Q4 2021 Otonomo Technologies Ltd Earnings Call
Good afternoon, ladies and gentlemen, and welcome to be attained them at Q4 end of year 2021 Conference call. Please continue to stand by your conference will begin shortly.
[music].
Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the attained a Nike So end of year 2021 conference call. At this time, all participants are in listen only mode.
Will it be a presentation followed by question and answer session at which time, if you wish to ask a question you laid to rest Alpha live I wanted you tend to fade.
I missed it budgets at your conference call is being recorded today.
I would now like to hand over to your Speaker me always Segal M. S. I O. Please go ahead.
Thank you operator, and thank you all for joining US today welcome to turn them on fourth quarter and full year 2021 conference call before we begin I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe Harbor.
Statement outlined in today's press release also pertains to this call. If you have not received a copy of their release. Please download one from the Investor Relations section of the company's website.
Today's call will be accompanied by a Powerpoint presentation. You are welcome to view the presentation on autonomous Investor Relations website.
Following the call.
Play.
Of the web of this webcast will be available on the autonomous Investor Relations website. Please also note that we will present during today's call non-GAAP numbers, which our historical non-GAAP financial measures a reconciliation of these measures to.
Most directly comparable GAAP financial measure is included in our press release.
Changes in business, such as competitive technological regulatory and other factors could cause actual results to differ materially from those expressed by the forward looking statements made today the company's historical results are not necessarily indicative of future performance. Therefore.
We can give no assurance as to accuracy of a ton of those forward looking statements and assume no obligation to update them, except as required by law.
Today, we're joined by Ben Volkow, cofounder, and CEO of atone them, all Bunny Malave, CFO and Amit Hummer Executive Vice President operations of a telling them all.
<unk> will begin with a review and an update of the business.
He will be followed by Bonnie who will give us an overview of the company's financial results then Amit will share insights on the company's mobility intelligence activity since the acquisition of new era.
We will open we will then open the call for the Q&A session. During the Q&A session of the skull Ben will be joined by Bonnie Mav meet Hummer and Duran Simon Executive Vice President strategy and corporate development.
With that I'd like to pass the call over to Ben vocal Ben. Please go ahead.
Yeah.
Thank you Mary and please move to slide three in the deck.
Hi, everyone and thank you for joining go to normal fourth quarter earnings at the end of the year conference.
Today's presentation will provide the idea that this.
Summary of the use of it.
Recent business development.
Further details regarding the go forward you morbidity intelligence.
Let's move to slide four.
Looking back at 2021 progress can be seen all across the board.
Our organic growth.
Estimates in our platform and technology. So what did you think was issued.
Our go to market company growth and strong marketing engagement.
This is teresa.
Because it was a good foundation for the ecosystem.
Unique solution.
Okay.
We continue to see strong growth drive the capital.
Capital investments partnerships and acquisitions and the signal that demonstrate its always struck would you envision a redesign.
With the larger opportunity before us.
Please move to slide five.
From a growth standpoint, our revenues increased by older foliage.
2021 .
We then correct.
They initially modest revenue growth was driven by a wide range of use cases.
Customers.
Cause segment.
We believe this is a stroke.
Estimate to the potential of our business model.
We signed six OEM agreement, which increased our total number of OEM agreement.
From 16 to 22.
These agreements include new OEM agreements and extensions with existing OEM partners.
Peoples does.
Two providing vehicle data.
A new generation of services and capabilities.
Sure.
The additions to our OEM partnerships in 2021 .
The number of addressable connected vehicles sports so normal.
By 25% from 40 million to 50 million.
We have partnership agreements with seven out of the top 10 automotive manufacturer.
We also added dozens of new customers engage with it.
Losing customers such as Obi I plot, where their optics.
Swarthmore David.
As you all aware, what's a normal public you who is who.
He said or not that all goes to.
To accelerate our growth and broaden our access to capital market.
Shortly thereafter in October we acquired in Euro.
In Europe provides us with several key strategic element.
Access to over 400 million additional that's it and that's a good.
<unk>.
So if the AI and analytics. They then said look bench and our ability to diversify our solution offerings.
Great.
So the addressable market and to accelerate market adoption.
In the fourth quarter of 2021 euro contributed to our revenue as expected.
We see a strong market response to the AI technology.
So this pipeline for 2022.
At least till later during the call Amit I'm here, although Europe seal and currently EVP operation, It's a noble will show more about a real morbidity intelligence.
Yeah.
Please move to slide six.
Yeah.
Finally, we are growing.
Okay.
Our employee base nearly doubled in 2021, enabling us to win key development capabilities.
Our go to market strategy.
We also added several new members to our leadership team.
The experience and capabilities we have.
To achieve our ambitious goals.
No I would turn the call over to bonding and love to provide more details on our 2021 financial performance.
Bonnie.
And please move to slide seven.
Thank you Ben.
Revenues for 'twenty, 'twenty, one or more than 40 year over year up from 394000 to $1 7 million.
Growth was driven by our new mobility intelligence activity, new customers and new OEM agreement.
We're also experiencing we also experienced COVID-19 related impacts that resulted in an increase in revenue contributed by mobility intelligence activity focused on population health.
Before I move further into the numbers I want to remind you that our non-GAAP items and smooth.
Oh based compensation expenses.
She Asian amortization of acquired intangible assets and merger and acquisition related expenses.
Our non-GAAP information is presented excluding these items.
Please move to slide eight.
I will now turn to the detailed financial results for the quarter.
GAAP operating loss was $16 2 million compared to $4 6 million quarter over quarter. The increase in the GAAP operating loss was mainly driven by the acquisition of Europe that doesn't even go where head count year over year and expenses associated with the cost of becoming a part.
Listed company.
In the fourth quarter non-GAAP operating loss was 13 8 million compared to $4 3 million in the fourth quarter of the physical year 2020.
It's too hungry.
3% increase.
This is driven by the same reasons mentioned before.
Our cost of revenues includes the close with phase two of our data providers, including the OEM or their data using our product.
And remains the same level compared to the fourth quarter 2020.
Our cloud infrastructure, mainly consist of costs related to the third party cloud services, which increased by 262% from 297000 in Q4, 'twenty 'twenty $1 1 million in Q4, 2021 due to our increase.
And the amount of data we ingest process.
Sure.
In the amount of data.
Our data consumers, which go from Q4, 2022 Q4, 2021 by more than 250%.
Our research and development expenses in our sales and marketing expenses for the fourth quarter 2021 continue to increase by 130% in 214%, respectively compared to the fourth quarter 'twenty twin mainly due to the accelerated.
Didn't work fourth row.
More than 200% in each department, including the acquisition of Europe .
General and administrative expenses for the fourth quarter of 2021 were $6 2 million compared to 8 million in the same period.
A year ago, representing an increase of over 680% year over year.
Mentioned earlier this is mainly as a result of the expenses associated with our FCC registration and the cost of the company becoming publicly traded.
They should not head count and the acquisition of New York.
Please move to slide nine.
Our cash position at the end of the year wasn't hardware and $8 1 million in cash cash equivalents and restricted cash an increase of one hardware. It at $80 3 million, which was primarily driven by proceeds received from our stock merger.
In 2022 them upon them always continue to focus on the growth in revenues OEM partnership expanded diversity in this solution, we offer and extend our partnerships, including in two new geographies.
I told them I expect to announce its guidance for 2022 at the end of March.
Now I would like to hand over to our EVP operation and the former CEO of Euro Amit will share some insights into the mobility intelligence activity over the last quarter.
Yeah.
Thank you, Bonnie and Ben and Hello to everyone on the call. Please move to slide 10.
In the next section I'll provide an update on the progress of the post merger integration of New York, The New mobility intelligence business units on them.
I'll talk about how we see it as an email just growing and how we see the traction in the market.
The rationale behind the acquisition of neurons with to create a powerful mobility intelligence platform.
Few of the connected vehicle mobility and transportation data into actionable insights.
In order to deliver increased value to our customers partners and the ecosystem.
With the neuro acquisition autonomous added a great team of more than 30 experts in data science Big data analytics and mobility intelligence with proven experience in building solutions for transportation mobility, as a service and smart city.
Please move to slide 11.
Neuron broadens and Diversifies, our data sets and enriches our mobility insight.
By adding data alerts such as mobile device mobility data demographics EV charging stations.
Mobility public Transportations and mall throughout call automotive OEM dataset.
Through the acquisition of neurons, we also owe the IV access of autonomy.
Our proprietary mobility intelligence algorithms developed by neurons and successfully deployed with customers.
We also added 11 registered patterns in the field of big data and mobility seeking out its analytics.
The execution of them out there has been completed and we are experiencing synergies and positive results earlier than expected.
We have already launched three new solution.
Focused on EV charging point operators.
Mobility as a service provider.
And transportation planning.
Please move to slide 12.
The first solution is focused on electric vehicle charging points for radio.
The platform enables operators to determine where to deploy EV charging side to maximize the return on investment.
Example, we recently signed a deal with a global energy company, focusing on EV charging station deployment.
The customer is undergoing a rapid global expansion.
One of the main challenges they have is planning the market expansion in a way that will bring the highest return on investment for each charging point deployed.
We just saw the most easy intelligence solutions based on mobility data and connected vehicles. They thought they were able to gain insights into which areas would have a higher demand for EV charging and cleansing market expansion accordingly to optimize a high return on investment.
Please move to slide 13.
The second solution targets mobility, as a therapy math providers.
The platform delivers greater visibility into the actual demand for mobility services.
These mass providers maximize ridership and their operational efficiency.
Another example of the impact of our solutions is a recent deal signed with a leader in the micro mobility space in Latin America.
This customer was acquired big data and insight in order to plant expansion and operate its fleet in cities across Latin America.
They have been using autonomous mapping intelligence solution to identify mobility popular multi modality men and areas of high demand and that's deploying their services accordingly.
Maximize ridership and optimize operational efficiency.
Please move to slide 14.
The third solution focused on smart Tvs and transportation planner.
Our platform enables transportation planners to generate insights into mobility demand pattern.
This enables them to map community needs and preferences.
And that has built the right input box here and better deployed an optimized mobile resources.
We recently signed a deal with a global mobility and transportation company consulting cities around the world on transportation system mobility management and environmental impact.
Please move to slide 15.
We are already experiencing positive results from the acquisition of New York.
Excuse significant operational results from Q3 to Q4.
We increased the number of mobility intelligence customers, we serve by 60%.
And we have doubled the number of geographies we serve.
And our mobility intelligence Q4 revenue was the highest to date.
In summary, after all first quarter together.
Can certainly see how the combination of a ton of them on your own holds great promise for the mobility and transportation sector.
This success drive us to continue our journey and to empower organization across the mobility transportation and automotive X system to drive strategic data driven decision.
Thank you Dan back to you.
Thank you Amit please move to slide 16.
Like all of them with you.
We have seen a number of announcements in the last few months promo yeah. It was sharing the data strategy.
Its impact on the future revenues in business School.
We see the continued electrification of Oems.
And the introduction of data services and API.
And we continue to see benefit of operating close to transportation and technology sectors.
Acquisition, there could be.
For example.
I'm pleased to announce that people thought the raw data and services are expected to be in the business operations and activities in the future.
We have said is when we tell our strategy.
Our interaction with this thing.
It is clear that.
Data.
Associated services are taking a central position in the growth and evolution of the automotive and mobility is cyclical.
These trends support.
Note that our vision and strategy.
So in looking at throughout 2022.
Following five strategic priorities, we will be our coastal.
Continued growth in our OEM partnerships as well as increasing diversity in the solutions, we create and go gracias we soon.
Further development of our mobility intelligence offering.
We are very excited by that.
Great engagement from the market and are building a strong product pipeline.
The three circles.
Mckinsey onto these expected market opportunity to be approximately $70 billion by 'twenty.
Our software defined cut out in the Eighty's.
Moody's data booties Vandal solution, the Liza one API one integration one data dictionary.
Close to one building and one contract.
Our strong customer facing team.
Ready to support this effort.
We have I expectations for each segment.
<unk> segment in 2022 and intend to.
Further partnerships and growth.
Demand for personalized data services is.
They said to continue to increase.
There wouldn't be a greater suppose that I personally like the ease of use cases.
Followed by reaches got the stake.
Customers value increased transparency for drivers.
Advanced mobility services.
Business growth in segments.
Such as insurance.
So services.
In 2022 is focused at.
To grow rapidly.
In the partnership Arena.
2022 is expected to be marked by the increased value and revenues generated by our current policy.
Additionally, the partnerships and collaborations are in process.
And we hope to share the development as we move forward.
This will assist us in making our vision a reality.
By extension of our market.
I want to touch upon one partnerships from Q4, our relationship with NXP.
Alex Pease.
Using hardware provider in the automotive H C.
With strong value and technology cultural position.
In this collaboration we are known.
We provide an end to end edge to cloud offerings.
We're in the normal <unk> data platform.
Orchestrate the medians of B H devices in there.
Is it in vehicles.
These devices enable energy savings privacy security cloud and data transportation cost saving we are extremely excited about this unique and innovative collaboration that is supposed to impact the market.
Please move to slide 17.
In summary is that we have signed today news to it in 'twenty.
'twenty, 'twenty, one and especially Q4.
So rapid growth now lets see Nashville and company Kpis.
Revenue grew more than 400%.
Which much of our business coming from recurring revenues.
The number of fully M agreement customers.
Vehicles.
The waived off rapidly.
We remain confident that our vision in the market.
And we remain positive on Q1 and 2022.
Thank you all for your consideration.
Married over four years.
Operator, we are ready to take your questions.
Thank you as a reminder, if you wish to ask a question. Please press star one on your kind of sign and wait for your name to be announced if you wish to cancel your request. Please press the pound was a husky once again hit star one if you have any questions or comment at this time.
We have our first question is coming from the line of Jeff's Nicolas <unk> from B Riley. Please ask your question.
Yeah. Thanks for taking my question and good to see.
The 400% revenue growth for the fourth quarter coming in above.
The guidance so I know one of the big companies early stage right. So there's a lot of different kpis.
One of them clearly being these OEM contracts six new OEM contracts signed that in 'twenty, one scenario to 'twenty. Two I think it is is what is the target that you're thinking of potentially for hitting that kpis for 2022, where you think you can add five to 10, new OEM partnerships. This year.
As a potential to do more than that as you expand or what's the thought process.
Okay.
Hi, Josh Thank you for the question.
So when we look into our OEM strategy.
I think that we will reach them.
People change it.
2022, and I will explain.
I think initially the focus for us.
On quantity.
We wanted to open the shop, we needed to have the coverage.
And it was important for us to bring as many Oems.
As possible and that's the right thing.
I think that in 2022.
We see we start to see some gaps in our coverage.
In some areas in some geographies, maybe we have to be a cause.
In some areas, maybe we missed some specific promises that we see a request in the market.
In some areas, maybe our coverage for fleets, which is our fastest growing segment is the docking.
So we will be moving more towards quality than quantity.
It's part of it we started sharing goes so the number of the top 10 Oems we have engagement suite right now they've been and we.
To get to 10.
So there'll be more emphasize on the quality of the data or the location of the data and all we see this hour although strategy instead of getting as much data as possible.
I think that the numbers of five to 10, new agreement extension to the agreement.
Is the you know.
Puck and aligns with our strategy.
But they seek those wont be just 10 agreements with every OEM and the OEM, but we have very clear target and in specific.
The marching orders for the team when they're approaching and talking to Oems.
I hope this answers the question.
Yeah, I think I got.
Got it so I guess, you're focusing more on the top 10 auto Oems, specifically, especially like the three right. So that you don't have those are the key focal points for 'twenty two.
Increased penetration there.
Yes, I think that those we believe could make a.
In fixed compared to smaller Oems.
We have some smaller OEM engagements and target, but very few two hour needs. When it comes to our data reads. So Terry.
Exactly.
Yes.
Could you what was the split between marketplace and SaaS. If you have that and I'm also just kind of curious how much of the revenue.
It was recurring for the fourth quarter or 2020 . One if you have that handy by chance.
Tied to us.
Thank you for the question Bonnie I'm going to answer it so.
Basically we decided not to.
To move.
We do not count.
And our marketplace.
On a separate it's a separate segment, we are offering all the Oems and the date of consumers that we have.
Our product offering whether it's a different use cases different.
That's our services, whether its marketplace, our licenses to the Oems or morbidity intelligence product.
Amidst mentioned on the call, but we are not giving the breakdown.
Ah down of a mixture of those and lipid.
Hum.
In terms of recurring revenues as we grow our recurring revenues compared to last quarter, where much focusing and we are building our offering now to have a growth in our recurring.
And revenues, so we will be a.
Showing recurring revenues.
And semi soft company.
Growing eight from quarter to quarter.
Thanks, and then.
Just look at what will the 20th B O with a more complete financial and so it was like.
I see.
So we are required to file at the end of April , but we are aiming to file it by our March 31st.
Yeah.
Thanks, and then so I wanted to ask a little bit so the company you've doubled the sales force right. So what's kind of the lead time to get a lot of these sales guys up to speed and.
How much revenue or as the sales team is expected to generate.
For 2022 on a per person basis like what are their kpis. How are they being paid is based on new contract revenue that they're bringing in and what are the expectations here for the new hires in sales and marketing team.
So we it's a good question. So I would say that it's very important for us to bring the people from the industry.
They're in a.
Our ability to ramp up and Onboarding.
E plus series.
Cynthia advantage.
We started with our CLO unbilled.
<unk> came to us after close to 20 years that the symptom.
Digging with data.
And the rest of the team is also people this is coming from the industry.
We brought someone from the fleet sector to lead our sleep business we brought.
Additional people with data background to lead some other engagements.
So we see people coming on board and you know going through the training and starting to be a sixth season in the rest of the month and we are working all the time to improve it.
And the team he is measure the number we'll see but I will say that we give a lot a lot of weight. These days to bookings not just revenues.
And.
Very important for our growth is very important for our future use revenues.
And the team is the largest being measured on closing abuse and get the revenues, but also on making sure that our recurring revenue.
And I hope he tends to as the question was there another part of the question.
No I think that's it and then last question for me is that I guess I'm. Just curious why do you wait until March to give 2022 guidance is there one or two.
Large potential deals that you think are in the works that could materialize in the near term that you're waiting to get better visibility on that.
Also I think last quarter, you talked about there was a potential Mitsubishi renewal agreement, but I didn't hear any commentary about that is that is it still in flux or what's your expectation there.
So we see the market is very dynamic at this point are you know we made an acquisition.
We're very optimistic and are we want to.
And you can see that we can.
Get the best of.
The acquisition and to see the synergies between the companies, we decided to wait a little bit more into the quarter and who come back with a valid number.
By the end of Q1.
It's a little bit of a disappointment for you.
But it's not far away so.
Patients with us.
Sure No problem I'll hop back in queue. Thanks.
Once again, if you do have any questions or comments at this time. Please press star one on your telephone and wait for your name to be announced.
We have the next question is coming from the line of Ryan <unk> from Needham <unk> co. Please ask your question.
Good morning, and good afternoon.
Thanks for the questions.
Some of these new OEM partners can you give me give us an idea.
How long it typically takes to onboard these new OEM agreements turn to full access to the data are we talking.
Months, typically are maybe kind of walk us through what that process looks like.
So definitely I.
And I hope you're aware the Ryan I think that for us typically.
Always you know many many Oems we have about 22 different agreements so there's.
Spread there, but it typically.
Say that again.
Engage the reader engagement with an OEM when it comes to.
The commercial discussions that privacy related discussion.
The agreement itself.
Today's six to nine months, depending on the OEM.
It used to be almost the ability I think we improved it seemed Oems are in it.
Improved and we see really six to nine months.
Afterwards, the actual on boarding of the OEM.
Usually it takes two to three weeks on OE side.
In every OEM is data that is different.
Every OEM is anonymous nation requirement.
The difference is.
When we're talking about data with PAA I.
Consensus needs to be in today.
Every OEM, it's I think decent implementation of the consent management.
On the technical side of adding a new OEM takes us two to three weeks usually.
Okay.
Can you do it once in use and you don't need to do it again, you have the OEM and on boarded.
That's the process six months then.
No.
Super helpful.
And if I could on the.
The sales side, one of those sales cycles, typically look like from engagement to contracted revenue.
A couple of quarters.
I, it's a good question I see that.
As you know we are approaching a number of industries with our data we re approach the Swiss industry.
The insurance industry.
Our approach with aggregate date, smart <unk>, it's smb's et cetera.
I see I see.
Different timelines in different industries.
And I think that whether we are talking about aggregate data like smart cities like Vips like parking solutions.
We are talking typically about.
I would say three to four months from the first quarter in theory they construct.
And you know we just closed the deal after a week now, but this was really an unusual one.
When we are talking about social data use cases they.
They like with insurance like with suites.
Many times it goes with POC sales.
So we're talking about the longer term I would say five to six months compared to three to four months.
Those are the times when designs we've seen the industry.
<unk>.
Becoming shorter.
With more maturity on I'll end with one maturity on Dod decided with better operational and he gave a sudden foundation, but those other times today three to four months with aggregate data in five to six months from first codes and so I think that agreement when it comes to us with a more complex.
So the whole data use cases I.
I hope it answers the question.
It does thanks Praful.
That's all I had.
There are no further questions at this time I will now hand over to Ben who will go for closing remarks.
Well, thank you all for joining today.
We will be happy of course to elaborate and is there any further questions with this we will wrap up for today. Thank you and good day everyone.
Ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now disconnect your lines. Thank you.
[music].
[music].
Okay.
Okay.
Okay.
[music].
Yes.
[music].
Okay.
[music].
[music].
[music].