Valens Semiconductor Reports Fourth Quarter and Full Year 2023 Results
Fourth quarter revenues reached
"
"We implemented our vision for a holistic strategy that leverages
"As more corporations implement return-to-office policies, our offerings are increasingly relevant for all types of meeting rooms, from large corporate board rooms to small huddle rooms, as well as small office/home office setups. We also identified a large opportunity that solves the growing requirement for a cost-effective long-range single-chip solution for multi-Gig connectivity in videoconferencing, IT, industrial and medical applications. The introduction of our VS6320 chipset for USB3.2 extension opens new prospects for us, especially in end markets that we are targeting for expansion. For example, we can increase our current foothold in the industrial sector by addressing its unmet demand for high bandwidth and resilience required by AI- based computer vision. This ground-breaking chipset has already garnered industry recognition and is expected to drive opportunities in several verticals.
"2023 was also our first full year of selling our chipsets into a broad range of Mercedes-Benz models, which was reflected in our record auto sales this year. We are also seeing progress on the vehicle safety and ADAS front based on participating in a growing number of evaluation processes for our VA7000 MIPI A-PHY-compliant chipsets. While the automotive sector is currently experiencing softer demand and slower decision-making around new technology adoption, there is much anticipation surrounding our offerings, such as with our strategic partnership for our next-generation A-PHY-compliant chipsets with Intel Foundry Services and the introduction of the VA700R chipset for the trucking industry. The progress we have made to date highlights our focus on advancing connectivity and safety solutions in the automotive market.
"
Key Financial Highlights
- Fourth quarter 2023 revenues reached
$21.9 million , compared to$23.5 million in the fourth quarter of 2022
- GAAP gross margin was 61.7% for the fourth quarter 2023 (non-GAAP gross margin was 63.1%). This compared to GAAP gross margin 68.3% for the fourth quarter 2022 (and non-GAAP gross margin of 69.2%). The year-over-year change was mostly due to the larger share of automotive revenue compared to audio-video, which has much higher gross margin
- GAAP Net Income increased to$2.8 million in the fourth quarter 2023, up from a Net Loss of$(7.3) million in the fourth quarter 2022
- Adjusted EBITDA in the fourth quarter of 2023 was positive, increasing to$2.2 million , up from$(4.6) million in the fourth quarter 2022 - Full year revenues reached
$84.2 million in 2023, compared to$90.7 million in 2022
- Audio-video revenues accounted for 68.2%, reaching$57.4 million compared to$74.5 million in 2022, as customers worked through excess inventory which slowed the pace of orders
- Automotive revenues accounted for 31.8% reaching a record of$26.8 million , up from$16.2 million in 2022
- 2023 full year GAAP gross margin was 62.5% (non-GAAP gross margin was 63.9%). This compared to 2022 full year GAAP gross margin was 69.9% (and non-GAAP gross margin of 70.7%) - Full year 2023 GAAP Net Loss was
$(19.7) million , better than a Net Loss of$(27.7) million in 2022 - Adjusted EBITDA loss in 2023 was
$(10.3) million , better than the$(14.9) million recorded in 2022 - Robust balance sheet of
$142.0 million in cash, cash equivalents and short-term deposits, and no debt, as ofDecember 31, 2023 , compared to$142.7 at the end ofSeptember 2023 , and$148.4 million at the end ofDecember 31, 2022 - Inventory balance of
$13.8 million onDecember 31, 2023 , down from$16.9 million onSeptember 30, 2023 , and$23.8 million onDecember 31, 2022
Key Business Developments
Leveraged
-
Florida's largest county modernizes classrooms with Valens Semiconductor connectivity products in district's public schools - Introduced the innovative USB3.2 extension, our VS6320 chipset, which is gaining traction in the marketplace
- Dozens of products, such as cameras and huddle-room docking stations already in development by customers
- Revenues expected to begin ramping up in the second half of 2024
- Awards won: CES 2024 Innovation Award Honoree/Embedded Technology category, ISE 2024'S Commercial Integrator's TNT Top New Technology Award and AV Technology Magazine's Best of Show - Sold VA6000 chipsets for infotainment and telematics into a broad range of Mercedes-Benz models, the S, C, and E class series and EV models for the first full year, driving automotive revenues to more than 30% of total revenues in 2023
- Progressed and leveraged the VA7000 chipset family
- Continued to make progress and expanded the prospective opportunity pipeline with automotive OEMs
- Validated by leading European labs at the request of leading automotive OEMs who are evaluating our technology, adding to the excellent Electromagnetic Compatibility (EMC) immunity tests inJapan by JASPAR earlier in 2023
- Intel Foundry Services (IFS) partnership to fabricate the next-generation of our A-PHY-compliant chipsets, enabling significant cost and power reductions for this chipset family while achieving the highest performance and robustEMC immunity
- Based on the VA7000, developed a new chipset that improves visibility for truckers on the highway by delivering an unparalleled combination of bandwidth and link distances for surround view and rear-view visibility
- Collaborated with AI image processing company, iCatch Technology, onValens Semiconductor's automotive-grade VA7000 for its 3600 multi-camera video conferencing solution and a multi-channel surround view monitoring system for the automotive industry
Financial Outlook
Disclaimer:
"As with the rest of the semiconductor industry,
"Looking ahead,
Conference Call Information
NYSE Rule 203.01 Annual Financial Report Announcement
Pursuant to Rule 203.01 of the New York Stock Exchange Manual,
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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Three Months Ended
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Year Ended
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2023 |
2022 |
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2023 |
2022 |
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Revenues |
21,940 |
23,473 |
|
84,161 |
90,715 |
|
Gross Profit |
13,527 |
16,030 |
|
52,592 |
63,390 |
|
Gross Margin |
61.7 % |
68.3 % |
|
62.5 % |
69.9 % |
|
Net Income (Loss) |
2,790 |
(7,317) |
|
(19,661) |
(27,667) |
|
Working Capital [1] |
158,763 |
163,721 |
|
158,763 |
163,721 |
|
Cash, cash equivalents and short-term deposits [2] |
142,020 |
148,387 |
|
142,020 |
148,387 |
|
Net cash used in operating activities |
(4,136) |
(5,831) |
|
(6,359) |
(22,095) |
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Non-GAAP Financial Data |
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Non-GAAP Gross Margin[3] |
63.1 % |
69.2 % |
|
63.9 % |
70.7 % |
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Adjusted EBITDA Income (Loss) [4] |
2,212 |
(4,610) |
|
(10,259) |
(14,903) |
|
Non-GAAP Income (Loss) per share
(in |
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1. Working Capital is calculated as Total Current Assets, less Total Current Liabilities, as of the last day of the period.
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Three Months Ended |
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Year Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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REVENUES |
21,940 |
|
23,473 |
|
84,161 |
|
90,715 |
||||
COST OF REVENUES |
(8,413) |
|
(7,443) |
|
(31,569) |
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(27,325) |
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GROSS PROFIT |
13,527 |
|
16,030 |
|
52,592 |
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63,390 |
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OPERATING EXPENSES: |
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Research and development expenses |
(8,631) |
|
(16,462) |
|
(48,171) |
|
(58,207) |
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Sales and marketing expenses |
(3,984) |
|
(4,081) |
|
(17,314) |
|
(16,959) |
||||
General and administrative expenses |
(2,648) |
|
(3,587) |
|
(14,024) |
|
(16,593) |
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TOTAL OPERATING EXPENSES |
(15,263) |
|
(24,130) |
|
(79,509) |
|
(91,759) |
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OPERATING LOSS |
(1,736) |
|
(8,100) |
|
(26,917) |
|
(28,369) |
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Change in fair value of Forfeiture Shares |
95 |
|
(865) |
|
1,713 |
|
2,907 |
||||
Financial income (expenses), net |
4,477 |
|
1,684 |
|
5,637 |
|
(1,770) |
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INCOME (LOSS) BEFORE INCOME TAXES |
2,836 |
|
(7,281) |
|
(19,567) |
|
(27,232) |
||||
INCOME TAXES |
(51) |
|
(41) |
|
(112) |
|
(451) |
||||
INCOME (LOSS) AFTER INCOME TAXES |
2,785 |
|
(7,322) |
|
(19,679) |
|
(27,683) |
||||
Equity in earnings of investee |
5 |
|
5 |
|
18 |
|
16 |
||||
NET INCOME (LOSS) |
2,790 |
|
(7,317) |
|
(19,661) |
|
(27,667) |
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EARNINGS PER SHARE DATA:
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BASIC AND DILUTED NET INCOME (LOSS)
PER ORDINARY SHARE
[6]
(in |
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WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTING NET INCOME (LOSS) PER ORDINARY SHARE |
102,964,797 |
|
98,632,019 |
|
101,985,939 |
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97,820,782 |
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6. See footnote 5. |
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ASSETS |
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CURRENT ASSETS Cash and cash equivalents |
|
|
17,261 |
|
|
20,024 |
Short-term deposits |
|
|
124,759 |
|
|
128,363 |
Trade accounts receivables |
|
|
14,642 |
|
|
11,514 |
Inventories |
|
|
13,836 |
|
|
23,816 |
Prepaid expenses and other current assets |
|
|
4,196 |
|
|
4,793 |
TOTAL CURRENT ASSETS |
|
|
174,694 |
|
|
188,510 |
LONG-TERM ASSETS: |
|
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|
|
Property and equipment, net |
|
|
2,954 |
|
|
2,790 |
Operating lease right-of-use assets |
|
|
2,202 |
|
|
3,824 |
Other assets |
|
|
708 |
|
|
535 |
TOTAL LONG-TERM ASSETS |
|
|
5,864 |
|
|
7,149 |
TOTAL ASSETS |
|
|
180,558 |
|
|
195,659 |
|
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES |
|
|
15,931 |
|
|
24,789 |
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
Forfeiture shares |
|
|
38 |
|
|
1,751 |
Operating leases liabilities |
|
|
190 |
|
|
1,624 |
Other long-term liabilities |
|
|
95 |
|
|
54 |
TOTAL LONG-TERM LIABILITIES |
|
|
323 |
|
|
3,429 |
TOTAL LIABILITIES |
|
|
16,254 |
|
|
28,218 |
|
|
|
|
|
|
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TOTAL SHAREHOLDERS' EQUITY |
|
|
164,304 |
|
|
167,441 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
180,558 |
|
|
195,659 |
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Three Months Ended
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Year Ended
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2023 |
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2022 |
|
2023 |
2022 |
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CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
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|
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Net income (loss) for the period |
|
2,790 |
|
(7,317) |
|
(19,661) |
|
(27,667) |
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
439 |
|
361 |
|
1,632 |
|
1,377 |
|
Stock-based compensation |
|
3,509 |
|
3,129 |
|
15,026 |
|
12,089 |
|
Exchange rate differences |
|
(2,707) |
|
(1,280) |
|
945 |
|
4,259 |
|
Interest on short-term deposits |
|
(481) |
|
(574) |
|
(848) |
|
(1,213) |
|
Change in fair value of forfeiture shares |
|
(95) |
|
865 |
|
(1,713) |
|
(2,907) |
|
Reduction in the carrying amount of ROU assets |
|
410 |
|
446 |
|
1,874 |
|
1,726 |
|
Equity in earnings of investee, net of dividend received |
|
(12) |
|
- |
|
1 |
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Trade accounts receivable |
|
(7,020) |
|
(3,449) |
|
(3,166) |
|
(4,419) |
|
Prepaid expenses and other current assets |
|
(557) |
|
(2,098) |
|
489 |
|
3,462 |
|
Inventories |
|
3,066 |
|
(1,942) |
|
9,980 |
|
(14,494) |
|
Long-term assets |
|
(168) |
|
243 |
|
(174) |
|
293 |
|
Current Liabilities |
|
(2,931) |
|
5,592 |
|
(9,187) |
|
6,962 |
|
Change in operating lease liabilities |
|
(347) |
|
184 |
|
(1,598) |
|
(1,571) |
|
Other long-term liabilities |
|
(32) |
|
9 |
|
41 |
|
8 |
|
Net cash used in operating activities |
|
(4,136) |
|
(5,831) |
|
(6,359) |
|
(22,095) |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
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Investment in short-term deposits |
|
(32,682) |
|
(82,345) |
|
(206,024) |
|
(214,522) |
|
Maturities of short-term deposits |
|
41,804 |
|
76,215 |
|
208,561 |
|
203,902 |
|
Purchase of property and equipment |
|
(86) |
|
(317) |
|
(1,185) |
|
(1,109) |
|
Net cash provided by (used in) investing activities |
|
9,036 |
|
(6,447) |
|
1,352 |
|
(11,729) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Exercise of options |
|
233 |
|
289 |
|
1,498 |
|
822 |
|
Net cash provided by financing activities |
|
233 |
|
289 |
|
1,498 |
|
822 |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
942 |
|
108 |
|
746 |
|
(3,765) |
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
6,075 |
|
(11,881) |
|
(2,763) |
|
(36,767) |
|
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD |
|
11,186 |
|
31,905 |
|
20,024 |
|
56,791 |
|
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
|
17,261 |
|
20,024 |
|
17,261 |
|
20,024 |
|
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|
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SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
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Cash paid for taxes |
|
31 |
|
56 |
|
293 |
|
214 |
|
|
|
|
|
|
|
|
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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Trade accounts payable on account of property and equipment |
|
486 |
|
53 |
|
611 |
|
317 |
|
Operating lease liabilities arising from obtaining operating right-of-use assets[7] |
|
55 |
|
132 |
|
398 |
|
648 |
|
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7. Excluding the impact of |
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Three Months Ended
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Year Months Ended
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2023 |
2022 |
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2023 |
2022 |
|
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|
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Net income (loss) |
2,790 |
(7,317) |
|
(19,661) |
(27,667) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
Change in fair value of Forfeiture Shares |
(95) |
865 |
|
(1,713) |
(2,907) |
|
Financial expense (income), net |
(4,477) |
(1,684) |
|
(5,637) |
1,770 |
|
Income taxes |
51 |
41 |
|
112 |
451 |
|
Equity in earnings of investee |
(5) |
(5) |
|
(18) |
(16) |
|
Depreciation |
439 |
361 |
|
1,632 |
1,377 |
|
Stock-based compensation expenses |
3,509 |
3,129 |
|
15,026 |
12,089 |
Adjusted EBITDA income (loss) |
2,212 |
(4,610) |
|
(10,259) |
(14,903) |
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Three Months Ended
|
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Year Ended
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GAAP Income (Loss) per Share |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income (loss) used for computing Income (loss) per Share |
2,790 |
|
(7,317) |
|
|
(19,661) |
|
(27,667) |
|
Earnings Per Share Data: |
|
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|
|
|
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|
|
GAAP income (loss) per Share (in |
|
|
|
|
|
|
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|
|
Weighted average number of shares used for computing net income (loss) per share |
102,964,797 |
|
98,632,019 |
|
|
101,985,939 |
|
97,820,782 |
|
|
Three Months Ended
|
|
|
Year Ended
|
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Non-GAAP Income (Loss) per Share[8] |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income (loss) |
2,790 |
|
(7,317) |
|
|
(19,661) |
|
(27,667) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
|
|
Stock based compensation |
3,509 |
|
3,129 |
|
|
15,026 |
|
12,089 |
|
Depreciation |
439 |
|
361 |
|
|
1,632 |
|
1,377 |
|
Change in fair value of Forfeiture Shares |
(95) |
|
865 |
|
|
(1,713) |
|
(2,907) |
|
Total Income (loss) used for computing Income (Loss) per Share |
6,643 |
|
(2,962) |
|
|
(4,716) |
|
(17,108) |
|
Earnings Per Share Data: |
|
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|
|
|
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Non-GAAP Income (loss) per Share (in |
|
|
|
|
|
|
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|
Weighted average number of shares used for computing net income (loss) per share |
102,964,797 |
|
98,632,019 |
|
|
101,985,939 |
|
97,820,782 |
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8. The company calculates its non-GAAP Loss per Share as GAAP Net Income (Loss) adjusted to exclude the following: Stock based compensation, depreciation, and the change in fair value of Forfeiture Share 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:
VP Investor Relations
investors@valens.com
valens@finprofiles.com
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