Q3 2021 Innoviz Technologies Ltd Earnings Call

Speaker 1: and welcome to INOVIS third quarter 2021 earnings conference call. Joining us today are Omer Kailov, INOVIS Chief Executive Officer and Eldar Segla, INOVIS Chief Financial Officer. Following the formal remarks, we will open the call for your questions.

Good morning, and welcome to interface third quarter 2021 earnings conference call joined.

Joining us today are all murky love interface, Chief Executive Officer, and in a dark Sigler interface Chief Financial Officer. Following their formal remarks, we will open the call for your questions.

Speaker 1: I would like to remind everyone that this call is being recorded and will be available on the investor relations section of our website at ir.inevis.tech.

I would like to remind everyone that this call is being recorded and will be available on the Investor Relations section fall website at IR Dot interface Doc Tech.

Speaker 1: Before we begin, we would like to remind you that our discussions today will include forward-looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of Pneus

Before we begin we would like to remind you that our discussions today will include forward looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of interface Act.

Speaker 1: Actual results could differ materially from those anticipated in the forward-looking statement.

Actual results could differ materially from those anticipated in the forward looking statements.

Forward looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them.

Speaker 1: forward-looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them.

Speaker 1: For a discussion of some of the important risk factors that could cause actual results to defer materially from any forward-looking statements, please see the risk factor section of our Form 20F filed with the SEC on April 21st, 2021. I will now turn the call over to Omer. Please go ahead.

For a discussion of some of the important risk factors that could cause actual results to differ materially from any forward looking statements. Please see the risk factors section of our form 20-F filed with U S. D. C on April 21st 2020.

One I will now turn the call over to Omer. Please go ahead.

Yeah.

Speaker 2: Hey, good morning everyone, good to see you.

Good morning, everyone.

Okay.

No.

Speaker 3: I.

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Okay.

Yeah.

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Sure.

Hi, everyone and good morning, I'm, almost <unk> CEO and co founder of <unk> technologies and with meal adult Sigla are twofold very happy to be in New York and meeting with investors in bookings with analyst and being able to bring our car the grizzly with recall.

Speaker 4: Hi everyone and good morning. I'm Omer Kelaf, CEO and co-founder of Innoviz Technologies, and with me, Eldar Segla, our CFO . Very happy to be in New York and meeting with investors and talking with analysts and being able to bring our car, the Grizzly, which we call, and with our Innoviz ONE LIDAR to show and demonstrate the great performance.

With our it'll be the warm leads out to show and demonstrate that the great performance.

Good to be here today.

Before I move on to our quarterly update very we have a very special guest with US are very happy and honored to have Mr. Richard Rowe who's the VP of automated driving or BMW. He's joining us now today from Germany and unit Here's the book about the program the process, where we are very.

Speaker 4: Before I move on to our quarterly update, today we have a very special guest...

Speaker 4: I'm very happy and honored to have Mr. Richard Rao, who is the VP of Automated Driving of BMW. He is joining us now today from Germany in Munich. He is here to talk about the program, the process.

Speaker 4: We are very fortunate for BMW being selected in all these technologies through magna out you want up?

Fortunate for BMW been selected this technology through Magna all tier one partner and I'm very excited to see you here rich ores who've been working together for the last two or three or maybe four years right. Now. Thank you very much for accepting my invite for being here today.

Speaker 4: And I'm very excited to see you here. Richard, we've been working together for the last three or maybe four years right now. Thank you very much for accepting my invite to be here.

Speaker 5: Thank you, Omer. Thank you for inviting me. I'm glad to support you in this important call for Inovit.

Thank you Omar Thank you for inviting me and clips two to support you in this important call for for <unk>.

I would like to give you all are in a few minutes a little bit a little perspective on our joint project, we have with innovates and Magna before I dive into this however, I need to give a little disclaimer because we do have very strict policies at BMW that restrict me.

Speaker 5: I would like to give you all in a few minutes a little perspective on our joint project we have with Inovitz and Magne.

Speaker 5: Before I dive into this, however, I need to give a little disclaimer.

Speaker 5: because we do have very strict policies at BMW that restrict me in terms of what I can say about ongoing projects within BMW. So please understand that I will not talk about specific launch dates or specific features or functionalities.

In terms of what I can say about ongoing project within BMW. So please understand that I will not talk about specific launch dates or specific features and functionalities.

Speaker 5: nor will I be commenting on the programs of other OEMs or on other laser scanner programs.

Nor will I be commenting on on the programs of other Oems or on other laser scanner programs.

Speaker 5: With having this set, maybe I give you a little background on where we stand at BMW with autonomous driving. Many things which I'm going to say are public knowledge but maybe in this...

With having a set maybe I give you a little background on where we stand at BMW with autonomous driving many things, which I'm going to say our public knowledge, but maybe in the end in this.

Speaker 5: in this summary not fully present to you.

In this summary, not not fully present to you first of all we have announced this quite a few times that we do work on a full level three customer system.

Speaker 5: First of all, we have announced this quite a few times that we do work on a full level three customer system.

Speaker 5: So through autonomous driving that will launch as soon as the necessary regulations are in place and as soon as it meets all the high safety standards at BMWs for the safety of our customers.

Hum sort of true autonomous driving that will launch as soon as the necessary regulations are in place.

And as soon as it needs all the the highest safety standards at BMW for the safety of our customers.

Speaker 5: We have also talked quite a bit in public about on conferences and the like that for us, a LiDAR or a laser scanner is an absolute necessary component in the overall sensor setup for a true level 3 sensor.

We have also I think talked quite a bit in public about on conferences and the like that for us a lighter or a laser scanner is an absolute necessary component in the overall trends are set up for a true level three system.

Speaker 5: and that we are pretty firm about have been for the last few years and that has not changed. You cannot build from a BMW perspective a true level 3 system without lighter systems or without at least one lighter.

We are pretty firm up all of them would have been for the last few years and that has not changed you cannot build.

From a BMW perspective, a true a level three system without lightest systems or without at least one later in the system.

Speaker 5: For this end, we have nominated Magna and Innovitz already some time back to develop for us, for our autonomous deck, a LIDAR for really an end user customer application so that it meets all autonomous requirements and all the performance requirements we have for the system. That one was announced, I think, within the internet early 2018.

For this end we have nominated.

Martina and innovates already some time back to develop for us for all of two enormous stack.

A lighter for really an end user customer applications.

Application so that it meets all autonomous requirements and all the performance requirements, we have for the system.

That one was announced I think it within the Internet early 2018.

Speaker 5: And this project is ongoing and...

And this project is is ongoing and.

Speaker 5: And if I move on now a little bit to technological aspects of this project.

And if I move on a little bit to two technological aspects of this project.

Speaker 5: Designing a LiDAR as an integral part of an autonomous system is a very challenging task because you have to take many design decisions and optimizations. This whole process cannot really be reduced to single parameters as the question what is the right wavelength of the laser I use, what is the right type of mirror and the like. There are many many things you have to take into consideration.

Designing a lighter as an integral part of an autonomous system is a very challenging task because you have to take many many design decisions.

And optimizations this whole process cannot really be reduced to a single parameters are asked the question. What is the right wavelength of the laser I use what is the right type of narrower and the like there are many many things you have to take into consideration for this and we do have quite a sizable team at BMW.

Speaker 5: For this end, we do have quite a sizable team at BMW that is doing nothing else than working on a daily basis with a highly competent team at Inovitz and in Magna to exactly designing the system, to finding the best trade-offs, the best design decision that we have an overall system that do meet or that doesn't meet all the level three requirements we do have.

But just doing nothing else then working on a on a daily basis with a highly competent team at the end of it and in Montana to exactly designing the system to finding the best tradeoffs. The best design decisions that we have an overall system that do meet or that doesn't meet all of the level three.

<unk> requirements, we do have.

Especially on the technical side things like Oh is it 15, 15 nanometer laser or nine O. Five nanometer laser is a better option. The decisions you need to take and in specifically the specific IP innovates brings to the table clearly tell us from my perspective there.

Speaker 5: especially on the technical side, things like, you know, is it 15, 15 nanometer laser or 905 nanometer laser, the better option, the decisions you need to take and specifically the specific IP, in which brings to the table clearly, it tells from my perspective, the overall optimization towards the 905 with a specific that in a way that in which can provide.

The the overall optimization towards the nine five with the specifics, but in a way that it can provide.

Overall I can say that this project that we have.

Speaker 5: Overall, I can say that this project that we have is right on track with respect to all important parameters, with respect to the design of the system, with respect to validation, and also with respect to the industrialization, which is also an overall very challenging task because LIDARs are highly complex.

Is right on track with respect to all important parameters with respect to the design of the system with a with respect to validation and also with respect to the industrialization, which is also an overall very challenging task because.

It is a highly complex systems and overall the project is on track that BMW will be able to deliver with the with my introduction statements I've just met on it is it is a real pleasure to work with the team at <unk>.

Speaker 5: And overall, the project is on track that BMW will be able to deliver with my introduction statements I have just made. And it is a real pleasure to work with the team at Inovitz because they are great in terms of their competence. They are extremely skilled. They have IP that makes a significant difference for us. And that overall, we are there on a very good track.

Because they have they are great in terms of their competence. They have they are extremely skilled they have IP that makes a significant difference for us and that overall we are there.

A very good track so I hope I hope this helps to give you a little bit perspective on our on over together with <unk> and with this I would pass it back to Omar.

Speaker 5: So I hope this helps to give you a little bit perspective on our work together with Inovit. And with this, I would pass it back to Omari.

Thank you very much Richard I really appreciate it and I'm very very excited to hear you talk about that with him. It's been such a long journey, so far and as you know we are committed to continuing to work with you and help you will be very successful and you're drilling it could be the first level III a carmaker.

Speaker 4: Thank you very much, Richard. I really appreciate it. And I'm very, very excited to hear you talk about our team.

Speaker 4: been such a long journey so far and as you know we are super committed to continue to work with you and help you be very successful in your journey to be the first level three car maker in the market. It's a real honor and I know it's very uncommon that BMW would participate in such a forum and I believe it's really thanks to a very special relationship that we've managed to generate in the last few years and hopefully will continue.

<unk> are in the market. It's a it's a real honor and I know, it's a very uncommon that BMW would participate in such a boom and I believe it's a really thanks to a very special relationship that we've managed to generate in the last few years and hopefully will continue thank you very much.

Okay.

So I think the there should be enough for today, but let's continue.

Speaker 4: I think that should be enough for today, but let's continue. Let me move to our presentation, talking about what Inuviez has been up to in the last quarter. So before I'll talk about the exact activities, are you seeing my slide?

Let me move to our presentation talking about the movies he's been up to in the last quarter.

So before I'll talk about the exact activities Oh, you're seeing my site. Okay. Good. Okay. So of course for the Lidar market. There are different applications are for both of them.

Speaker 4: So of course for the LIDAR market, there are different applications of automation, whether it's logistics, and agriculture, and smart cities and trucks. There are many ways you can leverage on a good LIDAR. Innovies has always been very focused on one category, which we thought is going to be the most important and most relevant for us, which is the passenger vehicle.

Mission, whether it's a logistics in agriculture, and smart cities and trucks. There are many ways you can leverage on a on a good lidar.

<unk> has always been very focused on one category, which we thought is going to be the most important and most relevant for us which is the passenger vehicles.

When you talk about the passenger vehicle, it's important to understand that this uh huh.

Speaker 4: When you talk about the passenger vehicle, it's important to understand that this...

Okay.

It.

Okay, I'm sorry, okay. So in order to understand this market.

Speaker 4: Okay, so in order to understand this market, it's also important to understand that it's also setting the highest bar. It is the most cost sensitive because it's for a private young...

It's all fun right.

Important to understand that it's also setting the highest but it is the most cost sensitive because it's for a privately owned vehicles.

It requires the highest performance because it for highway driving for very fast car.

Speaker 4: It requires the highest performance because it's for highway driving for very fast cars. It has the highest standards on reliability that's for a passenger vehicle that needs to last for 15 years. It requires perception software that comes along with the sensor. It requires a very strong industrialization process for a product that needs to be built in millions, as Richard just said. It has very high sensitivity to size and power consumption.

Cars.

It has the highest standards on reliability, that's for passenger vehicles that need to last for 15 years.

Wires perception self build as it comes along with defensible. It requires very strong industrialization forces for a product that needs to be built in millions.

As I said it has very high sensitivity people size and power consumption.

Speaker 4: And of course, eventually when it comes to very high volume, you need to work with P1s that allow you to access the market. I think that if you combine all of those unique requirements and maybe the most harsh one, this is where Innoviz stands out with our solution, which is the most cost effective in higher quality.

And of course eventually when it comes to very high volume you need to work with tier ones that that allows us to exit the market I think that if you combine all of those are unique requirements and maybe the most harsh one this is where.

<unk> stands out with our solution, which is the most cost effective and high performance of course, the adult portfolio in this market because it is the largest growing market. In 10 2030 is the shortest validation forces in order to reach the market in opposed to level four level five level three is much more.

Speaker 4: Of course, the opportunity in this market comes because it is the largest growing market until 2030. It is the shortest validation process in order to reach the market, opposed to level 4, level 5. Level 3 is much more simplified. Customer value is already proven. OEM financial motivation is already proven as well. The car makers would be able to charge for chauffeur driving from drivers and generate recurrent revenues month.

Simplified cut.

Customer value was already proven OEM financial motivation is already proven as well the carmakers would be able to charge for chauffeur driving fone drivers and generates recurring revenues.

Of course, when working automotive you generate also a very good relation for very long term, having a very strong customer loyalty for many many years.

Speaker 4: Of course, when working in automotive, you generate also very good relation for very long term, having a very strong customer loyalty for many, many years. And since this market is about to converge, and we see many opportunities now on the decision making for programs that are going to be launched for the following years. And of course, those programs will last for many, many years. Beyond that, this is our opportunity to take a very significant market share.

And since this market is about to converge and we see many many opportunities now onto decision making for programs that are going to be launched for the following years and of course those programs will last for many many years beyond that this is the opportunity to to take a very significant market share.

Now we have a certain methodology on how we develop things over the last five six years every year, we stop and look at what we're doing in trying to find what's the next 10 X improvement what is the game changer that we can bring inflow offering that can allow us to be much more attractive.

Speaker 4: Now, at Innoviz, we have a certain methodology on how we develop

Speaker 4: over the last five, six years, every year we stop and look at what we're doing and trying to find what's the next 10x improvement, what is the game changer that we can bring into our offering that can allow us to be much more attractive.

Speaker 4: What we identified right now is that if our focus is the level two, level three passenger vehicles platform, we believe that Innovis 2 new product is already meeting the highest performance targets and we see it as the most cost effective solution than meeting our target.

What we identified right now is that if our focus is the level three level two level three passenger vehicles and platform. We believe that these two new product is already meeting the highest performance targets and we see it as the most cost effective solution that in meeting our targets right now.

Speaker 4: Right now, having our all-automotive experience...

Having our all automotive.

Our experience makes us to understand that with our ability and our financial stability raising money through the Spuc gave US 12 months ago and understanding that strategically point of view, we want to go in and start to address this market is a dialect and tier one supplier on that.

Speaker 4: makes us to understand that with our ability and our financial stability, raising money through the the SPAC gave us 12 months ago an understanding that strategically point of view, we want to go and start to address this market as a direct tier one.

Speaker 4: That would be a very meaningful ability for us to access the market and get many benefits.

A very that would be a very meaningful ability for us to access the market and.

And many a benefit from it.

A standout total one is when a company technology company provide the silicon technology.

Speaker 4: Standard Tier 2, Tier 1 is when a technology company provides a certain technology, a reference design, a prototype, and eventually sells the components. The Tier 1 takes full ownership of the process, works directly with the carmaker, integrating the product, designing the tools, designing the manufacturing, producing the samples, and basically doing everything in the program while the Tier 2 only sells its technology.

Design prototype and eventually fills that bonus the tier one takes full ownership of the forces well directly was the carmaker integrating the products designing the pool is designing and manufacturing will do send the samples and basically doing everything in the polygon was it feels too only sells Ah.

It's technology now.

Speaker 4: In our case, since we've been able to work very closely with both Magna and BMW, we were able to absorb a lot of...

In our case since we've been able to work very closely with both magana and and BMW, we were able to absorb a lot of knowledge. In this program. We are also responsible for the minutes back from the samples were responsible for the design for manufacturing we are responsible for the design of the manufacturing tools all of these assets.

Speaker 4: In this program, we are responsible for the manufacturing of the samples, we are responsible for the design for manufacturing, we are responsible for the design of the manufacturing tools. All of these assets that we were able to collect through the further years

If you were able to collect through the further years showed us that there are still gaps between us and being in a class 61, but those are gifts that we can mitigate now that since you were able to raise that.

Speaker 4: showed us that there are still gaps between us and being in a classic T1, but those are gaps that we can mitigate now that since we were able to raise

Speaker 4: It allows us to strategically go in that direction and offer our solution directly to CalMEC.

Some money, it's allowed us to strategically go in that direction and author our solution directly to car makers. So some of those capabilities are now it's done in all such as integration of the software the operating system. So the the the production validation and of course the.

Speaker 4: So some of those capabilities are now done in-house, such as integration of the software, the operating systems, the auto cell, the production validation. And of course, when it comes to high volume manufacturing, we will be able to leverage on our existing...

When it comes to high volume manufacturing, we will be able to still deliver on our system.

Speaker 4: relationship with our existing T1s as they have those capabilities of automotive grade, high volume manufacturing and it's really a win-win situation for everyone.

Our relationship with our existing tier ones, if they have those capabilities automotive grade high volume manufacturing and it's really a win win situations or everyone. There.

The benefits for us.

Speaker 4: having higher revenues in terms of us not just selling the components right now, we're selling the complete solution, we give us substantially higher, potentially revenues.

Both having higher revenues in terms of not just selling the components right now we're selling the complete solution, which gives us substantially higher or potentially revenues and it has it allows us to be much more flexible in control of the process. When we were getting all the skus now we're working directly with.

Speaker 4: And it allows us to be much more flexible in control of the process when we're submitting to other SKUs. Now we are working directly with the customer in negotiations, understanding their needs and requirements, and allowing us to be more competitive when it's needed.

The customary negotiations understanding their needs and requirements and allowing us to be more competitive when it's needed.

Of course, when it comes to offering a product with the less margin stack because we are the tier one.

Speaker 4: Of course, when it comes to offering a product with less margin stack, because we are the tier one.

Speaker 4: It allows us to give a much more pricing fit. And of course, when it comes to amortizing all of our efforts, which could be very tremendous for one single program, we innovators, since we are developing the technology, we are bringing a new product to the market, we can amortize those efforts across multiple programs in that manner, allowing us to provide a much better offering to every other customer.

It allows.

Allows us to give them much more.

And pricing fit and of course, when it comes to Oh monetizing all of our airports, which could be very tremendous for one single program. We innovate since we are developing the technology, where we are bringing a new product to the market. We can amortize those airports across multiple programs and in that manner.

Allowing us to provide a much better offering to every other customer.

Speaker 4: from project management, being part of a level two level free program means a very highly complex technology project. We, Innovis, are a very technical company working in a simpler project management manner will allow for simpler processes to move faster. We believe that's another value that Innovis in our methodology to be flexible with our customer, helping them to get to the market is going to be the benefit of our customers.

For them.

Management being part of a level two level three program. It means a very highly complex technology project, we resolved very technical company.

Working in a simpler project management manner will allow for simpler orthosis to move first though we believe that's another value that is not.

The other ones, we can be flexible with our customers, helping them to get to the market is going to be the benefit of our customers.

Speaker 4: And last one of these, it's really a win-win situation for everyone because our car makers, customers can get a very strong, a very good pricing of commercial terms. Our T1 partners can leverage on volume production that we can bring to the table, allowing them to exercise their manufacturing sites that are already automotive certified and allow us, eventually, to generate additional revenues and gain more business.

Now some of this it's really a win win situation for everyone. Because all carmakers customers can get very strong very good.

<unk> Oh for a commercial terms.

<unk> partners can leverage on volume production that we can bring to the table, allowing them to exercise their manufacturing sites that are already automotive certified and allow us eventually to generate additional revenues and gain more business.

In the car space when you build a call you'll have thousands of suppliers. The carmakers cannot work directly with each and other suppliers in the market and therefore, they selectively choose who are the main steel ones that you can that eventually would source those technology through them.

Speaker 4: In the car space, when you build a car, you have thousands of suppliers. The car makers cannot work directly with each and other supplier in the market, and therefore they selectively choose who are the main tier ones that you can eventually would source those technologies through them. And it's not in every tier one that today exists has gone through a very long process with the car maker in order for them to be recognized as a tier one.

And it's not in every tier one that today exist has gone through a very long process with the carmakers in order for them to be recognized as a few one.

Speaker 4: We've gone, I told you a few in the last quarter, I told you about the different audits that we were passing. The context of those audits is related to the fact that we've been audited to become a tier one in front of one of the biggest carmakers in the market.

We've gone I told you a few in the last quarter I told you about the different orders.

If we were passing the context of those audits related to the fact that you've been audited to become a tier one in front of one of the biggest call makers in the market today those sessions with them for over several months, although a year basically allowed us today to say that with many of these.

Speaker 4: Those sessions that were length for over several months, over a year, basically, allowed us today to say that we're with many disciplines which are related to logistics in cyber security and software development.

Planes, which are related to logistics and cyber security software development.

Speaker 4: and quality assurance. We've gone through a lot of efforts and eventually I'm very happy to tell you today that we were able to formally be recognized as a direct supplier to one of the biggest car makers in the market and now eligible to be nominated as the direct supplier of the Lidar. That combination is part of an RFQ that is going on and we believe that we have very good chances to be nominated eventually.

And quality assurance, we've gone through a lot of airports and eventually I can I'm very happy to tell you today that we were.

We're able to formally been recognized as a direct supplier one of the biggest car makers in the market and now eligible to be nominated as the dark supply of the light on that.

Asia is part of an RFP that is going on and we are we believe that we have very good chances to be nominated eventually.

Speaker 4: yet to become. That process gives us also higher confidence in now approaching other carmakers, being able to show them that we're already fully certified as a tier one, working directly in front of carmakers, now giving us a back wind to work with other carmakers and we are working through the same process with additional OEMs.

To become.

And that process. It gives us also higher confidence now approaching other carmakers being able to show them that we were already fully certified as a tier one working directly in front of carmakers now, giving us a back went to to.

Work with other car makers and we are working we are working through the same process with additional Oems as we speak.

Speaker 4: This slide talks about market fit. What we are showing here is a reflection of all of the RFIs and RFQs that we received in the last...

This slide talks about markets, what we're showing here is a reflection of all of the other five are a SKU that we received the last two years as you can see the spread of the different requirements are split between two axis is one is the field of view. The other is the arrangement resolution and as you can see there is another element here.

Speaker 4: As you can see, the spread of the different requirements are spread between two axes. One is the field of view. The other is the range and resolution. And as you can see, there is another element here, which is related to the cost.

Related to the cost.

Speaker 4: Of course, the premium vehicles are usually targeting very high, very fast driving of autonomous driving, which pushes the performance requirements higher.

Of course, the the premium vehicles, all usually targeting very high very fast driving autonomous driving which pushes the performance requirement is higher.

Speaker 4: Inovis One, which was our first product to the market, was designed around the requirements we got from the premium vehicles, us knowing that those car companies are more likely to be in the market faster than others because they are much more technical. And since then, we are also brought in Inovis One Plus because the requirements in the market continue to increase.

It'll be one which was our first product to the market was designed that long ago, we got from the premium because us knowing that those car companies are more like more likely to be in the market faster than others, because they are much more technical.

And since then we are also brought in interviews one plus because the requirements in the market continuously increase as you can see those products have very high performance and yes, I'm not able to support our low cost brands because of the price Berlioz full that we designed <unk> two that is going to be a.

Speaker 4: As you can see, those products have very high performance and yet are not able to support low cost brands because of the price barriers. For that, we designed Innoviz 2 that is going to be a great fit for the entire market. It has 30 times improvement over Innoviz 1 and it's going to be significantly cheaper that will allow us to meet all of the demands that we see from the different brands. I have very high confidence with this product to be a real game.

People the entire market. It has 30 times improvement, although it'll be one and it's going to be significantly cheaper that will allow us to meet all of the demands that we see from the different brands I have very high confidence with this product to be a real game changer.

Speaker 4: I want to talk about the Nvidia announced with me yesterday. So Nvidia is a company we announced yesterday about working and being part of their platform. Inobis is a formal Nvidia drive ecosystem partner. Nvidia is a very common platform used by probably most of our customers that are gonna pass to develop an autonomous.

I want to talk about and give you our announcement made yesterday. So Nvidia is as a company, we announced yesterday about working and being part of their platform.

As a formal Nvidia drive ecosystem, both know Nvidia is a very common platform used by probably most of our customers that don't want a fast developing autonomous vehicle.

Speaker 4: As such, NVIDIA recognized that our sensor is asked by several of our customers to be integrated as fast as possible.

As such Nvidia recognized that our sense, though is asked by several of our customers to be integrated as fast as possible and working with them to be they are in.

Speaker 4: and working with NVIDIA and incorporating our LIDAR into their platform is eventually going to help our customers to move faster, solve problems, not to deal with problems that were already dealt ahead of time. NVIDIA's decision to include InnoBiz on its platform is a vote of confidence, initially coming from their customers who wish to integrate InnoBiz LIDAR.

And incorporating a lidar.

One is eventually going to help our customers to move faster solve problems and not to deal with problems that were already there at the time.

The decision to include interviews on its platform as a vote of confidence initially coming from their customers who wish to integrate it'll be later, we are appreciate of Nvidia, making our lives are accessible to the market and believe it will help our customers accelerate their autonomous vehicle development.

Speaker 4: We are appreciative of NVIDIA making our light accessible to the market and believe it will help our customers accelerate their autonomous vehicle development.

I wanted to talk about confidence.

Speaker 4: So when interviews went public six months ago and started to prepare, so that we had to provide some guidance on how we see our potential going forward.

So when it went public.

Six months ago and started to prepare towards.

So we had to provide some guidance on how we see our potential going forward.

When doing our business model and trying to reflect what's the potential revenues. Although deal. If there were several key elements that we took into account. The first one is related to the pipeline I'm happy to tell you that since then that time, many other customers have propagated.

Speaker 4: When doing our business model and trying to reflect what's the potential revenues over deals, there were several key elements that we took into account. The first one is related to the pipeline. I'm happy to tell you that since then, that time, many other customers have propagated into the pipeline. Additional car makers that were not in the discussion a couple of years ago are now providing LFI's and other...

Propagated into the pipeline. Additionally, collimator was that were not in our in the discussion a couple of years ago are now providing all advising us Q. This gives us a lot of confidence since we see that light. Those are now going to also not only to the premium because and we see more and more car makers with an interesting blue light.

Speaker 4: This gives us a lot of confidence since we see that LIDARs are now going also not only to the premium vehicles and we see more and more car makers with an interest in blue LIDARs in very high volume.

In very high volume.

In terms of progress through the funnel in a way is continuing to work with the different got it with different programs and propagated into different stages I can say that today on three programs, we already the final stage, possibly.

Speaker 4: In terms of progress through the final interviews, it's continuing to work with the different programs and propagated in different stages. I can say that today on three programs, we are at the final stage. Possibly, we know that in some of them, we are deleting candidates and we believe that we have chances, good chances to win this program, very meaningful.

Some of them, we are the leading candidate and we believe that we have chances good chances to win this program very meaningfully for us.

Speaker 4: ASP, as I said earlier, now competing on programs as a direct supply will allow us to increase our overall potential revenues and increase our outcome.

A S b as I said earlier now competing on programs is a dark the supplier will allow us to increase the overall potential revenues and increase our outcome.

Speaker 4: From market fit, I want to say that when we started our discussion with the market a year and a half ago, we talked about INOVIs-1, we talked about INOVIs-2, and there was another product we called INOVIs-SLL. Now, SLL was the development of INOVIs-1 in terms of the improvement of performance. What we managed to do in the last year and a half and actually that was announced a few months ago, we were able to bring the 30 times improvement

Well market States I want to say that when we started oh and discussion with them out there for a year and a half ago. We talked about is one we talked about <unk> and there was another product called U S.

Hello.

It's a low was the development of <unk> one in terms of the improvement of performance. What we managed to do in the last year and a half and actually that was announced a few months ago, we were able to bring the 30 times improvement.

Speaker 4: into Inovis 2, which was initially only targeted the cost reduction of Inovis 1. So Inovis 2 is now including both the cost reduction of 70% of Inovis 1 and the performance improvement of Healthy Times. Having such a product in our hands gives us higher confidence in our ability to acquire very meaningful business in the future.

Into two which was initially only targeted cost reduction of individual ones. So <unk> two is now including both the cost reduction of 70% between one and the performance improvement of 30 times, having such a product in our hands gives us higher confidence in our ability.

To acquire very meaningful business in the future.

Speaker 4: The Tiroan role is giving us ability to control our process, the our ability to be much more flexible and competitive, and in that manner allowing us to have eye confidence that we will be able to achieve a bigger portion of the market. With all of these elements, which we are continuously developing, I believe that what you know is now able to say is that we have very high confidence in our ability to meet our vision and our target.

The table on role is giving us ability to control our process, our ability to be much more flexible and competitive and that men are allowing us to have iphones. The dentist that we would be able to.

And to achieve a bigger portion of the market with all of these elements, which we are continuously developing I believe that what is now able to say is that we have very high confidence in our ability to meet our.

Our vision and our targets.

Speaker 4: Several announcements that we've made in the last quarter, such as integrating with Webasto, which is a steel one, using lidars for roof mounting. NVIDIA, as we were talking, and EV motors, who is an importer for electric vehicles to Israel.

Several of the announcements that you've made in the last quarter.

<unk> is integrating with the way bustle, which is I feel one using lidar roof mounting Nvidia as we were talking.

EV Motors, who is in both the fourth electric vehicle to Israel, Julie fix which is.

Speaker 4: to Ephix, which is a small city, an intersection.

A small 50 and infrastructure and are.

Speaker 4: development using our leaders in the Chinese region.

The development using our library in the Chinese region.

Speaker 4: and Modify.ai and 3D Targets which is an AV integrator in Italy. Very thankful for all our partners. It's a real honor to grow our ecosystem which we are using our lives.

And modify a I and III target, which is an Eva integrator in Italy, very thankful for all our partners.

It's a real honor to grow our ecosystem, which we're using all of those.

Small update on our funnel.

Speaker 4: Small update on our funnel. So we have additional customers getting into advanced technology evaluation. Additional customer moved into the process of the commercial and requirements negotiation, which led to an increase of the potential order book of $200 million. And we will continue to give you update as many of those programs that we are working on will materialize.

We have additional customers getting into advanced technology evaluation additional customer who moved into the process of and the commercial requirements negotiation, which led to an increase of the potential order book of a $200 million.

And we will continue to give you updates as many of those programs that we're working on.

It will materialize.

Yeah.

Speaker 4: Now I want to talk about technology development. So as you know, we're expecting to have Inovis 2 coming along. The team has been working very difficult, very hard in the last two, three weeks towards a certain milestone with the customer to show them the Inovis 2 B sample. I have here the Inovis B sample in my hand. And this is a product that today the team is working to tailor and basically bring to the performance that is needed.

Now I want to talk about technology development. So as you know we were expecting to have any movies do coming along the team has been working very difficult very hard in the last two or three weeks towards a certain milestone with the customer to show them that you know will be still be sample I have here the interviews the sample in my head.

And this is a product that they are today. The team is working to tailor and basically bring to their cost performance that is needed.

Speaker 4: I suppose that you are able to see the excitement of the team. And I can tell you that I've spent also several evenings with the team. And today, I can tell you that just last night, I got a picture from the lab. People at 2 o'clock in the morning, they stay until 4 o'clock in the morning. The level of passion that exists in the team on eventually providing our LIDAR to the market, bringing Innobis 2 to our customer, meeting our commitments, has always been a very high.

Suppose that you are able to see the excitement of the team and I can tell you that I've spent also several evenings with the team and today I can tell you that just like last night I got the picture from a from the lab people at the two o'clock in the morning, and they stay on until a four o'clock in the morning.

The level of passion that exists in our in the in the team on eventually providing a lighthouse to the market, bringing in it would be stupid to our customer meeting our commitment has always been a very high importance to US you know we still is making its first stair steps showing here the first flights coming from the product there Phil.

Speaker 4: Innobis 2 is making its first steps, showing here the first light coming from the product. There is still much work to do, but I'm very thankful for my team and for those who are listening to me now. I'm looking forward to seeing it in my own eyes. It's very exciting. Thank you very much.

Much work to do but I'm I'm very thankful for my team and I for those who are listening to me now.

Looking forward to state in my own eyes, and it's a very exciting. Thank you very much and I will move along to allow us to talk about the financials.

Speaker 4: I will move along to Eldar to talk about the...

Speaker 6: Thank you very much Omer and thank you everybody for joining us today.

Thank you very much Omer.

Thank you everybody too for joining us today.

Speaker 6: So revenues for Q3 2021 were $2.1 million, an increase of 106% compared to Q2 2021, and an increase of 13% compared to Q3 2020.

So revenues for Q3 2021 were two $1 million, an increase of 106% compared to Q2 2021, and then increase of 13% compared to Q3 'twenty 'twenty.

Speaker 6: Inovis One related revenues in Q3 2021 were $1.6 million or 79% of the total quarterly revenues, an increase of 36% compared to $1.2 million or 66% of the total quarterly revenues in Q3 2020.

One related revenues in Q3, 2021 were one $6 million or 79% of total quarterly revenue, an increase of 36% compared to $1 $2 million or 66% of the total quarterly revenues.

Q3 2020.

Speaker 6: The company continued to see strong interest for its products and expects the positive results that it has seen so far

The company continued to see strong interest for our product.

Expect the positive momentum to continue.

Speaker 6: operating expenses for Q3 2021 were 13...

Operating expenses for Q3, 2021 with 13.

Speaker 6: $30 million and increased from $16.8 million in

$30 million, an increase from 16 point.

$8 million in Q3, 'twenty 'twenty Q3, 2021 operating expenses.

Speaker 6: Q3 2021 operating expenses.

Speaker 6: and included $18.2 million of stock-based compensation. The increase in operating expenses compared to Q3 2020 was primarily due to increase of $7.4 million of stock-based compensation and people related expense.

Included $18 $2 million in stock based compensation the increase in operating expenses compared to Q3 2020 was primarily due to increase of seven $4 million of stock based compensation and people related expenses.

Speaker 6: Additionally, the company continue to invest in R&D, which R&D expenses totaling $20.6 million of which

Ali the company continued to invest in R&D, which R&D expenses totaling $26 million of which.

Speaker 6: $3.7 million was attributable to stock-based compensation compared to $14.7 million of R&D expenses incurred in Q3 2020, of which $0.6 million was attributable to stock-based compensation.

$3 $7 million was attributable to stock based compensation compared to $14 $7 million of R&D expenses incurred in Q3, 'twenty 'twenty of which $6 million was attributable to stock based compensation.

Speaker 6: As of September 30th, 2021, the company had $139.6 million in cash and $185 million in short-term deposits, compared to the previous year.

As of September 30th 2021 the company had $139.6 million in cash and $185 million and short term deposits compared to $58 million in cash as of September 30th 2020 banks.

Speaker 6: $58 million in cash as of September 30th, 2020. The increase in cash was related to closing of the company's business combination transaction earlier this year.

And cash was related to closing of the company's business combination transaction earlier this year.

Speaker 6: Thank you very much for joining, and I'm returning the call to Omar.

Thank you very much for joining and I'm returning the call to Omar. Thank you. Thank you Wendell.

Speaker 4: now. So again thank you all for joining us today. Let's use this opportunity to get some questions from the people on the line.

So again, thank you all for joining US today, let's say use this opportunity to get some questions from the people on the line. Thank you.

Speaker 7: Thank you. In order to ask a question, please raise your hand using your mobile or desktop application and wait for your name to be announced.

Thank you in order to ask a question. Please raise your hand, using your mobile or desktop application and wait for your name to be announced.

Once again, please raise your hand, using your mobile or desktop application and wait for your name to be announced.

Speaker 7: Once again, please raise your hand using your mobile or desktop application and wait for your name to be announced.

Yes.

Yes.

Speaker 7: Our first question today comes from the line of Michael Filato. Michael, you will be prompted to unmute. Please go ahead.

Our first question today comes from the line of Michael feed lots of Michael you will be prompted to on mute. Please go ahead.

Hi, guys can you hear me.

Loud and clear okay, great. So thanks for taking the question and thanks for the presentation. So the first one.

Speaker 8: Okay, great. So thanks for taking the question and thanks for the presentation. So the first one I wanna ask here is around sort of an article that came out with an interview with the director of development at BMW.

Can I ask here is around it's sort of an article that came out with an interview with director of development at BMW and he had mentioned that you know BMW would put out a level three sort of platform on the seven series.

Speaker 8: And he had mentioned that BMW would put out a level three sort of platform on the seven series, maybe next year. So I know you can't comment on your customers' timeline, right? I totally understand that. But I want to kind of ask the question, when will we be able to buy a car with the unit of his lighter on it, whether it's a BMW or something else?

Next year. So I know you can't comment on your customers' timeline right I totally understand that but I want to kind of ask the question when will we be able to buy a car when it was minor on it whether it's a BMW or something else.

So as you said the BMW article, which gave a indication of.

Speaker 4: So as you said, BMW Article, which gave indication of...

Speaker 4: having a level three following next year, I wouldn't be able to provide any other indication than what BMW is offering, but as Mr. Richard Rao said, level three of BMW would always consist of a light.

Having a level three following next year.

I wouldn't be able to provide any other indications and what BMW was offering but as.

Mr. Rich are the ROE said level three of BMW would always can consist of a lighter.

Speaker 4: Other than that, I would say that the dots could be connected.

And other than that I would say that the data could be connected.

And somewhere else [laughter].

Speaker 8: Okay, fair enough. I had to ask. So, next question would be, I think you made it very clear what you feel the advantages of are of being a direct tier one supplier to OEMs.

Okay Fair enough I had to ask so our next question would be you know I I.

He made a very clear what you feel the advantages of our or of being a direct tier one supplier to Oems.

Speaker 8: But it seems like that strategy has maybe changed since earlier in the year when you're going to the SPAC merger process, when you talked a lot about the necessity of working through a Tier 1 supplier in order to supply high-volume series production. So, maybe you could just explain what is driving that shift in sort of your strategy. And then also, there's got to be some balance sheet requirements in order to supply directly a high-volume program. So, maybe you could talk about some of those things.

But it seems like that strategy has maybe changed since earlier in the year. When you were going through this back merger process. When you talked a lot about the necessity of working through a tier one supplier in order to supply high volume series production.

Maybe you can just explain what's driving that shift and sort of your strategy.

And then also you know there's got to be some balance sheet requirements in order to supply directly a high volume program. So maybe you could talk about some of the.

Speaker 8: the exposure to warranty recall risk and how you plan on dealing with that.

The exposure to warranty recall risk and how you plan on I guess dealing with that.

Sure so.

Speaker 4: Sure, so the opportunity of becoming a direct supplier of T1 came along through different discussions with car makers. We always let the car makers decide what's the best way to engage with us. Because we have several T1s, we let the car makers have their preference on how they want to engage.

The opportunity of becoming a direct supplier to one came along through different discussions with the column acres. We always left the call makers decide what's the best way to engage with us because we have several tier ones and eventually they the when we left the carmaker.

To have their preface and how they want to engage.

Speaker 4: So in talking with them about the potential advantages of us becoming a direct T1, highlighted the opportunity in terms of being able to be much more flexible and providing a much cost effective solution. And in working with a T1 has a lot of overlap in terms of duplication of teams that are working basically co-side and making the overall project a bit more complex and a bit more.

So in talking with them about the potential advantages of us becoming a direct tier one highlighted the opportunity in terms of being able to be much more flexible and providing a much cost effective solution and in working with a tier one has a lot of overlap in terms of.

Patient of teams that are working basically cold side, and making the overall project a bit more complex and a bit more expensive.

Speaker 4: expensive. And some car makers are willing to go through that, you know, are preferring that combination, but some car makers understand that for a very high volume production of when it comes to hundreds of thousands and millions, and the price point is very, very sensitive, they became more attentive or interested to understand what might be the situation with becoming a direct supplier.

Some car makers are willing to go through that.

Oh.

Referring that combination, but somehow make us understand that for very high volume production of <unk>. When it comes to hundreds of thousands or millions and the price point is very very sensitive they became more attentive or interested to understand what might be the situation within a is becoming a dark stockpile.

Speaker 4: It was our strategy that when we started that, you know, without the relevant, I would say, experience in automotive and knowing how to interface with the car maker, it was basically a mandatory.

It was our strategy you know that when we started.

Without the relevant I would say experienced at automotive and knowing how to interface with you. Once it was the time that it was it was basically a mandatory thing to do.

Speaker 4: Following four or five years of work in this space, I can tell you that I've been in discussions that the cow makers were giving us audits on so many areas that I personally never...

Following a four or five years of work in this space I can tell you that you know I've been in discussions that the car makers, they've given us all the time when so many areas that I personally have never.

Speaker 4: knew before. And I was quite amazed about how knowledgeable my team became in automotive. I would say that Innovis is probably one of the most experienced automotive players today in Israel. And eventually the feedback that we were getting from those auditors were quite impressive. And in there, I would say they were not a

New before and I was quite amazed about how knowledgeable advice team became in automotive I would say that the you know this is probably one of the most experienced automotive player today in Israel and eventually the feedback we're getting from those older stores were quite impressive in there I would say they were not done.

Speaker 4: They are not used to companies' tier twos to have such a capacity and expertise in automotive and eventually felt very comfortable with giving us the opportunity to complete the record

What used to companies it still appears to have such a capacity and an expertise in automotive and eventually felt very comfortable with it giving us the opportunity to compete directly.

Speaker 4: I believe that it will give us additional capabilities in the future. The overall financial stability that we have due to our ability to raise a substantial money in the last process in the SPAP process gave them sufficient confidence that we were able to fulfill their needs and meet their targets.

And I believe that it will give us additional.

And your capabilities in the future the overall financial stability that we have due to our ability to raise a substantial money in in a in the last the processing in the spot. What's this gave them sufficient confidence that we will be able to fulfill their needs and meet those targets.

Speaker 8: Excellent, thanks. And just one more quick one. In these three programs that are in sort of the final stages that you referenced, are you competing with the Innovus 1 or the Innovus 2 on those programs?

Excellent Thanks, and just one more quick one in these three programs that are in the final stages.

You referenced are you competing with the interim as one or the inner there's two on those programs.

Those are for these two were competing with these two those are very high volume programs and the sensitivity for the pricing is tremendously.

Speaker 4: Those are for Innovis 2. We are competing with Innovis 2. Those are very high volume programs and the sensitivity for the pricing is tremendously higher. And also the requirements that we see are growing over time. And there is a really good fit between those two products. Innovis 2 is not only much better from the previous product, but also from the previous product.

Higher and also the requirement that you feel you know growing over time and.

And there was a really good fit between those two products.

These two.

It's a not only that is much better from.

Speaker 4: performance point of view and pricing, the industrialization of it has been simplified significantly.

Performance point of view on pricing the industrialization.

Has been simplified significantly without going to the very fine details I would say no and it'll be it's one well.

Speaker 4: without going to the very fine details, I would say, you know, in InnoBiz 1, we're using four lasers and four detectors, and InnoBiz 2 are only using one laser and one detector, which allows us a much simpler, you know, assembly process, shorter, and basically allowing us to have a much more robust design that allows us to reach volume very fast.

They're using full lasers in 46 stores and it will be squarely on using one laser in one pistol, which allows us a much simpler.

Assembly process, shorter and and and and basically allowing us to have a much more robust.

The design that allows us to reach volumes really fast.

Got it thank you very much.

Thank you Michael Philosopheme Bahrenburg. Our next question today comes from the line of Mark Delaney from Goldman Sachs. Mark. Please go ahead.

Speaker 7: Thank you Michael Cilato from Barenberg. Our next question today comes from the line of Mark Delaney from Goldman Sachs. Mark, please go ahead.

Hi, Yes, good morning, and thanks very much for taking the questions I thought first maybe I could ask a follow up on this.

Speaker 9: Yes, good morning and thanks very much for taking the questions. I thought first maybe I could ask a follow up on this approach as a tier one. Can you comment on how broad base you think that approach will be going forward? Do you think a lot of your customers are going to want to use it as the tier one or is it still more of a select situation? Will you be the tier one? And then when you think about the financial implications of that, you commented on the potential to have more profit dollars available to individuals with that model. Could you also talk about the margin percentages of doing that? The tier one margin is tend to be lower or some curious if there's some trade-offs even in the entire EBIT or EBITDA. You need to be thinking about a little bit of a different margin percentage profile.

<unk> approach is a tier one can you comment on how broad base, you think that approach will be going forward or do you think a lot of your customers are going to want to use it.

As the tier one or is it still more of a select situations will you'll be the tier one and then when.

When you think about the financial implications of that you you commented on the potential to have more <unk>.

Profit dollars are available to any of us with that model could you also talk about the margin percentages are doing 92 tier one margins tend to be lower so I'm curious if there is some some tradeoffs, even if its higher EBIT or EBITDA, we need to be thinking about a little bit of a different margin percentage profile. Thanks.

Speaker 4: Sure, and maybe before I'll answer your question, I forgot to answer Michael questions on warranty and liability. Obviously when we are discussing this matter with Komet,

Sure and maybe before I answer your question I forgot to answer Michael's questions on warranty liability. Obviously, when we are discussing this matter with telling me of course.

Speaker 4: That's part of the negotiation. So we're negotiating the level of quarantine, the ability, the capping off that we could have in order to be meeting their needs. And we bring it to a position that

That's part of the negotiation. So we were negotiating the level of flooring and the ability to tap into that.

We have in order to be meeting their needs and we bring it to a position that it makes sense.

Speaker 4: And we've done a good job so far. And so far, we were able to accomplish and basically meet all of the requirements in a very.

And we've done a good job so far.

And so far we were able to accomplish and basically meet all of their requirements are in a very and in a good way that meets both sides needs.

Speaker 4: in a good way that meets both sides and needs. And then to your question about how are going to continue to approach the market. So since we have the relationship with the two ones, we do let our customers to have their preference and it's for some.

And then to your question about.

How we're going to continue to approach the market. So since we have the relationship with the tier ones and we do let our customers to make the to have their preference for some car makers.

Speaker 4: We are still addressing as a tier two. Most I can say there are many programs in Asia, in Japan, in China that we are still acting as a tier two and planning to continue to do so.

We are still addressing as of Q2, most of and I can say there are many programs in Asia in Japan in China that we all are.

He is asking is is it still too.

And planning to continue to do so.

Speaker 4: In Europe and in the US, I believe that our still one position would take a more significant portion, but still if all customers would prefer a different setting, that is something that we'll be happy to support.

In Europe, and the U S. I believe that our tier one position, we'll take a more significant portion but still.

All customers would prefer a different setting that is something that we'd be happy to support.

And regards to the margins.

Speaker 4: and in regards to the margins, I can't let it down.

Adult swim CFO here.

Yes.

So thank you.

Speaker 6: can hear me. So thank you, Mark, for your question. So yes, the top line, as you mentioned...

I Hope you can hear me.

So thank you Mark for your question. So yes, the top line as you mentioned is higher.

Selling the whole system. It has some impact on our gross margins.

Speaker 6: It has some impact on our gross margins, obviously. We are switching from...

We are we are switching from serving.

Speaker 6: component-based model to selling a whole system. So all in all, we are taking some lower margin.

A component based model to selling our whole system.

So all in all there is a we.

We are taking some lower margin.

But still we will see much more benefit from this model.

Speaker 6: Still, we will see much more benefit from this model as it decreases...

It decreases significantly our top line.

Speaker 9: That's really helpful. Thank you both. And a second question for me if I could you mentioned in your pressure lease Being in final consideration with a large OEM for a level two level three

That's really helpful. Thank you both and a second question for me if I could you mentioned in your press release being in final consideration with a large OEM for a level two level three program could you go into more depth on that if you're able to in terms of how many other lidar companies maybe being.

Speaker 9: Could you go into more depth on that if you're able to in terms of how many other LIDAR companies may be being considered at this stage? And also, if you do, in fact, win that opportunity, is there any color you can provide in terms of the timing and magnitude of that business opportunity?

Considered it at this stage and also if you do in fact win that that opportunity is there any color you can provide in terms of the timing and magnitude of that business opportunity. Thank you.

Speaker 4: Yeah, so as far as we know, and we were told by the TESOL team that currently we are only competing with an additional supplier.

Yeah, so as far as we know and we were told by the sourcing team that currently we are only competing with an additional supplier.

<unk>, which is another tier one.

Speaker 4: We are from the point of being able to announce the deal, that's part of the negotiation as well. We at first probably would be able, if we win it, we'll be able to announce

We are in default from the point of being able to announce the deal are that's part of the negotiation as well we its first probably would be able to if we win it.

We'll be able to announce.

Speaker 4: we have gathered another nomination in the market for level two level three. It's a very big opportunity, very substantial. It's one of the biggest car makers in the.

We have gathered another nomination in the market for level two level three it's a very big opportunity very substantially it's one of the biggest car makers in the market.

Speaker 4: And following a certain milestone, we will be able to also disclose the name of the customer. And that was already agreed by the two sides that once we will meet a certain milestone, which is basically not a very long term. It's a delivery related to the to the B sample delivery. We will also be able to announce who is the customer.

And following a certain milestone and we will be able to also disclose the name of the customer and that was already agreed by the two sides of that once we will meet the filter myself, which is basically at the very long term, it's a delivery related to the b sample delivery.

We will also be able to announce who is the customer.

Anything that I forgot to address here.

Yeah, just any color you're able to provide a if you can in terms of what when revenue may start for that program. If you do win it and you any size on.

Speaker 9: yeah the any uh... career will provide uh... if you can in terms of what when revenue may start for that program if you do when it and and you any size on uh... the opportunity for that

The opportunity for that.

Revenue perspective.

Speaker 4: So the timeframe is about 24.

So it's a sort of a.

Timeframe is about 24.

Yeah ramp up.

Speaker 4: But the volumes are quite significant again. And there is an NRE portion to it.

But the volumes are.

Quite significantly again.

And therefore, there was an early portion to it and.

Speaker 4: But the growth stage is 24 and then 25.

But the growth stages, 24, and then 25 and onwards.

Thank you.

Welcome. Thank you Mark Delaney from Goldman Sachs. Our next question comes from the line of a draft Shepherd.

Speaker 7: Our next question comes from a land of a gray shepherd from Canter Fitzgerald. Please go ahead.

From Cantor Fitzgerald. Please go ahead.

Hey, everyone.

Can you hear me okay.

Yes.

Yeah.

Thank you.

I've been on the lower end, if you're able to amplify that would be great is that any better much better undress. Thank you. Please go ahead great.

Speaker 7: A bit on the lower end, if you're able to amplify, that would be great. Is that any better? Much better, Andreas. Thank you. Please go ahead. Great, thank you guys. And congrats on the quarter. Most of my questions had kind of an answer, but maybe just to do a quick follow up on NFS2. You mentioned that the first engineering samples, they are expected to be delivered later this year. What is kind of next, and what is that timeline look like going forward?

Thanks, guys and congrats on the quarter.

My questions have kind of been answered, but maybe just a quick follow up on our interest to you mentioned that the.

First engineering samples they are expected to be delivered later this year.

What is kind of next and what is the timeline look like going forward.

Speaker 4: So I have here one of the first samples of Inuvis II.

So I have here one of the first samples of this too.

Speaker 4: It's already, we have all of the components inside integrated. One of the unique elements that we've done also with, you know, these two, some of the vertical integration, you might say, that we are doing all of the design for manufacturing, but also the manufacturing in our offices. So we have our own clean room with our active alignment process. So we are building units as we speak.

<unk> already and we have all of the components inside integrated one of the unique.

Elements that we've done also with some of the vertical integration you might say.

We're doing all of the design from an infection, but also the manufacturing in our offices. So we have our own clean room with our active alignment process. So we are building units as we speak are enormous too simple and the team is working on the integration of the basically the software now.

Speaker 4: In this two samples and the team is working on the integration of basically the software now.

Speaker 4: And we expect to be able to show the innovation to customers in the coming weeks, maybe less, and show it to the public at a later time. This is very, we mentioned, actually pulling slightly the process.

And we expect to be able to show are the you know these two are two customers in the coming weeks, maybe maybe less.

And then show it to the public at a later time.

This is a very we we mentioned who actually pulling slightly the process.

Speaker 4: We are also working on several variants of the design to meet different installation positions because there are different customers looking to either mount it on the roof or in the grill or in the windshield etc. So those require some tweaks in the design.

We are also working on some several variants of the design to meet different installations positions because though.

For customers looking to either mounted on the roof or in degree or in the windshield et cetera. So those require some tweaks in the design.

Speaker 4: And then we are that's part of the work that we do with customers in regards to this. So there is going to be a first

And then we are that's part of the work that we do with our customers in regards to this thought there was going to be your first.

Speaker 4: B-Sample available and shown and basically shared with customers by...

The sample available and shown are behind it.

And basically shared with customers.

By end of this year and there is another step towards the middle of deal, which is going to be a version that is already designed for automotive and then we will continuously to see sample the sample, but in general availability of the <unk> is going to be end of this year.

Speaker 4: And there is another step towards the middle of deal, which is going to be a version that is already designed for automotive.

Speaker 4: And then we will continue for the C sample, the D sample, but in general availability of the B sample is going to be end of.

Speaker 5: Excellent. That's very helpful. Thanks for that. And maybe one quick follow up for me is you know you recently announced your partnership there with JuFX and I was just wondering you know, I know that you you keep emphasizing that the kind of the main priority is targeting you know passenger vehicles to know YAMS but

Excellent that's very helpful. Thanks for that and maybe one quick follow up for me is you recently announced your partnership there with.

Two effects and I was just wondering I know that you you keep emphasizing that the kind of the main priority is targeting.

Targeting passenger vehicles and Oems, but.

Speaker 5: Are there more kind of opportunities here, you know, low hanging fruit similar to this recent collaboration that you're entertaining and that you see kind of pursuing in addition to the OEM?

Are there more kind of opportunities here, you know low hanging fruit similar to this recent collaboration that you're entertaining and you see kind of pursuing in addition to the Oems.

Speaker 4: Absolutely. I can share my vision on how where the LIDA market would go. I personally believe that

Absolutely I can share my vision on how where the lighter market would go I I personally believe that.

Speaker 4: 20 years from today, the lidar technology, the 3D sensing, would be very similar to where the cameras are today.

22 years from today, the Lidar technology, the three D sensing would be very similar to where did that come about.

Okay.

If you think about applications done today by Carnival, which are used in order to try to understand the environments and ultimately all this.

Speaker 4: If you think about applications done today by cameras, which are used in order to try to understand the environment and operate around it, with the camera, the data is very much, I would say,

With the Carnival and the data is very much a.

I would say.

Speaker 4: the environment is very meaningful when it comes to the ability to extract and understand the scene. Because, for example, in the car space the cameras are trained in a very specific location in the road with specific kinds of people and cars and you see what happens when there is an ambulance or a very strange vehicle and suddenly the camera fails because...

The environment is very meaningful when it comes to the ability to extract and understand the thing because in for example in the car space.

The cameras are trained in a very specific location in the road with specific kinds of of people and and in cars and you'll see what happens when there is an ambulance or a very strange people and suddenly they come to the failed because.

Speaker 4: The problem of camera is that it's very much related to how much you are training your data in order to mitigate with new changing environments. Now when you think about infrastructure, you can see that the data is very much related to how much you are training your data.

The problem of kind of like that it's very much related to how much you are training you'll data in order to mitigate the new changing environment now.

Now when you think about infrastructure logistics smart cities and you think about you know cranes that are used in very complex.

Speaker 4: smart cities and you think about cranes that are used in very complex environments, where for a camera in order to use it to have a seamless integration and extract value from it, you need to implement a lot of effort and training to work in that very complex environment.

Governments look for Carnival in order to use it to have a seamless integration and extract value from it you need to implement a lot of effort and training to kind of work and that's very they very.

Speaker 4: diverse area. A LIDAR, because of its ability to see the world in 3D and basically stand out, like to be able to extract the objects and the people and the height and understand the 3D dimension environment for a LIDAR to be integrated into so many applications would be much easier and seamless.

Elliot.

<unk> because of its ability to feed the world in three D and basically then I'll like to be able to extract the objects in the people and the hype and understand the three D dimension environment for the lidar to be integrated into so many applications would be much easier and seamless and therefore.

Speaker 4: And therefore, I believe that LIDA would help to accelerate and scale many applications that today are very difficult to exercise because of the nature of the data of common-

I believe that lighter would help to accelerate and scale. Many applications that today are very difficult to exercise because of the nature of the data come out. So I have no doubt that litle would grow very dramatically. Its basically another central only that it's really we want in our world.

Speaker 4: So I have no doubt that LIDAR would grow very dramatically. It's basically another sensor only that it's 3D. We're all in a world that is 3D, and therefore it adds a lot of value around surveillance, so both my cities but also in shape.

That is D and therefore, it adds a lot of value of our own surveillance about smart cities infrastructure and I'm I believe that would grow very fast.

Speaker 4: infrastructure and I believe that would grow very fast.

Great. Thank you very much guys.

Speaker 7: Thank you, Andrea Sheppard from Cantor Fitzgerald. Our next question today comes from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.

Thank you Andreas Shepard from Cantor Fitzgerald. Our next question today comes from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.

Hi, Thanks for taking my question and congratulations on the progress.

Speaker 5: Hi, thanks for taking my question and congratulations on your progress. I just want to understand a little more about the significance of the Nvidia Drive platform. Is that opening up more tier one for you? A broader market acceptance, maybe even getting over some of those hurdles. You said what it is to be a automotive supplier.

Yes, my understanding a little more about the significance of the Nvidia drive platform.

Is that opening up more tier ones for a broader market acceptance or maybe even getting over some of those hurdles you said, what it has to be a automotive supplier.

Oh I can share that Oh, we all know very impressed by the way that Nvidia has managed to secure I would say in the U S and Europe I would say that almost most almost all of our customers are using Nvidia, which is very impressive.

Speaker 4: Oh, I can share that we are very impressed by the way that Nvidia has managed to secure. I would say in the US and Europe , I would say that almost all of our customers are using Nvidia, which is very impressive.

Speaker 4: As such, in order for us to gain points in the resulting decision, we are very keen to do integration into this platform as much as possible to allow them a more seamless integration.

As such.

In order for us to gain points in the in their sourcing decision. We are very keen to do integration into this platform is as much as possible to allow them more seamless integration.

Eventually it call me kill or shuttle developer.

Speaker 4: Eventually a car maker or a shuttle developer, he will make its own decision on what is the right sensor set he wants to use, whether it's one-lider or four-liders or six, really his own understanding of what the application that he needs.

He will make its own decisions on what is the right Central said he wants to use whether its one double fault either Arizona six it's really his own understanding of what's the application that he needs to do.

Speaker 4: NVIDIA motivation is to try to predict which sensors are more likely to be used by their customers and as such to address those integration efforts ahead of time and basically give their customers a better product in terms of an open source stack that already includes the differences

Not Nvidia motivation is to try to predict what sense those are more likely to be used by their customers and as such to address those integration efforts ahead of time and basically give their customers a better product in terms of.

And open source stack, that's already includes a different set of skills.

Speaker 4: Inovis LIDAR was indicated from several customers to NVIDIA on the desire to use our product. And as such, we started to work with NVIDIA in order to port our algorithms from our edge processing units to the main centralized computer of NVIDIA. The automotive space is, I would say, there are two camps. There is the distributed computing, and you have the centralized...

This slide though was the indicators from several customers doing video on the desire to use our product and that we started to work with and be there in order to pull our.

I'll go with informed our etch processing units to the main centralized computer often video the automotive space is I would say there are two camps. There is that distributed computing and you have the centralized computing in a distributed computing platform you have what the central where each one is making its own processing power.

Speaker 4: In a distributed computing platform, you have multiple sensors where each one is making its own processing power and providing on the...

And providing a.

Yeah, and on the network and already processed data object detection, which obviously.

Speaker 4: on the network and already process data object detection which obviously reduces a lot of costs related to no high need for high bandwidth of data and the main processing power doesn't need to be very strong because you don't need to process all of the different...

We do see a lot of costs related to know a high need for high bandwidth data and the main processing power it doesn't need to be very strong because you don't need to process all of the different central that has many advantages. There's another architectural which is centralized which means that the main processor was very strong.

Speaker 4: That has many advantages. There is another architecture which is centralized, which means that the main processor is very strong. It is connected directly to multiple sensors and can host the different processing power of each sensor on its own. Of course, it requires additional routing into the platform, but that's what customers, our customers make their own decisions.

<unk> is connected directly to multiple sensors and and you can host the different processing power of its central when its own of course it requires additional a lot with them into the platform, but that's that's what customers our customers make their own decision.

Speaker 4: You know, he's supporting, wants to support all of those infrastructure, since Nvidia seems to become a very strong

Is supporting wants to support all of those infrastructures and it seems and video seems to become a very strong.

Speaker 4: platform, we started to port all of our edge processing algorithms that so far was implemented on our automotive grade platform, what we call the Inoviz app, and was used by different customers for edge computing is now ported to the NVIDIA platform to help our customer get a faster and more easy integration of our lighters and our perception.

Platform and we started to pull all of our edge processing I'll go with the sofa was implemented on our automotive grade, but from what we called the interviews up.

And it was used by different customers for edge computing is now a bolted to the ingredients platform.

To help our customers get a faster and more easy integration of a lighter than a perception filter.

Speaker 4: I hope I answered your question. Yeah, that's a very complete answer. Maybe I just asked about that.

I Hope I answered your question, Yeah, very complete answer.

Maybe I'll just ask about that it's just ask the one processor controlling all of the.

Speaker 5: as the one processor controlling all of the cameras, LIDARs, and radars, is it NVIDIA that has the Fusion software, or are you providing some of that?

Cameras Lidar and radar is it didnt video that has the fusion software are you providing some of that.

Speaker 4: It's a... basically we are not doing sensor fusion. It's done by either Nvidia or the customer, or the Carmaker.

It's a basically where we are not doing sensor fusion, it's done by either an older customer older car maker.

Okay, great. Thanks.

Say that eventually.

Speaker 4: say that eventually from perspective of functional safety in the car

From our perspective, a function of the safety in the call.

Speaker 4: the different layers of the lidar and the camera needs to be completely separated. Because if the perception software is working based on using both camera and lidar, it means that if the camera fails, your perception software fails as well. And that is not acceptable when it comes to functional safety and therefore our perception software needs to be completely disconnected from the camera.

The different players of the lighthouse and the carnival and needs to be completely separated because if the perception. So Phil is working based on using both camera and lidar, which means that if the kind of fill your perception. So phil it feels as well and that is not the.

Acceptable when it comes to the functional safety and therefore, our perception software needs to be completely disconnected a form that come out.

I see thank you.

Thank you Kevin Cassidy from Rosenblatt Securities you have no further questions. Please proceed.

Speaker 7: Thank you, Kevin Cassidy from Rosenblatt Securities. You have no further questions. Please press play as

Okay. So thank you very much it's a very exciting to be here in New York and we will then be happy to see you again in next Walton and give you more updates on our progress. Thank you for the support thank you for the question.

Speaker 4: Okay, so thank you very much. It's very exciting to be here in New York and we will be happy to see you again in the next world and give you more updates on our progress. Thank you for the support. Thank you for the questions. We are very excited about what we do. Again, I think that what we are able to bring to the market now with Inuvis II, it gives us a huge, I would say...

We are very excited about what we do again I think that.

What we are able to bring to the market with now with these two it gives us a huge.

I would say self.

Speaker 4: self-fulfillment in our ability to deliver a product if we believe it's a game changer. And eventually it will allow us to accomplish our mission in enabling autonomous driving to everyone.

Self fulfillment and in our ability.

<unk> to deliver a product that you believe is a game changer.

And eventually will allow us to accomplish our mission and labeling autonomous driving to everyone.

Speaker 4: Thank you very much again. Thank you for my team at home. Thank you. Goodbye.

Thank you very much again and thank you for my for my team at home I think Goodbye Bye bye.

Right.