Valens Semiconductor Ltd. (VLN) Q4 FY2025 Earnings Call Transcript & Summary

Good morning. My name is Hila, and I will be your conference operator today. At this time, I would like to welcome everyone to Valens Semiconductor's Fourth Quarter and Full Year 2025 Earnings Conference Call and Webcast. [Operator Instructions]. I will now turn the call over to Michal Ben Ari, Investor Relations for Valens Semiconductor. Please go ahead.

Thank you, and welcome, everyone, to Valens Semiconductor's Fourth Quarter and Full Year 2025 Earnings Call. With me today are Yoram Salinger, Chief Executive Officer; and Guy Nathanzon, Chief Financial Officer. Earlier today, we issued a press release that is available on the Investor Relations section of our website under investors.valens.com. As a reminder, today's earnings call may include forward-looking statements and projections, which do not guarantee future events or performance. These statements are subject to the safe harbor language in today's press release. Please refer to our annual report on Form 20-F filed with the SEC on February 25, 2026, 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. We will be discussing certain non-GAAP measures on this call, which we believe are relevant in assessing the financial performance of this business, and you can find reconciliations of these metrics within our earnings release. With that, I will now turn the call over to Yoram.

Hello, everyone, and thank you for joining us. I'd like to begin this call by introducing myself to you all. My name is Yoram. I come to Valens with over 25 years of leadership experience in global high-tech companies. My background is in building and scaling technology companies through key growth phases, and that's exactly what I intend to do here at Valens. I'm really excited to have joined this company. I've only been here a few months, but it's already clear to me that Valens has exceptional technology, a strong executive team, dedicated and professional employees and very compelling opportunity ahead. Before I dive into Q4 numbers and our annual overview, I want to take this opportunity, my first Valens earnings report to present you with my initial thoughts about the company and to set expectations around Valens growth in the years ahead. This company has delivered some remarkable achievements over the years. We created HDBaseT standard and founded the HDBaseT Alliance, which boasts over 200 members companies. We sell to nearly all of the leading players across the audio-video industry, supporting their innovation across various verticals they serve. In the automotive market, we are a long-time supplier of chips for Mercedes-Benz, powering the state-of-the-art MBUX infotainment systems. We were a key contributor to the MIPI A-PHY standard, and we've become a pillar within the growing A-PHY ecosystem, achieving 4 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 million and $77 million. The midpoint reflects growth 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 and my strategy for achieving our growth targets 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 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 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'd like now 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 $19.4 million, exceeding our guidance range of $18.2 million to $18.9 million. 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 $4.3 million within the guidance range. Our full year revenues for 2025 were $70.6 million, also exceeding our guidance range of $69.4 million to $70.1 million. GAAP gross margin for the full year 2025 came in at 62.4% and adjusted EBITDA loss was $16.9 million, both above our guidance. Looking ahead to Q1 2026, we expect revenue to be in the range of $16.3 million to $16.7 million. Beyond the numbers, I want to begin our quarterly discussion with a review of one of our core growth engines, audio-video. Valens is offering 2 unique and cutting-edge chipsets that fill market gaps for this industry, the VS3000 and the VS6320. Let's start with the VS3000, the only chip on the market that can extend uncompressed HDMI 2.0 over widely used category cables. Our chip is the solution of choice for products that need to reliably send high-resolution video over long distances. Think projectors, think lecture halls and auditoriums, think boardrooms, warehouses, sports bars, casinos, anything that requires multiple display and high-quality video. Our VS3000 is basically the most suitable option. In 2025, our VS3000 finally transitioning from high-end only to more mainstream products. Major companies brought state-of-the-art VS3000 powered products to market, including leaders, Crestron, Extron, Kramer, and Atlona. This translated into bounce-back year, marking a nearly 100% increase in VS3000 sales from 2024. This is great news for Valens as the VS3000 is the most advanced HDBaseT chip we offer and is a pillar of our growth opportunity in our core audio-video market. 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 in airports, interactive kiosks in museums, video walls in retail stores, telemedicine setups in hospitals or high-end conference rooms. Released in 2024, sales of the VS6320 grew nearly 25% during 2025. Last year, many market leaders released products based on this chipset, including Hall Technologies, INOGENI and ProITAV. In January 2026, one of the world's top 3 Pro AV manufacturers whose name I cannot reveal at this time, released to market a new series of USB 3 extenders targeting meeting rooms based on this chip. We expect the VS6320 to be another growth engine for us in 2026 and beyond as the market continues to break past the limitations of USB 2. Now I'd like to turn to our other core business, automotive. Our opportunity in automotive is dominated by the VA7000 chipset, which offers high-performance connectivity for cameras and radars used in autonomous driving. It is the first chipset on the market to comply with the MIPI A-PHY standard for high-speed sensor connectivity. Needless to say, when we are talking about ADAS and autonomous systems, errors could lead to catastrophic consequences for drivers, passengers and pedestrians alike, which is why our VA7000 offer best-in-class noise immunity, reaching error rates that are orders of magnitude lower than what our competition can support. MIPI A-PHY has achieved important milestone over recent months. We secured a new design win for the VA7000 chipset, which will be integrated into an ADAS system of a premium global automotive OEM serving the Chinese market. The deal brings Valens to 4 VA7000 A-PHY 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 A-PHY 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 interoperability testing with 7 vendors of A-PHY silicon. We support a Japanese company Sakae Riken as they unveiled a 7000 base 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-first automotive-grade QHD front and rear cameras over low-cost channels based on our chipset. MIPI A-PHY reached other milestones as well. A different silicon vendor announced its own A-PHY design win with a major Chinese OEM. Sony Semiconductor Solutions introduced to the market the first sensor in the world, which integrated A-PHY extension and the A-PHY ecosystem continues to grow with new products and integrations being developed by major players such as OMNIVISION, Panasonic and Qualcomm. The industry is buying into A-PHY standard, and Valens is recognized as the go-to leader within the ecosystem, positioning us well for the future design wins. Of course, our first generation of automotive chipsets, the VA6000 has been in mass production since 2021 with Mercedes-Benz. The contract generated revenues of $18.4 million during 2025, a 12% drop from 2024 revenues, derived from the decline in the number of product units sold by us to full installations in Mercedes-Benz car, coupled with an erosion in the average selling price. 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 10% across various departments, which is expected to save around $5 million annually in operating expenses. The reduction was targeted and disciplined designed to optimize our cost structure, streamline our operations and sharpen execution across the company. This was not a decision I took lightly. Valens was built by exceptional people, and I'm 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.

Thank you, Yoram. I'll start with our fourth quarter and full year 2025 results and then provide our outlook for the first quarter and full year of 2026. We generated quarterly revenue of $19.4 million, which exceeded our guidance range of $18.2 million to $18.9 million. This compared to revenues of $17.3 million in Q3 2025 and $16.7 million in Q4 2024. The cross-industry business or CIB, accounted for $13.9 million or approximately 70% of total revenues, while automotive contributed $5.5 million or approximately 30% of total revenues this quarter. This compares to Q3 2025 revenues of $13.2 million from CIB and $4.1 million from automotive, which represented approximately 75% and 25% of total revenues, respectively. In Q4 2024, revenues from CIB were $11.7 million and $5 million were from automotive or approximately 70% and 30% of total revenues, respectively. Q4 2025 gross profit was $11.7 million compared to $10.9 million in the third quarter of 2025 and compared to $10.1 million in the fourth quarter of 2024. Q4 2025 gross margin was 60.5% compared to our guidance range of 58% to 60%. This compares to a Q3 2025 gross margin of 63% and 60.4% in Q4 2024. On a segment basis, Q4 2025 gross margin for the CIB was 66.4% and gross margin from automotive was 45.9%. This compares to Q3 2025 gross margin of 69.1% and 43.2%, respectively. And for Q4 2024, gross margin of 64.7% and 50.5%, respectively. The decrease in gross margin of the CIB compared to Q3 2025 was due to a change in the product mix. The increase in Q4 2025 in automotive gross margin compared to Q3 2025 was due to cost optimization. Non-GAAP gross margin in Q4 was 63.9%, which compares to 66.7% in Q3 2025 and 64.5% in Q4 2024. Operating expense in Q4 2025 totaled $20.9 million compared to $19 million in Q3 2025 and $18.5 million in Q4 2024. Research and development expense in Q4 totaled $11.1 million compared to $10.8 million in Q3 2025 and $10.1 million in Q4 2024. SG&A expenses in Q4 were $10.1 million compared to $7.4 million in Q3 2025 and $8.3 million in Q4 2024. The increase compared to Q3 2025 is mainly due to lower income from a certain batch production incident in an amount of $1 million and a higher payroll expense. Change in earnout liability in Q4 was an income of $0.3 million compared to an expense of $0.7 million in Q3 2025 and an expense of $0.1 million in Q4 2024. The change compared to Q3 2025 is mainly due to reassessment of the earn-out amount to be paid to Acroname shareholder. GAAP net loss in Q4 was $8.8 million compared to a net loss of $7.3 million in Q3 2025 and a net loss of $7.3 million in Q4 2024. Adjusted EBITDA in Q4 was a loss of $4.3 million within the guidance range of a loss between $4.6 million to $4.2 million. This compares to an adjusted EBITDA loss of $4.3 million in Q3 2025 and an adjusted EBITDA loss of $3.7 million 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. The difference between GAAP and non-GAAP loss per share was mainly due to stock-based compensation, change in earn-out liability, depreciation and amortization expense and certain batch production incident income. I will now turn to the full year 2025 results. Total revenues for the year 2025 were $70.6 million, exceeding our guidance of between $69.4 million to $70.1 million. This compares to full year revenues from 2024 of $57.9 million. Revenues from the cross-industry business were $51.6 million, representing 73% of the total revenue compared to $36.3 million in 2024. This increase was due to the recovery in the market of the audio-video. Automotive business revenue was $19 million, representing 27% of total revenues, down 12% from $21.6 million 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 margin 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% for the full year 2025 compared to 62.9% in 2024. Full year 2025 operating expense were higher, reaching $78.1 million compared to $75.6 million in 2024. The primary increase in operating expense was related to R&D expense, which increased by $2.2 million, mainly due to increased payroll expense that was driven by 2 factors: the U.S. dollar-Israeli shekel currency influence and additional headcount in 2025 due to the acquisition of Acroname in May 2024. GAAP net loss for the full year 2025 decreased to $31.6 million from $36.6 million in 2024. Adjusted EBITDA loss for the full year 2025 was $16.9 million, a decrease compared to $21.1 million 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 equivalents and short-term deposits totaling $92.6 million and no debt. This compares to $93.5 million at the end of Q3 2025 and $131 million at the end of 2024. The decrease in cash from the previous year is attributed to a large part of our share repurchase program, which totaled $24 million in 2025. This means that the company consumed $14.4 million in ongoing operations during 2025. Our working capital at the end of Q4 was $95.7 million compared to $98.9 million at the end of Q3 2025 and $133.6 million at the end of 2024. Our inventory as of December 31, 2025, was $10.1 million, a decrease from $11 million on September 30, 2025, and $10.2 million on December 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 $16.3 million to $16.7 million. 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 $7.9 million to $7.5 million loss. For the full year 2026, we expect revenues to be in the range of $75 million to $77 million. The midpoint reflects growth of approximately 8% compared to the annual revenues of 2025. I'll now turn the call back to Yoram for his closing remarks before opening the call for Q&A.

Thank you, Guy. We believe that Valens is in a strong position. We have a healthy balance sheet. We are market leaders in audio-video, and we are well positioned to take a leadership position in automotive as well. We are reusing 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 beyond. With that, I'll now open the call to answer your questions.

[Operator Instructions]. The first question is from Suji Desilva of ROTH Capital.

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?

So thank you for your question. So usually, Q4 is categorized by end of year budget to be consumed within the Q4. This is what drove our customers to increase their orders with us, and this is what kind of drove the Q4 results.

And then as we look ahead to '26 on the full year revenue guide, any thoughts on how that might break out between the AV business and the auto business? Or maybe you can talk qualitatively what you expect in the auto business in the coming year with the 3 wins, OEM wins you have out there?

So I think when you refer to the wins, you mean the 4 wins that we have with the...

The 4, not 3, sorry, 4, yes.

Yes. So basically, we're not splitting our guidance between the different business units. So we're not going to go into that today. But having more design wins in automotive is obviously something that we're striving towards and maintaining our very strong position within the audio-video business is something that we'll be focusing on in 2026 and beyond.

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 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'll ramp those?

Valens has been known for years for establishing the HDBaseT standard and the HDBaseT Alliance. I think that in calculating 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 the automotive, I think there are 2 distinct partners that we need to focus on. One is Mobileye, and Mobileye is a very strong and close partner for Valens. And the other one is the announcement of the Sony sensor kind of supporting A-PHY. Those 2 are marking the road for us for looking for more partnerships in order to drive our success in the automotive ADAS business. Was there other part of the question that I missed?

And just the medical, the newer areas, medical, industrial, any thoughts on driving the growth?

So I think Valens 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 the both industrial and medical over the past year. We will continue pursuing larger opportunities in those markets. But you know the emphasis is that we got 2 very strong anchors that we're going to be extremely focused on, and this is why we kind of outlined the 2 other than the automotive and Pro AV. But we would obviously chase large opportunities, significant opportunities, both in industrial and medical alike.

The next question is from Quinn Bolton of Needham & Company.

I guess I wanted to follow up on Suji's sort of last question there. It was a little confusing to me where it sounds like you're trying to refocus Valens' efforts on your 2 core markets of Pro AV or the AV market in general as well as automotive. And so it isn't entirely clear. Are you deemphasizing the machine vision and medical opportunities? Will you be more selective with opportunities to pursue in those markets? Or are you still focused on the machine vision and medical markets, leveraging the technologies you've developed in the AV and automotive market?

So that's actually a very good question, and I'm 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 shouldn't look in a light way. So by saying that, we're just kind of stating pretty much the obvious that we're going to focus on that. A company like ours having the Mercedes-Benz deal for, I don't -- I think, like 6 years now and having 4 design wins in the ADAS market is something of significance for us. We're 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 the medical and industrial. That being said, we are looking to find anchor deals, like 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 2 relatively new markets for the company.

And then I 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 the VS3000 and VS6320, the vast majority of the AV business? Just want to make sure if there are some headwinds that we identified those.

So just to be clear on that, we're not segmenting our revenues based on our chipset families. The VS3000 and the VS6320 are the newest generation of our products. It takes time for products to kind of ramp up into its entire capacity or market adoption. Market adoption in the chipset industry takes time, right? 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 the momentum and actually be influential on the total results. Therefore, I highlighted those as growing factors in our business, not to say anything or don't conclude anything about other family of chips that we have in the market.

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 quarter guidance, it's down slightly on a year-over-year basis after some pretty healthy year-on-year growth in the past 3 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 worked through in Q1? And is that the reason for sort of the down year-on-year guidance for March? Or are there other factors, macro or just the rate of new product adoption that you mentioned in the script that accounts for the sort of year-on-year decline in the first quarter?

So our guidance for the year represents growth -- yet another growth year for the company. The guidance is $75 million to $77 million for the year. Macroeconomics and unstability and tariffs are things that are influencing our business like pretty much everybody else. So we see Q1 to be a little bit slower than the rest of the year. But we're still -- as we said, we're still confident that this is going to be yet another growth year for the company. Q1 will be slower after a very strong Q4, usually, what happens is that our customers will utilize what they've acquired from us. And then as the year advance, it's going to ramp up.

The next question is from Rick Schafer of Oppenheimer.

This is Ray on the line for Rick. I wanted to welcome you, Yoram. And thanks for taking the question. So my first question is on the strategic vision of the company. And I appreciate the commentary and 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? Like where are the biggest opportunities to sustain growth? I just wanted to ask and if you could help us better understand the long-term strategic vision and the competitive position of the company, that would be great.

So it's 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, right? This is what we are extremely strong when it comes to noise immunity and extenders. We're probably the leading technology in the world. I think that the reason we are focusing on the 2 core businesses of the company is because we see great growth opportunity within those 2 markets. And I think that in order for us to be appreciating the opportunity, we're pretty much stating that those markets are not declining, and it's not something that we're going to kind of shift our eyes from the ball, so to speak. That being said, we will definitely seize opportunities within other markets in order to explore other opportunities in adjacent markets. So -- and I've been asked the direct question about medical or industrial, 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's important to me and essential for me coming into this job to reemphasize the strength of this company in the markets that we operate for years now.

So my second question is on the fourth A-PHY 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 3 wins? Any additional details would be great.

So we're not able to disclose the name, obviously, the sizes of those deals as those deals have been done with OEMs and partners that we have to be conscious of privacy. So sorry for that, but that's 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 the second half of 2027. And we need to put kind of an asterisk on that because we know that automotive projects tend to be delayed somewhat at times. And the other thing needs to be kind of acknowledged is that the ramping up of model years is taking some more years for this to get to its full capacity. So at that point, the only thing I could say we're extremely proud to have those 4 design wins. We're extremely happy to have one in China, which is obviously signaling a lot in what's 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 materialize, it could be a big business for us. And the biggest -- the best example for us is obviously our long-lasting relations with Mercedes.

And maybe lastly, I wanted to ask about the cost cuts. One of the first actions taken was the $5 million cost reduction. I was wondering if you can expand on that a little bit. Will the cuts be equally between the -- I think it was previously called the CIB or cross-industry business and the auto business. And I believe previously, you talked about the top line revenues of around $110 million in order to get to EBITDA breakeven. Has the target or timing of this breakeven changed?

So first of all, the cuts were all over 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, assuming the same level of operating expenses and the same level of gross margin, the company can be EBITDA positive anywhere between $110 million to $120 million of revenue and there is no change on that aspect.

The next question is from David Storms of Stonegate.

Circle back to some of the remarks. But have you given a cadence those savings will take place? Will they be more first half or second half weighted? Just saying.

Sorry, it was extremely hard for us to understand the question. You were cutting off. Dave, are you there?

Apologies. The cadence for the cost savings, will they be evenly distributed for the year -- take place.

So it's very hard for us to hear your full question. I assume you're asking how was the cuts conducted, right?

Yes.

Yes. Well, if I got the question right, it was cross company. So the cuts were done cross-company departments. So it was not one segment or the other that has been impacted. It was cross company. And I think it's part of being an extremely responsible management team that looks at the -- our very strong balance sheet and trying to actually optimize the operation of the company to ensure further growth in the years to come.

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?

Are you referring to a specific segment? Or are you speaking in general regarding customer acquisitions?

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 potential to win more contracts there, that would be helpful as well.

So obviously, in the automotive business, in order to have design wins, you need to be in connection with the ecosystem, including the car manufacturers, 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're working with. We're working with the partners I mentioned and others in order to be in a position to be considered for winning more business in the years to come. So that's on the automotive. On the industrial and medical, as I've indicated earlier, we are focusing on larger opportunities, which suggest that we're looking to have wins with leading providers of those both industries. And that's exactly what we're doing. Obviously, for obvious reasons, I cannot disclose names, but you could be rest assured that once we have something to share, we would definitely share with you guys how we advance in those markets.

[Operator Instructions] There are no further questions at this time. Mr. Salinger, would you like to make a concluding statement?

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. I hope to meet you again in our next earnings call. Goodbye.

Thank you. This concludes the Valens Semiconductor Results Conference Call. Thank you for your participation. You may go ahead and disconnect.