Expands leading-edge connectivity solutions in
high-growth industries
Announces long-term financial
goals
HOD HASHARON, Israel, Nov. 12,
2024 /PRNewswire/ -- Valens Semiconductor (NYSE:
VLN), a leader in high-performance connectivity, today hosted its
2024 Investor Day in New York
City. Management provided an overview of the Company's
go-forward strategy, growth drivers, product innovation plans and
announced new long-term financial goals to deliver significant
shareholder returns.
"As a leader in high-performance connectivity solutions, we are
well-positioned to meet growing global demand for faster, more
reliable video experiences," said Gideon
Ben-Zvi, Chief Executive Officer. "Our chipsets are the
hidden gems embedded inside countless devices that are
transforming the global digital experience in how we work, live and
learn every day.
"We have a tremendous growth opportunity ahead. Our growth
strategy includes leveraging our core technology to serve new
markets undergoing digital transformation, diversifying our revenue
sources and augmenting organic growth with strategic acquisitions
that will expand our market reach. We believe this strategy can
generate sustainable growth and create significant long-term value
for our shareholders."
Strategic Growth Drivers and Market Expansion
During the Investor Day presentation, Valens management outlined
its financial goals for 2029 and provided revenue guidance for
2025. Management also discussed its strategy for both organic and
inorganic growth across key verticals that have a combined total
addressable market (TAM) of approximately $5.5 billion:
- Video-Conferencing: Valens anticipates growing
demand for AI-enabled intelligent meeting solutions that deliver
high-quality video experiences for both remote and in-person
meetings. With the ongoing trend of more video peripherals and more
meeting rooms of all sizes, Valens plans to capitalize on its
high-speed connectivity solutions, including its industry-leading
USB3 extension offering. The TAM for Video-Conferencing solutions
is expected to grow to $350 million
by 2029.
- Automotive: The shift to software-defined vehicles
and advanced driver assistance systems (ADAS) represents a
significant growth opportunity for Valens. The Company recently
announced three new design wins with European automotive OEMs that
included Valens' ADAS connectivity chipsets in next-generation
vehicles starting in 2026. As vehicle technology evolves, the
demand for high-resolution sensors and real-time data processing
continues to grow. The automotive TAM is expected to reach
$4.5 billion by 2029.
- Industrial Machine Vision: Valens' chipsets address
a critical competitive need in manufacturing where companies
require advanced machine vision capabilities to enhance factory
efficiency and inspection accuracy. Valens' market-leading VS6320
and VA7000 chips, innovative video and USB connectivity solutions
will help advance the widespread adoption of industrial machine
vision. The Industrial Machine Vision TAM is expected to reach
$460 million by 2029.
- Medical: Valens has supplied chipsets to the
medical industry for many years and is now focusing on new
opportunities specific to medical endoscopies and the shift to
single-use devices for this procedure. The U.S. FDA is urging this
transition to enhance patient safety and eliminate risk factors.
Valens' chipsets offer a simple, reliable and cost-effective
solution for one-time use endoscopies that could meaningfully
expedite this important industry transition. The annual TAM for
single-use endoscopes could reach $625
million pending full regulatory approval and market
adoption.
- Acquisitions: Valens plans to augment healthy
organic growth with acquisitions of synergistic companies that are
revenue generating with a clear path to profitability mainly
in the ProAV, Industrial and Machine Vision markets. Valens' robust
balance sheet, with more than $133.1
million of cash and cash equivalents as of September 30, 2024, combined with its strong
financial discipline, positions the Company to pursue acquisitions
that align with its strategy and goals for long-term growth and
profitability.
2029 Financial Goals
"Looking ahead, we are confident in our ability to capitalize on
opportunities in both existing and new markets. With a talented
team and more than 17 years of experience delivering cutting-edge
technology, and a very strong balance sheet, we are well positioned
to execute our disciplined growth strategy and deliver long-term
value for our shareholders," concluded Ben-Zvi.
Based on these strategic initiatives, Valens Semiconductor
expects to achieve the following financial goals by the end of
2029:
- Total revenue is expected to be between $220 - $300 million
in 2029, gross margin of between 50% - 60%:
- Professional Audio-Video revenues of between $90 - $100 million
and gross margin between 65% - 75%.
- Industrial Machine Vision revenues of between $35 -$50 million
and gross margin between 55% - 65%.
- Automotive revenues of between $65 - $110 million
and gross margin between 35% - 45%.
- Acquisitions are expected to contribute revenues of between
$30 - $40
million depending on potential acquisition
opportunities.
- Adjusted EBITDA margin is expected to be between 15% - 20% in
20291
- In the following years, Valens expects:
- Significant automotive revenue scale with ADAS deployment
within existing and new OEMs.
- Potential upside from single-use endoscopy.
2025 Guidance
- Revenue guidance of $71 -
$76 million or 25% - 33% YoY
growth.
- Pro AV - Partial recovery from the inventory digestion
cycle, adoption and commercialization of VS6320 based products for
the video conferencing market.
- Industrial Machine Vision - Design win announcements based on
the VS6320 and VA7000.
- Automotive - New design wins announcements with leading
OEMs.
- Acquisitions - Identify potential synergetic acquisitions and
close at least one, assuming the Company identifies a relevant
deal.
2024 Guidance
- Revenue guidance of $57.2 -
$57.5 million.
- Audio-video revenue is expected to be between $32.8 - $33.0
million.
- Automotive revenue is expected to be between $21.4 - $21.5
million.
- Acroname's revenue is expected to be $3
million. Acroname's results shall be part of the Audio-Video
segment.
Webcast Replay
A webcast replay of today's Investor Day presentation will be
available at Valens - Investor Relations and related
presentations will remain accessible in the investor relations
section of the Company's website.
About Valens Semiconductor
Valens Semiconductor (NYSE: VLN) is a leader in high-performance
connectivity, enabling customers to transform the digital
experiences of people worldwide. Valens' chipsets are integrated
into countless devices from leading customers, powering
state-of-the-art audio-video installations, next-generation
videoconferencing, and enabling the evolution of ADAS and
autonomous driving. Pushing the boundaries of connectivity, Valens
sets the standard everywhere it operates, and its technology forms
the basis for the leading industry standards such as HDBaseT® and
MIPI A-PHY. For more information, visit
https://www.valens.com/.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"estimate," "plan," "project," "forecast," "intend," "will,"
"expect," "anticipate," "believe," "seek," "target" or other
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. These
forward-looking statements include, but are not limited to,
statements regarding our anticipated future results, including
financial results such as financial goals for 2029, potential
acquisition opportunities, currency exchange rates, and contract
wins, and future economic and market conditions. These statements
are based on various assumptions, whether or not identified in this
press release, and on the current expectations of Valens
Semiconductor's ("Valens") management and are not predictions of
actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as and
must not be relied on by any investor as a guarantee, an assurance,
a prediction or a definitive statement of fact or probability.
Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. Many actual events and
circumstances are beyond the control of Valens Semiconductor. These
forward-looking statements are subject to a number of risks and
uncertainties, including the cyclicality of the semiconductor
industry; the effect of inflation and a rising interest rate
environment on our customers and industry; the ability of our
customers to absorb inventory; competition in the semiconductor
industry, and the failure to introduce new technologies and
products in a timely manner to compete successfully against
competitors; if Valens fails to adjust its supply chain volume due
to changing market conditions or fails to estimate its customers'
demand; disruptions in relationships with any one of Valens' key
customers; any difficulty selling Valens' products if customers do
not design its products into their product offerings; Valens'
dependence on winning selection processes; even if Valens succeeds
in winning selection processes for its products, Valens may not
generate timely or sufficient net sales or margins from those wins;
sustained yield problems or other delays or quality events in the
manufacturing process of products; our ability to effectively
manage, invest in, grow, and retain our sales force, research and
development capabilities, marketing team and other key personnel;
our ability to timely adjust product prices to customers following
price increase by the supply chain; our ability to adjust our
inventory level due to reduction in demand due to inventory buffers
accrued by customers; our expectations regarding the outcome of any
future litigation in which we are named as a party; our ability to
adequately protect and defend our intellectual property and other
proprietary rights; our ability to successfully integrate or
otherwise achieve anticipated benefits from acquired businesses;
the market price and trading volume of the Valens ordinary shares
may be volatile and could decline significantly; political,
economic, governmental and tax consequences associated with our
incorporation and location in Israel; and those factors discussed in Valens'
Form 20-F filed with the SEC on February 28,
2024 under the heading "Risk Factors," and other documents
of Valens filed, or to be filed, with the SEC. If any of these
risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. There may be additional risks that
Valens does not presently know or that Valens currently believes
are immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. In addition,
forward-looking statements reflect Valens' expectations, plans or
forecasts of future events and views as of the date of this press
release. Valens anticipates that subsequent events and developments
may cause Valens' assessments to change. However, while Valens may
elect to update these forward-looking statements at some point in
the future, Valens specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as
representing Valens' assessment as of any date subsequent to the
date of this press release. Accordingly, undue reliance should not
be placed upon the forward-looking statements.
Investor Contacts:
Michal Ben Ari
Investor Relations Manager
Valens Semiconductor Ltd.
Michal.Benari@valens.com
Lisa Fortuna
Senior Vice President
Financial Profiles, Inc.
ValensIR@finprofiles.com
1 Although we provide guidance for Adjusted EBITDA
margin, we are not able to provide guidance for projected Net
profit (loss) margin, the most directly comparable GAAP measures.
Certain elements of Net profit (loss), including share-based
compensation expenses and warrant valuations, are not predictable
due to the high variability and difficulty of making accurate
forecasts. As a result, it is impractical for us to provide
guidance on Net profit (loss) margin or to reconcile our Adjusted
EBITDA margin guidance without unreasonable efforts. Consequently,
no disclosure of projected Net profit (loss) margin is included.
For the same reasons, we are unable to address the probable
significance of the unavailable information.
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