Vuzix Corp Q1 FY2025 earnings call

• Collaboration with Quanta continues to expand with ongoing development of smart glasses and new programs, combining Quanta's manufacturing and Vuzix's waveguide technology.
• Acquired a state-of-the-art waveguide R&D and tooling facility in Milpitas, California, which is operational and supports rapid prototyping and small batch manufacturing.
• Collaboration with Fraunhofer IPMS on a high-performance CMOS micro-LED backplane for next-generation display applications.
• Offered expanding family of smart glasses reference designs like Ultralite Pro and Ultralite Audio with AI-driven features.
• Design win with a European OEM for waveguides related to smart thermal AR glasses, with volume production expected in fall 2025.
• Multiple DOD programs in progress with prime contractors, expecting production rollouts in 2025.
• Received largest reorder from XanderGlasses for Z100 smart glasses, and partnerships with TranscribeGlass and Mentra Labs.
• Enterprise deployments in Mexico with Nadro using Vuzix M400 Smart Glasses, achieving efficiency improvements, and partnerships with Moviynt and Augmex for enterprise solutions.

Total revenue for Q1 2025 was $1.6 million, down 21% year-over-year but up 24% sequentially. Engineering services were $0.3 million, an increase of 47% year-over-year. Gross loss was $0.3 million for the quarter, compared to a gross loss of $0.1 million in the same period in 2024. Research and development expense was $2.6 million, a decrease of approximately 5% year-over-year. Sales and marketing expense was $1.5 million, a decrease of approximately 31% year-over-year. General and administrative expenses were $4 million, a decrease of approximately 3% year-over-year. Net loss was $8.6 million, or $0.11 per share, versus a net loss of $10 million, or $0.16 per share, in the same period in 2024.

• Expect to meet performance milestones required for Quanta's second and third investment tranches, which would bring $10 million in growth capital.
• Plan to allocate investment proceeds to expand waveguide manufacturing capabilities to meet demand growth.
• Sufficient cash position and disciplined cost structure provide runway to execute operating plan into 2026.

• General economic and business conditions.
• Competitive factors.
• Changes in business strategy or development plans.
• Ability to attract and retain qualified personnel.
• Changes in legal and regulatory requirements.
• Inventory obsolescence due to new model introductions.

Q: How much of the 9 million M400 inventory do you still have on hand?

A: The bulk of inventory at quarter end was a little over $4 million, with provisions against it close to $5 million, and now down to approximately $4.2 million.

Q: Update on comfort and enthusiasm regarding multiple product design partnerships with Quanta?

A: Enthusiasm remains high, relationship with Quanta is good, multiple programs with at least two rolling before end of 2025.

Q: Expectation regarding Quanta's two remaining investment tranches by end of 2025?

A: Should be by end of 2025, ahead of schedule, with Quanta team working on finalizing details.