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Vuzix Corp (VUZI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $1.16M (down 16% YoY) and diluted EPS was -$0.09, with operating expenses reduced 22% YoY; cash rose to $22.6M and working capital to $24.3M .
  • Versus S&P Global consensus, revenue missed ($1.161M actual vs $1.555M*), while EPS modestly beat (-$0.09 actual vs -$0.10*); estimate coverage was thin (1 estimate each)*.
  • Management guided to robust YoY and sequential Q4 growth in product and engineering services, driven by OEM programs, defense production waveguides, and a high six-figure smart-glasses backlog for a leading online retailer (Amazon program ramping U.S./Canada) .
  • Strategic progress included unlocking the third $5M Quanta tranche (total $20M), LX1 enterprise glasses positioning for warehousing/logistics, and expanded OEM/defense engagements; financing totaled $10.6M in Q3 (Quanta $5M + ATM $5.3M) .

Values with asterisk (*) are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • “Unlocked third Quanta Computer investment tranche, receiving $5 million and bringing total investment to $20 million,” strengthening balance sheet and OEM scaling .
  • “We received the first wave of purchase orders from a leading global online retailer… deliveries ramping significantly in Q4 2025,” supporting enterprise momentum; Amazon rollout expanding in U.S./Canada and into data centers .
  • Total operating expenses down 22% YoY, with G&A down ~41% and S&M down ~35% YoY, aided by lower stock-based compensation and bad debt recovery; net loss narrowed to $7.4M (-$0.09/share) from $9.2M (-$0.14/share) .

What Went Wrong

  • Revenue declined 16% YoY to $1.16M, with a 9% decrease in product sales (M400) and a 33% decline in engineering services (timing) .
  • Gross loss increased to $0.4M vs $0.3M YoY, primarily due to lower revenues not absorbing relatively fixed manufacturing overheads .
  • Product mix and limited scale continued to pressure margins; management noted fixed overhead absorption and highlighted mix expected to improve in 2026 as defense and LX1 scale .

Financial Results

Consolidated Performance (Q1–Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Total Sales ($USD Millions)$1.581 $1.296 $1.161
Sales of Products ($USD Millions)$1.324 $1.045 $0.896
Sales of Engineering Services ($USD Millions)$0.257 $0.250 $0.265
Gross Profit/Loss ($USD Millions)-$0.265 -$0.761 -$0.411
Net Loss ($USD Millions)-$8.638 -$7.666 -$7.354
Diluted EPS ($USD)-$0.11 -$0.10 -$0.09
Research & Development ($USD Millions)$2.606 $2.571 $2.936
Selling & Marketing ($USD Millions)$1.537 $1.353 $1.147
General & Administrative ($USD Millions)$3.961 $2.757 $2.575
Depreciation & Amortization ($USD Millions)$0.405 $0.413 $0.424

Q3 YoY Comparison (Q3 2025 vs Q3 2024)

MetricQ3 2024Q3 2025
Total Sales ($USD Millions)$1.386 $1.161
Sales of Products ($USD Millions)$0.988 $0.896
Sales of Engineering Services ($USD Millions)$0.397 $0.265
Gross Profit/Loss ($USD Millions)-$0.260 -$0.411
Loss from Operations ($USD Millions)-$9.299 -$7.494
Net Loss ($USD Millions)-$9.222 -$7.354
Diluted EPS ($USD)-$0.14 -$0.09
R&D ($USD Millions)$2.334 $2.936
S&M ($USD Millions)$1.766 $1.147
G&A ($USD Millions)$4.347 $2.575
Depreciation & Amortization ($USD Millions)$0.411 $0.424

Segment Breakdown (Revenue)

Segment ($USD Millions)Q1 2025Q2 2025Q3 2025
Products$1.324 $1.045 $0.896
Engineering Services$0.257 $0.250 $0.265
Total$1.581 $1.296 $1.161

KPIs and Balance Sheet Highlights

KPIQ1 2025Q2 2025Q3 2025
Cash & Cash Equivalents ($USD Millions)$15.2 $17.5 $22.6
Net Cash Used in Operating Activities ($USD Millions)-$3.5 -$4.7 -$5.0
Working Capital ($USD Millions)$19.5 $20.3 $24.3
Debt OutstandingNone None None
Q3 Financing Inflows ($USD Millions)——$10.6 (Quanta $5.0 + ATM $5.3)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product RevenueQ4 2025Not provided “Robust YoY and sequential growth” Raised (qualitative)
Engineering Services RevenueQ4 2025Not provided “Robust YoY and sequential growth” Raised (qualitative)
Smart Glasses Backlog FulfillmentQ4 2025Not provided “High six-figure backlog” fulfillment for leading online retailer New disclosure
OEM Waveguide RevenueQ4 2025“Volume shipments began to first tier-1 OEM in Q2” “Shipping production waveguides in Q4” Execution progressing
Operating ExpensesFY 2025Cost reductions underway “Total operating expenses down 22% YoY in Q3” Maintained discipline
Margins/Tax/DividendsQ4/FY 2025Not providedNot providedMaintained (no numeric guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Tech Initiatives (LX1, Ultralight, Waveguides)Q1: Ultralight platform and Silicon Valley waveguide R&D facility; OEM design wins; AR + AI use cases . Q2: LX1 announced; OEM volume waveguide shipments; strong yields vs Quanta gates .LX1 positioned for warehousing/logistics; partnerships with TCL CSOT and Saphlux for microLED/waveguides; high-index material roadmap (silicon carbide) .Accelerating commercialization and ecosystem build-out
Supply Chain/TariffsQ1: Tariff changes may pressure margins .Q3: Quanta scaling discussions noted supply chain and tariff considerations for NA vs RoW .Ongoing headwind being actively managed
Enterprise Product PerformanceQ1: Nadro (Mexico) 30% picking gains; Airbus pilots . Q2: LX1 sampling; M400 sales pick-up .First wave of orders from leading online retailer; deliveries ramping Q4; LX1 “portfolio” with M400 .Improving demand and deployments
Regional TrendsQ1: Mexico deployments (Nadro) .Amazon rollout expanding from Europe to U.S./Canada; considering additional regions and use cases .Expansion across North America
Regulatory/Legal—Defense contracting visibility impacted by continuing resolution; announcements delayed .Temporary headwind
Defense/OEM ProgramsQ1: Multiple DoD programs expected to start production rollouts in 2025 . Q2: First production orders in back half; tier-1 OEM shipments .Shipping production waveguides in Q4; six-figure defense development order .Progressing to production revenue
R&D ExecutionQ1: Facility acquisition enables rapid prototyping; Fraunhofer backplane collaboration .Advancing high-index materials and manufacturing; OEM/ODM co-dev .Continued investment and capability gains

Management Commentary

  • “We received the first wave of purchase orders from a leading global online retailer… with deliveries ramping significantly in Q4 2025 after months of validation testing.” — Paul Travers .
  • “Total operating expenses… declined… the lowest quarterly level achieved since 2020.” — Grant Russell on cost discipline .
  • “We are now transitioning into production deliveries of the waveguides and display engines for a lightweight heads-up display for fielded military personnel, with revenue contribution beginning in Q4 this year.” — Paul Travers .
  • “We appointed Dr. Chris Parkinson… as President of Vuzix’ Enterprise Solutions… so we can capture the clear, measurable value smart glasses deliver… higher productivity… faster time-to-resolution… better safety.” — Paul Travers .
  • “Inbound interest from leading ODMs… led by Quanta… we completed the third $5 million tranche… bringing Quanta’s total investment to $20 million.” — Paul Travers .

Q&A Highlights

  • Capacity scaling with Quanta: Management in active discussions to expand beyond ~1M/year Rochester capability; addressing supply chain and tariffs for NA vs RoW; timeline not yet disclosed, but expects clarity over next few quarters .
  • Defense ramp visibility: Production waveguides shipping in Q4; potential for two programs in production during 2026; additional programs pending engine modifications and government budget processes .
  • Amazon program specifics: Maintenance and “human-in-the-loop” robotics workflows in warehouses; expansion to U.S./Canada and into data centers; exploring AWS AI integration; management views Amazon as potentially significant .
  • Margin trajectory: Mix shift (LX1 better margins; defense typically higher margin than enterprise product) expected to lift margins in 2026 .

Estimates Context

MetricConsensus (Q3 2025)Actual (Q3 2025)Surprise
Revenue ($USD)$1,555,000*$1,161,947 Miss (~-25.4% vs consensus)*
Primary EPS ($USD)-$0.10*-$0.09 Beat (+$0.01)*
EBITDA ($USD)N/A*-$6,602,289*N/A
  • Primary EPS – # of Estimates: 1*; Revenue – # of Estimates: 1*.
  • Coverage remains thin; estimate revisions likely to reflect the revenue miss and Q4 ramp commentary*.

Values with asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 topline softness (products and engineering services) stemmed from M400 demand and engineering timing; cost discipline materially improved P&L (OpEx -22% YoY), narrowing losses .
  • Near-term catalyst: Q4 ramp across enterprise (Amazon backlog fulfillment) and OEM/defense (production waveguides), with management explicitly guiding to robust YoY and sequential growth .
  • Strategic positioning strengthened: $20M Quanta investment and partnerships (TCL CSOT, Saphlux) reinforce waveguide leadership and microLED integration pathways toward color/full-color roadmaps .
  • Liquidity runway: $22.6M cash, no debt, and $10.6M Q3 financing inflows; management expects sufficient runway to execute through 2026 .
  • Margin outlook: Mix shift to defense and LX1 expected to support margin improvement in 2026; watch product mix and scale effects as Q4 ramps .
  • Estimate context: Revenue missed low-coverage consensus; EPS modestly beat; anticipate revisions as Q4 orders and OEM deliveries materialize*.
  • Trading lens: Stock likely sensitive to tangible Q4 order flow, defense production visibility, and CES 2026 showcase outcomes; monitor disclosures on Amazon deployments, OEM program volumes, and Quanta capacity expansion .