Q4 2021 Velodyne Lidar Inc Earnings Call

February 28, 2022

Good day and welcome to the Validus Lidar fourth quarter and year end 2021 financial results Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two.

Please also note. This event is being recorded and I would now like to turn the conference over to Andrew Chen. Please go ahead. Thank you operator.

Good afternoon. This is Andrew Chen head of IR for Teledyne Lidar.

Thank you for joining us today to discuss <unk> fourth quarter and year end 2021 financial results.

On our call Chief Executive Officer, Ted Tewksbury will open with his vision and a review of 2021 accomplishments.

Then chief Financial Officer Drew Hamer will review the financial results and outlook.

Ed will return to summarize and open the call for questions.

To ensure that we address as many analyst questions as possible during the call.

We request that you. Please limit one initial question and one follow up question.

Before we begin I would like to remind you that shortly after the market closed today.

<unk> issued a press release announcing its fourth quarter 2021 financial results.

<unk> also published an investor presentation.

You may access the press release and the presentation in the Investor Relations section of Teledyne Lidar Dot com.

Today's discussion includes forward looking statements.

Please refer to our press release, and our SEC filings, including our most recent 10-K and 10-Q for a discussion of factors that could cause the company's actual results to differ materially from these forward looking statements.

In management's financial remarks, non-GAAP metrics will be referenced.

Management provides non-GAAP metrics because it uses them for budget planning purposes, and for making operational and financial decisions and believes that providing these non-GAAP financial measures to investors as a supplement to GAAP financial measures help investors evaluate <unk> core operating and financial performance and business trends consistent with how management evaluates such.

Performance in trips.

In addition management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies.

A full description and reconciliation of these non-GAAP measures versus GAAP is included in the company's press release issued today.

Now I'd like to turn the call over to our new CEO Ted Tewksbury.

Thanks, Andrew and thanks to all of you joining us today.

I'm very excited to be on my first call as CEO of Teledyne Lidar.

In the several months that I've been at development I've been meeting with employees customers partners and board members.

I have been enormously impressed with the deep bench of talent here.

Strength of our customer relationships and the capabilities of our products and technologies.

We have everything we need to achieve our mission of creating smart technology for a world in motion and our vision of science and service of safety.

The only thing I'd invented lidar as we know it creating an entirely new industry.

Lidar is a critical technology for autonomy, enabling the movement of people and goods safely through the world.

Has the potential to transform every industry as we know it.

And demand is growing exponentially across a wide range of applications.

<unk> has always been a lidar technology innovation and market leader and is well positioned to capitalize on this opportunity.

I joined <unk> and to build on its strong foundation to create the fastest growing most profitable and financially successful global Lidar company.

As CEO of three public technology companies prior to <unk> I have a proven track record of scaling new technologies into profitable growth businesses I'm.

I'm here to do the same for relevant.

I'd like to start today with a brief summary of our Q4 and full year 2021 financial results and some recent highlights.

Then I'll discuss our focus areas for 2022, followed by an overview of product traction, we're seeing with customers in our target markets.

In the fourth quarter of 2021, we sold a record number of sensors for a quarter.

More than 4900 units.

This spring sensors sold to over 15000 for 2021 of which 2400 where solid state.

With a strong fourth quarter, we delivered full year 2021 revenue of $62 million.

Drew will provide a detailed review of our financials in a moment.

Okay.

The first step in any business transformation is to get the right people in the right seats.

Last year, we announced key new hires, including our Chief product Officer Sinclair Vas.

And our Chief operating Officer, Jim Barnhart.

Last month, we hired Dr. <unk> Gupta as executive Vice President of engineering responsible for both hardware and software.

<unk> proven engineering leadership will help us accelerate the introduction of cutting edge next generation Lidar solutions.

Last June we opened our India design center in Bangalore, and we are already benefiting from the addition of a large team brilliant engineers.

In 2021 valid I'd put in place a strong foundation for growth.

In 2022, our top priority is to accelerate the path to profitability by rationalizing our cost structure and driving lidar deployments at scale across a wide range of industries.

Our strategy for doing this consists of four pillars.

The first pillar is to drive light our volume in early autonomous markets, such as industrial robotics and intelligent infrastructure.

<unk> the way for success in later automotive applications.

We are synchronizing our investments to coincide with two major ways of Lidar commercialization.

The first wave will be dominated by industrial automation robotics and intelligent infrastructure.

According to Yodlee. These markets alone are estimated to be $2 $8 billion by 2026.

And their growth ramp has already started.

<unk> has the right products ready to ship in volume to these markets today.

The second wave autonomous vehicles, or avs and advanced driver assistance systems, or Adas will ramp into production later in the decade.

According to <unk> by 2026, the automotive market is estimated to be another $2 9 billion, bringing our total available market to $5 7 billion.

Within automotive our strategy is to focus initially on trucking avs and leading edge electric vehicles, or Evs, which are an excellent fit for our existing products.

Based on our conversations with many automotive tier ones and Oems, we believe that mainstream adoption of lidar in passenger cars will require smaller form factors and lower prices that are currently available today.

Supplying high performance light our at scale into the early markets will generate near term revenue, while enabling us to perfect. The high volume low cost manufacturing needs needed to succeed in automotive and other price sensitive applications.

This strategy will enable us to benefit from successive layers of revenue growth maximizing our return on investment over both the short and the long term.

The second pillar is to develop high performance sensors at a price point to accelerate mass adoption.

As I mentioned this is essential for automotive and Adas applications, where sensor prices need to fall well below $500 before most tier ones and Oems will deploy lidar at scale.

Teledyne already offers the broadest lidar portfolio with the best overall performance to price ratio in the industry.

This includes both rotational as well as solid state sensors for a wide variety of applications.

Going forward, we are pursuing a multi pronged approach to reducing product costs, even further while simultaneously meeting our customers most demanding performance requirements.

First we are developing new sensor architectures with fewer components and inherently lower bill of materials cost.

Second we are employing a platform based design approach leveraging our proprietary chip based technology, the micro lidar array across our entire product portfolio.

We will continue to miniaturize integrate and Modularized common building blocks to to improve engineering efficiencies and scalability.

Third we are using software configurable hardware to address diverse use cases with speed and agility.

These initiatives will enable us to drive prices down while simultaneously pulling gross margins up.

The third pillar is to expand our software to deliver complete autonomous vision solutions to our customers.

Our customers use our lidar sensors is one component of a system that also includes software and sometimes other sensors.

Our goal is to provide as much of that solution as possible to increase our value to customers, while expanding our revenue and gross margins.

In 2021, we strengthened the company's software offerings with the introduction of the Bella development Kit, which we call V D K.

CDK provides customers with the ability to plug in our lidar sensors with Vela and off the shelf library of software functions to fast track their solution development.

Our village software Trans late raw point cloud data into actionable information.

Delivering high level perception outputs for roadways, sidewalks and indoor environments, including seen segmentation object detection velocity estimation free space detection.

And Lidar based <unk>.

The next generation of Delta and V. Dk will include even more advanced software and machine learning capabilities, including scalable machine learning, enabling our sensors to continuously learn and improve performance and adapt to changing environments and use cases.

Platform services, enabling customers to develop their own applications with teledyne lidar using our cloud analytics diagnostics calibration perception visualization and other Apis.

Sensor fusion, enabling multiple lidar to be integrated with camera radar and other sensors for applications like Adas that require redundancy.

And new vertical market solutions optimized for our target applications, including warehouse robotics intelligent infrastructure.

A dash and ground truth ing.

And finally, our fourth pillar is to lead with the operational and manufacturing excellence.

With over 67000 sensors shipped to date validate and has established itself as the clear leader in shipping like our at scale.

In 2021, we made excellent progress in transferring our high volume products offshore.

80% of our Vela rate line and 100% of our product family are now running at contract manufacturers.

We expect to complete the transfer of all of our lines offshore later this year, while maintaining optionality for buy American compliant products here in the U S.

In 2022, we continue to increase the automation of our manufacturing processes and put in place the capacity to deliver high volumes and quality levels as required by an industry poised for significant growth.

Yeah.

Successful execution of the four pillars will enable <unk> to focus investments on high ROI opportunities that deliver greater value to customers, while lowering the company's overall cost structure and driving the volume levels needed to build a profitable growth business.

Now I'd like to provide a deeper dive into the impressive progress we've made with customer adoption of our products and our three target markets industrial and robotics intelligent infrastructure and automotive.

The industrial and robotics market is closest to large scale commercial deployment.

Companies worldwide are automating their supply change to save money improve efficiencies and alleviate bottlenecks caused by the pandemic and other macro issues.

In warehouses or customers are using <unk> lidar enabled robotics to move goods with a high level of precision efficiency and safety, helping to maintain continuity of operations.

Currently e-commerce retailers and sidewalk robotics programs are deploying our lidar for fulfillment delivery and data center operations.

For example, one of our customers is getting whose middle mile delivery trucks fulfill revenue generating orders daily for Walmart and other fortune 500 companies.

In industrial environments customers have integrated <unk>, lidar sensors to power robotics and airports and seaports.

Also validated as the light or provider of choice for drones are.

Our sensors enabled <unk> mapping and digital twin modeling of indoor and outdoor environments, providing an efficient and cost effective way to map large areas and just hours.

The second target market ripe for commercialization as intelligent infrastructure and smart cities.

<unk> intelligent infrastructure solution.

S generates real time data analytics, and predictions, hoping to improve traffic and crowds flow efficiency improve sustainability and protect vulnerable road users.

Lidar reliably collects data in any weather relating condition 24 seven.

Iis is cost effective and easily installed with a single sensor.

It can provide coverage for an entire intersection.

Placing inductive loop detectors camera and radar.

Our award winning solution is implemented across three continents with North American pilots rolled out in seven states so far.

We expect traction in the intelligent infrastructure market to accelerate with new funding from the recently passed one two trillion infrastructure Bill.

The third market automotive includes both avs and acas.

While level, two plus and level III assets had been slower than expected to reach full deployment.

We remain convinced that the high functional safety levels needed for automotive require lidar is an essential component of the sensor suite.

Economists shuttles, including beep by Navient.

Mobility, and leading robo taxi innovators such as motion are integrating <unk> lidar in their systems to provide the highest levels of performance and safety.

New electric vehicle companies like fair at a future or using our solid state directional sensors to leapfrog traditional EV Oems.

<unk> will power their autonomous driving systems to help deliver a comprehensive suite of highway urban and parking autonomy features.

Trucking accounts for over 72% of the transportation of goods in the U S alone.

Economists trucking programs are rapidly expanding to address capacity efficiency safety and environmental concerns.

<unk> Lidar and perception software are being deployed and driverless trucks by companies like Ford Auto Sean and trunk Tech.

For safety critical applications are pedestrian automatic emergency braking software solution also called P. AEP.

It has been shown to dramatically improve safety in darkness, as compared to current camera plus radar solutions.

Tragically 2021 saw an historic increase in roadway roadway fatalities.

Data showed that approximately 76% of pedestrian fatalities happened at night or in low light conditions.

<unk> P. AAV can help prevent these tragedies and save lives.

The other thing is actively working with the National Highway Transportation Safety administration, and other government agencies to update performance standards and required the safety performance that lidar can provide to help protect vulnerable road users.

Finally, <unk> would not be where we are today without our partners and customers are.

Our automated with validating program now has 100 partner companies, including Nvidia and Siemens.

Our partners are working to commercialize next generation autonomous solutions in the global market.

Using validated lidar sensors and software.

While we are proud of all of these successes, we acknowledged that the company needs to do a much better job of parlaying these opportunities into financial results and shareholder value.

We believe that the focus provided by the four pillar strategy will enable us to do this.

We also recognize that the company's previous guidance has fallen short of actual financial results.

As I start my tenure as <unk>, New CEO . It is important to me to build credibility and trust with all of our investors and analysts.

With that in mind, it would not be judicious to provide guidance beyond the range of our visibility.

As you have seen <unk> is experiencing robust customer demand for our products across all of our target markets.

These early deployments of <unk> and lighter in real customer products are the best leading indicators of revenue growth in the next several years.

That said our ability to supply this demand is severely constrained by shortages of critical semiconductor components needed to build our sensors.

Given our limited visibility, we will not provide full year guidance as the company has done in the past instead.

Instead, we will provide quarterly guidance as we move into 2022.

We look forward to providing longer term models when our visibility improves.

With that I'll turn it over to drew to provide more detail on our financials.

Thanks Ted.

Hello, everyone. It's my pleasure to speak with you today as noted at the onset of the call I will provide non-GAAP results for the fourth quarter and full year 2021.

Starting with the fourth quarter total revenue increased to $17 5 million up from $13 1 million in the third quarter of 2021, reflecting across the board improvements.

Product revenue grew to $13 $7 million up from $11 $8 million in the third quarter of 2021.

This reflects our third consecutive quarter of increased demand and growth in our unit sales volumes.

During the fourth quarter, we sold more than 4900 sensors of which more than 900, where solid state, reflecting a linear increase in demand.

The weighted average selling price per sensor increased to $2738 in the fourth quarter compared to $2622 in the third quarter, reflecting strong demand for our products.

License and services revenue was $3 $9 million.

Up from $1 $3 million in the prior quarter, reflecting an annual royalty true up of approximately $2 $4 million due.

Due to increased usage.

We delivered a gross profit of $3 $2 million, improving $7 $4 million when compared to our third quarter gross loss of $4 2 million.

This reflects increased sensor licensing revenue the benefit of higher volumes and improvements in production yields and reserves for potential excess materials.

Operating expenses were $35 2 million compared to $33 $4 million in the third quarter, primarily due to increased investments in our technology.

Net loss improved to $31 8 million or <unk> 16 per share compared to $37 $5 million or <unk> 19 per share in the third quarter of 2021.

We ended the year with $294 $4 million in cash and short term investments compared to $353 million at December 31, 2020.

This reflects $89 $3 million from the exercise of our publicly traded warrants offset by our operating cash usage of $127 million.

For the year ending December 31 2021.

We are pleased to have grown our unit volumes to over 15000, Lidar sensors up 35% compared to 2020.

We are proactively working to achieve mass adoption pricing levels, and we lowered weighted average selling prices from $4632 two in 2020 to $2988 in 2021.

Total revenue was $61 9 million compared to $95 $4 million in 2020.

Product revenue was $48 million compared to $68 $4 million in 2020.

The change reflects a one time $11 $1 million stocking fee in 2020 and.

$16 $3 million related to lower Asps in 2021 that are partially offset in 2021 by an increase of $7 million in the volume and mix of sensors and parts. So.

Yeah.

License and services revenue was $13 $9 million in 2021 compared to $27 million in 2020, which reflected a nonrecurring fee for the patent cross license agreements.

Turned into during the second and third quarters of 2020.

Net loss was $129 $8 million compared to $65 1 million for 2020.

Turning to guidance as Ted mentioned going forward, we will provide guidance on a quarterly basis until visibility into market conditions improves.

Based on currently available information, we expect revenue for the first quarter to be between $10 million and $12 million driven by shipments of product to the Companys global customer base.

We expect the number of censorship and weighted average selling prices to fluctuate each quarter based upon customers needs and product mix.

The revenue guidance excludes an estimate of the noncash contra revenue charges of $5 million to $7 $5 million vesting in the first quarter of 2022.

This is expected to result from the issuance to Amazon Dot Com NV investment holdings LLC of a warrant or the Amazon warrant to purchase up to an aggregate of $39 million 594032 shares of the company's common stock subject to adjustment investing in accordance with the terms and <unk>.

Conditions set forth in the Amazon warrant.

While we believe the warrant has far reaching value implications dibella and lidar.

Accounting rules fall within U S. GAAP revenue standards since the warrant is directly related to our product sales with Amazon.

The number of warrants shares vesting will primarily be proportionate to the discretionary purchases by Amazon or its affiliates and recorded as a contra revenue in the periods the discretionary payments occur.

Divesting of the warrant shares is based on these discretionary payments made pursuant to existing commercial agreements with vela dining to Amazon any possible future commercial agreements between <unk> and Amazon and the anticipated entry into an agreement between valid dining Amazon related to the use of <unk> technology.

With that I'll turn the call back to Ted.

Thank you drew.

We have taken decisive action by strengthening our exceptional leadership team, adding outstanding engineering talent and advancing our roadmap of Lidar innovation.

Software in order to deliver complete autonomous vision solutions and forth by leading the industry and manufacturing and operational excellence.

By focusing on the four pillars, we plan to expand our valued customers, while accelerating the path to profitable revenue growth.

Lidar is going to make our communities safer or supply chains more efficient and our planet greener.

And <unk> is leading the way.

Hey, thank each of you for joining today's call and look forward to touching base throughout the year as it unfolds.

In March we will be at three events Cowens virtual mobility disruption summit Baron Berg's virtual industrial Technologies Conference and Ross annual conference in person.

Then in April we will present that bank of America's annual Global Automotive summit hosted in conjunction with the New York Auto show.

Operator, I would now like to open the call for questions.

We will now begin the question and answer session.

If you would like to ask a question press Star then one to join the queue.

If you are using a speaker phone please pick up your handset before pressing the keys.

You would like to withdraw yourself from the question queue Press Star then too.

We will pause momentarily to assemble our roster.

And the first question comes from calling Rush with Oppenheimer. Please go ahead and thanks. Thanks. So much cause can you break out the mix of hardware sales by application obviously, the automotive market has come in a little bit slower than folks that are expected. So I'm just curious.

How much of those.

Those hardware cells are actually going into testing programs, how much of it it's more than a dollar each other industrial applications that are actually growing up right now.

We see our sales the view of this includes over R&D sales and everything else. It's not just the commercial sales are administered but.

We do see are split it's probably.

Probably ruin rented 30, 30%.

The automotive space and.

And the rest is going cross various industrial service.

Okay excellent and then.

You ramp up production can you talk a little bit about yield coming off those automated lines and what you are saying and and how much improvement there might be you'll have to go in terms of some of the cost reduction and efficiency of that manufacturing.

Yes.

We're not going to start.

Mmm.

However, I can't say that we're seeing Jim Martin Lawrence leadership bizarre CPUC hormone, we're seeing continually improving our yields.

Okay, Great I'll take it offline. Thanks, so much guys.

The next question comes from Rochdale with Needham and company. Please go ahead.

Yeah. Thanks for taking my questions I appreciate it.

On the gross margins.

To see some improvement on the on the product gross margins.

The negative decline is not as great, but negative 8%.

And the overall growth margins have been helped by a higher mix of licensing and services.

So when you kind of look into 2022.

How should we think about the hsp declined.

And then how do we think about kind of the mix of licensing and services.

So.

We clearly see Ya.

You guys moving off offshore to reduce the cost of manufacturing, reducing the product costs.

But how do we think about ASB should be expecting kind of another decline nasp's as you kind of ramp.

Production, so any thoughts there would be really helpful. Thank you.

So let me.

Let me just comment on the pay is peak trends that we're seeing first of all long term as I indicated prepared remarks, we are committed to driving down.

Cost structure to who we can reduce our prices and trying to use the pool Bruce Martin job. So.

Who had an abnormal happening however in the short term we have headwinds from supplying strange that I mentioned.

Particularly semiconductor components, which are any scare supply and in some cases, we have to pay higher than normal prices for those components and Fortunately, we were able to pass on those costs to our customers in the present environment. So you will see.

Starting to drift up due to that second trend.

But then going forward towards the end of the year 2023, you start seeing asp's coming down.

And then you went ahead and entered yeah. So it's showing I think it's similar to what percentage speeded preview differently is that right.

Right now we are not normal times with their reviews go down to inflation is the first time people see it as the decade. So.

Our customers are understanding of that and we will see asp's come up a bit but in a normal situation I think as we've talked about it in the past, we think of Asp's coming down and kind of on a linear basis over time I think of it. It's like it is a four quarter kind of linear line you might might average out. So that you can see a trending down and that's going to be a function of us free to market.

Ah sensors to have a lower price points, Vikar Valerie and others.

While we still need the team higher prices on some of your other centers. So it will be giving you the weighted average asp's across call. The censors, but we do expect to kind of on a regular basis over time, you should see that trending down when things return to normal and I should add that the increasing prices that we're seeing as a result to supply constraints or not.

Causing us to lose design things because the entire supply chain has received environment, including all of our competitors.

Very good for my follow up I appreciate it had the outlining the strategy of the four pivot.

Just wondering in terms of your customer portfolio.

You did mention that you are seeing an increased penetration of sulfate sensors.

Wondering.

How we think about solid state censor penetration this year.

Customers.

Which end markets are adopting the solid state.

And wondering about.

The nature of some of these multiyear agreements.

And how you are looking at those multiyear agreements and project pipelines progressing throughout the year. Thank you.

So let me first comment on the solid state censored question we.

Are seeing solid state centers being sold into automotive applications also a lot of the robotics and industrial automation applications are using solid state, but they're also using rotational so we're seeing both types of centrist being saltiness getting applications in the intelligent infrastructure segment.

The surround view rotational sensors are very popular products are very popular because you can mount on a telephone pole at an intersection and you've got immediate real time, three D view of traffic and road conditions in history and then the other road users.

So we're seeing both of those.

As far as what we do expect to see a continuing increase in the solid state sensors.

They do have the benefit of a lower price points and a very suitable for the lines industrial applications.

As far as the multi year agreements or concerns you will notice that they were conspicuously absent from the press release as well as from the prepared remarks the.

The reason for that is that these are very important metrics that we use to measure the business internally and we will continue to measure.

And a year agreements as well as the final statistics.

The number of active customer projects that we have ongoing.

The company was very transparent in the past.

Providing those details in these call however, given the increasingly competitive nature of the industry. We've made the decision that we will no longer be reporting those multi year agreements inactive projects and the final as we've done in the past.

We are in the process of <unk>.

Getting new metrics, yes, we will be able to share with you that will give you a more accurate leading indicators.

Our future revenue growth and will start doing that next court.

Thank you.

The next question comes from Sam Peterman with Craig Hallum. Please go ahead.

Hi, guys. Thanks for taking my question I wanted to add.

First.

Sales for next year.

I'm sorry for next quarter.

Can you breakdown, how much that you expect to come from products versus licenses and services.

Yeah. So a vast majority of that's going to come from products, we have kind of a run rate license the services around $1 billion quarter.

And so that should continue.

And then the rest of the coming from products.

Okay, Great that's really helpful.

And then kind of bigger picture here, you mentioned, a new architecture that year transitioning to can you describe the architecture a little more and then can you talk about what that means for.

The <unk> family of products that you have been developing as your next gen products.

So yes.

<unk> to give any more detail publicly on the architecture, they're working on low cost architecture.

The company has.

Geared in the past and being a little bit too open.

King products before they were ready for.

Full volume production anything that attempted to serve our investors well does it serve company well. It certainly serves our competitors very well. So we don't want to do that anymore.

Just to elaborate a little bit more on the products that we have in the development queue right now.

Would be these new architecture to achieve performance that our customers requiring a target market at a much lower price point.

And that's particularly to accelerate adoption in automotive where as I mentioned, our customers are demanding prices on several hundred dollars. So that this is a pretty big hurdle and that does require new architecture.

This is the second kinds of products that we have in the pipeline our next generation solution.

We already have where we are addressing new use cases, as well as reducing costs and we're doing that and as I mentioned and prepared remarks by leveraging reusable hardware software configurability and and the micro light on the rig which is really.

And a workhorse building blocks that we can proliferate through the entire product line in order to reduce costs.

Proven scalability and.

And get products to market period passed and then the third.

New product.

Allegory of course is the software where we continue to move up the software stack in order to deliver complete solutions to our customers and deliver more value to them, which in turn increases are gross margins in our profitability.

Okay, great. Thanks for the detailed that's all for me.

Uhm.

We still have time for questions. So I can take a question plus star and one to join the queue.

Alright. This concludes our question and answer session I'll turn the conference back over to Ted take story for any closing remarks.

Okay perfect. Thank you all for joining us today here and we look forward to seeing you, perhaps even talk from any preventive medicine.

Very much have a good day.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

[music].

Yeah.

[music].

Good day, and welcome to the Validus Lidar fourth quarter and year end 2021 financial results Conference call.

All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star Keith followed by zero. After today's presentation, there will be an opportunity to ask questions.

Ask a question you May press Star then one on I touched downtown to withdraw your question. Please press Star then two please.

Please also note. This event is being recorded and I would now like to turn the conference over to Andrew Chen. Please go ahead. Thank you operator.

Good afternoon. This is Andrew Chen head of IR for Teledyne Lidar.

Thank you for joining us today to discuss <unk> fourth quarter and year end 2021 financial results.

What are called Chief Executive Officer, Ted Tewksbury will open with his vision and a review of 2021 accomplishments.

Then chief Financial Officer Drew Homer will review the financial results and outlook.

That will return to summarize and open the call for questions.

To ensure that we address as many analyst questions as possible during the call.

We request that you. Please limit one initial question and one follow up question.

Before we begin I would like to remind you that shortly after the market closed today.

<unk> issued a press release announcing its fourth quarter 2021 financial results.

Philadelphia also published an investor presentation.

You may access the press release and a presentation in the Investor Relations section of Teledyne Lidar Dot com.

Today's discussion includes forward looking statements.

Please refer to our press release and our SEC filings.

Including our most recent 10-K and 10-Q for a discussion of factors that could cause the company's actual results to differ materially from these forward looking statements.

In management's financial remarks, non-GAAP metrics will be referenced.

Management provides non-GAAP metrics because it uses them for budget planning purposes.

And for making operational and financial decisions.

That providing these non-GAAP financial measures to investors as it.

Supplement to GAAP financial measures help investors evaluate <unk> core operating and financial performance and business trends consistent with how management evaluates such performance in trips.

In addition management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies.

A full description and reconciliation of these non-GAAP measures versus GAAP is included in the company's press release issued today.

Now I'd like to turn the call over to our new CEO Ted Tewksbury.

Thanks, Andrew and thanks to all of you joining us today.

I'm very excited to be on my first call as CEO of Teledyne Lidar.

And the several months that I've been at <unk>.

<unk> been meeting with employees customers partners and board members.

I have been enormously impressed with the deep bench of talent here.

Breadth of our customer relationships and the <unk>.

Capabilities of our products and technologies.

We have everything we need to achieve our mission of creating smart technology for a world in motion and our vision of sites and service or safety.

Oliver I invented lighter as we know it creating an entirely new industry.

Lidar is a critical technology for autonomy, enabling the movement of people and goods safely through the world.

Has the potential to transform every industry as we know it.

And demand is growing exponentially across a wide range of applications.

<unk> has always been in the Lidar technology innovation and market leader and is well positioned to capitalize on this opportunity.

I joined <unk> and to build on its strong foundation to create the fastest growing most profitable and financially successful global Lidar company.

As CEO of three public technology companies prior to <unk>.

A proven track record of scaling new technologies into profitable growth businesses.

I'm here to do the same for irrelevant.

I'd like to start today with a brief summary of our Q4 and full year 2021 financial results and some recent highlights.

Then I'll discuss our focus areas for 2022, followed by an overview of product traction, we're seeing with customers in our target markets.

In the fourth quarter of 2021, we sold a record number of sensors for a quarter or more.

<unk> 4900 units.

This brings sensors sold to over 15000 for 2021 of which 2400 where solid state.

With a strong fourth quarter, we delivered full year 2021 revenue of $62 million.

Drew will provide a detailed review of our financials in a moment.

The first step in any business transformation is to get the right people in the right seats.

Last year, we announced key new hires, including our Chief product Officer Sinclair Vas.

And our Chief operating Officer, Jim Barnhart.

Last month, we hired Dr. <unk> Gupta as executive Vice President of engineering responsible for both hardware and software.

<unk> proven engineering leadership will help us accelerate the introduction of cutting edge next generation Lidar solutions.

Last June we opened our India design center in Bangalore, and we are already benefiting from the addition of a large team of brilliant engineers.

In 2021 valid I'd put in place a strong foundation for growth.

In 2022, our top priority is to accelerate the path to profitability by rationalizing our cost structure and driving lidar deployments at scale across a wide range of industries.

Our strategy for doing this consists of four pillars.

The first pillar is to drive light our volume in early autonomous markets, such as industrial robotics and intelligent infrastructure.

<unk> the way for success and later automotive applications.

We are synchronizing our investments to coincide with two major ways of Lidar commercialization.

The first wave will be dominated by industrial automation robotics and intelligent infrastructure.

According to Yodlee. These markets alone are estimated to be $2 $8 billion by 2026.

And their growth ramp has already started.

<unk> has the right products ready to ship in volume to these markets today.

The second wave autonomous vehicles are Evs and advanced driver assistance systems, or Adas will ramp into production later in the decade.

According to Yodlee by 2026, the automotive market is estimated to be another $2 9 billion, bringing our total available market to $5 7 billion.

Within automotive our strategy is to focus initially on trucking avs and leading edge electric vehicles, or Evs, which are an excellent fit for our existing products.

Based on our conversations with many automotive tier ones and Oems, we believe that mainstream adoption of lidar in passenger cars will require a smaller form factors and lower prices that are currently available today.

Supplying high performance slide are at scale into the early markets will generate near term revenue, while enabling us to perfect. The high volume low cost manufacturing needs needed to succeed in automotive and other price sensitive applications.