Please refer to our Annual Report on Form 20-F filed with the SEC on 02/25/2026 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 or subsequent events. You can find reconciliations of these metrics within our earnings release. With that, I will now turn the call over to Yoram Salinger.

In global high-tech companies, I have a background in building and scaling technology companies through essential growth phases. That is my intention here at Valens Semiconductor Ltd. I am excited to have joined this company. Although I've only been here a few months, it is clear that Valens Semiconductor Ltd. possesses exceptional technology, a strong executive team, dedicated and professional employees, and significant opportunities ahead. Before discussing Q4 numbers and our annual overview, I want to take this opportunity, my first earnings report for Valens Semiconductor Ltd., to share my initial thoughts about the company and set expectations for its growth in the coming years. This company has achieved remarkable successes over time. We established the HDBaseT standard and founded the HDBaseT Alliance, which has over 200 member companies. We supply nearly all the leading players in the audio-video industry, supporting their innovations across various verticals. In the automotive market, we have long been a supplier of chips for Mercedes-Benz, powering the advanced MBUX infotainment system. We contributed significantly to the A5 standard and have become a key player in the growing A5 ecosystem, achieving four design wins for the next-generation ADAS systems. We are confident that both the audio-video and automotive markets represent important long-term growth areas for the company. The first key number I want to share is our new growth projection: we anticipate that by 2026, our revenues will range between $75 million and $77 million, which reflects about 8% growth compared to last year. While we expect growth to continue in 2026, the rate and extent may be influenced by macroeconomic conditions and the adoption pace of new technologies, which could lessen visibility and increase uncertainty. Given the current environment and reduced visibility beyond the short term, we will provide single-year growth projections moving forward. My outlook for Valens Semiconductor Ltd. and strategy for achieving our growth target focuses on concentrating our resources on our core businesses: audio-video and automotive. These are the markets where we have technology leadership and see lasting profitable growth opportunities. However, we will also remain proactive by pursuing significant revenue-generating opportunities in additional verticals that need high-performance connectivity solutions in challenging environments. Our main priority will be ensuring disciplined execution, profitability, and innovation in our core markets. With that context, I will now delve into our Q4 and 2025 full-year performance. I am pleased to report a strong fourth quarter that exceeded our initial expectations, with revenues of $19.4 million, surpassing our guidance range of $18.2 million to $18.9 million, driven by high customer demand in the audio-video market. This marks our seventh consecutive quarter of growth. The GAAP gross margin for Q4 2025 was 60.5%, which was better than our guidance, and the adjusted EBITDA loss was $4.3 million, within the guidance range. Our total revenues for 2025 reached $70.6 million, again exceeding our guidance of $69.4 million to $70.1 million. The GAAP gross margin for the full year was 62.4%, with an adjusted EBITDA loss of $16.99 million, both surpassing our guidance. Looking ahead to Q1 2026, we expect revenues will range from $16.3 million to $16.7 million. Beyond the figures, I want to initiate our quarterly discussion by reviewing one of our core growth engines, audio-video. Valens Semiconductor Ltd. is offering two innovative chipsets, the VS3000 and the VS6320, that fill market gaps in this industry. Starting with the VS3000, it is the only chip on the market capable of extending uncompressed HDMI 2.0 over widely used category cable. Our chip is the preferred solution for products that need to reliably transmit high-resolution video over long distances, such as projectors, lecture halls, boardrooms, warehouses, sports bars, and casinos. The VS3000 has transitioned from high-end products to more mainstream applications, achieving nearly a 100% increase in sales from 2024. This is excellent news for Valens Semiconductor Ltd., as the VS3000 is our most advanced HDBaseT chip in the audio-video sector and is a cornerstone of our growth strategy. As 4K video continues to gain popularity, and as lower-quality solutions fade, we expect VS3000 sales to continue to rise as we move into 2026 and beyond. The second cutting-edge chip I want to highlight is the newest VS6320. This is the first and only high-performance USB 3.2 extension solution built on its dedicated chip. While USB 2.0 has been adequate for basic devices like keyboards and mice, USB 3.2 is increasingly used for new products such as high-resolution USB cameras and interactive displays, applicable in areas like digital signage, interactive kiosks in airports, museums, retail, telemedicine, and high-end conference rooms. One of the world's top three ProAV manufacturers is utilizing this chip. We anticipate that the VS6320 will also drive growth for us in 2026 and beyond. Regarding the automotive sector, we have significant opportunities related to high-speed sensor noise immunity, achieving vastly improved error rates recently. Our four VA7000 A5 design wins globally reinforce the connectivity standard as a leader for next-generation ADAS and autonomous systems. We announced partnerships around our VA7000 A5 chipset, with Mobileye, a leading ADAS systems provider, choosing our chips for their advanced product's sensor-to-compute connectivity infrastructure. We successfully completed internal viability tests with seven A5 silicon vendors and supported the Japanese company Sakai Riken in launching a VA7000-based e-mirror that offers significantly more imaging data than other market solutions. In Q1 2026, a major Korean supplier, MCNEX, introduced the first automotive-grade QHD front and rear cameras over low-cost channels, based on our chipset. We reached additional A5 milestones, as another silicon vendor announced an A5 design win with a major Chinese OEM, while Sony Semiconductor Solutions launched the first sensor globally that integrates A5 extension, putting us in a strong position for future design wins. Our first-generation VA6000 has been in mass production with Mercedes-Benz since 2021, generating revenues of $18.4 million during 2025. Finally, I want to address the challenging but necessary decision to reduce our workforce. In late January, we announced a workforce reduction of approximately [indiscernible], aimed at optimizing our cost structure, streamlining operations, and enhancing execution across the company. This decision was not taken lightly, as Valens Semiconductor Ltd. was built by exceptional people, and I appreciate the contributions of those leaving the company. However, this action enables us to confidently invest in our core business segments while retaining the flexibility to seize emerging opportunities. With that, Guy, please discuss our financial performance in more detail.

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 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 amounting to $1,000,000 and higher payroll expenses. The 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 driven by two factors: the U.S. dollar to 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 December 31, 2025, was $10,100,000, a decrease from $11,000,000 on September 30, 2025, and $10,200,000 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 $16,300,000 to $16,700,000. We expect gross margin for Q1 to be in the range of 57% to 59%, and we expect an adjusted EBITDA loss in Q1 to be in the range of an indiscernible amount. 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.

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.

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?

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 are 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.

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.

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?

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

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.

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?

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 lightly. 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 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.

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.

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.

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?

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.

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.

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.

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

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.

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.

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.

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?

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.

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 more first-half or second-half weighted?

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 through the year, or when will they take place?

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?

Right?

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.

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?

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

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.

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.

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?

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.

Goodbye. Thank you. This concludes the Valens Semiconductor Ltd. results conference call. Thank you for your participation.