Valens Semiconductor Ltd. · NYSE:VLN
Valens Semiconductor — Investor Day (December 2024)
41 slides from Valens Semiconductor's investor day presentation, Dec 23, 2024
Slide 1: Welcome to Valens Semiconductor's 2024 Investor Day
Welcome to Valens Semiconductor’s 2024 Investor Day 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation (this "Presentation") are “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
Slide 3: GAAP and non-GAAP Measures
GAAP and non-GAAP Measures This presentation includes GAAP and non-GAAP measures. Non-GAAP Gross Margin is defined as GAAP Gross Profit excluding share-based compensation, depreciation and amortization expenses, divided by revenue. Non-GAAP Operating Expenses is defined as GAAP Operating Expenses ex
Slide 4: The High-Performance Connectivity Company
The Highest Bandwidth High-speed connectivity for a variety of applications, with no latency. The High-Performance Connectivity The Longest Reach Unprecedented flexibility for system Company Design over the simplest wiring infrastructure. The Lowest Error Rate Reliable, error-free connectivity for S
Slide 5: The Pain Points of Wired Connectivity
The Pain Points of Wired Connectivity Too many cables Distance limitations Video resolution At our homes, offices, Extended reach Handling high-throughput, plants & vehicles compromises signal time-sensitive content integrity transmission Rough environments High costs Installation complexity EMC, EM
Slide 6: Select Customers & Products Empowered by Valens
Select Customers & Products Empowered by Valens Digital Video Entertainment Education Industrial Medical Automotive Signage Conferencing
Slide 7: Sticking to our CORE
Sticking to our CORE The Valens Edge: A DSP-Based Approach to Error Handling Backed by 120+ Patents Valens delivers the most optimized connectivity solutions for long-reach, high-resolution video. We provide superior performance wherever others can’t.
Slide 8: The Valens Difference: Best-in-class EMC Performance
The Valens Difference: Best-in-class EMC Performance Legacy connectivity solutions are Valens’ unique approach to noise handling RESTRICTED by noise, forcing OEMs to: LIBERATES Customers, offering them: ▪ Scalable Bandwidth ▪ Reduce bandwidth ▪ Simple Wiring ▪ Deploy expensive wiring ▪ Long-reach ▪
Slide 9: Our Strategy for Growth
Our Strategy for Growth Leveraging our Core to Advance Existing Verticals and Transform New Ones 1 Established Leadership Pro-AV 2 Transforming New Markets 3 Mergers & Acquisitions Video Conferencing Video Conferencing $350M Changing the Way We Work, TAM by 2028/29 Learn and Live Automotive Automoti
Slide 10: Spotlight on Pro-AV Success
Spotlight on Pro-AV Success Valens Created the Leading Industry Standard and Largest Interoperable Ecosystem Founding Members ▪ Inventor of HDBaseT technology – an audio-video industry standard ▪ Co-Founder of the HDBaseT Alliance, with Samsung, LG and Sony Pictures. Over 200 members developing HDBa
Slide 11: Video Conferencing: Changing the Way We Work, Learn and Live
Opportunity Video Conferencing: Spotlight Changing the Way We Work, Learn and Live Total Addressable Market (TAM)1 Market Drivers $400 ▪ New AI era of intelligent meeting experiences, led by $350 Microsoft Teams and Zoom $300 ▪ Democratization of video conferencing for remote and in-room participant
Slide 12: A group of people in a room Description automatically generated
A group of people in a room Description automatically generated
Slide 13: Spotlight on Automotive Success
Spotlight on Automotive Success Enabling State-of-the-Art Infotainment Systems In Mercedes-Benz Vehicles ▪ On the road with Mercedes since 2020 ▪ The only multi-gig connectivity over unshielded cabling (UTP) Providing Unprecedented Visibility to Truck Drivers Around the World ▪ Exceptional combinati
Slide 14: Automotive OEMs have called for a global standard for sensor connectivity
Technological Superiority Automotive OEMs have called for Data Rate Sensor Integration a global standard for next- generation sensor connectivity. That standard is MIPI A-PHY.. Noise Product Immunity/ Maturity EMC ▪ Best-in-class EMC performance ▪ Clear roadmap to ultra-high bandwidth Security Ecosy
Slide 15: A-PHY Ecosystem
A-PHY Ecosystem Platform Vendors Camera & Radar Module Vendors thinCAM NCM25-AC A-PHY FSC300 train camera module e-mirror A-PHY camera SAC8539 & SAC8904 SoCs Huashan-2 ADAS platform head A1000 L ADAS Platform FSM:GO A-PHY 4D A-PHY A-PHY camera modular radar modules platform SoCs supported by EyeQ A-
Slide 16: Automotive: The Foundation for Next-Gen ADAS & Autonomous Systems
Opportunity Automotive: The Foundation for Next-Gen Spotlight ADAS & Autonomous Systems Total Addressable Market (TAM)1 Market Drivers $5,000 ▪ Race towards higher levels of ADAS and Software-Defined $4,500 Vehicles, leading to: $4,000 ▪ Increasing number of high-resolution sensors $3,500 ▪ Complex,
Slide 17: The MIPI A-PHY Ecosystem
5 nas ™M mobileye" UW) sanz SONY Wratens veunkTeon wemee THE MIPIA-PHY ECOSYSTEM awanrest Ss cadence’ SPACE Oetee intel foundry omaxyy /¥ NetVision nextchip Tektronix @ Truzchip
Slide 18: Spotlight on Industrial & Medical Success
Spotlight on Industrial & Medical Success Industrial PCs and Panels Valens New Market Enablers Medical Imaging Leveraging our Automotive and ProAV Chipsets The combination of Machine Vision trends and Valens’ new offering represents a unique opportunity for the company to expand its customer base in
Slide 19: Industrial Machine Vision: Advancing Vision-Driven Automation
Opportunity Industrial Machine Vision: Spotlight Advancing Vision-Driven Automation Total Addressable Market (TAM)1 Market Drivers $500 ▪ Rise of machine vision due to: $450 ▪ Increased factory automation addressing workforce $400 shortage and increased cost of labor $350 ▪ Tighter inspection regula
Slide 20: Scott Reardon, CEO – D3 Embedded
WWvalens NYSE (VLN) 2024 Investor Day Scott Reardon, CEO D3 Embedded
Slide 21: Single-use Medical: An Industry on the Verge of Transformation
Opportunity Single-use Medical: An Industry on Spotlight the Verge of Transformation Total Addressable Market (TAM)1 Market Drivers ▪ Disposable endoscopes eliminate risk of infection (#2 health hazard, 2024, ECRI) ▪ Sterilization is timely, expensive and generates toxic waste (ESG) 50% 125 million
Slide 22: One Technology. Infinite Possibilities.
One Technology. Infinite Possibilities. VS100 Series VS2000 Series VA6000 Series VS3000 Series VA7000 Series VS6320 Chip Breakthrough chipset for Addition of USB opens First automotive-grade The only uncompressed The first MIPI A-PHY The market’s only ProAV, offering the first new applications for c
Slide 23: Financial Overview & Guidance
Financial Overview & Guidance 23
Slide 24: Growth Opportunities
Revenues $100 $90.7 $90 $84.2 Growth Opportunities $16.2 $80 $70.7 $70 $26.8 $7.9 $60.0 $56.9 $60 $1.0 Millions $50 $2.1 $41.2 $40 $74.5 $62.8 $16.6 $30 $59 $54.8 $57.4 $41.2 $20 $24.6 $10 $0 2019 2020 2021 2022 2023 YTD Sep 2024 2029 2024 Guidance: $57.2-$57.5 Million Audio-Video Automotive Audio-V
Slide 25: Revenues
Revenues $30 Annual Quarterly $25 $24.2 $23.5 $23.9 $23.1 $100 $22.5 $21.6 $21.9 $90.7 $20.7 $3.5 $3.7 $90 $84.2 $4.1 $20 $19.1 $7.5 $8.7 $2.2 $16.2 $4.9 $6.1 $80 $17.5 $2.0 $16.0 $70.7 $70 $26.8 $2.0 $7.9 $15 $60.0 $14.2 $13.6 $60 $56.9 $13.4 $1.0 Millions Millions $1.7 $11.6 $6.6 $50 $2.1 $4.5 $5.
Slide 26: Gross Margin
Gross Margin Annual Revenues Per Segment Gross Margin Per Segment Company’s Gross Margin (% of total revenue) 1.7% 3.7% 11.2% 17.9% 31.8% 40.3% 100% 79.0% 76.4% 80% 80.8% 71.6% 69.9% 79.5% 77.9% 78.4% 77.1% 98.3% 73.9% 62.5% 96.3% 58.8% 88.8% 82.1% 60% 68.2% 59.7% 40% 36.2% 30.7% 31.1% 20% 21.2% -26
Slide 27: Revenue Diversity Across Customers
Revenue Diversity Across Customers FY-2023 Total Number FY-2023 | 197 YTD SEP 2024 of Customers YTD Sep 2024 | 179 Customer A 16% Customer A 17% Other Other 34% 35% Customer B 6% Customer B 11% Customer C 8% Customer C 8% Customer D 8% Customer D Customer H Customer E Customer H 8% 7% 1% 5% Customer
Slide 28: Key Financial Data
Key Financial Data YTD SEP US$ Millions Annual 2023 Q1-2024 Q2-2024 Q3-2024 2024 Company $84.2 $11.6 $13.6 $16.0 $41.2 Revenue Audio-Video $57.4 $7.2 $8.1 $9.4 $24.6 Automotive $26.8 $4.4 $5.5 $6.6 $16.6 Company 62.5% 59.0% 61.4% 56.4% 58.8% GAAP Gross Margin % Audio-Video 77.1% 77.2% 75.4% 70.2% 73
Slide 29: Cash Balance, Inventory Level, Working Capital
Cash Balance1 Inventory Level Working Capital2 200 180 174.4 30.0 200.0 160 148.4 183.3 142.0 180.0 133.1 163.7 158.8 140 25.0 23.8 160.0 120 140.0 136.1 20.0 100 120.0 Millions Millions Millions 80 15.0 13.8 100.0 11.7 80.0 60 9.3 10.0 60.0 40 40.0 5.0 20 20.0 - - - 1 Cash Balance is defined as cas
Slide 30: Sales & Product Life Cycle
Sales & Product Life Cycle Pro AV 6 6-9 36-60 Months 0 12 24 36 48 60 72 84 96 108 120 Industrial Machine Vision 6-12 9-12 60-72 Months 0 12 24 36 48 60 72 84 96 108 120 Automotive 12-18 24-30 60-72 Months 0 12 24 36 48 60 72 84 96 108 120 Evaluation Process Customers Product Development Customers P
Slide 31: Long Term Growth Drivers
ADAS Deployment Long Term Growth Drivers & Single Use Endoscopy CAGR ~30% - ~40% Automotive Potential Non-Organic ▪ ADAS Initial Upside Growth Ramp Up ▪ Infotainment ▪ Long Vehicles Industrial $220-$300 ▪ Potential Machine Million Acquisitions Vision Pro AV ▪ Machine Vision ▪ Industrial ▪ Medical ▪
Slide 32: Long-Term Financial Goals – Pro AV
Long-Term Financial Goals – Pro AV Revenue $90-$100 Ramp up from 2025 Gross Margin 65%-75% Millions $31.8-$32 1 Assumptions: ▪ End of inventory digestion cycle ▪ Adoption of the VS6320, mainly in the video conferencing vertical ▪ Growth of the video conferencing market – hybrid work and education 20
Slide 33: Long-Term Financial Goals – Industrial Machine Vision
Long-Term Financial Goals – Industrial Machine Vision Revenue $35-$50 Millions Ramp Up from 2026-2027 Gross Margin 55% - 65% Assumptions: ▪ Adoption of the VS6320 and the $1 VA7000 in the Industrial Machine Vision Market 2024 2029 Guidance
Slide 34: Long-Term Financial Goals – Automotive
Long-Term Financial Goals – Automotive Revenue $65-$110 Millions Ramp Up from 2027-2028 Gross Margin 35% - 45% $21.4-$21.5 Assumptions: ▪ Commercialization of ADAS based models ▪ Adoption of the A-PHY standard 2024 2029 Guidance
Slide 35: Mergers and Acquisitions
Mergers and Acquisitions M&A Strategy Recent Acquisition Pioneer in advanced automation and control technologies Applications: Highly Flexibility to Synergistic selective move quickly opportunities Industrial Robotic Audio-Video control-systems conference rooms $133 million cash to execute on our M&
Slide 36: Long Term Financial Goals - Summary
Long Term Financial Goals - Summary Revenue Revenue Ramp Up Gross Margin (Millions) (Millions) 2024 2029 Year Profile Pro AV $31.5-$31.6 $90–$100 2025 65%-75% Industrial Machine Vision $1.0 $35–$50 2026-2027 55%-65% Automotive – $21.4-$21.5 $65–$110 2027-2028 35%-45% Infotainment, ADAS, Long Vehicle
Slide 37: 2025 Guidance and Goals
2025 Guidance and Goals Welcome to Revenue GuidanceValens Semiconductor’s ProAv Industrial Machine $71-$76 Million 2024 Investor Day Partial recovery from the Vision ~25%-33% YoY growth inventory digestion cycle Design Wins Adoption and announcements based commercialization of on the VS6320 and VS63
Slide 38: Recent M&A Deal In The Industry
Recent M&A Deal In The Industry AVIVA Links* Valens Semiconductor Latest News: Company 4 years, ~50 employees, private 17 years, 260 employees, > 40 million chips sold, Publicly an all-cash transaction Traded valued at $242.5 million Technology ASA, new SERDES standard. Was HDBaseT, MIPI A-PHY Stan
Slide 39: Summary
Summary Revenue Growth Diversification Design Wins Cycles Target of X 4-6 Among different Long sales and within 5 years verticals and products life cycle industries provides long term customer engagement and good visibility Profitable Business Strong Cash Balance Model Allows executing Goals: both t
Slide 40: Thank You!
Thank You! 40
Slide 41: Appendix - GAAP to Non-GAAP Reconciliation
Appendix - GAAP to Non-GAAP Reconciliation ($ thousands) Q3/24 Q2/24 Q1/24 Q4/23 Q3/23 Q2/23 Q1/23 GAAP gross margin 9,045 8,344 6,815 13,527 8,338 14,934 15,793 Depreciation and amortization 446 180 116 121 114 118 58 Share-based compensation 238 243 231 207 198 197 187 NON-GAAP gross margin 9,729