Stonegate Capital Partners has updated its coverage on Valens Semiconductor Ltd. (NYSE:VLN) following the company's first-quarter fiscal 2026 results. Valens reported revenue of $16.9 million for 1Q26, compared to $19.4 million in the previous quarter and $16.8 million in the same period last year. The sequential decline was expected after a stronger 4Q25, but results modestly exceeded analyst expectations. GAAP gross margin came in at 62.2%, above the company's guidance range of 57.0%–59.0%. Additionally, the adjusted EBITDA loss of $(5.5) million was better than the guided range of $(7.9) million to $(7.5) million.
Management reiterated full-year fiscal 2026 revenue guidance of $75.0 million to $77.0 million, indicating confidence in a stronger second half. According to Stonegate, the year is shaping up as a period of measured recovery and product-cycle execution. Near-term growth is expected to build through the year as the Communications Infrastructure Business (CIB) returns to sequential growth, automotive remains steady, and the A-PHY ecosystem development continues. Management noted that broader supply-chain conditions remain an area to monitor but stated that it does not see risk to meeting its full-year targets.
Key takeaways from the update include execution ahead of plan despite a slower first-half setup. The second-half acceleration is viewed as the key thesis variable, with management expecting a meaningfully stronger back half driven by CIB sequential growth, ProAV momentum, and design wins and design-ins converting into customer launches in 3Q26 and 4Q26. Automotive revenue grew to $5.9 million in the quarter, while traction in the VA7000 market, including industrial machine vision and medical endoscopy, expands the addressable opportunity beyond core A-PHY automotive applications, though revenue contribution from these areas is likely several quarters out.
For more details, the full announcement is available here.
