Valens Semiconductor .(VLN) - 2021 Q3 - Earnings Call Transcript

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]