Valens Semiconductor Reports Third Quarter 2024 Results
Reports beats on all guidance metrics
Awarded three automotive design wins from leading European OEMs for VA7000 MIPI A-PHY chipsets
Announces organizational changes and leadership transitions
Will host Investor Day on
"We delivered solid third quarter results, reflecting the growth in the demand for our high-performance connectivity solutions," said
"We are especially excited about our three new automotive design wins from leading European OEMs this quarter. We expect our VA7000 chipsets to be integrated into certain vehicle models starting in 2026 with accelerated adoption in 2027 and 2028. Additionally, now that leading OEMs have validated our technology, we are poised to expand our opportunity set with other OEMS and Tier-1 automotive suppliers looking to adopt the MIPI A-PHY standard.
"In our audio-video market, we are excited to see a high rate of adoption of our VS6320 chips with more than 50 customers now developing new products using them. We believe this reflects growing market demand for reliable, streamlined, and affordable connectivity and validates our groundbreaking technology. We expect the VS6320 to power a record number of customer products and are planning a robust lineup of new product launches over the next 12 months. We anticipate initial sales from the VS6320 before the end of the year with a continued ramp towards the end of 2025.
"We are seeing new opportunities for both our VA7000 and VS6320 technology in the dynamic machine vision vertical where growth is being driven by factory and warehouse automation, as well as more demanding inspection regulations. In this vertical, several camera module manufacturers are already integrating our chipsets into their cutting-edge products. We also received outstanding feedback from prospective customers on our technology at the recent VISION tradeshow.
"We are pleased with our progress in the third quarter and the momentum we are seeing in our business. Given the continued validation of our industry-leading technology and our fortress balance sheet, we are well positioned to capitalize on exciting growth opportunities in both existing industries and new ones," concluded Ben-Zvi.
Recent Business Highlights
- Achieved three design wins with European automotive OEMs for the VA7000 MIPI A-PHY compliant chipset, validating Valens' position as a key supplier of ADAS connectivity solutions.
- Progressed with the integration of Acroname, expanding Valens' position in the industrial market with a holistic USB-focused offering.
- Showcased VA7000 and VA6320 chipsets at VISION trade show and engaged with leading camera module manufacturers (Teledyne e2v, FRAMOS, Leopard Imaging, and others) in industrial machine vision.
- Unveiled the breakthrough USB3 and industrial grade extender solution which eliminates the need for multiple cables and accelerates time to market for industrial vendors.
- More than 50 customers are developing VS6320 based products for the audio-video market.
Key Financial Highlights
- Third quarter 2024 revenues reached
$16.0 million , exceeding our guidance of between$14.7 million dollars to$15.4 million dollars . This compared to$13.6 million in the second quarter of 2024 and compared to$14.2 million in the third quarter of 2023.
- Audio-video revenues accounted for approximately 60% of total revenues at$9.4 million compared to$8.1 million dollars in the second quarter of 2024 and compared to$9.7 million in the third quarter of 2023.
- Acroname contributed revenues of$1.6 million in its first full quarter following the acquisition in May, exceeding the guidance of$1.2-1.4 million . Acroname's results are included in the Audio-Video segment results.
- Automotive revenues accounted for approximately 40% of total revenues at$6.6 million , compared to $5.5 million dollars in the second quarter of 2024 and compared to $4.5 million in the third quarter of 2023. - GAAP gross margin was 56.4% for the third quarter of 2024, above guidance of between 52% and 53% (non-GAAP gross margin was 60.7%). This compared to GAAP gross margin of 61.4% in the second quarter of 2024 (non-GAAP gross margin of 64.5%) and 58.9% for the third quarter of 2023 (non-GAAP gross margin of 61.1%).
- On a segment basis, audio-video gross margin was 70.2% and automotive gross margin was 37.0% compared to 75.4% and 40.9%, respectively, in the second quarter of 2024 and compared to 75.8% and 21.6%, respectively, in the third quarter of 2023. The increase in automotive gross margin compared to the third quarter of 2023 was due to improvement in our chip costs. The decrease in Audio Video gross margin was due to product mix shift and lower fixed cost absorption. - GAAP net loss was
$(10.4) million in the third quarter of 2024, compared to a GAAP net loss of$(8.9) million in the second quarter of 2024 and compared to$(12.5) million in the third quarter of 2023. - Adjusted EBITDA loss in the third quarter of 2024 was
$(5.1) million , beating the guidance range of a loss between$(6.8) million and$(6.3) million . This compared to Adjusted EBITDA loss of$(5.2) million in the second quarter of 2024 and compared to$(8.8) million in the third quarter of 2023. - Strong balance sheet of
$133.1 million in cash, cash equivalents and short-term deposits, and no debt, as ofSeptember 30, 2024 , compared to$130.6 million onJune 30, 2024 , and$142.0 million onDec 31, 2023 . - Inventory balance of
$11.7 million onSeptember 30, 2024 , down compared to$14.1 million onJune 30, 2024 , and$13.8 million as of Dec 31, 2023.
Financial Outlook
"Looking ahead, we remain confident in our growth potential for the medium and long term," said
"Our fourth quarter 2024 revenues are expected to range between
Disclaimer:
Organizational Changes and Leadership Transitions
To address new opportunities across verticals, the Company is implementing organizational changes within the Audio-Video Business Unit. Valens' Audio-Video Business Unit will now be named Cross Industry Business Unit, encompassing verticals including Audio-Video, Industrial, Machine Vision, and Medical. To facilitate the Company's growth strategy, the Cross Industry Business Unit will also include a change in leadership. Valens is confident that these changes will enable the Company to achieve its goals in these new high-growth markets.
The Company has announced that
Ben-Zvi added, "Adar is a seasoned executive in our industry. His extensive background, track record, and industry relationships make him the ideal leader for the next phase of our success in our automotive business. In this role, he will focus on automotive sales and business development as we continue to pursue OEM design wins and expand our market reach. We are excited to welcome Adar into the Valens team and look forward to the vision he brings to advance our strategic goals."
Investor Day
Conference Call Information
Forward-Looking Statements
This 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, 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
About Valens Semiconductor
SUMMARY OF FINANCIAL RESULTS
(
|
Three Months Ended
|
|
Nine Months Ended
|
||
|
2024 |
2023 |
|
2024 |
2023 |
Revenues |
16,038 |
14,166 |
|
41,194 |
62,221 |
Gross Profit |
9,045 |
8,338 |
|
24,204 |
39,065 |
Gross Margin |
56.4 % |
58.9 % |
|
58.8 % |
62.8 % |
Net loss |
(10,355) |
(12,492) |
|
(29,266) |
(22,451) |
Working Capital[1] |
136,146 |
152,560 |
|
136,146 |
152,560 |
Cash, cash equivalents and short-term deposits[2] |
133,098 |
142,696 |
|
133,098 |
142,696 |
Net cash provided by (used in) operating activities |
2,964 |
6,088 |
|
1,349 |
(2,223) |
Non-GAAP Financial Data |
|
|
|
|
|
Non-GAAP Gross Margin[3] |
60.7 % |
61.1 % |
|
62.3 % |
64.2 % |
Adjusted EBITDA Loss[4] |
(5,137) |
(8,831) |
|
(17,374) |
(12,471) |
Non-GAAP Loss per share (in |
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
REVENUES |
16,038 |
|
14,166 |
|
41,194 |
|
62,221 |
COST OF REVENUES |
(6,993) |
|
(5,828) |
|
(16,990) |
|
(23,156) |
GROSS PROFIT |
9,045 |
|
8,338 |
|
24,204 |
|
39,065 |
OPERATING EXPENSES: |
|
|
|
|
|
|
|
Research and development expenses |
(10,309) |
|
(13,419) |
|
(30,415) |
|
(39,540) |
Sales and marketing expenses |
(4,880) |
|
(4,015) |
|
(13,636) |
|
(13,330) |
General and administrative expenses |
(5,825) |
|
(3,843) |
|
(12,793) |
|
(11,376) |
Change in earnout liability |
(264) |
|
- |
|
(292) |
|
- |
TOTAL OPERATING EXPENSES |
(21,278) |
|
(21,277) |
|
(57,136) |
|
(64,246) |
OPERATING LOSS |
(12,233) |
|
(12,939) |
|
(32,932) |
|
(25,181) |
Change in fair value of Forfeiture Shares |
3 |
|
89 |
|
38 |
|
1,618 |
Financial income, net |
1,885 |
|
368 |
|
3,659 |
|
1,160 |
LOSS BEFORE INCOME TAXES |
(10,345) |
|
(12,482) |
|
(29,235) |
|
(22,403) |
INCOME TAXES |
(14) |
|
(16) |
|
(52) |
|
(61) |
LOSS AFTER INCOME TAXES |
(10,359) |
|
(12,498) |
|
(29,287) |
|
(22,464) |
Equity in earnings of investee |
4 |
|
6 |
|
21 |
|
13 |
NET LOSS |
(10,355) |
|
(12,492) |
|
(29,266) |
|
(22,451) |
EARNINGS PER SHARE DATA:
BASIC AND DILUTED NET LOSS PER ORDINARY |
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES AND
IN COMPUTING NET LOSS PER ORDINARY |
106,098,703 |
|
102,216,654 |
|
105,075,212 |
|
101,659,653 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(
ASSETS |
|
|
|
|
||
CURRENT ASSETS Cash and cash equivalents |
|
|
35,443 |
|
|
17,261 |
Short-term deposits |
|
|
97,655 |
|
|
124,759 |
Trade accounts receivable |
|
|
7,217 |
|
|
14,642 |
Inventories |
|
|
11,737 |
|
|
13,836 |
Prepaid expenses and other current assets |
|
|
3,000 |
|
|
4,196 |
TOTAL CURRENT ASSETS |
|
|
155,052 |
|
|
174,694 |
LONG-TERM ASSETS: |
|
|
|
|
|
|
Property and equipment, net |
|
|
2,889 |
|
|
2,954 |
Operating lease right-of-use assets |
|
|
6,460 |
|
|
2,202 |
Intangible assets |
|
|
4,937 |
|
|
- |
Goodwill |
|
|
1,847 |
|
|
- |
Other assets |
|
|
702 |
|
|
708 |
TOTAL LONG-TERM ASSETS |
|
|
16,835 |
|
|
5,864 |
TOTAL ASSETS |
|
|
171,887 |
|
|
180,558 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES |
|
|
18,906 |
|
|
15,931 |
LONG-TERM LIABILITIES |
|
|
|
|
|
|
Forfeiture Shares |
|
|
- |
|
|
38 |
Non-current operating leases liabilities |
|
|
3,598 |
|
|
190 |
Earnout liability |
|
|
2,328 |
|
|
- |
Other long-term liabilities |
|
|
66 |
|
|
95 |
TOTAL LONG-TERM LIABILITIES |
|
|
5,992 |
|
|
323 |
TOTAL LIABILITIES |
|
|
24,898 |
|
|
16,254 |
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
|
|
146,989 |
|
|
164,304 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
171,887 |
|
|
180,558 |
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(
|
|
Three Months Ended
|
Nine Months Ended
|
|||
|
|
2024 |
2023 |
2024 |
2023 |
|
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net loss for the period |
|
(10,355) |
(12,492) |
(29,266) |
|
(22,451) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Income and expense items not involving cash flows: |
|
|
|
|
|
|
Depreciation and amortization |
|
823 |
400 |
1,758 |
|
1,193 |
Stock-based compensation |
|
3,760 |
3,708 |
11,259 |
|
11,517 |
Exchange rate differences |
|
87 |
1,379 |
1,353 |
|
3,652 |
Interest on short-term deposits |
|
(312) |
22 |
605 |
|
(367) |
Change in fair value of forfeiture shares |
|
(3) |
(89) |
(38) |
|
(1,618) |
Change in earnout liability |
|
264 |
- |
292 |
|
- |
Reduction in the carrying amount of ROU assets |
|
896 |
478 |
1,619 |
|
1,464 |
Equity in earnings of investee, net of dividend received |
|
4 |
6 |
21 |
|
13 |
Changes in operating assets and liabilities, net of effects of |
|
|
|
|
|
|
Trade accounts receivable |
|
2,804 |
8,429 |
7,719 |
|
3,854 |
Prepaid expenses and other current assets |
|
977 |
643 |
1,285 |
|
1,046 |
Inventories |
|
2,274 |
2,115 |
4,675 |
|
6,914 |
Long-term assets |
|
(73) |
(40) |
(7) |
|
(6) |
Current Liabilities |
|
2,692 |
1,916 |
1,590 |
|
(6,256) |
Change in operating lease liabilities |
|
(865) |
(392) |
(1,487) |
|
(1,251) |
Other long-term liabilities |
|
(9) |
5 |
(29) |
|
73 |
Net cash provided by (used in) operating activities |
|
2,964 |
6,088 |
1,349 |
|
(2,223) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
Investment in short-term deposits |
|
(16,443) |
(64,189) |
(103,662) |
|
(173,342) |
Maturities of short-term deposits |
|
25,380 |
47,803 |
129,418 |
|
166,757 |
Purchase of property and equipment |
|
(722) |
(180) |
(987) |
|
(1,099) |
Cash paid for business combination, net of cash acquired |
|
- |
- |
(7,800) |
|
- |
Net cash provided by (used in) investing activities |
|
8,215 |
(16,566) |
16,969 |
|
(7,684) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
Exercise of stock options |
|
56 |
279 |
692 |
|
1,265 |
Net cash provided by financing activities |
|
56 |
279 |
692 |
|
1,265 |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(498) |
(25) |
(828) |
|
(196) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
10,737 |
(10,224) |
18,182 |
|
(8,838) |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD |
|
24,706 |
21,410 |
17,261 |
|
20,024 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
|
35,443 |
11,186 |
35,443 |
|
11,186 |
|
|
|
|
|
|
|
SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
Cash paid for taxes |
|
39 |
10 |
102 |
|
262 |
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING |
|
|
|
|
|
|
Trade accounts payable on account of property and equipment |
|
309 |
- |
309 |
|
125 |
Fair value of earnout liability assumed in business combination |
|
- |
- |
2,036 |
|
- |
Operating lease liabilities arising from obtaining operating right-of-use assets |
|
579 |
33 |
5,412 |
|
469 |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(
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, certain batch production incident expenses and change in fair value of Forfeiture Shares and 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
|
Nine Months Ended
|
||||
|
2024 |
|
2023 |
2024 |
2023 |
|
|
|
|
|
|
|
|
Net Loss |
(10,355) |
|
(12,492) |
(29,266) |
(22,451) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
Change in fair value of Forfeiture Shares |
(3) |
|
(89) |
(38) |
(1,618) |
|
Change in earnout liability |
264 |
|
- |
292 |
- |
|
Certain batch production incident expenses |
2,249 |
|
- |
2,249 |
- |
|
Financial income, net |
(1,885) |
|
(368) |
(3,659) |
(1,160) |
|
Income taxes |
14 |
|
16 |
52 |
61 |
|
Equity in earnings of investee |
(4) |
|
(6) |
(21) |
(13) |
|
Depreciation and amortization |
823 |
|
400 |
1,758 |
1,193 |
|
Stock-based compensation expenses |
3,760 |
|
3,708 |
11,259 |
11,517 |
Adjusted EBITDA Loss |
(5,137) |
|
(8,831) |
(17,374) |
(12,471) |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(
The following tables provide a calculation of the GAAP Loss per share and reconciliation to Non-GAAP Loss per share.
|
Three Months Ended
|
Nine Months Ended
|
|
||
GAAP Loss per Share |
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
|
|
GAAP Net Loss used for computing Loss per Share |
(10,355) |
(12,492) |
(29,266) |
(22,451) |
|
Earnings Per Share Data: |
|
|
|
|
|
GAAP Loss per Share (in |
|
|
|
|
|
Weighted average number of shares and vested RSUs used |
106,098,703 |
102,216,654 |
105,075,212 |
101,659,653 |
|
|
|
|
|||
|
Three Months Ended |
Nine Months Ended |
|||
Non-GAAP Loss per Share[7] |
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
|
|
GAAP Net Loss |
(10,355) |
(12,492) |
(29,266) |
(22,451) |
|
Adjusted to exclude the following: |
|
|
|
|
|
Stock based compensation |
3,760 |
3,708 |
11,259 |
11,517 |
|
Depreciation and amortization |
823 |
400 |
1,758 |
1,193 |
|
Certain batch production incident expenses |
2,249 |
- |
2,249 |
- |
|
Change in earnout liability |
264 |
- |
292 |
- |
|
Change in fair value of Forfeiture Shares |
(3) |
(89) |
(38) |
(1,618) |
|
Total Non-GAAP Loss used for computing Loss per Share |
(3,262) |
(8,473) |
(13,746) |
(11,359) |
|
Earnings Per Share Data: |
|
|
|
|
|
Non-GAAP (Loss) per Share (in |
|
|
|
|
|
Weighted average number of shares and vested RSUs used |
106,098,703 |
102,216,654 |
105,075,212 |
101,659,653 |
|
|
|
|
|
|
|
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. GAAP Gross Profit excluding share-based compensation, depreciation and amortization expenses, divided by revenue. For the three months ended
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, certain batch production incident expenses and change in fair value of Forfeiture Shares and 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 note 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, certain batch production incident expenses 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.
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For more information, please contact:
Investor Contacts:
Investor Relations Manager
michal.benari@valens.com
valens@finprofiles.com
Media Contact:
Head of Communications
yoni.dayan@valens.com
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