Ray

Ray, on behalf of Travis Steed, followed up on the status of MediHoney remediation efforts, asking if it remains excluded from the 2026 guidance. He also sought additional color on the low double-digit decline in Tissue Technologies' international organic growth, inquiring about any material changes in international market dynamics and the outlook for China.

Answer

President and CEO Mojdeh Poul confirmed that MediHoney revenues are not accounted for in the 2026 guide, as remediation continues to ensure a safe, quality product upon its return. EVP and CFO Lea Knight clarified that the international component was not a significant driver of the Tissue Technologies decline, which was primarily due to Integra Skin's tough prior-year comparison and MediHoney. She highlighted strong double-digit performance in China and Canada for the international business, expecting continued growth.

Ray asked for an update on the status of MediHoney remediation efforts, specifically whether it is still excluded from the guidance or baked in for Q1 and full year 2026. He also inquired about the Tissue Technologies organic growth, asking how much the low double-digit international decline contributed and if there were any material changes in international market dynamics, particularly regarding China.

Answer

Mojdeh Poul, President and CEO, confirmed that no revenues for MediHoney are accounted for in the 2026 guidance, as remediation efforts are ongoing into 2026 to ensure a safe and quality product. She noted that any acceleration of the timeline would be an upside. Lea Knight, Chief Financial Officer, clarified that the international component is not a significant driver for Tissue Technologies (primarily CSS). She explained that the 12.8% decline in Tissue Technologies would have been about 6% absent MediHoney, largely driven by Integra Skin's strong prior-year comp. She added that strong growth for Integra Skin is expected going forward. For international markets, China and Canada showed strong double-digit performance in the CSS business, which is expected to continue as a growth contributor in 2026.

Ray, asking on behalf of Rick Schafer, inquired about Valens Semiconductor's long-term strategic vision, identifying key strengths and the biggest opportunities for sustained growth, as well as the company's competitive position. He also asked for details on the fourth A-PHY design win, including its timing, potential size, and whether it represents a larger revenue opportunity compared to the previous three wins. Finally, Ray questioned the specifics of the $5 million cost reduction, its distribution across business segments, and if the target or timing for achieving EBITDA breakeven (previously $100M-$110M revenue) has changed.

Answer

CEO Yoram Salinger emphasized Valens' core competency in high-performance connectivity solutions for challenging environments, highlighting its leadership in noise immunity and extended reach. He reiterated the focus on audio/video and automotive for growth, while pursuing large opportunities in adjacent markets like medical and industrial. Regarding the fourth A-PHY design win, Salinger stated that specific names and sizes cannot be disclosed due to privacy, but revenue generation is anticipated to start in the second half of 2027, with full capacity ramping up over several years. He expressed pride in the four design wins, especially the one in China, and stressed the importance of securing more. CFO Guy Nathanzon clarified that the cost cuts were implemented "all over the company" to optimize OpEx and increase efficiency. He confirmed that the EBITDA breakeven target remains between $110 million and $120 million in revenue, assuming consistent operating expenses and gross margin.

Ray, on behalf of Rick Schafer, asked about Valens Semiconductor's long-term strategic vision, key strengths, and biggest opportunities for sustained growth as the new CEO evaluates the company's competitive position. He also inquired about the timing and potential size of the fourth A-PHY design win, particularly its revenue opportunity in the Chinese market compared to earlier wins, and sought details on the $5 million cost reduction, its distribution across business units, and any changes to the EBITDA breakeven revenue target.

Answer

CEO Yoram Salinger emphasized Valens Semiconductor's core competency in high-performance connectivity solutions for challenging environments, highlighting noise immunity and extended reach as leading technologies. He reiterated the focus on AV and automotive for growth while pursuing large opportunities in adjacent markets like medical and industrial. Salinger stated that revenue generation for the fourth A-PHY design win is expected in the second half of 2027, acknowledging potential delays and ramp-up time, but could not disclose specific deal sizes due to privacy. Regarding cost cuts, Salinger confirmed they were company-wide to increase efficiency. CFO Guy Nathanzon added that the EBITDA breakeven revenue target remains unchanged at $110 million-$120 million, assuming current operating expenses and gross margins.