Gauzy Safety Tech at Busworld 2025 Gauzy Safety Tech at Busworld 2025 Showcased in Gauzy’s Booth and on Four New Buses from Customer Yutong Bus Co., Ltd. (SHA: 600066), the World’s Largest Bus OEM Incorporates Ambarella’s (Nasdaq: AMBA) CVflow® AI Systems-on-Chip (SoCs) into a Fully Homologated, Regulatory-Compliant CMS Next-Generation of Smart-Vision for Busses Combines AI, HDR Cameras, Adaptive Overlays, and Automated Safety Functions for ADAS Solution TEL AVIV, Israel and BRUSSELS, Oct. 06, 2025 (GL ...

Core Viewpoint - Gauzy Ltd. announced the resignation of Michael Donnelly from its Board of Directors for personal reasons, effective immediately, while expressing gratitude for his contributions to the company [1][2]. Company Overview - Gauzy Ltd. is a fully-integrated company specializing in vision and light control technologies, focusing on research, development, manufacturing, and marketing to enhance user experiences across various industries [3]. - The company is headquartered in Tel Aviv, Israel, with subsidiaries in Germany, France, the United States, Canada, China, Singapore, and the United Arab Emirates, serving leading brands in aeronautics, automotive, and architecture across over 60 countries [3]. Leadership Commentary - Michael Donnelly expressed his privilege in working with Gauzy and optimism about the company's future growth and shareholder value creation [2]. - Eyal Peso, Co-Founder and CEO, acknowledged Donnelly's instrumental role in the company's growth and long-term strategy development, wishing him success in future endeavors [2]. Board Dynamics - The Board and management of Gauzy expressed appreciation for Donnelly's service, confirming that his resignation was not due to any disagreement with the company or its management [2].

Company Overview - Gauzy Ltd. is a fully-integrated light and vision control company focused on research, development, manufacturing, and marketing of vision and light control technologies [2] - The company is headquartered in Tel Aviv, Israel, with subsidiaries in Germany, France, the United States, Canada, China, Singapore, and the United Arab Emirates [2] - Gauzy serves leading brands across aeronautics, automotive, and architecture in over 60 countries through direct fulfillment and a certified distribution channel [2] Event Announcement - Gauzy Ltd. will have its senior management attend the B. Riley Securities Consumer & TMT Conference on September 10, 2025, in New York [1]

Core Insights - Gauzy Ltd. has been selected as the exclusive smart glass supplier for a Fortune 100 financial services leader, marking a significant milestone for the company [1][4] - The initial installations of Gauzy's smart glass have been completed in multiple office locations across the United States, including Texas, Florida, and Pennsylvania, with plans for expansion as new facilities are built and existing sites modernized [2] - The engagement with the financial services leader highlights Gauzy's role in the modernization of office environments, focusing on adaptability, customer experience, and sustainability [3] Strategic Significance - The program with the Fortune 100 financial services leader validates Gauzy's technology and execution capabilities, establishing a repeatable template for financial service environments [4] - This engagement reflects the company's focus on scalable platforms that create operational efficiencies for customers and drive recurring demand for its materials, controls, and services [5] Market Impact - The nationwide scalability of this engagement positions Gauzy as a standard supplier for new office construction and modernization projects, creating potential for recurring demand [8] - Gauzy's dynamic glazing technology can reduce building energy use by up to 20–30%, aligning with sustainability goals and reinforcing its relevance in ESG-focused markets [8] - Early installations demonstrate the company's execution capability, while the planned multi-phase rollout provides visibility into a pipeline of future deployments [8] Company Overview - Gauzy Ltd. is a fully-integrated light and vision control company, focused on the research, development, manufacturing, and marketing of vision and light control technologies [6] - The company serves leading brands across various industries, including aeronautics, automotive, and architecture, in over 60 countries [6]

Company Performance - Gauzy Ltd. reported a quarterly loss of $0.66 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.40, representing an earnings surprise of -65.00% [1] - The company posted revenues of $20.05 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 30.75%, compared to revenues of $24.41 million a year ago [2] - Over the last four quarters, Gauzy Ltd. has surpassed consensus EPS estimates only once and has topped consensus revenue estimates two times [2] Stock Movement and Outlook - Gauzy Ltd. shares have declined approximately 34.8% since the beginning of the year, while the S&P 500 has gained 9.6% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at -$0.14 for the coming quarter and -$0.73 for the current fiscal year [7] Industry Context - The Electronics - Miscellaneous Products industry, to which Gauzy Ltd. belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Gauzy Ltd.'s stock performance [5]

[Condensed Consolidated Financial Statements](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents Gauzy Ltd.'s interim financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, along with explanatory notes [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$136,806 thousand** by June 30, 2025, due to lower current assets and increased liabilities, reducing equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | **Assets** | | | | | | Total Current Assets | $46,452 | $54,608 | $(8,156) | -14.94% | | Total Non-Current Assets | $90,354 | $83,637 | $6,717 | 8.03% | | **Total Assets** | **$136,806** | **$138,245** | **$(1,439)** | **-1.04%** | | **Liabilities** | | | | | | Total Current Liabilities | $70,874 | $56,728 | $14,146 | 24.94% | | Total Long-Term Liabilities | $48,072 | $33,187 | $14,885 | 44.85% | | **Total Liabilities** | **$118,946** | **$89,915** | **$29,031** | **32.29%** | | **Shareholders' Equity** | | | | | | Total Shareholders' Equity | $17,860 | $48,330 | $(30,470) | -63.05% | - Cash and cash equivalents decreased significantly from **$5,615 thousand** at December 31, 2024, to **$1,235 thousand** at June 30, 2025, representing a **78% decline**[4](index=4&type=chunk) - Trade receivables, net, decreased from **$24,358 thousand** to **$16,991 thousand**, a **30.2% reduction**, indicating potential changes in collection or sales patterns[4](index=4&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues decreased and operating loss increased for both three and six months ended June 30, 2025, though net loss improved due to financial income | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :------------------------------------ | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Revenues | $20,054 | $24,409 | -17.84% | $42,421 | $49,138 | -13.70% | | Gross Profit | $4,286 | $6,592 | -35.00% | $10,018 | $12,807 | -21.78% | | Operating Loss | $(12,510) | $(7,921) | 57.94% | $(21,203) | $(17,552) | 20.80% | | Financial Income (Expenses), net | $1,790 | $(15,274) | 111.72% | $(240) | $(18,828) | 98.72% | | Loss Before Income Tax | $(10,720) | $(23,065) | -53.53% | $(21,443) | $(36,250) | -40.85% | | Net Loss for the Period | $(10,736) | $(23,087) | -53.51% | $(21,514) | $(36,334) | -40.80% | | Basic and Diluted Loss Per Share | $(0.57) | $(2.60) | -78.08% | $(1.15) | $(5.14) | -77.63% | - Other comprehensive loss significantly increased to **$(10,947) thousand** for the three months ended June 30, 2025, from **$4,116 thousand** in the prior year, primarily due to a large fair value loss on changes of own credit risk[10](index=10&type=chunk) [Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders' Equity (Capital Deficiency)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Redeemable%20Convertible%20Preferred%20Shares%20and%20Shareholders'%20Equity%20(Capital%20Deficiency)) Total shareholders' equity significantly decreased to **$17,860 thousand** by June 30, 2025, primarily due to net loss and other comprehensive loss | Metric (in thousands) | Balance at January 1, 2025 | Changes during Six Months Ended June 30, 2025 | Balance at June 30, 2025 | | :-------------------------- | :------------------------- | :-------------------------------------------- | :----------------------- | | Ordinary shares (Amount) | $865 | $0 | $865 | | Additional paid-in capital | $275,390 | $1,537 | $276,927 | | Other comprehensive loss | $(2,913) | $(10,493) | $(13,406) | | Accumulated deficit | $(225,012) | $(21,514) | $(246,526) | | **Total Shareholders' Equity** | **$48,330** | **$(30,470)** | **$17,860** | - The company issued **22,850 ordinary shares** through the exercise of options and warrants during the six months ended June 30, 2025[14](index=14&type=chunk) - Share-based compensation contributed **$1,537 thousand** to additional paid-in capital for the six months ended June 30, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash, cash equivalents, and restricted cash saw a net decrease of **$4,590 thousand** by June 30, 2025, primarily due to reduced financing activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Net cash used in operating activities | $(3,870) | $(15,663) | 75.20% | | Net cash used in investing activities | $(3,648) | $(4,218) | 13.51% | | Net cash (used in) provided by financing activities | $2,928 | $78,974 | -96.29% | | Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | $(4,590) | $59,093 | -107.77% | | Balance at End of Period | $1,365 | $63,785 | -97.86% | - Operating cash outflow improved significantly, decreasing from **$(15,663) thousand** in 2024 to **$(3,870) thousand** in 2025, driven by positive changes in trade receivables and other current liabilities[29](index=29&type=chunk) - Financing activities provided substantially less cash in 2025 (**$2,928 thousand**) compared to 2024 (**$78,974 thousand**), largely due to the absence of IPO proceeds and a decrease in proceeds from long-term debt[29](index=29&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, significant transactions, and segment information [NOTE 1 - Nature of Operations](index=11&type=section&id=NOTE%201%20-%20Nature%20of%20Operations) Gauzy Ltd., an Israeli smart glass technology company, completed its IPO in June 2024, and despite losses, maintains sufficient liquidity for the next 12 months - Gauzy Ltd. was incorporated in Israel in 2009 and is engaged in the development, manufacturing, and supply of technologies for operating and control of complex materials[34](index=34&type=chunk) - On June 7, 2024, the Company closed its initial public offering (IPO), issuing **4,411,765 shares** at **$17.00 per share**, generating net proceeds of **$68.25 million**[36](index=36&type=chunk) - As of June 30, 2025, the Company had an accumulated deficit of **$246,526 thousand** and incurred operating losses of **$21,203 thousand**, with negative cash flows from operating activities of **$3,870 thousand**[37](index=37&type=chunk) - Management believes existing cash, cash equivalents, and available amounts under Note Purchase Agreements (NPAs) provide

Financial Data and Key Metrics Changes - The company generated revenues of $20.1 million for Q2 2025, with a gross margin of 21.4%, down from 27% in the prior year period [14][15] - Total operating expenses increased to $16.8 million from $14.5 million year-over-year, primarily due to higher corporate expenses and increased depreciation and R&D expenses [16][17] - Adjusted EBITDA was negative $8.7 million, compared to negative $3.9 million in the prior year [17] - Free cash flow improved to an outflow of $5.2 million from negative $11.5 million year-over-year [18] - The company ended the quarter with total liquidity of $36.2 million, including $35 million available under an undrawn credit line [18][19] Business Line Data and Key Metrics Changes - The backlog of orders reached a record $43 million to be shipped in 2025, indicating strong customer demand [6][14] - The aeronautics segment is the largest contributor to the backlog, with $21.3 million associated with this division [48] - The warehouse division reported a gross margin of 23%, down from 37% in the prior year, reflecting lower segment revenue and a change in product mix [15] Market Data and Key Metrics Changes - The global automotive smart glass market is projected to grow from $16 billion in 2024 to over $25 billion by 2028, with the company positioned to capitalize on this growth [8] - The marine lab market is valued at $6.2 billion, with the company expanding its presence in this sector [9] Company Strategy and Development Direction - The company aims to strengthen its balance sheet through debt financing, having closed on $15 million under favorable terms [5][19] - Strategic expansion into the marine sector and the aeronautics division is a focus, with new product launches planned for early 2026 [10][11] - The company is committed to non-dilutive capital sources to fund operations until achieving cash flow profitability [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year guidance despite shipment delays due to external factors, including a conflict in the region [6][29] - The second half of 2025 is expected to be significantly stronger than the first half, supported by a record backlog of orders [6][20] - Management emphasized the importance of operational discipline and cash management strategies to improve cash flow productivity [18] Other Important Information - The company has made significant board changes to align with its public company evolution, welcoming back a former director with expertise in global expansion and M&A [12] - The company is focused on enhancing its innovation pipeline across all business divisions [23] Q&A Session Summary Question: Can you elaborate on the timing dynamics affecting revenue? - Management acknowledged shifts in delivery timing and expressed confidence in meeting annual guidance despite some deliveries moving to the second half of the year [26][29] Question: What is the confidence level for the second half revenue ramp? - Management confirmed the company is prepared to deliver $45 million to $50 million quarters, aligning with sales order cadence [31][32] Question: Can you discuss liquidity dynamics going forward? - Management highlighted a $35 million credit line available for use and expressed confidence in achieving cash flow positive status [36][38] Question: What are the levers expected to achieve positive EBITDA this year? - Management indicated that achieving over $31 million in revenue would lead to positive adjusted EBITDA, with improved gross margins expected in the second half [43][45] Question: How does the backlog mix look for key contributors? - The aeronautics segment is the largest contributor to the backlog, with management confident in meeting targets for this division [47][48] Question: How will working capital items change to support increased shipping capacity? - Management noted that 80% of the business is factored, allowing for immediate cash flow upon invoicing, which supports production planning [50][52]

Financial Performance - Q2 2025 revenues reached $20.1 million [9], while gross margin was 21.4% [9] - The company raised $15 million in bank debt at favorable rates and terms [9] - Q2 2025 revenue increased by 22.4% year-over-year compared to Q2 2024 [27] - Adjusted EBITDA for Q2 2025 was $(8.7) million, a year-over-year growth of -$4.8 million [27] - The company reaffirms full year 2025 revenue guidance of $130-140 million, representing a 26-35% year-over-year growth [9, 34] Backlog and Pipeline - Purchase order backlog reached $43 million, up $7 million [9] - The company has a contracted backlog of $409 million minimum revenue expected to realize over 10 years [17] - The company expects to realize over $1 billion in contracted & uncommitted revenue over 10 years [17] - Over 80% of 2024 revenues are recurring in nature [25] Segment Performance - Aeronautics revenue for Q2 2025 was $6.9 million, a decrease of 31.7% year-over-year [30] - Architecture revenue for Q2 2025 was $2.5 million, a decrease of 5.2% year-over-year [30] - Automotive revenue for Q2 2025 was $1.4 million, an increase of 54.1% year-over-year [30] - Safety-Tech revenue for Q2 2025 was $9.3 million, a decrease of 14.1% year-over-year [30]

Core Insights - Gauzy Ltd. reported a record backlog of purchase orders amounting to $42.9 million at the end of the quarter, indicating strong demand and business momentum [5][6] - The company announced new product lines, including commercial aircraft cabin shading and advanced driver-assistance systems (ADAS) for buses, which are expected to enhance its market position [5][14] - The company secured new strategic customers in architecture, aeronautics, and safety technology sectors, further diversifying its client base [5][14] Financial Performance - For the second quarter of 2025, revenues were $20.1 million, down from $24.4 million in the same quarter of 2024, primarily due to shifts in delivery timing [6][8] - Gross margin decreased to 21.4% from 27.0% year-over-year, attributed to lower revenues against a fixed cost base [6][9] - The net loss for the second quarter was $10.7 million, an improvement from a net loss of $23.1 million in the prior year [6][11] Operational Highlights - The company closed on $15 million of debt financing with Mizrahi Bank, which includes $5 million drawn in July, enhancing its liquidity position [5][13] - Total available liquidity at the end of the quarter was $36.2 million, consisting of $1.2 million in cash and a $35 million undrawn credit facility [6][13] - The company reaffirmed its full-year revenue guidance, expecting revenues to be in the range of $130 million to $140 million for 2025 [16] Market Developments - General Motors began delivering Cadillacs featuring the largest smart glass panel in the industry, utilizing Gauzy's SPD technology, marking a significant milestone in the electric vehicle sector [5][14] - Gauzy is expanding into the high-margin marine market, having secured nine contracts to date, which could provide additional revenue streams [5][14] - The company is also supporting major brands like Moderna with its smart glass technology for commercial spaces [5][14]

Core Insights - Gauzy Ltd. announced the election of Alejandro Weinstein to its Board of Directors, effective November 1, 2025, following the annual general meeting of shareholders [1] - The company aims to adopt a leaner board structure to reduce corporate expenses and maintain agility [1] Company Leadership - Alejandro Weinstein has over 30 years of managerial experience, including serving as CEO of CFR Pharmaceuticals S.A., where he led the company to a multi-billion-dollar sale to Abbott Laboratories [2] - His expertise in global expansion, mergers and acquisitions, and public company leadership is expected to support Gauzy's growth and strategic objectives [2][3] Board Changes - Gal Gitter concluded his service on the Board after his term expired, and Danny Allouche is also stepping down, both recognized for their significant contributions during their tenures [3] - Eyal Peso, CEO and Chairman of Gauzy, expressed gratitude for the contributions of both departing board members, highlighting their roles in the company's growth and strategic direction [3] Company Overview - Gauzy Ltd. specializes in vision and light control technologies, focusing on research, development, manufacturing, and marketing [4] - The company operates globally with subsidiaries in multiple countries, serving various industries including aeronautics, automotive, and architecture [4]