Vuzix Q4 2024 Earnings Call Transcript

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March 13, 2025
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Operator

Greetings and welcome to the Vuzix Fourth Quarter and Full Year Ending December thirty one, twenty twenty four Financial Results and Business Update Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this call is being recorded.

Operator

Now, I would like to turn the call over to Ed McGregor, Director of Investor Relations at Vuzix. Mr. McGregor, you may begin.

Edward McGregor
Edward McGregor
Director of Investor Relations at Vuzix

Thank you, operator, and good afternoon, everyone. Welcome to the Vuzix fourth quarter and twenty twenty four full year ending December thirty one financial results and business update conference call. With us today are Vuzix CEO, Paul Travers and our CFO, Grant Russell. Before I turn the call over to Paul, I would like to remind you that on this call, management's prepared remarks may contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements during the question and answer session. Therefore, the company claims the protection of the Safe Harbor for forward looking statements that are contained in the Private Securities Litigation Reform Act of 1995.

Edward McGregor
Edward McGregor
Director of Investor Relations at Vuzix

Actual results could differ materially from those contemplated by any forward looking statements as a result of certain factors, including but not limited to general economic and business conditions, competitive factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel, as well as changes in legal and regulatory requirements. In addition, any projections as to the company's future performance represent management's estimates as of today, 03/13/2025. Vuzix assumes no obligation to update these projections in the future as market conditions change. This afternoon, the company issued a press release announcing its financial '20 '20 '4 results and filed its 10 K with the SEC. So participants in this call who may not have already done so may wish to look at those documents as the company will provide a summary of the results discussed on today's call.

Edward McGregor
Edward McGregor
Director of Investor Relations at Vuzix

Today's call may include certain non GAAP financial measures. When required, reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in the company's Form 10 ks annual filing at sec.gov, which is also available at www.vuzix.com. I'll now turn the call over to Vuzix CEO, Paul Travers, who will give an overview of the company's operating results and business outlook. Paul will then turn the call over to Grant Russell, Vuzix's CFO, who will provide an overview of the company's fourth quarter and full year financial results. After which, we'll move on to the question and answer session. Paul?

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Thank you, Ed. Welcome to the Vuzix Q4 and full year twenty twenty four conference call. In recent years, the wearable computer and AR industry has seen significant changes progressing in maturity and acceptance. External factors such as COVID-nineteen have shown the role of these enterprise smart glasses in improving workplace efficiency. As the industry has developed, Vuzix has continued to invest and adjust its strategy to align with the future direction of the market.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

On the technology front, Vuzix has been discussing ours and the industry's progress on wave guides in the micro displays that drive them for years. We're now approaching a pivotal moment, which should increase adoption greatly. Innovation in these technologies has finally enabled the development of all day wearable smart glasses with high performance displays and industry first. As we've long emphasized, our waveguide optics work seamlessly with a variety of third parties supporting enterprise, medical and our OEM business including military and defense sectors and now with the broader consumer markets following on. Despite the noise and pace of change in the industry, Vuzix remains focused on its pursuit to develop the best mouse trap to solve and support the enterprise and other markets we address as they unfold.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

We continue to enhance the performance, the features that matter and of course the cost competitiveness of our waveguides arguably the most critical component of AI and AR smart glasses and other wearables. Our commitment to investing in and advancing our core waveguide technology has led to one of the most significant developments in Vuzix recent history, the establishment of a strategic partnership with leading ODM supplier Quanta Computer. This collaboration besides highlighting the credibility of what Vuzix has created over the years has facilitated the development of multiple smart glasses reference designs based on our waveguide technology and is proving to help open up the markets in general for us. Our partnership with Quanta reinforced by their $20,000,000 multi phase investment underscores our shared vision of revolutionizing the AR and AI industry. Through this collaboration, Vuzix is poised to supply millions of cutting edge and cost competitive wave guides for AR and ARI driven smart glasses to Qantas extensive OEM client base.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

The first ten million dollars tranche of this investment was received in September of twenty twenty four and we remain on track to meet the milestones required to unlock the remaining $25,000,000 trenches as anticipated. At CES twenty twenty five, we introduced our UltraLight Pro AR Smart Glasses platform designed for specific enterprise verticals and market use cases. These binocular full color see through glasses powered by Qualcomm's AR1 processor fill a critical gap in the current market. The response has been overwhelmingly positive and we are already receiving inbound interest from OEMs and white label partners. The Ultra Lite Pro AR Smart Glasses platform was also awarded Best in Show by Wearable, the authority on wearable technology.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Further at CES twenty twenty five, we introduced the Ultralight Audio Smart Glasses platform, a new upgrade to the base Ultralight platform, which integrates dual speakers and noise canceling microphone for enhanced audio and voice interaction. And more recently at Mobile World Congress in Barcelona, Micro OLED, a Grenoble based maker of AR Smart Glasses and their ActiveLook software platform along with the semiconductor company STMicroelectronics announced a reference design for AR Smart Glasses based on the ultralight audio smart glasses platform from Vuzix featuring Micro OLED's active look software. This reference design supporting the active look ecosystem will enable third party eyewear smart glasses models for sports and outdoor applications that require mission critical information in real time and on the move. Our Z100 UltraLite AR Smart Glasses platform launched at CES twenty twenty four is aimed at building an ecosystem attracting early adopters and laying the foundation for our OEM and white label business. In November, we strategically reduced the price of the Z100 to accelerate adoption among ecosystem partners effectively OEMs and early adopters.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

This move has led to increased demand and follow on orders for this AI powered smart glasses. The Z100 is being selected for its all day wearability, seamless heads up display integration and competitive pricing, which supports high volume sales. The Vuzix Z100 Smart Glasses are being focused on white label and OEM customers and we are actively fielding multiple RFQ opportunities based on this platform. As we have previously indicated, we have been steadily pivoting towards the ODMOEM side of our business, forging strong development and supply partnerships throughout the industry. We have strengthened our presence in the defense and industrial sectors where our differentiated solutions are meeting mission critical demands.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Our partnership with Thales, Garmin, L3Harris and others yet to be named demonstrate our ability to deliver differentiated higher margin solutions that align well with both our customers' needs and Vuzix long term growth strategy. In the enterprise software ecosystem, our acquisition of Mobient in November of twenty twenty two is allowing us to expand our offerings within the logistics vertical with end to end solutions. We expect these new solutions will be white labeled and or OEM and in some cases carry the Vuzix brand. We have multiple employing Mobileum by Moviant software and have moved from the proof of concept stage to formal rollouts. We are listening to our growing customer base and evolving our Mobileum software beyond picking and packing workflows to deliver end to end enterprise solutions that extend beyond warehousing and logistics as well.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

In parallel, we continue to engage with our stable of ISV partners to drive broader adoption of smart glasses in the enterprise sector. We've been working with these ISVs for some time now as you all know, and they are seeing the business opportunities finally coming to fruition also. Together, we aim to deliver intelligent all day wearable solutions integrating hardware and software to drive tangible business outcomes and productivity. As we have repeatedly stated, the primary differentiator for Vuzix is our ability to make a quality waveguide in volume at an affordable cost. With our proprietary technologies, we can process in a timely fashion hundreds of waveguides per single run, while the bulk of our competitors are capped at a dozen waveguides or so on an industry standard 300 millimeter wafer requiring a much more time consuming process.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

This advantage comes from a custom design process and equipment, extensive experience and developed IP enabling us to quickly design and manufacture smart glasses and add new features. To bolster this edge, our patent portfolio has grown by 50% in the past two years to over four twenty five patents and pending patents covering a wide range of optical waveguide and wearable computing technologies solidifying our AR industry leadership. Our ODMOEM business has the potential to start ramping up meaningfully with Quanta as our partner and with our major computing firms scaling production, our ODMOEM business will grow. We anticipate an increase in our reference designs and OEM customer count and are actively involved in multiple projects with Quanta that have potential to create significant business opportunities for both entities. Quanta's extensive scale and expertise in electronic product manufacturing combined with Vuzix proprietary waveguides and smart glasses technology form a powerful alliance.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

We foresee that this collaboration will result in high volume production of our waveguides and AR components ultimately reaching millions of units and driving substantial revenue growth for Vuzix. Moreover, we are engaging in various stages of discussions with several other ODMs who are already designing or interested in designing and manufacturing AIAR smart glasses for widespread consumer use. In 2025, Vuzix anticipates significant growth in customer wins across our OEM and enterprise businesses as the industry stabilizes and expands. We expect multiple design wins for both consumer and enterprise OEM products where Vuzix will supply optical waveguides and display engines. In the defense and security markets, we foresee multiple programs with current OEMs and defense contractors leading to production engagements and orders for customized designs.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

In enterprise, we are nurturing numerous customer wins that are being supported by measured success that exceed customer benchmarks by an order of magnitude. In parcel processing, for example, Moviance newly introduced Mobilian application running on Vuzix smart glasses is seeing parcel scanning to bin placement speeds clocked at a fraction of the current methods from frontline workers. For new workers where turnover is high, we are seeing scan to bin placement improvements of upwards of 250% in some instances. In a typical warehouse with 80 pickers each picking 300 items per day from pallets, a 15% to 20% improvement in efficiency would enable the same workforce to pick an additional 3,600 to 4,800 items per day, significantly increasing increasing daily throughput without adding staff. Summarized as a result of these fully demonstrated KPIs, key performance indicators, which stand up on their own, we expect these customers will be placing follow on orders that have the potential to effectively consume all of our existing M400 inventories.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

And as a result of our anticipated conversion of our existing M Series inventory into cash, Vuzix is well on its way to introducing next generation purpose built products based directly on the customer feedback in the deal and our network of ISV partners and resellers. We have also recently received a commercial order for Vuzix Shields, which consumes our remaining inventory and planned production of this first generation model, and we are currently responding to RFQs that will effectively consume our remaining M4000 inventory. Let me add, Vuzix enters 2025 with a strong financial foundation. As of year end 2024, we had approximately $18,000,000 in cash and cash equivalents, reflecting our disciplined cost management and capital raising efforts. This includes $8,200,000 raised through our at the market facility in Q4, providing additional flexibility to support our growth initiatives.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Additionally, we are making strong progress towards meeting milestones required for the remaining $10,000,000 investment from Quanta Computer, which will further reinforce our liquidity position. Finally, as the aforementioned business unfolds, we expect a large portion of our finished inventories to be converted to cash. Grant will now take you through our financial numbers. Grant?

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

Thank you, Paul. As Ed mentioned, the 10 K we filed this afternoon with the SEC offers a detailed explanation of our annual financials. So I'm just going to provide you with a bit of color on some of the full year as well as quarterly numbers. For the three months ended 12/31/2024, we reported $1,300,000 in total revenues as compared to $1,100,000 in the prior year's comparable fourth quarter. The revenue increase was primarily due to higher unit sales of our M400 smart glasses.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

For the full year ended 12/31/2024, Vuzix reported $5,800,000 in total revenues as compared to $12,100,000 for the prior year. Product sales decreased by 58% year over year as unit sales of our M400 product declined compared to the previous year when two major distributors placed significant stocking orders in the first half of twenty twenty three, representing 54% of our total product sales in 2023. Sales of engineering services for the year ended 12/31/2024, were $1,300,000 as compared to $1,400,000 in 2023, a decrease of 7%. Please note, as disclosed in our 10 ks, we have $2,100,000 worth of remaining performance obligations over revenues already recognized under a current waveguide development project. For the full year ended 12/31/2024, there was an overall gross loss of $5,600,000 as compared to a loss of $2,600,000 for 2023.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

The larger gross loss for 2024 was primarily driven by further inventory obsolescence reserves included in cost of sales and increased unapplied manufacturing overhead costs of $2,100,000 due to reduced further builds of the M400 finished goods in the second half of twenty twenty four. The larger additional inventory reserve amounts were related to the expected surplus components and obsolescence provision in excess of currently planned existing future product builds in 2025 and early twenty twenty six, and all part of our planned transition to expected new smart glasses models now being developed. No finished goods have been included in these inventory reserves. And as the ultimate realizable value of these excess components that may not be used in future products build is unknown at this time, a 100 obsolescence provision was accrued. Research and development expenses for 2024 fell 22% to $9,600,000 as compared to $12,300,000 for the 2023 period.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

The decrease was primarily due to a $1,600,000 reduction in salary and benefits related expenses due to headcount decreases and a $1,000,000 drop in external development costs. For the December, research and development expenses were $2,200,000 as compared to $3,500,000 in the twenty twenty three fourth quarter. The decrease again was driven by headcount reductions. Sales and marketing costs for all of 2024 fell to $8,200,000 from $12,700,000 in 2023, a reduction of $4,500,000 or 36%. The most significant factors for these expense reductions include a $1,600,000 decrease in advertising and trade show expenses and a $1,600,000 reduction in salary and benefits expenses driven by headcount decreases.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

For the December, sales and marketing expenses were $2,000,000 as compared to $4,800,000 in the twenty twenty three fourth quarter. The decrease again was driven by reductions in headcount and advertising expenses, changes in bad debt provisions and severance accruals booked in Q4 of twenty twenty three. General and administrative expenses for 2024 decreased 7% to $17,200,000 as compared to $18,600,000 for the 2023 period. The decrease was largely due to a $1,400,000 decline in non cash stock based compensation and a $1,100,000 decline in salary and benefits related expenses due to headcount reductions, partially offset by a $1,000,000 increase in Investor Relations. For the fourth quarter ending 12/31/2024, general and administrative expenses were 4,300,000 as compared to $4,700,000 in the twenty twenty three fourth quarter.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

Decrease again was driven by headcount reductions. For the fourth quarter ended 12/31/2024, the net loss was $13,700,000 or $0.16 per share as compared to a net loss of $19,900,000 or $0.32 per share for the fourth quarter of twenty twenty three. For the full year ended 12/31/2024, the net loss was $73,500,000 or $1.08 per share as compared to a net loss of $50,100,000 or 79% for the full year of 2023. The increased net loss was mostly attributable to the write off of our technology license and investment in Atomistic, which was recorded in the second quarter of twenty twenty four. Excluding this write off, the net loss for 2024 was $6,900,000 less than the 2023 net loss.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

Now for some balance sheet and cash flow highlights. Our cash position as of 12/31/2024, was $18,200,000 a decrease of $8,400,000 from 12/31/2023. And we had a net working capital position of $24,600,000 Net cash flows used in operating activities was $23,700,000 for the year ended 12/31/2024, as compared to $26,300,000 for the 2023 year, a decrease of $2,600,000 For all of 2024, we raised $18,300,000 the financing activities that consisted of a $10,000,000 investment by Quanta Computer in September, '8 point '2 million dollars of net proceeds received from equity sales under our ATM offering in the fourth quarter of twenty twenty four. Cash used in investing activities in 2024 was $2,900,000 down significantly from $19,300,000 in 2023, primarily due to reductions in investments amounts and licensing fees paid to Atomistic and manufacturing equipment and tooling investments for our new waveguide manufacturing facility in 2023. We are presently envisioning spending significantly less on CapEx investments in 2025 as we feel our waveguide manufacturing capacity is now adequate for the expected demand in the near term.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

I'm pleased to report that after a year of expense reductions, when we look at our major operating expense groupings, R and D, sales and marketing and G and A in our Q4 twenty twenty four versus Q4 twenty twenty three, we reduced our recurring cash operating costs and that's after adding back non cash compensation, bad debt provisions and the severance accruals we made at the end of twenty twenty three. We saw a $2,700,000 reduction per quarter or 36% year over year. We expect to keep these expense savings in place and intend to look for further at all our spending in 2025 as we move forward and expand our business. Looking forward in 2025, we are confident that management's plans and the expected further funding of the second and third tranches from Kona, which will bring in another $10,000,000 in new cash along with potential further equity sales under ATM program. And of note, we raised $1,300,000 to date in 2025 that the company has more than adequate resources to move forward with its operating plan well into 2026.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

And with that, I would like to turn the call back over to the operator for Q and A.

Operator

Thank you. Our first question comes from Christian Schwab with Craig Hallum. Please state your question.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Great. Hey, guys. So just for clarity, we talked about the M400 clearing out the inventory that you have in 2025. Can you just let us know how much inventory you have of the M400 that you plan on selling?

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

There is as much as $9,000,000 worth of cash, I think, sitting in that bucket right now, Christian.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

Yes. That's the cost of inventory.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Right.

Grant Russell
Grant Russell
CFO, EVP, Treasurer & Director at Vuzix

As we stated in our narrative, anything that wasn't finished goods got 100% provided for. So there's we have ability to build more units if we so desire, but we're not going to invest further in the M400 until we move this existing stock. But that could easily generate a false at $9,000,000 to $10,000,000 plus any margin we make selling it and we certainly still expect to make some margin.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

And Kristen, the interesting change in life these days for Vuzix is we have a nice list of companies in our pipeline that have gone past proof of concepts. These guys are now rolling out. We're starting to get orders for larger volumes and some of these accounts could take many thousands of units. So as much as we're preparing for a next generation product, which we talked about a little bit in the call, we very well could be needing to make more of and finishing inventories that we currently have around the M400 that are just partial work in process.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Great. Thank you for that clarity. And then, Paul, you mentioned a few different times that you believe that Quanta can drive millions of units for you. Can you give us an idea when a ramp like that is logically going to start and what's your ASP would be on that?

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

It's interesting because we've got several things that are going on with Quanta right now. Some of it are reference designs and they're tools that are being used to bring on third party OEM companies that will want to put their name on the product. And in those cases, Vuzix will ultimately be selling waveguides into that process. And you sell a color waveguide, not to get into a whole lot of numbers because they're not really public, but you might imagine competitors selling them at in volume, plus 100,000 piece quantities of hundreds of dollars per and yet Vuzix can do in those kind of quantities sub-fifty kind of numbers. So it's a significant price reduction in the higher volume markets that Vuzix can bring to the table.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

The size of this market opportunity as that broader market starts to move, it's going to replace the phone ultimately. That's why Zuckerberg is spending billions. And I will tell you that we've got that piece of the business going on. And then at the same time, we are building products that will be white labeled and in some cases carry the Vuzix brand. And you should knock on wood expect to see production programs happening before the end of this year in those cases.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

In those cases, it's white labeled. It's coming partially a big part of it comes from Vuzix and what we bring to the table on that case. Many of the white labels for those first products are in the enterprise space and it's a significantly higher margin and it's a significantly higher selling price. But it will just get started towards the fall going into the winter season And then rolling into next year, it should be pretty exciting times.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Okay, fantastic. No other questions. Thank you.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

You're welcome, Christian.

Operator

Thank you. That's all. I'll hand it over to Paul Travers. Thank you.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Thank you. So we actually got a handful of questions from other of our shareholders before the conference call, and I thought I could at least answer a few of these. I can't answer there's a few of them that I can't answer just because I can't answer them. As much as I would love to, they go to points that are they're not public at this point in time. But let me start with a few.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Number one here, you've expanded your waveguide manufacturing capabilities. What production capacity do you expect to achieve by the end of twenty twenty five? And how will this support your goal of supplying millions of units to OEMs? So let me give you guys a feel for how this works. The Quanta investment is a $20,000,000 investment, dollars 10,000,000 was upfront and there's two tranches coming for another five and five.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

The bulk of that is all about production getting into high volume capacity and we're very close to meeting both Tranche 2 and Tranche 3, which are the $25,000,000 gates And those are, like I said, related significantly to volume. And the volume is $500,000 plus and then $1,000,000 plus on an annual basis kinds of numbers. And so we'll be there before half of this year is up, knock on wood. We're practically there right now. So the volume capacity is right there for what the short term need is for us to take the Rochester facility and crank that up to double, let's say, does not cost us everything that it costs us the first time.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

It's an incremental cost to be able to turn that production facility into something that would double those numbers. So that's not significant. But the ultimate goal is not 1,000,000 or two waveguides on an annual basis. This is going to be like the smartwatch. Smartwatches sell 300,000,000 smartwatches a year.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

Quanta is not doing this for 20,000 to 50,000 to 100,000 pieces a year. Their drive here is a multibillion dollar industry. That's the kind of company they are. That's many of the companies that we're talking with today because of what we can make and the price points we can hit. They're in that boat if they want to move the needle.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

And so you will see a Phase II effort from where we're going that should help us get into the much higher volumes in the outbound years here. So our next question, with the $10,000,000 received from Quanta and two additional $5,000,000 tranches expected in 2025, how do you plan to allocate this capital towards R and D, production or market expansion? And what impact do you foresee on the cash burn rates? First of all, let me say that the Quanta investment in Vuzix is lockstep with where we are taking our company. The synergy, what they want is what Vuzix wants.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

And so if you think about the cash burns, they're 100% aligned for the most part with what Vuzix wants and needs to do. So this isn't all of a sudden we have to take these dollars and put them into something that feels like it's a sidetrack. Now there is a portion of the monies also here that are dedicated to product development efforts to generate business on the backside. That is also log step in Vuzix interest. So these dollars are going into R and D, next generation gizmos around wave guides that we build and cranking up production, which I think is what everybody on this call wants to hear about.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

The next question, how do you assess the competitive threat from larger players entering the AR Smart Glasses market in 2025 and beyond? And what differentiates Vuzix offerings to maintain their edge. First of all, the competitive threat. There will be more than one company that brings smart glasses to market. Everybody in this room should realize that.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

If there's another company that comes out with a product, it's not a need to panic. There's BMW, there's Ford, there's Tesla, there's this is going to be a multi multi billion dollar industry. So there'll be other players. I said we bring a lot of competitive advantages. Yes, one is price.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

It's great to know that we have a good price that we compete with, but we also bring great performance. We've been at this longer than any other company out there. So when you lean towards the enterprise side of this business, which is also going to be in the billions, we bring stuff to the table that nobody else can bring. When it comes to the high volume waveguide side of the business, our price points are nobody else can do what we can do today in this regard. So we're in front there.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

So yes, there's going to be competitors. We welcome that rising tide floats all boats, but we believe we with the partnerships that we're building with companies like Quanta and others have a great chance to get a very nice and sizable part of this market opportunity. Like I said, there was some other questions in here that dealt with closer to tier one companies and when and rolls out and I just cannot talk about those companies and where they are in their processes. I can tell you this though, generally speaking, you will see more and more design wins and partner wins and starting rollouts happen throughout this year. Back in the World War II days when the airplanes would fly and they would take another kill and they put a marker on the front of their airplane as another notch on the pistol handle, you're going to see a lot of that start to unroll at Vuzix this year that will roll into, knock on wood, significant volumes through 2026.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

So and will some of those be Tier 1s? I certainly believe we have Tier one partners 100% that are working with Vuzix right now. Their timing for when they roll out their requirements for market acceptance, I mean, if you think about companies like Luxottica, they don't want to put their name on something that doesn't look fashion forward and 1100% in line with what their brand looks like. So we're already striving for that same answer, and Vuzix is a company that can help bring that to them. So in Broad Stokes, I hope that answered the bulk of everybody's questions.

Paul Travers
Paul Travers
Chief Executive Officer at Vuzix

I want to thank everybody for spending the time again with us this afternoon. And I really do look forward to seeing the rest of this year unfold and us having our future conference calls with a whole lot more to talk about with significant real programs and companies and partnerships that we've been able to announce along the way. Thank you, everybody. Have a wonderful evening.

Operator

Thank you. This concludes today's call. All parties may disconnect.

Executives
    • Edward McGregor
      Edward McGregor
      Director of Investor Relations
    • Paul Travers
      Paul Travers
      Chief Executive Officer
    • Grant Russell
      Grant Russell
      CFO, EVP, Treasurer & Director
Analysts
    • Christian Schwab
      Senior Research Analyst at Craig-Hallum Capital Group LLC
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Key Takeaways

  • Vuzix announced a strategic partnership with Quanta Computer backed by a $20 million upfront investment and up to $25 million in additional tranches to scale waveguide production and support millions of AR smart glasses units.
  • At CES 2025 Vuzix launched its UltraLight Pro and UltraLight Audio AR Smart Glasses platforms—powered by Qualcomm’s AR1 processor—that won “Best in Show” and have already attracted inbound OEM and white-label interest.
  • The company is pivoting toward ODM/OEM and white-label models, securing design wins with defense and industrial partners such as Thales, Garmin and L3Harris, while leveraging its Mobient acquisition to roll out end-to-end logistics software solutions.
  • Full-year 2024 revenue was $5.8 million (down from $12.1 million) with a net loss of $73.5 million primarily due to write-offs; management cut recurring cash operating costs by 36% in Q4, ended the year with $18.2 million of cash and expects an additional $10 million from Quanta to fund operations into 2026.
  • Vuzix plans to clear approximately $9–10 million of M400/M4000 inventory in 2025, converting existing stock into cash and margins to support the launch of next-generation smart glasses.
AI Generated. May Contain Errors.
Earnings Conference Call
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