Gauzy Ltd. Ordinary Shares Q1 FY2025 earnings call

• Solid first quarter performance despite global uncertainty, highlighting strength of business model and growing demand for technologies.
• Key business milestones achieved, including Air France KLM selecting Gauzy's shading system for Boeing 777, Mercedes-Benz implementing Smart Glass technologies, and Cadillac Celestique EV ramp-up.
• Backlog of purchase orders expanded to almost $36 million at end of March.
• Secured $10 million debt financing with more favorable terms compared to pre-IPO borrowings.

Safety Tech: Revenue in Q1 2025 was $10.8 million, up 1.5% from prior year. Gross margin improved to 19.7% from 12.8% due to scale. Aero: Revenue was $7.6 million in Q1 2025, up 24.6% from prior year. Gross margin was 33.9% vs 44.1% prior year, impacted by tariff uncertainties. Architecture: Revenue was $2.4 million in Q1 2025, down 8.2% from prior year. Gross margin expanded to 32.1% from 48.9% due to scale and efficiencies. Automotive: Revenue was $1.5 million in Q1 2025, up from $1.3 million prior year. Gross margin improved, with expectations of continued improvement in 2025.

• Reiterated 2025 revenue guidance of $130 million to $140 million, representing over 30% growth midpoint from 2024.
• Reaffirmed adjusted EBITDA to be positive for full year 2025, with second half expected stronger than first half.

• Uncertainties related to tariffs affecting customer shipment timing in certain segments.
• Forward-looking statements subject to risks and uncertainties where actual results could differ materially from expectations.

Q: Could you talk about the line of sight on Q2 revenue and converting backlog to firm revenue?

A: Eyal Peso stated Q2 should be strong as backlog of purchase orders to be shipped soon. No real business impact from tariffs, and business is solid with no cancellations.

Q: What were the offsets to free cash flow improvement?

A: Meir Peleg mentioned working capital management, including payment terms with suppliers and financing invoices. Eyal Peso added improving cash flow through better supplier payment terms.

Q: What's the line of sight on the additional $10 million financing?

A: Eyal Peso said it's a done deal with few deliverables left, expected to close soon.

Q: Any additional hiccups from macro uncertainty in future?

A: Eyal Peso stated no real impact on business, just some hesitation in March causing timing shifts, but overall business remains strong.

Q: Which segments are driving the backlog?

A: Aero had $15.5 million, Safety Tech had significant growth, Automotive had $6 million, and Architecture had $2.2 million in backlog.

Q: What contributes to EBITDA positive for full year?

A: Eyal Peso mentioned growth in segments like Aero and Safety Tech, with improvement in gross margins and disciplined OpEx.

Q: Expectations for OpEx rest of the year?

A: Eyal Peso said OpEx should be steady with a bit higher in sales and marketing. Meir Peleg added slightly higher OpEx mainly in sales and marketing.

Q: Working capital as revenue grows?

A: Meir Peleg said working capital grows with business, but efforts are made to improve payment terms with suppliers and financing invoices to manage it.