Core Viewpoint - Valens Semiconductor has appointed Igal Rotem to its Board of Directors, replacing Michael Linse, to enhance its leadership with his extensive experience in the high-tech sector [1][2][3] Company Overview - Valens Semiconductor (NYSE: VLN) is a leader in high-performance connectivity, providing technology that transforms digital experiences globally [4] - The company's chipsets are integrated into various devices, supporting advanced audio-video installations, next-generation videoconferencing, and the development of ADAS and autonomous driving technologies [4] - Valens is known for setting industry standards, including HDBaseT® and MIPI A-PHY [4] Leadership Changes - Igal Rotem's appointment is effective immediately as of August 25, 2025, following a Board meeting [3] - His background includes serving as Chairman of Shift4 EU Bank and leading Finaro to become a global leader in digital acquiring and payment processing solutions [2] - Rotem's experience in scaling businesses and driving strategic growth is expected to be instrumental for Valens as it expands its technology leadership [2]

Summary of Precision Optics Corporation (POCI) Conference Call Company Overview - Precision Optics Corporation (POCI) is an optics technology company founded in 1982, with a focus on developing next-generation technological solutions in various fields, primarily in medical devices and defense aerospace [6][7][8]. - The company has made two acquisitions in the last five to six years: Ross Optical and Lighthouse Imaging, both established in the 1980s [6][7]. Revenue Breakdown - Approximately 60% to 70% of POCI's revenue comes from the medical device market, while 30% to 40% is derived from defense and aerospace sectors [8]. - The company is experiencing adjustments in revenue streams based on near-term demand for its technologies [8]. Core Technologies - POCI specializes in three main areas: 1. **Micro Optics**: Producing extremely small optics, including a right-angle prism measuring 50 microns, which is about the width of a human hair [15][16]. 2. **Ultra Precision Optics**: Developing high-resolution imaging systems, particularly for medical devices [19]. 3. **Digital Imaging**: Utilizing advancements from consumer electronics to create imaging systems for medical devices and defense applications [22]. Product Development Process - The product development process typically takes two to three years, starting from the conception phase to full-scale manufacturing [31]. - POCI has introduced a new product development approach called the Unity platform, which aims to accelerate development time by 6 to 12 months and reduce costs significantly [35][36]. Market Trends - The minimally invasive surgery market, particularly the endoscope market, is projected to grow at an annual rate of 5% to 10% [46]. - The single-use endoscope market is growing at a rate of 20% or higher, driven by safety benefits and reduced sterilization requirements [50][51]. Defense and Aerospace Applications - Approximately 40% of POCI's revenue comes from defense and aerospace, with applications in imaging systems for drones and satellite communications [52][55]. - The company is also exploring opportunities in laser weapons technology [57]. Manufacturing Expansion - POCI is consolidating its manufacturing operations in Massachusetts to meet growing demand and improve recruitment of technical talent [61][62]. Customer Retention and IP - POCI's embedded IP in products creates a barrier for customers to switch manufacturers, fostering long-term relationships [41][42]. - The company has maintained long-term contracts with major medical device companies, with some products in production for over 20 years [43][44]. Financial Outlook - POCI expects substantial growth in the coming years, with plans to move two to three programs into production annually [14]. - The company is focused on maintaining a robust product development pipeline to support this growth [37]. Conclusion - Precision Optics Corporation is well-positioned to capitalize on growth in the medical device and defense sectors, leveraging its core technologies and expanding manufacturing capabilities to meet increasing demand [8][61].

Summary of Conference Call Insights Industry Overview - The conference primarily focused on the **crypto and digital assets** sector, discussing regulatory changes and their implications for institutional investment in cryptocurrencies [6][12][23]. - The **medical device** and **defense aerospace** sectors were also highlighted, particularly through the lens of **Precision Optics**, which specializes in optics technology [40][82]. Key Points on Crypto and Digital Assets - **Regulatory Changes**: The shift in the U.S. government stance towards crypto, particularly with the SEC under new leadership, is seen as a positive development for institutional investment [6][7]. - **Legislative Frameworks**: The enactment of the **Genius Act** and the anticipated **Clarity Act** are crucial for establishing a regulatory framework that will facilitate institutional participation in the crypto market [7][12]. - **Institutional Adoption**: The potential for significant institutional investment in cryptocurrencies is expected to increase, particularly with the clarity provided by new regulations [12][23]. - **Beneficiaries**: Companies like **Coinbase** and **Galaxy Digital** are positioned to benefit from these regulatory changes, with Coinbase set to gain from stablecoin economics and Galaxy Digital from institutional trading volumes [10][14][18]. - **Exodus Movement**: This smaller company is viewed as a "bank shot" play on institutional adoption, benefiting indirectly from rising altcoin prices driven by institutional interest [19][25]. Key Points on Precision Optics - **Company Overview**: Precision Optics has been in operation for over 40 years, focusing on optics technology, with 60-70% of revenue derived from the medical device market [38][40]. - **Core Technologies**: The company specializes in **micro optics**, **ultra precision optics**, and **digital imaging**, which are critical for applications in medical devices and defense [41][46]. - **Product Development Process**: The development timeline for new products typically spans 2-3 years, with a focus on creating prototypes and moving them into production [65][70]. - **Market Trends**: The minimally invasive surgery market, particularly single-use endoscopes, is experiencing significant growth, with annual growth rates projected at 20% or higher [80][81]. - **Defense Applications**: Precision Optics is also targeting the defense sector, focusing on applications where size and weight are critical, such as satellite communications and laser weapons [84][86]. Additional Insights - **Institutional Hesitance**: Historically, institutions have been cautious about entering the crypto space due to regulatory uncertainty, but recent developments are expected to change this dynamic [12][23]. - **Market Dynamics**: The rise in altcoin prices is anticipated to attract retail investors, further driving engagement in the crypto market [24][25]. - **Manufacturing Expansion**: Precision Optics is consolidating its manufacturing capabilities to meet growing demand, particularly in Massachusetts [88]. This summary encapsulates the critical insights from the conference, highlighting the evolving landscape of both the crypto and medical device industries, along with the strategic positioning of key companies within these sectors.

Group 1 - Valens Semiconductor Ltd. reported Q2 2025 revenue of $17.1 million, exceeding guidance of $16.5 to $16.8 million, marking a 26% year-over-year increase from $13.6 million in Q2 2024 [1][8] - The company achieved a GAAP gross margin of 63.5% and a non-GAAP gross margin of 67.2%, both within guidance and an increase from 62.9% in Q1 2025 [1][8] - Adjusted EBITDA loss improved to $(4.0) million, better than the expected range of $(4.9) to $(4.4) million, and down from $(5.2) million in the previous year [1][8] Group 2 - The growth was driven by strong demand in ProAV and industrial sectors, with the company launching its first MIPI A-PHY standard platform in industrial machine vision and expanding VS3000-based products to approximately 150 [1][8] - Despite strong momentum, the company faces headwinds from tariff impacts, particularly in the automotive sector [1] - The outlook for the company remains uncertain for the end of FY25, but steady growth is expected through 2026 and beyond as ProAV inventories correct and the automotive outlook improves [1]

Valens Semiconductor (VLN) FY Conference Summary Company Overview - **Company Name**: Valens Semiconductor - **Industry**: Semiconductor, High-Performance Connectivity - **Established**: Approximately 20 years ago - **Public Listing**: NYSE since 2021 - **Employees**: 260 - **Chipsets Sold**: Over 40 million - **Q2 2025 Revenue**: $17.1 million - **Total Addressable Market**: $5 billion - **R&D Investment**: $500 million with 125 patents [4][3][12] Core Business Segments - **Cross-Industry Business**: - **Verticals**: Professional audio/video, industrial, and machine vision - **Key Customers**: Crestron, Epson, Panasonic, Siemens, Medtronic [5][6][7][8] - **Market Opportunity**: Video conferencing expected to reach $350 million by 2029 [8] - **Automotive Segment**: - **Focus**: Advanced Driver Assistance Systems (ADAS) - **Key Customer**: Mercedes, with design wins from Mobileye expected to generate revenue from late 2026 [12][15][16] - **Market Opportunity**: Expected to reach $4.5 billion by 2029 [12] - **Industrial Machine Vision**: - **Market Growth**: Driven by factory automation and e-commerce [20] - **Market Opportunity**: Expected to reach nearly $500 million by 2029 [20] - **Medical Applications**: - **Focus**: Single-use endoscopy with potential revenue of $600 million annually [24][25] Financial Performance - **2019 Revenue**: $60 million - **2020 Revenue**: $60 million - **2021 Revenue**: $71 million - **2022 Revenue**: $91 million (peak year due to COVID-19 inventory buildup) [27] - **2023 Revenue**: $84 million - **2024 Revenue**: $58 million (decline due to inventory adjustments) [28] - **2025 Revenue Guidance**: $66 to $71 million, representing an 18% year-over-year growth [29][30] Key Financial Metrics - **Gross Margin**: 63.5% for 2025, with automotive at 50% [30] - **EBITDA Loss**: $4 million expected in 2025, with a forecasted loss of $6.8 to $7.4 million in Q3 [30][31] - **Cash Balance**: $103 million at the end of the quarter [31] Strategic Outlook - **Long-Term Revenue Target**: $220 to $300 million by 2029, with a growth rate of 30% to 40% year-over-year [33] - **Growth Drivers**: Recovery in professional audio/video, new revenue from machine vision and ADAS starting in 2027, and medical applications [34][35] - **Market Position**: Strong technological advantages in handling electromagnetic interference and high-resolution video delivery [14][19] Challenges and Risks - **Dependence on Mercedes**: Current automotive revenue is heavily reliant on one customer, with challenges due to tariffs impacting performance [41][42] - **Long Design Cycles**: Revenue from new verticals may take time to materialize due to lengthy design and evaluation processes [68][72] Additional Insights - **Product Development**: New chip (VS6320) aimed at expanding market presence in smaller video conferencing rooms [10][11][56] - **Acquisition of Acronym**: Aimed at enhancing USB connectivity solutions, expected to complement existing product offerings [60][62] - **R&D Strategy**: Focus on long-term investment with expected revenue generation from new markets in the coming years [67][69] This summary encapsulates the key points from the Valens Semiconductor FY Conference, highlighting the company's strategic direction, financial performance, and market opportunities.

HOD HASHARON, Israel, Aug. 7, 2025 /PRNewswire/ -- Valens Semiconductor (NYSE: VLN) ("Valens"), a leader in high-performance connectivity, today announced that Guy Nathanzon, Chief Financial Officer, will participate in the following investor events in August:Oppenheimer 28th Annual Technology, Internet & Communications ConferenceFormat: Presentation and virtual one-on-one meetingsWhen: Monday, August 11 to Wednesday, August 13. Presentation is scheduled for August 11 at 2:05 pm ETWebcast Link: https://wsw. ...

Financial Data and Key Metrics Changes - The company reported revenues of $17.1 million for Q2 2025, exceeding guidance and marking the fifth consecutive quarter of growth [6][25] - GAAP gross margin was 63.5%, within the guidance range, while adjusted EBITDA loss was $4 million, better than the guidance range [6][28] - Full year 2025 revenue guidance was updated to $66 million to $71 million, reflecting a 14% to 23% increase compared to 2024 [6][31] - GAAP net loss for Q2 was $7.2 million, an improvement from $8.3 million in Q1 2025 and $8.9 million in Q2 2024 [28][29] - Cash, cash equivalents, and short-term deposits totaled $102.7 million at the end of Q2 2025, down from $112.5 million at the end of Q1 2025 [30] Business Line Data and Key Metrics Changes - Cross Industry Business (CIB) generated $12.8 million, approximately 75% of total revenue, while Automotive contributed $4.3 million, about 25% [25] - CIB gross margin was 67.8%, while Automotive gross margin was 50.5% for Q2 2025 [26][27] - The CIB revenue increased from $8.1 million in Q2 2024 to $12.8 million in Q2 2025, while Automotive revenue decreased from $5.5 million in Q2 2024 [25][26] Market Data and Key Metrics Changes - The company noted growing demand in the ProAV market, particularly for the VS3000 chip, with product launches increasing from around 100 to over 150 [9][10] - The automotive segment is seeing strong interest, with design wins from leading European OEMs and participation in major industry events [18][20] Company Strategy and Development Direction - The company focuses on integrating its chips into high-end products, expecting market penetration to take time as customers evaluate and adopt the technology [7] - The strategy includes targeting premium offerings in various industries, including Professional Audio-Video, Machine Vision, and Medical [8][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of global tariffs on customer forecasts, leading to a cautious revenue outlook for the second half of the year [6][31] - Despite the challenges, management expressed confidence in the long-term strategy and market opportunities, indicating a belief in returning to growth [33] Other Important Information - The company announced a leadership transition, with the current CEO stepping down in 2025 but remaining involved as a Board member and shareholder [22][23] - The company completed a share repurchase program, investing $10.2 million from a second plan to return value to shareholders [30] Q&A Session Summary Question: Impact of tariffs on revenue guidance - Management explained that the downward revision in guidance is primarily due to tariffs affecting customers in both CIB and Automotive segments [35][36] Question: Automotive gross margin expectations - Management indicated that while they do not provide specific segment guidance, they expect gross margin improvements in Automotive due to product cost optimization [37][38] Question: Customer activity and order improvements - Management noted a temporary weakness in both segments for Q3 but expressed optimism for better visibility in Q4 [42][43] Question: Updates on automotive design wins - Management confirmed that the design wins are with prestigious companies, creating positive industry noise and potential for further attention from other OEMs [46][47] Question: Trends in Industrial Machine Vision - Management highlighted strong market fit and growing interest in the Machine Vision segment, with ongoing discussions and design wins expected [50][51] Question: Customer activity in logistics and ProAV - Management observed a slow recovery in traditional markets and noted growth in the conference room segment as a new opportunity [52][53] Question: Changes in product development plans due to tariffs - Management stated that there have been no significant changes in customer product development plans, maintaining focus on long-term roadmaps [58][59] Question: Snapdragon Ride platform involvement - Management clarified that they demonstrated interoperability with the Snapdragon Ride platform, showcasing the ease of integration of their chips [60][61]

[Condensed Consolidated Interim Financial Statements (Unaudited)](index=1&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) [Condensed Consolidated Interim Balance Sheet](index=3&type=section&id=Balance%20sheets) Total assets decreased from **$172.15 million** to **$144.79 million**, driven by reduced current assets and increased treasury shares, leading to a significant reduction in shareholders' equity Condensed Consolidated Interim Balance Sheet Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | **Assets** | | | | Total Current Assets | 127,331 | 153,903 | | Total Long-Term Assets | 17,462 | 18,249 | | **TOTAL ASSETS** | **144,793** | **172,152** | | **Liabilities** | | | | Total Current Liabilities | 21,333 | 20,327 | | Total Long-Term Liabilities | 6,965 | 9,137 | | **TOTAL LIABILITIES** | **28,298** | **29,464** | | **Shareholders' Equity** | | | | Total Shareholders' Equity | **116,495** | **142,688** | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **144,793** | **172,152** | - Total Assets decreased by **$27,359 thousand (15.89%)** from December 31, 2024, to June 30, 2025, mainly due to a decrease in short-term deposits[5](index=5&type=chunk) - Total Shareholders' Equity decreased by **$26,193 thousand (18.36%)** primarily due to net loss for the period and share repurchases[7](index=7&type=chunk) [Condensed Consolidated Interim Statements of Operations and Comprehensive Loss](index=5&type=section&id=Statements%20of%20operations%20and%20comprehensive%20loss) Revenues and gross profit increased for the six months ended June 30, 2025, with an improved net loss and per-share results Condensed Consolidated Interim Statements of Operations and Comprehensive Loss Summary | Metric (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Revenues | 33,887 | 25,156 | 17,059 | 13,597 | | Gross Profit | 21,417 | 15,159 | 10,835 | 8,344 | | Operating Loss | (16,845) | (20,699) | (7,389) | (9,410) | | Net Loss | (15,492) | (18,911) | (7,184) | (8,869) | | Basic and diluted net loss per ordinary share | (0.15) | (0.18) | (0.07) | (0.08) | - Revenues increased by **34.7%** for the six months ended June 30, 2025, compared to the same period in 2024, reaching **$33,887 thousand**[9](index=9&type=chunk) - Net loss improved by **18.08%** for the six months ended June 30, 2025, decreasing to **$15,492 thousand** from **$18,911 thousand** in the prior year[9](index=9&type=chunk) [Condensed Consolidated Interim Statements of Changes in Shareholders' Equity](index=6&type=section&id=Statements%20of%20changes%20in%20shareholder's%20equity) Shareholders' equity decreased from **$142.69 million** to **$116.50 million**, primarily due to net loss and significant share repurchases Condensed Consolidated Interim Statements of Changes in Shareholders' Equity Summary | Item (in thousands) | Six months ended June 30, 2025 | | :------------------ | :----------------------------- | | Balance as of January 1, 2025 | 142,688 | | Exercise of options and vesting of RSUs | 385 | | Repurchase of ordinary shares | (19,761) | | Stock based compensation | 7,941 | | Change in unrealized gains on cash flow hedges | 734 | | Net loss for the period | (15,492) | | Balance as of June 30, 2025 | 116,495 | - The company repurchased **7,500,298 ordinary shares** for **$19,761 thousand** during the six months ended June 30, 2025[11](index=11&type=chunk) - Stock-based compensation contributed **$7,941 thousand** to additional paid-in capital for the six months ended June 30, 2025[11](index=11&type=chunk) [Condensed Interim Consolidated Statements of Cash Flows](index=8&type=section&id=Statements%20of%20cash%20flows) Net cash increased, driven by investing activities, despite cash used in operating and financing, a shift from prior year Condensed Interim Consolidated Statements of Cash Flows Summary | Cash Flow Activity (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | (7,761) | (1,615) | (211) | (225) | | Net cash provided by (used in) investing activities | 38,121 | 8,754 | 15,531 | (10,355) | | Net cash provided by (used in) financing activities | (19,376) | 636 | (9,979) | 510 | | Increase (Decrease) in Cash and Cash Equivalents | 11,166 | 7,445 | 5,592 | (10,394) | | Cash and Cash Equivalents at the End of the Period | 46,589 | 24,706 | 46,589 | 24,706 | - Net cash used in operating activities increased significantly to **$7,761 thousand** for the six months ended June 30, 2025, compared to **$1,615 thousand** in the prior year[14](index=14&type=chunk) - Investing activities provided **$38,121 thousand** in cash for the six months ended June 30, 2025, a substantial increase from **$8,754 thousand** in the prior year, primarily due to maturities of short-term deposits[14](index=14&type=chunk) - Financing activities used **$19,376 thousand** in cash for the six months ended June 30, 2025, mainly due to share repurchases, contrasting with cash provided in the prior year[14](index=14&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=10&type=section&id=Notes%20to%20consolidated%20financial%20statements) [NOTE 1 - General Information and Geopolitical Risks](index=10&type=section&id=NOTE%201%20-%20GENERAL) Valens Semiconductor Ltd., an Israeli semiconductor provider, monitors geopolitical conflicts, with no material operational impact - Valens Semiconductor Ltd. was incorporated in Israel in 2006 and began trading on the NYSE under the symbol 'VLN' as of June 30, 2021[16](index=16&type=chunk) - The company is a leading provider of semiconductor products (chips) for Audio-Video and Automotive industries, known for its Physical Layer (PHY) technology and HDBaseT Technology[17](index=17&type=chunk) - Ongoing conflicts in Gaza, Northern Israel, Lebanon, Iran, and the broader region have not materially affected operations to date, but the company continues to monitor developments[17](index=17&type=chunk) [NOTE 2 - Summary of Significant Accounting Policies](index=10&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Interim financial statements adhere to GAAP and SEC rules, with no material accounting policy changes; new pronouncements are being evaluated - Financial statements are prepared in accordance with GAAP and SEC rules for interim financial reporting, with all adjustments being normal and recurring[18](index=18&type=chunk)[19](index=19&type=chunk) - No material changes in significant accounting policies since December 31, 2024[21](index=21&type=chunk) - The company is evaluating ASU 2023-09 (Improvements to Income Tax Disclosures) effective after December 15, 2025, and ASU 2024-03/2025-01 (Expense Disaggregation Disclosure) effective after December 15, 2026, for potential impacts[22](index=22&type=chunk)[23](index=23&type=chunk) [NOTE 3 - Business Combination (Acroname Acquisition)](index=12&type=section&id=NOTE%203%20-%20BUSINESS%20COMBINATION) Valens acquired Acroname Inc. for **$11.20 million**, contributing **$2.42 million** in revenues and **$1.20 million** net loss for the period - Valens acquired Acroname Inc. on May 31, 2024, for a total consideration of **$11,196 thousand**[25](index=25&type=chunk)[26](index=26&type=chunk) Consideration Transferred | Consideration Transferred (in thousands) | Amount | | :--------------------------------------- | :----- | | Cash payment | 9,160 | | Fair value of earnout liability | 2,036 | | **Total consideration** | **11,196** | - Acroname contributed **$2,421 thousand** in revenues and **$1,197 thousand** in net loss to Valens' consolidated results for the six months ended June 30, 2025[27](index=27&type=chunk) Acquired Assets and Assumed Liabilities | Acquired Assets and Assumed Liabilities (in thousands) | Amount | | :----------------------------------------------------- | :----- | | Total assets acquired | 12,184 | | Total liabilities assumed | (988) | | **Net assets acquired** | **11,196** | [NOTE 4 - Inventories](index=14&type=section&id=NOTE%204%20-%20INVENTORIES) Total inventories increased to **$11.50 million** from **$10.16 million**, driven by finished goods, with significantly reduced write-downs Inventory Summary | Inventory Category (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Work in process | 3,851 | 4,547 | | Finished goods | 7,646 | 5,608 | | **Total Inventories** | **11,497** | **10,155** | - Inventories increased by **$1,342 thousand (13.22%)** from December 31, 2024, to June 30, 2025[32](index=32&type=chunk) - Inventory write-downs decreased substantially from **$300 thousand** in the six months ended June 30, 2024, to **$9 thousand** in the same period of 2025[32](index=32&type=chunk) [NOTE 5 - Commitments and Contingent Liabilities](index=14&type=section&id=NOTE%205%20-%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) Noncancelable purchase obligations decreased; a provision for a customer complaint regarding damaged chips is recorded, with reimbursement expected Commitments Summary | Commitment Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Open purchase orders | 6,058 | 8,044 | | Non-paid IP/license agreements | 1,029 | 2,349 | - The company is not a party to any material legal actions or investigations as of June 30, 2025, except for a customer complaint[36](index=36&type=chunk) - A provision for a customer complaint regarding damaged chips, amounting to **$2,136 thousand**, is recorded in other current liabilities as of June 30, 2025[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk) The provision was decreased by **$323 thousand** during the three months ended June 30, 2025[40](index=40&type=chunk) [NOTE 6 - Other Current Liabilities](index=15&type=section&id=NOTE%206%20-%20OTHER%20CURRENT%20LIABILITIES) Total other current liabilities slightly decreased to **$8.28 million** from **$8.38 million**, with accrued vacation as a key component Other Current Liabilities Summary | Item (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Accrued vacation | 3,786 | 3,166 | | Estimated accrual for a certain batch production incident | 2,136 | 2,182 | | Derivative liabilities | 600 | 605 | | Accrued expenses | 1,536 | 1,738 | | Other | 186 | 662 | | **Total** | **8,277** | **8,384** | - Accrued vacation increased by **$620 thousand (19.58%)** from December 31, 2024, to June 30, 2025[40](index=40&type=chunk) [NOTE 7 - Forfeiture Shares](index=15&type=section&id=NOTE%207%20-%20FORFEITURE%20SHARES) 359,375 ordinary shares remain subject to forfeiture due to unmet price targets, after 646,875 shares were forfeited in September 2024 - **1,006,250 Ordinary Shares** were initially subject to forfeiture based on price targets or M&A transaction minimum price[41](index=41&type=chunk) - On September 30, 2024, **646,875 Ordinary Shares** were forfeited[42](index=42&type=chunk) Forfeiture Shares Valuation Metrics | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Stock price | 2.63 | 2.60 | | Expected term (years) | 0.25 | 0.75 | | Expected volatility | 63.84% | 63.84% | | Risk-free interest rate | 4.41% | 4.20% | - The fair value of forfeiture shares remained at **$1 thousand** at June 30, 2025, and December 31, 2024[43](index=43&type=chunk) [NOTE 8 - Earnout Liability](index=16&type=section&id=NOTE%208%20-%20EARNOUT%20LIABILITY) Earnout liability decreased to **$1.75 million** from **$2.41 million**, resulting in a **$0.66 million** gain recognized in operations - Earnout payments of up to **$7.2 million** are contingent on product development completion and achievement of revenue, EBITDA, and cashflow targets in 2024 and 2025[45](index=45&type=chunk) Earnout Liability Valuation Metrics | Metric | June 30, 2025 | | :-------------------- | :------------ | | Discount rate | 20.7%-21.0% | | Expected term (years) | 0.50-1.00 | | Expected volatility | 45.89% | | Risk-free interest rate | 4.29% | Earnout Liability Activity | Earnout Liability Activity (in thousands) | Six months ended June 30, 2025 | Year ended December 31, 2024 | | :---------------------------------------- | :----------------------------- | :--------------------------- | | Fair value at the beginning of the period | (2,413) | - | | Initial recognition of earnout liability | - | (2,036) | | Change in fair value of earnout liability | 663 | (377) | | **Fair value at the end of the period** | **(1,750)** | **(2,413)** | [NOTE 9 - Derivatives and Hedging](index=17&type=section&id=NOTE%209%20-%20DERIVATIVES%20AND%20HEDGING) Valens uses foreign currency forward contracts for risk management; non-designated hedges resulted in a **$0.62 million** net loss, designated hedges impacted expenses - The company uses foreign currency forward contracts to mitigate foreign currency exchange rate fluctuations, not for trading or speculative purposes[50](index=50&type=chunk) Non-Designated Hedges Summary | Non-Designated Hedges (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Notional amount (ILS/USD) | 5,069 | 20,038 | | Fair value of derivatives assets | 28 | 1 | | Fair value of derivatives liabilities | 600 | 605 | - Non-designated hedges resulted in a net realized and unrealized loss of **$619 thousand** for the six months ended June 30, 2025, recognized in financial income, net[52](index=52&type=chunk) Designated Hedges Summary | Designated Hedges (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Notional amount | 13,436 | 20,061 | | Fair value of derivatives assets | 1,335 | 601 | - For designated cash flow hedges, **$614 thousand** of gains were reclassified from accumulated other comprehensive income into profit or loss for the six months ended June 30, 2025, impacting cost of revenue, R&D, sales & marketing, and G&A expenses[54](index=54&type=chunk) [NOTE 10 - Treasury Shares](index=19&type=section&id=NOTE%2010%20-%20TREASURY%20SHARES) Valens initiated two share repurchase programs, acquiring 3,302,194 shares for **$10 million** and 4,823,786 shares for **$11.4 million** - The company initiated a share repurchase program of up to **$10 million** on December 27, 2024, repurchasing **3,302,194 shares** for **$10 million** as of June 30, 2025[62](index=62&type=chunk) - A second share repurchase program of up to **$15 million** was initiated on February 11, 2025, with **4,823,786 shares** repurchased for **$11.4 million** as of June 30, 2025[62](index=62&type=chunk) [NOTE 11 - Stock-Based Compensation](index=19&type=section&id=NOTE%2011%20-%20STOCK-BASED%20COMPENSATION) Stock-based compensation totaled **$7.94 million** for the six months ended June 30, 2025, with significant grants of stock options and RSUs Stock-Based Compensation Summary | Stock-Based Compensation (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Total stock-based compensation (Options) | 661 | 1,582 | 278 | 690 | | Total stock-based compensation (RSUs) | 7,279 | 5,917 | 3,496 | 3,045 | - Unrecognized compensation costs for unvested stock options were **$1,466 thousand** as of June 30, 2025, expected to be recognized over **1.97 years**[60](index=60&type=chunk) - Unrecognized compensation costs for unvested RSUs totaled **$23,931 thousand** as of June 30, 2025, expected to be expensed over approximately **2.50 years**[66](index=66&type=chunk) [Stock Options](index=19&type=section&id=Stock%20Options) 11,765,601 stock options were outstanding as of June 30, 2025, with 1,689,425 granted and 476,431 exercised during the period Stock Option Activity | Stock Option Activity | Six months ended June 30, 2025 | | :-------------------- | :----------------------------- | | Options outstanding as of December 31, 2024 | 10,569,170 | | Granted during the period | 1,689,425 | | Exercised during the period | (476,431) | | Forfeited during the period | (16,563) | | Options outstanding as of June 30, 2025 | 11,765,601 | | Options exercisable as of June 30, 2025 | 9,934,550 | - The weighted-average fair value of options granted during the six months ended June 30, 2025, was **$2.31** at the grant date[64](index=64&type=chunk) - The total intrinsic value of options exercised during the six months ended June 30, 2025, was **$829 thousand**, a decrease from **$1,821 thousand** in the prior year[64](index=64&type=chunk) [Restricted Stock Units](index=22&type=section&id=Restricted%20Stock%20Units) 10,644,869 RSUs were outstanding as of June 30, 2025, with 4,583,634 granted and 2,515,132 vested, resulting in **$7.28 million** in expenses RSU Activity | RSU Activity | Six months ended June 30, 2025 | | :-------------------------------- | :----------------------------- | | RSUs outstanding at the beginning of the year | 8,827,092 | | Granted during the period | 4,583,634 | | Vested during the period | (2,515,132) | | Forfeited during the period | (250,725) | | Outstanding at the end of the period | 10,644,869 | - The weighted average grant date fair value of outstanding RSUs at June 30, 2025, was **$2.72**[66](index=66&type=chunk) - RSU expenses increased to **$7,279 thousand** for the six months ended June 30, 2025, from **$5,917 thousand** in the prior year[68](index=68&type=chunk) [NOTE 12 - Net Loss Per Ordinary Share](index=23&type=section&id=NOTE%2012%20-%20NET%20LOSS%20PER%20ORDINARY%20SHARE) Basic and diluted net loss per ordinary share was **$(0.15)**, an improvement from **$(0.18)**, with anti-dilutive securities excluded Net Loss Per Ordinary Share Summary | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Net loss (in thousands) | (15,492) | (18,911) | (7,184) | (8,869) | | Weighted average common shares and vested RSUs | 104,403,869 | 104,563,467 | 103,551,779 | 105,079,508 | | Basic and dilutive net loss per common share | (0.15) | (0.18) | (0.07) | (0.08) | - The weighted-average number of shares used in computing net loss per ordinary share remained relatively stable year-over-year[70](index=70&type=chunk) - Options (**11.17 million**), Restricted Stock Units (**9.74 million**), Private Warrants (**3.33 million**), Public Warrants (**5.75 million**), and Forfeiture Shares (**0.36 million**) were anti-dilutive and excluded from diluted EPS calculation for the six months ended June 30, 2025[70](index=70&type=chunk) [NOTE 13 - Financial Income, Net](index=23&type=section&id=NOTE%2013%20-%20FINANCIAL%20INCOME%2C%20NET) Financial income, net, decreased to **$1.46 million** from **$1.77 million**, due to derivative losses and reduced interest income Financial Income, Net Summary | Item (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Foreign currency exchange differences | (157) | (1,271) | (17) | (745) | | Realized and unrealized losses on derivative instruments | (619) | - | (823) | - | | Interest income on short-term deposits | 2,322 | 3,061 | 1,088 | 1,294 | | Other | (83) | (16) | (23) | (9) | | **Total financial income, net** | **1,463** | **1,774** | **225** | **540** | - Realized and unrealized losses on derivative instruments amounted to **$619 thousand** for the six months ended June 30, 2025, compared to none in the prior year[71](index=71&type=chunk) - Interest income on short-term deposits decreased by **$739 thousand (24.14%)** for the six months ended June 30, 2025[71](index=71&type=chunk) [NOTE 14 - Segment and Revenue by Geography and by Major Customer](index=24&type=section&id=NOTE%2014%20-%20SEGMENT%20AND%20REVENUE%20BY%20GEOGRAPHY%20AND%20BY%20MAJOR%20CUSTOMER) CIB revenues significantly increased, Automotive revenues slightly decreased; Hong Kong and Portugal grew, while Hungary and the US declined [a. Operating Segments (CIB and Automotive)](index=24&type=section&id=a.%20Operating%20Segments%20(CIB%20and%20Automotive)) CIB segment revenues grew substantially to **$24.58 million**, while Automotive revenues slightly decreased to **$9.31 million** - Valens operates in two segments: Cross Industry Business (CIB) and Automotive[72](index=72&type=chunk)[73](index=73&type=chunk) Segment Performance | Segment Performance (Six months ended June 30, 2025, in thousands) | CIB | Automotive | Consolidated | | :------------------------------------------------- | :----- | :--------- | :----------- | | Revenues | 24,576 | 9,311 | 33,887 | | Gross profit | 16,821 | 4,596 | 21,417 | | Segment operating loss | (5,450)| (11,395) | (16,845) | - CIB revenues increased by **61.19%** for the six months ended June 30, 2025, compared to the same period in 2024[76](index=76&type=chunk)[77](index=77&type=chunk) - Automotive revenues decreased by **6.03%** for the six months ended June 30, 2025, compared to the same period in 2024[76](index=76&type=chunk)[77](index=77&type=chunk) [b. Geographic Revenues](index=26&type=section&id=b.%20Geographic%20Revenues) Hong Kong, China, Portugal, and Japan showed significant revenue growth, while Hungary and the United States experienced declines Geographic Revenues Summary | Geography (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Israel | 193 | 431 | 129 | 178 | | Hong Kong | 5,094 | 1,574 | 3,279 | 841 | | China | 4,574 | 3,507 | 2,353 | 1,987 | | United States | 4,329 | 4,462 | 1,652 | 3,013 | | Portugal | 4,556 | 3,098 | 2,318 | 1,207 | | Hungary | 4,710 | 6,129 | 1,830 | 4,082 | | Japan | 3,011 | 2,036 | 1,682 | 837 | | Other | 7,420 | 3,919 | 3,816 | 1,452 | | **Total** | **33,887** | **25,156** | **17,059** | **13,597** | - Hong Kong revenues surged by **223.63%** for the six months ended June 30, 2025, compared to the prior year[79](index=79&type=chunk) - Hungary revenues decreased by **23.15%** for the six months ended June 30, 2025, compared to the prior year[79](index=79&type=chunk) [c. Supplemental data - Major Customers](index=26&type=section&id=c.%20Supplemental%20data%20-%20Major%20Customers) Customer A's accounts receivable share increased to **25%**, while Customer D's dropped to **0%**; Customer A and C maintained or increased revenue Accounts Receivable by Major Customer | Customer | Accounts Receivable (% of Total) June 30, 2025 | Accounts Receivable (% of Total) December 31, 2024 | | :--------- | :--------------------------------------------- | :------------------------------------------------- | | Customer A | 25% | 14% | | Customer B | 20% | 18% | | Customer C | 10% | 16% | | Customer D | 0% | 14% | Revenues by Major Customer | Customer | Revenues (% of Total) Six months ended June 30, 2025 | Revenues (% of Total) Six months ended June 30, 2024 | | :--------- | :--------------------------------------------------- | :--------------------------------------------------- | | Customer A | 13% | 12% | | Customer C | 9% | 7% | | Customer D | 8% | 14% | | Customer E | 4% | 10% | | Customer F | 4% | 10% | | Customer G | 2% | 10% | - Customer A's accounts receivable percentage increased from **14%** to **25%**, while Customer D's decreased from **14%** to **0%** from December 31, 2024, to June 30, 2025[80](index=80&type=chunk) [d. Long-lived assets by Geography](index=27&type=section&id=d.%20Long-lived%20assets%20by%20Geography) Total long-lived assets slightly decreased to **$10.61 million**, with the majority located domestically in Israel Long-lived Assets by Geography | Geography (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Domestic (Israel) | 9,082 | 9,482 | | China | 273 | 314 | | USA | 1,003 | 931 | | Other | 248 | 286 | | **Total** | **10,606** | **11,013** | - Long-lived assets in Israel constitute the largest portion, totaling **$9,082 thousand** at June 30, 2025[82](index=82&type=chunk) [NOTE 15 - Related Party Transactions](index=27&type=section&id=NOTE%2015%20-%20RELATED%20PARTY%20TRANSACTIONS) Valens granted 789,425 stock options and 549,654 RSUs to executive officers and Board members, with a total fair value of **$2.08 million** - **789,425 stock options** were granted to executive officers and Board members during the six months ended June 30, 2025, with a weighted average exercise price of **$2.36**[83](index=83&type=chunk) - **549,654 RSUs** were granted to executive officers and Board members during the six months ended June 30, 2025[84](index=84&type=chunk) - The fair value of granted stock options was **$857 thousand**, and granted RSUs was **$1,222 thousand**, both to be recognized over **1-4 year** vesting periods[85](index=85&type=chunk) [NOTE 16 - Subsequent Events](index=27&type=section&id=NOTE%2016%20-%20SUBSEQUENT%20EVENTS) Valens completed its Second Buyback program by purchasing an additional 1,327,439 Ordinary Shares for **$3.6 million** and is assessing the OBBBA tax reform impact - Between July 1, 2025, and July 21, 2025, Valens purchased an additional **1,327,439 Ordinary Shares** for **$3.6 million**, completing its Second Buyback program[86](index=86&type=chunk) - The United States enacted the One Big Beautiful Bill Act (OBBBA) in July 2025, allowing for immediate expensing of U.S. R&D and certain capital expenditures, among other tax changes[87](index=87&type=chunk) - Valens is currently assessing the impact of the OBBBA tax reform on its future consolidated financial statements[87](index=87&type=chunk)

Valens Semiconductor (NYSE:VLN) August 2025 GAAP and non-GAAP Measures Certain statements in this presentation (this "Presentation") are "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 pred ...

Core Insights - Valens Semiconductor Ltd. reported financial results for Q2 2025, achieving revenues of $17.1 million, marking the fifth consecutive quarter of growth [2][3] - The company updated its full-year 2025 revenue guidance to a range of $66 million to $71 million, reflecting a 14% to 23% increase compared to 2024, primarily due to the impact of tariffs [3][4] Financial Performance - Q2 2025 revenues reached $17.1 million, exceeding guidance of $16.5-$16.8 million, compared to $16.8 million in Q1 2025 and $13.6 million in Q2 2024 [4][17] - Q2 gross margin was 63.5% GAAP and 67.2% non-GAAP, compared to 62.9% GAAP in Q1 2025 and 61.4% GAAP in Q2 2024 [8][17] - Q2 net loss was $(7.2) million, an improvement from $(8.3) million in Q1 2025 and $(8.9) million in Q2 2024 [8][17] Segment Performance - Cross-Industry Business (CIB) revenues accounted for approximately 75% of total revenues at $12.8 million, up from $11.7 million in Q1 2025 and $8.1 million in Q2 2024 [4][5] - Automotive revenues represented about 25% of total revenues at $4.3 million, down from $5.1 million in Q1 2025 and $5.5 million in Q2 2024 [5] Business Highlights - Strong demand was noted in the ProAV market, with positive momentum in industrial machine vision [3] - The MIPI A-PHY standard continued to gain traction in the automotive sector, enhancing long-term market potential [3] - The company launched the first MIPI A-PHY standard platform in the industrial machine vision market [8] Cash Position - As of June 30, 2025, cash, cash equivalents, and short-term deposits totaled $102.7 million, down from $112.5 million as of March 31, 2025 [8][17] - The company utilized $10.2 million for a share repurchase program during Q2 2025 [8] Future Outlook - For Q3 2025, Valens Semiconductor expects revenues between $15.1 million and $15.6 million, with a gross margin range of 58.0% to 60.0% [9]