Valens Semiconductor .(VLN) - 2024 Q1 - Quarterly Report

Valens Semiconductor Q1 2024 Earnings Release Management Commentary and Business Update Management reports exceeding Q1 guidance despite market headwinds, highlighting strong progress in new product adoption - Exceeded Q1 revenue guidance despite ongoing macroeconomic headwinds and slow inventory digestion in the audio-video and automotive markets[3] - The new VS6320 USB 3.0 extension solution has gained significant traction with over 30 product design-ins, with sales expected to ramp in H2 2024[4] - The company targets a total addressable market (TAM) of approximately $1 billion annually in audio-video and $4.5 billion annually by 2029 in automotive[5] - Maintains a strong, debt-free balance sheet, enabling continued investment in long-term growth objectives[6] Key Financial Highlights and Outlook The company reported a Q1 revenue decline but maintains a strong balance sheet and raised its Q2 revenue guidance Q1 2024 Financial Highlights vs. Q1 2023 | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $11.6 million | $23.9 million | | GAAP Gross Margin | 59.0% | 66.1% | | Non-GAAP Gross Margin | 62.0% | 67.2% | | GAAP Net Loss | $(10.0) million | $(5.4) million | | Adjusted EBITDA Loss | $(7.1) million | $(2.9) million | - The company holds a strong balance sheet with $139.8 million in cash, cash equivalents, and short-term deposits, and no debt as of March 31, 2024[9] Q2 2024 Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Revenues | $12.5 million - $13.0 million | | Gross Margin | 52.0% - 52.5% | | Adjusted EBITDA Loss | $(8.3) million - $(8.0) million | Consolidated Financial Statements This section presents the unaudited Q1 2024 consolidated statements of operations, balance sheets, and cash flows Summary of Financial Results Q1 2024 results show revenues of $11.6 million and a net loss of $10.0 million, a decline from the prior-year quarter Q1 2024 vs Q1 2023 Financial Summary (U.S. Dollars in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenues | 11,559 | 23,880 | | Gross Profit | 6,815 | 15,793 | | Net Loss | (10,042) | (5,377) | | Non-GAAP Gross Margin | 62.0% | 67.2% | | Adjusted EBITDA Loss | (7,069) | (2,858) | | Non-GAAP Loss Per Share | $(0.06) | $(0.03) | Condensed Consolidated Statements of Operations Q1 2024 operations resulted in an operating loss of $11.3 million and a net loss of $10.0 million from $11.6 million in revenue Statement of Operations Highlights (U.S. Dollars in thousands) | Line Item | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | REVENUES | 11,559 | 23,880 | | GROSS PROFIT | 6,815 | 15,793 | | Research and development expenses | (10,145) | (13,960) | | TOTAL OPERATING EXPENSES | (18,104) | (22,852) | | OPERATING LOSS | (11,289) | (7,059) | | NET LOSS | (10,042) | (5,377) | | BASIC AND DILUTED NET LOSS PER SHARE | $(0.10) | $(0.05) | Condensed Consolidated Balance Sheets The company's balance sheet shows total assets of $171.3 million and total shareholders' equity of $158.2 million as of March 31, 2024 Balance Sheet Highlights (U.S. Dollars in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents & short-term deposits | 139,787 | 142,020 | | Inventories | 12,489 | 13,836 | | TOTAL CURRENT ASSETS | 166,165 | 174,694 | | TOTAL ASSETS | 171,277 | 180,558 | | TOTAL LIABILITIES | 13,125 | 16,254 | | TOTAL SHAREHOLDERS' EQUITY | 158,152 | 164,304 | Condensed Consolidated Statements of Cash Flows Net cash used in operations improved significantly to $1.4 million, while cash and equivalents increased to $35.1 million in Q1 2024 Statement of Cash Flows Summary (U.S. Dollars in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | (1,390) | (8,669) | | Net cash provided by investing activities | 19,109 | 3,277 | | Net cash provided by financing activities | 126 | 928 | | INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 17,839 | (4,535) | | CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 35,100 | 15,489 | Reconciliation of GAAP to Non-GAAP Financial Measures This section details the reconciliation of GAAP to non-GAAP financial measures, including Adjusted EBITDA and Non-GAAP Loss per Share Reconciliation of Net Loss to Adjusted EBITDA The company reconciled its Q1 2024 GAAP Net Loss of $(10.0) million to an Adjusted EBITDA Loss of $(7.1) million Reconciliation of Net Loss to Adjusted EBITDA (U.S. Dollars in thousands) | Line Item | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net Loss | (10,042) | (5,377) | | Stock-based compensation expenses | 3,764 | 3,822 | | Depreciation | 456 | 379 | | Financial income, net | (1,234) | (191) | | Adjusted EBITDA Loss | (7,069) | (2,858) | Reconciliation of GAAP to Non-GAAP Loss Per Share The Q1 2024 GAAP Loss per Share of $(0.10) was reconciled to a Non-GAAP Loss per Share of $(0.06) GAAP to Non-GAAP Loss Per Share Reconciliation (Q1 2024) | Metric | Amount (in thousands, except per share) | | :--- | :--- | | GAAP Net Loss | $(10,042) | | Adjustments (Stock comp, Depreciation, etc.) | $4,195 | | Total Non-GAAP Loss | $(5,847) | | GAAP Loss per Share | $(0.10) | | Non-GAAP Loss per Share | $(0.06) |