• Valens Semiconductor (VLN) recently announced its second quarter 2022 results. Those are the details.

Valens Semiconductor (VLN) recently announced its second quarter 2022 results. Below are the highlights.

Financial and Business Highlights

– Record quarterly revenue of $22.5 million, up 28.4% from Q2 2021 and 4.0% from Q1 2022

– Q2 2022 GAAP gross margin was 70.2% versus 71.2% in Q2 2021 (non-GAAP gross margin was 71.0% versus 71.1% in Q2 2021)

– GAAP net loss for the second quarter of 2022 was ($10.0) million, which included net finance charges of $3.6 million, primarily due to the devaluation of the cash balance linked to the Israeli shekel, compared to a net loss of (3.7) million dollars in the second quarter of 2021, and adjusted EBITDA loss in the second quarter was (4.5) million dollars, compared to (2.1) million in the second quarter of 2021

– Strong balance sheet with working capital of $168.3 million and $156.8 million in cash, cash equivalents and short-term deposits as of June 30, 2022

– Automotive: 2022 automotive revenues are on track to double from 2021 – Continue to progress in the evaluation of the company’s new MIPI A-PHY VA7000 chipsets, as more than 30 OEMs, Tier 1 and Tier 2 evaluate this product for ADAS and surround view applications

– Audio-Video: Substantial demand for VS3000, Valens Semiconductor’s new family of audio-video products, from Tier 1 customers in many geographies. Crestron Electronics has announced a full suite of more than 24 professional audio-video (ProAV) products powered by the VS3000 for use in business, education and more. This adds to the multiple VS3000-based products already introduced by Crestron – interest in the company’s technology in the medical field continues to grow. Introducing a connectivity solution with Würth Elektronik for medical imaging in unprecedented resolution that meets stringent medical isolation specifications

KEY QUOTES:

“In the second quarter of 2022, Valens Semiconductor recorded its highest quarterly revenue ever of $22.5 million, up 28.4% from the second quarter of 2021, as we continue to address growing customer demand in our audio-video and automotive markets. In audio video, the key trends we’re seeing are the shift to higher resolutions and the growing demand for high-bandwidth video connectivity and camera imaging extensions, as organizations aim to improve and optimize the transmission of content. It is clear that our audio-video distribution technology will continue to play an important role in areas such as work, education, medicine, government and others. In our automotive segment, revenue from our VA6000 of Mercedes Benz cars continues to climb. We have made great strides in our truck backup camera project with Stoneridge, which will integrate our VA6000 chipsets into a safety connectivity solution. With a significant number of potential automotive customers and partners looking to integrate our VA7000 chipsets to support Advanced Driver Assistance Systems (ADAS) into their platforms, we believe we are well on our way to winning design contracts by mid-2023.”

“Given our better-than-expected first half and our visibility into the second half of 2022, we are increasing our revenue, gross margin and adjusted EBITDA guidance for the full year. Thanks to our continued conversations with from potential customers and partners, we learn more about their priorities, plans and timeline for using our current and next-generation solutions.To match their roadmaps, we recently realigned and optimized our automotive R&D efforts for the next two years, which we believe will also help achieve Adjusted EBITDA breakeven by the end of 2023. Now more than ever, Valens Semiconductor is well positioned to create long-term value for our stakeholders.

– Gideon Ben-Zvi, CEO of Valens Semiconductor

On the financial perspectives

“The second quarter of 2022 came in above the upper end of our guidance, marking a strong first half for the year and positioning us for a better than originally expected 2022.”

“For the third quarter of 2022, revenue is expected to be between $22.5 million and $22.8 million. Gross margin is expected to be between 65.4% and 66.1%, and Adjusted EBITDA loss is expected to be between ($6.2) and ($5.6) million.

“We are also increasing our full-year 2022 revenue, gross margin and adjusted EBITDA guidance. The company now expects revenue to be between $89.1 million and $89 million. $8 million, up from the previous range of $86.5-88.0 million. Most of this increase is attributed to audio-video, while automotive revenue essentially doubled from full year 2021. Gross margin is expected to be between 68.0% and 68.5%, up from the previous range of 66.0% and 67.3%. Adjusted EBITDA loss is expected to be between ($25.7) million and ($24.3) million, significantly better than our previous guidance of ($37.2) million to ($35.5) million dollars, due to higher-than-expected revenues and improved gross margin. Additionally, we expect to continue to benefit from a strong dollar on our Israeli shekel spending. Finally, we have refined our automotive R&D focus for the next two years on products that support sensor-ECU connectivity. This will allow us to slow the pace of hiring and reduce our investments in automotive R&D without affecting revenue opportunities or altering our longer-term technology roadmap.

“We expect to break even in Adjusted EBITDA by the end of next year as the modest increase in R&D spending in 2023 from the reduced level in 2022 will be offset by expected revenue growth. from one year to the next.”

– Dror Heldenberg, CFO of Valens Semiconductor