Vuzix(VUZI) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Overview Vuzix's Q2 2025 performance overview, including CEO's strategic highlights and key financial metrics CEO's Strategic and Operational Highlights Vuzix CEO Paul Travers highlighted key achievements in Q2 2025, including receiving the second $5 million Quanta tranche, achieving volume shipments of waveguides to a tier-1 OEM customer, introducing the LX1 enterprise smart glasses for warehousing and logistics, and growing revenue by 19% year-over-year while decreasing cash operating expenses by 26% - Received the second $5 million Quanta investment tranche, bringing Quanta's total investment to $15 million out of a planned $20 million[3] - Achieved an important OEM business milestone by shipping waveguides in volume to the first tier-1 OEM waveguide customer[3] - Finalized and introduced the LX1 enterprise smart glasses, with initial customer sampling underway and production rollout scheduled before year-end, targeting the warehousing and logistics industry[3] Q2 2025 vs Q2 2024 Performance Metrics | Metric | Q2 2025 vs Q2 2024 | | :----------------------- | :----------------- | | Revenue Growth | +19% YoY | | Cash Operating Expense | -26% YoY | Second Quarter 2025 Financial Results Detailed financial results for Q2 2025, including condensed statements of operations and performance analysis Condensed Consolidated Statements of Operations Vuzix reported its condensed unaudited Consolidated Statements of Operations for Q2 2025, showing a 19% increase in total sales year-over-year, but also a larger gross loss. Net loss significantly improved from $40.6 million in Q2 2024 to $7.7 million in Q2 2025, largely due to the absence of a significant impairment charge and reduced operating expenses Condensed Consolidated Statements of Operations ($000s except per share amounts) | Metric ($000s except per share amounts) | Q2 2025 | Q2 2024 | Change ($000s) | | :------------------------------------- | :------ | :------ | :------------- | | Sales of Products | 1,045 | 601 | +444 | | Sales of Engineering Services | 250 | 491 | -241 | | Total Sales | 1,296 | 1,093 | +203 | | Total Cost of Sales | 2,057 | 1,426 | +631 | | Gross Profit (Loss) | (761) | (333) | -428 | | Research and Development | 2,571 | 2,359 | +212 | | Selling and Marketing | 1,353 | 2,238 | -885 | | General and Administrative | 2,757 | 4,492 | -1,735 | | Depreciation and Amortization | 413 | 1,188 | -775 | | Impairment of Licenses, Patents & Trademarks | - | 30,120 | -30,120 | | Loss from Operations | (7,855) | (40,730) | +32,875 | | Total Other Income (Expense) | 189 | 118 | +71 | | Net Loss | (7,666) | (40,612) | +32,946 | | Loss per Common Share | (0.10) | (0.62) | +0.52 | Detailed Financial Performance Analysis Vuzix's Q2 2025 financial performance showed a 19% revenue increase driven by product sales, particularly M400 smart glasses. However, gross loss widened due to inventory obsolescence and manufacturing overhead. Operating expenses significantly decreased, primarily from reduced S&M and G&A costs, leading to a substantial reduction in net loss and improved cash flow from operations - Total revenues increased by 19% to $1.3 million in Q2 2025, up from $1.1 million in Q2 2024, primarily due to higher product sales, specifically increased unit sales of M400 smart glasses[5] - Gross loss increased to $0.8 million in Q2 2025 from $0.3 million in Q2 2024, attributed to further reserves for inventory obsolescence and increased unapplied manufacturing overhead costs[6] - Research and Development (R&D) expense increased by approximately 9% to $2.6 million, mainly due to a $0.3 million increase in external development costs for new products[7] - Selling and Marketing (S&M) expense decreased by approximately 40% to $1.4 million, driven by a $0.5 million decline in salary and benefits (due to headcount reductions) and a $0.3 million decrease in bad debt expense[8] - General and Administrative (G&A) expense decreased by approximately 39% to $2.8 million, largely due to a $2.0 million decline in non-cash stock-based compensation related to the 2024 cash salary reduction program, which ended on April 30, 2025[9] - Net loss significantly improved to $7.7 million ($0.10 per share) in Q2 2025, compared to a net loss of $40.6 million ($0.62 per share) in Q2 2024[10] - Net cash flows used in operating activities improved to $4.7 million in Q2 2025 from $5.6 million in Q2 2024. The company maintained $17.5 million in cash and cash equivalents and a positive working capital of $20.3 million as of June 30, 2025[10] Management Outlook and Strategic Initiatives Vuzix's strategic vision, market opportunities, and operational priorities for future growth and product development Strategic Vision and Market Opportunities Vuzix sees growing market momentum for AI-enhanced wearable solutions, believing it is uniquely positioned to capitalize on the convergence of AI and AR technologies. The company anticipates securing additional design wins for ODM/OEM products in consumer and enterprise AI smart glasses markets, aiming for long-term recurring revenue streams - The market is gaining momentum for AI-enhanced wearable solutions, and Vuzix is uniquely positioned to capitalize as AI and AR technologies converge[11] - Confident in securing additional design wins for new ODM/OEM products targeting both consumer and enterprise AI smart glasses markets[12] - These design wins are expected to evolve into long-term recurring revenue streams, either through supplying optical waveguides and display engines or creating co-branded AI smart glasses[12] Operational Priorities and Product Roadmap Vuzix ended Q2 2025 with sufficient capital and expects to receive the final $5 million Quanta investment. The company plans to expand its work in the defense sector, drive enterprise customer engagements with measurable productivity gains, and anticipates follow-on smart glasses orders to reduce inventory before the LX1 product rollout for warehousing and logistics by year-end - Ended June 2025 with the necessary capital resources to execute the current operating plan and anticipates receiving the final $5 million Quanta investment after meeting all manufacturing and performance milestones[12] - Goal to expand work in the defense sector with existing and new prime contractors, leading to additional custom design-ins and accelerating scaled production orders[12] - Seeing growing enterprise customer engagements and measurable successes, supported by substantial usage data demonstrating significant productivity gains, driven by leading enterprise ISV applications and the Vuzix Solutions platform[12] - Anticipated follow-on orders for smart glasses this year are expected to further reduce existing inventory levels and convert finished goods into cash, paving the way for a smooth rollout of the next-generation LX1 product for warehousing and logistics before year-end[12] Additional Corporate Information Supplementary corporate details including conference call information, company overview, forward-looking statements, and investor contacts Conference Call Information Vuzix scheduled a conference call for August 14, 2025, at 4:30 p.m. ET to discuss Q2 2025 operational and financial highlights, with CEO Paul Travers and CFO Grant Russell participating. Details for live access and a 30-day telephonic replay are provided - Conference call held on Thursday, August 14, 2025, at 4:30 p.m. Eastern Time (ET)[13] - Participating on the call are Vuzix' Chief Executive Officer and President Paul Travers and Chief Financial Officer Grant Russell[13] - A telephonic replay will be available for 30 days, starting on August 14, 2025, at approximately 5:30 p.m. (ET)[14] About Vuzix Corporation Vuzix Corporation is a leading designer, manufacturer, and marketer of AI-powered Smart Glasses, Waveguides, and Augmented Reality (AR) technologies for enterprise, medical, defense, and consumer markets. The company holds over 450 patents and has received numerous innovation awards since its founding in 1997 - Vuzix is a leading designer, manufacturer, and marketer of AI-powered Smart Glasses, Waveguides, and Augmented Reality (AR) technologies, components, and products[15] - Products serve enterprise, medical, defense, and consumer markets, including head-mounted smart personal displays, wearable computing devices, and OEM waveguide optical components and display engines[15] - The Company holds more than 450 patents and patents pending and numerous IP licenses in relevant fields[15] - Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, and Kyoto and Okayama, Japan[15] Forward-Looking Statements Disclaimer This section advises readers that the news release contains forward-looking statements regarding future product releases, market opportunities, R&D success, revenue, operating results, and industry leadership. It cautions against undue reliance on these statements, which are based on beliefs and assumptions as of the release date and subject to risks detailed in SEC filings, and disclaims any obligation to update them - The news release contains "forward-looking statements" as defined by the Securities Litigation Reform Act of 1995 and applicable Canadian securities laws[16] - These statements relate to, among other things, new product releases, market opportunities, R&D project successes, smart glasses pilot to roll-out conversion rates, OEM programs, future revenue and operating results, and the Company's leadership in the Smart Glasses and AR display industry[16] - Readers should not place undue reliance on such statements, which are based on the Company's beliefs and assumptions as of the release date and subject to risk factors detailed in SEC filings[16] Investor Relations Contact Contact information for investor relations is provided, including the name, title, email, and phone number of the Director of Investor Relations, Ed McGregor, along with the company's address and general investor email - Investor Relations Contact: Ed McGregor, Director of Investor Relations, Vuzix Corporation[17] - Contact details: ed_mcgregor@vuzix.com, Tel: (585) 359-5985[17] - Company address: Vuzix Corporation, 25 Hendrix Road, West Henrietta, NY 14586 USA. Investor Information email: IR@vuzix.com[17]