What Valens Semiconductor (VLN) Said on Its Q3 Earnings Call

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Valens Semiconductor (NYSE:VLN) reported third-quarter revenue above its guidance as automotive sales rose sharply, and outlined a strategy to expand beyond premium connectivity…

Valens Semiconductor (NYSE:VLN) reported third-quarter revenue above its guidance as automotive sales rose sharply, and outlined a strategy to expand beyond premium connectivity applications into higher-volume audio-video and automotive markets.

Revenue rose to $21.9 million from $17.3 million a year earlier, exceeding the company's forecast of $21.3 million to $21.7 million. The GAAP net loss narrowed to $5.5 million, or $0.05 per share, from $7.3 million, or $0.07 per share, in the prior-year quarter.

Chief Executive Officer Yoram Salinger said the company plans to embed its connectivity technology in more types of video conferencing equipment and sell finished connectivity products, rather than relying solely on chipset sales. In automotive, Valens is working with onsemi on a lower-cost camera solution using the MIPI A-PHY connectivity standard.

Automotive revenue reached $7.9 million, up from $4.1 million a year earlier and $5 million in the second quarter. The cross-industry business, which includes audio-video, contributed $14 million, compared with $13.2 million a year earlier.

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Chief Financial Officer Karine Pinto-Flomenboim said Valens technology is used across Mercedes-Benz passenger vehicle models, making its automotive revenue dependent on demand for those vehicles. She said the company expects revenue at the recent level to continue, subject to Mercedes-Benz demand, while noting seasonal variation between quarters.

GAAP gross margin was 62.2%, above the company's 60% to 62% guidance range but below 63% a year earlier. Automotive gross margin increased to 53.9% from 41.5% in the second quarter, primarily because of lower testing facility expenses and a change in product mix. Cross-industry gross margin fell to 66.8% from 69.2% sequentially, which Pinto-Flomenboim attributed mainly to product mix.

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