Valens Semiconductor Reports Fourth Quarter and Full Year 2021 Results

Delivered Record Annual and Quarterly Revenue in Both the Audio-Video and Automotive Segments

HOD HASHARON, ISRAEL, March 2, 2022 – Valens Semiconductor Ltd. (NYSE: VLN), a premier provider of high-speed connectivity solutions for the automotive and audio-video markets, today reported financial results for the fourth quarter and full year ended December 31, 2021.

“Valens Semiconductor delivered record revenues for the full year and fourth quarter 2021 exceeding $70 million and $20 million, respectively. The growth was driven by strong demand for our innovative high-speed digital connectivity solutions and solid execution across our company,” said Gideon Ben-Zvi, CEO of Valens Semiconductor.

“2021 was the first full year of mass production of our first-generation chipsets in Mercedes-Benz automobiles, which drove our full year automotive revenues to nearly $8 million. We are well on our way to replicating our Audio-Video success in the Automotive market, and we have achieved several important milestones in 2021 towards this goal. We shipped the first-in-industry engineering samples of MIPI A-PHY standard chipsets, our VA7000, to OEMs, Tier 1s and other leading automotive companies for evaluation and integration into their platforms. In Audio-Video, we introduced and started generating revenue from our newest chipset product family, Stello. Valens is well positioned to capitalize on new opportunities as the market increasingly adopts hybrid models that require video conferencing in the Corporate, Medical and Education verticals.

“2022 is off to a strong start. With our unique standard-setting technology, we continue to leverage our first-mover advantage and deliver offerings that are essential for more advanced and safer driver-assistance systems. We plan to expand our foothold in the Automotive and Audio-Video markets with new product offerings, and to create value for all of our stakeholders in 2022 and beyond,” concluded Ben-Zvi.

Key Financial and Business Highlights

• Record full year revenues of $70.7 million, up 24.2% from 2020
  • Audio-video revenues increased 14.5% year-over-year to $62.8 million
  • Automotive revenues increased 281% year-over-year to $7.9 million
  • 2021 full year GAAP gross margin was 71.6% (non-GAAP gross margin was 71.8%)
• Record fourth quarter revenues of $20.7 million, up 46.8% from the fourth quarter of 2020, and up 8.7% from the third quarter 2021
  • GAAP gross margin was 71.2% for the fourth quarter 2021 (non-GAAP gross margin was 71.5%)
• Shipped first-in-industry MIPI A-PHY automotive chipsets to potential customers and leading ecosystem players
• Generated initial revenue from Stello, the newest Audio-Video product family
  • The Stello chipset is already embedded in designs of more than 100 different products from leading Audio-Video manufacturers
• Met all demand from customers, in a severely supply constrained environment
• Record backlog of $78.2 million as of December 31, 2021
• Strong balance sheet with $174.4 million in cash, cash equivalents and short-term deposits as of year-end 2021
  • Net proceeds from transactions related to Valens listing as a public company totaled $131.6 million

First Quarter and Full Year 2022 Outlook

“2021 was a transformative year for Valens, as we became a public company and with the proceeds, further solidified our balance sheet to fund growth. Going forward, we remain focused on delivering value to all our stakeholders by increasing revenues year after year, optimizing margins and diligently managing our operations. Our ultimate goal is to achieve and then continue to amplify our profitability,” said Dror Heldenberg, CFO of Valens Semiconductor.

“Valens is introducing first quarter 2022 guidance. Revenue is expected to range between $20.6 million and $21.0 million. Gross margins are expected to range between 66.5% and 67.0%. Adjusted EBITDA is expected to be in the range of $(10.7) million to $(9.7) million.

“For the full year 2022, the company expects revenue to range between $83.0 million and $85.0 million. Gross margins are expected to range between 65.5% and 67.2%, as we anticipate substantial growth in our Automotive revenues in 2022 compared to 2021. Adjusted EBITDA is expected to be in the range of $(38.4) million to $(37.8) million,” concluded Heldenberg.

Adjusted EBITDA is a non-GAAP measure. See the tables below for additional information regarding this and other non-GAAP metrics used in this release.

Conference Call Information

Valens will host a conference call today, Wednesday, March 2, 2022, at 8:30 a.m. Eastern Time (ET) to discuss its fourth quarter and full year 2021 financial results and business outlook. To access this call, dial (at least 10 minutes before the scheduled time) dial +1 (888) 642-5032 (U.S.), 0 (800) 917-5108 (UK), 03 918 0609 (Israel) or +972 3 918 0609 (all other locations).

A live webcast of the conference call will be available via the investor relations section of Valens’ website at Valens – Financials – Quarterly Results. The live webcast can also be accessed by clicking here. A replay of the conference call will be available on Valens’ website shortly after the call concludes.

NYSE Rule 203.01 Annual Financial Report Announcement

Pursuant to Rule 203.01 of the New York Stock Exchange Manual, Valens Semiconductor Ltd. hereby announces to holders of its ordinary shares that its Annual Report on Form 20-F for 2021 (including its full year 2021 audited financial statements), which was filed with the U.S. Securities and Exchange Commission on March 2, 2021, is available in the investor relations section of its website at https://investors.valens.com/financials/sec-filings/default.aspx. While the company encourages the sustainable approach of downloading and reading the report online, hard copies of the 2021 Annual Report will be provided free of charge, upon request, as follows: Valens Semiconductor Ltd., 8 Hanagar St. POB 7152, Hod Hasharon 4501309, Israel, or by emailing: investors@valens.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the anticipated transaction and future economic and market conditions. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Valens’ management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Valens.

These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political and legal conditions; failure to realize the anticipated benefits of the proposed business combination; future global, regional or local economic and market conditions; the development, effects and enforcement of laws and regulations; Valens’ ability to manage future growth; Valens’ ability to develop new products and solutions, bring them to market in a timely manner, and make enhancements to them; the effects of competition on Valens’ future business; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; the effects of health epidemics, such as the recent global COVID-19 pandemic, have had and could in the future have on Valens’ revenue, its employees and results of operations; the cyclicality of the semiconductor industry; Valens’ ability to adjust its supply chain volume due to changing market conditions or failure to estimate its customers’ demand, including during any downturn in the automotive or audio-video markets; disruptions in relationships with any one of Valens’ key customers; difficulty selling products if customers do not design Valens products into their product offerings; Valens’ dependence on winning selection processes and ability to generate timely or sufficient net sales or margins from those wins; political conditions in Israel; and those factors discussed in Valens’ Form 20-F  filed with  the SEC today, March 2, 2022 under the heading “Risk Factors,” and other documents of Valens filed, or to be filed, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Valens does not presently know or that Valens currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Valens’ expectations, plans or forecasts of future events and views as of the date of this press release. Valens anticipates that subsequent events and developments may cause Valens’ assessments to change. However, while Valens may elect to update these forward-looking statements at some point in the future, Valens specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Valens’ assessment as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

About Valens

Valens Semiconductor is a leading provider of semiconductor products, pushing the boundaries of connectivity by enabling long-reach, high-speed video and data transmission for the automotive and audio-video industries. Valens’ HDBaseT technology is the leading standard in the professional Audio-Video market with tens of millions of Valens’ chipsets integrated into thousands of HDBaseT-enabled products. Valens Automotive is a key enabler of the evolution of autonomous driving, providing chipsets that are already on the road and its underlying technology has been selected to become the basis for the new international standard for automotive connectivity. For more, visit https://www.valens.com/.

For more information, please contact:

Daphna Golden, VP Investor Relations
Valens Semiconductor Ltd.
investors@valens.com

Moriah Shilton
Financial Profiles, Inc.
US: +1 310-622-8251
Valens@finprofiles.com

SOURCE Valens Semiconductor