Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gauzy Ltd (GAUZ, Financial) reported a solid start to 2025 with strong performance in the Automotive and Safety Tech divisions, despite global uncertainties.
- The company achieved significant business milestones, including partnerships with Journeo and Umbrella, and a renewal of FMCSA exemption to accelerate ADAS adoption.
- Gauzy Ltd (GAUZ) signed a favorable $10 million debt financing agreement, part of a planned $20 million, enhancing their liquidity and supporting growth.
- The backlog of purchase orders increased from $31 million at the end of 2024 to almost $36 million by March 2025, indicating strong demand.
- The company reaffirmed its 2025 guidance, expecting revenue growth of over 30% and positive adjusted EBITDA for the full year.
Negative Points
- Revenue for Q1 2025 was $22.4 million, down from $24.7 million in the prior year, due to timing shifts in the Aero and Architecture divisions.
- Adjusted EBITDA was negative $5.5 million, a decrease from negative $4.8 million in the prior year quarter.
- The Aero division experienced a 24.6% decline in revenue compared to the prior year, with gross margin also decreasing.
- Architecture revenue decreased by 8.2% compared to the prior year, impacted by market uncertainties.
- Despite improvements, the company does not expect to achieve positive free cash flow until 2026.
Q & A Highlights
Q: Can you provide insight into the expected revenue growth for the second quarter and the conversion of backlog orders into firm revenue?
A: Eyal Peso, CEO, stated that the second quarter is expected to be strong, with a significant backlog of purchase orders ready to be shipped. Despite some hesitance in March due to tariff uncertainties, there were no cancellations, and the company is confident in meeting its full-year guidance.
Q: How did Gauzy manage to achieve better free cash flow despite negative EBITDA?
A: Meir Peleg, CFO, explained that the improvement in cash flow was primarily due to effective cash management strategies, including better payment terms with suppliers and financing invoices, which allowed for faster cash inflow.
Q: What is the status of the additional $10 million financing?
A: Eyal Peso, CEO, confirmed that the first $10 million is secured and expected to close soon. The second $10 million is anticipated to be signed by early Q3, although it is not yet finalized.
Q: How did macroeconomic uncertainties impact Q1, and what is the outlook for future quarters?
A: Eyal Peso, CEO, emphasized that while there was some hesitation due to tariff uncertainties, it did not affect the core business. The backlog remains strong, and the company is confident in meeting its full-year guidance.
Q: Which segments are contributing most to the spike in purchase orders?
A: Eyal Peso, CEO, highlighted that the Aero and Safety Tech segments are seeing significant growth, with substantial purchase orders in the backlog. Automotive and Architecture also have notable contributions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
