Valens Semiconductor Reports First Quarter 2024 Results
Exceeds first quarter revenue guidance and raises second quarter guidance in anticipation of improved customer demand
"We were pleased to report some upside relative to our first quarter revenue guidance even though our business, like most in our industry, also continued to be impacted by macroeconomic headwinds and ongoing slow inventory digestion in the audio-video and automotive markets." said
"This quarter, we saw significant interest ramping up for our high-performance USB 3.0 extension solution, the VS6320. Since its launch in Q4 of last year, the chip has been designed into more than 30 products, and we anticipate multiple announcements and product launches as early as the
"Our ongoing investment in expanding our presence within multiple verticals of the audio-video market enables us to capitalize on positive long-term trends, thanks to the latest additions to our portfolio, namely the VS6320 and the VA7000 chipsets. We believe that these verticals, which include video conferencing, industrial, and machine vision, combined may represent a total addressable market of approximately
"With our unparalleled innovative connectivity solutions and highly sophisticated chipsets, we believe
Key Financial Highlights
- First quarter 2024 revenues reached
$11.6 million , compared to$23.9 million in the first quarter of 2023
- GAAP gross margin was 59.0% for the first quarter 2024 (non-GAAP gross margin was 62.0%). This compared to GAAP gross margin 66.1% for the first quarter 2023 (and non-GAAP gross margin of 67.2%). The year-over-year change was due to lower total revenues, which resulted in lower fixed cost absorption, evaluation of certain cost of inventory and a larger share of automotive revenues compared to audio-video, which has much higher gross margin
- GAAP Net Loss was$(10.0) million in the first quarter 2024, compared to a GAAP Net Loss of$(5.4) million in the first quarter 2023
- Adjusted EBITDA Loss in the first quarter 2024 was$(7.1) million , compared to Adjusted EBITDA loss of$(2.9) million in in the first quarter 2023 - Robust balance sheet of
$139.8 million in cash, cash equivalents and short-term deposits, and no debt, as ofMarch 31, 2024 , compared to$142.0 at the end ofDecember 2023 - Inventory balance of
$12.5 million onMarch 31, 2024 , down from$13.8 million onDecember 31, 2023
Financial Outlook
Disclaimer:
"The macroeconomic landscape continues to be challenging with ongoing short lead times, causing uncertain order activity and inventory consumption by our customers," said
"When the semiconductor industry improves, we will be prepared to advance our growth strategy with an even wider range of solutions and we remain optimistic about
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
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2024 |
2023 |
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Revenues |
11,559 |
23,880 |
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Gross Profit |
6,815 |
15,793 |
||
Gross Margin |
59.0 % |
66.1 % |
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Net Loss |
(10,042) |
(5,377) |
||
Working Capital [1] |
153,272 |
161,371 |
||
Cash, Cash Equivalents and Short-Term Deposits [2] |
139,787 |
139,703 |
||
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(1,390) |
(8,669) |
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Non-GAAP Financial Data |
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Non-GAAP Gross Margin[3] |
62.0 % |
67.2 % |
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Adjusted EBITDA Loss [4] |
(7,069) |
(2,858) |
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Non-GAAP Loss Per Share[5] (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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2. As of the last day of the period.
3. Non-GAAP Gross Margin is defined as: 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, further adjusted to exclude share-based compensation and change in fair value of Forfeiture Shares, 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. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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( |
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Three Months Ended
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2024 |
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2023 |
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REVENUES |
11,559 |
|
23,880 |
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COST OF REVENUES |
(4,744) |
|
(8,087) |
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GROSS PROFIT |
6,815 |
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15,793 |
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OPERATING EXPENSES: |
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Research and development expenses |
(10,145) |
|
(13,960) |
||
Sales and marketing expenses |
(4,388) |
|
(5,060) |
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General and administrative expenses |
(3,571) |
|
(3,832) |
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TOTAL OPERATING EXPENSES |
(18,104) |
|
(22,852) |
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OPERATING LOSS |
(11,289) |
|
(7,059) |
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Change in fair value of Forfeiture Shares |
25 |
|
1,507 |
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Financial income, net |
1,234 |
|
191 |
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LOSS BEFORE INCOME TAXES |
(10,030) |
|
(5,361) |
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INCOME TAXES |
(17) |
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(19) |
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LOSS AFTER INCOME TAXES |
(10,047) |
|
(5,380) |
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Equity in earnings of investee |
5 |
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3 |
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NET LOSS |
(10,042) |
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(5,377) |
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EARNINGS PER SHARE DATA:
BASIC AND DILUTED NET LOSS PER ORDINARY SHARE
[6]
(in |
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WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF NET LOSS PER ORDINARY SHARE |
104,047,426 |
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101,076,390 |
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6. See footnote 5. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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( |
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ASSETS |
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CURRENT ASSETS Cash and cash equivalents |
|
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35,100 |
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|
17,261 |
Short-term deposits |
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|
104,687 |
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|
124,759 |
Trade accounts receivable |
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|
9,907 |
|
|
14,642 |
Inventories |
|
|
12,489 |
|
|
13,836 |
Prepaid expenses and other current assets |
|
|
3,982 |
|
|
4,196 |
TOTAL CURRENT ASSETS |
|
|
166,165 |
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|
174,694 |
LONG-TERM ASSETS: |
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Property and equipment, net |
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2,740 |
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|
2,954 |
Operating lease right-of-use assets |
|
|
1,749 |
|
|
2,202 |
Other assets |
|
|
623 |
|
|
708 |
TOTAL LONG-TERM ASSETS |
|
|
5,112 |
|
|
5,864 |
TOTAL ASSETS |
|
|
171,277 |
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180,558 |
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LIABILITIES AND EQUITY
CURRENT LIABILITIES |
|
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12,893 |
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15,931 |
LONG-TERM LIABILITIES |
|
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Forfeiture Shares |
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13 |
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|
38 |
Operating leases liabilities |
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|
140 |
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|
190 |
Other long-term liabilities |
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|
79 |
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|
95 |
TOTAL LONG-TERM LIABILITIES |
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|
232 |
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|
323 |
TOTAL LIABILITIES |
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|
13,125 |
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|
16,254 |
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TOTAL SHAREHOLDERS' EQUITY |
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158,152 |
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164,304 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
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|
171,277 |
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180,558 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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( |
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Three Months Ended
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2024 |
2023 |
CASH FLOW FROM OPERATING ACTIVITIES |
|
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Net loss for the period |
|
(10,042) |
(5,377) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Income and expense items not involving cash flows: |
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Depreciation |
|
456 |
379 |
Stock-based compensation |
|
3,764 |
3,822 |
Exchange rate differences |
|
525 |
1,252 |
Interest on short-term deposits |
|
275 |
(566) |
Change in fair value of forfeiture shares |
|
(25) |
(1,507) |
Reduction in the carrying amount of ROU assets |
|
484 |
464 |
Equity in earnings of investee, net of dividend received |
|
5 |
3 |
Changes in operating assets and liabilities: |
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Trade accounts receivable |
|
4,735 |
(1,399) |
Prepaid expenses and other current assets |
|
207 |
(639) |
Inventories |
|
1,347 |
250 |
Long-term assets |
|
74 |
42 |
Current Liabilities |
|
(2,761) |
(5,058) |
Change in operating lease liabilities |
|
(418) |
(402) |
Other long-term liabilities |
|
(16) |
67 |
Net cash used in operating activities |
|
(1,390) |
(8,669) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Investment in short-term deposits |
|
(37,840) |
(40,725) |
Maturities of short-term deposits |
|
56,979 |
44,144 |
Purchase of property and equipment |
|
(30) |
(142) |
Net cash provided by investing activities |
|
19,109 |
3,277 |
CASH FLOWS FROM FINANCING ACTIVITIES: |
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Exercise of stock options |
|
126 |
928 |
Net cash provided by financing activities |
|
126 |
928 |
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Effect of exchange rate changes on cash and cash equivalents |
|
(5) |
(71) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
17,839 |
(4,535) |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD |
|
17,261 |
20,024 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
|
35,100 |
15,489 |
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SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION |
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Cash paid for taxes |
|
35 |
56 |
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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
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Trade accounts payable on account of property and equipment |
|
212 |
460 |
Operating lease liabilities arising from obtaining operating right-of-use assets |
|
31 |
278 |
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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 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 and change in fair value of Forfeiture Shares, 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. |
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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. |
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Three Months Ended
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2024 |
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2023 |
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Net Loss |
(10,042) |
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(5,377) |
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Adjusted to exclude the following: |
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Change in fair value of Forfeiture Shares |
(25) |
|
(1,507) |
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Financial income, net |
(1,234) |
|
(191) |
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Income taxes |
17 |
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19 |
|
Equity in earnings of investee |
(5) |
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(3) |
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Depreciation |
456 |
|
379 |
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Stock-based compensation expenses |
3,764 |
|
3,822 |
Adjusted EBITDA Loss |
(7,069) |
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(2,858) |
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
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( |
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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
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GAAP Loss per Share |
2024 |
2023 |
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GAAP Net Loss used for computing Loss per Share |
(10,042) |
(5,377) |
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Earnings Per Share Data: |
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GAAP Loss per Share (in |
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Weighted average number of shares used in calculation of net loss per share |
104,047,426 |
101,076,390 |
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Three Months Ended
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Non-GAAP Loss per Share[7] |
2024 |
2023 |
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GAAP Net Loss |
(10,042) |
(5,377) |
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Adjusted to exclude the following: |
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Stock based compensation |
3,764 |
3,822 |
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Depreciation |
456 |
379 |
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Change in fair value of Forfeiture Shares |
(25) |
(1,507) |
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Total Non-GAAP Loss used for computing Loss per Share |
(5,847) |
(2,683) |
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Earnings Per Share Data: |
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Non-GAAP Loss per Share (in |
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Weighted average number of shares used in calculation of net loss per share |
104,047,426 |
101,076,390 |
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7. The company calculates its non-GAAP Loss per Share as GAAP Net 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. |
For more information, please contact:
Valens@finprofiles.com
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