Good morning, ladies and gentlemen, and welcome to the Gauzy Second Quarter 2025 Earnings Call Conference. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, August 13, 2025. I would now like to turn the conference over to Dan Scott. Please go ahead. Thank you, operator, and thank you, everyone, for joining us today. Hosting the call today are Gauzy's CEO and Co-founder, Eyal Peso, and his CFO, Meir Peleg. On this call, management will be making forward-looking statements, not historical facts, which are based on management's current expectations, beliefs, projections, and assumptions, many of which, by their nature, are inherently uncertain. These forward-looking statements, which are subject to risks and uncertainties, may actually result in different materials from our forward-looking statements if any of our key expectations, beliefs, projections, or assumptions are incorrect because of other factors discussed in today's earnings news release and in the comments made during this conference call or in our latest reports to the Finance, Securities, and Exchange Commission, each of which can be found on our website, www.gauzy.com. We do not undertake any duty to update any forward-looking statements. This call contains time-sensitive information that is accurate only as of today, August 13, 2025. The call is recorded by law. Gauzy disclaims any obligation to publicly update or revise any information to reflect the events or circumstances that occur after this call. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's second quarter press release for definitional information and reconciliations of historical non-GAAP measures and comparable financial measures. With that, let me turn the call over to Eyal. Thank you very much, Dan, and good morning, everyone. Thank you for joining us today as we discuss our second quarter 2025 results. For today's call, I'd like us to focus on five key takeaways. First, the significant sequential increase in our backlog of orders for Q2 2025 confirms our customer support and demand for our technology, which I will highlight with an example momentarily. Second, our full-year expectations remain intact in light of certain changes in the timing of shipments during the second quarter that are reflected in our results. As a reminder, our business can vary from quarter -to -quarter, which is why we encourage investors to consider our results on an annual basis. Third, we continue to achieve new technological and business milestones that will drive our growth in 2025 and beyond. Fourth, since the beginning of the second quarter, we have closed on $15 million of debt financing under favorable terms as part of our plan to strengthen our balance sheet. Finally, a reaffirmed guidance supported by a strong backlog of purchase orders to be shipped in 2025 and an enhanced balance sheet. Our teams worked hard in the quarter to execute despite a momentary disruption of the business caused by the conflict with Iran. This included supply chain and operating disruptions for the majority of the month of June, which resulted in some shipment delays into the back half of 2025. I am relieved to say that in light of this and tariff announcements earlier in the year, the strong demand we see from our customers continues as evidenced by our record jump in near-term backlog of $43 million to be shipped in 2025. An example of this is our largest customer in Asia today, Yutong, the world's largest bus manufacturer, more than doubled its orders for the year during this quarter. These factors resulted in lower revenues as compared to Q2 2024, which we again view as an issue of timing and doesn't impact our full-year outlook for the business. We expect the second half to be significantly stronger than the first half, supported by a record spike in the backlog of purchase orders to be shipped in 2025. Now, let me highlight some of the key business milestones we achieved during the second quarter and subsequent period. We achieved a major milestone with the first customer's delivery of General Motors Cadillac Celestiq, featuring the industry's largest piece of dimmable smart glass ever used in serial production, powered by our SPD technology. This multi-zone, independently controlled panoramic roof demonstrates our ability to bring advanced materials to serial production at scale. This long-term contract with General Motors represents a significant leap forward in bringing dynamic glass from concept to reality. Building on our SPD integrations with Ferrari, McLaren, Mercedes-Benz, and the Cadillac program expands our presence in the EV segment and positions us to capitalize on the global automotive smart glass market's trajectory to grow from $16 billion in 2024 to over $25 billion by 2028. Next, we launched our breakthrough prefabricated smart glass stack, a turnkey solution that accelerates OEM adoption of dynamic lensing in the automotive market. This fully industrialized product combines our dimmable smart glass film, conductive elements, and adhesive insulate into a single unit that eliminates costly post-processing steps and enables Tier 1 suppliers and OEMs to integrate smart glass at scale with speed. Our annual production capability of more than 1.9 million sq ft positions us to capture significant market share through predictable, high-margin business-to-business channels. Multiple Tier 1 suppliers and vehicle programs are evaluating our prefabricated stacks for integration into the late 2025 through 2027 production platform. These two announcements better position Gauzy to win in the automotive smart glass market, projected to reach $25 billion by 2028 and growing at over 11% CAGR. We're excited about our strategic expansion into the marine sector, where we see significant opportunity within the $6.2 billion global marine lab market. Following our successful implementation at the new MSC Cruise Terminal in Miami, the biggest terminal in the world, our PDLC and SPD smart glass technologies are gaining strong traction with cruise lines seeking sustainable, experience-driven vessel design. We've now secured nine programs in the maritime sector, validating demand in these high-margin segments. With volatility shifts on the border globally and the cruise industry's aggressive focus on reimagining the onboard experience, our technologies deliver the privacy, solar control, and energy efficiency that operators need to meet their ESG goals while enhancing passenger experience. In our architecture division, we continue to be selected by some of the biggest companies in the world to outfit their commercial spaces, including most recently Moderna for their corporate headquarters. In our Aeronautics division, we're pleased to share that we will be revealing a new commercial airline cabin shading product at CES early 2026. This is expected to serve as our main growth engine in this segment as we move from cockpit into commercial cabins. As a reminder, the decision on how to control light in commercial aircraft has moved from the OEM to also include the airline. This opens our business to more than 700 individual airlines, both new production and retrofitting their existing fleet. In our safety tech visit, I'm excited to announce that Gauzy Smart -Vision AF is now installed also in buses across the big metropolises of Strasbourg, France, and Manchester in the United Kingdom. We will also be launching our new AI-based AF product, Smart -Vision for Buses, in October at the premier event for the bus industry in Brussels called Bus World. This follows the successful and ongoing deployment of Smart -Vision for trucks with customers like Ford Trucks, like previously announced. With regards to governance, subsequent to quarter end, we announced important board changes aligned with our public company evolution. Following our first annual shareholder meeting, we welcomed back longtime investor and former director, Alejandro Weinstein, to the board of Gauzy. His expertise in global expansion, M&A, and public company leadership will be invaluable as we scale operations and advance our market leadership. Before I turn it over to Meir, I want to emphasize that we ended the quarter on exceptionally strong footing to accomplish our full-year objectives. Our first half performance, together with our record purchase orders backlog of $43 million to be delivered in 2025, are in cadence with our expected sales performance that meets the guidance. The entire Gauzy organization is excited to deliver on this tremendous momentum. I will turn it over to Meir for an update on Gauzy's financial results. Thank you, Eyal. I'd like to begin by providing a detailed overview of our second quarter 2025 financial results. For the second quarter, we generated revenue of $20.1 million. At the segment level, all our divisions experienced shifts in timing dynamics as Eyal discussed at the corporate level. At the same time, the improvement that we noticed across the board in our record backlog was represented within our R&D division. Due to the lower top line over the same fixed cost base, our gross margin was 21.4% compared to 27% in the prior year period. Gross margin variance was primarily attributed to dynamics within our Aeronautics division, which reported a gross margin of 23% during the quarter compared to 37% in the prior year, reflecting lower segment revenue across a relatively fixed cost base and a change in product mix. Specifically, our highest margin category also had a compounding effect of bringing down our overall margin for the quarter. The remainder of the segments collectively experienced more stability and margin performance. Total operating expenses for the second quarter were $16.8 million compared to $14.5 million in the prior year quarter. The change was mainly due to higher corporate expenses associated with being a public company versus a private company during the same quarter last year. Additionally, there was a higher depreciation and amortization accounting for a third of the difference and higher R&D expenses this quarter as compared to Q2 2024. The difference between the operating expenses of this quarter compared to the same quarter last year was planned, budgeted, and executed to support dramatically stronger quarters in the near term. Based on these factors, it is evident this quarter was - $8.7 million compared to - $3.9 million in the prior year quarter. Importantly, our production facilities across all divisions are sized to accommodate more than double the current run rate of production, so we are well positioned to execute the order ramp-up and deliveries in the coming quarters. Turning to our cash resources, during the quarter, our free cash flow improved to an outflow of $5.2 million compared to - $11.5 million in the prior year quarter. This is reflective of the operational discipline and cash management strategies we have implemented to accelerate our path toward cash flow positivity. The end of the quarter was total activity of $36.2 million, including $35 million of available capacity under our unjoined trade line. Following that, at quarter end, was $53 million, including $9.2 million of short-term receivable financing. Since quarter end, we have raised an additional $5 million of plain vanilla debt in stacking taxes under federal tariffs. This brings our total borrowing within roughly $15 million. We have received approval from our board to raise an additional $10 to $15 million of debt and are in the process of merging with new and existing lenders to extend our borrowing. We are committed to funding our business through non-dilutive capital sources and will continue to pursue plain vanilla debt as our primary focus until we achieve cash flow positivity. This is consistent with our previously announced plan to strengthen our value. We believe we are well positioned to meet our goals as we enter the second half of the year with a strong backlog and energized operations. We continue to expect revenue to be in the range of $130 million - $140 million, representing more than 30% growth at the midpoint compared to the 2020 quarter. Based on the benefits of scale, the federal role of rating leverage, and the strong recurring revenue base that we have, we also continue to expect adjusted EBITDA to be positive for the full year 2025. This guidance reflects the strong demand we're seeing across all our segments, our record backlog at quarter end, the growing adoption of our technology by leading OEMs, and the expanded production capacity we've put in place to meet this demand. Now, I will turn it back over to Eyal to close remarks. Thank you, Meir. Looking ahead to the remainder of 2025, our enthusiasm for the opportunity before us continues to grow. Our business momentum keeps building with our record order backlog delivering full-year revenue visibility. From an operational standpoint, we're in a position to deliver on tremendous order and delivery growth. We're excited about recent enhancements we have made inside our organization. We have promoted a new Executive Vice President for the airlines division. We have also moved each division's production teams from the business division to the global operations team, reporting to the COO. This streamlines procurement, supply chain, and best practice sharing across the organization. I am more confident than ever in Gauzy as reinforced by my recent significant purchase of additional shares in June. Mr. Weinstein, our newly elected director and longtime investor, joined me in this purchase of 560,000 shares, underscoring the leadership's strong conviction in the company's strategic direction and future growth. We are energized by the encouraging adoption of our light and vision control technology across industries. We have a strong innovation pipeline across all four business divisions. We're expanding our addressable markets and remain committed to delivering on our goals to increase shareholder value. In conclusion, I extend heartfelt appreciation to our dedicated employees, valued customers, strategic partners, and committed shareholders for their unwavering support and trust in Gauzy. Thank you for your time today. Now we will open up the line for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. Your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. First question comes from Dan Levy with Barclays. Please go ahead. Hi, good morning. Thank you for taking the questions. I wanted to ask if you could just double-click on some of the timing dynamics that brought the revenue, if you could just unpack what went on there and what is the comfort that these dynamics won't occur in the future? Hi, Dan. Good morning. This is Eyal. Thanks for the question. What we have announced and my answer is that we had some shifts in timing of deliveries. You know we repeat this every quarter, and it's still the case that we can have shifts between quarters, but we're very comfortable and confident in our still annual guidance. It's basically shifting from H1 to H2 of deliveries that we have in the book. I'd like you to refer to the backlog that we reported of $42.9 million. The spike there is, it shows the numbers are there. We had a few deliveries move into H2 from H1. Sometimes hard to predict, and mostly it's because of aero, where we always have also the best projection for the business by the nature of the business. If you look at the per segment, what we've done in H1, then you'd see the big differences in aero. That's also our biggest part of the backlog that has to be shipped in 2025. I'd like to say the following. First of all, if you add H1 delivery plus the backlog 30th of June, you reach about $86 million that we've done or we have orders to ship in 2025, and that is in cadence within the expectations that we had. There are a few million dollars that could have been in H1 that are going to be delivered in H2. These are POs in the system that are well within the cadence of sales orders that we expect and certainly within the expectations that we have for the full year. There were a few reasons for shipment delays, mainly in the aeronautics segment, and also some due to our production stop we had two or three weeks in June. As you know, there was a conflict that was kind of surprising at the end of the quarter. We had to be shutting down the production in Tel Aviv for two or three weeks. That, of course, did, and we said that a few times, we're very happy that did not affect at all the business itself. Customers support us, and those things shipped a little bit into Q3 and into H2. I'd like to say that, again, it's timing and not taking away anything from the confidence we have for the full-year guidance. Okay. Related to that, and I think you've been addressing this, the first half to second half ramp is aggressive. That would put 70% of your full-year revenue in the second half. Maybe what's the timing, what's the confidence that there won't be timing issues in the second half? Also, given that would be a dramatic increase over anything you've ever delivered in a half, the implied second half, what's the confidence that the execution will be there to meet that demand? That's a great question. I'd like to say that from when we budgeted 2025, approved in the board, the quarters, we have prepared the company to deliver $45 million and $50 million quarters. That was always the case. That's how we, that's the budget we approved the board. The company assessed both HR, meaning we have two shifts across all the business divisions when we need it, approved to work also on weekends when we need. The company has the capacity to ship $45 million and $50 million quarters. If you align that with the fact that we have the sales order cadence to reach our targets, then yes, execution is possible. It's what we really planned from the get-go for Q4. It's also going to be a bigger Q3. We have designed the company this year to be delivering $45 million and $50 million quarters. That is as we planned. I'd like to say that as long as the sales orders are coming in the cadence they should, and again, you see the delivery in H1, plus what we needed June 30, the backlog, it's completely within the expectations of what we had expected in the beginning. We could have had $2 million, $3 million, $4 million already delivered, and it would go down from the backlog, but it's still within that world of expectations. That's where investors should get, should they feel that we have prepared ourselves for $44 million, $45 million, and $50 million deliveries per quarter. Okay, thanks. If I could just squeeze one more in, and it's about the liquidity. You ended the quarter with $1 million on the balance sheet. I know there's a note here that you're supposed to get $5 million of debt financing in the third quarter in July. Can you just talk about the liquidity dynamics and what's the comfort that there's sufficient liquidity going forward? Thanks. Sure. We're doing our best. Of course, liquidity of, you're right, Dan, we're adding cash. If you see, we ended Q1 and Q2 with the same level of cash in the bank. We have the $35 million credit line that we can tap on at any time, signing me and Meir and withdraw money. However, as we always mentioned, we'd like, if we can get better debt financing, simple debt, I mean, plain vanilla, no equity involved. We do that to better perform our cash flow performance. We have received from our own main bank that has been accompanying us for 15 years since we initiated the company, Mizrahi, we've received much, much better terms debt on $10 million that we got in Q2. We have additional $5 million from them in Q3. I'd like to say that we also, we always said that we'd need more simple debt financing in order to get to cash flow positive. We are on good terms to receive the rest that we need. Again, I want as long as everyone understands that the $35 million are as good as cash. We can tap on them anytime we want. That provides us visibility with regards to liquidity all the way through to the end of 2026, where we have guided the market and we still reaffirm that we're going to be cash flow positive. As we go through H2, the business is balancing, and we reaffirm that we are going to be at a deposit for the full year. Also, kind of balancing the business, the inflow and outflow should give a lot of comfort with regards to liquidity. I'd like just to mention that, again, we always have these $35 million in place if we need, if we get better terms from, for instance, like Mizrahi, we take it. It's there for us to use if we need. I'd like really to, again, mention again that the $35 million is part of our liquidity for financing the business until cash flow positive. Okay, thank you. Thank you. The next question comes from Josh Nichols with B. Riley. Please go ahead. Hi, this is Matthew on for Josh Nichols. Thanks for taking my questions. I guess just to start off, you just reiterated your expectation for positive EBITDA this year. Can you walk us through the levers you expect to get there? Is it mainly just from ramping revenue in the second half, or how should we expect you to get there? Thanks. Thanks, Matthew. I'd like to always refer back to our Q4 2024, where we walked the talk of getting to adjusted EBITDA positive. We've done that with $31.1 million revenue. I confirm, I mean, I'd like to reiterate the following message. As long as we have more than $31 million, $32 million revenues, we're adjusted EBITDA positive. If you'd like to just average out, as long as we are going to average the full year at $31 million, $32 million, the full year is going to be EBITDA positive. That's why I'd like investors to analyze that. That's the point of break even. If you look at the guidance we have towards year-end and the order book that we need to deliver, you'd see that in H2, we're much stronger. We're reaffirming the guidance we gave. It's leaving us in Q3, Q4 top line that would improve our gross margin dramatically. We showed that also in Q4 2024. Our fixed cost is a big, big lever on our gross margin. The more we have on top line, then the gross margins improve dramatically. If you look at Q4 2024 bridge that, you'd see why we are reaffirming EBITDA positive for the full year on guidance of the top line that we gave and why we feel so confident that that's achievable, balancing H2 with balanced H1 as we expected from the beginning. Got it. Thank you. In terms of the mix in the backlog, does it lean more towards a certain segment? Which segment should we see as a key contributor for hitting that for your guidance? Yeah, thanks. That goes to, again, adding some more comfort level to the guidance that we provided. The biggest contributor to the backlog, as of June 30, is aeronautics, where that's also the business we always had the best projections of because these things tend to not change much. During the year, there are not many changes within our customers' projections. You don't suddenly make more jets or less jets. It's usually things that within the year don't change. If you look at the backlog in page seven of our deck, $21.3 million is associated to aero. That's also where we, if you compare H1 2024, let's say, to H1 2025, where we had, you know, if you compare these two, we had the biggest miss. The miss is only, again, with timing of shipments. You're going to see that bouncing back in H2. We are 100% confident that for aero, for the aero business, we're going to hit the target. It's also the biggest part of our backlog. This really adds into our confidence for the guidance we gave for the full year. Thank you. I guess the last one for me, you mentioned the company having the capacity to ship outside quarters in the second half. How should we expect working capital items to change in support of that? Yeah, that's a great question. I'd like to say that today, maybe 80% or 85% of our business is factored, right? 80%. Yeah. The good thing about our business, I mean, it's something we'd like one day to get rid of. The fact that we're serving companies like Boeing and Airbus, the Tier 1, we're serving Tier 2 to a Ferrari and McLaren and an automotive port, Iveco, MAN, Airbus helicopters. We're serving customers that are very easily and very cheaply factored. It means that we're financing the invoices. The working capital structure that we need, of course, it has to be healthier to support quarters of $40 million and $50 million. The way we're doing it is the fact that we have this engine of working capital in Gauzy can support itself due to the fact that we're factoring today 80% of our business. It means that we're getting paid once we invoice that payment immediately. We don't need to wait for payment terms. We can always get cash once we invoice, and that can support the production of next week or the next week and the next week. When you factor 80% of your business and you get your money day one, it's so much easier to plan growth with relation to working capital. Good question. I hope I answered it. I hope, you know, it doesn't make sense. I'm just saying that the working capital is growing, and the way we're supporting it is by factoring more and more of our invoices to get money day one that can support the production of the following week and the following month and so on and so forth. Got it. Thank you. That was all for me. Thanks. Thank you. As a reminder, if you wish to ask a question, please press star one. Again, if you wish to ask a question, please press star one. The next question comes from Itay Michaeli with TD Cowen. Please go ahead. Great. Thank you. Hi, everybody. Just two follow-ups on the second half outlook. I was curious if you can comment on how we should think about the cadence between Q3 and Q4. Should we expect roughly a similar level of revenue in each quarter, or will there be a skewed one quarter to another? Hi, guys. Thanks for the question. Today, I mean, again, we don't want to say, you know, quarterly projections are not as accurate, and I'd like to be careful here. I can say that roughly around Q4, if you look back three, four, five years, it's always our strongest quarter. You should expect that to be the case this year and maybe even a little bit more than years before. You're going to see a stronger Q4 than Q3, especially with the vacation patterns in Europe, less so much within Gauzy, but with our customers. Still, 65% of our business is in Europe. In August, in many cases, our customers are actually shutting down. Q3, I'd say I'd be careful and say about 40%, 60% is what you can expect. I'd like to say that this is, again, a very rough estimation, not something that is to be taken very accurately. Thanks, [audio distortion] That was helpful. Going back to the kind of bridging to positive EBITDA, if we take the second quarter starting point of $20 million revenue and roughly a $9 million EBITDA loss, it does still imply a very, very strong incremental margin to get back to where you were in the fourth quarter of last year. I'm curious whether that's mostly underutilization of fixed costs. Is there some OpEx to think about just to help us in terms of the implied incremental margin from first half to second half on your guidance? Thanks, Itay. Really, I'd like to refer, when you look at Gauzy, we need to see an annual kind of things straighten out on an annual level. If we say we claim what we did before, we did it in Q4 2024, if we claim that $31 million is where we're breaking even on EBITDA, the cost structure of the company hasn't changed much. It's, in some cases, actually improved. You should expect the same on average to get to EBITDA positive. Also, that our top line improves about $40 million quarter would also dramatically improve our gross margin. That's where you can analyze your leftover EBITDA. We already showed that on $31.1 million, where EBITDA break even or a little bit positive. That's where I'd like you to get comfort from in the reference. Also, it's very important to say that there is also quite a big effect of, when you look at the EBITDA of Q2, there's quite a bit of effect on vacation. We are 700 and something employees. We have a lot of the employees located in Europe, where vacation patterns change quite dramatically between Q2 and Q3. You can see that in former years. You should expect also, and it is significant enough to mention, that there's going to be vacation liability dropping in the second half, both because of the fact that the year ends in Q2 for European employees on vacation, and it's quite a bit of a liability. What was the liability? The total liability was $4.8 million. So $4.8 million of vacation liabilities only that we had end of Q2. You should expect to see a big change in that in Q3 and onward for two reasons. That's also something worth knowing about Gauzy. It's that most of our employees, that's the cutoff date for accumulating vacation, and it goes to zero end of Q2. Also, there's usually a big drop in August because that's when they take their annual vacation. It is a big liability if you can see the out of our EBITDA. Just always remember that $31 million, that's where we break even. Anything above that with much improved gross margins because of the top line is going to contribute significantly to the EBITDA. That's very helpful. Thank you for all that detail. Thanks, Itay. Thank you. There are no further questions at this time. I would now like to turn the conference over to Eyal Peso, CEO. Please go ahead, sir. Thank you, everyone, for joining in today. Excited about what's coming and looking forward to talking to you soon again. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.