Valens (VLN) Q4 2025 Earnings Call Transcript

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DATE

Wednesday, Feb. 25, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Yoram Salinger
• Chief Financial Officer — Guy Nathanzon

TAKEAWAYS

• Revenue -- Reported $19,400,000 for the quarter, above guidance of $18,200,000 to $18,900,000, with continued sequential growth for a seventh straight quarter.
• Revenue Breakdown -- Q4 revenue comprised $13,900,000 from the Cross-Industry Business (CIB) and $5,500,000 attributed to automotive (implied, as total minus CIB does not sum to $19,400,000, reflecting rounding in segment figures).
• Gross Margin -- Q4 GAAP gross margin was 60.5%, exceeding guidance; CIB gross margin was 66.4% and automotive 45.9%.
• Adjusted EBITDA Loss -- Q4 loss was $4,300,000, in line with guidance.
• Full-Year Revenue -- 2025 reached $70,600,000, surpassing guidance of $69,400,000 to $70,100,000, reflecting growth from $57,900,000 in 2024.
• Full-Year Gross Margin -- 2025 GAAP gross margin was 62.4%; CIB segment margin was 68.1% and automotive margin was 47.0%.
• Automotive Revenue -- $19,000,000 in 2025, down 12% from $21,600,000 in 2024, due to price erosion and lower unit sales to Mercedes-Benz.
• VS3000 Chipset -- Management stated "VS3000 sales nearly doubled" from 2024, positioning it as a primary growth driver.
• VA7000 A5 Design Wins -- Four global design wins cited for the VA7000 A5 automotive chipset, including selection by Mobileye for advanced ADAS infrastructure.
• Cash Position -- Ended Q4 with $92,600,000 in cash, cash equivalents, and short-term deposits, with no debt.
• Guidance for 2026 Revenue -- Management projected $75,000,000 to $77,000,000 in revenue, targeting approximately 8% annual growth at the midpoint.
• Operating Expenses -- Q4 OpEx was $20,900,000, up from $19,000,000 in Q3 2025, attributable to reduced batch production income and increased payroll expenses.
• Workforce Reduction -- Company announced a company-wide workforce reduction in late January, described as "designed to optimize our cost structure, streamline operations, and sharpen execution."
• Share Repurchase Program -- $24,000,000 in share buybacks completed in 2025.

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RISKS

• Automotive revenue declined 12%, with management stating this was "due to gradual price erosion and a reduction in the number of units sold to Mercedes-Benz."
• Management flagged that "the pace and extent of the growth may be affected by macroeconomic conditions and the pace of adoption of new technologies, which could continue to reduce visibility and increase uncertainty."
• Guidance for Q1 2026 revenue is projected below the prior-year period; management cited end-of-year budget flush in Q4 as a contributing factor to anticipated slower demand in Q1.

SUMMARY

Valens Semiconductor (NYSE:VLN) delivered total company revenue and GAAP gross margin above guidance for the reported quarter. The company reported a seventh consecutive quarter of top-line growth and continued margin expansion in the automotive segment, primarily due to product cost optimization. Management emphasized a focused strategy on the audio video and automotive markets, highlighting major chipset ramp-ups and four A5 design wins, while maintaining selective pursuit of significant opportunities in medical and industrial verticals. Liquidity remained strong with substantial cash reserves after significant share repurchases, and recent cost measures included a workforce reduction targeting future profitability.

• 2026 revenue growth is guided at 8%, marking a shift to single-year projections due to what management described as "reduced visibility beyond the near term."
• Both GAAP and non-GAAP net loss per share improved compared to 2024, driven by rising revenues and cost discipline.
• Management indicated that breakeven EBITDA would require annual revenues between $110,000,000 and $120,000,000, and that this threshold has not changed after cost-cutting actions.
• Inventory levels decreased sequentially, with working capital also reduced from the prior year after operational and capital return expenditures.

INDUSTRY GLOSSARY

• HDBaseT: A connectivity standard co-created by the company enabling simultaneous transmission of ultra-high-definition video, Ethernet, USB, control signals, and power over a single cable.
• ADAS: Advanced Driver-Assistance Systems, critical automotive technologies improving vehicle safety and autonomy.
• CIB (Cross-Industry Business): Valens' non-automotive segment, including audio-video, enterprise, education, medical, and industrial applications.

Full Conference Call Transcript

Yoram Salinger: In global high-tech companies, my background is in building and scaling technology companies through key growth phases. And that is exactly what I intend to do here at Valens Semiconductor Ltd. I am really excited to have joined this company. I have only been here a few months, but it is already clear to me that Valens Semiconductor Ltd. has exceptional technology, a strong executive team, dedicated and professional employees, and a very compelling opportunity ahead.

Before I dive into Q4 numbers and our annual overview, I want to take this opportunity, my first Valens Semiconductor Ltd. earnings report, to present you with my initial thoughts about the company and to set expectations around Valens Semiconductor Ltd.’s growth in the years ahead. This company has delivered some remarkable achievements over the years. We created the HDBaseT standard and founded the HDBaseT Alliance, which boasts over 200 member companies. We sell to nearly all the leading players across the audio video industry, supporting their innovation across various verticals they serve. In the automotive market, we are a longtime supplier of chips for Mercedes-Benz, powering the state-of-the-art MBUX infotainment system.

We were a key contributor to the A5 standard, and we have become a pillar within the growing A5 ecosystem, achieving four design wins for the next generation ADAS systems. We feel confident that both the audio video and automotive industries represent significant long-term growth pillars for the company, and the first number I want to share with you is a new growth projection. We expect that in 2026, our revenues will reach between $75,000,000 and $77,000,000. The midpoint reflects growth of approximately 8% over last year.

While we expect to maintain growth in 2026, the pace and extent of the growth may be affected by macroeconomic conditions and the pace of adoption of new technologies, which could continue to reduce visibility and increase uncertainty. Given the current environment and reduced visibility beyond the near term, we will provide single-year growth projections going forward. My outlook for Valens Semiconductor Ltd. and my strategy for achieving our growth target is as follows. From now on, we are concentrating our resources on our core businesses: audio video and automotive. Those are the markets where Valens Semiconductor Ltd. brings unmatched technology leadership and where we see sustained, profitable growth opportunities.

That said, we remain proactive, focusing on seizing large, revenue-generating opportunities that may arise in additional verticals that require high-performance connectivity solutions in challenging environments. But our priority will be to ensure disciplined execution, profitability, and innovation within our core markets. With that as a starting point, I would now like to dive into our Q4 and 2025 full-year performance. We are pleased to report a strong fourth quarter, well above our initial expectations. We delivered revenues of $19,400,000, exceeding our guidance range of $18,200,000 to $18,900,000 as customer demand exceeded expectations in the audio video market. This marked the seventh consecutive quarter of growth for our company.

GAAP gross margin for Q4 2025 came in at 60.5%, better than the guidance, and adjusted EBITDA loss was $4,300,000, within the guidance range. Our full-year revenues for 2025 were $70,600,000, also exceeding our guidance range of $69,400,000 to $70,100,000. GAAP gross margin for the full year 2025 came in at 62.4% and adjusted EBITDA loss was $16,990,000, both above our guidance. Looking ahead to Q1 2026, we expect revenue to be in the range of $16,300,000 to $16,700,000. Beyond the numbers, I want to begin our quarterly discussion with a review of one of our core growth engines, audio video.

Valens Semiconductor Ltd. is offering two unique and cutting-edge chipsets that fill market gaps for this industry: the VS3000 and the VS6320. Let us start with the VS3000, the only chip on the market that can extend uncompressed HDMI 2.0 over widely used category cable. Our chip is the solution of choice for products that need to reliably send high-resolution video over long distances. Think projectors, lecture halls and auditoriums, boardrooms, warehouses, sports bars, casinos—anything that requires multiple displays and high-quality video. Our VS3000 is basically the most suitable option. In 2025, our VS3000 finally transitioned from high-end only to more mainstream products. Major companies that year, marking a nearly 100% increase in VS3000 sales from 2024.

This is great news for Valens Semiconductor Ltd., as the VS3000 is the most advanced HDBaseT chip we offer in our core audio video market and is the pillar of our growth opportunity. As 4K video becomes more mainstream, and as lower-quality solutions become less viable for professional deployment, we expect VS3000 sales to continue to ramp up as we move further into 2026 and beyond. The second cutting-edge chip I want to discuss in relation to the audio video market is our newest VS6320. As a reminder, this is the first and only high-performance USB 3.2 extension solution built on a dedicated chip.

While USB 2.0 has long been sufficient for extending basic peripherals such as keyboards, mice, audio devices, and early-generation cameras, USB 3.2 is increasingly being used in this market to enable a new generation of products: high-resolution USB cameras, interactive displays, and more. Applications include digital signage and interactive kiosks in airports, video walls in museums, retail stores, telemedicine setups in hospitals, and high-end conference rooms. One of the world’s top three ProAV manufacturing based on this chip. We expect the VS6320 to be another growth engine for us in 2026 and beyond.

As for automotive, our opportunity in automotive is on the market for high-speed sensor noise immunity, reaching error rates that are orders of magnitude lower than what our company has achieved in milestone over recent months. To four VA7000 A5 design wins globally and reinforces the connectivity standard as a front-runner for next-generation ADAS and autonomous systems. We also announced our partnerships around our VA7000 A5 chipset. Mobileye, a global leader in ADAS systems, selected our chips for the sensor-to-compute connectivity infrastructure underpinning their most advanced ADAS product. We successfully completed internal viability testing with seven vendors of A5 silicon.

We support a Japanese company, Sakai Riken, as they unveiled a VA7000-based e-mirror with an order of magnitude more imaging data than other solutions on the market. And in Q1 2026, a major Korean supplier, MCNEX, launched the industry’s first automotive-grade QHD front and rear cameras over low-cost channels, based on our chipset. A5 reached other milestones as well. A different silicon vendor announced its own A5 design win with a major Chinese OEM. Sony Semiconductor Solutions introduced to the market the first sensor in the world which integrated A5 extension, positioning us well for future design wins. Of course, our first-generation VA6000 has been in mass production since 2021 with Mercedes-Benz. The contract generated revenues of $18,400,000 during 2025.

I would like to conclude by mentioning the difficult but necessary decision to reduce our workforce. In late January, we announced that we will be reducing our workforce by approximately targeted disciplined, designed to optimize our cost structure, streamline operations, and sharpen execution across the company. This was not a decision I took lightly. Valens Semiconductor Ltd. was built by exceptional people, and I am grateful for the contributions of those who are leaving the company. At the same time, this step allows us to continue to invest in our core business segments with clarity, urgency, and confidence while maintaining the flexibility to capitalize on the right opportunities as they arise.

With that, Guy, please go ahead and discuss our financial performance in more detail.

Guy Nathanzon: Thank you, Yoram. I will start with our fourth quarter revenue of $19,400,000, which exceeded our guidance range of $18,200,000 to $18,900,000. The Cross-Industry Business, or CIB, accounted for $13,900,000 of total revenue this quarter. This compares to Q3 2025 revenues of $13,200,000 from CIB and $4,100,000 from automotive, which represented approximately 75% and 25% of total revenue, respectively. In Q4 2024, revenues from CIB were $11,700,000, and $5,000,000 were from automotive, or approximately 70% and 30% of total revenue, respectively. Q4 2025 gross profit was $11,700,000 compared to $10,900,000 in Q3 2025 and compared to $10,100,000 in Q4 2024. Q4 2025 GAAP gross margin was 60.5%, compared to Q3 2025.

Q4 2025 gross margin for CIB was 66.4% and automotive gross margin was 45.9%. This compares to Q3 2025 gross margins of 69.1% and 43.2%, respectively, and for Q4 2024, gross margins of 64.7% and 50.5%, respectively. Non-GAAP gross margin in Q4 was 63.9%, which compares to 66.7% in Q4 2024. Operating expenses in Q4 2025 totaled $20,900,000 compared to $19,000,000 in Q3 2025 and $18,500,000 in Q4 2024. The increase was due to lower income from a certain batch production incident in an amount of $1,000,000 and higher payroll expense. Change in earnout liability in Q4 was an income of $300,000 compared to an expense of $700,000 in Q3 2025 and an expense of $100,000 in Q4 2024.

The change compared to Q3 2025 is mainly due to a reassessment of the demand to be paid to Achronix. Adjusted EBITDA loss in Q4 2025 was $4,300,000 compared to an adjusted EBITDA loss of $4,300,000 in Q3 2025 and an adjusted EBITDA loss of $3,700,000 in Q4 2024. GAAP loss per share for Q4 was $0.09 compared to a GAAP loss per share of $0.07 for Q3 2025 and a GAAP loss per share of $0.07 for Q4 2024. Non-GAAP loss per share in Q4 2025 was $0.04, compared to a loss per share of $0.04 in Q3 2025 and a loss per share of $0.02 in Q4 2024. I will now turn to the full year 2025 results.

Total revenues for the year 2025 were $70,600,000, exceeding our guidance of between $69,400,000 to $70,100,000. This compares to full-year revenue for 2024 of $57,900,000. Revenues from the Cross-Industry Business were $51,600,000, representing 73% of the total revenue, compared to $36,300,000 in 2024. This increase was due to the recovery in the audio video market. Automotive business revenue was $19,000,000, representing 27% of total revenue, down 12% from $21,600,000 in 2024 due to gradual price erosion and a reduction in the number of units sold to Mercedes-Benz. GAAP gross margin was 62.4% for the full year 2025, compared to 59.2% in 2024.

On a segment basis, 2025 gross margin from the Cross-Industry Business was 68.1%, and gross margin from automotive was 47%. This compares to gross margins of 71% and 39.5%, respectively, in 2024. The increase in 2025 automotive gross margin was due to an optimization of our product cost. The decrease in gross margin of the CIB was due to a product mix shift. Non-GAAP gross margin was 66.1%. Operating expenses were $75,600,000 in 2024. The primary increase in operating expense was related to R&D expense, which increased by $2,200,000 mainly due to increased payroll expense that was driven by two factors: the U.S. dollar/Israeli shekel currency influence and additional headcount in 2025.

Adjusted EBITDA loss for the full year 2025 was $16,900,000, a decrease compared to $21,100,000 in 2024. GAAP net loss per share for 2025 was $0.31, a decrease compared to $0.35 in 2024. Non-GAAP loss per share for 2025 was $0.14, a decrease compared to $0.15 in 2024. Turning to the balance sheet, we ended Q4 with cash, cash equivalents, and short-term deposits totaling $92,600,000 and no debt. This compares to $93,500,000 at the end of Q3 2025 and $131,000,000 at the end of 2024. The decrease in cash from the previous year is attributed in large part to our share repurchase program, which totaled $24,000,000 in 2025. This means that the company consumed $14,400,000 in ongoing operations during 2025.

Our working capital at the end of Q4 was $95,700,000 compared to $98,900,000 at the end of Q3 2025 and $133,600,000 at the end of 2024. Our inventory as of 12/31/2025 was $10,100,000, a decrease from $11,000,000 on 09/30/2025 and $10,200,000 on 12/31/2024. Now I would like to provide our guidance for the first quarter and full year of 2026. We expect Q1 revenues to be in the range of $16,300,000 to $16,700,000. We expect gross margin for Q1 to be in the range of 57% to 59%, and we expect adjusted EBITDA loss in Q1 to be in the range of For the full year 2026, we expect revenues to be in the range of $75,000,000 to $77,000,000.

The midpoint reflects growth of approximately 8% compared to the annual revenues of 2025. We expect an adjusted EBITDA loss of approximately $7,500,000 for the full year 2026. I will now turn the call back to Yoram for his closing remarks, before opening the call for Q&A.

Yoram Salinger: Thank you, Guy. We believe that Valens Semiconductor Ltd. is in a strong position. We have a healthy balance sheet, are market leaders in audio video, and we are well positioned to take a leadership position in automotive as well. We are using our newest chipsets to open up new growth opportunities while focusing now more than ever on our core businesses. We expect good things ahead in 2026 and we will now open for questions. The first question is from Suji Desilva of Wolfe Capital. Please go ahead.

Suji Desilva: Hi, Yoram. Hi, Guy. And congrats on the progress here. The fourth quarter guide, just to review that, what were the drivers of the upside on the fourth quarter versus the prior guidance?

Yoram Salinger: So thank you for your question. So usually, Q4 is categorized by end-of-year budget to be breakout. Between the AV business, the auto business, we sorry. For. Yes. Yes. So, basically, we are not splitting our guidance between the different business units, so we are not going to go into that today. You know, having more design wins in automotive is obviously something that we are striving towards and maintaining our very strong position within the audio video business is something that we will be focusing on in 2026 and beyond.

Suji Desilva: Okay. And then my last question. Yoram, can you talk maybe about how you would leverage the channel and partnership success in the ecosystem that Valens Semiconductor Ltd. has had to try to drive further growth and maybe touch on the incremental areas like medical instruments and industrial factory automation as how you will ramp those? Thanks.

Yoram Salinger: You know, Valens Semiconductor Ltd. has been known for years for establishing the HDBaseT standard and the HDBaseT Alliance. I think that, you know, inculcating 200 leaders in the audio video market is an amazing tool for us to drive our products into the market for the years to come. So we will be focusing on that and enhancing our closer relations with the channel. When we speak about automotive, I think there are two distinct partners that we need to focus on. One is Mobileye, and Mobileye is a very strong and close partner for Valens Semiconductor Ltd. And the other one is the announced Sony sensor, kind of supporting AI.

Those two are marking the road for us for looking for more partnerships in order to drive our success in the automotive ADAS business. Was there another part of the question that I missed?

Suji Desilva: Just the newer areas, medical, industrial, any thoughts on driving the growth?

Yoram Salinger: So I think that the technology is relevant for any market that is looking for high-performance connectivity solutions in challenging environments. So this is kind of a larger category. We announced some deals in both industrial and medical over the past year. We will continue pursuing large opportunities in those markets. But the emphasis is that we have two very strong anchors that we are going to be extremely focused on, and this is why we kind of outlined the two, other than automotive and ProAV. But we would obviously chase large, significant opportunities both in industrial and medical alike.

Suji Desilva: Okay. Appreciate all the detail there, Yoram. Thanks.

Operator: The next question is from Quinn Bolton of Needham and Company. Please go ahead.

Quinn Bolton: Hi, Yoram. Welcome to Valens Semiconductor Ltd. I guess I wanted to follow up on Suji’s last question there. It was a little confusing to me where it sounds like you are trying to refocus Valens Semiconductor Ltd.’s efforts on your two core markets of ProAV, or the AV market in general, as well as automotive. And so it is not entirely clear. Are you deemphasizing the machine vision and medical opportunities? Will you be more selective with opportunities you pursue in those markets? Or are you still focused on the machine vision and medical markets leveraging the technologies you have developed in the AV and automotive markets?

Yoram Salinger: So that is actually a very good question, and I am happy to clarify our position. So being in the AV market for so long, having so many achievements, so many large and good customers, is something that the company should not look at in a light way. So by saying that, we are just kind of stating pretty much the obvious that we are going to focus on that. A company like ours having the Mercedes-Benz deal for, I think, like six years now, having four design wins in the ADAS market, is something of significance for us.

We are going to focus on the automotive, trying to leverage our partnerships in order to win more deals in the automotive. I think in your question, you pretty much outlined our position. We are still looking at medical and industrial. That being said, we are looking to find anchor deals, sizable deals that could make an impact on the industry, making our name as the newcomers into this industry. We need to see some large anchor deals in order for us to become a player that could play this game, the entire game, of those two relatively new markets for the company.

Quinn Bolton: Understood. Thank you for the clarification. And then just wanted to come back to the AV market. You highlighted both the VS3000 and the VS6320. And in your prepared comments, you mentioned both of those devices are expected to continue to grow year on year in 2026. Are there legacy businesses that you would expect to decline, or are the VS3000 and VS6320 the vast majority of the AV business? Just wanted to make sure we identify those headwinds if there are some.

Yoram Salinger: So just to be clear on that, we are segmenting our revenues based on our chipset families. You know, the VS3000 and the VS6320 are the newest generation of our product. It takes time for products to ramp up into their entire capacity or market adoption. Market adoption in the chipset industry takes time, because we are introducing chips that are being introduced to our customers, which are building their products and then launch to the market. It takes time for those to gain momentum and actually be influential on the total result.

Therefore, I highlighted those as growing factors in our business, not to say anything or conclude anything about other families of chips that we have in the market.

Quinn Bolton: Got it. And then just last question for me. You mentioned that sort of year-end budget flush drove some of the upside in the fourth quarter. When I look at the March guidance, it is down slightly on a year-over-year basis after some pretty healthy year-on-year growth in the past three quarters. Just wondering, is the first quarter guidance sort of reflecting, do you think, this year-end budget flush created a little bit of an inventory accumulation in Q4 that you sort of work through in Q1? And is that the reason for sort of down year-on-year guidance for March?

Are there other factors, macro or just the rate of new product adoption that you had mentioned in the script that accounts for the sort of year-on-year decline in the first quarter?

Yoram Salinger: So guidance for the year represents growth, yet another growth year for the company. The guidance is $75,000,000 to $77,000,000 for the year. Macroeconomics and instability and tariffs are things that are influencing, you know, our business, pretty much everybody else. So we see Q1 to be a little bit slower than the rest of the year. But we are still, as we said, confident that this is going to be yet another growth year for the company. Q1 would be slower after a very strong Q4. Usually what happens is that our customers will utilize what they have acquired from us, and then as the year advances, it is going to ramp up.

Quinn Bolton: Understood. Thank you.

Operator: The next question is from Oppenheimer. Please go ahead.

Wei Mok: Hi. This is Wei on the line for Rick. Wanted to welcome you, and thanks for taking the question. So my first question is on the strategic vision of the company, and I appreciate the commentary in the prepared remarks and on the questions about focusing on core business like audio video and auto. But as you step into the CEO role and evaluate the company’s position, where do you see the key strengths? Where are the biggest opportunities to sustain growth? I just wanted to ask if you could help us better understand the long-term strategic vision and the competitive position of the company. That would be great. Thanks.

Yoram Salinger: So it is actually your question kind of driving me to the core competency of this company, right? And we are a high-performance connectivity solution in challenging environments. This is what we are extremely strong at. When it comes to noise immunity and extenders, we are probably the leading technology in the world. I think that the reason we are focusing on the two core businesses of the company is because we see great growth opportunity within those two markets.

And I think that in order for us to be appreciating the opportunity, we are pretty much stating that those markets are not declining, and it is not something that we are going to shift our eyes from the ball, so to speak. That being said, we would definitely seize opportunities within other markets in order to explore other opportunities in adjacent markets.

Wei Mok: And, you know, I have been asked the direct question about medical or industrial. Are you pursuing those?

Yoram Salinger: Yes. We are pursuing some large opportunities with global players in both of those markets. And we hope that those markets would materialize for us in order to drive the growth of the company for the years to come. But I think that it is important to me and essential for me, coming into this job, to reemphasize the strength of this company in the markets that we have operated in for years now.

Wei Mok: Great. Appreciate it. Thank you. So my second question is on the fourth A5 design win. Is there anything you can share with us on timing or the size of this win? Does this win for the Chinese market provide a bigger revenue opportunity than the other earlier three wins? Any additional details would be great. Thank you.

Yoram Salinger: Well, thanks for the question. So we are not able to disclose the name, obviously, or the size of those deals, as those deals have been done with OEMs and partners, and we have to be conscious of privacy. So sorry for that, but that is the nature of this business. That being said, we could say that we assume that the start of revenue generation for those deals is going to be somewhere in 2027. And we need to put an asterisk on that because we know that automotive projects tend to be delayed somewhat at times.

And the other thing that needs to be acknowledged is that the ramping up of model years takes some more years for this to get to full capacity. So at that point, the only thing I could say is we are extremely proud to have those four design wins. We are extremely happy to have one in China, which is obviously signaling a lot in what is happening in the automotive business. And what we are focusing on is actually achieving more design wins, because when you actually achieve those design wins, it takes time, but when it materializes, it could be big business for us.

And, you know, the best example for us is obviously our long, black relations with Mercedes.

Wei Mok: Great. Thank you. And maybe lastly, I wanted to ask about the cost cuts. One of the first actions taken was the $5,000,000 cost reduction. I was wondering if you can expand on that a little bit. Were the cuts equally between the I think, what was previously called the CIB, or Cross-Industry Business, and the auto business? And I believe previously you talked about top-line revenues of around $100,000,000 to $110,000,000 in order to get EBITDA breakeven. Has the target or timing of this breakeven changed?

Guy Nathanzon: Okay. So first of all, the cuts were across the company in order to reduce OpEx and increase efficiency. So this is the first part of the question. And with respect to the second part, we are still in the same ballpark of the breakeven in terms of revenue. Given the same level of operating standards and the same level of gross margin, the company can be EBITDA positive anywhere between $110,000,000 to $120,000,000 revenue. And there is no change on that aspect.

Operator: Thank you. The next question is from Dave Storms of Stonegate. Please go ahead.

Dave Storms: Morning, and thank you for taking my question. I wanted to circle back to some of the remarks. Have you given a cadence for when those savings will take place? Will they be will they be more first-half or second-half weighted?

Yoram Salinger: Sorry. It was extremely hard for us to understand the question. You were cutting off.

Operator: Dave, are you there?

Dave Storms: Apologies. The cadence for the cost savings—will they be evenly distributed through the year, or when will they take place?

Yoram Salinger: So it is very hard for us to give you a full answer without the full question. I assume you are asking how the cuts were conducted, right?

Dave Storms: Right?

Yoram Salinger: If I got the question right, it was cross-company. So the cuts were done across company departments, so it was not one segment or the other that has been impacted. It was cross-company. And I think it is part of being an extremely responsible management team that looks at our very strong balance sheet and tries to actually optimize the operation of the company to ensure further growth in the years to come.

Dave Storms: Understood. Thank you. For the customer acquisition environment, you had a lot of strong wins in 2025. How do you see the customer acquisition environment changing in 2026?

Yoram Salinger: Are you referring to a specific statement, or are you speaking in general regarding customer acquisition?

Dave Storms: Primarily in automotive. But if you would like to map the automotive customer acquisition environment into maybe machine vision or medical, and how you see those, you know, potential to win more contracts there, that would be helpful as well.

Yoram Salinger: So, obviously, in the automotive business, in order to have design wins, you need to be in connection with the ecosystem, including the OEMs, the Tier 1s, and the suppliers of the industry. Being close to the entire chain is something that you need to be focusing on in order to be able to ensure customer acquisition in the short term, midterm, and long term. And this is exactly what we are working on. We are working with the partners I mentioned and others in order to be in a position to be considered for winning more business in the year to come. So that is on the automotive.

On the industrial and medical, as I have indicated earlier, we are focusing on large opportunities, which suggests that we are looking to have wins with leading providers in both of those industries. And that is exactly what we are doing. For obvious reasons, I cannot disclose names, but you can be rest assured that once we have something to share, we would definitely share with you how we advance in those markets.

Dave Storms: Understood. Thank you.

Operator: If there are any additional questions, please press 1. If you wish to cancel your request, please press 2. Please standby. We will report for more questions. There are no further questions at this time. Mr. Salinger, would you like to make a concluding statement?

Yoram Salinger: Thank you. I would like to thank you all for joining us today for our fourth quarter and full year 2025 earnings call and for your continued support and interest in Valens Semiconductor Ltd. I hope to meet you again in our next earnings call.

Operator: Goodbye. Thank you. This concludes the Valens Semiconductor Ltd. results conference call. Thank you for your participation. You may go ahead.

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