Core Points - Vuzix Corporation is set to join the Russell 3000® Index effective June 27, 2025, following the annual reconstitution of the Russell indexes [1][2] - The inclusion in the Russell 3000® Index will also lead to automatic inclusion in either the large-cap Russell 1000® Index or the small-cap Russell 2000® Index [2] - Vuzix's President and CEO, Paul Travers, expressed that this addition will enhance awareness and ownership of Vuzix among institutional investors [3] - Approximately $10.6 trillion in assets are benchmarked against Russell's US indexes, indicating the significance of this inclusion for Vuzix [3] Company Overview - Vuzix is a leading designer and manufacturer of AI-powered smart glasses, waveguides, and augmented reality technologies for various markets including enterprise, medical, defense, and consumer [5] - The company holds over 425 patents and has received multiple awards for innovation, including recognition at the Consumer Electronics Show from 2005 to 2024 [5] - Founded in 1997, Vuzix is publicly traded on NASDAQ under the ticker VUZI and has offices in Rochester, NY, and Japan [5] Industry Context - FTSE Russell is a global leader in index provision, calculating thousands of indexes that cover 98% of the investable market globally [6][7] - Approximately $18.1 trillion is benchmarked to FTSE Russell indexes, highlighting their importance in investment management [7] - Russell indexes are widely utilized by investment managers and institutional investors for index funds and as benchmarks for active investment strategies [3][7]

Core Insights - Vuzix Corporation is recognized for its AI-powered smart glasses, which are being utilized by Amazon to enhance warehouse operations [1][2][3] - The smart glasses facilitate real-time remote diagnostics and problem-solving for maintenance teams, improving safety and productivity in logistics [2][3] Company Overview - Vuzix is a leading designer and manufacturer of AI-powered smart glasses and AR technologies, holding over 425 patents and numerous IP licenses [4] - The company has received multiple awards for innovation, including recognition at the Consumer Electronics Show from 2005 to 2024 [4] - Founded in 1997, Vuzix is publicly traded on NASDAQ under the ticker VUZI, with offices in Rochester, NY, and Japan [4]

[Vuzix First Quarter 2025 Financial Report](index=1&type=section&id=Vuzix%20First%20Quarter%202025%20Financial%20Report) [CEO's Opening Remarks](index=1&type=section&id=CEO%27s%20Opening%20Remarks) CEO Paul Travers highlights increasing commercial momentum driven by design wins and growing interest in AI-powered smart glasses - Vuzix is experiencing **increasing commercial momentum**, with investments translating into **design wins** and near-term **commercial traction**[3](index=3&type=chunk) - The broader tech industry is **increasing its focus** on AI-powered smart glasses, signaling a **potential acceleration** in market adoption[3](index=3&type=chunk) - Q1 2025 enterprise sales showed **sequential improvement** over Q4 2024, driven by new customer deployments and growing follow-on orders[3](index=3&type=chunk) [First Quarter 2025 Financial Results](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) Vuzix reported Q1 2025 total revenues of **$1.6 million**, a **21% YoY decrease**, resulting in a net loss of **$8.6 million** Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | ($ thousands except per share amounts) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Sales** | **$1,581** | **$2,004** | | Sales of Products | $1,324 | $1,829 | | Sales of Engineering Services | $257 | $175 | | **Gross Loss** | **$(265)** | **$(53)** | | **Loss from Operations** | **$(8,774)** | **$(10,092)** | | **Net Loss** | **$(8,638)** | **$(10,048)** | | **Loss per Common Share** | **$(0.11)** | **$(0.16)** | - Total revenues for Q1 2025 decreased by **21% YoY** to **$1.6 million**, mainly due to reduced unit sales of M400 smart glasses[4](index=4&type=chunk) - Operating expenses decreased YoY: Research and Development down **5% to $2.6 million**[6](index=6&type=chunk), Selling and Marketing down **31% to $1.5 million**[7](index=7&type=chunk), and General and Administrative down **3% to $4.0 million**[8](index=8&type=chunk) - Cash used in operating activities **significantly improved**, decreasing to **$3.5 million** for Q1 2025 from **$8.8 million** in the same period of 2024[9](index=9&type=chunk) [Management Outlook](index=2&type=section&id=Management%20Outlook) Management is confident in its **$19.5 million** working capital, focusing on securing ODM/OEM design wins and expanding defense business - The company ended March 2025 with **$19.5 million** in working capital, which management believes is sufficient to execute the current operating plan[10](index=10&type=chunk) - Key strategic goals for 2025 include securing new ODM/OEM design wins for recurring revenues, growing business with new and existing prime defense contractors, and converting existing smart glasses inventory to cash via anticipated follow-on orders[10](index=10&type=chunk)[11](index=11&type=chunk) - Vuzix is pleased with its **burgeoning commercial relationships** with Quanta and other key ODMs/OEMs, which involve both capital and commercial collaborations[11](index=11&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Vuzix scheduled a conference call for May 12, 2025, at 4:30 p.m. ET, featuring CEO Paul Travers and CFO Grant Russell - A conference call was scheduled for Monday, **May 12, 2025**, at **4:30 p.m. ET** to discuss Q1 2025 operational and financial highlights[12](index=12&type=chunk) - **CEO Paul Travers** and **CFO Grant Russell** will host the call[12](index=12&type=chunk) - Details for **live participation** via phone or webcast, as well as information for a **30-day replay**, were provided[12](index=12&type=chunk)[13](index=13&type=chunk) [About Vuzix Corporation](index=3&type=section&id=About%20Vuzix%20Corporation) Vuzix (NASDAQ: VUZI) is a leading public company designing and marketing AI-powered Smart Glasses and AR technologies - Vuzix is a **leading designer and manufacturer** of AI-powered Smart Glasses, Waveguides, and AR technologies[14](index=14&type=chunk) - The company holds more than **425 patents** and patents pending in its field[14](index=14&type=chunk) - Founded in 1997, Vuzix is a public company trading on **NASDAQ under the ticker VUZI**[14](index=14&type=chunk) [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section provides a standard legal disclaimer for forward-looking statements, cautioning that future results may differ materially - The news release contains **forward-looking statements** concerning new product releases, future revenue, and the company's industry leadership[15](index=15&type=chunk) - Readers are cautioned not to place undue reliance on these statements as **actual results could differ materially** due to various risk factors[15](index=15&type=chunk) - Vuzix has **no obligation to update or revise** these forward-looking statements unless required by law[15](index=15&type=chunk)

Core Insights - Vuzix Corporation and Himax Technologies have jointly introduced a next-generation AR optical module at Display Week 2025, showcasing a fully integrated solution that combines Himax's advanced microdisplay technology with Vuzix's waveguides, aimed at enhancing AR glasses for both enterprise and consumer markets [1][4] Company Overview - Vuzix is a prominent designer and manufacturer of AI-powered smart glasses and AR technologies, holding over 425 patents and numerous IP licenses, with a focus on providing high-quality viewing experiences across various sectors including enterprise and medical [5] - Himax Technologies is a leading fabless semiconductor provider specializing in display imaging processing technologies, with a strong market presence in automotive display technology and a portfolio of over 2,600 patents [6][7] Product Features - Himax's Dual-Edge Front-lit LCoS microdisplay is compact, measuring only 0.09 c.c. and weighing less than 0.2 grams, while delivering 1 lumen output and up to 350,000 nits of luminance with a power consumption of no more than 250mW, ensuring visibility in various lighting conditions [2] - Vuzix's waveguides are designed for mass production, featuring a slim 0.7 mm thickness, weighing less than 5 grams, and offering a 30-degree diagonal field of view, making them customizable and ready for integration into next-generation AR devices [3] Strategic Collaboration - The collaboration between Vuzix and Himax aims to accelerate the adoption of next-generation AR wearables by combining high-performance microdisplay technology with advanced waveguides, creating a commercially viable solution for the AR market [4]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $1.6 million, down 21% year-over-year due to decreased sales of smart glasses, particularly the M400, but up 24% sequentially from the prior quarter [22] - Engineering services revenue increased to $300,000, a 47% increase from the prior year's period [22] - The net loss for Q1 2025 was $8.6 million or $0.11 per share, compared to a net loss of $10 million or $0.16 per share for the same period in 2024 [25] Business Line Data and Key Metrics Changes - The smart glasses market presence is expanding, with a notable design win for waveguides related to smart thermal AR glasses for a European OEM customer [13] - The company received its largest reorder to date from Xander Glasses, a private label product for assisting the hearing impaired [16] - The enterprise market is seeing significant deployments, with over 500 Vuzix M400 Smart Glasses deployed across 14 warehouses in Mexico, resulting in over 30% improvements in order picking efficiency [18] Market Data and Key Metrics Changes - The collaboration with Quanta is expanding, with ongoing development around smart glasses and ODM reference platforms [8] - The company is witnessing increased interest in custom waveguide development capabilities, indicating a growing market demand [22] - The enterprise business is expected to be characterized by hardware and software solution bundles tailored to specific customer needs [20] Company Strategy and Development Direction - The company is focused on expanding its brand and global presence within the waveguide and AI-driven smart glasses market [7] - Vuzix is investing in new product development, with several unannounced products slated for release later in 2025 [12] - The strategic relationship with Quanta is in great shape and growing, with multiple programs expected to roll out before the end of 2025 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the commercial momentum in the smart glasses market, driven by OEM and enterprise engagements [6] - The company anticipates significant and sustained revenue growth due to large market opportunities and strategic investments in the industry [7] - Management highlighted the importance of AI in enhancing the functionality and appeal of smart glasses, making them more compelling for enterprise applications [49] Other Important Information - The acquisition of a state-of-the-art waveguide R&D facility in California is expected to enhance manufacturing capabilities and support customer needs [9] - The company has no current or long-term debt obligations outstanding, providing a strong financial position to execute its operating plan [26] Q&A Session Summary Question: How much of the $9 million M400 inventory do you still have on hand? - The bulk of the inventory at the end of the quarter was a little over $4 million, with provisions against it of close to $5 million, resulting in approximately $9 million of product [29] Question: Any update on product design partnerships with Quanta? - The relationship with Quanta is very good, and multiple programs are expected to roll out before the end of the year [30][31] Question: Expectation for the remaining tranches with Quanta? - Both tranches are expected by the end of 2025, with progress ahead of schedule [32][33] Question: Competitiveness of waveguides in the market? - Vuzix can manufacture waveguides at scale and at a lower cost compared to competitors, which face challenges in production volume and cost [38][39] Question: Features that differentiate Vuzix products? - Vuzix offers unique features such as low visibility of forward light and integrated prescriptions, making their products more socially acceptable [42][43]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $1.6 million, down 21% year-over-year due to decreased sales of smart glasses, particularly the M400, but up 24% sequentially from the prior quarter [22] - Engineering services revenue increased to $300,000, a 47% increase from the prior year's period [22] - The net loss for Q1 2025 was $8.6 million or $0.11 per share, compared to a net loss of $10 million or $0.16 per share for the same period in 2024 [25] Business Line Data and Key Metrics Changes - The smart glasses segment saw a decline in sales, particularly the M400 model, contributing to the overall revenue drop [22] - Engineering services revenue growth indicates increased interest in custom waveguide development capabilities [22] Market Data and Key Metrics Changes - The company is witnessing significant interest and engagement in the OEM business, particularly in enterprise, defense, and consumer segments [6][8] - The enterprise market is characterized by hardware and software solution bundles tailored to specific customer needs, with notable deployments in logistics and manufacturing [19][20] Company Strategy and Development Direction - The company is focused on expanding its presence in the waveguide and AI-driven smart glasses market, leveraging strategic partnerships, particularly with Quanta [8][9] - Vuzix aims to enhance its manufacturing capabilities and product offerings, with several new unannounced products slated for release in 2025 [21][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing developments in the smart glasses market and the company's strategic initiatives, which are expected to lead to significant revenue growth [7][20] - The company anticipates that its cash position and disciplined cost structure will provide sufficient runway to execute its operating plan well into 2026 [27] Other Important Information - The acquisition of a state-of-the-art waveguide R&D facility in California is expected to enhance the company's manufacturing capabilities and support customer needs [10][11] - The company has made progress towards achieving performance milestones required for additional investment tranches from Quanta, which would provide $10 million in growth capital [26] Q&A Session Summary Question: How much of the $9 million M400 inventory do you still have on hand? - The company has a little over $4 million in M400 inventory at the end of the quarter, with provisions against that of close to $5 million [30] Question: Any update on product design partnerships with Quanta? - Management remains enthusiastic about the relationship with Quanta, with multiple programs expected to roll out before the end of the year [32] Question: Expectation for the two remaining tranches with Quanta? - Both tranches are expected by the end of 2025, with the company ahead of schedule on performance milestones [34]

Table of Contents VUZIX CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Exact name of registrant as specified in its charter) FORM 10-Q Delaware 04-3392453 State or other jurisdiction of incorporation or organization ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (I.R.S. Employer Identification No.) For the Quarterly Period Ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

Core Insights - Vuzix Corporation is experiencing increasing commercial momentum in 2025, with a focus on AI-powered smart glasses and strategic partnerships [2][9] - The company reported a 21% decrease in total revenues for Q1 2025 compared to Q1 2024, primarily due to lower product sales [3][4] - Despite challenges in the smart glasses market, Vuzix maintains a positive outlook, supported by improvements in enterprise sales and strategic programs [2][9] Financial Performance - Total sales for Q1 2025 were $1.581 million, down from $2.004 million in Q1 2024 [3] - Gross loss increased to $0.265 million in Q1 2025 from $0.053 million in Q1 2024, attributed to reduced manufacturing builds [4] - Net loss decreased to $8.638 million, or $0.11 per share, compared to a net loss of $10.048 million, or $0.16 per share in the prior year [7] Expense Analysis - Research and Development expenses decreased by approximately 5% to $2.606 million in Q1 2025 [5] - Selling and Marketing expenses saw a significant decrease of approximately 31% to $1.537 million [6] - General and Administrative expenses slightly decreased by approximately 3% to $3.961 million [7] Operational Outlook - The company ended Q1 2025 with working capital of $19.5 million, indicating sufficient resources to execute its operating plan [9] - Vuzix aims to secure design wins in ODM/OEM products and grow its business with defense contractors [9] - Anticipated follow-on orders for smart glasses are expected to reduce existing inventory and facilitate the introduction of next-generation products [9]

Company Overview - Vuzix Corporation is a leading supplier of smart glasses, waveguides, and augmented reality (AR) technologies [5] - The company designs, manufactures, and markets AI-powered smart glasses and AR technologies for various markets including enterprise, medical, defense, and consumer [5] - Vuzix holds over 425 patents and patents pending, along with numerous IP licenses in optics and augmented reality wearables [5] Upcoming Conference Call - Vuzix will host a conference call on May 12, 2025, at 4:30 PM ET to discuss its first quarter 2025 operating results [1] - The call will feature Vuzix's CEO Paul Travers and CFO Grant Russell, who will present operational and financial highlights for the quarter ended March 31, 2025 [3] Accessing the Conference Call - Participants can join the live conference call by dialing specific numbers for U.S., Canadian, and international callers [2] - A live and archived webcast will be available on the investor relations page of Vuzix's website [3] - Telephonic and webcast replays will be accessible for 30 days starting May 12, 2025 [4]

Core Insights - Vuzix Corporation has received a significant order for custom color waveguides to be used in a new generation of thermal smart glasses, marking a key development in augmented reality technology [1] - The thermal smart glasses will feature advanced capabilities such as real-time thermal overlays and support thermal detection from -40°C to +330°C, targeting rugged enterprise applications [3] Company Overview - Vuzix is a leading designer and manufacturer of smart glasses and augmented reality technologies, holding over 425 patents and numerous IP licenses in optics and wearable displays [4] - The company has been recognized for innovation at the Consumer Electronics Show (CES) from 2005 to 2024, highlighting its commitment to technological advancement [4] Product Development - The order for waveguides follows a nearly two-year development cycle, with volume production of the smart glasses expected to begin in fall 2025 [1] - The collaboration involves a European design and R&D advisory firm and will be produced by one of the world's largest contract electronics manufacturers [1] Use Cases - Potential applications for the thermal smart glasses include firefighting, electronic inspection, search and rescue, and outdoor operations such as hunting and HVAC maintenance [2][3]