DALLAS, TX -- May 13, 2026 -- Valens Semiconductor Ltd.(NYSE:VLN): Stonegate Capital Partners Updates Coverage on Valens Semiconductor Ltd. (NYSE:VLN). Valens Semiconductor reported 1Q26 revenue of $16.9M, compared with $19.4M in 4Q25 and $16.8M in 1Q25. GAAP gross margin was 62.2%, above guidance of 57.0%–59.0%. Adjusted EBITDA loss was $(5.5)M, better than the guided range of $(7.9)M to $(7.5)M. While revenue stepped down sequentially following a stronger 4Q25, results were modestly ahead of expectations and management reiterated FY26 revenue guidance of $75.0M–$77.0M. We continue to view 2026 as a year of measured recovery and product-cycle execution, with near-term growth expected to build through the year as CIB returns to sequential growth, automotive remains steady, and A-PHY ecosystem development continues. Management noted that the broader supply-chain conditions remain an area to monitor; importantly, management also stated that it does not see risk to meeting its full-year targets.
Cross-Industry Business: Revenue of $11.0M, or ~65% of total revenue, decreased from $13.9M in 4Q25 and $11.7M in 1Q25. The sequential decline appears consistent with the digestion of stronger 4Q demand, but management expects CIB to grow in 2Q26 and accelerate further in 3Q26 and 4Q26, with approximately 5% growth for the segment expected across the year. Gross margin was strong at 70.8%, up from 66.4% in 4Q25 and 69.1% in 1Q25, primarily due to product mix. In Audio-Video, adoption of the VS3000 and VS6320 chipsets remained the primary driver. The VS6320 continued to gain traction, with another major AV manufacturer releasing a product based on the chip during the quarter.
Automotive Segment: Automotive revenue was $5.9M, or ~35% of total revenue, increasing from $5.5M in 4Q25 and $5.1M in 1Q25. Segment gross margin was 46.2%, compared with 45.9% in 4Q25 and 48.4% in 1Q25. Valens’ automotive opportunity remains centered on the VA7000 chipset, which supports high performance connectivity for cameras and radars used in ADAS and autonomous driving and was the first chipset to comply with the MIPI A-PHY standard.
Growth Strategy: Valens expanded its presence in industrial machine vision through integration of the VA7000 chipset, enabling next-generation factory automation and inspection systems. In the medical market, the Company advanced its endoscopy initiative with the first three VA7000-based product launches, demonstrating reliability and image-quality advantages as programs progress through evaluation and development. Given typical qualification timelines, we still expect several quarters before meaningful revenue contribution, but the long-term headroom appears significant. In ProAV, customer demand exceeded expectations and the portfolio continued to broaden across VS3000 and VS6320 use cases, reinforcing ecosystem strength and positioning the business for sustained growth.
Strong Financial Position: VLN ended 1Q26 with $86.1M of cash, cash equivalents, and short-term deposits, and no debt, compared with $92.6M at year end 2025 and $112.5M at the end of 1Q25. Working capital was $91.3M at quarter end, compared with $95.7M in 4Q25 and $119.8M in 1Q25. While the cash balance declined sequentially, the balance sheet remains a meaningful source of flexibility as the Company continues to fund product development and support growth initiatives.
Guidance: For 2Q26, Valens expects revenue of $17.2M–$17.6M, gross margin of 60.0%–62.0%, and adjusted EBITDA loss of $(4.9)M to $(4.4)M. Full-year 2026 revenue guidance was reiterated at $75.0M–$77.0M. Management expects the 2H26 to be meaningfully stronger than the first half, supported by design wins and design-ins converting into customer product launches in 3Q26 and 4Q26.
Valuation: We use a DCF Model and EV/Revenue comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $3.60 to $4.57 with a mid point of $4.02. Our EV/Revenue valuation results in a range of $3.48 to $4.34 with a mid-point of $3.91.
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SOURCE: Stonegate, Inc.
