238 1,234 LOSS BEFORE INCOME TAXES (8,218) (10,030) INCOME TAXES (93) (17) LOSS AFTER INCOME TAXES (8,311) (10,047) Equity in earnings of investee 3 5 NET LOSS (8,308) (10,042) EARNINGS PER SHARE DATA: BASIC AND DILUTED NET LOSS PER ORDINARY SHARE[6] (in U.S. Dollars) $(0.08) $(0.10) WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF NET LOSS PER ORDINARY SHARE 105,255,959 104,047,426 Change in unrealized losses on cash flow hedges (542) - TOTAL COMPREHENSIVE LOSS (8,850) - VALENS SEMICONDUCTOR LTD.CONDENSED CONSOLIDATED BALANCE SHEETS(U.S. Dollars in thousands) ASSETS March 31, 2025 December 31, 2024 CURRENT ASSETS Cash and cash equivalents 40,997 35,423 Short-term deposits 71,543 95,532 Restricted Short-term deposit 1,153 1,138 Trade accounts receivable 9,551 7,751 Inventories 10,858 10,155 Prepaid expenses and other current assets 2,597 3,904 TOTAL CURRENT ASSETS 136,699 153,903 LONG-TERM ASSETS: Property and equipment, net 3,498 3,555 Operating lease right-of-use assets 7,253 7,458 Intangible assets 4,467 4,702 Goodwill 1,847 1,847 Other assets 798 687 TOTAL LONG-TERM ASSETS 17,863 18,249 TOTAL ASSETS 154,562 172,152 LIABILITIES AND EQUITY CURRENT LIABILITIES 16,879 20,326 LONG-TERM LIABILITIES Forfeiture Shares 1 1 Non-current operating leases liabilities 6,412 6,645 Earnout liability 2,587 2,413 Other long-term liabilities 76 79 TOTAL LONG-TERM LIABILITIES 9,076 9,138 TOTAL LIABILITIES 25,955 29,464 TOTAL SHAREHOLDERS' EQUITY 128,607 142,688 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 154,562 172,152 VALENS SEMICONDUCTOR LTD.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(U.S. Dollars in thousands) Three Months Ended March 31, 2025 2024 CASH FLOW FROM OPERATING ACTIVITIES Net loss for the period (8,308) (10,042) Adjustments to reconcile net loss to net cash used in operating activities: Income and expense items not involving cash flows: Depreciation and amortization 770 456 Stock-based compensation 4,166 3,764 Exchange rate differences 140 525 Realized and unrealized losses on non-designated derivative instruments (204) - Interest on short-term deposits 517 275 Change in fair value of forfeiture shares - (25) Change in earnout liability 174 - Reduction in the carrying amount of ROU assets 418 484 Equity in earnings of investee, net of dividend received (3) 5 Changes in operating assets and liabilities, net of effects of business acquired: Trade accounts receivable (1,800) 4,735 Prepaid expenses and other current assets 825 207 Inventories (762) 1,347 Other assets (115) 74 Current Liabilities (3,196) (2,761) Change in operating lease liabilities (230) (418) Other long-term liabilities (3) (16) Net cash used in operating activities (7,611) (1,390) CASH FLOWS FROM INVESTING ACTIVITIES: Investment in short-term deposits (30,005) (37,840) Maturities of short-term deposits 53,278 56,979 Purchase of property and equipment (357) (30) Derivative instruments of non-designated hedges (265) - Net cash provided by investing activities 22,651 19,109 CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase of Ordinary Shares (9,585) - Exercise of stock options 188 126 Net cash provided by (used in) financing activities (9,397) 126 Effect of exchange rate changes on cash and cash equivalents (69) (5) INCREASE IN CASH AND CASH EQUIVALENTS 5,574 17,839 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 35,423 17,261 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 40,997 35,100 SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION Cash paid for taxes 19 35 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Trade accounts payable on account of property and equipment 62 212 Operating lease liabilities arising from obtaining operating right-of-use assets 213 31 VALENS SEMICONDUCTOR LTD.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(U.S. Dollars in thousands)The following table provides a reconciliation of Net loss to Adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA is defined as Net profit (loss) before financial income (expense), net, income taxes, equity in earnings of investee and depreciation and amortization, further adjusted to exclude share-based compensation and change in fair value of Forfeiture Shares and change in earnout liability, which may vary from period-to-period. We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because not all issuers calculate Adjusted EBITDA in the same manner. Adjusted EBITDA should not be considered as an alternative to Net loss or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.Although we provide guidance for Adjusted EBITDA, we are not able to provide guidance for projected Net profit (loss), the most directly comparable GAAP measures. Certain elements of Net profit (loss), including share-based compensation expenses and warrant valuations, are not predictable due to the high variability and difficulty of making accurate forecasts. As a result, it is impractical for us to provide guidance on Net profit (loss) or to reconcile our Adjusted EBITDA guidance without unreasonable efforts. Consequently, no disclosure of projected Net profit (loss) is included. For the same reasons, we are unable to address the probable significance of the unavailable information. Three Months Ended March 31, 2025 2024 Net Loss (8,308) (10,042) Adjusted to exclude the following: Change in fair value of Forfeiture Shares - (25) Change in earnout liability 174 - Financial income, net (1,238) (1,234) Income taxes 93 17 Equity in earnings of investee (3) (5) Depreciation 770 456 Stock-based compensation expenses 4,166 3,764 Adjusted EBITDA Loss (4,346) (7,069) VALENS SEMICONDUCTOR LTD.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(U.S. Dollars in thousands, except per share amounts)The following tables provide a calculation of the GAAP Loss per share and reconciliation to Non-GAAP Loss per share. Three Months Ended March 31, GAAP Loss per Share 2025 2024 GAAP Net Loss used for computing Loss per Share (8,308) (10,042) Earnings Per Share Data: GAAP Loss per Share (in U.S. Dollars) $(0.08) $(0.10) Weighted average number of shares used in calculation of net loss per share 105,255,959 104,047,426 Three Months Ended March 31, Non-GAAP Loss per Share[7] 2025 2024 GAAP Net Loss (8,308) (10,042) Adjusted to exclude the following: Stock based compensation 4,166 3,764 Depreciation 770 456 Change in fair value of Forfeiture Shares - (25) Change in earnout liability 174 - Total Non-GAAP Loss used for computing Loss per Share (3,198) (5,847) Earnings Per Share Data: Non-GAAP Loss per Share (in U.S. Dollars) $(0.03) $(0.06) Weighted average number of shares used in calculation of net loss per share 105,255,959 104,047,426 1. Working Capital is calculated as Total Current Assets, less Total Current Liabilities, as of the last day of the period.2. As of the last day of the period.3. Non-GAAP Gross Margin is defined as: GAAP Gross Profit excluding share-based compensation and depreciation and amortization expenses, divided by revenue. For the three months ended March 31, 2025, and 2024, share-based compensation and depreciation and amortization expenses were $650 thousand and $347 thousand, respectively.4. Adjusted EBITDA is defined as Net profit (loss) before financial income (expense), net, income taxes, equity in earnings of investee, and depreciation and amortization, further adjusted to exclude share-based compensation and change in fair value of Forfeiture Shares and in earnout liability, which may vary from period-to-period. We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because not all issuers calculate Adjusted EBITDA in the same manner. Adjusted EBITDA should not be considered as an alternative to Net loss or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity. Please refer to the appendix at the end of this press release for a reconciliation to the most directly comparable measure in accordance with GAAP.5. See reconciliation of GAAP to non-GAAP financial measures. 6. See footnote 5.7. The company calculates its non-GAAP Loss per Share as GAAP Net Loss adjusted to exclude the following: Stock based compensation, depreciation and amortization, and the change in fair value of Forfeiture Share and earnout liability divided by the weighted average number of shares used in calculation of net loss per share.For more information, please contact:Michal Ben AriInvestor Relations ManagerValens Semiconductor Ltd.[email protected]Miri SegalMS-IR IR for Valens[email protected]Media Contact:Yoni DayanHead of CommunicationsValens Semiconductor Ltd.[email protected]Photo - https://mma.prnewswire.com/media/2681398/Valens_Semiconductor_financial_results.jpgLogo - https://mma.prnewswire.com/media/2309625/Valens_Semiconductor_Logo.jpgSOURCE Valens Semiconductor WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Valens Semiconductor Reports First Quarter 2025 Results

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