Valens Semiconductor Reports Strong Q3 2025 Results with Sixth Consecutive Quarter of Growth

Valens Semiconductor Ltd. reported third quarter 2025 revenue of $17.3 million, significantly exceeding guidance of $15.1–$15.6 million and marking the company's sixth consecutive quarter of growth. The performance represents an increase from $17.1 million in the second quarter and $16.0 million in the same period last year. GAAP gross margin reached 63.0%, surpassing expectations while showing a slight easing from 63.5% in the previous quarter. The company's adjusted EBITDA loss of $4.3 million improved significantly compared to the projected range of $7.4–$6.8 million.

The cross-industry business segment generated $13.2 million in revenue, representing approximately 75% of total revenues and showing sequential growth from $12.8 million in the second quarter. This performance was supported by strong adoption of the VS3000 chipset in professional audiovisual applications. Valens expanded its growth vectors beyond ProAV by announcing the market's first end-to-end camera-to-processor MIPI A-PHY platform with D3 Embedded for industrial machine vision applications. The segment achieved gross margins of 69.1%, improving from 67.8% in the prior quarter due to favorable product mix.

Valens' automotive segment reported revenues of $4.1 million, reflecting a sequential decrease from $4.3 million in the second quarter and a year-over-year decline from $6.6 million. Continued weakness in the automotive market attributed to the current tariff environment was identified as the primary driver of this decrease. Automotive gross margins decreased to 43.2%, primarily due to product version mix and operational expenses related to a manufacturing line transition. Despite these challenges, management expects gradual improvement over the coming quarters as the automotive market stabilizes alongside ongoing A-PHY ecosystem progress.

The company advanced its medical market initiatives with three VA7000-based endoscopy product launches, including the industry's first single-use 4K colonoscope, demonstrating reliability and image-quality advantages. These medical programs are progressing through evaluation and development phases, with typical qualification timelines suggesting several quarters before meaningful revenue contribution. In industrial machine vision, Valens expanded its presence through integration of the VA7000 chipset, enabling next-generation factory automation and inspection systems. The ProAV business continued to show strength with customer demand exceeding expectations and the portfolio broadening across VS3000 and VS6320 use cases.

Valens ended the third quarter with $93.5 million in cash, cash equivalents, and short-term deposits, despite $3.6 million in share repurchase expenditures. The company maintains zero debt, underscoring strong financial resilience and readiness to pursue growth opportunities, including potential strategic acquisitions. For the fourth quarter of 2025, Valens expects revenue between $18.2 million and $18.9 million, with adjusted EBITDA loss projected between $4.6 million and $4.2 million. Gross margins are anticipated to range between 58.0% and 60.0%. Full-year 2025 revenue guidance of $69.4 million to $70.1 million represents a year-over-year gain of approximately 20% at the midpoint, reflecting the company's sustained growth trajectory across multiple market segments.