Vuzix Corporation Q3 FY2025 earnings call

• Vuzix is in discussions with Quanta Computer to ramp capacity for waveguides as the AI smart glasses industry accelerates. Quanta has made strategic investments totaling $20 million. - Announced new display ecosystem partnerships with TCL and Saphlux. - OEM and defense business is accelerating with production deliveries of waveguides and display engines for military applications starting in Q4. - Amazon is expanding its use of Vuzix's Smart Glasses in logistics facilities and data centers, with plans to expand to additional regions and use cases. - Chris Parkinson joined as President of Enterprise Solutions, focusing on rebuilding the sales motion, working with partners and resellers, and introducing new products like the LX1 and Ultralight Pro.

In the third quarter of 2025, Vuzix reported revenue of $1.2 million, a 16% year-over-year decrease due to reduced sales of the M400 smart glasses. Engineering services revenue was $0.3 million, down from $0.4 million in the prior year, primarily due to timing of work on a major project. There was an overall gross loss of $0.4 million. Research and development expense was $2.9 million, an increase of approximately 26%. Sales and marketing expense was $1.1 million, a 35% decrease. General and administrative expense was $2.6 million, a 41% decrease. Total operating expenses declined $1.8 million or 20% to $7.1 million. The net loss was $7.4 million or $0.09 per share. Cash and cash equivalents were $22.6 million as of September 30, 2025.

• Discussions with Quanta about ramping capacity for waveguides to meet increasing demand, with potential for significant volume increases. - Expect Amazon business to grow materially as they scale and expand use cases. - Defense programs are ramping into production, with more clarity expected early in 2026. - Product mix in 2026 is expected to have higher margins, particularly with new products like the LX1 having better margin models.

• General economic and business conditions could impact results. - Competitive factors may affect market share. - Changes in business strategy or development plans could alter outcomes. - Difficulty in attracting and retaining qualified personnel. - Supply chain issues and tariffs could impact operations. - Legal and regulatory changes may pose challenges.

Q: About Quanta and potential volume ramping, especially in relation to CES, Paul responded that there are multiple programs with Quanta, and discussions are ongoing about ramping to higher volumes than the current 1 million per year out of the Rochester plant.

Q: Regarding defense industry program ramping, Paul said development programs are in production in Q4, with more clarity expected early in 2026 on a particular program, and other programs may be shareable after government activities resume.

Q: About the Amazon program, Paul mentioned Amazon is expanding its use of Vuzix's glasses in logistics, data centers, and potentially janitorial services, with AWS looking to integrate AI components with the glasses.