Q4 2021 MicroVision Inc Earnings Call
Good day, everyone and welcome to the Microvision fourth quarter and full year 2021 financial and operating results conference call.
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At this time I'd like to turn the conference over to drew Markham. Please go ahead.
Thank you Jamie I am pleased to be joined today by our CEO Sumit Sharma and our CFO on a biopharma following their prepared remarks, we will open the call to questions.
Please note that some of the information Youll hear in todays discussion will include forward looking statements, including but not limited to statements regarding our product development testing and performance comparisons to our competitors' market opportunity potential product sales in future demand business and strategic opportunities.
Customer and partner engagement projections of future operations and financial results availability of funds as well as statements containing words like potential believe expect plans and other similar expressions.
These statements are not guarantees of future performance actual results could differ materially from the future results implied or expressed in these forward looking statements.
We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K , and quarterly reports on Form 10-Q filing.
Filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward looking statements. All forward looking statements are made as of the date of this call and except as required by law. We undertake no obligation to update this information.
In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's regulation G for reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure as well as for all the financial data presented on this call. Please refer to the information included in our press release and in our form 8-K.
<unk> and submitted to the SEC today, both of which can be found on our corporate website at IR Dot Microvision dot com under the SEC filings tab.
This conference call will be available for audio replay on the Investor Relations section of our website at Www Microvision Dot Com now I would like to turn the call over to Sumit Sharma.
Thank you drew and welcome everyone to this review of our 2021 fourth quarter and full year results.
2021 was an incredible year in Microvision history.
Our team completed our best in class a sample.
Which is a foundation of our four products, we announced in September in Munich.
With that announcement, we solidified our OEM and tier one engagements and started aligning to their program timelines for 2025 and beyond.
We enjoy a continued validation of our core technology and revenue.
A major OEM as we disclosed last August .
Focus on Dr market for commercial and military applications.
Microvision has real world evidence that showcases our significant advancements over the competition, while being cost competitive at the same time.
Truly a win win for the industry.
We also ended the year with the strongest balance sheet in our company's history.
I expect 2022 to.
To be another incredible year in our journey and I would like I would like to update you on three topics.
First our technology platform second our go to market momentum and third our competitive outlook.
Yeah.
We continue advancing our technology platform with the introduction of our etch perception software on a dynamic new lidar product.
This is a very important extension of our intellectual property that we believe will give our adas solution an advantage over every other solution.
By creating algorithms that would output obstacles versus free space clusters with associated velocities, we expect our solution to enable Oems to significantly simplify their overall system architecture and reduce costs.
This year in Q2, we expect to deploy Lidar test vehicles in the U S and Germany, Protract testing high speed Highway pilot test scenarios.
In Q3, we expect to complete class one certification with external test facilities of our dynamic new leader.
Thank you for we expect to start strategic sample sale of this integrated hardware and software product to OEM and tier one partners.
Demonstrating our solution for a true hardware pilot system at a competitive cost will clearly differentiate us from all other lidar companies and prove why we believe we will be delivering a best in class Adas solution to the market.
To put it simply between Q2 and Q4, the performance and capabilities of our Adas solution will come into focus and be ready for OEM adoption.
Now I would like to provide an update on our go to market momentum.
We remain focused on promoting our solutions directly to Oems.
The market has heard a lot of things about so-called partnerships between Oems and other lidar companies.
As we understand these partnerships do not represent any purchase commitment for production in 2025 and beyond.
We believe being an incumbent in the Lidar sensor market does not offer an advantage if the solution that as proposed would have a vehicle resembling taxis with big notches in body styling or odd looking cutoffs in the upfront grille design.
The location of the grill reduces the advantages of a lidar sensor.
Oems and tier ones continue to seek solutions that will solve <unk> problems at an acceptable cost.
Cars have always been about style beauty technology.
Our low profile sensor with this capability to enable hybrid pallet is setting a high bar for our competitors.
We are focusing on developing our solution for Oems needed rather than height.
Our company is the only one that has delivered to a global OEM at key product with actual experience scaling for cost and reliability.
So far Oems and tier ones have provided positive feedback on our architecture and Pat.
Oems are very engaged in the Adas market.
They articulated to us the monumental shift in mobility that they are focusing on.
What technology, they need and how the path to success is still wide open.
The recent multibillion dollar transaction in the market for an Adas company is indicative of the one thing the generation opportunity. This represents for Oems and Microvision.
I am confident that our go to market strategy remains sound and that we are positioned to capitalize on the growth in demand for Adas solutions from Oems.
Finally, I would like to update you on our competitive outlook.
We've had the opportunity to present, our technology to Oems and tier ones and talk about our sustainable strategic advantages.
We have learned through these conversations that the most important thing every OEM has the ability to deliver a high cost competitive solution for L. Three and L. Two plus with the most advanced features for ensuring safety.
I can say with confidence that for every OEM meeting we have attended this.
Pacification of our sensor exceeded their requirements and specifications offered by any other Lidar company.
With our technology Oems do not need to choose between high resolution at long range or high resolution and near field.
This is unique to our technology.
Uh huh.
Our dynamic new Lidar gives the highest resolution at range and the near field simultaneously.
Our technology has additional advantages like low latency output with lateral and axial velocities all within a single system.
No other Lidar company can provide all the specification the single sensor.
Therefore, we feel confident that none of the partnerships for other larger companies are set in stone.
Additionally, Oems will also get our etch process point cloud, which is segmented for obstacle versus free space clusters.
Our hardware is also built with standard components that our scale and our not exotic.
This is a charm of our technology and IP.
We utilized automotive qualified cost competitive components.
With the addition of our Mems modules digital and analog ASIC and software can deliver the highest performance at the most cost competitive levels.
So far our competition does not meet the cost side or performance needed to achieve high speed Highway pilot features that Oems are focused on.
We continue to maintain a strong competitive edge.
I want to conclude my portion of the remarks by reiterating a few key points.
One 2021 was a very important and successful year for Microvision in the delivery of our innovation with OEM and tier one engagements real validation of our lidar and our very strong balance sheet.
Two we are gearing up for an important highway safety test track work in second quarter of this year that will showcase exactly what our technology is capable of doing.
We look forward to sharing this with you in the future.
Three we are very focused on our go to market strategy, making the necessary investment in talent sales and marketing to showcase the technology Oems and spotlight just how significant a competitive differentiator is our in the market.
I want to conclude today by saying how proud I am of our team for delivering throughout 2021, and allowing us to position well for the incredible 2022 and beyond.
I would like to now turn the call over to uninvolved, let's talk about our financials.
Thanks, Amit.
Based on the continued interest from the Oems. It is clear that the automotive lidar market is a very attractive space.
We're confident that Microvision will play a critical role with Oems and that we have a sound business model.
Today, I'm going to be spending time, focusing on two key topics.
Topic number one our business model and the resulting financial profile topic number two our 2021 financial results and 2022 outlook.
Let's start with topics number one our business model and the resulting financial profile.
My goal here is to help our investors model Microvision and build the framework of our financial profile once the company signed up a few agreements.
Let's start with slide five.
The chart on slide five represents the number of projected parts to be manufactured between now and 2030 that will include <unk> plus and <unk> capabilities.
If we assume that attitude plus vehicles will require at least one lidar sensor and LPG vehicles to have at least two.
Using this assumption and an average ASP or average selling price of $800, which was the median of ESB estimates obtained after polling several industry experts, we estimate that the cumulative revenue opportunity for lidar sensors through 2030.
$80 billion.
Let's turn to slide six.
This slide summarizes our accumulative revenue could be between $2 billion to $4 billion through 2030.
With a corresponding cumulative EBITDA profile of one to 2 billion once we're able to secure the partnership with the Oems for our sensor units to be included in their fleets.
Both these numbers are potentially conservative and arrived at by assuming the ESP to be 500, instead of 800 or every lidar sensor unit for these estimates.
We estimate that the market share of Microvision can start from 15% and gradually rise to 40% depending on the adoption by the number of Oems.
As I mentioned earlier, the end customers for Microvision will be tier ones, which in turn will be supplying the central units to the Oems.
The revenue from tier ones attributable to Microvision will primarily come from two revenue streams.
Number one hardware number two software.
Now, let's discuss the stream number one hardware revenue.
The hardware revenue stream starts once the directed by agreement had been secured with an OEM.
Our manufacturing partnership has been established between the OEM and tier one.
This revenue stream can be modeled as a gross profit sharing arrangement with the tier ones and micro vision.
On an ASP of $500, we believe that the gross profit will be in the 10% to 15% range for tier one gradually tapering off to 2030 as the hardware becomes more and more commercialized after mass production.
We believe that micro vision could be expected to share 50% of these gross profits with the tier one does revenue.
This revenue stream is expected to grow with the number of lidar units being produced and delivered by the tier ones to the Oems.
The tapering off gross profit is very typical to any hardware product in its lifecycle.
Based on these parameters, we believe that the hardware revenue stream can be estimated to contribute approximately a quarter of the total consolidated cumulative revenue of $2 4 billion through 2030.
Yes.
Let's talk about screen number two with the software revenue.
The revenue model for this stream can be expect it to be a fixed fee for every lidar unit delivered by the tier one to the Oems for the proprietary software on micro Vision's custom ASIC.
We expect to be able to command, 15% to 25% of the ESP 500. This example, as this is the software engine that controls the hardware and associated sensor fusion with radar to build the word model for the OEM.
The software revenue stream will be expected to contribute the remaining three fourth of the total revenue.
Unlike the hardware stream, where gross profit would be expected to taper off with the increased adoption of Lidar technology.
Software revenue per unit typically tends to remain consistent over time.
To summarize using these parameters, we estimate that the cumulative revenue could be potentially between $2 4 billion.
We believe that these estimates have too big potential upsides.
Number one the average ASP can be potentially higher than 500.
And number two if you add to this fan the lidar sensors that is just needed for L. Two vehicles on top off the <unk> plus an LTE vehicles, the market size increases considerably over $80 billion.
Let's talk about cost now.
We believe that the largest cost for microvision to deliver the revenue is expected to be head count.
As the business is expected to scale driven by the number of OEM partnerships as no associated production costs and related risks are expected to be assumed by microvision.
The number of partnerships with Oems is expected to be the most important driver in scaling of the engineering resources.
In addition, there may be some increases required in sales and marketing effort as the company scales of business.
As a result of this the EBITDA profile of the company is expected to quite resemble that of a typical software company.
Yeah.
With these general guidelines and assumptions, we estimated the corresponding EBITDA to be $1 billion to $2 billion.
These are less illustrative figures should help you to quantify what success may look like for Microvision through 2030.
Please note that while these are not forecasts I hope these assumptions help you understand why we are really excited about the future.
We are truly transforming micro vision's core technology to make the most prolific and advanced lidar solution out there in the market.
Now, let's move on to slide seven and eight and recap. The following three very significant ways that we believe our lidar sensor hardware and perception software outperforms the competition.
Number one the bis and cost advantages.
Number two the highway pilot capabilities, what dynamic you lidar product at low latency and high resolution at range.
And lastly, the proprietary software on custom ASIC powered by edge computing that provide free space clusters versus obstacles.
Moving on to slides nine and 10 that just give you a peek into how we're investing in the growth of our company and positioning the business as we scale the efforts with Oems and tier ones.
Slide nine shows our Lidar test vehicle, which will be fitted with our lidar technology.
Our team is working to complete the track testing in Q2 2022 in both the U S and Germany.
Slide 10 shows our investment in top of the line R&D infrastructure and labs with the latest automation and reliability testing capabilities.
Now, let's discuss the second topic I mentioned earlier that I wanted to cover 2021 financial highlights and 2022 outlook.
Let's walk through slide 12.
We finished the year with $2 5 million of royalty revenue from Microsoft.
As a reminder, this revenue is attributable to the contract executed in April 2017, with Microsoft for using our technology in there.
Display product.
No cash was received for this revenue in 2021, as we received an upfront payment of $10 million as a contract signing.
As of December 31, 2021, we had applied for $7 million against the contract liability.
During the year ended December 31, 2021 be applied $2 5 million against the contract liability with desk customer.
For the revenue outlook for 2020, we anticipate that there will be another $2 5 million revenue to be recognized this year as the remaining Microsoft contract liability winds down.
In addition, we also plan to sell some lidar sensor units for strategic sales to Oems and tier one during the second half of this year.
At the moment, we do not expect significant revenue from the direct sale of these lidar sensors.
R&D expenses totaled $24 1 million compared to $9 8 million last year.
The increase was primarily driven by the higher noncash stock based compensation.
It was $6 1 million in 2021 compared to <unk> 7 million in 2020.
Backing out the stock based compensation R&D expense on a cash basis was $18 million in 2021.
This cash R&D spend was primarily due to our investments and adding more engineering resources to ramp up our effort with the Oems and tier ones and the cost of direct materials to support the development of our products.
For the 2022 outlook on the R&D expense, we expect R&D on a cash basis to be slightly higher than $18 million in 2021.
The increase in cash R&D. This year will be driven by already implemented inflation base increases to the payroll of our non executive employees across the board in the U S to compete with the local labor markets.
Additionally, we also plan to add engineering resources as necessary to ramp up our efforts with Oems.
We expect that there may be new stock based awards to incentivize the employees following the company's policies.
An important component as we invest in our talent pipeline and motivate our employees to share the upside and the growth of the company.
Yeah.
SG&A expense totaled $22 3 million for 2021 as compared to $5 9 million last year.
The increase was primarily due to higher noncash stock based compensation expense.
It was $9 2 million as compared with <unk> 6 million in 2020.
Another reason for higher SG&A.
Increased investment in professional and consulting firms to accelerate our business development efforts and higher business insurance costs.
For the fourth quarter of 2021, SG&A expense was $6 5 million.
During this quarter, we also invested over $2 5 million in engaging professional firms consulting firms and other executive activities to ramp up efforts to promote and expand our business development and marketing efforts.
Additionally, after backing out the stock based compensation of $1 6 million from the Q4 SG&A.
Cash SG&A for the quarter was $2 5 million.
That translates into $10 million to $11 million for full year 2022.
In addition to the above for SG&A, we will be investing our cash in several growth initiatives as discussed including investments in business development in both the U S and Germany.
Cash used in operating activities for the year of 2021 was $29 4 million.
And cash used for additions to PP&E.
Capex was $2 5 million.
Higher Capex in 2021 was mainly driven by the increased R&D activities for the Lidar product development and investments to upgrade our IP and R&D infrastructure as the head count almost doubled in <unk> 2021.
We expect capex requirements to be lower in 2022 as compared to 2021.
As a company we have always thought to be very disciplined about using our cash to execute our strategic objectives.
Based on the 2022 outlook that I, just described for cash burn and our current liquidity I feel this positions us well compared to our peers, whose burn rate is three to four times spent hours.
Now, let me give you an update on our ATM facility.
Company remains very strategic and focused on the shareholder value creation.
In 2021, the ATM program was mainly used in the first half of 2021 when the company raised $68 million of net proceeds issuing 4 million shares taking advantage of the strong equity markets back then and strengthening the balance sheet.
During the second half of 2021, there were no sales of shares that were executed under the ATM program as the broader lidar equity markets, including most of our peers experienced overall weakness in the stock prices.
We finished the year with cash and cash equivalents of $115 million, including investment securities that gives us a strong liquidity position.
Given our current liquidity levels, we believe that we are well positioned to invest in some of the growth initiatives that summit and I have talked about.
Let me summarize the themes from this update call for all our investors and three key points.
Number one we are confident in our technology and looking forward to seeing it in the highway task tracked settings targeted in the next quarter.
Number two we're excited about the business model that we're working towards the strategic partnerships that we're looking to execute that could help us build a one to 2 billion cumulative EBITDA business through 2030 in the future with a high growth profile.
And lastly, number three our current liquidity position and 2022 cash burn outlook positions us well with respect to our peers.
With this I would like to open the line for questions.
Thank you and Bob at this time, we are conducting a question and answer session investor.
Investors can submit their questions within the meeting webcast by taking them into the Q&A button on the right side of your viewing screen.
Analysts, who publish research may ask questions on the phone line.
Analysts to ask questions on the phone line. Please please press star and then one.
Our first question is from Andrew Shepherd from Cantor Fitzgerald. Please go ahead with your question.
Hi, good afternoon, and congrats on the quarter.
Thank you.
Hey, guys. So my question is I'm wondering can.
Can you give us a little more color on the highway pilot feature track testing and the class one.
Certification what are some things that we can look for that will be meaningful and to determine whether.
It's going well or it's not going well.
I think I'll start with the second part first I think class one is something thats part of our core technology.
Ben at this for more than 20 years.
As we develop our systems class one is one of the foundational pieces of our team works on.
To enable that in the automotive space using a 95 nanometer laser we actually happened to have some very significant IP and patents filed for it.
Well, we're expecting to do is to execute that in the product and the dynamic view lidar.
And actually go through an external party not just the self certification process, but go to an external third party test site get the full product qualification done in preparation for.
The strategic sale to support strategic sales to Oems and tier ones is unimportant I've mentioned so class. One is just the episodic thing where we're going to go through the process. The self certification happens and of course as we go outside to a third party lab, we're going to keep everybody in the market updated through Q3, when the certification is complete.
The first part of your question you know I just think about the track testing. So dragged US thing is there is no finished theres a long period of time that you have to keep testing to whatever the Oems and tier ones. Most critical scenarios are.
We've done a lot of work to gather data from them and our team is focused on a set of scenarios that are incredibly challenging to be solved that 130 kilometers per hour to make a level III system.
For a truly highway pilot high speed hydropower system. So.
They have that focus and we continue to plan for starting that testing and by June a tranche of work is going to be done that they are expecting but what I actually expect us beyond that.
As a matter of fact five am this morning.
That the work will be ongoing because there's interesting things that they always want to know, but we have a foundational work that they feel is the most important to really differentiate our solution Lidar software hardware software solution from what they're seeing for highway pilot. So I hope that answers your question.
Yes, It does thats very helpful and maybe one quick follow up if I may.
Regarding your go to market strategy, you know in the past you've alluded to the three pillars.
And today, you kind of expand a little bit more about maybe the main one which is the direct relationships with the Oems, but I'm wondering can you maybe expand and give us a little more color on the other to the tier one partnerships and the silicon partnerships.
Specifically, what are some things that youre going to be doing to pursue those partnerships and what do you ultimately think.
Will lead to <unk>.
Securing a lot of those partnerships.
Okay. So again I'll answer the second part first.
Ultimately the.
The tier one because we were going to partner, but they are the ones that are going to keep up the product and provided directly to the Oems integrated in whatever form thats needed.
The silicon partnerships.
Are important because that enables us whatever domain controller and OEM picks that a tier one is implementing our sensor would have plug in and effectively play with it all the software stacks would have to be figured out and where you how.
How youre software goes to the stock would have to be established so silicon partnerships are important as important that anybody thats, making a level three domain controller.
That new system plays nice with it I know, it's all implemented and it's a fluid system.
Partnering and promoting directly to the OEM is actually very important and I can personally tell you that it's a <unk>.
That they want to see the tier one necessarily do not have the technology because they do not have in term R&D to go bring the best solutions to the Oems.
So therefore Oems want to see the best solutions out there to enable their technology path. So the direct.
The go to market strategy, we're doing directly marketing to the Oems bears fruit when they actually start seeing what is it what's the best technology.
And how they could actually benefit from that and create a differentiated product for themselves compared to everybody else, but ultimately as we've always said they will essentially there'll be a directed buy agreement or some sort of way to go to work, where we are going to partner with a tier one with the solution, we're providing that the OEM wants.
And the Silicon domain partnerships of course, Oems and tier ones identify that as a parallel path for themselves for domain controller, but we want to secure to make sure web that when that decision happened in parallel our solution will play nicely with it.
Got it that's very helpful. Thanks, so much and congrats again on the quarter.
Thank you. Thank you everyone.
And ladies and gentlemen, I'll now turn the call back over to antibodies.
Two rig questions submitted through the webcast. Thank you.
Thank you Jamie.
So we've got a list of questions. So let me just run through them.
First question is.
Can you give us a sense as to what level of cash you feel is necessary to support the business.
And why continue to keep the ATM open.
So let me let me answer that question as I described in my remarks earlier, our cash spend and operating activities was $29 4 million and Capex, two and a half in 2021.
For 2022, we expect this.
Cash basis, R&D cash basis to be higher than $18 million for 2022 and for 2022, the SG&A expense.
To be 12 million plus some additional investment to pursue business development and marketing efforts now.
With a cash balance of $115 million.
We have always sought to be very disciplined.
Than our competitors.
We view the ATM program is very strategic and focused on creating shareholder value.
We raised ATM in first half of 2021, when the stock prices were high for the broader light our market. We have not used the program. Since then however, the availability of ATM gives us the required flexibility when we see active and interesting growth opportunities come on.
Right.
The next question is do you have sort of a target revenue level in mind.
For when you expect to reach maybe breakeven on the operating income line or EBITDA level.
And is there a target revenue threshold that you were expecting or a timeframe they are expecting to reach breakeven.
I'll take this question as well.
As I walked through earlier in my remarks, how to build a framework for the revenue of $2 billion to $4 billion on the 1% to 2 billion EBITDA cumulatively through 2030.
Once the production commences our business model will then resemble a software company and hence as soon as production commences revenue will quickly translate into EBITDA for Microvision.
In the Meanwhile, we expect to pursue singles and doubles to strategic sales all sensor samples to Oems and pursuing co development deals.
What can we expect from the company's track testing by June 2022.
Would you like to pick up.
I think as I, just previously mentioned I think what to expect in the track testing is we have some test scenarios that the team is going to war is working on actually validating on a test track.
Additional testing as that comes along from Oems and other parties.
We will do that in Germany and in the U S. So we can create a body of work. So they can have some ground food testing data from track testing and then of course, followed that up with additional testing at their preferred test tracks.
But it's really targeting is not open ended but it's targeted to a specific test scenarios that will demonstrate why we are able to achieve level III or we can support potentially level III highway pilot features from our hardware directly.
Next question for you as well.
Our Oems thinking about the Adas market.
So I was actually pretty fortunate to be actually present, a lot of the OEM meetings.
With our business development team.
I mean, clearly said theyre very engaged their teams are very active all the teams are very responsive and engaged with us.
The broader market as well I'm pretty sure, but I think the best way to describe it as they see this as a very monumental once in a generation opportunity to.
To redefine mobility and they recognize that as we start looking towards more EV vehicles coming out the value proposition for them is shifting and therefore Adas safety is going to be a big selling point in the future for vehicles.
If all the vehicles have the same level of performance of the powertrain is not that important a company that has diesel or any kind of internal combustion engine technology as you can see publicly.
It has been stated that they are going down right there, they're seeing the sunset timeline for their technologies and battery vehicles are coming up Adas starts, becoming a sort of a main tentpole that they have to rally around.
And it is clear just sitting there and talking and looking at the activity and looking at the interest that they are very very active and they are very focused on understanding what's the best way to bring Adas solution to the vehicle and that's why the terms like cost competitive or actually ahead of your technology because the seriousness of it is also a prototype vehicles thats going to be.
Don for marketing this is production vehicles, they're looking for in the next wave. So the current wave is just more trying out in understanding the market, but the next wave of decisions I believe our focus on true production vehicles on multiple.
Our product lines.
The next question is also for you. Please sure argue and recent discussions with Oems and tier ones and do you have any RFID rfu's can you quantify in terms of top 10, Oems and tier ones that you are having conversations and.
Where those are in terms of stage of advancement.
So specifically I don't think im going to name a name, but I think like as we've said our focus is in Germany and in U S. Right now the top Oems.
In the European Union, Germany, specifically in the U S.
That's a pretty big pretty strong Universal company that you're focused on that we're focused on.
As far as where we are I think what I mentioned in a previous call was if you can look at it that the actual decision is an RFU then the hardcore work starts in early 2023, Q1, I suppose I think I said that and in the meantime, what we're doing right now in 2022 as they are evaluating solutions. So crack testing data what we can do for our product was uniqueness about it.
Are we going to be cost competitive with the.
The strategy is going to be for manufacturing who's our silicon partner all of those kind of evaluation and sort of like the homework before you actually start going towards the decision is what we are in the middle of and so I'm just can say that in general, but I think that's one of the Oems are concerned I think we rather not mention names. This call, but you can imagine our our expansion plans in Germany to be closer to the.
Oems out there and of course in the U S. We've said that publicly so that's the universe.
Thank you.
The next question is also for you Mike.
My sense in the industry right now is that Oems will soon be making decisions on lidar for production for the years 2024 or 2025.
Is that your understanding as well.
So I think the.
The data that we have so far I think the next wave of production ready vehicles that are high.
The high volume high volume compared to like the numbers that we have in our in our corporate deck to support that is 2025 and beyond as you know under Bob mentioned right. We're modeling it out to 2030, but for model year <unk>.
Out there is what it is.
Decision timelines are right now.
Yes.
I'll take the next question.
This is well Microvision final sale the two tier ones.
So as we discussed during our go to market go to market strategy discussions this is Ed.
An important piece of our business model.
Directly marketing our solution to Oems to secure a directed buy agreement once that secured our lidar solution becomes a part of the broader Adas solution that the tier one is applying to the Oems.
We're not going to assume production risks and costs as tier one has already commercialized the broader Adas solution.
Our lidar product will become a part of it this.
This is why one of the competitive advantage of our product because our product will fit in within the requirements of what the Oems looking to do to build award model.
We're not seeking to displace a tier one or the oem's desire to control the camera module and other non lidar sensor perceptions.
Next question for you.
Your software run on chip platforms, like Qualcomm and Nvidia or is there another appropriate architecture.
I think that's also in the corporate deck, we put out our.
Can you be more clear about that one slide that's there.
Our software will actually run on our custom silicon digital SLC within our system and.
And that will take the streaming point cloud and effectively do the obstacle versus free space clustering velocities and other features but it will be within our software stack and of course, the domain controller will have the world model generation planning and maneuvering wish the Oems and potentially tier ones alone.
The domain controller of course is the big Silicon companies like Nvidia Qualcomm NXP Ti you can name it is infineon.
Infineon right those are entail of course, they're going to focus on that but our software will run on our our sourcing.
Within our system within our Lidar.
Thank you.
I'll take the next question is microvision actively pursuing or investing in non lidar technology.
This is a good one we're actively pursuing and investing in the automotive lidar at this time MVP very confident about our strategy.
We believe the $80 billion revenue opportunity potential in the Lidar space continues to be the most attractive space that will be monetize <unk>.
However, we believe that a significant value in our <unk> vertical as well.
Why <unk>.
Remains to be an attractive market at the moment there is more focus on software than hardware.
If there is an opportunity to tap into the <unk> market, we have products ready to go on that side and stand ready to support potential customers as and when needed.
I'll take the next question as well.
What can you share about your process to identify potential strategic alternatives.
So being a public company with a $150 million cash balance as of 12 31 and high average daily trading volumes were always focused on maximizing shareholder value.
We work closely with our board to address potential transactions at appropriate valuations.
Global players and Oems are aware of our capability and products in other verticals and we stand ready to support their growth opportunities as and when they come along.
But as we have previously disclosed we currently have no agreements or commitments do engage in any specific strategic transaction.
Yeah.
I will take the next question as well.
Is the focus of your spend and does it unlocked extra capabilities.
So as I discussed in the highlighted in my remarks earlier as well.
Cash is being spent on growth.
We increased our head count to 97 people as of February 2022. This is almost double of what where we were in March 2021 last year.
We're expanding our engineering business development and marketing teams in Germany, and U S to support potential customers to take us through the next phase of our growth as a company.
So that's why I feel very excited about the future.
The of Microvision.
I think it looks like we're almost out of time. So these are all the questions we could.
Get from online and.
All of the.
Investor audiences.
Thank you for your time, and we look forward to speak with you on our next quarterly update call.
Yeah.
Thank you. This concludes today's conference all parties may disconnect and have a great day. Thank you.