• Revenue: $16.7 million for Q4 2024, exceeding guidance of $16 million to $16.3 million.
• Gross Margin: 60.4% for Q4 2024, above the midpoint of guidance.
• Net Loss: $7.3 million for Q4 2024.
• Adjusted EBITDA: Loss of $3.7 million for Q4 2024, better than the guidance range.
• Cash and Cash Equivalents: $131 million as of the end of 2024.
• Full Year Revenue: $57.9 million for 2024, exceeding guidance.
• Operating Expenses: $18.5 million for Q4 2024.
• Research and Development Expense: $10.1 million for Q4 2024.
• SG&A Expenses: $8.3 million for Q4 2024.
• Automotive Revenue: $21.6 million for 2024.
• Cross Industry Business Revenue: $36.3 million for 2024.
• Guidance for 2025 Revenue: Expected to be in the range of $71 million to $76 million.

• Warning! GuruFocus has detected 3 Warning Signs with VLN.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Valens Semiconductor Ltd (NYSE:VLN) reported fourth-quarter revenues of $16.7 million, exceeding the top end of their guidance.
• The company achieved a gross margin of 60.4% for the fourth quarter, surpassing the midpoint of their guidance.
• Valens Semiconductor Ltd (NYSE:VLN) announced three design wins in the automotive industry for AS platforms, indicating strong market traction.
• The company successfully completed its first acquisition, Acronym, which is expected to expand its position in the industrial market.
• Valens Semiconductor Ltd (NYSE:VLN) has a robust balance sheet with $131 million in cash and cash equivalents, providing financial stability.

Negative Points

• Valens Semiconductor Ltd (NYSE:VLN) experienced a decline in full-year 2024 revenue to $57.9 million from $84.2 million in 2023.
• The company reported a GAAP net loss of $7.3 million for the fourth quarter, compared to a net profit of $2.8 million in Q4 2023.
• Automotive business revenue decreased by 19.4% to $21.6 million in 2024 due to price erosion and reduced sales to Mercedes-Benz.
• Operating expenses increased to $18.5 million in Q4 2024, up from $15.3 million in Q4 2023, impacting profitability.
• Valens Semiconductor Ltd (NYSE:VLN) faced challenges with inventory digestion and weakness in customer markets, affecting sales.

Q & A Highlights

Q: Within the cross-industry business, which end markets are showing the strongest demand in the near term? Are there any showing weakness? How should we think about the growth trajectory for this segment throughout 2025? A: Gideon Ben-Zvi, CEO: The traditional audio-video market, which suffered from weakness last year, is now showing growth opportunities, particularly in small conference rooms. The industrial market is larger but grows at a different pace due to new customer acquisition. All three marketstraditional ProAV, new AV opportunities, and machine visionare appealing, with differences in timing and magnitude.

Q: Could you walk us through the key drivers behind the gross margin guide for the first quarter, and do you see this level sustaining beyond the first quarter? A: Guy Nathanzon, CFO: For the CIB, product shifts might change in future quarters. In automotive, cost structure optimization should sustain margins. Overall company margins depend on the revenue ratio between CIB and automotive.

Q: Can you expand on emerging from the bottom of the cycle? What are you seeing that gives you confidence in this outlook? A: Gideon Ben-Zvi, CEO: Customer feedback indicates market recovery. Additionally, new product opportunities, like the collaboration with Sennheiser, provide optimism. Our product roadmap allows us to penetrate new market segments.

Q: How does the recent M&A in the vehicle connectivity market affect the competitive landscape, and how is Valens positioned to compete? A: Gideon Ben-Zvi, CEO: We are confident in our AI technology's superiority for high bandwidth with unshielded cables. Despite M&A activities, our technology remains unmatched, as evidenced by our design wins.

Q: Could you update us on the three European OEMs and the timeline for L2 or L2+ programs? A: Gideon Ben-Zvi, CEO: We expect to see chips embedded in cars by the end of 2026, though exact dates can vary due to automotive industry complexities. The long tail of these projects is beneficial for sustained growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.