Following a slight bump in the road in Q2, AR enterprise smart glasses vendor Vuzix entered a $20 million three-tranche strategic investment with Quanta Computer Inc., a global Fortune 500 company, this week to boost the vendor ahead of 2025.
The moves gives Vuzix a much-needed boost following an underperforming Q2 period. The Quanta Computer Inc. investment consists of Vuzix common and preferred stock, vastly boosting the firm’s readiness for the second half of 2024. This is a timely move, as market forecasts expect smart glasses to outperform VR headsets.
Frank Chuang, the Vice President of Quanta Computer, added:
We plan to work closely with Vuzix to support the AR smart glasses industry and today’s investment in Vuzix represents a strong endorsement of our partnership.
Notably, the large-scale investment splits the capital across various stock assets, with Quanta already dedicating $10 million towards common stock, and soon the investors will commit two separate upcoming $5 million investments towards series B preferred stock tied to incoming Vuzix roadmap milestones.
The firm first disclosed the Quanta partnership last November, and the most recent $20 million investment “represents another important step in our partnership,” said Paul Travers, President and CEO of Vuzix.
Travers also added:
This investment, and the ones to follow, will significantly strengthen our balance sheet and assure that we can implement whatever steps needed to ramp production of waveguides, as well as the co-development of new smart glasses and related technologies. We look forward expanding our customer relationship and partnership with such a leading product manufacturer as Quanta, as well as realizing the significant revenue potential it stands to generate for Vuzix in the upcoming years with both parties’ successes.
Investments Come, Just in Time
In Vuzix’s second-quarter results for 2024, the company’s total revenues decreased by a staggering 77 per cent to approximately $1.1 million. In comparison, the previous year’s revenue was about $4.7 million. Additionally, Vuzix reported an overall year-on-year gross loss of $0.3 million for Q2 2023.
Paul Travers said that in the second quarter of 2024, “Vuzix underpinned key end-customer and strategic relationships within the enterprise, consumer, and defence markets centred around business opportunities that are expected to have a meaningful impact on both our balance sheet and top-line revenue growth over the back half of 2024 and into 2025.”
According to Vuzix, the decrease in capital is attributed to a drop in product sales, specifically its M400 smart glasses. However, Vuzix points out that in 2023, product shipments were inflated due to Asian-based distribution, suggesting that the decline may not be as severe as the numbers indicate.
Travers also added:
At the same time, we have reduced our annual cost structure going forward by $8M as compared to 2023 through headcount reductions, tighter cost controls and a voluntary and widely adopted salary reduction program that offers staff, directors and management restricted stock or stock options in lieu of foregoing up to 50 per cent of their base salaries.
Key points from the Q2 financial report include a 17 per cent year-on-year decrease in research and development expenses and an 11 per cent decrease in selling and marketing expenses. However, administrative expenses increased by approximately 5% in Q2.
Travers also noted that Vuzix expects “to see top-line revenue improvement over the second half of 2024.” According to the CEO, Vuzix also has “a number of enterprise accounts that are on a path to volume deployment of our smart glasses and solutions within their operations to deliver improved productivity, lower onboarding times and fewer errors.”
Vuzix Launches M400 Xtreme Smart Glasses
Vuzix Corporation recently unveiled the M400 Xtreme smart glasses kit, designed to withstand extreme weather conditions. The new kit features the latest lightweight and long-lasting Xtreme Weather power bank and boasts IP67-rated protection against dust and water. It can operate in temperatures ranging from 20°C to 45°C. According to Vuzix, a leading smart glasses supplier, the M400 smart glasses have already seen widespread adoption.
Vuzix positions the M400 Xtreme kit as an out-of-the-box solution that improves upon the M400 All-Weather Kit in terms of battery capacity, suitability for harsh workplace environments, and a headband designed for long shifts.
To promote the uptake of smart glasses in remote and challenging conditions, Vuzix has introduced a limited-time Collaboration Package offer, providing free access to augmented reality communications tools, including Vuzix Video Conferencing for Zoom.
These tools enable users to quickly and easily launch and join meetings and share video streams through the M400 smart glasses using clients’ video conferencing applications. Vuzix has priced all three M400 smart glass kits at $1,799.99 each.
