Q4 2021 Aeva Technologies Inc Earnings Call
And a lot of the technology to market.
I would like to highlight a few first wanted to anyone accomplishment, which are summarized on slide five.
First we significantly expanded our leadership position in 40, Lidar technology with the largest portfolio of FMC W patterns among peers in the industry.
New advancements that raised the bar in perception and equally important matured our technology towards commercialization.
In Q4, we completed development of Ares to the worlds first 40, a wider offering camera level of resolution with 500 meters of range and a crucial dimension of ism velocity.
Often in automotive reliable and compact form factor that leverages proven semiconductor processes to enable <unk> ability.
Second as more customers experienced the advantages of <unk> 40, Lidar this has accelerated our commercial momentum.
We deepen our relationship with key partners such as supporting two simple with Eva 40, let or under trucks that achieved the world's first fully autonomous drawn on open public roads.
Establishing a foundational agreement with our undisclosed customer for development through to production.
And securing a production win with plus which is on track to start initial deployment in late 2022.
We also announced our first expansion beyond automotive was a collaboration with Nikon to bring Ava 40, lidar to the $10 billion industrial automation and metrology markets.
Third we solidified our supply chain as we continue to progress towards production.
This included selecting fabricate to manufacture a lot our trip module, which is the heart of our lidar with all core sensing components integrated onto our silicon Photonics platform.
The new production volume is automotive qualified with plans to scale to support mass production volumes.
And fourth we more than doubled our team last year and has assembled a group of leaders experienced in developing and scaling new technology.
Combined with $445 million in liquidity at the end of 2021, we are well positioned with the talent and resources to continue executing on our plan to bring Ava 40 about are to scale.
Turning to slide seven on our inaugural earnings call last year, we shared our key objectives for 2021 and I am pleased to share that we accomplished all of them on or ahead of schedule.
Our ability to execute on our plan is a testament to the strong team we have assembled at Eva and our commitment to our mission as well as the growing demand for our unique <unk> technology.
Moving to slide nine I would like to provide more color on our key business updates.
We are proud to have supported our partner too simple on their significant milestone of becoming first in the industry to successfully operated fully autonomous semi truck on open public roads.
<unk> hundred 40, <unk> is the only long range lidar onto simple on road fleet using our unique instantaneous velocity data to symbols perception stack can classify objects and growth hazard at long ranges with greater confidence, which provides additional response time for the safe operation of autonomous trucks.
We continued to progress well with two simple development milestone and look forward to supporting additional driver operation and the expansion of two simple Andre fleet.
Turning to slide 10 earlier this month, we unveiled areas too which is the world's first commercially available 40, Lidar that is built for automotive grade reliability and Leverages Silicon Photonics technology enabled volume scalability.
And we still represents a significant leap forward for Lidar that we believe will open the door to accelerating autonomous program, where high performance sensing is crucial to achieving our next level of automation.
And we need to deliver new real time perception capability enabled by Eva unique FMC there'll be technology, and now possible with legacy time of flight Lidar sensors.
The first is ultra resolution, which delivers a camera level resolution for the static world with up to 1000 lines per frame or up to approximately 20 times. The resolution of legacy time of flight solutions.
And 40 localization, which leverages <unk> unique velocity data to estimate the motion of the vehicle itself effectively serving as an independent navigation solution and enabling redundant functionally safe positioning for our customers.
This enables an Eva equipped vehicles to always know where it is even in environments, where GPS can be challenge, such as tunnels or parking garages and important capability needed for higher levels of automation.
<unk> two is designed for automotive grid reliability across a variety of fruit and environment. The commission had.
A quarter of the size of our previous generation. It enables multiple integration options across diverse applications, such as passenger vehicles trucks industrial robots and more.
Within <unk>, we utilize our breakthrough later on chip architecture, which integrates all of course, nothing components lasers detectors and optics also silicon photonic chip module.
To our knowledge <unk> remains the only company to have successfully achieved this level of integration and performance.
By doing so we're able to remove all fiber and significantly lower total system component counts.
This reduces overall complexity increases that reliability and allows for higher levels of automation and manufacturing scale.
Importantly areas through March of next stage, enabling path to commercialization.
In late Q2, we expect to begin deliveries to our customers for them to develop and validate for their programs. This includes deployment for plus trucks beginning in late 2022.
Over the course of this year, we also expect to build on our commercial momentum as additional potential customers begin using areas too.
As we have noted over the past year interest for Avon Mcw approach has accelerated and we are very encouraged by the strong reception, so far with Harry's too.
We look forward to converting more programs towards production with a continued focus to align with companies that have a shared determination and ability to deploy via our unmatched scale.
Switching gears in automotive, let's move to the next slide which highlights an exciting development for industrial applications last year, we announced a strategic collaboration with my colleagues to bring next generation high precision solutions to the industrial automation and metrology markets using Eva 40 by the measures objects and the micron level.
Which is about 1000 times more precise than we will can be achieved with typical legacy to begin buyer we.
We do this utilizing the same core chip architecture that we have developed for automotive, which we believe will result in a solution that is meaningfully smaller and lower cost relative to what is currently available.
This also enables us to drive greater economies of scale across our different applications.
Since announcing the collaboration we have made good progress together with dot com, including defining our first product and industrial metrology as well as achieving micron level precision using a lighter on chip module.
This is enabling us to pull forward the timing of our first product launch by one year now targeting 2024.
Beyond industrial metrology, the combination of high precision and small form factor of <unk> 40, <unk> opened up a number of other unique industrial applications, where performance size and costs have been limiting factors.
It does machine tooling infrastructure and other volume manufacturing.
Collectively these applications represent a $10 billion and growing market and we look forward to pursuing these opportunities.
Moving to the next slide I would like to share with everyone. Our plan and objective for 2022.
<unk> been highly encouraged by the growing demand to deploy 40 about our technology and with the launch of Aries do we plan to build on the strong progress achieved last year.
Believes this will enable us to accelerate our timeline to commercialization and to meet the increasing demand for our technology as Oems and autonomous players increasingly CFM CW as a key enabler to the next generation of autonomy.
In light of this customer and market pool, we have made a strategic decision to proactively accelerate our shift from <unk> towards scaled deployment of the Ares platform for commercial programs, particularly once we believe have the highest potential for success.
As we have discussed before our mission is to bring the next wave of perception for everything and our approach.
Roche of partnerships remain focused on aligning with companies that have a shared determination and ability to deploy a lot of MF scale.
And by pulling forward, our transition from Nrg's towards scaled deployment. It can begin scaling volumes earlier.
Importantly, we continue to progress towards production with all of our key partners and continue to deliver on program milestones.
This is also the case in non automotive, where we have defined our first product and industrial metrology with Nikon and were pulling forward the industrial launch by one year target in 2024.
We feel confident in our ability to continue to progress towards production and we plan to expand our commercial momentum in 2022.
If we continue to execute this year, we believe the momentum will enable us to achieve our target of 2020 for volume production for automotive as we have discussed before as well as accelerate the launch of our industrial application.
In terms of specific objectives for this year.
Our first is to deploy areas due to customers for qualification.
We have already begun bringing up of initial units and expect to start deliveries in the second quarter.
Second we aim to convert two additional programs towards production.
We are encouraged by the growing interest for Avon FMC there'll be approach and we expect to build on our commercial momentum as additional customers begin testing and development with areas too.
Third we will accelerate the release of our first non automotive applications.
Now that we have defined our first product with Nikon and are pulling forward our timeline for 274 with <unk>.
And to leverage the momentum from our lighter on chip module as we continue to see strong inbound interest and put our focus and resources towards additional opportunities that align with our mission to bring Ava 40, lidar to mass scale.
And fourth we will be working closely with our supply chain to prepare for commercial deployment. This include a spice and applicable ISO certifications as well as preparing our supply base for scale deployments.
And with that I will turn the call over to Rob to discuss the financials.
Thank you <unk> and good afternoon, everyone I would like to start with a summary of our fourth quarter financial results.
Revenue in the fourth quarter was two point wherever we can.
Continuing to make on customer development milestone.
$7 million in the fourth quarter.
<unk>, primarily by R&D expenses related to product development and to a lesser.
The extent G&A and sales and marketing expenses.
Gross cash, which we define as operating cash flow less capital expenditure.
$26 6 million for the fourth quarter.
As a result, our balance sheet remains strong with cash cash equivalents and marketable securities totaling $445 million at the end of the fourth quarter.
Finally, our weighted average shares outstanding in the fourth quarter was $214 3 million.
Turning to three 1% year over year.
Sure.
non-GAAP operating loss was $81 9 million and gross cash was $86 million.
85% to $95 million range provided last two demonstrating our continued discipline in how we invest for growth.
Now on our financials.
Due to progress towards production.
All of our key partners and remain on track with that.
Bachmann milestone and timeline, while also pursuing opportunities with new customers.
As <unk> mentioned, we are accelerating our path to commercialization Brian .
Brian is strategically building our transition from <unk> to skilled deployment of <unk>.
We'll review.
22.
We believe this will enable us to begin giving commercial program with product sales with revenue earlier than previously contemplated.
As such we expect revenue in 2020 to be in the range of $8 million to $12 million.
Representing and up to 30% year over year increase.
Depending on the scaling of <unk> deployment.
Based on the timeline of our customers' development milestone and the expected <unk>.
We expect revenue to be backend loaded in 2022.
Turning to non-GAAP operating expense rich.
Which exclude stock based compensation and other potential nonrecurring charges.
We expect this to be in the range of $140 million to $150 million in 2022, which primarily reflect our growing team kind of incremental investment and product development initiatives to accelerate towards commercialization.
In summary, the results in 2021 highlight our ability to execute on our plan to bring Dave are fully lined out to market.
And looking forward, we remain well positioned with our balance sheet to continue investing to support our expanding number of customers and accelerated timeline towards commercialization.
With that I'll turn it over to solution for closing remarks.
Thank you so before we start with Q&A I would like to thank the <unk> team for their significant contributions.
Until year than it was.
Planned deleverage and accelerating our path to commercialization to all of our stakeholders. Thank you for the ongoing commitment and confidence in <unk> breakthrough <unk> technology.
We're off to a strong start in 2022, and we look forward to sharing future development as we work to bring <unk> to market.
And with that we will now open the line for questions.
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Our first question is from Colin Rusch.
Oppenheimer. Please proceed with your question.
Thanks, So much guys and congrats on all the progress.
Yes could you just talk a little bit about the process with sovereign from here, obviously getting them onboard as an important benchmark.
They are known for bringing a lot of value with it. Thank you Gary.
Processes. So just curious how closely youre working with those teams in Wichita progress.
Preparations around.
Sure Yeah happy to answer that so we.
We recently have been setting up our production for scalability.
This is definitely a crucial for our ability to scale up areas. Two later on this year.
And one of the key drivers that were working through with them is really enabling higher levels.
Shrink so that's that's kind of the one of the focus areas for us where the team this year that we're going to be focused on.
Our next question is from <unk> Desilva.
Roth capital markets.
Steve with your question Hi, Rob Congratulations on the progress here in the first year. So.
So I was curious in the industrial market, how you were able to pull in that program a year was that a customer driven or was it your technology advancing faster I'd be curious on that.
Hello there.
Also in similar Poland's B.
Motive market versus the industrial.
Thanks.
Yes, sure happy to so first of all.
It's both.
So we're obviously excited to continue to make progress on the collaboration opportunities, we have especially on the $10 billion of existing industrial metrology automation market and we have made significant progress in icon in the past quarter as I mentioned on the call.
So including defining our first product there with them so.
So it is that customer pool.
We see as a key driver for that but also in addition to that we've been able to achieve micron level precision using the same minor on chip module that we have in developing for automotive and we talked about last year. So there.
It's a combination we see the opportunity to be able to now pull that and further add.
Obviously.
We can gain better.
The efficiencies without a lot of our chip module that we have already developed.
All for automotive there to enable those applications. So we.
We continue to work with Nikon and also expanded collaboration there.
We will be also looking at it.
An additional opportunity there beyond industrial metrology.
We plan to capitalize on them.
Our next question is from Chris and Gara of Baird. Please proceed with your question.
Hi, good afternoon.
Regarding your.
Do you have what's the guidance for this year, so if I annualize the.
Quarterly run rate exiting last year and also given your commentary that you expect to 'twenty two to be backend loaded.
Any particular reason than to why we should expect to see lighter quarter. It wasn't in the first half or maybe the first three quarters before getting back to last quarter's run rate exiting 'twenty two particularly.
Yeah. Justin this is Rob so as I mentioned in the prepared remarks, our revenue comparable of both NRT and a ramp up of any stool.
Wrap up and therefore, it will be backend loaded Q3, and Q4 will be heavier quarters.
Hi.
From a development milestone.
Our next question is from Joe Moore of Morgan Stanley . Please proceed.
Yes.
Your question.
Great. Thank you.
To the extent that you talked about scaling up peers you are.
Manufacturing volume capability towards there.
Sort of lower volume applications that you're manufacturing floor, but can you scale manufacturing what kind of capability.
That will bring you.
We're obviously working through.
With our supply chain to scale manufacturing capacity. So what this really means is a couple of areas first of all we're going through scaling up various too in terms of.
Capability later this year.
Driven with our supply chain.
Earlier on the call.
But.
Also we're going to be leveraging areas to launch to deploy to our customers that are looking to add.
Do their actual deployment later this year.
End of this year already so this is.
The platform and what this really means for US is that if you look at if we continue to execute we believe that momentum carries us through to actually.
Continue hitting our target for 2020 for volume production.
<unk>.
Of course to do that we have to start the scaling of that.
Throughout this year.
Our next question is from Sam Peterman of Craig Hallum. Please proceed with your question.
Hi, guys, Andrew revenue shifts away from NRG since here and more product can you talk a little bit about what the gross margin impact of that will be I think you guys exited the year over 50 per Simon.
Your stack projections.
It looks like you were aiming for over 50% again is that something thats doable.
Well as you ramp up manufacturing in pharma and others.
Yes, and then Suraj, so as I mentioned before our gross margins are expected to fluctuate.
Until we reach production in 2024.
As of now we have a mix of both product revenue as well as ordinary.
And so the fluctuations are expected to continue.
And we'll provide more updates as we go along.
Our next question is from Arden from <unk> of Piper Sandler. Please proceed with your question.
Hi.
Thanks for taking.
Taking my questions.
Really appreciate the update on the sort of leaning forward with Erez and.
No.
Not only this year, but you know as we look over the next sort of.
Two or three years.
And some of the predictions are provided as part of the some of your initiatives.
Kind of a discussion initial spec discussions.
Kind of last year.
Think of some of the projections.
And into 'twenty five and beyond.
Sure Yes. Thanks for the question. So first of all obviously, we're not commenting our financial outlooks out beyond this year, but as I said, we're seeing strong interest for our technology and plan to expand our commercial with some this year. We are on track with all of our customers that we have talked about for production and as a matter of fact, not only have we hit the milestone was the actual.
Some of those program, including on the on the industrial side that we talked about today. So overall, we're seeing a strong interest for our technology and plan to expand that momentum with Aries do I think that the interest has been quite strong and we are planning to leverage that interest and capitalize on it later this year.
We continue to execute this year, we believe we'll be in a really good position to carry the momentum for all of our programs and to achieve our targeted FY 'twenty four for volume production.
Our automotive and as we talked about earlier, we are now also able to pull industrial from $25 24. So all production volume targets are now starting in 'twenty four.
Our next question is from Pierre <unk> of New Street.
Proceed with your question.
Thanks for taking the question. So I just wanted to come back to your the second consecutive year.
Outlines.
Yes.
Conducting two additional programs through our production so.
Just to make sure.
I understand that we're a PD.
We childhood, Colombia, Colombia, you consider.
Sorry more than one.
And then when you're talking about.
We are seeing.
Many of them are treated and then when you talked about converting to Wildcat production does that mean.
Actions starting in <unk>.
Is that like putting on the planning products in mind.
The clinical milestones for this program, but beyond 2023.
Yes.
But in the past quarters. So plus of course is one of the programs on the production side there'll be a converting.
Talked about last year, which be contingent.
And make progress with <unk> and hitting our milestones with working through it together.
Through development and into production.
So it's a similar types of programs, we're talking about here in terms of.
AD programs towards production and we are planning to.
Effectively the type of program is over.
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