| --- | --- | --- | --- | --- | |-------------|-------|-------|-------|-------| | | | | | | | (NYSE: VLN) | | | | | Disclaimer Forward-Looking Statements 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. Forwardlooking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect, ...

Financial Data and Key Metrics Changes - In Q4 2021, the company reported record total revenues of $20.7 million, up 47% compared to Q4 2020 [7][38] - For the full year 2021, total revenues reached $70.7 million, an increase of 24% from 2020 [8][44] - Gross profit for Q4 2021 grew to $14.8 million, a 43.5% increase, with a gross margin of 71.2% [40] - Full-year gross profit was $50.6 million, up 16.3%, with a gross margin of 71.6% [47][51] Business Line Data and Key Metrics Changes - Audio-video revenues in Q4 2021 increased by 40% to $18.6 million, while automotive revenues reached $2.2 million, a 141.2% increase [39] - For the full year 2021, audio-video revenues were $62.8 million, up 15%, and automotive revenues were $7.9 million, up 281% [8][44] Market Data and Key Metrics Changes - The company noted strong demand in the audio-video market, particularly in APAC and EMEA, recovering from COVID-19 impacts [27][30] - In the automotive sector, the company is seeing growing interest in the MIPI A-PHY standard from various companies across the supply chain [18] Company Strategy and Development Direction - The company aims to become a one-stop shop for all in-vehicle high-speed connectivity solutions, focusing on both audio-video and automotive markets [23][35] - The introduction of the VA7000 chipset is part of the strategy to secure design wins and drive significant revenue growth [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting customer demand despite supply chain challenges, having fulfilled all orders in 2021 [46] - The company anticipates continued strong demand for its products in 2022, supported by a robust backlog of over $78 million [48][56] Other Important Information - The company ended 2021 with a strong balance sheet, including cash and equivalents of $174.4 million and no debt [52] - The company plans to invest in the development and commercialization of next-generation products, with a focus on enhancing its product offerings [56][58] Q&A Session Summary Question: Can you elaborate on proactive measures taken to address supply chain issues? - Management highlighted that they increased inventory levels to meet customer commitments despite global supply chain challenges [64][66] Question: What is the timing for revenue contribution from the trucking market? - Initial revenues from the Stoneridge partnership are expected towards the end of 2022, with mass production anticipated in early 2023 [71] Question: How do you see chip inventory levels in the automotive space? - Management noted that inventory levels among customers are low, which is encouraging for future revenue growth [84] Question: Can you provide insights on the VA7000 chipset sampling? - The VA7000 is in the evaluation stage, with positive feedback on its performance, particularly regarding electromagnetic capabilities [99] Question: What is the expected mix of automotive revenues for 2022? - The company expects automotive revenues to contribute about 20% of total revenues in 2022, primarily from the VA6000 chipset [95]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIE ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Fourth Quarter and Full Year 2021 Performance Highlights](index=1&type=section&id=Key%20Financial%20and%20Business%20Highlights) Valens Semiconductor achieved record revenues for Q4 and full year 2021, driven by strong demand in its Audio-Video and Automotive segments Key Performance Metrics | Metric | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 | YoY Change (FY) | | :----- | :------ | :------ | :------ | :------ | :-------------- | | Revenues | $20.7 million | $14.1 million | $70.7 million | $56.9 million | +24.2% | | Audio-Video Revenues | N/A | N/A | $62.8 million | N/A | +14.5% | | Automotive Revenues | N/A | N/A | $7.9 million | N/A | +281% | | GAAP Gross Margin | 71.2% | 72.8% | 71.6% | 76.4% | -4.8 ppts | | Non-GAAP Gross Margin | 71.5% | 73.4% | 71.8% | 76.9% | -5.1 ppts | | Record Backlog (as of Dec 31, 2021) | N/A | N/A | $78.2 million | N/A | N/A | | Cash, cash equivalents and short-term deposits (as of Dec 31, 2021) | N/A | N/A | $174.4 million | N/A | N/A | - Shipped **first-in-industry MIPI A-PHY** automotive chipsets to potential customers and leading ecosystem players[3](index=3&type=chunk)[5](index=5&type=chunk) - Generated initial revenue from Stello, the newest Audio-Video product family, which is already embedded in designs of **over 100 different products**[3](index=3&type=chunk)[5](index=5&type=chunk) - Met all customer demand despite a **severely supply-constrained environment**[5](index=5&type=chunk) [Business and Strategic Developments](index=1&type=section&id=Business%20and%20Strategic%20Developments) The company advanced its market position in 2021 through mass production for Mercedes-Benz and the launch of its new Stello chipset - 2021 marked the **first full year of mass production** for first-generation chipsets in Mercedes-Benz automobiles[3](index=3&type=chunk) - Shipped first-in-industry engineering samples of **MIPI A-PHY standard chipsets (VA7000)** to OEMs, Tier 1s, and other leading automotive companies for evaluation[3](index=3&type=chunk) - Introduced and began generating revenue from the new **Stello chipset product family** in Audio-Video, which is embedded in over 100 different products[3](index=3&type=chunk)[5](index=5&type=chunk) - Plans to expand its foothold in Automotive and Audio-Video markets with new product offerings in 2022 and beyond[4](index=4&type=chunk) [First Quarter and Full Year 2022 Outlook](index=2&type=section&id=First%20Quarter%20and%20Full%20Year%202022%20Outlook) The company projects continued revenue growth for 2022, with a significant increase anticipated in the Automotive segment Q1 and Full Year 2022 Guidance | Metric | Q1 2022 Guidance | FY 2022 Guidance | | :----- | :--------------- | :--------------- | | Revenue | $20.6 million - $21.0 million | $83.0 million - $85.0 million | | Gross Margins | 66.5% - 67.0% | 65.5% - 67.2% | | Adjusted EBITDA | $(10.7) million - $(9.7) million | $(38.4) million - $(37.8) million | - Anticipates **substantial growth in Automotive revenues** in 2022 compared to 2021[8](index=8&type=chunk) - The company's ultimate goal is to **achieve and amplify profitability**[6](index=6&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) [About Valens Semiconductor](index=3&type=section&id=About%20Valens) Valens Semiconductor provides high-speed connectivity solutions for the automotive and audio-video industries, with its HDBaseT technology a market standard - A leading provider of semiconductor products for long-reach, high-speed video and data transmission for the automotive and audio-video industries[15](index=15&type=chunk) - **HDBaseT technology** is the leading standard in the professional Audio-Video market with tens of millions of chipsets integrated into products[15](index=15&type=chunk) - Valens Automotive chipsets are already on the road and its technology is the basis for the **new international standard for automotive connectivity**[15](index=15&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements that are subject to significant risks, uncertainties, and other factors - Forward-looking statements are identified by words such as "estimate," "plan," "project," "forecast," "intend," "will," and "expect"[12](index=12&type=chunk) - These statements are based on current expectations of management and are **not predictions of actual performance**[12](index=12&type=chunk) - Statements are subject to risks including changes in market conditions, ability to manage growth, competition, and global health epidemics[13](index=13&type=chunk)[14](index=14&type=chunk) [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) [Summary of Financial Results](index=4&type=section&id=SUMMARY%20OF%20FINANCIAL%20RESULTS) This section presents key GAAP and Non-GAAP financial metrics for Q4 and the full year 2021 Financial Highlights (in thousands, except per share data) | Metric | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 | | :----- | :------ | :------ | :------ | :------ | | Revenues | $20,739 | $14,123 | $70,684 | $56,910 | | Gross Profit | $14,767 | $10,288 | $50,579 | $43,478 | | Gross Margin | 71.2% | 72.8% | 71.6% | 76.4% | | Net loss | $(7,973) | $(6,011) | $(26,534) | $(19,635) | | Cash, cash equivalents and short-term deposits | $174,359 | $61,570 | $174,359 | $61,570 | | Net cash used in operating activities | $(11,380) | $(6,368) | $(21,609) | $(19,606) | | Non-GAAP Gross Margin | 71.5% | 73.4% | 71.8% | 76.9% | | Adjusted EBITDA (after issuance-related costs) | $(6,951) | $(4,592) | $(14,010) | $(16,366) | | Loss per share (after issuance-related costs) | $(0.08) | $(0.56) | $(0.62) | $(1.88) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The statement details revenues, costs, and expenses, resulting in a net loss for the reported periods Statement of Operations (in thousands, except per share data) | Metric | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 | | :-------------------- | :------ | :------ | :------ | :------ | | REVENUES | $20,739 | $14,123 | $70,684 | $56,910 | | COST OF REVENUES | $(5,972) | $(3,835) | $(20,105) | $(13,432) | | GROSS PROFIT | $14,767 | $10,288 | $50,579 | $43,478 | | Research and development expenses | $(14,890) | $(10,833) | $(46,875) | $(44,725) | | Sales and marketing expenses | $(4,460) | $(3,420) | $(14,214) | $(13,657) | | General and administrative expenses | $(4,042) | $(2,454) | $(16,556) | $(7,884) | | TOTAL OPERATING EXPENSES | $(23,392) | $(16,707) | $(77,645) | $(66,266) | | OPERATING LOSS | $(8,625) | $(6,419) | $(27,066) | $(22,788) | | NET LOSS | $(7,973) | $(6,011) | $(26,534) | $(19,635) | | BASIC AND DILUTED NET LOSS PER ORDINARY SHARE | $(0.08) | $(0.90) | $(1.15) | $(3.25) | - General and administrative expenses for FY 2021 include **$5,958 thousand in issuance-related costs**[23](index=23&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet outlines the company's assets, liabilities, and shareholders' equity as of year-end 2021 and 2020 Balance Sheet (in thousands) | Metric | Dec 31, 2021 | Dec 31, 2020 | | :-------------------- | :----------- | :----------- | | TOTAL CURRENT ASSETS | $199,031 | $76,377 | | TOTAL LONG-TERM ASSETS | $3,569 | $2,788 | | TOTAL ASSETS | $202,600 | $79,165 | | TOTAL LIABILITIES | $20,403 | $11,777 | | REDEEMABLE CONVERTIBLE PREFERRED SHARES | — | $149,611 | | SHAREHOLDERS' EQUITY (DEFICIT) | $182,197 | $(82,223) | - Significant increase in cash, cash equivalents and short-term deposits from **$61,570 thousand in 2020 to $174,359 thousand in 2021**[21](index=21&type=chunk)[26](index=26&type=chunk) - Redeemable convertible preferred shares were converted to ordinary shares by September 29, 2021, resulting in a shift from a **shareholder deficit to positive equity**[26](index=26&type=chunk)[35](index=35&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This statement details cash flows from operating, investing, and financing activities for fiscal years 2021 and 2020 Statement of Cash Flows (in thousands) | Metric | FY 2021 | FY 2020 | | :-------------------- | :------ | :------ | | Net cash used in operating activities | $(21,609) | $(19,606) | | Net cash provided by (used in) investing activities | $(84,163) | $28,314 | | Net cash provided by financing activities | $135,431 | $406 | | INCREASE IN CASH AND CASH EQUIVALENTS | $30,475 | $10,760 | | CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | $56,791 | $26,316 | - Net cash provided by financing activities **significantly increased in 2021** due to proceeds from transactions related to the merger (public listing)[6](index=6&type=chunk)[28](index=28&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=8&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES) This section reconciles GAAP Net Loss and Loss per Share to their non-GAAP counterparts, Adjusted EBITDA and Non-GAAP Loss per Share - **Adjusted EBITDA** is defined as net profit (loss) adjusted for financial items, taxes, depreciation, amortization, and share-based compensation[19](index=19&type=chunk)[30](index=30&type=chunk) - Non-GAAP measures may not be comparable to similar measures disclosed by other issuers due to different calculation methods[19](index=19&type=chunk)[30](index=30&type=chunk) - Guidance for projected Net profit (loss) is not provided due to the **high variability and difficulty** of making accurate forecasts for certain elements[31](index=31&type=chunk) [Adjusted EBITDA Reconciliation](index=8&type=section&id=Adjusted%20EBITDA%20Reconciliation) This table reconciles GAAP Net Loss to Adjusted EBITDA by adjusting for non-cash and non-operating items Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 | | :-------------------- | :------ | :------ | :------ | :------ | | Net loss | $(7,973) | $(6,011) | $(26,534) | $(19,635) | | Financial income (expense), net | $(820) | $(428) | $(929) | $(3,300) | | Income taxes | $169 | $37 | $407 | $164 | | Equity in earnings of investee | $(1) | $(17) | $(10) | $(17) | | Depreciation | $312 | $294 | $1,099 | $1,093 | | Share-based compensation expenses | $1,362 | $1,533 | $9,869 | $5,329 | | Adjusted EBITDA - before issuance-related costs | $(6,951) | $(4,592) | $(16,098) | $(16,366) | | Issuance-related costs | — | — | $2,088 | — | | Adjusted EBITDA - after issuance-related costs | $(6,951) | $(4,592) | $(14,010) | $(16,366) | [Loss Per Share Reconciliation](index=9&type=section&id=Loss%20Per%20Share%20Reconciliation) This table reconciles GAAP Loss per Share to Non-GAAP Loss per Share, adjusting for preferred share dividends and issuance costs Reconciliation of GAAP to Non-GAAP Loss Per Share (in thousands, except per share data) | Metric | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 | | :----- | :------ | :------ | :------ | :------ | | GAAP Net Loss | $(7,973) | $(6,011) | $(26,534) | $(19,635) | | Accrued dividend related to Preferred Shares | — | $(3,662) | $(11,330) | $(14,330) | | Total Loss used for computing GAAP Loss per share | $(7,973) | $(9,673) | $(37,864) | $(33,965) | | GAAP Loss per share | $(0.08) | $(0.90) | $(1.15) | $(3.25) | | Non-GAAP Net loss (adjusted for issuance-related costs) | $(7,973) | $(6,011) | $(20,576) | $(19,635) | | Non-GAAP Loss per share | $(0.08) | $(0.56) | $(0.62) | $(1.88) | - All **Preferred Shares were converted into Ordinary Shares** as of September 29, 2021[35](index=35&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) The company hosted a conference call on March 2, 2022, to discuss its financial results and business outlook - Conference call held on **Wednesday, March 2, 2022**, at 8:30 a.m. Eastern Time (ET)[9](index=9&type=chunk) - Access was available via dial-in numbers for the U.S., UK, Israel, and other locations[9](index=9&type=chunk) - A live webcast of the conference call was available via the investor relations section of Valens' website, with a replay available after the call[10](index=10&type=chunk) [Annual Financial Report Announcement](index=2&type=section&id=NYSE%20Rule%20203.01%20Annual%20Financial%20Report%20Announcement) The company announced the filing and availability of its 2021 Annual Report on Form 20-F with the SEC - The Annual Report on **Form 20-F for 2021** was filed with the U.S. Securities and Exchange Commission on March 2, 2022[11](index=11&type=chunk) - The report is available in the investor relations section of Valens' website[11](index=11&type=chunk) - Hard copies of the 2021 Annual Report will be provided free of charge upon request[11](index=11&type=chunk) [Contact Information](index=10&type=section&id=For%20more%20information%2C%20please%20contact) This section provides contact details for investor relations and media inquiries - Investor Relations Contact: Daphna Golden, VP Investor Relations, Valens Semiconductor Ltd., investors@valens.com[36](index=36&type=chunk) - Media Contact: Moriah Shilton, Financial Profiles, Inc., US: +1 310-622-8251, Valens@finprofiles.com[36](index=36&type=chunk)

Financial Data and Key Metrics Changes - The company reported record revenues of $19.1 million for Q3 2021, representing a 48.8% increase from Q3 2020 [28] - Gross profit increased from $9.5 million in Q3 2020 to $13.8 million, with a gross margin of 72.4% compared to 74.4% last year [31] - The net loss for Q3 2021 was $8.5 million, an improvement from a loss of $8.8 million in Q3 2020, with a loss per share of $0.94 [35] - The company ended Q3 with cash, cash equivalents, and short-term deposits of over $205 million, with no debt [37] Business Line Data and Key Metrics Changes - Audio-video revenues increased by 38.5% to $17.1 million, while automotive business revenues contributed $2 million, an increase of over 300% year-over-year [29] - Record bookings of $36 million during Q3 resulted in a book-to-bill ratio of 1.88, supporting growth projections [32] Market Data and Key Metrics Changes - The serviceable addressable market is estimated to grow to over $9 billion by 2026 across automotive and audio-video markets [19] - The company is seeing strong interest in the MIPI A-PHY standard, with over 15 prospective customers and partners eager to test the VA7000 chip [24] Company Strategy and Development Direction - The company aims to leverage its first-mover advantage with the MIPI A-PHY standard to capture a substantial share of the growing automotive market [16][20] - The focus remains on executing its strategy to enhance the development and commercialization of next-generation products [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in fulfilling customer demand despite global supply chain shortages, indicating that supply should not be an issue for Q4 [46] - The company anticipates revenue in the range of $19.4 million to $20.6 million for Q4 2021, reflecting an increase in full-year revenue guidance [38] Other Important Information - The company has a compelling financial model supported by high gross margins and long-term revenue visibility [21] - Operating expenses for Q3 were $22 million, with an expected increase of about $2 million per quarter moving forward due to public company costs [51] Q&A Session Summary Question: Visibility on backlog and supply constraints - Management highlighted that they met all customer commitments during Q3 despite supply chain shortages, with extended lead times and price increases being the main impacts [45][46] Question: Competitive landscape for A-PHY - Management noted strong momentum for A-PHY adoption, with partnerships expanding and a superior technology position [48] Question: Automotive revenue mix for 2022 and 2023 - The majority of revenues will still come from existing projects, with initial revenues from new automotive products expected by the end of 2022 [49][50] Question: Average dollar content in vehicles - Currently, Daimler vehicles contain 3-4 chips from the company, with potential revenue per car increasing to $70-$100 with new products [57][58] Question: Backlog allocation and revenue projections - Management expressed confidence in meeting revenue targets for Q4 and indicated that the backlog will support revenue projections for the following year [63]