The gist of it: one thing stood out in Vuzix’ investor presentation, the company said that BAE, Honeywell Aerospace, and Rockwell are currently selling large complex aviation heads up displays (HUDs) for well into the six figure range per aircraft. Vuzix said that its waveguides and MicroLED display engines taken together can offer a significant reduction in the needed space and cost to implement HUDs within the precious little space available inside an aircraft. People can get excited about a lot of things, like the market for AR specs in the fashion industry, as an accessory, but there is always that reversion to the mean, where real value can be added and that’s the prize, the big prize.
As Vuzix says, making the technology for AR smart glasses is hard and that means that a consumer product is going to be even harder to deliver. Disrupting multi-billion dollar enterprise markets? Well, that’s where there’s room to grow and get paid for all the hard work that goes into manufacturing microdisplays.
Vuzix’s Financial Performance in Q1’23
Vuzix started Q1’23 on a high note with record sales of smart glasses. The rise in sales was primarily fueled by the expansion of sales channels and increased customer adoption in North America. As a result, the company’s total revenues for the first quarter rose to $4.2 million, a 67% increase compared to $2.5 million in Q1’22.
| 2022 ($000s) | 2023 ($000s) | QoQ Change (%) | |
| Total Sales | 2,503 | 4,191 | 67.4 |
| Total Cost of Sales | 2,027 | 3,315 | 63.5 |
| Gross Profit | 476 | 876 | 84 |
| Gross Profit % | 19 | 21 | |
| Research and Development | 3,103 | 3,070 | -1.1 |
| Selling and Marketing | 2,023 | 2,540 | 25.6 |
| General and Administrative | 5,453 | 5,132 | -5.9 |
| Depreciation and Amortization | 259 | 964 | |
| Impairment of Patents and Trademarks | 50 | 18 | -64 |
| Total Operating Expenses | 10,890 | 11,723 | 7.7 |
| Loss from Operations | -10,414 | -10,847 | 4.2 |
| Total Other Income (Expense) | -92 | 607 |
Vuzix’s smart glasses are being used to enhance productivity across various sectors and configurations, ranging from healthcare to logistics in Industry 4.0. The company’s newest win in the healthcare space was with Proximity. Proximity’s PX Lens product, based on Vuzix’s M4000, enables users to live-collaborate on procedures, share surgical content from anywhere, securely record and store procedural videos, and analyze operating room practices to improve patient safety and productivity.
The company’s smart glasses product family now offers a standardized Android 11 operating system for the M400 and M4000 and the Vuzix Shield. This advancement offers key benefits including increased security, improved user experience, easier integration with various third-party mobile device management software packages, and the enablement of advanced Android features within third-party apps.
In its investor presentation, Vuzix discussed its in-house expertise in design and manufacturing of waveguides and MicroLEDs, most of which is being developed at its New York facility. The company’s services range from custom system design to providing design parameters tailored to meet the specific waveguide layout requirements of its customers. This capability, combined with its production processes, allows the company to produce waveguides of varying sizes quickly and effectively.
To further enhance its capabilities, Vuzix is expanding its waveguide production at a new facility that offers an additional 12,000 square feet of manufacturing space. This facility is designed to accommodate its latest wave guide technologies, enabling it to increase production capacity and achieve cost reductions per unit. Moreover, the facility will focus on advancements in higher index materials, advanced glass substrates, and unique formulation technologies. The company anticipate that optical component waveguides and parts will start coming out of this facility in the second half of 2023.
The company acknowledged that production of RGB MicroLEDs with high efficiency color on a single substrate, is a technically intricate process, yet it is a strategic imperative due to its seamless integration with optical waveguides. To ensure a stable supply of these devices, Vuzix has established close collaborations with leading vendors in the field through partnerships and investments. Notably, its agreement with Atomistic SAS, a French company that develops and manufactures microLED displays, showcases significant potential. Although specific details remain confidential, the company’s CEO confirmed that Atomistic’s innovative approach is yielding promising outcomes. The design process is complex, and certain stages of fabrication require specialized equipment, but progress is being made towards achieving Vuzix’s objectives.
In 2022, Atomistic SAS signed a series of agreements with Vuzix. The agreements provide for an exclusive license of key Atomistic technology and the design of a custom backplane. The goal of the collaboration is to develop the first fully integrated color MicroLED microdisplay for AR glasses.
