Q1 2025 Blaize Holdings Inc Earnings Call
Operator: Thank you for standing by, and welcome to Blaize Inc.'s Q1 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Lana Adair, Investor Relations. Please go ahead.
Thank you for standing by and bucket two please inc's first quarter 2025 earnings conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone if your question has been answered.
And you'd like to remove yourself from the queue simply press star one again.
Today's program is being recorded.
Now I'd like to introduce your host for today's program a lot of Adair Investor Relations. Please go ahead. Thank.
Lana Adair: Thank you. Good afternoon, everyone. We appreciate you joining for Blaize's Q1 2025 earnings call. We are very pleased to be joined today by CEO Dinakar Munagala and CFO Harminder Sehmi. Before we start, we would like to remind you that the following discussion contains forward-looking statements within federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including, but not limited to, statements regarding our competitive position, anticipated industry trends, our business and strategic priorities, and our financial outlook for Q2 2025 and the full fiscal year 2025. These statements are neither promises nor guarantees and undue reliance that should be placed on them. Such forward-looking statements involve risks and uncertainties available in our SEC filings that may cause actual results to differ materially from those discussed here.
Thank you and good afternoon, everyone.
Speaker Change: We appreciate you joining for Blaze is first quarter of 2025 earnings call. We are very pleased to be joined today by CEO Gennaker, when a dollar and CFO I'm understanding it.
Speaker Change: Before we start we would like to remind you that the following discussion contains forward looking statements within federal Securities laws. All statements other than statements of historical fact are statements that could be deemed forward looking including but not limited to statements regarding our competitive position anticipated industry trends, our business and strategic priorities.
Speaker Change: And our financial outlook for the second quarter of 2025, and the full fiscal year 2025.
Speaker Change: Statements are neither promises nor guarantees an undue reliance that should be placed on them.
Speaker Change: Such forward looking statements involve risks and uncertainties available in our SEC filings that may cause actual results to differ materially from those discussed here additional information that could cause actual results to differ from the forward looking statements can be found in the risk factors section of Blazers. Most recent annual report.
Lana Adair: Additional information that could cause actual results to differ from the forward-looking statements can be found in the Risk Factors section of Blaize's most recent annual report on Form 10-K for the year ended 31 December 2024, as updated by our periodic reports filed subsequently to that 10-K. Any forward-looking statements on this conference call, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Blaize assumes no obligation to update or revise them, whether as a result of new information, future events, or otherwise, except as required by law. The following discussion contains references to certain non-GAAP financial measures. The company believes that these non-GAAP financial measures are useful to investors as supplemental operational measures to evaluate the company's financial performance.
Speaker Change: Short on Form 10-K for the year ended December 31 2000.
Speaker Change: 24 as updated by our periodic reports filed subsequently to that 10-K.
Any forward looking statements on this conference call, including responses to your questions are based on management's reasonable current expectations and assumptions as of today and Blaze assumes no obligation to update or revise them, whether as a result of new information future events or otherwise except as required by law.
The following discussion contains references to certain non-GAAP financial measures. The company believes that these non-GAAP financial measures are useful to investors as supplemental operational measures to evaluate the company's financial performance for.
Lana Adair: For a reconciliation of each of these non-GAAP financial measures to be most directly comparable to GAAP metrics, please see our website at ir.blaize.com. Details of our results and additional management commentary are available in our earnings release, which can be found on the investor relations section of our website at ir.blaize.com. This call is being audio webcast on our investor relations website, and an audio replay will be available on our website, ir.blaize.com, after the call ends. Now, we'd like to turn the call over to Dinakar Munagala, Chief Executive Officer of Blaize.
Speaker Change: For a reconciliation of each of these non-GAAP financial measures to be most directly comparable to GAAP metrics. Please see our web site at IR death blades Dot com details of our results and additional management commentary are available in our earnings release, which can be found on the investor.
Speaker Change: Relations section of our website at IR Dot plays Dot Com. Finally, this call is being audio webcast on our Investor Relations website, and an audio replay will be available on our website IR dot plays dot com after the call and now.
Speaker Change: Now, we'd like to turn the call over to dinner car when a gala chief Executive officer of place.
Dinakar Munagala: Thank you for joining us for our second earnings report as a public company. Since our last update, we're now moving from pilots to real deployment. Our large pipeline includes active late-stage programs with multiple contracts advancing from field validation into final negotiations. We've begun shipping production AI chips and systems into real-world deployments across smart city and defense sectors, with momentum fueled by new partnerships in Q1 and Q2, including C-BIST in South Korea, Turbo Federal in the US. We've also been developing a new turnkey vertical AI solution stack designed to combine our chip software and validated applications to help accelerate deployment in key sectors. We look forward to announcing this offering soon.
Speaker Change: Thank you for joining us for our second earnings report as a public company.
Speaker Change: Since our last update.
Speaker Change: We're now moving from pilots to the deployment.
Speaker Change: Our large pipeline includes active late stage programs with multiple contracts advancing from field validation into final negotiations.
Speaker Change: We have begun shipping production <unk> chips and systems into real world deployments across across smart city in different sectors.
Speaker Change: With momentum fueled by new partnerships in Q1, and Q2, including C based in South Korea Turbo federal in the U S.
Speaker Change: We've also been developing new turnkey vertical AI solution stack designed to combine our chip software and validated applications to help accelerate deployment in key sectors.
Speaker Change: We look forward to announcing this offering soon.
Dinakar Munagala: We are operating with financial discipline and a clear focus on execution, supported by a balance sheet aligned with our near-term and mid-term priorities, with feasibility to fund operations, scale customer programs, and support strategic growth through 2026. For those who are new to Blaize, we build AI processors and software that bring real-time inference to the physical world, starting with video and vision and expanding into true multimodal edge intelligence. We do this with a unique combination of energy-efficient chips and integrated software built specifically for environments where speed, power, and cost really matter. From processing satellite imagery on orbiting platforms, to fusing LiDAR and video streams for perimeter security at airports and smart cities, to enabling object detection and license plate recognition on roadside cameras and drones, our platform delivers real-time AI inference. For example, today, most cameras can see, but they cannot understand.
Speaker Change: We are operating with financial discipline, and a clear focus on execution supported by our balance sheet aligned with our near term and midterm priorities.
Speaker Change: Feasibility to fund operations scale customer programs and support strategic growth through 2026.
Speaker Change: For those who are new to Blaise we.
Speaker Change: Build AI processes and software that bring real time influence to the physical world.
Starting with video and vision and expanding into true multimodal edge intelligence.
Speaker Change: We do this with a unique combination of energy efficient chips and integrated software built specifically for environments, where speed and power in Australia.
Speaker Change: From processing satellite imagery on operating platforms to fusing lidar and video streams for perimeter security at airports and smart cities.
Speaker Change: So enabling object detection and license plate recognition on roadside cameras and drones.
Speaker Change: Our platform delivers real time AI inference.
Speaker Change: For example, today most cameras can see but they cannot understand.
Dinakar Munagala: Video systems capture enormous amount of data, but they rely on costly manual operation to make sense of what is happening. This is where Blaize leads. We don't just talk about AI, we deliver real-time deep inference for physical environments, enabling intelligence visually and contextually and reliably. In H1 2025, we moved from development to real-world deployment. In Q1, we began shipping production chips and AI accelerator cards into smart city programs. We were selected by CBIST to lead the Chungbuk Digital Innovation Hub in South Korea, delivering edge AI infrastructure for regional smart city deployments. That momentum carried forward, and now in Q2, we're executing across geographies with active engagements in key US infrastructure initiatives, expanding into South America, Asia, and Middle East. At ISC West, the largest physical security event in North America, we showcased AI-powered smart city solutions across critical applications.
Video systems capture enormous amount of data, but they rely on costly manual operation to make sense of what is happening.
Speaker Change: This is where blaze leads.
Speaker Change: We don't just talk about AI, we deliver real time deep influence for physical environments, enabling intelligence visually and contextually and reliably.
Speaker Change: In the first half of 2025, we move from development to real World deployment.
In Q1, we began shipping production chips and AI accelerator cards into smart city programs.
Speaker Change: We were selected by <unk> to lead the chamber digital innovation hub in South Korea.
Speaker Change: Delivering edge AI infrastructure.
Speaker Change: For regional Smart city deployments.
Speaker Change: That momentum carried forward and now in Q2 were executing across geographies with active engagements in key U S infrastructure initiatives expanding into South America Asia and Middle East.
Speaker Change: At ISC West the largest physical security event in North America.
Speaker Change: We showcased AI powered smart city solutions across critical applications.
Dinakar Munagala: Examples are perimeter defense, school safety, campus monitoring, and public surveillance. Adding further strength to the applications, our technology is now integrated with OrionVM and VSaaS, delivering hybrid cloud model for smart surveillance, Thrive Logic for school safety solutions, and CVEDIA for pre-trained vision AI models. This all demonstrates Blaize's ability to deliver deployable partner-validated solutions for smart infrastructure. Our diversified global pipeline includes late-stage engagements across smart infrastructure, public safety, defense, and industrial automation. Field deployments are underway and several programs are advancing into contract stage from field testing. Our partnership with Turbo Federal has already yielded an opportunity for 2025, focused on delivering trusted AI-powered inference and perimeter security in defense-critical environments, starting with video and expanding into situational awareness. We're finalizing a purchase order for Blaize-powered servers bundled with AI Studio, our orchestration software, bringing integrated compute and intelligence to customer hands.
Speaker Change: Examples are perimeter defense.
Speaker Change: Safety campus monitoring and public surveillance.
Speaker Change: Adding further strength to the applications. Our technology is now integrated with our ion beam and Dcs delivering hybrid cloud model for smart surveillance.
Speaker Change: Private logic for school safety solutions and Sylvia for pre trained.
Speaker Change: Vision AI models.
This all demonstrates blazers ability to deliver deployable.
Speaker Change: No validated solutions for smart infrastructure.
Speaker Change: Our diversified global pipeline includes late stage engagements across smart infrastructure public safety defense and industrial automation.
Speaker Change: Field deployments are underway and several programs are advancing into contract stage from field testing.
Speaker Change: Our partnership with total federal has already yielded an opportunity for 2025 focus on delivering trusted AI powered entrance and perimeter security and defense critical environments.
Speaker Change: Starting with the video and expanding into situational awareness.
Speaker Change: We are finalizing a purchase order for blaze powered <unk> bundled with dice studio, our orchestration software, bringing integrated compute and intelligence.
Speaker Change: Two customer hence.
Dinakar Munagala: In parallel, our engagement with the Ministry of Defense continues to advance towards proof of concept and field qualification phases. This momentum reflects our efforts to build trusted relationships with high-value customers through targeted engagement, strategic pilots, and solution co-development across the US, Asia, and the Middle East. Because we are finding faster procurement cycles and government-led AI initiatives, these efforts are driving deeper engagements, strengthening our pipeline, and converting into signed contracts and revenue. This traction informed how we've built our next step. Today, if you want smarter cameras or systems, it usually means stitching together parts from different vendors, which takes time, money, and technical help. Customers have made it clear that they don't just want raw components. They need ready-to-deploy solutions tailored to their use case.
Speaker Change: In parallel our engagement with the Ministry of Defense continues to advance towards proof of concept and field qualification phases.
Speaker Change: This momentum reflects our efforts to build trusted relationships with high value customers.
Speaker Change: Through targeted engagement strategic pilots and solution co development across the U S Asia and the Middle East.
Speaker Change: Because we are finding faster procurement cycles and government led AI initiatives.
Speaker Change: These efforts are driving deeper engagements.
Speaker Change: Lengthening, our pipeline and converting into signed contracts and revenue.
Speaker Change: This traction informed how we built our next step.
Speaker Change: Today, if you want smartphone cameras our systems it usually means stitching together.
Speaker Change: <unk> from different vendors, which takes time.
Speaker Change: Money and technical help customer.
Speaker Change: Customers have made it clear.
Speaker Change: They don't just want raw components.
Speaker Change: They need ready to deploy solutions tailored to their use case.
Dinakar Munagala: I'm pleased to share that I will soon be introducing a new pre-integrated vertical AI solution platform, like a ready-to-deploy turnkey AI stack in a box. Combining our energy-efficient chip architecture, integrated software, and proven applications from best-of-breed ecosystem partners. It's designed to streamline deployment and deliver faster results in key sectors like defense, smart infrastructure, and public safety. Think of it like what Apple did with the Macintosh. It wasn't just a computer, it was a complete experience, a comprehensive tool that made advanced technology accessible and usable. With this upcoming vertical AI platform, what used to take three to six months of custom integration could soon be field-ready in half the time. Early adopters are seeing up to 60% lower total cost of ownership. As we move into Q3, we anticipate sharing formal proof points and success stories from these deployments.
Speaker Change: I am pleased to share that will soon be introducing a new pre integrated vertical AI solution platform.
Speaker Change: Like ready to deploy turnkey.
Speaker Change: Jack in the box.
Speaker Change: Combining our energy efficient chip architecture.
Speaker Change: Integrated software.
Speaker Change: And proven applications from best of breed ecosystem partners.
Speaker Change: It's designed to streamline deployment and deliver faster results in key sectors like defense smart infrastructure and public safety.
Speaker Change: Think of it like what Apple did with the Macintosh.
It wasn't just a computer it was a complete experience a comprehensive tool that made advanced technology accessible and usable.
Speaker Change: With this upcoming vertical AI platform.
Speaker Change: It used to take three to six months of custom integration could soon be feel ready in half the time.
Speaker Change: And early adopters are seeing up to 60%.
Speaker Change: Lower total cost of ownership.
Speaker Change: As we move into Q3, we anticipate sharing formal proof points.
Speaker Change: And success stories from these deployments.
Dinakar Munagala: To support this shift towards solutions first approach, we're executing a dual go-to-market strategy. On one side, we work directly with high-value customers, especially in smart infrastructure and defense, where trust, integration, and long cycle deployments matter. These include engagements with defense ministries, smart infrastructure projects in Korea, and national initiatives in India. In each case, Blaize provides the platform intelligence powering critical systems in cities, transportation, defense, and public safety. On the other side, we scale through channel partners, leveraging our turnkey vertical AI platform as the foundation. These are full stack, vertical-ready offerings built in collaboration with best-of-breed edge AI application partners. For example, Videonetics in smart airports, VSBLTY in smart retail and defense, alwaysAI in mining, Thrive Logic, and CVEDIA in school safety. Each partner brings proven deployable applications. Blaize provides the compute and orchestration to run them in the field.
Speaker Change: To support this shift towards.
Speaker Change: Solutions first approach.
Speaker Change: Executing our go to market strategy.
Speaker Change: On one side, we work directly with high value customers, especially in smart infrastructure and defense.
Speaker Change: <unk> Trust integration and long cycle deployments motto.
Speaker Change: These include engagements with defense ministries.
Speaker Change: Smart infrastructure projects in Korea.
Speaker Change: And national initiatives in India.
Speaker Change: In each case Blaze provides the platform intelligence.
Speaker Change: Powering critical systems in cities transportation defense and public safety.
Speaker Change: On the other side, we scale through channel partners, leveraging our turnkey vertical AI platform as the foundation.
These are full stack vertical ready offerings built in collaboration with best of breed Agi application partners.
Speaker Change: For example video analytics and smart airports visibility in smart retail and defense, all the CIA and mining thrive.
Speaker Change: <unk> logic and <unk> 15.
Each partner brings proven deployable applications.
Speaker Change: Blaise provides the compute and orchestration to run them in the field.
Dinakar Munagala: This combined approach gives us the flexibility to serve high-touch accounts while accelerating growth across broader commercial markets. Here's where we're heading. We bring together what systems see, the real-time video and the sensor data at the edge, with what they understand, the language models running on the data. This is multimodal intelligence in action. Not just vision, not just language, but the fusion of both. Video, sensors, speech, and structured data to create context, to make decisions, and act in the physical world where it matters most. Think of it like this, small, efficient models tuned for real-world tasks, like those small language models you've been reading about. They're faster, lighter, more secure, and they don't need a data center to make sense of what's right in front of them. That's the future we're building towards, and it's already starting to take shape.
Speaker Change: This combined approach gives us the flexibility to sell high touch account, while accelerating growth across broader commercial markets.
Speaker Change: So here's where we are heading.
We bring together what system see the real time video and the census data at the edge.
Speaker Change: With what they understand.
Speaker Change: The language models running on the data.
Speaker Change: This is multimodal intelligence in action not just vision, not just language, but the fusion of book.
Speaker Change: Sensors speech and structured data to create context to make decisions and act in the physical world where it matters most.
Speaker Change: Think of it like this.
Speaker Change: Small efficient models tuned for real world tasks.
Speaker Change: Like those small language models, you've been reading about.
Speaker Change: The faster lighter more secure and they don't need a data center to make sense of what's right in front of them.
Speaker Change: That's the future we're building towards.
Speaker Change: And it's already starting to take shape. This combination of edge processing scalable software and partner driven deployment is how we deliver value to date.
Dinakar Munagala: This combination of edge processing, scalable software, and partner-driven deployment is how we deliver value today. Because what we're building at Blaize isn't just about chips or code, it's about enabling intelligence where the world needs it most, in the field, in motion, and in the moments that matter. This quarter reflects that commitment in action, from pilots to deployments, from concept to customer. We're executing with clarity and building momentum across key verticals. Thank you for your continued support. Now I'll turn it over to Harminder for the financial update.
Speaker Change: Because what we're building at Blaze isn't just about chips are cord, it's about enabling intelligence, where the world needs. It most.
Speaker Change: In the field in motion.
Speaker Change: And in the moments that matter.
Speaker Change: This quarter reflects that commitment in action from pilots to deployments from concept to customer we are executing with clarity and building momentum across key verticals.
Speaker Change: Thank you for your continued support.
Speaker Change: Now I'll turn it over to Herman for the financial update.
Harminder Sehmi: Thank you, Dinakar, and good afternoon, everyone. In Q1 2025, revenue was just over $1 million, slightly ahead of expectations, and represented shipments of our PCI cards to support smart city customers. The prior year revenue of $549,000 was largely from providing strategic consulting services to an automotive customer. The cost of revenue was $327,000 in this quarter, compared to $306,000 last year. Our company consummated a business combination and listing on Nasdaq earlier this year. Like others that have undertaken similar transactions and are listing on a major exchange, we incurred non-recurring cash transaction costs and non-cash accounting adjustments to complete the merger in this quarter. These adjustments are significant in size and can obscure or overshadow the accounting of our underlying operations.
Herman: Thank you Denny and good afternoon, everyone.
Herman: In the first quarter of 2025 revenue was just over $1 million slightly ahead of expectations.
Herman: And Ah represented shipments of our PCI cards to support Smart city customers.
Herman: The prior year revenue of $549000 was largely from providing strategic consulting services to an automotive customer.
Herman: The cost of revenue was $327000 in this quarter.
Herman: Third to $306000 last year.
Herman: Our company consummated a business combination and listing on NASDAQ earlier this year.
Herman: Like others that have undertaken similar transactions and a listing on a major exchange, we incurred nonrecurring cash transaction costs and noncash accounting adjustments to complete the merger in this quarter.
These adjustments are significant in size and can obscure our overshadow the accounting of our underlying operations.
Harminder Sehmi: I will identify and explain them to you first, and later focus on the underlying performance, which provides a better indicator of operations during this year and as we scale the business. In this quarter, our GAAP net loss was $147.6 million, after charging $109.6 million in other expenses and $39 million in operating expenses. This is compared to the GAAP net loss of $16.7 million in the prior year. Included in the other expenses of $109.6 million was a charge of $226 million, reflecting the change in the fair value of convertible notes and warrants. This was offset by a $116.5 million credit related to the fair value of the earn out liability. These two items largely net to the $109.6 million adjustment. In the prior year, other expenses of $8.4 million were primarily related to the change in fair value of the convertible notes and warrants.
Herman: I would identify and explain them to you first and later focus on the underlying performance, which provides a better indicator of operations. During this year and as we scale the business.
Herman: And this quarter, our GAAP net loss was $147 6 million.
Herman: After charging $109 $6 million and other expenses.
Herman: $39 million and operating expenses.
Herman: This is compared to the GAAP net loss of $16 7 million in the prior year.
Herman: Included in the other expenses of $109 6 million.
Herman: It was a charge of $226 million, reflecting the change in the fair value of convertible notes and warrants.
Herman: This was offset by a $116 5 million credit related to the fair value of the earn out liability. These.
Herman: These two items largely net to the $109 $6 million adjustment.
Herman: In the prior year other expenses of $8 4 million were primarily related to the change in fair value of the convertible notes and warrants both were noncash adjustments.
Harminder Sehmi: Both were non-cash adjustments. Our Q1 total operating expense of $39 million included non-recurring transaction costs of $12 million and a non-cash share-based compensation charge of $11 million. The growth in the stock-based compensation charge in the Q1 of this year, of $10.7 million, was predominantly due to the completion of our merger that triggered certain RSU vesting conditions. The resulting underlying operating expense of $15.9 million in the Q1 was up $7.6 million from the prior year, that I will now discuss in more detail now. This increase of $7.6 million related to 3 primary areas. Higher employee costs as we invested in our go-to-market and customer support capability during the year, investment in software tools and third-party IP in preparation of our next generation chip, and costs associated with preparing the company to operate in public markets.
Herman: Our first quarter total operating expense of $39 million included nonrecurring transaction costs of $12 million.
Herman: And a noncash share based compensation charge of $11 million.
Herman: The growth in the stock based compensation charge in the first quarter of this year of $10 $7 million was predominantly due to the completion of our merger that triggered certain rsum vesting conditions.
Herman: The resulting underlying operating expense of $15 9 million in the first quarter was up $7 6 million from the prior year.
Herman: With that I will now discuss in more detail now.
Herman: This increase of $7 $6 million related to three primary areas.
Herman: Higher employee costs as we invested in our go to market and customer support capability during the year.
Herman: Investment in software tools, and third party IP and preparation of our next generation chip.
Herman: And costs associated with preparing the company to operate in public markets.
Harminder Sehmi: The underlying research and development costs were $7.1 million in Q1, up from $3.9 million in the prior year. This increase of $3.2 million is primarily attributed to software tools, third-party IP, and higher employee costs to remain competitive. Our underlying selling, general, and administrative expenses for Q1, excluding depreciation and amortization, were $8.3 million, an increase of $4.5 million over the prior year Q1. This increase was due to several factors, an expansion of the sales teams globally, higher marketing costs in connection with our listing on Nasdaq, higher support function costs, including audit and legal fees, and increased insurance costs. Overall, the underlying operating expenses serve as a foundation to support our future revenue growth prospects. As a result, our adjusted EBITDA loss for Q1 2025 was $15.4 million, compared to a loss of $7.5 million in Q1 last year.
Herman: The underlying research and development costs were $7 1 million in the first quarter up from $3 9 million in the prior year.
Herman: This increase of $3 2 million is primarily attributed to software tools.
Herman: Party, IP and higher employee costs to remain competitive.
Herman: Our underlying selling general and administrative expenses for this quarter, excluding depreciation and amortization were $8 3 million.
Herman: An increase of $4 $5 million over the prior year quarter.
Herman: This increase was due to several factors and.
Herman: An expansion of our sales teams globally.
Herman: Higher marketing costs in connection with our listing on NASDAQ.
Herman: Higher support function costs, including audit and legal fees.
Herman: And increased insurance costs.
Herman: Overall, the underlying operating performance.
Herman: Foundry.
Herman: Foundation to support our future revenue growth prospects.
Herman: As a result, our adjusted EBITDA loss for the first quarter of 2025 was $15 4 million.
Herman: Compared to a loss of $7 $5 million in Q1 last year.
Harminder Sehmi: I anticipate the adjusted EBITDA to improve each quarter as we progress through 2025. Our cash and cash equivalents totaled $45 million as of 31 March this year, down from $50.2 million on 31 December 2024. Upon closing of the business combination, the company received additional equity of $15.3 million and settled $4.5 million of one-time transaction costs. Allowing for annually paid insurance and software licenses of $3 million in the quarter, the underlying cash used for operations, including for inventory, was $13.1 million. Earlier, Dinakar spoke to the scale and momentum within our current revenue pipeline. Shipments of product have commenced in Q1, and we expect that revenue should accelerate as we move through the year and into 2026. We plan to add to the growing list of new partnerships forged with selected ecosystem partners already announced.
Herman: I anticipate the adjusted EBITDA to improve each quarter as we progress through 2025.
Herman: Our cash and cash equivalents totaled $45 million as of 31 March this year down from $50 2 million on December 31 2024.
Herman: Upon closing of the business combination the company received additional equity of $15 3 million.
Herman: And settled for $5 million of one time transaction costs.
Herman: Allowing for annually paid insurance and software licenses of $3 million in the quarter the underlying cash used for operations, including four inventory was $13 1 million.
Herman: Earlier clinical spoke to the scale and momentum within our current revenue pipeline.
Herman: <unk> is a product of commenced in the first quarter and we expect that revenue should accelerate as we move through the year and into 2026.
Herman: We plan to add to the growing list of new partnerships forged with selected ecosystem partners already announced.
Harminder Sehmi: We further expect our revenue pipeline to be enhanced as we deepen collaborations with these partners and they begin to expose their end customer opportunities to us. We continue to undertake pilots and proofs of concept with customers to enable their AI workloads onto Blaize hardware. This is an essential first step in demonstrating the inherent advantages of our programmable architecture. We anticipate a faster path to production as follow-on customers in our selected verticals are quicker to adopt our solutions. Recent market developments around tariffs have prompted many companies to accelerate inventory procurement. Whilst that surge in demand could strain the supply chain for chips and finished products, we maintain close collaboration with our key vendors. Our inventory on hand, plus the projected deliveries from orders already placed, is currently expected to meet the immediate demands for the next 2 quarters.
Herman: We further expect our revenue pipeline to be enhanced as we deepened collaborations with these partners and they begin to expose their end customer opportunities to us.
Herman: We continue to undertake pilots and proof of concept with customers to enable their AI workloads onto place hardware.
Herman: This is an essential first step in demonstrating the inherent advantages of our programmable architecture.
Herman: We anticipate a faster path to production as follow on customers and our selected verticals are quicker to adopt our solutions.
Herman: Recent market developments around tariffs have prompted many companies to accelerate inventory procurement.
Herman: Whilst that surge in demand constrained the supply chain for chips and finished products, we maintain close collaboration with our key vendors.
Herman: Our inventory on hand, plus the projected deliveries from orders already placed is currently expected to meet the immediate demands for the next two quarters.
Harminder Sehmi: Together with our partners and end customers, we will continue to monitor signs of any impact to pipeline conversion from the increased macro challenges over the remaining seven months of this fiscal year. We exercise strong discipline on managing our resources and will continue to take steps to reduce our cash burn if the environment remains uncertain. In our larger revenue opportunities, our aim is to secure advanced payment commitments from customers to minimize cash tied up in working capital. I anticipate these measures taken together, plus the cash projected from revenue this year, should enable us to extend our cash runway into H1 2026. Our guidance for the next quarter ending 30 June 2025 is as follows. Revenue is projected to be in the range of $1.5 to $1.7 million. The adjusted EBITDA loss is expected to be between $13 million and $14 million.
Herman: Together with our partners and end customers, we will continue to monitor signs of any impact of pipeline conversion from the increased macro challenges over the remaining seven months of this fiscal year.
Herman: We exercised strong discipline on managing our resources and will continue to take steps to reduce our cash burn if the environment remains uncertain.
Herman: In our larger revenue opportunities. Our aim is to secure advanced payment commitments from customers to minimize cash tied up in working capital.
Herman: I anticipate these measures taken together.
Herman: The cash projected from revenue this year should enable us to extend our cash runway into the first half of 2026.
Herman: Our guidance for the next quarter ending 30 June 2025 is as follows.
Herman: Revenue is projected to be in the range of one five to $1 7 million.
Herman: The adjusted EBITDA loss is expected to be between $13 million $14 million.
Harminder Sehmi: The stock-based compensation charge is expected to be approximately $10 million, and the weighted average shares outstanding should be approximately 90 million. We are reaffirming our revenue guidance for the full fiscal year ending December 31, 2025, in the $19 million to $50 million range. Operator, can you hear me? Operator, can you hear me?
Herman: The stock based compensation charge is expected to be approximately $10 million.
Herman: And the weighted average shares outstanding should be approximately $90 million.
Herman: We are reaffirming our revenue guidance for the full fiscal year, ending December 31, 2025, and the 19 million to $50 million range.
Speaker Change: Operator can you hear me.
Herman: Yeah.
Herman: Operator can you hear me.
Operator: Yes. Ladies and gentlemen, if your question has been answered Gil, your line is open from D.A. Davidson.
Herman: Yes.
Herman: Ladies and gentlemen, if your question has been answered.
Your line is open from D. A davidson.
Gil Luria: Yes. Thank you. Good afternoon. First question is about some of these new wins, and how those are a little bit more on sizing and timing of the wins at CBIST and Turbo Federal in terms of when you expect those to come in and how can you help us quantify the size of those wins, please?
Speaker Change: Yes. Thank you good afternoon.
Speaker Change: First question is about some of these new wins.
Speaker Change: And how those are.
Speaker Change: Little bit more on sizing and timing of the winds at sea based in turbo federal in terms of.
Speaker Change: When when you expect those to come in and how how can you help us quantify the size of those events. Please.
Dinakar Munagala: Thank you for the question, Gil. These are strategic engagements for us in our chosen markets. CBIST, for example, specifically around smart cities, and Turbo Federal is around defense, primarily. It's our standard products that they would use into these verticals and combining our hardware as well as software. As we start announcing, we are, of course, as Harminder mentioned, we're negotiating contracts. We will start announcing them as we start signing them.
Speaker Change: So these are.
Bill: No. Thank you for the question Bill the visa strategic engagements for us in our chosen markets.
Speaker Change: CBS for example, specifically around smart cities.
Speaker Change: And double barrel is around defense primarily.
Speaker Change: It's our standard products that they would use.
Speaker Change: Into these verticals and combining our hardware as well as software and as we start announcing.
Speaker Change: We have put the negotiating as had been mentioned renegotiating.
Speaker Change: Contracts as we.
Speaker Change: We will start announcing them as we can start finding them yeah. The only thing I would add is that they range in size from the low millions to tens of millions over a period of time. So the start point is towards the end of this year for some of them, but they extend our pipeline into 2026.
Harminder Sehmi: Yeah. The only thing I would add is that they range in size from the low millions to tens of millions over a period of time. The start point is towards the end of this year for some of them, but they extend our pipeline into 2026.
Gil Luria: Got it. To continue on that path, can you remind us what the revenue cycle is? At what point do you recognize revenue from these different types of customers? Is it only when they turn on the new capabilities? Is it when they receive shipment? How that relates to both these customers as well as your Gulf Ministry of Defense customer.
Speaker Change: Got it and then to continue on that path can you remind us what the revenue cycle is so.
Speaker Change: At what point do you recognize the revenue.
Speaker Change: From these different types of customers is it only when <unk>.
Speaker Change: They turned on.
Speaker Change: The new capabilities is it when they receive shipment.
Speaker Change: And how that relates to both of these customers as well as your Gulf Ministry of defense customer.
Harminder Sehmi: Generally, we sell hardware. We sell solutions with our partners, which is a combination of hardware, software, and professional services. Each of those have their own revenue recognition. When we are shipping product into the customer, we recognize that revenue straight away. When it is a software license, it depends whether it is a perpetual license. As soon as that license becomes operative, then we recognize the revenue then. If it is an annual license, of course, it is spread over the period. Professional services is recognized as and when we deliver those services.
Speaker Change: So generally we sell hardware.
Speaker Change: We sell.
Speaker Change: Solutions with our partners, which is a combination of hardware software and professional services. So each of those have their own revenue recognition when we're shipping product into the customer we recognize that revenue straight away.
Speaker Change: When it is a software license it depends whether it's a perpetual license as soon as that license becomes operator, then we recognize the revenue then if it's an annual license of course, it's spread over the period.
Speaker Change: Professional services is recognized as and when we deliver those services.
Gil Luria: Got it. The last one from me is a little bit of a longer-term one. What's the update on the next generation of chips that you're planning, and how has the very rapid development in the quality and efficiency of the AI models impact what capabilities that next generation's going to have?
Got it and then the last one for me is a little bit of a longer term one.
Speaker Change: What's the update on the next generation of chips that you're planning and how has the very rapid development in the quality.
Speaker Change: And efficiency of the AI models impact what capabilities that next generation is going to have.
Dinakar Munagala: Right. First of all, we are very excited that the kind of workloads that we're seeing, and the changes that are coming about in the shrinking of AI models are a perfect fit for the existing products in the market. In addition to this, of course, this is all proving to be exactly the direction we set out as we define our next generation products. As we launch our next generation products, we will of course update them, I mean, provide an update. All in all, the key aspects of efficient inference at the edge, having complete programmability, and supporting these shrinking multi-modal AI, these are the key facets that are the growth drivers. We're seeing this live in action right now as we engage with customers and also driving our pipeline.
Speaker Change: Right. So first of all we're very excited that.
Speaker Change: The kind of workloads that we see.
Speaker Change: And the changes that are coming about in the shrinking of AI models are a perfect fit for the existing products in the market.
Speaker Change: In addition to this of course this is all proving to be.
Speaker Change: Exactly the direction, we set out.
Speaker Change: As we define our next generation products.
Speaker Change: As we launch that next edition products, we will of course update them.
Speaker Change: We provide an update but all in all the key aspects of efficient inference at the edge.
Speaker Change: Having complete programmability.
Speaker Change: Supporting these shrinking multi model. These are the key facets that are there.
Speaker Change: The growth drivers and we are seeing this live action right now as we engage with customers and also driving our pipeline.
Gil Luria: Great. Thank you.
Speaker Change: Great. Thank you.
Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question, please press star 11 on your telephone. Our next question comes from the line of Richard Shannon from Craig-Hallum. Your question, please.
Speaker Change: Thank you and as a reminder, ladies and gentlemen, if you do have a question. Please press star one on your telephone. Our next question comes from the line of Richard Shannon from Craig Hallum. Your question. Please.
Richard Shannon: Well, hi, guys. Thanks for taking my questions. Just a heads-up, my line went blank for about 3 or 4 minutes, I don't know what I missed in mostly Harminder's remarks here, but if I overlap with something, my apologies. I guess my first question is in the large contract that was announced even before the start of your SPAC closing earlier this year, you've got a bullet in your press release here about progressing through the proof of concept and field qualification stages. I know in the original announcement around this, you're hoping to have proof of concept done by last month in April. Wondering if maybe you can clarify what's going on there. Should we view this as some sort of delay? You sound like there's a deepening engagement here, I'd love to get a little more clarity on what's going on here.
Richard Shannon: Hi, guys. Thanks for taking my questions.
Richard Shannon: Just a heads up my line went blank for about three or four minutes. So I don't know if I am what.
Richard Shannon: What I missed in most of our vendors remarks here, but if I overlap with something my apologies I.
Richard Shannon: I guess my first question is in the large contract that you have there was announced even before the start of your ears back closing.
Richard Shannon: Early this year here and you've got a bullet in your press release here about progress progressing through the proof of concept in field qualification stages I know in the original announcement around this year, hoping to have proof of concept done by last month in April so.
Richard Shannon: So I'm wondering if maybe you can kind of clarify what's going on there should we view this as some sort of delay because you sound like Theres, a deepening engagement here, so I'd love to get a little clarity on what's going on here.
Dinakar Munagala: Sure. No, thank you for that. Newmont, of course, we are in constant communication with them, and we have done various proof of concepts. The exact field trial is being discussed as we speak, and everything that we've said in terms of revenue towards the end of the year, that is still good. I'll let Harminder add.
Richard Shannon: Sure. Thank you for that.
Richard Shannon: So the money of course, we are in constant communication with them and we have done various proof of concept. The exact field trial is being discussed as we speak.
Richard Shannon: And we're still.
Richard Shannon: Everything that we've said in terms of revenue towards the end of the year that is still good.
Harminder Sehmi: No, I think you've addressed it. We always signal that revenue from this contract, it's a multi-year contract, it has several use cases, and we're going to start deploying towards the end of this year. Again, it's one of those classic combinations of hardware shipments. It's got software licenses and some professional services. We expect that to extend beyond 2026 and into early 2027.
Richard Shannon: I mean the red.
Speaker Change: You've addressed it so do we.
Speaker Change: We always signaled that revenue from this contract was a multiyear contract. It has several use cases and we're going to start deploying towards the end of this year again, it's one of those classic combinations of hardware shipments, it's got software licenses and professional services.
Speaker Change: And we expect that to extend beyond 'twenty six and into early 'twenty seven.
Richard Shannon: Okay, perfect. Thanks for that. Maybe I'll touch on the pipeline here. Maybe if there's any way that you can quantify or characterize how that's improved here since the last earnings call and frankly, the beginning of the year, that'd be also helpful. Thank you.
Speaker Change: Okay perfect. Thanks for that.
Speaker Change: Maybe I'll touch on on the pipeline here, maybe if there's any way that you can quantify or characterize how that's improved here since the last earnings call and frankly at the beginning of the year that would be also helpful. Thank you.
Dinakar Munagala: Sure. When we started off, beginning of this year, based on all the customer engagement that we have, we signaled the pipeline of $400 million and the guidance. The pipeline is actually growing rapidly in two ways. First of all, once we go ahead and land a particular ISV and deliver to certain use case, that ISV's pipeline also becomes ours. They want to get us into other deals. We're actually seeing a pipeline amplification factor this way. The other part we're witnessing solid momentum is through multimodal AI. The merging of computer vision and small language models. The combination of that creates new and interesting use cases and value to end customers. We're seeing a growth based on that as well.
Speaker Change: Sure.
Speaker Change: So when we started off beginning of this year.
Speaker Change: Based on all of the customer engagement that we have.
Speaker Change: We signaled the pipeline of $100 million in the guidance.
Speaker Change: The pipeline is actually.
Growing.
Speaker Change: Rapidly.
Speaker Change: In two ways.
Speaker Change: First of all once we go ahead and land, a particular ISP and delivered to certain use case.
Speaker Change: Isps pipeline also becomes ours.
Speaker Change: They want to get it into other deals. So we are actually seeing a pipeline amplification.
Speaker Change: This weight.
Speaker Change: The other part will fitness, we're witnessing solid momentum is true multimodal AI the merging of computer vision and small language models. The combination of that creates new and interesting use cases and value to end customers. So we're seeing growth based on that.
Speaker Change: Well.
Harminder Sehmi: Yep. One thing I'll add to that is, Richard, all of this pipeline is based on our currently shipping generation of product.
Speaker Change: Yes.
Richard Shannon: One thing I'll add to that is all of Richard all of this pipeline is based on our currently shipping generation of product.
Dinakar Munagala: Yeah.
Richard Shannon: Okay. That is helpful. I am sorry, am I being cut off by the moderator here?
Richard Shannon: Okay that is helpful.
Speaker Change: I'm, sorry, my being cut off by the model.
Harminder Sehmi: No. No.
Richard Shannon: Okay, great. Well, I'll ask one more, and then I'll step out of line here. Your announcement of this partner, C-BIST in South Korea seems very interesting. I guess I'd love to understand both the strategic development cycle leading up to that announcement, and then over what time period should we expect to see some tangible financial results from this? It sounds like, if I caught your comments correctly, towards the end of the year, which I guess certainly would make sense. I guess I'd love to have you describe how that progressed to this point and where you expect it to go forward.
Richard Shannon: No.
Speaker Change: Okay, great well I'll ask one more and then I'll step out of line here.
Speaker Change: Your announcement of this partner see best in South Korea seems very interesting and I guess I'd love to understand both the.
Speaker Change: Canada development strategic development cycle, leading up to that announcement and then over what time period should we would expect to see some tangible financial results from this it sounds like if I caught your comments correctly towards the end of the year, which I guess certainly it makes sense, but I guess I'd love to help.
Speaker Change: Can you describe how that progressed at this point, where you expect it to go forward.
Dinakar Munagala: Sure. We have been engaged with them for almost a year now. There's been work behind the scenes that went in leading up to this initial announcement. There are active deployment cycles that we are discussing with them. As Harminder signaled, it is revenue towards end of the year. As we begin announcing specific projects, of course, we will set up time with you and go through specific things as well.
Speaker Change: So we have been engaged with them for almost a year now. So there has been work behind the scenes that went in leading up to this initial announcement.
Speaker Change: But they are active.
Speaker Change: Deployment cycles that we are discussing with them.
Speaker Change: And as has been the signal it is revenue towards the end of the year as we began announcing specific projects of course, we will.
Speaker Change: Setup time with you and go through specific.
Speaker Change: Things as well.
Richard Shannon: Okay, great. Well, we look forward to hearing more about that. I will jump out of line. Thank you.
Speaker Change: Okay.
Speaker Change: Okay, great well look forward to hear more about that I will jump out of line. Thank you sure.
Dinakar Munagala: Sure.
Operator: Thank you. Our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Your question, please.
Operator: Thank you and our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Your question. Please.
Kevin Cassidy: Yes. Thanks for taking my question. Yeah, my line cut out also, just as Harminder was giving the guidance. We got the revenue guidance. I saw in your press release that you're bringing your adjusted EBITDA loss down to $40 to $55 million from $70 to $75 million. Your stock-based compensation is going up. I wonder if you'd discuss that, maybe if you could repeat it just to understand what the moving parts are.
Kevin Cassidy: Yes, thanks for taking my question.
Speaker Change: Yes, My line cut out also.
Kevin Cassidy: Our vendor was giving me all.
Kevin Cassidy: Guidance.
Speaker Change: We got the revenue guidance, but I just wonder I saw in your press release.
Kevin Cassidy: You're bringing your.
Kevin Cassidy: Adjusted EBITDA loss down to 40%.
Kevin Cassidy: 55 million from $70 million to $75 million, but your stock based compensation is going up I wonder.
Kevin Cassidy: You had discussed that maybe if you could repeat it just to understand what the moving parts on it.
Harminder Sehmi: Yes. The $40 to 55 range is just reflecting our revenue range.
Kevin Cassidy: Yes. So the 42 to 55 range is just reflecting a revenue range. So it depends on which side of the map.
Kevin Cassidy: Passengers on regular flight 166.
Kevin Cassidy: I forget correctly.
Harminder Sehmi: Hello?
Kevin Cassidy: Hello.
Dinakar Munagala: Can somebody mute, please?
Kevin Cassidy: Gets up the mute please.
Harminder Sehmi: Okay, yeah. The current EBITDA range that I've guided on just reflects that revenue range. The difference between last time and this time is essentially the external costs of our next generation chip. Whilst all the work is still continuing, we are negotiating payment terms with our key vendors right now, and we expect that some of these costs will be deferred towards the end of 2025 into 2026 onwards. That's the big change.
Kevin Cassidy: Okay, Yeah. So.
Kevin Cassidy: So.
Kevin Cassidy: In the current EBITDA rates that I've guided on just reflects that revenue range. The difference between last time and this time is essentially the external costs of next generation chip and whilst all the work is still continuing we are negotiating payment terms with our key vendors right now and we expect that some of these.
Kevin Cassidy: Costs will be deferred towards the end of 2025 into 26 onwards, so thats the big change.
Kevin Cassidy: Okay.
Kevin Cassidy: The new vertical AI solution platform, that seems very interesting. You've mentioned a few times that you do have software contracts, but would this accelerate maybe shipping everything with Blaize software on it, and would it turn into a recurring revenue stream?
Kevin Cassidy: A new vertical AI solution platform.
Kevin Cassidy: That seems very interesting.
Kevin Cassidy: Is this you know you have mentioned a few times that you do have software contracts, but with this accelerate maybe shipping everything with.
Kevin Cassidy: Ladies software on it and with it.
Kevin Cassidy: Turning into a recurring revenue stream.
Dinakar Munagala: Excellent, we actually are quite excited about this. The whole vertical AI stack in a box, what it brings to the end customer is, I would say, three main aspects. The first thing is it's a hardware plus software, everything, including our software as well as partner software for specific use cases, packaged and ready to go, just like a Macintosh. You pull it out of the box and it just works. The second aspect, it helps customers, especially in the edge enterprise, they're not as AI savvy. This actually helps them from an IT spend point of view. They don't need heavy IT to deploy AI into their workflows. The third part is continuous change management and improvement. As they want to get new use cases added, it becomes seamless and easy.
Kevin Cassidy: Excellent.
Kevin Cassidy: We actually are quite excited about this.
Kevin Cassidy: <unk>.
Kevin Cassidy: The whole vertical AI stack in a box what.
Kevin Cassidy: It brings to the end customer.
Kevin Cassidy: I would say three main aspects.
Kevin Cassidy: First thing is it's it's a hardware plus software everything, including Asaf, Venezuela partner software for specific use cases packaged and ready to go just like a Macintosh you've put it out of the box and it just works.
Kevin Cassidy: The second aspect that helps customers.
Kevin Cassidy: Especially in the edge enterprise.
Kevin Cassidy: They are not as many they're not as AI savi. So this actually helps them from an IP spend point of view right. They don't need a VIP to deploy AI into their workflows.
Kevin Cassidy: The third part is continuous change management and improvement right as they want to get new use cases added it becomes seamless and easy.
Dinakar Munagala: To answer your question, yes, this does give us an opportunity to monetize our software and take part of the revenue as recurring. Did my audio come through? I think there was some crosstalk, but I hope you got my audio.
Kevin Cassidy: And to answer your question.
Speaker Change: Yes, this does give us an opportunity to monetize our software.
Kevin Cassidy: Okay.
Kevin Cassidy: As recurring.
Kevin Cassidy: Yeah.
Did my audio come through I think there was some cross talk but I hope you got my audio.
Operator: You sound loud and clear. That was just someone in the background of Kevin's line.
Speaker Change: You said ladder clear that was just someone in the background of Kevin's line.
Kevin Cassidy: Okay.
Dinakar Munagala: Okay.
Kevin Cassidy: Okay.
Operator: This does conclude the question and answer session of today's program. I'd like to hand the program back to Dinakar Munagala for any further remarks.
Speaker Change: And this does conclude the question and answer session of today's program I'd like to hand, the program back to Datacom lunar Galli for any further remarks.
Kevin Cassidy: Yes.
Dinakar Munagala: Thank you, everyone. To wrap up, Q1 was about execution, and we made real progress. We've cleared the non-cash one-time accounting items tied to the merger. What you're seeing now reflects our actual operating performance. We've moved from pilots to live deployments in smart cities, defense, national infrastructure. We were selected by C-BIST in South Korea. We're finalizing POs with Turbo Federal, and we're advancing with our anchor customers. Our commercial traction is real. Our solutions are being deployed, and our strategy is working. Looking ahead, we'll continue to update on revenue and bookings. You've been part of our journey, and we truly appreciate your support. Thanks again. We're building momentum, and we're just getting started.
Kevin Cassidy: Thank you everyone to wrap up Q1 was about execution and we made real progress.
Kevin Cassidy: We've cleared the noncash onetime accounting items tied to the merger.
Kevin Cassidy: So what youre seeing now reflects our actual operating performance.
Kevin Cassidy: We've moved from pilots to live deployments and smart cities defense National infrastructure.
Kevin Cassidy: We were selected by <unk> in South Korea.
Finalizing peers with total federal and we are advancing with our anchor customers.
Kevin Cassidy: Commercial traction Israel.
Kevin Cassidy: Our solutions are being deployed and our strategy is working.
Kevin Cassidy: Looking ahead, we'll continue to update on revenue and bookings.
Kevin Cassidy: <unk> been part of our journey and we truly appreciate your support thanks again.
Kevin Cassidy: Building momentum and we're just getting started.
Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Kevin Cassidy: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Kevin Cassidy: Okay.
Kevin Cassidy: Okay.
Kevin Cassidy: [music] okay.
Kevin Cassidy: Yes.
Kevin Cassidy: [music].
Kevin Cassidy: [music].
Kevin Cassidy: [music].