Valens Semiconductor Ltd.

Good morning. My name is Yoni, and I will be your conference operator today. At this time, I would like to welcome everyone to Valence Semiconductor's third quarter 2022 earnings conference call and webcast. All participant lines have been placed in a listen-only mode. Opening remarks by Valence Semiconductor Management will be followed by a question and answer session. I will now turn the call over to Daphna Golden, Vice President, of Investor Relations for Valence Semiconductor. Please go ahead.

Thank you and welcome everyone to Valence Semiconductor's third quarter 2022 earnings call. With me today are Gideon Bensley, Chief Executive Officer, and Dwell Hasenberg, Chief Financial Officer. Earlier today, we issued a press release that is available in the Investor Relations section of our website under investors.valence.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 20F filed with the SEC on March 2, 2022, 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 the business, and you can find reconciliations of these metrics within our earnings release. In the coming weeks, we will be in New York, Scottsdale, Arizona, and London for investor conferences and meetings. If you're interested in meeting with us, please email me at investorsatvalence.com. With that, I will now turn the call over to Gideon.

Thanks, Dasnak, and thank you everyone for joining our call. Q3 quarterly results exceeded our guidance. Q3 2022 revenues were a record of $23.1 million, up 21% compared with Q3 2021. We also achieved better-than-anticipated gross margin and adjusted EBITDA. We are increasing our full-year revenue guidance and improving our adjusted EBITDA guidance for the year. Our high-speed connectivity technology is used in diversified business activities that supports people's daily lives and industries in two business segments, audio-video and automotive, in which we continue to diversify and expand our footprints. Now I will turn to a review of our business. Starting with audio-video. Demand for our high-speed, uncompressed multimedia distribution solutions was strong and our audio-video business continued expanding into new applications and verticals from corporate, education, government, industrial to medical and more. Starting with education. The trend of educational entities using hybrid models to enable students and staff to switch between on-site and remote learning is here to stay, and we are seeing more and more classrooms around the world equipped with video collaboration systems. Hybrid learning enables the continuity of teaching and learning. It increases equitability by giving students access to additional education opportunities that meet their academic needs. In this way, our technology democratizes opportunity and contributes to equity. In the corporate sector, the opportunity across industries and geographies is substantial for audio-video connectivity technology, such as ours, as video conferencing technology is increasingly essential for the office space, video meeting, and remote work. In command and control, the use of our technology is growing. Many entities across the globe need to visualize their operations, enhance their efficiency, and better safeguard communities. A recent use case in the corporate sector is a multinational electric utility company where security is of paramount importance. The company needed to isolate a certain department's operations from the rest of the IP network while still providing uncompressed long-distance multimedia extensions. Our wired audio-video distribution products allow them to meet this goal. I am also proud to share that earlier this year, Valence semiconductor chipsets embedded in Panasonic's 4K HD suite of video products were used to enhance the experience of athletes and spectators from around the world at the Beijing Olympic and Paralympic Winter Games. They all experienced breathtaking immersive visuals in real time in the different sporting events. All in all, our audio-video business grew on the top line and generated strong margins with a healthy mix of customers, industries, and geographies. In Q3, we also continue to sell our automotive VA6000 chipset in USB extension applications for audio-video use. I believe that going forward, we will see additional revenue contribution in the audio-video business by repurposing our automotive products. This leads me to our automotive business. Valet Semiconductor offers a unique set of in-vehicle wired symmetric and non-symmetric high-speed connectivity required by the automotive industry. Our VI6000 chipset family provides symmetric connectivity and enables data flow for infotainment and telematics. Mercedes-Benz started using our chipsets in the S-Class model in Q4 2020, and today you can find our chips in the S, C, and E-Class models, including in the electric vehicle known as EV models. The VA7000 chipset family, our non-symmetric product, was the first in the industry to comply with the NIPI AFI standard. It addresses the growing need for high-speed video connectivity for automotive applications such as advanced driver assistance systems known as ADAS, which is projected to run towards an $8 to $10 billion market in the coming years. The MIPI-A5 standard that was released in Q4 2020 is the industry standard for in-vehicle long-reach video connectivity. It will be required initially for high-speed connectivity between the sensors to the compute unit for automotive applications such as ADAS and autonomous driving. Valence Semiconductor's non-symmetric DSP-based connectivity technology is the foundation for the MIPI-A5 standard, which aims to replace the legacy analog solution existing today in cars. Valence VA7000 product family features outstanding resilience to electromagnetic interference, known as DMI, making it an ideal connectivity solution for the high-bandwidth, high-resolution sensors that significantly improve object detection, and classification. Our AFI-compliant chipset greatly simplifies integration of cameras, LIDAR, and radar. It also enables flexible integration of these sensors into a sensor cluster that is connected over a single link. This is known as sensor fusion. Sensor fusion opens the door to more accurate centralized computing and is key element for ADAS Level 3. Speaking on radar specifically, it is becoming clear that in addition to camera and sensors, radar are essential to meet our automotive OEM and T1 ASUS requirements. Our connectivity products are currently being evaluated by leading radar companies that are considering the use of VA7000 with their sensors. In our previous course, we communicated our expectations regarding the pace of adoption of our VA7000 solutions. I'm pleased to share with you, we have already received initial RFIs from potential customers for our MIPI AFI compliant VA7000 chipset. We are on track for fresh design wins next year with smart production expected to start in 2025. In line with our strategic plan, the growing MIPI AFI ecosystem continues to gain recognition and is well positioned for large scale implementation by automotive OEMs around the world. An important pillar is solidifying the ecosystem in Intel, which chairs the MIPI Alliance Board of Directors and determines that MIPI AFI is the most cutting-edge high-speed connectivity technology in the automotive industry. In Q3, we announced a collaboration with Intel Foundry Services to support the development of a MIPI AFI-compliant offering for their automotive customers. We believe our partnership with Intel Foundry will encourage other automotive chip manufacturers to join the growing WIPI-A5 ecosystem as automotive OEMs require multiple production sources. The interoperability between systems from a number of vendors is the requirement for the acceptance of any industry standard. In the third quarter, we announced the successful completion the industry's first joint interoperability test between a Valene Semiconductor VA7000 chip on the receiver side and Sony Semiconductor Solution prototype of integrated sensor and transmitter chipset on the other side. Sony Semiconductor Solution has stated the importance of introducing this cutting-edge technology into their image sensors. They also expect that the MIPI A5 transmitter integration will provide significant cost and performance benefits to the global base of automotive customers. Last month, we conducted a webinar with Sony Semiconductor Solutions and Jet Park, an association of Japanese automotive OEMs and tier ones, such as Toyota, Nissan, Honda, Mazda, Suzuki, and Denso, on how automotive companies can advance ADAS in autonomous driving with SMIPI A5. Hundreds of participants from the Japanese automotive industry joined the webinar to hear speakers from the Jasper Toyota Next Generation High-Speed Network Group, Sony Semiconductor Solutions Automotive Development, and Valen Semiconductor discuss the progress of MIPI-A5 and growing importance of electromagnetic compatibility, known as EMC, in cars. As car companies integrate sensors requiring higher bandwidth and EMC into next-generation ADAS and autonomous systems, interoperability among multiple vendor components will be crucial. To address this need, test equipment vendors are beginning to create off-the-shelf testing solutions. Keysight Technologies, which delivers advanced design and validation solutions, is addressing the growing market demands for high-speed digital interfaces for next-generation in-vehicle networks. In September, they announced their partnership with several companies, including Valen Semiconductor, to develop an EPFI compliance test solution that ensures data transmission quality and broad-scale interoperability. Before turning to our financials, this call marks the first anniversary of Valen Semiconductor as a public company. Since going public, we have made significant progress executing against our business plan and growth strategy, which is supported by our solid balance sheets. So far during 2022, we have successfully operated in a turbulent geopolitical and economic environment. In the near term, we will continue to monitor the macro environment and in particular, items that could impact our business during 2023 such as lead times, order patterns, and demand levels across industries. We are focused on creating long-term value to all our stakeholders. We believe that we have sufficient resources and capabilities to continue to invest in and expand our competitive advantages, enhance our product portfolio and market presence. We will continue to focus on our best opportunities, which we believe will drive sustainable growth and profitability for the company. I'll now turn it over to George Heldenberg, our CFO, to review our Q3 2022 financial results and provide our financial outlook.