Blaize Holdings, Inc. Q1 FY2025 earnings call

• Moved from pilots to real deployment with a large pipeline featuring active late-stage programs and contracts advancing from field validation to final negotiations. • Began shipping production AI chips and systems into real-world deployments across smart city and various sectors, boosted by new partnerships in Q1 and Q2 such as CBIST in South Korea and Turbo Federal in the US. • Developed a new turnkey vertical AI solution stack combining chips, software, and validated applications to accelerate deployment in key sectors, with an upcoming announcement. • Operate with financial discipline, supported by a balance sheet aligned with near-term and mid-term priorities to fund operations, scale customer programs, and support growth through 2026. • In Q1, started shipping production chips and AI accelerator cards to smart city programs, selected by CBIST for the Chungbuk digital innovation hub in South Korea. In Q2, executed across geographies with active engagements in US infrastructure, South America, Asia, and the Middle East, showcasing AI-powered smart city solutions at ISC West. • Integrated with partners like OrionVM, VSaaS, Thrive Logic, and CVEDIA for hybrid cloud, school safety, and pre-trained vision AI models. • Diversified global pipeline includes late-stage engagements in smart infrastructure, public safety, defense, and industrial automation, with field deployments and contracts progressing. • Partnership with Turbo Federal for defense-critical environments, finalizing purchase orders for Blaize-powered servers bundled with AI Studio. • Advancing with the Ministry of Defense towards proof of concept and field qualification phases. • Dual go-to-market strategy: working directly with high-value customers in smart infrastructure and defense, and scaling via channel partners using the turnkey vertical AI platform.

In the first quarter of 2025, revenue was just over $1 million, primarily from shipments of PCI cards to support smart city customers. The prior year's revenue of $549,000 stemmed from strategic consulting services for an automotive customer. Cost of revenue in the current quarter was $327,000, compared to $306,000 in the prior year.

• Q2 2025 revenue projected in the range of $1.5 million to $1.7 million. • Adjusted EBITDA loss expected between $13 million and $14 million. • Stock-based compensation charge anticipated to be approximately $10 million. • Weighted average shares outstanding estimated at approximately 90 million. • Reaffirmed full fiscal year 2025 revenue guidance within the $19 million to $50 million range.

• Macro challenges over the remaining seven months of the fiscal year could impact pipeline conversion. • Tariffs and other market developments may strain the supply chain for chips and finished products, but close collaboration with key vendors is ongoing to monitor such impacts.

Q: About the sizing and timing of new wins like CBIST and Turbo Federal, when can we expect them and how to quantify their size?

A: These are strategic engagements in targeted markets. For example, CBIST is related to smart cities and Turbo Federal to defense. We are negotiating contracts and will announce them upon signing. Sizes range from low millions to tens of millions over time, with some starting towards the end of 2025 and extending the pipeline into 2026.

Q: What is the revenue cycle recognition for different customers?

A: Generally, we recognize hardware revenue upon shipment. For software licenses, perpetual licenses are recognized when they become operative, and annual licenses are recognized over the period. Professional services revenue is recognized as the services are delivered.

Q: Provide an update on the next generation of chips and the impact of rapid AI model development?

A: We are excited as the shrinking of AI models aligns with our existing products. The next generation products will focus on efficient edge inference, complete programmability, and supporting shrinking multi-modal AI, which are key growth drivers and are already evident in current customer engagements and pipeline.

Q: Progress on the Ministry of Defense contract regarding proof of concept and field qualification stages?

A: We are in constant communication with the Ministry of Defense, conducting proof of concepts, and discussing field trials. Revenue from this contract is expected towards the end of 2025, and it is a multi-year contract involving hardware, software licenses, and professional services, extending beyond 2026 into early 2027.

Q: How has the pipeline improved since the last earnings call?

A: The pipeline is growing rapidly. Firstly, landing an ISV (Independent Software Vendor) and delivering to a use case amplifies our pipeline as the ISV brings in other deals. Secondly, multi-modal AI, combining computer vision and small language models, creates new use cases and value, driving pipeline growth.

Q: Talk about the strategic development cycle and tangible results timeline for the CBIST partnership?

A: We have been engaged with CBIST for almost a year. There has been behind-the-scenes work leading to the initial announcement, and active deployment cycles are being discussed. Revenue from this partnership is expected towards the end of 2025, and we will announce specific projects as they progress.

Q: Explain the change in the adjusted EBITDA loss range and the impact of stock-based compensation?

A: The $40 million to $55 million adjusted EBITDA range reflects the revenue range. The difference from previous periods is due to external costs of our next generation chip, with some costs deferred to the end of 2025 into 2026. The increase in stock-based compensation is mainly due to the merger triggering RSU vesting conditions.

Q: How does the new vertical AI solution platform accelerate shipping and create recurring revenue?

A: The vertical AI stack in a box is a ready-to-go package of hardware and software, including our software and partner software for specific use cases, similar to a Macintosh. It helps customers with IT spend and enables seamless continuous change management and improvement, providing an opportunity for software revenue to be recurring.