Valens Semiconductor Reports Second Quarter 2024 Results
Exceeds second quarter revenue guidance due to improved customer demand for high-performance connectivity solutions
Acquires Acroname, bolstering innovative USB offering for the industrial market
Strong balance sheet supports highly selective acquisition strategy to complement organic growth
"Our team made solid progress executing against our long-term strategy and capitalizing on growing market demand for our chipsets," said
"On
"We continued to see growing interest in the adoption of our latest USB3 extension technology, the VS6320 chipset. Since its introduction late last year, we have engaged with over 50 customers, that are integrating the chipset into a wide variety of products, as announced at
"The Pro AV market presents a significant growth opportunity for
"Additionally, we are confident that our innovative technology will position us to take advantage of the large opportunity within the automotive segment, which we estimate will have a total addressable market of
"As we look to the second half of 2024 and beyond,
Key Business Highlights
-
Acquired Acroname Inc. , a pioneer in advanced automation and control technologies for applications in industrial, Audio-Video, video conferencing rooms, and embedded robotic control systems, for$7.8 million in cash. An additional$1.3 million was transferred to Acroname in consideration for the amount Acroname held in cash at closing. Further, Valens will be obligated to pay the sellers earn out payments of up to$7.2 million , depending on the achievement of certain revenue, EBITDA and cashflow targets in 2024 and 2025, and development of a certain product byJune 2026 . The acquisition enables Valens to expand its position in the industrial market with a holistic USB-focused offering. - Engaged with over 50 customers for the VS6320, with a wide variety of product launches announced at
InfoComm International - the largest professional Audio-Video trade show inNorth America , including USB extenders, PTZ cameras, video bars, wall plates, docking stations, room appliance controllers, and USB hub switches. - Announced a new suite of products by Good Way Technology, one of the world's leading PC peripheral design and manufacturing companies, based on
Valens Semiconductor's VS6320 chipset, compliant with the HDBaseT-USB3 standard. - Progressed on several evaluation processes with global automotive OEMs for the VA7000 MIPI A-PHY compliant chipset and are continuing to work with the long list of companies joining the A-PHY ecosystem by designing and developing products based around this technology.
Key Financial Highlights
- Second quarter 2024 revenues reached
$13.6 million , of which Acroname contributed$0.4 million , compared to$24.2 million in the second quarter of 2023.
- Audio-video revenues accounted for approximately 60% of total revenues at$8.1 million , of which Acroname contributed$0.4 million , compared to$15.5 million in the second quarter of 2023, due to ongoing inventory digestion.
- Automotive revenues accounted for approximately 40% of total revenues at$5.5 million , compared to$8.7 million in the second quarter of 2023, due to lower demand from Mercedes-Benz. - GAAP gross margin was 61.4% for the second quarter of 2024 (non-GAAP gross margin was 64.5%). This compared to GAAP gross margin of 61.8% for the second quarter of 2023 (non-GAAP gross margin of 63.1%). GAAP Net Loss was
$(8.9) million in the second quarter of 2024, compared to a GAAP Net Loss of$(4.6) million in the second quarter of 2023. On a segment basis, Audio-Video gross margin was 75.4% and automotive gross margin was 40.9% compared to 75.3% and 37.8%, respectively in the second quarter of 2023. - Adjusted EBITDA Loss in the second quarter of 2024 was
$(5.2) million , compared to Adjusted EBITDA loss of$(0.8) million in the second quarter of 2023. - Strong balance sheet of
$130.6 million in cash, cash equivalents and short-term deposits, and no debt, as ofJune 30, 2024 , compared to$139.8 million onMarch 31, 2024 , with the reduction in cash due to ongoing operational expenses and$7.8 million associated with the acquisition. - Inventory balance of
$14.1 million onJune 30, 2024 , of which$2.5 million was from Acroname. Excluding this amount, inventories were$11.6 million , down compared to$12.5 million onMarch 31, 2024 .
Financial Outlook
Disclaimer:
"Looking ahead, we are confident in our growth potential for the medium and long term. As the industry recovers, we are prepared to implement our growth strategy with an even more comprehensive portfolio of solutions, designed to penetrate new markets and sectors," said
"Our third quarter revenues are expected to range between
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
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SUMMARY OF FINANCIAL RESULTS |
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( |
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|
Three Months Ended
|
Six Months Ended
|
||
|
2024 |
2023 |
2024 |
2023 |
Revenues |
13,597 |
24,175 |
25,156 |
48,055 |
Gross Profit |
8,344 |
14,934 |
15,159 |
30,727 |
Gross Margin |
61.4 % |
61.8 % |
60.3 % |
63.9 % |
Net loss |
(8,869) |
(4,582) |
(18,911) |
(9,959) |
Working Capital[1] |
142,349 |
160,766 |
142,349 |
160,766 |
Cash, cash equivalents and short-term deposits[2] |
130,630 |
138,042 |
130,630 |
138,042 |
Net cash provided by (used in) operating activities |
(225) |
358 |
(1,615) |
(8,311) |
Non-GAAP Financial Data |
|
|
|
|
Non-GAAP Gross Margin[3] |
64.5 % |
63.1 % |
63.3 % |
65.1 % |
Adjusted EBITDA Loss[4] |
(5,168) |
(782) |
(12,237) |
(3,640) |
Non-GAAP Earnings Loss per share
(in |
|
|
|
|
|
||||
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. |
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3. GAAP Gross Profit excluding share-based compensation and depreciation 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, |
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5. See reconciliation of GAAP to non-GAAP financial measures. |
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||
( |
||||
|
Three Months Ended |
Six Months Ended |
||
|
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
REVENUES |
13,597 |
24,175 |
25,156 |
48,055 |
COST OF REVENUES |
(5,253) |
(9,241) |
(9,997) |
(17,328) |
GROSS PROFIT |
8,344 |
14,934 |
15,159 |
30,727 |
OPERATING EXPENSES: |
|
|
|
|
Research and development expenses |
(9,961) |
(12,161) |
(20,106) |
(26,121) |
Sales and marketing expenses |
(4,368) |
(4,255) |
(8,756) |
(9,315) |
General and administrative expenses |
(3,397) |
(3,701) |
(6,968) |
(7,533) |
Change in earnout liability |
(28) |
- |
(28) |
- |
TOTAL OPERATING EXPENSES |
(17,754) |
(20,117) |
(35,858) |
(42,969) |
OPERATING LOSS |
(9,410) |
(5,183) |
(20,699) |
(12,242) |
Change in fair value of Forfeiture Shares |
10 |
22 |
35 |
1,529 |
Financial income, net |
540 |
601 |
1,774 |
792 |
LOSS BEFORE INCOME TAXES |
(8,860) |
(4,560) |
(18,890) |
(9,921) |
INCOME TAXES |
(21) |
(26) |
(38) |
(45) |
LOSS AFTER INCOME TAXES |
(8,881) |
(4,586) |
(18,928) |
(9,966) |
Equity in earnings of investee |
12 |
4 |
17 |
7 |
NET LOSS |
(8,869) |
(4,582) |
(18,911) |
(9,959) |
EARNINGS PER SHARE DATA:
BASIC AND DILUTED NET LOSS PER ORDINARY SHARE
[6]
(in |
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES AND VESTED RSUS USED IN COMPUTING NET LOSS PER ORDINARY SHARE |
105,079,508 |
101,685,915 |
104,563,467 |
101,381,153 |
|
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6. See note 5. |
|
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CONDENSED CONSOLIDATED BALANCE SHEETS |
||
( |
||
ASSETS |
|
|
CURRENT ASSETS Cash and cash equivalents |
24,706 |
17,261 |
Short-term deposits |
105,924 |
124,759 |
Trade accounts receivable |
10,021 |
14,642 |
Inventories |
14,070 |
13,836 |
Prepaid expenses and other current assets |
3,972 |
4,196 |
TOTAL CURRENT ASSETS |
158,693 |
174,694 |
LONG-TERM ASSETS |
|
|
Property and equipment, net |
2,666 |
2,954 |
Operating lease right-of-use assets |
6,777 |
2,202 |
Intangible assets |
5,172 |
- |
|
1,847 |
- |
Other assets |
633 |
708 |
TOTAL LONG-TERM ASSETS |
17,095 |
5,864 |
TOTAL ASSETS |
175,788 |
180,558 |
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES[7] |
16,344 |
15,931 |
LONG-TERM LIABILITIES |
|
|
Forfeiture Shares |
3 |
38 |
Non-current operating leases liabilities |
3,774 |
190 |
Earnout liability |
2,064 |
- |
Other long-term liabilities |
75 |
95 |
TOTAL LONG-TERM LIABILITIES |
5,916 |
323 |
TOTAL LIABILITIES |
22,260 |
16,254 |
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
153,528 |
164,304 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
175,788 |
180,558 |
|
||
7. As of |
|
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
( |
||||
|
Three Months Ended
|
Six Months Ended
|
||
|
2024 |
2023 |
2024 |
2023 |
CASH FLOW FROM OPERATING ACTIVITIES: |
|
|
|
|
Net loss for the period |
(8,869) |
(4,582) |
(18,911) |
(9,959) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
Income and expense items not involving cash flows: |
|
|
|
|
Depreciation and amortization |
479 |
414 |
935 |
793 |
Stock-based compensation |
3,735 |
3,987 |
7,499 |
7,809 |
Exchange rate differences |
741 |
1,021 |
1,266 |
2,273 |
Interest on short-term deposits |
642 |
177 |
917 |
(389) |
Change in fair value of forfeiture shares |
(10) |
(22) |
(35) |
(1,529) |
Change in earnout liability |
28 |
- |
28 |
- |
Reduction in the carrying amount of ROU assets |
239 |
522 |
723 |
986 |
Equity in earnings of investee, net of dividend received |
12 |
4 |
17 |
7 |
Changes in operating assets and liabilities, net of effects of businesses acquired: |
|
|
|
|
Trade accounts receivable |
180 |
(3,176) |
4,915 |
(4,575) |
Prepaid expenses and other current assets |
101 |
1,042 |
308 |
403 |
Inventories |
1,054 |
4,549 |
2,401 |
4,799 |
Other assets |
(8) |
(8) |
66 |
34 |
Current Liabilities |
1,659 |
(3,114) |
(1,102) |
(8,172) |
Change in operating lease liabilities |
(204) |
(457) |
(622) |
(859) |
Other long-term liabilities |
(4) |
1 |
(20) |
68 |
Net cash provided by (used in) operating activities |
(225) |
358 |
(1,615) |
(8,311) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Investment in short-term deposits |
(49,379) |
(68,428) |
(87,219) |
(109,153) |
Maturities of short-term deposits |
47,059 |
74,810 |
104,038 |
118,954 |
Purchase of property and equipment |
(235) |
(777) |
(265) |
(919) |
Cash paid for business combination, net of cash acquired |
(7,800) |
- |
(7,800) |
- |
Net cash provided by (used in) investing activities |
(10,355) |
5,605 |
8,754 |
8,882 |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Exercise of stock options |
510 |
58 |
636 |
986 |
Net cash provided by financing activities |
510 |
58 |
636 |
986 |
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
(324) |
(100) |
(330) |
(171) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(10,394) |
5,921 |
7,445 |
1,386 |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD |
35,100 |
15,489 |
17,261 |
20,024 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
24,706 |
21,410 |
24,706 |
21,410 |
|
|
|
|
|
SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
Cash paid for taxes |
28 |
213 |
63 |
252 |
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
Trade accounts payable on account of property and equipment |
279 |
35 |
279 |
160 |
Fair value of earnout liability assumed in business combination |
2,036 |
- |
2,036 |
- |
Operating lease liabilities arising from obtaining operating right-of-use assets |
4,802 |
152 |
4,833 |
436 |
|
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||
( |
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|
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The following table provides a reconciliation of Net loss to Adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA is defined |
|||||
Although we provide guidance for Adjusted EBITDA, we are not able to provide guidance for projected Net profit (loss), the most directly |
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|
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|
Three Months Ended
|
Six Months Ended
|
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
|
|
Net Loss |
(8,869) |
(4,582) |
(18,911) |
(9,959) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
Change in fair value of Forfeiture Shares |
(10) |
(22) |
(35) |
(1,529) |
|
Change in earnout liability |
28 |
- |
28 |
- |
|
Financial income, net |
(540) |
(601) |
(1,774) |
(792) |
|
Income taxes |
21 |
26 |
38 |
45 |
|
Equity in earnings of investee |
(12) |
(4) |
(17) |
(7) |
|
Depreciation and amortization |
479 |
414 |
935 |
793 |
|
Stock-based compensation expenses |
3,735 |
3,987 |
7,499 |
7,809 |
Adjusted EBITDA Loss |
(5,168) |
(782) |
(12,237) |
(3,640) |
|
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
||||
( |
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The following tables provide a calculation of the GAAP Loss per share and reconciliation to Non-GAAP Loss per share. |
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|
Three Months Ended
|
Six Months Ended
|
||
GAAP Loss per Share |
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
GAAP Net Loss used for computing Loss per Share |
(8,869) |
(4,582) |
(18,911) |
(9,959) |
Earnings Per Share Data: |
|
|
|
|
GAAP Loss per Share (in |
|
|
|
|
Weighted average number of shares used in calculation of net loss per share |
105,079,508 |
101,685,915 |
104,563,467 |
101,381,153 |
|
Three Months Ended
|
Six Months Ended June 30, |
||
Non-GAAP Loss per Share [8] |
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
GAAP Net Loss |
(8,869) |
(4,582) |
(18,911) |
(9,959) |
Adjusted to exclude the following: |
|
|
|
|
Stock based compensation |
3,735 |
3,987 |
7,499 |
7,809 |
Depreciation and amortization |
479 |
414 |
935 |
793 |
Change in earnout liability |
28 |
- |
28 |
- |
Change in fair value of Forfeiture Shares |
(10) |
(22) |
(35) |
(1,529) |
Total Non-GAAP Loss used for computing Loss per Share |
(4,637) |
(203) |
(10,484) |
(2,886) |
Earnings Per Share Data: |
|
|
|
|
Non-GAAP Earnings (Loss) per Share (in |
|
|
|
|
Weighted average number of shares used in calculation of |
105,079,508 |
101,685,915 |
104,563,467 |
101,381,153 |
|
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8.The company calculates its non-GAAP Loss per Share as GAAP Net Loss adjusted to exclude the following: Stock based compensation, depreciation, |
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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