Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What are the next steps in your Waveguide supply relationship with Quanta once you meet the milestones? And what are your ultimate production and supply goals with them? A: Paul Travers, CEO, explained that the initial goal is to achieve a manufacturing capacity of over 1 million Waveguides annually. However, the ultimate aim is to significantly exceed this number, as the market for Smart Glasses is expected to grow substantially, similar to the smartwatch market. The relationship with Quanta and other companies will require much higher volumes in the future.
Q: Can you size the market opportunity around your mention of the Talos in display product? A: Paul Travers noted that the defense space offers significant opportunities, with Waveguide systems priced between $4,000 to $7,000 each. Partnerships in this sector could involve programs producing thousands of units annually, potentially expanding to 5,000 to 10,000 units over five years. Specific details about the Talos partnership remain confidential for now.
Q: Are there other players trying to make Waveguides? Who do you think stands to be your biggest competitors in this space over the next year or two? A: Paul Travers mentioned that while there are a few companies making Waveguides, many use semiconductor-based processes that are costly and have limited capacity. Vuzix's manufacturing process is more cost-effective and scalable. Some competition may arise from companies in China, but they face similar challenges. Quanta's choice of Vuzix underscores confidence in their ability to meet high-volume demands at competitive prices.
Q: What are the financial implications of the Quanta investment for Vuzix? A: Grant Russell, CFO, highlighted that Vuzix received $10 million from Quanta's investment, with two additional $5 million tranches expected in 2025 upon meeting specific milestones. This investment supports Vuzix's transition to an OEM supplier and strengthens their financial position.
Q: How is Vuzix managing its operating expenses and cash flow? A: Grant Russell stated that Vuzix has reduced its quarterly cash operating expenses by 28% year-over-year to $4.8 million. The company is focused on trimming expenses while continuing its strategic transition to an OEM supplier. Vuzix maintains a strong cash position with $14.3 million in cash and no debt obligations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.