Q1 2022 MicroVision Inc Earnings Call
Yes.
Good day and welcome to the Microvision first quarter 2022 financial operating results conference call.
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Okay.
Thank you Anthony I'm pleased to be joined today by our CEO Sumit Sharma and our CFO on about Burma. Following their prepared remarks, we will open the call to questions. Please.
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 concerning 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 the 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 . These 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 a reconciliation 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.
David and submitted to the SEC today, both of which can be found on our corporate website at IR that 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 Dot Microvision dotcom.
Now I would like to turn the call over to Sumit Sharma Sumit.
Thank you drew and good afternoon, everyone.
I'm excited to provide you with an update on our recent quarter along with a look ahead to the back half of 2022.
I'm thrilled to talk about our performance from the last quarter on our execution momentum and leadership role and solutions, where highway pilot systems.
The progress we have made over the past three months has laid important foundations, which set us up for continued progress towards our 2022 goals and beyond.
First.
We are executing on the go to market strategy outlined in January and remain on track.
We remain committed to partnering with Oems and securing directed by agreements with their tier ones to provide the technology that will enable their adas systems, which unlocked new highway safety features.
We understand that Oems are under pressure to deliver new generation safety and driving experiences that will help them differentiate their products in the market.
That's being disrupted by consumer expectations for safety and autopilot features.
Our integrated hardware and software solution will allow them to deliver advanced highway pilot safety features.
Microvision would retain the lighter hardware and perception software ownership, while allowing them to retain control over the driving experience to differentiate their brand.
We are getting aligned with their valuation schedules.
Our lidar sensor hardware is built entirely on technology and materials that Oems and tier one suppliers already know understand entrust, making it easier to incorporate into their supply chain and with predictable cost to start serious production with auto grade quality of our opto electronic products.
Our business model is built on partnering with Oems and supporting them as Lidar based Adas solutions are deployed across their fleets.
Without demo vehicles in U S and Germany ready by the end of June we expect to start strategic sales in the back half of the year.
Okay.
Second we are building momentum.
The last few months have included some important milestones in our go to market plan.
We completed as planned and important around a track testing in March in Detroit, Michigan.
Over the course of several days, we stimulated several real life driving scenarios at highway speeds.
This is an important step towards commercializing our solution as it starts to demonstrate to Oems the superior capabilities and benefits of the micro grid in hardware and software.
Through these test our engineering team was able to gather important ground truth data that will help us refine our software solution for the respective OEM audiences.
In the future, we expect to demonstrate our demo vehicles operating in full drive by wire mode, and autonomous maneuver such high speed driving scenarios.
This is a big milestone for our team and I'm very proud of their achievements.
During this phase of testing, we continue to develop new software features that showcase our product to be at the next level beyond our competition.
With our solution, we can detect wet growth surfaces that could lead to hydro planting conditions at full frame rate.
Developing new features like this that enabled detection of changing road conditions at high speeds will help develop better and safer Adas systems.
This is well beyond slower sensor fusion classification software our competitors are talking about.
This is next level feature set that none of our competitors have shown.
Okay.
The important thing to take away from this track testing at that delivering lidar data suited to high speed highway driving scenarios is fundamentally different than city driving conditions.
We understand better than most that success that high with scenarios means seeing further ahead at high resolution painting, a clear picture of what is and isn't drivable and enabling faster reaction times.
Through this testing we are demonstrating to Oems that our solution is best suited to their needs.
We surpassed their already high standards and we are in a class of our own compared to our competitors.
With this momentum we expect sample sales to start in second half of this year and our path to OEM acceptance remains on track.
Last we are positioned to take a leadership role in this space.
Over the last three months, we have been investing time and energy into how we communicate our value to Oems.
We have been confident for a long time that we have the right combination of hardware software and business model that will enable automakers to develop next generation Adas features.
Microvision will remain committed to enabling OEM success and paving the way for new hires at the high speed Highway a desk experiences.
That is our focus.
Looking ahead at the balance of 222, I couldnt be more thrilled.
The recent track testing of our solution is just one in a series of important milestones that will bring us closer to securing OEM partnerships.
We will be completing additional testing in June timeframe that puts our solution to additional highway speed highway driving scenarios.
Yeah.
We have existing plans for our product and form factors that will allow us to deliver on Oems needs for flexibility.
We will continue to work towards guiding and shaping new standards for what Lidar based Adas solutions will need to deliver to enable the next wave of highway safety experiences.
Yeah.
Before I hand, the call over to <unk>.
To go over the results and projections in more detail I want to close by reiterating that Microvision is continuing to innovate every day.
We're executing on our go to market strategy, we're building momentum on securing OEM partnerships.
Burning and evolving the way, we communicate our differentiated value to Oems and other stakeholders that are committed to improving highway driving safety just as we are.
Thank you.
What we're talking about.
Okay.
Thanks, Amit.
As <unk> discussed earlier, we're really excited about the ongoing track testing of our integrated Lidar solution with perception software.
Our goal was to demonstrate the density and low latency of our ultra high resolution point cloud by stimulating scenarios that drivers based on high base every day.
We retrofitted a new 2022, Jeep Cherokee with our latest Microvision lidar system, including our dynamic Lidar sensor and our short to medium range Center.
The Lidar data captured from the sensors was fused with additional data captured from radar sensors mounted on the front bumper of the desk vehicle.
For the purpose of these tests, the Lidar point cloud showing what parts of the road are drivable and non drivable appear on a laptop in the back seat of the desk vehicles.
But ultimately it's this ultra high resolution point cloud data along with the roll Lidar and radar data feeds that would be fused together and our custom ASIC and passed along to the Adas.
Wowing Oems to create faster and more accurate safety features along with their unique driving experience.
Now in this financial performance discussion I would like to discuss two things Tom.
Topic number one.
Let me recap what we believe the key attributes of the business model can be once the medium and longer term series production down targets, what the Oems are achieved.
Topic number to the Q1 2022 financial results and progress against the milestones.
Let's recap topic number one key attributes of the business.
The chart on slide five represents the number of projected cars to be manufactured between now and 2030 that will include the <unk> plus an LTE capabilities.
Assuming as two plus vehicles will require at least one integrated lidar with perception software and LTE vehicles to have two of those we.
<unk> cumulative revenue opportunity for Lidar sensors is $80 billion through 2030, using this assumption and an average selling price of $800.
Do you estimate the cumulative revenue profile for Microvision through 2030, we used an estimate of $500 as the ESP.
Using this number and the number of cars to be produced through 2030, we believe the revenue opportunity for microvision could be cumulatively between $2 billion to $4 billion with a corresponding EBITDA profile of one to 2 billion. Once we're able to secure the series production partnership with the tier one and OEM for.
Our sensor units to be included in their fleet.
We estimate that the market share of Microvision can start from 15% in graduate rise to 40% depending on the adoption by the number of Oems.
Our go to market strategy is to pursue Oems and then strike series production partnerships with the existing tier ones as only they have the experience to supply auto grade quality opto electronic devices to Oems.
The revenue from tier ones attributable to Microvision will primarily come from two revenue streams with the hardware contributing 25% of the total revenue.
And the remaining 75% of the revenue to be coming from the software.
We do believe that these cumulated revenue and EBITDA estimates have do big potential upsides number one the average ASP can potentially be higher than 500, especially in the initial years.
Second if we add to this the lidar sensors just needed for our two vehicles on top of <unk>, plus and <unk> the market size increases considerably.
Please note that while these are not forecasts I hope these assumptions help you understand why we are really excited about the future.
We're working to transform Microvision core technology to make it the most prolific and advanced Lidar solution out there in the market and believe that our lidar sensor production hardware and software outperforms the competition on the following three parameters.
Number one doesn't cost advantages number two highway pilot capabilities with dynamic view lidar product at low latency and higher resolution at range and number three proprietary software on custom ASIC powered by edge computing to provide free space clusters.
Versus obstacles.
Now moving on to topic number two.
Let's discuss the current quarterly performance update an update on the milestones.
We recognized $350000 in royalty revenue from Microsoft in the first quarter of 2022.
As a reminder, this revenue is attributable to the contract executed in April 2017, with Microsoft for using our technology in their display product.
Please note that no cash flow.
<unk> for this revenue in 2022, as we received an upfront payment of $10 million at the contract signing in 2017.
As of March 31, 2022, we have an an applied for $9 5 million left on the contract liability.
As previously stated in our year end results.
We expect to recognize $2 5 million revenue for the entire year of 2022 against this contract liability with Microsoft.
We expect the revenue to be higher in the remainder of this year.
In addition, we also plan to sell some lidar sensors for strategic sales to Oems and tier ones. During the second half of this year.
At the moment, we do not expect significant revenue from the direct sale of these lidar sensors.
In terms of expenses R&D expenses totaled $7 6 million compared to $4 5 million last year.
The increase was primarily driven by higher salary and benefits due to increased head count.
Inflation based salary adjustments.
For non executive for Nonexecutive employees in the U S noncash stock based compensation and higher non direct labor based expenses.
SG&A expenses totaled $5 9 million in the first quarter this year as compared to $2 2 million last year.
The increase was primarily due to higher noncash stock based compensation expense.
Higher professional services and consulting costs and increased head count and payroll expenses.
We continue to invest to accelerate our business development efforts and marketing efforts.
As we March towards achieving the milestones we laid out for 2022, we expect there may be new stock based performance awards to incentivize our employees and important confident as we invest in our talent pipeline and motivate our employees to share the upside and the growth of the company.
Cash used in operating activities for the first quarter in 2022 was $10 9 million.
This cash burn includes approximately $1 5 million of one time nonrecurring payments that impacted working capital.
Capex in this quarter was <unk> 9 million, which was primarily driven by one time investments required and retrofitting of the cars with our integrated Lidar for track testing.
We finished the quarter with a liquidity of $103 million, including investment securities.
As interest rates have ticked up in the year to date period, we have added short dated one year treasury bills to capture some ear from market and hence our investment Securities has gone up from $33 million at the end of December to $47 6 million at the end of March.
From an outlook perspective, we expect 2022 cash burn to be moderately higher than 2021, as we scale the business and invest in the growth of the company.
Okay.
As a company we have always sought to be very disciplined about using cash to execute our strategic objectives.
<unk> on the current 2022 outlook and our current liquidity, we are well positioned as compared to our peers, whose burn rate ranges three to five times our cash burn.
Now let me give you an update on our ATM facility. The company remains very strategic and focused on shareholder value creation in.
In 2021, the ATM program was mainly used in the first half 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 as well as the first quarter of 2022, there were no sales of shares executed under the ATM program as the broader lidar equity markets, including most of our peers experienced overall weakness in stock prices.
We expect to use this ATM facility as a flexible tool to fund our growth plans as and when needed.
Now as we conclude our prepared remarks, let me summarize the teams from this business update call for all our investors.
Number one we are confident in our technology and looking forward to complete additional testing and highway distract settings that are happening this quarter.
Second we're excited about the business model are working towards the strategic partnership that will be.
We are looking to execute could help us build a one to 2 billion cumulative EBITDA business through 2030, and the future with a high growth profile.
And number three our current liquidity position and 2022 cash burn outlook positions us well with regard to our peers.
With this I would like to open the line for questions.
Thank you on above at this time, we are conducting a question and answer session.
Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the right side of the screen.
Analysts, who publish research you may ask questions on the phone line for analysts to ask questions on the phone. Please press Star then one.
Our first question is from Andres Sheppard of Cantor Fitzgerald, you May now go ahead.
Hey, guys. Good afternoon, and congrats on the quarter can you hear me okay.
Yes, Andreas thank you.
Wonderful. Thank you a few questions from my end I wanted to go back to the feedback that you.
Provided in the past from your meetings with Oems in Germany.
And particularly I was hoping if you can maybe give us some clarity on what were the one or two biggest selling point that resonated most with them was it microvision has long history.
An experienced with Lidar is at a predictable cost structure is the proprietary software on the custom ASIC I'm, just wondering what stood out to them. The most in your opinion.
I'll give you my impression because I was present.
Most of those meetings.
If you take a step back what they are specifically what's exciting is a piece of technology that has pedigree there is a history to it.
It's been deployed in other fields, there is history on reliability history on successful partnerships.
The overall size of the technology and what the cost structure may look like right. That's very compelling and then if you think about it also delivers all the main feature set that they need like range resolution of range velocity.
And of course, the perception software Theyre looking for.
Implemented in Asia.
So all of those things combined you know there is a very compelling case, you know the pedigree being a foundational won a technology thats not fly by the parents know a company that did not exist a couple of years ago. We have 20 years of history, we have history working with.
Well sophisticated Oems globally.
Delivering product.
Having delivered product that went into production.
So.
No that was always gets a lot of compliments.
A lot of respect.
Got it no that's very helpful and maybe to expand a little bit about in the <unk>.
M program right. So you've mentioned you have $140 million currently available.
And this kind of gives you and you talked about this little flexibility and is a differentiator.
Your peers.
In the same industry can you give us a sense that it has.
Isn't been used since June of last year.
Can you give us any sense on kind of how you expect to use it going forward either this year or next year.
Yep. So thank you Andreas so yes, the $140 million facility, we used about $68 million of Ed last year. So about half of it is remaining.
And we kind of see this facility as a flexible tool.
Which obviously gives us the firepower to access if and when needed.
Which positions us well with respect to some of our <unk>.
Competition, which went through a stack.
So the way we expect to use this facility as asthma needed because right now I think our cash balance and liquidity levels are.
Whoa are very sufficient to handle all our investment requirements and we will only plan to use this facility as and when needed.
Permitted by the market so and that's the reason why we didn't use this facility in the second half of last year and even this quarter because we saw weakness in the overall.
Equity markets, because I think our goal is to make sure we drive shareholder value and use this facility very judiciously.
To fund our growth plans.
Thanks anyway, no that's super helpful as well.
Maybe one on on strategy.
So obviously the Tam the total addressable market for the automobile industry is quite massive particularly as the adoption of electric vehicles continue and particularly as we move up in the levels of autonomy, but im wondering is there any.
Consideration into also potentially targeting other non.
Automobile verticals. This is something that some of your peers have alluded to and again I understand that the automobile is the primary market, but I'm just wondering any thoughts about maybe expanding into some of that.
Some of these other verticals.
I think what we've said in the past and are so consistent but we have our strategic sales that we're focused on is our go to market strategy direct sales, which is what you're talking about in a more general seeding the market with our sensors for different applications from drones to.
Deliveries to smart cities I think certainly once our hardware is available that's going to be made available out there, but if you take a look at like no. Other people that are actually doing those kind of sales right now.
They are already getting a lot of pressure from cheaper knockoffs from the Chinese market and the margins are not that lucrative right. So it's the kind of like the first thing to focus on as a company right now with all our resources. All the expansion. We are talking about is to make sure. We secure the first footstep in Adas establish ourselves establish our product line.
But once the hartford's available of course, we intend to make those samples available to explore different market segments.
I have looked at this pretty deeply follower. So I can tell you like those other segments are not as big as anywhere near as big as what this market segment is they're dominated by a handful of companies. Some of them are in Germany. They have been dominating them for more than a decade as you know and you know their local low quality compared to what we're providing right. So we're providing specs that are.
Orders of magnitude more than what the next competitor is providing in that space. So simpler applications, but certainly at some point you know we are a lidar company with perception software.
If there is opportunities for us to expand into different segments and there is.
There is a compelling reason to create value for that for our shareholders of course, we're going to do that.
Thanks, Sue I know Thats very thorough I appreciate it maybe one last one for me is can you give us a little bit of.
Visibility into supply chain, obviously with everything going on.
Most companies right this isn't.
Specific to Microvision, but there has been supply disruptions as a result of the pandemic and so I'm just wondering any visibility that you can give us into that is that something that you expect to persist is that something that you see improving and kind of what are some of the things that you're doing.
Two hopefully try to mitigate some of those disruptions.
I think our supply chain team our operations team did a really good job well ahead of our with all of the supply problems that were coming up we have secured the materials that we need to meet the objectives that I have discussed for 2022 and the front end of 2023.
But as far as the detailed question, but I think you may be asking.
Our wafer for the Mems, we've already tool those up.
First as far as components are like.
FPGA is an MCU and other components, we have secured adequate supply of the risk material profile.
We've done everything possible to secure our path forward of course to the big thing that we're going to focus on shortly in the second half and moving forward beyond that is our custom ASIC.
As we go further and further along in our maturity in this product.
And engagement with our customers the supply chain issues that youre talking about rather start relieving because right now we have strategic sales with a handful of units for the end of the year and beyond that also.
We expect to expand that next year, but we have been very careful to secure the risk items, because we're too small right. So we are too small of a volume to get lost in the middle of any kind of supply squeeze that may be happening out there.
Okay.
Wonderful. Thank you so much sumit and antibody for answering all my questions and congrats again on the quarter I'll pass it on thank you.
Thank you.
Thank you Andres.
Okay.
I will now turn the call back over to antibody farmer to read questions submitted through the webcast. Thank you.
Thanks Anthony.
The first question we're.
We're getting it.
Could you provide more color on the roof Assembly of the test vehicle in the recently released <unk> video via their to Lidar units. It appears they are mounted on heat sinks can you provide more color on that also do these current units represent the final size of the unit or do you expect them to.
Shrink down further.
So that's a good question I think let's let's go back to the first part of the question right. Why are the two units Miranda think about this demo vehicle as a test platform. Our engineers can put multiple lidar. They can check for interferons. They can have a dynamics good lidar or what under what we're describing the specific video.
They could have a mid range and a short range. So youre doing lots of ground food testing.
Different versions of the product you are creating all the data that you need to create if you recall in.
September last year in the Munich show, we announced four products three of them were static view Lidar and one was a dynamic view.
And the team is working towards just characterizing everything they can to make sure that the things that we say to our customers. What is on the data sheet is what we deliver that we characterize those things adequately and we understand the CPA that we understand the variances and we demonstrated that the majority of our company.
Our dataset, so I didn't think about in that terms as far as the question about the heat, saying I think it was.
Little surprised by that I think we've talked about this before.
Current product is FPGA based which is significantly higher power and when you're moving at high velocity. It may not be that important to cool it but the structure that has been created there. We want this demo car to go into hot weather in the summer time drive a different speeds. So it's just creating a platform that allows us to do variable.
Testing and not have to worry about.
The effects of thermal.
That may come across it now of course this FPGA goes away once we transition to our digital ASIC over the next couple of years.
But this is just what you see there is just a setup for our current hardware, which is FPGA and I think the final question. We have is like the size of it.
I think when you go to the ASIC the size of the device will get significantly smaller, but we also expect as we engage with more Oems they will have some mounting.
Some little.
Customized way to Mount the device for their testing. So we expect that the housing top and bottom to change to accommodate for their needs.
And 90, 899% of everything inside of exactly the same as just whatever they need to accommodate their needs forecasting.
So what you see there right now significantly lower than the future once we go to Nathan.
Thank you so much and I think I'd just like to add I think also the reason for to Lidar units is also to collect the ground truth data for which our software team is using to further refine.
And make the algorithm more powerful.
As well so that's another reason why we are using to lidar units there.
Yes.
Alright second question is.
Can you clarify what the human driving and controlling the car and the desk track footage.
Or was it being driven by the software.
Can you. Please provide comments on the quality of the images on a laptop and a sneak peek as many investors observed in that it appears of a lesser quality than prior images at CES and the website.
This is a good question. So this is where the rubber hits. The road now. So this is actually good so if you've heard about it we've been focus on Adas.
As for level, three and lower the driver is always in control.
So the the <unk>.
Domain controller and the safety system all intervene when there is something catastrophic about to happen alright.
So what youre seeing there right now is of course within graph with data and we're showing how with our sensor with the fusion that we're doing response times to be reduced so.
You could have a driver that is safe, but you can make even that driver's safer. So think about the testing that you are seeing it's adas focused.
And the calls that I also mentioned in the future.
Expect to demonstrate a drive by wire solution, which effectively talks about win eventually.
Companies are starting to look for level four they want to make sure. Your solution satisfy this need for current Adas level three level, two plus and so on but also that that same hardware eventually can go to level four.
We're definitely going to demonstrate a drive by wire solution as well at the appropriate time, but I think it's all good news because it kind of demonstrates that we are still focused on the big market, which is adas level, three and level, two plus and level two and the future market that comes beyond that the same hardware can also support this is actually very positive for us and of course.
All of our investors and our customers.
The other question that I'd.
Like too many parts of this question I mean, if I forget one of I'll remind me again, but the question is what's the quality of the point cloud from watching the video doesn't look the same alright. So think about I think this is a anomaly.
When people are seeing.
Pictures and other things from other Lidar companies those are actually in a visualization tool as in like there is multiple points that are left in there beyond what they are saying is that even possible, which is called like Super resolution.
What we're showing there is like a live 30 frames per second.
<unk>.
<unk> resolution Youre seeing on a vehicle for example, it's pretty impressive it's extremely impressive and anybody that is in this space will say that's unbelievable the amount of resolution were getting at ranges I will let you know.
<unk> hundred plus meters going around curves.
Yes. The other thing is when you go to a test track like this there's a buildings on the side of it the fees on this idea of a highway you have guardrails and most of the time. The lidar is being fired off into open space and things are really really far away. So anything that is within the range shows up and I think the piece of it and you are talking about is kind of an open highway where there was emerging seem happening.
It just so happened and Thats seen there was nothing around there except the vehicles. So I think the number of points, we're talking about the high resolution resolution range is our key.
Thesis for the product.
Extremely hard the team is working extremely hard to make sure that we have range and high resolution that range.
So I don't think I have any doubt that the things that we've talked about from a feature set we're going to be met.
Did I Miss anything on above I think I got it all now.
I think you got it all.
Okay.
Alright. The next question is.
One of the main challenges if any of putting the lidar behind the windshield was special windshield materials will be required for that.
Yes. This is this is an important one.
I talked to Tom's answer about this also quite a lot. So this is really being determined by the OEM and tier one day will decide if they wanted in a headline they wanted in the grill or they wanted behind the windshield.
We still believe and we have strong reason to believe that that behind the windshield is we're most likely going to end up because it's the ideal place for a the right sensor with the right resolution to be there now.
Once that happens the windshield is going to need to be accommodated.
Our laser light and go through glass of course.
But most.
<unk>.
Windshields are two pieces of glass and of course as people know they have a polymer film in the middle and that's blocking so of course, a special when she has to be created with his notch cut out. This is not new to us in our existing cars that are available they have in ovarian to this.
So at the right time, I think Oregon will decide what the right location is but we're agnostic or that we can go to any location or size of small power is low.
Is rated for high temperature. So we can accommodate in all different places, but the benefit with our technology of course is being Mems based that it's very quiet right theres no winding of motors and bearing surfaces like some of the other galvo based systems that are out there and therefore, we feel confident that we will be inside the cabin and we would meet all the audible noise.
Within the cabin, which is a pretty big thing so the windshield problem.
Then to work with the Oems show them data show them the benefit of it and from there. They will decide what makes the most sense for their fleet.
Thanks, Amit.
The next question is.
Some of the other light our competitors have marketed their solution as forward D, where instant velocity as the fourth dimension can you comment on how micro vision's Lidar solution compares to this.
Yes, I think branding aside what's very important is you need range high resolution and you do need velocity alright.
You need all three of them not just one so when people have this thing they call instantaneous velocity. It is FMC W base sensors they.
They are using a doppler effect, but the resolution does not meet the requirements that Oems have already set forth.
So it is not good enough to have one out of the three or two out of the three you have to have all three of those to be a valuable sensor.
The benefit that we have is we do extraneous velocity, we look at different frames and once something is been identified that philosophy is being tracked and it is instantaneous so when things come very quickly into the frame maybe it takes like several frames to really pinpoint their velocity right, but after that we're tracking the velocity consistently instantaneous also so.
Our sensor does offer velocity, that's actually a big benefit the other benefit we have that people forget is we do axial and radial velocity tangential.
Both whereas.
Sensors that have Doppler effect only they can only do axial velocity and they can miss a whole component of velocity. So it's not as useful it is more useful to know two of those big components of knowing if somebody is going sideways.
Cutting you off you need to know that vector and to know the vector yet the note both up.
The components of the vector.
The way we are doing velocity I'm very confident it is a better way and every time I presented it every time.
Our BD team has presented it right you just get like this role of IL satisfaction that somebody that understands.
Our velocity has to be done so I strongly believe we're on the right path.
Could we do a better job of marketing, but <unk> is just the main thing I think for Oems, It's a spec that they have and they have been defining it. So we focus our messaging directly to them.
Perfect. Thank you Sumit.
The next question is some of the other lidar competitors are now, saying that the sweet spot price point for Lidar for mass adoption is in the 200 to $300 range.
What are your thoughts about that let me take that question actually from it.
So the way we think about this as the ASP is going to be determined by economies of scale. So obviously, it's going to depend upon how many units are going to be needed by the OEM, which ultimately be driven by how much discounts can we get in bye bye.
Tier, one which would be manufacturing it in terms of the wafers in terms of the confidence that would be needed to manufacture our put this unit together so.
At this point the number obviously remains to be.
Unpredictable at this point, but we believe based on several executives in several conversations that the number would be higher in the beginning but as the adoption takes up and as the products become.
Commoditize this number won't come down but at this point, we believe that.
Our estimates are based on obviously, a $500 per unit range.
And at this point, we in fact, we believe that there's going to be a potential upside because we believe that number can be slightly higher than this in the beginning and then ultimately it will taper off as the volume picks up and as their economies of scale to manufacture those units in in large numbers.
Okay.
The next question is.
One of the major competitor recently stated that they are the only lidar hardware provider certified on the Nvidia High Purion platform. They also portrayed that there would be the soul and only lidar hardware provider certified on the platform and part of the reference design.
Is that your understanding of how Nvidia is approaching the market.
That is to only have a single lidar hardware provider as part of their Hyperion platform.
Yes, I can answer that with.
All the confidence in the world that is not true I think beyond that I'm not really sure how to answer this because I don't think thats.
I think at the moment. They may have said that that press release may have happened there may have been true but.
That is not going to be the case in the future.
Okay.
I think the next question that we're getting is Microvision has a low cash burn relative to others in the sector.
You describe a bit about why that is the case.
Let me answer that question.
Go ahead Sir.
Please go ahead please.
I was going to say, yes look I think the way we are focused on solving this problem is our focus on the <unk> II plus an LP business at this point.
Look I think we all know there is going to be autonomous driving at some point, but that is several years out at this point in time, so any investment that is needed for al four and five we'll have to in our.
Our strategy will have to come after we capture the immediately monetize able revenue opportunity that exists for <unk>, plus and L. Three and I think that's one of the reasons why our cash burn is actually much lower than.
Some of the other peers as well and obviously I think it's the quality of the engineers and the ability to better I think some had mentioned about this as our pedigree right. We have two decades of experience and over 430 patents in this field. So obviously, we do not need to.
Even acquire hardware companies only at some of the other peers have been doing.
To even have that capability. So I think that sort of goes on to prove that we already have the team we already have the resources and the new how to not only make this product best in the market and also refined.
The specific features in the software, which makes our solution the hardware, even more powerful and more valuable to the Oems.
Yes, I think I'd like to add a couple more comments to it I think at base level microbes Division as a company, it's got a long history.
And.
We've had some lean years and two years ago was pretty tough. So I think like you know we just have a very good culture about spending money on things that are going to.
Youll return.
We are funded by a public market by investors. So we have respect for the money and we do not shy away from growth and innovation like I mentioned, we continue to find new software features we add them.
If any of our engineers come up with an idea that is going to yield us an advantaged. We funded so we fund things we're not on the cheap side of it but having a $150 million of Opex cash burn. These are astronomical numbers for companies that only have less than three years four years or five years of history, we are too.
Decades, we're building on so that's one of the biggest benefits, we're always going to have.
Okay.
Thank you Sumit.
I guess it looks like we are out of time, so but do you have any closing remarks.
No I just want to thank everybody for joining and paying such close attention to the company I am very excited I'm very thrilled for what comes ahead.
Thank you. This concludes today's conference all parties may disconnect and have a great day.