Valens Semiconductor Cuts FY23 Guidance, Plans To Trim Headcount By 15%

Valens Semiconductor Ltd VLN revised its 2023 financial outlook and chalked out a plan to boost operational efficiency.

The company plans to streamline development platforms to align research & development (R&D) resources. 

VLN targets to cut headcount by 15% across several departments, with expected operating expense savings of around $9 million annually.

VLN projects the plan to conclude by the end of Q3 2023.

Outlook: For Q2 2023, the company reiterates the guidance for revenues at $23.9 million-$24.1 million (consensus: $23.98 million), gross margin at 61.0%-62.0%, and adjusted EBITDA loss at $(4.3) million-$(3.7) million.

For Q3 2023, Valens expects revenues to reach a bottom and to range $14.0 million-$14.2 million (consensus: $22.02 million), with an anticipated recovery in Q4 2023.

For 2023, the company reduced the outlook for revenues to $83.8 million-$84.2 million (from $97 million-$100 million earlier) vs. consensus of $97.74 million.

Also, the guidance was cut for 2023 gross margin to 61.9%-62.5% (from 62.0%-62.7% prior) and adjusted EBITDA loss to $(18.3) million-$(16.5) million from $(15.4) million-$(13.6) million earlier. 

On the other hand, VLN reaffirms the expected adjusted EBITDA breakeven by the end of 2023.

"Looking at the second half of 2023, in the last several weeks we have been witnessing a significantly slower than anticipated pace of bookings and additional customer requests to push out delivery, due to their delayed inventory digestion. As a result, we are reducing our revenue expectations for the second half of 2023," said Gideon Ben-Zvi, CEO.

Last month, the company reported Q1 2023 earnings of $23.88 million, beating the consensus of $23.71 million and the adjusted EPS loss of $(0.03) surpassed the estimate of $(0.07).

As of March 31, 2023, the company held $139.7 million in cash, cash equivalents and short-term deposits.

Price Action: VLN shares are trading lower by 2.55% at $2.29 premarket on the last check Thursday.