Q3 2025 Valens Semiconductor Ltd Earnings Call
Third quarter 2025 earnings conference call and webcast.
All participant lines have been placed in a listen only mode.
Opening remarks, they've learned semiconductor management will be followed by a question and answer session.
Good morning. My name is Karen and I will be your conference operator today.
I will now turn the call over to <unk> Investor relations for the lens semiconductor.
Please go ahead.
At this time, I would like to welcome everyone to Valencia semiconductors third quarter 2025 earnings conference call and webcast.
Thank you and welcome everyone to the land Semiconductor's third quarter 2025 earnings call with me today are getting Ben-zvi, Chief Executive Officer, and Guy Nothing's on Chief Financial Officer.
All participant lines have been placed in a listen-only mode.
Opening remarks, buy valent, semiconductor management will be followed by a question and answer session.
Earlier today, we issued a press release that is available on the Investor Relations section of our website under investors that's Atlanta dotcom.
Good morning. My name is Karen and I will be your conference operator. Today at this time I would like to welcome everyone to the land semiconductors third quarter 2025 earnings conference call and webcast.
All participant lines have been placed in a listen-only mode.
I will now turn the call over to Investor Relations for Valencia Semiconductor. Please go ahead.
As a reminder, today's earnings call May include forward, looking statements and projections, which do not guarantee future events or performance.
Opening remarks by Valencia, semiconductor management will be followed by a question and answer session.
Thank you and welcome everyone to Valens Semiconductor's third quarter 2025 earnings call.
These statements are subject to the Safe Harbor language in today's press release.
With me today are Gideon. Benny, chief executive officer and Guy, Nathan Chief Financial Officer.
Please refer to our annual report on form 20-F filed with the SEC On February 26, 2025 for a discussion of the factors that could cause actual results to differ materially from those expressed or implied we do not undertake any duty to revise or update such statements to reflect new information.
I will now turn the call over to me investor relations for valence semiconductor. Please go ahead.
Thank you and welcome everyone to valence semiconductors third quarter 2025 earnings call with me today are Gideon, benvi, chief executive officer and Guy, Nathanson Chief Financial Officer.
Earlier today, we issued a press release that is available on the investor relations section of our website under investors that balance.com. As a reminder, today's earning call may include forward-looking statements and projections, which do not guarantee future events or performance.
Subsequent events or changes in strategy.
These statements are subject to the safe harbor language in today's press release.
Earlier today, we issued a press release that is available on the investor relations section of our website under investors that are lens.com.
We will be discussing certain non-GAAP measures on this call, which we believe are relevant in assessing the financial performance of the business and you can find reconciliations of these metrics within our earnings release.
As a reminder, today's earning call may include forward-looking statements and projections, which do not guarantee future events or performance.
With that I will now turn the call over to Gideon.
These statements are subject to the safe harbor language in today's press release.
Thank you Nicole Hello, everyone and thank you for joining us before.
Please refer to our annual report on Form 20-F filed with the SEC on February 26, 2025, for our discussion of the factors that could cause actual results to differ materially from those expressed or implied. We do not undertake any duty to revise or update that statement to reflect new information, subsequent events, or changes in strategy.
Before we begin with the rundown before Q3 highlights I would like to take a moment to acknowledge our leadership transition as you know this would be my last earnings call as of Tomorrow, you want styling gear will assume the role of Chief Executive Officer opened in semiconductor.
Will be discussing certain non-gaap measures on this call, which we believe are relevant in, assessing the financial performance of the business and you can find reconciliations of these metrics within our earnings release.
Europe brings over 25 deals with leadership experience in global high Tech companies and a track record of driving growth innovation and successful exits.
With that, I will now turn the call over to Gideon.
Please refer to our annual report on form 20f filed with the SEC on February 26th, 2025, for a discussion of the factors that could cause actual results to differ materially from those expressed or implied. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events or changes in strategy.
Thank you m. Hello everyone. And thank you for joining us.
Stepped down from the CEO position I will continue to be a board member of the company.
We will be discussing certain non-gaap measures on this call, which we believe are relevant in, assessing the financial performance of the business and you can find reconciliations of these metrics within our earnings release.
And now let's discuss the business highlights we are pleased to report a strong third quarter well above our initial expectations.
With that, I will now turn the call over to Gideon.
Before we begin with the rundown of our Q3 highlights, I would like to take a moment to acknowledge our leadership transition as you know this will be my last earning call. As of tomorrow, your home selling gear will assume the role of Chief Executive Officer of Valencia, semiconductor.
Thank you, mhal. Hello everyone. And thank you for joining us.
We delivered revenues of $17 $3 million significantly above our guidance range of $15 $1 million to $56 million, if customer demand exceeded expectations in the Boise market, marking the sixth consecutive quarter of growth for our company.
Euron brings over 25 years of leadership experience in global high tech companies and a track record of driving growth, Innovation and successful. As I step down from the co position, I will continue to be a board member of the company.
Before we begin with the rundown of our Q3 highlights, I would like to take a moment to acknowledge our leadership transition as you know this will be my last earning call. As of tomorrow, your home selling gear will assume the role of Chief Executive Officer of Valencia, semiconductor.
Looking ahead to Q4 2025, we expect revenue to be in the range of 18 point too.
And now, let's discuss the business highlights. We are pleased to report a strong third quarter, well above our initial expectations.
$90 million setting us up for a seventh straight quarter of growth.
Euron brings over 25 years of leadership experience in global it companies and a track record of driving growth Innovation and successful exits. As I stepped down from the co position, I will continue to be a board member of the company.
For the full year of 2025, we expect revenue to be in the range of $69 million to $71 million.
And now let's discuss the business highlights. We are pleased to report a strong third quarter. Well above our initial expectations
GAAP gross margin for Q3 2025 came in at 63% better than the guidance and adjusted EBITDA loss was $4 3 million above the guidance range.
We delivered revenues of 17.3 million significantly above our guidance range of 15.1 to 15.6 million as customer demand, exceeded expectations and deploy the market marking. The 6 consecutive quarter of growth for our company. Looking ahead to Q4 2025, we expect Revenue to be in the range of 18.2 to 18.9 million setting us up for a 7 straight quarter of growth.
I'll begin our quarterly discussion with the review of our cross industry business unit, which covers industrial machine vision medical and the traditional professional audio video, where our customers have reported better than expected demand in probably we were succeeding with our strategy of first targeting high end products and allowing.
For the full year of 2025, we expect revenues to be in the range of 69.4 to 70.1 million.
We delivered revenues of 17.3 million significantly about our guidance range of 50.1 to 15.6 million as customer demand exceeded expectations in the pro market marking the 6 consecutive quarter of growth for our company. Looking ahead to Q4 2025, we expect Revenue to be in the range of 18.2 to 18.9 million dollars. Setting us up for a seventh straight quarter of growth.
The rest of the market to follow adopt.
Guidance range.
Adoption of the V. S 3000 chipset continues to grow underscoring the demand for language distribution of uncompressed full K video.
Range of 69.4 to 70.1 million.
<unk> 3000 remains the only solution available that delivers HDMI 2.0 high Fidelity audio Ethernet USB 2.0 control signal and power over single category cable at distances up to 100 meters. One notable trend in Q3.
Gap. Cross margin for Q3. 2025 came in at 63%, better than the guidance and adjusted with 4.3 million above the guidance range.
I'll begin our quarterly discussion with a review of our cross industry business unit, which covers industrial Machine Vision medical and the traditional professional audio video where our customers have reported better than expected demand employee. We are succeeding with our strategy of first targeting high-end product, and allowing the rest of the market to follow.
<unk> was the growing adoption of matrix solutions. These are increasingly being used to deliver high resolution video in command and control centers museums and life events. Several market leaders have launched state of the art markets product powered by the <unk> 3000, including X.
I'll begin our quarterly discussion with a review of our cross-industry business unit, which covers industrial Machine Vision medical and the traditional professional audio video where our customers have reported better than expected demand employee. We are succeeding with our strategy for first targeting high-end products, and allowing the rest of the market to follow.
Strong DTP three cross point premarin empty <unk>, III and the blown us okay HDI HDR sweeter.
We also had exciting news from the field regarding our USB three extension solution. The BS six to 320.
A major players that had previously been designing with the competing technology is now engaged us in for new design based on the BS six to $3 20, we expect continued strong interest in this product moving forward.
Adoption of the vs, 3,000 chipset continue to grow and underscoring the demand for longer distribution of uncompressed 4K video. The VSS 30000 Remains The Only Solution available that delivers HDMI 2.0, High Fidelity, audio ethernet, USB 2.0, control signals and power over singly category cable, at distances up to 100 m, 1 notables in Q3 was the growing adoption of Matrix Solutions. These are increasingly being used to deliver high resolution video in command and control centers, museums and Live Events. Several Market leaders have launched state-of-the-art marketing products, powered by the ds3000, including xtrons 833, Cross Point cameras, and the X3 and a Colonus. 4K HDR HDR feature.
Staying with the cross industry business unit less.
Adoption of the vs 3000 chipset continue to grow underscoring the demand for long range distribution of uncompressed 4K video. The VSS 3000 Remains The Only Solution available that delivers HDMI 2.0 High Fidelity, audio ethernet, USB 2.0, control signals and power over singly category cable at distances up to 100 m, 1 notable trains. In Q3 was the growing adoption of Matrix Solutions. These are increasingly being used to deliver high resolution video in command and control centers museums and Live Events. Several Market leaders. Have launched state-of-the-art, Matrix products, powered by the VSS.
On to industrial machine vision in July we announced that our V. Eight 7000 ships at the series originally developed for automotive is powering the markets first end to end camera to process or maybe a slight platform from <unk> III admitted.
We also had exciting news from the field regarding our USB 3 extension solution the vs 6320.
3,000 including Xtrons DTP3, Cross Pointe crammers, empty, X3, and a Clonas. 4K HDR, HDR, Switcher.
A major player that had previously been designing with a competing technology is now engaged Us in 4, new design. Based on the vs 320, we expect continued strong interest in this product moving forward.
This solution provides the industry's first product really passed to implementing the standup in AI based embedded vision systems.
We also had exciting news from the field regarding our USB 3 extension solution the vs 6320.
We are observing strong momentum for <unk> from within the ecosystem, where companies are embraced by a five superior performance next quarter. We're excited to showcase the ACI offering alongside customers and partners in.
A major player that had previously been designing with a competing technology has now engaged us in 49. Based on the VS 6320, we expect continued strong interest in this product moving forward.
Thank you with the cross industry. Business unit, let's turn to Industrial Machine Vision in July. We now that our VA 7000 chipset. The series originally developed for automotive, is powering the market. First end, to-end, camera to processor. Mpa5 platform from these 3 embedded,
In Yokohama, Japan in important regions for industrial vision systems, we continue to expect industrial machine vision to become an increasingly meaningful part of our revenue mix in the coming quarters with initial revenue anticipated by the end of 2026 and strong growth potential in deals that followed.
This solution provides the industry's best product pretty fast for implementing the standards in AI-based embedded vision systems.
I would like to conclude the discussion of our cross industry business unit with an update on the notable progress we're making in medical Endoscopies, you've heard us speaking about disposable endoscopies. Several times. It is time to be explicit recently, we announced some exciting news three oh.
Stand up in AI based embedded Vision systems.
And we launched the first being 7000 based endoscopies on the market, including the first disposable colonoscopy with <unk> video resolution as.
As a reminder, the VA 7000 ships. It is the first of the market with built in electro surgical noise cancellation.
So explain how important is innovation is I would like to cite the international standard governing safety and performance requirements for medical Endoscopies quote.
We are observing strong momentum for mpa fee. From within the ecosystem where companies are impressed by A5 Superior performance next quarter, we're excited to showcase the AI offering alongside customers and Partners at IP newcomer Japan in important regions for industrial Vision systems. We continue to expect industrial Machine Vision to become an increasingly meaningful part of our Revenue. Mix in the coming quarters, which initial Revenue anticipated by the end of 2026 and strong growth potential in the US that follow.
I would like to conclude this discussion of our cross industry. Business unit, with an update on the notable progress. We're making in medical endoscopies,
The short interruption of illumination or image display shall not be considered unacceptable degradation for endoscopies equipment that is to say the official standup gavarnie governance safety and endoscopy procedures allows for a video loss.
And the reason is simple until now there have not been endoscopies vet could flawlessly and electromagnetic interference while supporting the highest resolution sensors Valencia technology offers a solution for endoscopy svein dose that provides seamless video experience and Thats. The main reason why we are.
You have heard us speaking about disposable endoscopies, several times, it is time to be explicit. Recently we announced some exciting news, 3, OEM we launched. The first v7000 based in those copies on the market including the first disposable colonoscopy with 4K video resolution.
as a reminder, the VA 7000 chipset is the first of the market, with built-in, electrosurgical, noise, cancellation,
Seeing such strong market fit both for single use and reusable medical Endoscopies.
To explain how important this Innovation is. I would like to cite the international standard, governing safety and performance requirements for medical endoscopies, quote.
In the medical World There are two major trends, reducing the use of invasive surgeries and shifting towards single use medical devices.
<unk> solution addresses both of these emerging needs by enabling high resolution video transmission and allowing for surgical procedure to be performed without electromagnetic interference, we will be showcasing the medical offering next week at the Medica trade show taking place in diesel both Germany, and we anticipate considerable.
To short interaction of illumination or image. Display shall not be considered an acceptable degradation for endoscopy equipment; that is to say, the official standard governing safety and endoscopy procedures allows for video loss.
Interest driven by the growing momentum this solution is generating across the market.
Our goal over the next year is to secure additional design wins and continue supporting existing ones one with the aim of ramping into mass production starting in 2027% to 22008.
And the reason is simple. Until now there have not been endoscopies, that could flawlessly handle electromagnetic interference while supporting the highest resolution sensors valence technology offers a solution for endoscopies vendors that provide seamless video experience. And that's the main reason why we're seeing such strong Market fit, both for single use and reusable, Medical endoscopies.
In the medical world. There are 2 major Trends, reducing the use of invasive surgeries and shifting toward single-use medical devices.
These markets, representing a long term growth opportunity, it's known for its high barrier to entry, but stickiness tends to be strong once youre in now.
Now I would like to turn to the automotive industry.
Valens' solution addresses both of these emerging needs by enabling high-resolution video transmission and allowing for surgical procedures to be performed without electromagnetic interference.
As a reminder, our opportunity in automotive is dominated by the VA 7000, which offers high bandwidth and best in class EMI immunity. It is the first chips on the market to comply with the <unk> standup for high speed sensor connectivity.
We will be showcasing the medical offering next week at the medical trade show taking place in this field of Germany, and we anticipate considerable interest driven by the growing momentum the solution is generating across the market.
Late last year, we announced three design wins with leading European Oems for this solution, gaining a stronger foothold for <unk> within the global OEM community.
our goal over the next year, is to secure additional design wins and continue supporting existing ones, always the aim of ramping into mass production starting in 2027 to 2028
To drive <unk> forward and ensure it has the key connectivity standard in the automotive industry, we collaborate with multiple silicon vendors validating interoperability either ACI solution come to market.
This Market representing a long-term growth opportunity. It's known for its high barrier to entry, but sticking a tends to be strong once you're in.
Now, I would like to turn to the automotive industry.
The impact was clear in Q3.
Other AI provider announced the stomach or design win.
This makes <unk> the first automotive standouts to secure design wins across more than one silicon vendor.
As a reminder, our opportunity in automotive is dominated by the VA 70000 which offers high bandwidth and best-in-class, Emi immunity. It is the first chipset in the on the market to comply with the mpa5 standard for high-speed sensor connectivity.
Another important milestone for <unk> King from Sony Semiconductor solutions, which announced the upcoming release of the <unk>, 8% to eight the automotive industry first image sensor with a built in an EPA for interface.
Late. Last year, we announced 3 design wins which leading European oems for the solution. Gaining a strong, foothold for 85 within the global OEM community.
According to Sony the camera brings a number of benefits to Oems and tier ones, including reduced cost compact bauxite suppressed heat generation reduced camera module power consumption and improved resistance to erode due to external noise.
To drive A5 forward and ensure, it is the key connectivity standard in the automotive industry. We collaborate with multiple silicon vendors, validating interoperability either, AI Solutions, come to Market,
Having an integrated product is a pivotal milestone for any standout and this is why villains partner to solely from the early stages of this product's development, ensuring that the camera met the API specification and word interoperable with our VA 7000 ships it when solar markets. This chip.
The impact was clear. In Q3 as another A5 provider announced the standard for design win. This makes A5 the first Automotive product to secure design with across more than 1 silicon vendor
To its customers and partners. It is highly likely that the Valencia VA 7000 will be involved on the receive side.
<unk> also received another major endorsement by the leading player in the automotive industry. Samsung Electronics, we were proud to announce last quarter that Samsung is supporting the <unk> standard, reflecting strong market interest from global Oems.
According to Sony, the camera brings a number of benefits to oems and tier 1s including reduced costs compact both sides.
Resistance to allow you to external noise.
In addition, we will fabricate over a new generation of AI solution at Samsung Foundry heroes with Samsung corporate VP Foundry technology planning stated about 85.
Oems are demanding and next generation connectivity solution that can ferret them to higher level of Adas and autonomous driving and AI offers to keep technical breakthroughs necessary to achieve this it's clear.
Having an integrated product is a pivotal milestone for any standard. And this is why balance Department with Sony from the early stages of these products development ensuring that the camera met the A5 specification and was interoperable with our VA 7000 chipset. When Sony markets this ship to its customers and partners, it is highly likely that the valence VA 7000 will be involved on the received side.
The momentum around <unk> is building all around the world. We continue to be engaged in several evaluation processes with multiple Oems each at different stages of development. The sustained activity highlights the growing strength of the <unk> ecosystem and its acceptance as an emerging industry standard.
A5 also receives another major endorsement by deleting player in the automotive industry, Samsung Electronics. We were proud to announce last quarter that Samsung is supporting the mpa5 standard reflecting strong Market interest from global oems.
We remain confident in our leadership position in a fight supported by three design wins with leading European Oems and a strong partnership with mobilized.
In addition, we will fabricate our new generation of AI solution at Samsung Foundry. Here is what Samsung corporate VP found with technology planning stated about AI.
With that Guy please.
Please go ahead and discuss our financial performance in more detail. Thank you give them I'll start with our third quarter results and then provide our outlook for the fourth quarter and full year of 2025.
Oems are demanding and Next Generation connectivity solutions that can further them to higher level of Adas and autonomous driving. And AI offers the key technical breakthroughs necessary to achieve this, it's clear.
We generated quarterly revenue of $17 $3 million, which exceeded our guidance range of $15 one to $15 $6 million. This compares to revenue of $17 1 million in Q2, 2025 and $16 million in Q3 2024.
That the momentum around A5 is building all around the world. We continue to be engaged in several evaluation processes with multiple oems each, a different stages of development. This sustained activity, highlights. The growing strength of the mpa by ecosystem and its acceptance as an emerging industry standard.
The cross industry business or CRB.
Good for $13 $2 million or approximately 75% of total revenue, while automotive contributed $4 $1 million or approximately 25% of total revenue this quarter.
We remain confident in our leadership position in AI supported by 3 design, wins with leading European oems and a strong partnership with mobilize.
With that guy.
Please go ahead and discuss our financial performance in more detail. Thank you, Gideon! I'll start with our third quarter results, and then provide our outlook for the fourth quarter and full year of 2025.
This compares to Q2 2025 revenue of $12 $8 million from SEBI, and $4 $3 million from automotive, which represented 75% and 25% of total revenue respectively.
In Q3 2020 for revenue from CIB were $9 4 million and $6 $6 million were from automotive or approximately 60% and 40% of total revenue respectively.
We generated quarterly revenue of 17.3 million which exceeded our guidance range of 15.1 to 15.6 million. This compares to revenues of 17.1 million in Q2 2025 and 16 million dollars in Q3 2024.
Q3, 2025 gross profit was $10 9 million compared to $10 8 million in the second quarter of 2025.
The cross-industry business, or CLB, accounted for $13.2 million, or approximately 75% of total revenues, while Automotive contributed $4.1 million, or approximately 25% of total revenues this quarter.
And compared to $9 million in the third quarter of 2024.
Q3, 2025, gross margin was 63% compared to our guidance range of 58% to 60%.
This compares to Q2 2025 revenues of $12.8 million from CIB and $4.3 million from Automotive, which represented 75% and 25% of total revenues, respectively.
This compares to Q2 2025 gross margin of 6% to three 5% and 56, 4% in Q3 2024.
On a segment basis Q3, 2025 gross margin for the CIB was 69, 1% and gross margin from automotive for 43, 2%.
In Q3 2024 revenues from CIB, where 9.4 million and 6.6 million were from Automotive or approximately 60% and 40% of total revenues respectively.
This compares to Q2 2025 gross margin of 67, 8% and 55% respectively and for Q3 2024 gross margin of 73% and 36, 8% respectively.
Q3 2025 gross profit was 10.9 million compared to 10.8% quarter of 2025 and compared to 9 million in the third quarter of 2024.
Feel free 2025 gross margin was 63% compared to our guidance range of 58% to 60%.
The increase in gross margin of the CIB compared to Q2 2025 was due to change in product mix. The decrease in Q3 2025 in automotive gross margin compared to Q2 2025 was due to product versions of mix and certain operational expenses really.
<unk> two manufacturing line transition.
This compares to a Q2 2025 gross margin of 63.5% and 56.4% in Q3 2024 on the segment basis. Q3 2025 gross margin. For the CIB was 69.1% and growth margin from Automotive was 43.2%.
non-GAAP gross margin in Q3 were strong at 66, 7%, which compares to 67, 2% in Q2, 2025 and 67% in Q3 2024.
This compares to Q2 2025 gross, margin of 67.8% and 50.5% respectively and for Q3 2024, gross margin of 70.3% and 36.8% respectively.
<unk> expenses in Q3, 2025 totaled $19 million compared to $18 2 million.
In Q2, 2025, and $21 $3 million in Q3 2024.
Research and development expenses in Q3 totaled $10 8 million.
A million dollars compared to $10 2 million in Q2, 2025, and $10 $3 million in Q3 2024.
The increase in gross margin of the CIB compared to Q2 2025 was due to change in product. Mix the decrease in Q3 2025 in automotive gross margin compared to Q2 2025 was due to product versions mix and certain operational expenses related to manufacturing line transition.
SG&A expenses in Q3 were seven 4 million compared.
Compared to $8 $9 million in Q2, 2025, and $10 $7 million in Q3 2024.
The decrease compared to Q2 2025 is mainly due to income from certain batch production incident in the amount of $1 5 million recognized for insurance claims payments.
.7% which compares to 67.2% in, Q2, 2025, and 60.7 in Q3 2024 operating expenses in Q3 2025 totaled, 19 million compared to 18.2 million in Q2, 2025 and 21.3 million in Q3 2024.
Change in the earn out liability in Q3 was an expense of zero point $7 million compared to an income of zero point $8 million in Q2, 2025, and an expense of <unk> 3 million and.
Research and development expenses in Q3 totaled $10.8 million, compared to $10.2 million in Q2 2025 and $10.3 million in Q3 2024.
In Q3 2024, the change compared to Q2 2025 is mainly due to reassessment of the airlines amount to be paid to the acronym for shareholders.
GAAP net loss in Q3, 2005 was $7 $3 million compared to a net loss of $7 2 million in Q2, 2025, and a net loss of $10 4 million in Q3, 'twenty 'twenty four.
FGN expenses in Q3 were $7.4 million compared to $8.9 million in Q2 2025 and $10.7 million in Q3 2024. The decrease compared to Q2 2025 is mainly due to income from certain batch production incidents in the amount of $1.5 million recognized for insurance claim payments.
Adjusted EBITDA in Q3, 2025 was a loss of $4 $3 million better than the guidance range of a loss of between $7 4 million to $6 8 million.
This compares to an adjusted EBITDA loss of $4 million in Q2, 2025, and an adjusted EBITDA loss of $5 $1 million in Q3 2024.
Change in anal, liability in Q3 was an expense of 0.7 million compared to an income of 0.8 million in Q2 2025 and an expense of 0.3 million in Q3 2024. The change compared to Q2 2025 is mainly due.
To reassessment of the heirloom amount to be paid to the acronyms shareholders.
GAAP loss per share for Q3 was seven cents compared to a GAAP loss per share of seven cents for Q2, 2025, and a GAAP loss per share of 10 cents for Q3 2024.
non-GAAP loss per share in Q3, 2025 Watt <unk> comparator.
Get net loss. In Q3 2025 was 7.3 million compared to a net loss of 7.2 million in Q2 2025 and a net loss of 10.4 million in Q3 2024.
Compared to a loss per share of <unk> in Q2, 2025, and a loss per share of three cents in Q3 2024.
The difference between GAAP and non-GAAP loss per share was mainly due to stock based compensation change in aeronautical ability depreciation and amortization expenses and certain batch production incident income.
Adjusted to be down in Q3 2025 was a loss of 4.3 million. Better than the guidance range of a loss between 7.4 million to 6.8 million, this compares to an adjusted in Dallas of 4 million dollars in Q2 2025 and an adjusted debose of 5.1 million in Q3 2024.
Turning to the balance sheet.
We ended Q3 2025 with cash cash equivalents and short term deposits totaling $93 $5 billion and no debt.
This compares to $102 7 million at the end of Q2, 2025, and 131 million at the end of 2024.
Gap loss per share for Q3 was 7 cents compared to the Gap loss. Per share of 7 cents for Q2 20225 and a gap loss per share of 10 cents for Q3 2024.
During Q3 2025, the company allocated $3 $6 million for share repurchase program in total of $23 4 million.
Non-gaap plus per share in Q3 2025 was 4 cents, compared to a lost per share of 4 cents in Q2 2025 and they lost their. Share of 3 cents in Q3 2024,
Between Gen. Firstly 2025 and September 32025 currently there is no active share repurchase program.
The difference between gaap and non-gaap lost per share with many due to a stock based compensation changing urn off the ability depreciation and amortization expenses, and certain batch, production, incident income.
Our working capital at the end of Q3, 2025 was $98 9 million.
Turning to the balance sheet we ended Q3 2025 with cash cash equivalent and shorten deposits. Totaling 93.5 billion dollars and no debt.
Compared to $106 million at the end of Q2, 2025, and $133 $6 million at the end of 2024.
This compares to 202.7 million at the end of Q2, 2025, and 131 million, at the end of 2024.
Our inventory as of September 32025 was $11 million, a slight decrease from $11 $5 million on June 32025, and down from $11 2 million on December 31st 2024.
Now I would like to provide our guidance for the fourth quarter and full year of 2025.
During Q3 2025 the company allocated 3.6 million dollars for shares repurchase program and total of 23.4 million between Jen. First 2025 and September 30th, 2025 currently, there is no active share repurchase program.
We expect Q4 2025 revenue to be in the range of $18 two to $18 $9 million, meaning seventh consecutive quarters of growth in revenue.
We expect gross margin for Q4 2025 to be in the range of 58% and 60% and we expect adjusted EBITDA loss in Q4 2025 to be in the range of four six to $4 $2 million loss for.
our working capital, at the end of Q3, 2025 was 98.9 million compared to 106 million at the end of Q2, 2025, and 10033.6 million, at the end of 2024,
For the full year 2025, we expect revenue to be in the range of 69 $4 million to $71 million. The midpoint reflects growth of approximately 20% compared to the annual revenue of 2024.
Our inventory as of September 30, 2025, was $11 million, a slight decrease from $11.5 million on June 30, 2025, and down from $11.2 million on December 31, 2024.
Now, I would like to provide our guidance for the fourth quarter and full year of 2025.
I'll now turn the call back forgive him for his closing remarks before opening the call for Q&A.
We expect Q4 2025 Revenue to be in the range of 18.2 to 18.9 million. Meaning 7th consecutive quarters of growth in Revenue.
Thank you Guy.
Across each of our target markets for land semiconductors is well positioned for growth supported by our cutting edge technology and robust balance sheet.
We remain focused on executing our long term strategy and advancing on our path towards profitability.
The expected gross margins for Q4 2025 to be in the range of 58% and 60%. And we expect just in Q4 2025 to be in the range of 4.6 to 4.2 million dollars lost
On a personal note I would like to say it has been a privilege to lead the Valencia team over the last five and a half years.
Im confident that it is positioned as the next CEO villains.
Ron will accelerate <unk> growth and strengthened its position as the leader in high performance connectivity across industries.
We expect revenue to be in the range of $69.4 million to $70.1 million. The midpoint reflects growth of approximately 20% compared to the annual revenue of 2024. I'll now turn the call back to Gilon for his closing remarks before opening the call for Q&A.
With that I will now open the call to answer your questions operator.
Thank you, guy.
Thank you ladies and gentlemen at this time, we will begin the question and answer session.
A cross-section for a Target Market. Valencia is well, positioned for growth supported by our Cutting Edge technology and robust balance sheet.
He has a question please press star one.
If you wish to cancel here with Craig.
Please go ahead.
We remain focused on executing our long-term strategy and advancing on our path towards profitability.
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With that, I'll now open the call to answer to your questions. Operator, thank you, ladies and gentlemen. At this time, we will begin the question and answer session.
Hey, Neil.
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Quinn Bolton Thanks for letting me ask a question.
So I wanted to ask about the gross margin across the two businesses.
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Included within automotive, which trapped sequentially. So last quarter, you talked about the optimization of product cost within automotive this quarter. It looks like the sequential drop was due to product versions mix and certain operational expenses related to manufacturing transition.
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I'm wondering if you could give a little more detail on what that is.
It's a one time event or do you expect us to carryover in the future quarters, and then maybe for <unk>, just kind of walk us through the puts and takes in gross margin for the guide it.
Let's go ahead.
It seems like it came in a little bit softer than I would've thought thanks sure.
So we truly believe that this was like a kind of a.
A one time event.
Related to the mix of different versions of the product during the quarter and related to one time expenses related to a transition of certain manufacturing line and we believe that in the next quarter that should be improved it again.
Okay. So it should maybe return to what it was in <unk> with an auto or.
Smaller step up.
We still will be a little.
With cautious here and.
Hey it's uh Neil Young on for Quinn, Bolton. Thanks for letting me ask a question. Um so I wanted to ask about the gross margin across the 2 businesses uh specifically within Automotive which trapped sequentially. So last quarter, you talked about the optimization of product costs within Automotive. This quarter looks like the sequential drop was due to product versions mix and certain operational expenses related to manufacturing line transitions. Um, I was wondering if you could give a little more detail on what that is, you know, it's just a 1 time event. Should we expect this to carry over into the future quarters and then, you know, maybe for 4 q, just kind of walk us through the puts and takes and gross margin for the guide. Uh, you know, it seems like it came in a little bit softer than than I would have thought. Thanks.
I will try to avoid from providing exactly answer but it should be again to be improved its still early to say.
What would be the pace of improvement.
Okay. Thanks, that's very helpful.
And then the.
<unk> brought the industry business revenue came in definitely above what I really unexpected so I know earlier in the year or last quarter. When you guys were talking about your guide or some concerns around the impact of tariffs was that not as bad as previously feared sort of what's driving the strength in CIB or more specifically and maybe.
Sure. Hi Quinn. So uh, we truly believe that this was like a kind of a, a 1 time event related to the mix of a different versions of the product during the quarter and related to a 1-time expenses related to a transition of certain manufacturing line. And we believe that in the next quarter, that should be improved again.
Okay, so it should maybe return to what it was in Q2 with an auto or.
And should we expect it to grow at a higher rate sequentially than auto and <unk>. Thanks.
Hi, Thank you Quintin.
Thank you for the question, we see that the tariff influences becomes a milder and this is the reason that our companies are less reluctance from making older and they know that they can ship what they buy.
A smaller step up. We will still be a little bit cautious here, and I will try to avoid providing an exact answer, but it should be, again, it should be improved. It's still early to say what the pace of the improvement will be.
It's Nokia situation that the market is clear in Doncaster is clear it is improving.
We all read the same breadth, it's changing daily, but the whole atmosphere around it starts with far more relaxed not to the level before it all started.
Great. Thank you.
Okay, thanks, that's really helpful. Um and then the cross industry business Revenue came in uh, definitely above what I would have expected. So I know earlier in the year or last quarter when you guys were talking about your guide or some concerns around the impact of tariffs, you know, was that not as bad as previously feared sort of what's driving the strength and CIB or more specifically in proav. And, you know, should we expected to grow at a higher rate sequentially than Auto in the port Cube? Thanks.
The next question is from <unk>.
Yes.
From Roth capital.
Hi, Gideon Guy getting your best of luck on the transition in Europe.
Best of luck in the new role so.
It's in the the pro Avi upside in the quarter can you give some color on where that was coming from and how sustainable that is sure.
Sure Brosious.
Bromine is a very big part of the CIB and proteins, mainly in mattresses and conference rooms.
Hi, thank you Quentin. Uh, thank you for the question. We see that the Taurus influences becomes milder and this is the reason that, uh, companies are less reluctant from making new orders, and they know that they can ship what they buy. Uh, it's it's not yet. The situation that the the market is clearing. The atmosphere is clear. It's improving and as we all read the same press, it's changing daily. But the whole atmosphere around a Target is far more relaxed. Not relaxed to the level before it all started.
Projectiles, it's all one mix and it comes from all of them it doesn't come particularly from one.
Great. Thank you.
Say that one niche, which is starting to become bigger.
From suji.
Conference from camera. This is a if there is a sub segment that Mike.
Roth capital.
And entry this one but other than that it's the.
Stuff, we know for years and the market is getting back to what it used to and this is the probably the recovery.
I don't think I have a lot more color to put other than that but I believe that this covers.
<unk> is back to.
Okay, Alright, Thanksgiving and then my other question is maybe a bigger picture question can you talk about the factors that are pacing or gating.
Maybe a phy adopt broader MIT BHI adoption maybe.
Maybe across non auto and auto just to understand what you think is kind of left in 'twenty five 'twenty six to to help kind of accelerate that adoption.
You know, maybe a fine as I Repetitively say company like Vlans cannot daily.
When in <unk>. So we can really knock out maybe a fleet where it gives us the advantage of the bundles are very blunt. This is correct for automotive and for E Mail.
Hi Gideon guy, um, Gideon. Best of luck in the transition and you're in the best of luck in the new role. So, um, Team the, um, the proav upside in the quarter, can you give some color on where that was coming from and how sustainable that is? Thanks sure. Uh, probably has, uh, probably is a very big part of the CIB and probe is mainly, you know, the matrixes and the conference rooms and projectors. It's all 1 mix and it comes from all of them. It doesn't come particularly from 1. I might say that 1 Niche, which is starting and become higher. A bigger is the conference from camera. This is a, if there is a sub segments, that might has a, an entry is this 1. But other than that, it's the, uh, stuff we know for years and the market is, is getting back to what it used to, and this is the probe recovery. I, I don't think I have a lot more uh, color to put other than that.
Medical and for industrial and where people have.
but I believe that this covers whether the probe is is back to
Sirius influence of electromagnetic and when electromagnetic is strong and it changes the whole <unk>.
Okay, all right, thanks again and my other question is maybe a bigger picture question. Can you talk about the factors that are pacing or getting
System. This is where we are and this is.
We've part of what the new World and you would have more cameras.
More resolution.
More bits per pixel.
Maybe a fee, a broader, maybe a fee adoption, you know, maybe across non-auto and auto just understand. You know what you think is kind of left in 25 and 26 to, to help kind of accelerate that adoption.
More and they require.
Bandwidth and this bandwidth makes it makes the whole system to be more fragile and when it's more fragile meet basically the solution and that's exactly where we are and this is the reason for those with I am not sure I didn't answer exactly your question. So if it's not please don't hesitate to elaborate.
Is a um repetitively say company like Valencia win in points, we can win in knockout. Maybe if I where it gives the advantages, the advantages are very blunt. This is the correct for automotive and for a
Medical, and for industrial. And where people have?
Now getting that was the color I was looking for I mean, there is sort of opt in and it sounds like bandwidth and higher resolution video is one of the catalysts that's happening and then secondly in the market.
Serious influence of electromagnetic. And when electromagnetic is strong in changes, the whole ecosystem, this is where we are. And this is
Great Alright, thanks, guys.
Thank you.
The next question.
it's part of what the new world, the new world has more cameras, it has more resolution, more bits per pixel,
Hum.
More and and and they require.
Please go ahead.
Good morning, and thank you for taking my questions.
Just wanted to start with gross profit margin guide in Q4 year to date gross profit margin is tracking around 63% and you're obviously guiding between 50 to 60 is this an expectation that the mix is going to change as this typical seasonality as it is.
More bandwidth. And this bandwidth makes makes the whole system to be more fragile. And when it's more fragile MPA is the solution. And that's exactly where we are. And this is the reason for those with I am. Not sure I did answer exactly your your question. So if it's not, please don't hesitate to elaborate
Being judicious in the face of some macro environment any color here would be great.
Sure so on the <unk>.
For the quarter were trying to estimate the next quarter.
No, get Gideon. That was the color I was looking for. I mean, there there is sort of option and it sounds like bandwidth and higher resolution video is 1 of The Catalyst that's happening. Secularly in the market, right? Just understand great. All right, thanks guys.
Thank you.
Thus based on product mix and the combination of the.
Revenue drivers.
The next question is from Dave storms of stormgate.
The result.
Please go ahead.
What we've provided the guidance.
Understood I appreciate that and then just wanted to turn to the medical segment, great to see that you had the three product launches curious as to what the pacing made year round for further product launches and what the logistics look like for them for expansion there. Okay I agree with both of us or not.
Medical doctors, but they try to get us both at the same point of view.
Good morning and thank you for taking my questions. Um just wanted to start with the gross profit margin guide in Q4 year to date gross profit margin is tracking around 63% uh and you're obviously guiding between 58 to 60. Is this an expectation that the mix is going to change? Is this typical seasonality? Uh, it's just, you know, being judicious in the face of the macro environment. Any caller here would be great.
A medical Doctor.
There are stages when.
Sure, so, in the beginning of the quarter, we're trying to estimate the next quarter, a a results based on product mix.
The doctor penetrate with the camera in order to see what is in and then we started to shoulder or to burn off to do anything at this time.
All the frames are lost and he's blunt and he uses the memory you had before to see that he does correctly and the reason for that is because.
And the combination of the revenue and drivers and the result is what we've provided to the guidance.
There is no any resistance.
Resistance of electromagnetics.
No EMC the EMI is celebrating and influenced the very high what we do enable that the continuity of the surgery with our blue screens and this is one of the reasons that it is adopted in the industry and the other reason the.
Understood appreciate that. And then just wanted to turn, uh, to the medical segment. Great to see if they had the 3 product launches curious as to what the pacing may be around for further product launches and, uh, what the logistics look like, uh, for for expansion there. Okay. Uh, I believe that both of us are not the medical doctors, but I tried to get us both to the same point of view.
Of a medical doctor. There are stages when
The other reason is the pressure to move towards single use endoscopy. This reason is originated by.
The doctor penetrates with the camera in order to see what is inside. Then he starts to solder, burn, or do anything at that time.
The <unk>.
Tendency that same electric.
Is it a minimally invasive surgery responsible for maybe more than 50% of the infections in the hospital and both the try to move from single use endoscopy in one hand and to have more resilient system on the other hand, there is a third reason, which I mentioned in the second.
All the frames are lost, and he's blind. He uses the memory he had before to see that he does correctly. And the reason for that is because.
if there is no any
Drive to look for a solution that has immunity against electromagnetics. So the doctor would not have lost frames and the cost will be cheaper and enable single news and those could be the third is a little bit more upstart that try to extend it over the phone is the distance between the.
The.
Lens and sensor when they are remote.
The surgery sees.
In style.
<unk> life choices stroke, when they're connected it opens up so we can see larger and larger picture and this is a third motivation for why to move from traditional endoscopy to this new endoscopy that enables both bigger picture.
Both cheaper and.
Electromagnetic.
Resilience. So you can the doctor can do whatever you want without losing frames.
That's great color. Thank you.
I would say D C.
Please go ahead.
John.
Yeah.
Using those copy. This reason is originated by uh, the um, tendency that minimal invasive surgery, responsible for maybe more than 50% of the infections in hospitals and both the try to move from single use endoscopy on 1 end and to have more resilient system on the other hand. And there is a third reason, which I'll mention in a second drive to look for solutions that have immunity against against electromagnetic. So the doctor would not have lost frames and the cost will be cheaper and enable single use in those copy. The third is a little bit more abstract, I'll try to explain it over. The phone is the distance between the the the, um, lens and the and the sensor, when they are remote, the the um surgery sees the what is what's inside our body like through a stroke.
No further questions at this time Mr. Ben.
Would you like to make your concluding statement, yes. Thank you I would like to thank you all for joining us today for our third quarter of 2025 earnings call and for your continued support and interest in Berlin semiconductor, we hope to meet you again in our next earnings call Goodbye.
When they are connected, it opens up so we can see larger larger picture and this is a third motivation for why to move from traditional endoscopy to this new endoscopy that enables both bigger picture.
Both cheaper and electromagnetic resilience so you can the doctor can do whatever he wants without losing frames.
Okay.
Thank you.
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That's great. Call there. Thank you.
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There are no further questions at this time. Mr. Benze, would you like to make your concluding statement? Yes, thank you.
I would like to thank you all for joining us today for our sales quarters of 2025 earning call and for your continued support in interest in Balance semiconductor. We hope to meet you again in our next earning call, goodbye.
Thank you, this concludes the Valentine's semiconductor Channel conference call. Thank you for your participation. You may go ahead and disconnect.