Vuzix Corp (VUZI) 2024 Q3 法說會逐字稿

Greetings, and welcome to the Vuzix Second Quarter for the period ending September 30, 2024, Financial Results and Business Update Call. [Operator Instructions] As a reminder, this call is being recorded. Now I would like to turn the call over to Ed McGregor, Director of Investor Relations at Vuzix. Mr. McGregor, you may begin.

您好，歡迎參加截至 2024 年 9 月 30 日的 Vuzix 第二季財務業績和業務更新電話會議。[操作員說明] 請注意，此通話正在錄音。現在我想將電話轉給 Vuzix 投資者關係總監 Ed McGregor。麥格雷戈先生，您可以開始了。

Thank you, operator, and good afternoon, everyone. Welcome to the Vuzix Third Quarter 2024 ending September 30, Financial Results and Business Update Conference Call. With us today are Vuzix's CEO, Paul Travers; and our CFO, Grant Russell.

謝謝接線員，大家下午好。歡迎參加截至 9 月 30 日的 Vuzix 2024 年第三季財務業績和業務更新電話會議。今天與我們在一起的有 Vuzix 執行長 Paul Travers；和我們的財務長格蘭特·拉塞爾。

Before I turn the call over to Paul, I would like to remind you that on this call, management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties, and management make additional forward-looking statements during the question-and-answer session. Therefore, the company claims the protection of the safe harbor for forward-looking statements that are contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those contemplated by any forward-looking statements, as a result of certain factors, including, but not limited to, general economic business conditions, competitive factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel as well as changes in legal and regulatory requirements.

在我將電話轉交給保羅之前，我想提醒您，在這次電話會議中，管理層準備的發言可能包含前瞻性陳述，這些陳述受到風險和不確定性的影響，並且管理層在提問過程中也做出了額外的前瞻性陳述——並回答會議。因此，該公司聲稱受到 1995 年《私人證券訴訟改革法案》中包含的前瞻性陳述的安全港保護。由於某些因素，包括但不限於總體經濟業務狀況、競爭因素、業務策略或發展計劃的變化、吸引和吸引人才的能力，實際結果可能與任何前瞻性陳述預期的結果有重大差異。人員以及法律和監管要求的變化。

In addition, any projections as to the company's future performance represent management's estimates as of today, November 14, 2024, Vuzix assumes no obligation to update these projections in the future as market conditions change.

此外，對公司未來業績的任何預測均代表管理層截至今天（2024 年 11 月 14 日）的估計，Vuzix 不承擔未來隨著市場條件變化而更新這些預測的義務。

This afternoon, the company issued a press release announcing its Q3 2024 financial results and filed it with 10-Q with the SEC. So participants in this call who may not have ready done so may wish to look at those documents as the company will only provide a summary of the results discussed on today's call.

今天下午，該公司發布新聞稿，宣布其 2024 年第三季財務業績，並向 SEC 提交了 10-Q 報告。因此，尚未準備好參加本次電話會議的參與者可能希望查看這些文件，因為該公司只會提供今天電話會議中討論的結果的摘要。

Today's call may include certain non-GAAP financial measures. When required, reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in the company's filings at sec.gov, which is also available at www.vuzix.com.

今天的電話會議可能包括某些非公認會計準則財務指標。如有需要，可在 sec.gov 上的公司文件中找到根據 GAAP 計算和呈現的最直接可比較財務指標的調節表，也可以在 www.vuzix.com 上找到該文件。

I will now turn the call over to Vuzix's CEO, Paul Travers, who will give an overview of the company's operating results and business outlook. Paul will then turn over the call to Grant Russell, Vuzix's CFO, who'll provide an overview of the company's third quarter financial results. Paul will return to make some closing comments, after which we will move on to the Q&A session.

我現在將把電話轉給 Vuzix 的執行長 Paul Travers，他將概述公司的營運表現和業務前景。然後，Paul 將把電話轉給 Vuzix 財務長 Grant Russell，他將概述該公司第三季的財務業績。保羅將回來發表一些總結評論，之後我們將進入問答環節。

Paul?

保羅？

Good afternoon, everyone, and welcome to Vuzix' Q3 earnings call. Thank you all for joining us today. The AR and AI landscape is evolving rapidly with industry driving attention to AI-enabled Smart Glasses. This increasing interest validates our vision of becoming the premier supplier of waveguide optics and advanced AR products for the global market.

大家下午好，歡迎參加 Vuzix 第三季財報電話會議。感謝大家今天加入我們。隨著業界對支援人工智慧的智慧眼鏡的關注，AR 和人工智慧領域正在迅速發展。這種日益增長的興趣證實了我們成為全球市場波導光學和先進 AR 產品首要供應商的願景。

Today, I am pleased to share updates on how we are capitalizing on these trends, our strategic transition to OEM markets and the opportunities ahead for Vuzix, all of which should drive sustainable and profitable future for the company and its shareholders.

今天，我很高興與大家分享有關我們如何利用這些趨勢、向 OEM 市場的戰略轉型以及 Vuzix 未來機遇的最新信息，所有這些都將為公司及其股東帶來可持續和盈利的未來。

Our Waveguide manufacturing capabilities, a cornerstone of our competitive advantage continues to demonstrate to potential partners and customers our ability to produce in volume with industry-leading cost efficiency. With one of the lowest production costs globally and a scalable capacity to millions of units per year, we are well positioned to be a key supplier to major OEMs, providing them with Waveguides tailored to their AI-driven Smart Glasses products and system-level designs.

我們的波導製造能力是我們競爭優勢的基石，它不斷向潛在合作夥伴和客戶展示我們以行業領先的成本效率進行大量生產的能力。憑藉全球生產成本最低的公司之一以及每年可擴展至數百萬台的產能，我們有能力成為主要 OEM 的主要供應商，為他們提供適合其人工智慧驅動的智慧眼鏡產品和系統級設計的波導。

As an example, one of the most impactful developments in Q3 is our strategic partnership with Quanta Computer. Quanta's $20 million multiphase investment underscores our mutual commitment to revolutionizing the AR industry. The first $10 million tranche of this investment has been received. And the remaining two $5 million tranches are tied to specific milestones that we are on track to achieve early in the first half of 2025. This collaboration will enable Vuzix to supply millions of cutting-edge Waveguides, for AR and AI-driven Smart Glasses to Quanta's extensive OEM client base.

例如，第三季最有影響力的發展之一是我們與廣達電腦的策略夥伴關係。廣達 2000 萬美元的多階段投資凸顯了我們對 AR 產業變革的共同承諾。該投資的第一筆 1000 萬美元已收到。剩下的兩筆 500 萬美元與我們預計在 2025 年上半年早些時候實現的具體里程碑相關。此次合作將使 Vuzix 能夠為廣達廣泛的 OEM 客戶群提供數百萬個用於 AR 和 AI 驅動的智慧眼鏡的尖端波導。

We've strengthened our presence in the defense and industrial sectors where our differentiated solutions are meeting demands for mission-critical applications. The latest example of this being our just disclosed relationship with Thales. These markets offer high-margin opportunities that align well with our growth strategy. We've also made significant strides in broadening the scope of the Vuzix Z100 Smart Glasses from a developer kit to a full-scale consumer and enterprise-ready product, which I'll elaborate on shortly.

我們加強了在國防和工業領域的影響力，我們的差異化解決方案滿足了關鍵任務應用的需求。最新的例子是我們剛剛披露的與泰雷茲的關係。這些市場提供了與我們的成長策略非常契合的高利潤機會。我們還在將 Vuzix Z100 智慧眼鏡的範圍從開發套件擴展到全面的消費者和企業級產品方面取得了重大進展，我將很快對此進行詳細說明。

Last but not least, we have achieved a steady reduction in our quarterly cash operating expenses, which declined 28% year-over-year this quarter to $4.8 million. These savings were driven by planned, targeted cost reduction initiatives including workforce optimization and discretionary spending cuts. With these measures, we have extended our financial runway while ensuring resources are focused on scaling operations and advancing strategic initiatives.

最後但並非最不重要的一點是，我們的季度現金營運支出穩定減少，本季年減 28% 至 480 萬美元。這些節省是由有計劃的、有針對性的成本削減措施推動的，包括勞動力優化和可自由支配的支出削減。透過這些措施，我們擴大了財務跑道，同時確保資源集中用於擴大營運和推動策略舉措。

Before diving further into our operational and strategic updates, I'd like to provide some perspective on the AI Smart Glasses market and its potential size. According to recent industry research, the global Smart Glasses market is projected to grow substantially over the next several years. By comparison, there are over 300 million smartwatches sold annually. As an accessory to the smartphone, Smart Glasses are expected to rival that. And as a smartphone replacement, the market is expected to expand significantly from there.

在進一步深入了解我們的營運和策略更新之前，我想提供一些關於人工智慧智慧眼鏡市場及其潛在規模的觀點。根據最近的行業研究，全球智慧眼鏡市場預計在未來幾年將大幅成長。相比之下，每年智慧手錶的銷量超過 3 億塊。作為智慧型手機的配件，智慧眼鏡有望與智慧型手機相媲美。作為智慧型手機的替代品，市場預計將從此大幅擴張。

For Vuzix, even a small portion of market penetration would represent hundreds of millions of revenues for the company. Several factors are contributing to this tremendous projected growth. Artificial intelligence is revolutionizing education, business, natural language processing and ultimately, how smart glasses are used. Features like real-time object recognition, language translation, context aware notification and voice-activated assistance are redefining user experiences. AI's Ability to process and display information contextually and visually is a game changer, making AI-driven Smart Glasses indispensable in both consumer and enterprise settings.

對 Vuzix 來說，即使是一小部分市場滲透率也將為公司帶來數億美元的收入。有幾個因素促成了這一巨大的預期成長。人工智慧正在徹底改變教育、商業、自然語言處理以及最終智慧眼鏡的使用方式。即時物件辨識、語言翻譯、情境感知通知和語音啟動幫助等功能正在重新定義使用者體驗。人工智慧處理和顯示上下文和視覺資訊的能力改變了遊戲規則，使得人工智慧驅動的智慧眼鏡在消費者和企業環境中不可或缺。

Importantly, ongoing technological advancements in optics, displays, battery life and connectivity are making Smart Glasses more practical and user-friendly. Vuzix's Waveguide technology is a prime example of innovation, reducing costs while delivering high-performance displays that are flexible in design, lightweight and ergonomic. The convergence of these factors underscores why the market is expected to grow so dramatically.

重要的是，光學、顯示、電池壽命和連接方面的持續技術進步使智慧眼鏡更加實用且用戶友好。Vuzix 的波導技術是創新的典型例子，它可以降低成本，同時提供設計靈活、重量輕且符合人體工學的高性能顯示器。這些因素的結合凸顯了市場預計將如此急劇成長的原因。

At Vuzix, we are uniquely positioned to benefit from this growth due to our ability to supply scalable, low-cost waveguide solutions to major OEMs. Along with these developments is the increasing interest and involvement of global fashion brands. Companies like Essilor Luxottica and their Ray-Ban through their collaboration with Meta and the growing anticipation around Apple's AR offerings are setting the stage for Smart Glasses to evolve beyond just technology product. They are becoming a lifestyle accessory.

在 Vuzix，我們擁有獨特的優勢，能夠從這種成長中受益，因為我們有能力向主要 OEM 提供可擴展、低成本的波導解決方案。隨著這些發展，全球時尚品牌的興趣和參與度也與日俱增。Essilor Luxottica 及其 Ray-Ban 等公司透過與 Meta 的合作，以及人們對蘋果 AR 產品日益增長的期待，正在為智慧眼鏡超越技術產品的發展奠定基礎。它們正在成為一種生活方式的配件。

This shift is significant for Vuzix and the long-term health of the industry because it highlights the mainstreaming of Smart Glasses, which were previously viewed as niche technology. Fashion brands bring design, style and marketability that appeal to a broader consumer audience. This trend aligns perfectly with our long-term vision and strategy in several ways.

這項轉變對於 Vuzix 和產業的長期健康發展意義重大，因為它凸顯了智慧眼鏡的主流化，而先前智慧眼鏡被視為利基技術。時尚品牌帶來的設計、風格和適銷性吸引了更廣泛的消費者群體。這一趨勢在多個方面與我們的長期願景和策略完美契合。

Regarding OEM and White label opportunities, our waveguide technology platform is already being positioned for White label opportunities. as fashion brands seek to differentiate their products with cutting-edge technology. Vuzix is uniquely equipped to partner with them to deliver high-performance, sleek, AR solutions. In terms of market validation, the entrance of major fashion players further validates the potential of Smart Glasses market. Their ability to attract mainstream consumers helps drive awareness which benefits the entire industry, including Vuzix.

關於 OEM 和白標機會，我們的波導技術平台已經針對白標機會進行了定位。時尚品牌尋求透過尖端技術使自己的產品脫穎而出。Vuzix 擁有獨特的優勢，可與他們合作提供高效能、時尚的 AR 解決方案。從市場驗證來看，各大時尚品牌的入場進一步驗證了智慧眼鏡市場的潛力。他們吸引主流消費者的能力有助於提高意識，這有利於整個行業，包括 Vuzix。

As it relates to design leadership, while technology is our core strength, Vuzix has always emphasized ergonomics, lightweight stylist designs. Now I know I'm not a fashion leader, so looking to partner with those that are is a key focus. This focus positions us as an ideal technology partner for fashion brands looking to integrate our waveguides and optical engines into their product lines without compromising aesthetics.

由於它關係到設計領導力，而技術是我們的核心優勢，Vuzix 一直強調人體工學、輕量化造型師設計。現在我知道我不是時尚領導者，所以尋找與時尚領導者合作是一個重點。這一重點使我們成為希望將我們的波導和光學引擎整合到其產品線而不影響美觀的時尚品牌的理想技術合作夥伴。

Finally, regarding expanding consumer adoption, the integration of fashion and technology lowers the barriers to consumer adoption. Smart Glasses that look like stylish eyewear, will appeal to users who might not otherwise consider AR technology. This trend expands the addressable market with our core technology components and products. As part of our evolving strategy, as you can see, Vuzix is undergoing a significant shift in focus from primarily enterprise-facing markets to the highly anticipated consumer OEM sector.

最後，關於擴大消費者採用率，時尚與科技的融合降低了消費者採用的障礙。看起來像時尚眼鏡的智慧眼鏡將吸引那些可能不會考慮 AR 技術的用戶。這一趨勢擴大了我們的核心技術組件和產品的潛在市場。正如您所看到的，作為我們不斷發展的策略的一部分，Vuzix 的重點正在從主要面向企業的市場轉向備受期待的消費者 OEM 領域。

This transition reflects the broader opportunities we see in leveraging our proprietary technologies and manufacturing capabilities to partner with some of the world's leading brands and technology providers. The O&M market offers several advantages that align with our long-term growth goals. OEM partnerships enable us to deploy our waveguides and smart glasses technologies at scale.

這一轉變反映了我們在利用我們的專有技術和製造能力與一些世界領先品牌和技術提供商合作方面看到了更廣泛的機會。營運與維護市場提供了多項與我們長期成長目標相符的優勢。OEM 合作夥伴關係使我們能夠大規模部署我們的波導和智慧眼鏡技術。

Additionally, the need for customized solutions supports our industry-leading design and manufacturing capabilities. By focusing on OEM customers, Vuzix can diversify its revenue streams across multiple industries including consumer electronics, health care, defense and now even fashion. These industries represent substantial growth opportunities that complement our existing enterprise presence.

此外，對客製化解決方案的需求支持了我們領先業界的設計和製造能力。透過專注於 OEM 客戶，Vuzix 可以在多個行業中實現收入來源多元化，包括消費性電子、醫療保健、國防，現在甚至是時尚。這些行業代表著巨大的成長機會，可以補充我們現有的企業業務。

Our state-of-the-art Waveguide manufacturing facility positions us as a key supplier for OEM partners, with industry-leading cost efficiency and high-volume capacity. We are uniquely equipped to meet the growing demand for advanced Waveguide-based optics and AR components. We look to collaborate with OEM customers with system-level product designs, which allows us to stay at the forefront of innovation through codeveloping products tailored to the needs of our partners, we can refine our technologies and create new applications that further differentiate Vuzix in the AR ecosystem.

我們最先進的波導製造設施使我們成為 OEM 合作夥伴的主要供應商，具有領先業界的成本效率和大批量產能。我們擁有獨特的裝備來滿足對先進波導光學和 AR 組件不斷增長的需求。我們希望與 OEM 客戶合作進行系統級產品設計，這使我們能夠透過共同開發適合合作夥伴需求的產品來保持創新的前沿，我們可以改進我們的技術並創建新的應用程序，從而進一步使 Vuzix 在AR生態系。

We believe collaboration with OEM customers for codeveloped products derisks product development costs and shortens the time to market for new product offerings. We're optimistic about accelerating engagements with OEM customers which we believe will lead to the announcement of codeveloped products in the near term. The enterprise markets remain an important part of our business, but our strategic pivot towards OEM ensures that Vuzix is fully aligned with the largest growth opportunities in the industry.

我們相信，與 OEM 客戶合作共同開發產品可以降低產品開發成本並縮短新產品的上市時間。我們對加速與 OEM 客戶的合作持樂觀態度，我們相信這將導致在短期內宣布共同開發的產品。企業市場仍然是我們業務的重要組成部分，但我們以 OEM 為策略重點，確保 Vuzix 完全抓住產業中最大的成長機會。

Our OEM strategy is already bearing fruit with partnerships like Quanta Computer, Garmin and other as yet unannounced partnerships along with ongoing discussions that could drive significant revenue in the years ahead. We're excited about this transition as it positions Vuzix to capture a larger share of the expanding Smart Glasses markets with scalable, repeatable and high-margin revenue streams.

我們的 OEM 策略已經與廣達電腦、Garmin 等合作夥伴以及其他尚未宣布的合作夥伴關係取得成果，正在進行的討論可能會在未來幾年帶來可觀的收入。我們對這一轉變感到興奮，因為它使 Vuzix 能夠憑藉可擴展、可重複和高利潤的收入流，在不斷擴大的智慧眼鏡市場中佔據更大份額。

Just yesterday, Talos a French multinational company that specializes in aerospace, defense, security and transportation technologies, shared on LinkedIn publicly for the first time that they have developed a next-generation binocular helmet-mounted display designed to support superior awareness and degraded visual environments. It's innovative HMD features, next level optics that work with both day and night restoring a pilot's entire field of vision and off-line conditions, Vuzix who was specifically identified in their post has worked with Talos for quite some time on this design, one that is expected to be formally introduced early in the new year.

就在昨天，專門從事航空航太、國防、安全和運輸技術的法國跨國公司Talos在LinkedIn上首次公開分享，他們開發了下一代雙眼頭盔式顯示器，旨在支援卓越的感知和退化的視覺環境。它具有創新的HMD 功能、新一代光學器件，可在白天和夜間工作，恢復飛行員的整個視野和離線條件，Vuzix 在其帖子中特別指出，他已與Talos 在這一設計上合作了相當長的一段時間，預計明年初正式推出。

This quarter, we've made continued progress with the Vuzix Z100 Smart Glasses, originally introduced as a developer kit, the Z100 features advanced Waveguide-based displays and is accessible to a broader audience now by reducing the price to $499, we've made this innovative technology more attainable, allowing more users to experience its cutting-edge capabilities and opening the door to the broader markets and white label pricing. The Z100's functionality continues to grow with applications that leverage its advanced optics, AI integration and real-time processing capabilities. These include language translation, enabling seamless multilingual communications for business, travel and education, hearing assistance, providing closed captioning for the hearing impaired, transforming accessibility in real-time conversations and events.

本季度，我們在Vuzix Z100 智慧眼鏡方面取得了持續進展，該眼鏡最初是作為開發套件推出的，Z100 具有先進的基於波導的顯示器，現在透過將價格降低至499 美元，可供更廣泛的受眾使用，我們已經這種創新技術更容易實現，可以讓更多用戶體驗其尖端功能，並為更廣闊的市場和白標定價打開大門。隨著利用其先進光學、人工智慧整合和即時處理能力的應用的不斷發展，Z100 的功能不斷增強。其中包括語言翻譯，實現商務、旅行和教育的無縫多語言溝通、聽力輔助、為聽力障礙者提供隱藏式字幕、改變即時對話和活動的可訪問性。

And AI-driven applications enhancing productivity and efficiencies across industries with features like object recognition, guided workflows and contextual information to overlays. Beyond individual users, the Z100 is a flexible platform designed for OEM and white label opportunities. This flexibility is key as we expand partnerships with global enterprise and OEM customers, who seek customized solutions tailored to their specific use cases.

人工智慧驅動的應用程式透過物件識別、引導工作流程和疊加上下文資訊等功能提高各行業的生產力和效率。除了個人用戶之外，Z100 也是一個專為 OEM 和白標機會而設計的靈活平台。當我們擴大與全球企業和 OEM 客戶的合作夥伴關係時，這種靈活性至關重要，他們尋求針對其特定用例的客製化解決方案。

Momentum is building in the AR and AI Smart Glasses space and partnerships remain a vital component of our growth strategy. Our collaboration with Quanta Computer is a standout example and one that is opening key doors while elevating our status with potential customers. Our Waveguide technology and manufacturing capabilities gives us a distinct edge over competitors by offering high-quality waveguides at a fraction -- and other costs associated with alternative semiconductor-based solutions. This competitive cost efficiency is particularly valuable in the price-sensitive consumer and AR enterprise markets.

AR 和 AI 智慧眼鏡領域的勢頭正在增強，合作夥伴關係仍然是我們成長策略的重要組成部分。我們與廣達電腦的合作是一個突出的例子，它打開了關鍵的大門，同時提升了我們在潛在客戶中的地位。我們的波導技術和製造能力使我們能夠以極低的成本提供高品質的波導，並降低與替代半導體解決方案相關的其他成本，從而使我們比競爭對手具有明顯的優勢。這種具有競爭力的成本效率在價格敏感的消費者和 AR 企業市場中尤其有價值。

The development of next-generation Smart Glasses hardware, software and ecosystems is well underway, and Vuzix is deeply engaged in leveraging its scalable and cost-effective technology. As we move into 2025, starting with CES just a couple of months away, you can expect to see increasing evidence of our progress in positioning for long-term success. These milestones will clearly demonstrate Vuzix's strength and potential in shaping the future of Smart Glasses innovation.

下一代智慧眼鏡硬體、軟體和生態系統的開發正在順利進行，Vuzix 正在深入利用其可擴展且經濟高效的技術。隨著我們進入 2025 年，從幾個月後的 CES 開始，您可以期待看到越來越多的證據表明我們在實現長期成功方面取得了進展。這些里程碑將清楚地展示 Vuzix 在塑造智慧眼鏡創新未來方面的實力和潛力。

Grant will now take you through our numbers for the quarter. Grant?

格蘭特現在將帶您了解我們本季的數據。授予？

Thank you, Paul. As Ed mentioned, the 10-Q we filed this afternoon with the SEC offers a detailed explanation of our quarterly financials. So I'm just going to provide you with a bit of color on some of the numbers now. For the 3 months ended September 30, 2024, total revenues decreased by 36% to $1.4 million versus $2.2 million for the comparable period in 2023. The decrease was a result of a 28% decrease in Smart Glass product sales and a 51% decrease in Engineering Services revenues as compared to the prior year's quarter.

謝謝你，保羅。正如艾德所提到的，我們今天下午向美國證券交易委員會提交的 10-Q 報告詳細解釋了我們的季度財務狀況。所以我現在將為您提供一些數字的一些顏色。截至 2024 年 9 月 30 日的三個月，總收入下降 36%，至 140 萬美元，而 2023 年同期為 220 萬美元。與去年同期相比，智慧玻璃產品銷量下降 28%，工程服務收入下降 51%，導致這一下降。

. As of September 30, 2024, the company had $2.2 million of remaining performance obligations under a Waveguide development project, including an initial production line. There was an overall gross loss of $0.26 million for the 3 months ended September 30, 2024, as compared to a gross loss of $0.24 million for the same period in 2023. The 9% increase gross loss was the result of lower product revenues and our lower production rates of further Smart Glasses for the interim to observe many of our relatively fixed manufacturing and planned overhead costs.

。截至 2024 年 9 月 30 日，該公司在波導開發專案下還有 220 萬美元的剩餘履約義務，其中包括一條初始生產線。截至2024年9月30日的三個月，整體毛虧損為26萬美元，而2023年同期的毛虧損為24萬美元。毛損失增加 9% 是由於產品收入下降以及我們暫時降低更多智慧眼鏡的生產率，以觀察我們許多相對固定的製造和計劃管理費用。

As a result, manufacturing overhead costs as a percentage of total product sales increased to 40% of total sales from 15% for the same period in 2023. Research and development expenses were $2.3 million for the three months ended September 30, 2024, compared to $2.9 million for the comparable 2023 period, a decrease of approximately 20%. The reduction in R&D expense was largely due to a $0.4 million decrease in external development costs and a $0.2 million drop in salary and benefits related expenses.

因此，製造管理費用佔產品總銷售額的比例從 2023 年同期的 15% 上升至 40%。截至 2024 年 9 月 30 日止三個月，研發費用為 230 萬美元，而 2023 年同期為 290 萬美元，下降約 20%。研發費用的減少主要是由於外部開發成本減少了 40 萬美元，以及薪資和福利相關費用減少了 20 萬美元。

Sales and marketing expense was $1.8 million for the 3 months ended September 30, 2024, as compared to $2.8 million in the same period of 2023, a decrease of approximately 38%. And reduction in sales and marketing expense was largely due to a $0.5 million decrease in advertising and trade show expenses, a $0.2 million drop in travel-related expenses and a $0.6 million drop in consulting and wage costs from head count reductions, partially offset by a $0.3 million increase in allowances for credit losses.

截至2024年9月30日的三個月，銷售和行銷費用為180萬美元，而2023年同期為280萬美元，減少約38%。銷售和行銷費用的減少主要是由於廣告和貿易展覽費用減少了 50 萬美元，差旅相關費用減少了 20 萬美元，以及人員減少導致的諮詢和工資成本減少了 60 萬美元，但部分被信貸損失準備金增加30 萬美元。

General and administrative expense for the 3 months ended September 30, 2024, was $4.3 million versus $4.5 million for the comparable 2023 period, a decrease of approximately 3% The net loss for the 3 months ended September 30, 2024, was $9.2 million or $0.14 per share versus a net loss of $11 million or $0.17 per share for the same period in 2023.

截至2024年9月30日止三個月的一般及行政費用為430萬美元，而2023年同期為450萬美元，減少約3% 截至2024年9月30日止三個月的淨虧損為920萬美元或0.14美元每股淨虧損 1,100 萬美元，即 2023 年同期每股淨虧損 0.17 美元。

Now, the balance sheet and cash flow highlights. Our cash and cash equivalents position as of September 30, 2024, was $14.3 million, and our net working capital was $26.5 million. As of September 30, 2024, the company continues to have no current or long-term debt obligations outstanding. For the third quarter of 2024, total cash operating expenses, a non-GAAP measure consisting of the sum of our total operating expenses and our statement of operations less noncash stock-based compensation, depreciation, amortization and impairment charges was $4.8 million versus $6.7 million for the comparable 2023 period, a reduction of 28%.

現在，資產負債表和現金流量成為亮點。截至 2024 年 9 月 30 日，我們的現金及現金等價物部位為 1,430 萬美元，淨營運資本為 2,650 萬美元。截至2024年9月30日，本公司繼續沒有未償還的當前或長期債務。2024 年第三季度，總現金營運支出（一項非公認會計準則衡量標準，包括總營運支出和營運報表減去非現金股票薪資、折舊、攤提和減損費用）為480 萬美元，而670萬美元與 2023 年同期相比，減少了 28%。

Near the end of the third quarter of 2024, we received $10 million in cash fee the previously announced Quanta Computer investment in Vuzix common stock. There are 2 other further performance-based investment tranches totaling a further $10 million for which we expect to be achieved in 2025. The net cash flows used in operating activities were $5.3 million in the third quarter of 2024, as compared to a net use of $8 million for the third quarter of 2023.

接近 2024 年第三季末，我們收到了先前宣布的廣達電腦對 Vuzix 普通股投資的 1,000 萬美元現金費用。我們預計將在 2025 年完成另外兩筆基於績效的投資，總金額為 1,000 萬美元。2024 年第三季經營活動使用的現金流量淨額為 530 萬美元，而 2023 年第三季的淨現金流量為 800 萬美元。

Cash used for investing activities for the third quarter of 2024 was $0.3 million versus $2.5 million in the prior year's period, as we spent much less on fixed asset investments related to our Waveguide production facility and for technology license investments. We will continue to look at further trimming our operating expenses as needed while still proceeding forward with our operating plan and our continued transition to an OEM supplier.

2024 年第三季用於投資活動的現金為 30 萬美元，而去年同期為 250 萬美元，因為我們在與波導生產設施相關的固定資產投資和技術授權投資方面的支出大幅減少。我們將繼續考慮根據需要進一步削減營運費用，同時繼續推進我們的營運計劃並繼續向 OEM 供應商過渡。

Of course, we can improve our cash position through further potential strategic investments, government engineering service grants and under the right circumstances, other equity-based liquidity options available to the company. I would now like to turn the call back to Paul for some closing remarks.

當然，我們可以透過進一步的潛在策略投資、政府工程服務補助以及在適當的情況下為公司提供的其他基於股權的流動性選擇來改善我們的現金狀況。現在我想把電話轉回給保羅，讓他發表一些結束語。

Paul?

保羅？

Thanks, Grant. As we look ahead, the opportunities in the AR and AI-driven Smart Glasses market are vast. Aforementioned industry leaders continue to bring AR wearables into the spotlight driving awareness and adoption. This increased visibility directly benefits Vuzix as we continue to differentiate ourselves with advanced Waveguide technology and high-volume manufacturing capabilities for markets across the board.

謝謝，格蘭特。展望未來，AR 和 AI 驅動的智慧眼鏡市場機會龐大。上述產業領導者繼續將 AR 穿戴式裝置置於聚光燈下，以提高認知度和採用率。這種知名度的提高直接使 Vuzix 受益，因為我們將繼續透過先進的波導技術和大量製造能力在各個市場上脫穎而出。

Our immediate priorities include scaling Waveguide production to meet demand from defense and commercial OEM clients, securing additional partnerships with Fortune 500 companies and expanding our product portfolio to include additional lightweight, high-performance solutions as reference platforms to white label. The defense OEM markets represent a significant growth [indiscernible] for Vuzix as we continue to deliver solutions that align with the unique demands of military and government applications. These efforts will be supported by our competitive manufacturing capabilities and strong industry partnerships, positioning Vuzix to be a leader in this exciting market.

我們的當務之急包括擴大波導生產以滿足國防和商業OEM 客戶的需求，與財富500 強公司建立更多合作夥伴關係，並擴大我們的產品組合以包括更多輕量級、高性能解決方案作為白標的參考平台。隨著我們不斷提供符合軍事和政府應用獨特需求的解決方案，國防 OEM 市場對 Vuzix 來說意味著顯著成長[音訊不清晰]。這些努力將得到我們具有競爭力的製造能力和強大的行業合作夥伴關係的支持，使 Vuzix 成為這個令人興奮的市場的領導者。

In conclusion, Q3 has been a transformative quarter for Vuzix, marked by strategic advancements, disciplined financial management and operational achievements. We are well positioned to capitalize on the upcoming growing demand for smart glasses and remain committed to delivering value to our customers and shareholders.

總之，第三季度對 Vuzix 來說是一個變革性的季度，其特點是策略進步、嚴格的財務管理和營運成就。我們已做好充分準備，充分利用智慧眼鏡即將增長的需求，並繼續致力於為我們的客戶和股東創造價值。

With that, I would like to turn the call over to the operator for Q&A.

這樣，我想將電話轉給接線生進行問答。

(Operator Instructions)

（操作員說明）

There are no telephone questions at this time. I'll hand it back to Mr. Paul Travers.

目前沒有電話問題。我會把它還給保羅·特拉弗斯先生。

[indiscernible] Previous to the call. So we thought maybe we'd go over a few of those. Ed?

[音訊不清楚] 通話前。所以我們想也許我們應該回顧一下其中的一些。艾德？

Sure. We have several, Paul. First question, what are the next steps in your Waveguide supply relationship with Quanta once you meet the milestones? And what are your ultimate production and supply goals with them?

當然。我們有幾個，保羅。第一個問題，一旦達到里程碑，您與廣達的波導供應關係的下一步是什麼？您的最終生產和供應目標是什麼？

Yes. So first of all, the current goals out to retain certain level of manufacturing capacity -- and let me explain the most difficult part of that -- you just can already do with where we stand on the plant floor. There are some things that we have to do around prepping the finished parts to actually put them in devices that is taking a little bit of time. But as we said, that should happen in the first quarter or early in the year. And that's to get to 1 million plus Waveguides on an annual basis.

是的。首先，目前的目標是保持一定程度的製造能力——讓我解釋一下其中最困難的部分——你已經可以根據我們在工廠車間的情況來做到這一點。在準備成品零件以將它們實際放入設備中時，我們必須做一些事情，這需要一點時間。但正如我們所說，這應該發生在第一季或今年年初。這意味著每年波導數量將超過 100 萬個。

If you think about the market for a minute, right, 300 million smartwatches on an annual basis. That's the first stop for Smart Glasses. So stopping at 1 million, 1.5 million Waveguides on an annual basis is just not the goal here. The goal was actually order of magnitude plus over that at. So you'll see the relationship between us -- Quanta and quite frankly, other companies that we're involved with right now that need -- are going to need significantly higher volumes than that.

如果你想一下這個市場，你會發現每年有 3 億隻智慧手錶。這是智慧眼鏡的第一站。因此，每年 100 萬、150 萬個波導並不是我們的目標。該目標實際上比該目標高出一個數量級。所以你會看到我們之間的關係——廣達，坦白說，我們現在參與的其他有需求的公司——將需要比這更高的數量。

So step one is the million-plus step 2 is going to be a significant jump.

所以第一步是百萬以上，第二步將是一個重大的跳躍。

The next question. Can you size the market opportunity around your mention of the Talos in display product?

下一個問題。您能否根據您在展示產品中提到的 Talos 來評估市場機會？

We've talked about the defense space in the past. These are devices that they really push the envelope on the capabilities of what a Waveguide can do as such. The price per Waveguide system can be anywhere from $4,000 to $7,000 a system, monocular, binocular field of view, et cetera, based on that. We have partnerships with companies that range in the [ 2000 per ] year that ultimately could become 5-year kinds of programs that could jump into the 5,000, 10,000 piece quantity.

我們過去討論過防禦空間。這些設備真正挑戰了波導的功能極限。每個波導系統的價格可以從 4,000 美元到 7,000 美元不等，根據單目、雙眼視野等情況而定。我們與每年 [2000 件] 的公司建立了合作夥伴關係，最終可能會成為為期 5 年的計劃，數量可能會躍升至 5,000 件、10,000 件。

So it's a significant piece of business in defense. The Talos, I cannot speak directly to right now. I can't speak directly to Talos right now. Obviously, these are confidential kinds of relationships at this point in time. There'll be a lot more happening in the new year as the specific program gets -- that specific program gets announced.

因此，這是國防領域的重要業務。塔羅斯，我現在無法直接與他們交談。我現在無法直接與塔洛斯交談。顯然，目前這些關係都是保密的。隨著具體計劃的公佈，新的一年將會發生更多事情。

Okay. And we have one more. Are there other players trying to make Waveguides? And who do you think stands to be your biggest competitors in this space over the next year or 2?

好的。我們還有一個。有其他玩家嘗試製作波導嗎？您認為未來一兩年誰將成為您在該領域最大的競爭對手？

There's a handful of companies that make Waveguides. Many of them probably following 3 categories, at least it's an easy 3 category thing, let me start with. Many of them are using semiconductor-based process equipment, which has a limited run rate capacity. You got a 300-millimeter wafer, you get 12 Waveguides and maybe it takes 2 to 4 hours to produce. You get a -- like every 6 seconds Waveguide, just to do the [ $1 million ] a year kind of number.

有幾家公司生產波導。他們中的許多人可能遵循 3 個類別，至少這是一個簡單的 3 個類別的事情，讓我開始。其中許多使用基於半導體的製程設備，其運行速度能力有限。你有一個 300 毫米的晶圓，你有 12 個波導，也許需要 2 到 4 個小時來生產。你會得到一個——就像每 6 秒一個波導，只是為了達到每年 [100 萬美元] 的數字。

So that's really not competitive and it's expensive.

所以這確實沒有競爭力而且價格昂貴。

And you probably could spend a ton of money to parallel all that equipment, but this is equipment that's really expensive. And normally, in the semiconductor industry, the reason why prices come down on silicon is because instead of meeting a 1-inch piece of surface area on the piece of silicon, you shrink stuff down to like 5 millimeters by 5 millimeters. So on a single 300-millimeter wafer, you're getting 5,000 parts. You just can't scale that with Waveguides. They're 50 millimeters by 50 millimeters -- is a size of a regular pair of glasses.

您可能會花費大量資金來並行所有這些設備，但這是非常昂貴的設備。通常，在半導體行業，矽價格下降的原因是，您不是將矽片的表面積縮小到 1 英寸，而是將其縮小到 5 毫米 x 5 毫米。因此，在單個 300 毫米晶圓上，您將獲得 5,000 個零件。你無法用波導來擴展它。它們的尺寸為 50 毫米 x 50 毫米，相當於一副普通眼鏡的尺寸。

You don't get that economies of shrinkage that you do with Moore's Law in the semiconductor space. There's a couple of other methods. One of them uses prisms and blast and many, many, many steps to make it happen. And if you look at practically every one of these other options, the cost per Waveguide is very, very significant in a comparison to what Vuzix can do it.

在半導體領域，你無法得到像摩爾定律那樣的收縮經濟。還有其他一些方法。其中之一使用棱鏡和爆炸以及許多、許多、許多步驟來實現這一目標。如果您幾乎查看所有其他選項，您會發現與 Vuzix 的功能相比，每個波導的成本非常非常高。

So there's not really a lot of competition. I will say there's probably some companies in China that are working on China rates to this business that's coming. They have their challenges also because many of those folks are doing it the same way with semiconductor process equipment.

所以其實並沒有太多競爭。我想說的是，中國可能有一些公司正在研究即將推出的這項業務的中國費率。他們也面臨著挑戰​​，因為他們中的許多人正在以同樣的方式處理半導體製程設備。

It's part of the reason why Quanta pick Vuzix, quite frankly. I mean I can't get into all of the details around that, but they spent a fair amount of time on our plant floor, they looked at our processes, they looked at our capabilities, and they seem obviously quite convinced that Vuzix is going to be able to get the volumes that they're going to need for the higher and broader markets.

坦白說，這也是廣達選擇 Vuzix 的部分原因。我的意思是，我無法詳細了解這方面的所有細節，但他們在我們的工廠車間花了相當多的時間，他們查看了我們的流程，他們查看了我們的能力，他們似乎非常確信 Vuzix 正在發展以便能夠獲得更高更廣大的市場所需的銷售量。

And most critically at the price points, if that cost you $500 for a Waveguide and you need to or look at Orion's stuff from Meta or it's like $4,000 a Waveguide and very, very poor yields. That just doesn't make a business. You've got to be able to produce these things like chiplets and that's what Vuzix is plant floor and capabilities can do.

最關鍵的是在價格點上，如果你花費 500 美元買一個波導，而你需要或看看 Meta 上的 Orion 的東西，或者一個波導的價格是 4,000 美元，而且產量非常非常低。那根本做不成生意。你必須能夠生產小晶片之類的東西，這就是 Vuzix 的工廠車間和功能可以做到的。

And I think that's the questions for now. I'd like to just end really quickly to thank everybody for your interest and participation on today's call. Again, if you plan to attend CES this coming year, please stop by our booth to get an in-person look at the future of consumer Smart Glasses. It should be a very exciting show, Vuzix will have a lot to share this year. Thank you very much, everybody.

我認為這就是現在的問題。我想很快結束，感謝大家對今天電話會議的關注與參與。再次強調，如果您計劃參加今年的 CES，請光臨我們的展位，親自了解消費者智慧眼鏡的未來。這應該是一個非常令人興奮的展會，Vuzix 今年將有很多東西可以分享。非常感謝大家。

Thank you. And with that, we conclude today's call. All parties may disconnect. Have a good day.

謝謝。我們今天的電話會議到此結束。所有各方都可以斷開連接。祝你有美好的一天。