Q1 2022 Valens Semiconductor Ltd Earnings Call
Chief Executive Officer, and warehousing Garg, Chief Financial Officer.
Earlier today, we issued a press release that is available on the Investor Relations section of our website under investors that fluence Dot com.
As a reminder, today's earnings call May include forward, looking statements and projections, which do not guarantee future events or performance.
Statements are subject to the Safe Harbor language in today's press release, please refer to our annual report on form 20-F filed with the SEC on March 2nd of 2022 for a discussion of the factors that could cause actual results to differ materially from those expressed or implied.
We do not undertake any duty to revise or update such statements to reflect new information subsequent events or changes in strategy.
We will be discussing certain non-GAAP measures on this call, which we believe are relevant in assessing the financial performance of the business and you can find reconciliations of these metrics within our earnings release.
We will be in Boston, New York Tel Aviv, San Francisco and London later, this month and in June for Investor conferences and meetings, if youre interested in meeting with US. Please email me at investors at <unk> Dot com.
With that I will now turn the call over to get yes.
Thanks, Mark and thank you everyone for joining our call today Q.
Q1.
Fourth quarter formulated semiconductor and a very strong start to 2022.
Revenue and profitability exceeded our guidance, which shows driven by continued solid demand for our core audio video solution.
It is exceptionally strong demand for our emerging automotive products.
We reported the company's highest ever quarterly revenues of $21 6 million below 62% higher from Q1 2021, I'm proud to see if we continue to successfully meet customer demand, even introduced challenging supply chain environment and it will continue to do so taking proactive measures.
Working closely with our customers and suppliers.
As a result of the better than anticipated start to the year and our outlook for the rest of 2022, we are raising our full year guidance.
Most of this revenue increase is attributed to audio video was also essentially doubling the automotive revenue from the full year 2021 draw will elaborate in a regard to in his remarks.
<unk> is well positioned to benefit from significant growth in both the automotive and <unk> markets.
Starting with social video is in.
Mark for our <unk> solutions continued to build across all geographic regions and is expanding into new applications that we're dealing with some verticals corporate education government industrial and medical.
Companies recognize the potential of our cost effective a hyper full months and easy to install audio video solution that can be used in conference rooms, boardroom and trading activities in both hybrid and remote settings, we see a growing number of customers rolling out the next generation program.
Our newest member of the audio video products suite.
<unk> 3000.
A reminder, the VITAS recorded strong first uncompressed signals to deliver the most Chris fixture, possibly an HDMI each university.
Okay, H beam video and can transfer audio video one gigabit Ethernet USB format, all over it simple off the shelf single table.
Last quarter I discussed the role we believe this technology will play in what's called the next hormone for hybrid environments, such as work, if you're patient medical and others.
Seem to be patient and we are seeing more schools and university upgrading their classroom infrastructure to enable more advanced.
In the classroom and remote learning.
This trend is supported by the fact with the U S. Federal government recognizes the important role technology plays in keeping score operating most effectively and amazing students ongoing studies, even under the scenario that would have previously.
Calling on holds.
Congress has allocated to date, a budget of approximately $190 billion instead.
In elementary and secondary school emergency relief Esther.
Endings for kindergarten through <unk> grade K 12 schools, which include phonics for educational technology, including hardware software and connectivity.
<unk> remote in hybrid learning.
We believe the use of advanced technology will expand to deficiencies worldwide, which is an opportunity for <unk> to further enhance its business in the logging depletion market segments.
By implementing our solution, we have maintenance crews to stay open even in extreme scenarios, such as severe weather and pandemic outbreaks.
Last point last month, we announced that we joined the loaded the collaboration program to develop a solution using our technology and products in logistics USB peripherals suite two products for hybrid setups and rather interesting use case in education is university in Japan. It was looking to.
In modern classroom, where students could easily see professor on video screens from anywhere in the large classroom University also required.
True <unk> video quality as well as remote control of the in class camera.
Our audio video solution met all those requirements, while extending HDMI and USB controllers and power between PCM common resources.
Next door and displays over a single off the shelf low cost category cable.
We also continue to see demand for our audio video connectivity solutions for leading equipment vendors in the industrial and medical equipment markets.
Medical equipment space and I'm just going.
<unk> transformation due to remote and hybrid healthcare robotic surgery and deep artificial intelligence AI diagnostics.
Reputation require uncompressed high resolution video connectivity that is medical grade.
Patient isolated to ensure patient safety.
For example, the U S based center for special surgery required real time, uncompressed audio video connectivity and surgery rooms. The recently completed updating the central of the video signal transport infrastructure using wireless audio video solution.
Using these 3000 simple simple cabling was all that was needed to enable control and signal distribution easy installation and increased flexibility now.
Now this medical center can retrieve videos from any of the surgery surgical room in real time, as well as imaging such as X ray and multiple displays.
I'm also encouraged to see that our VA 7000 that was originally developed as a high speed camera productivity solution for automotive is also gaining traction in the medical industry.
Perfectly fit medical equipment targeted for use in critical procedures, it's require long reach reliable uncompressed high resolution video.
And recently several prospective customers in medical imaging has begun evaluating the VA 7000, while the sales cycle in medical is typically alone we are off to a very encouraging start and expect the medical market to become a meaningful business for balance.
We are proud of the role.
Our technology will play in improving patient care turning towards a module in the first quarter of 2022, we increased the number of Oems tier one until tools looking to integrate our newest VA 7000 ships into the platform from the 25 reported previously to modeling therapy to date.
In fact since December 2021, we have doubled the number of Oems that are evaluating our music ACI startup compliance B 7000 chips two days, we had eight Oems evaluating this solution.
Furthermore, we have also been receiving positive feedback on our engineering sample from prospective customers and partners, who have already started to evaluate the b 7000 samples. This is clear testament to the positive momentum and traction we see for the adoption of the 85 standard in the markets.
We expect the next step will be Oems, requiring MEP ace like Starbucks compliant high speed connectivity technology as part of their RF is an RF skus.
We believe we will begin to see visit requests towards the beginning of 2023, resulting in new design wins by immediate 2023, which will translate into mass production starting in 2025.
In parallel.
The larger ecosystem also continues to grow.
Earlier this week.
We announced an important partnership with omni vision, a leading tier two supplier for in vehicle commerce consoles or limit the API compliance center solution for advanced driver assistance system application Asia.
Only vision.
<unk> 7008, <unk> compliant chipset in their automotive reference design system camera modules.
Initial camera module will also include an image sensor from omni vision.
And as we speak we are demonstrating this eight five reference design at omni visions booths at the ultra sensitive choice exhibition.
Also as part of this we are leading assertion.
Turning sensor fusion into reality for Adas. It is clear the diffusion of data from various parts of central radar Lidar and camera and the integration of data in the compute unit. We've played an essential role in reliable agent systems and autonomous driving these costs.
Set of sensor fusion will require a reliable high bandwidth video connectivity solution that can aggregate the data from the value of central to the compute units, we believe with our ACI compliant solution will play a vital role in the realization of these important trends.
We are also advancing with our joint project with Stoneridge and continue to expect ramping revenue from this project in 2023 and beyond.
As a reminder, stoneridge is incorporating our VA six elements chipset into a connectivity solution to enhanced vision and safety systems in tractor trailers to address critical safety issues in the trucking industry.
The trucking industry is quite expensive with more than 2 million new heavy trucks sold each year globally. In addition to a significant after market opportunity.
Our automotive product portfolio currently comprise of the Nonsymmetric 7000 chipset and the significant B, a 6000 chips with families.
Is the one stop shop.
The in vehicle award high speed connectivity required by Oems.
Why does this importance.
Dave Infotainment and telematics data flows and card mostly over symmetrically.
To enable tomorrows automotive applications, such as Adas and autonomous vehicles manufacturers require video connectivity over Nonsymmetric links.
Total module market is looking to deploy download based product for high speed video connectivity for Adas and autonomous vehicle applications, rather than today's legacy solutions, which are proprietary and require dependency on specific vendor.
All told our end to end symmetric and Nonsignificant offerings.
Primarily beneath the ACI Starbucks complex chipset.
7000 provider, you'll get advantaged to automotive Oems looking for comprehensive.
<unk> addressing their high bandwidth connectivity needs.
Now I'll turn it over to George <unk>, our CFO to review, our Q1 2022 financial results and provide our financial outlook.
Thank you get them.
The first quarter of 2022 results and then provide our outlook for the second quarter and updated full year 2022 guidance.
Beginning with our first quarter 2022 results, we've talked on our revenue guidance achieving record total revenues of $21 $6 million, an increase of 61, 8% from the first quarter of 2021.
Q1, 2022 gross profit grew to a record of $15 3 million from $9 5 million Donuts in Q1 2021, an increase of 62% third quarter 2022 gross margin was 71, 4% similar to last year 71, 3%.
non-GAAP gross margin increased to 72, 1% up from 71, 8% in Q1 2021.
The better than anticipated gross margins were driven by favorable product mix in audio video as well as the increase in automotive gross margin from prior quarters as this business begins to scale.
In addition in Q1, we enjoyed the benefits from sales based on today's higher Asp's.
A portion of the cost of goods will still based on previous lower pricing.
Operating expenses in Q1, 2022 with $22 6 million.
From $15 $7 million in Q1 last year.
The $6 $9 million increase was mainly due to an additional 3.3 dollars $7 million in research and development expenses, representing 54% of the total yogurt year increase in Opex.
Demonstrates our continued investments in expanding our product offerings to address the business opportunities ahead of us.
Sales and marketing expenses increased $1 $1 million due to higher levels of promotion of our new audio visual automotive products and G&A expenses were up by $2 $1 million, primarily due to public company expenses, such as cost related to D&O insurance and professional services.
Yeah.
We also exceeded our adjusted EBITDA guidance with our first quarter 2022, adjusted EBITDA loss coming in at $4 $1 million compared to the loss of $4 3 million in the third quarter of 2021.
Our Q1 2022, adjusted EBITDA was $6 $1 million better than the midpoint of our guidance of $10 $2 million loss due to our island than expected revenues and gross margin as well as the fact that most of the better than internally projected operating expenses related to certain R&D.
Spencer that were deferred from Q1 into subsequent quarters in 2022.
Loss per share for Q1, 2022 was <unk> 91, 6% lower than Q1, 2021, which was 93 cents per share.
Q1, 2022 is calculated as the net loss of $5 $1 million, which includes an income of $2 $6 million related to food value of forfeiture should divided by 97 2 million shares Q1 2021 countries.
A loss of $10 $1 million divided by $10 8 million shares.
The non-GAAP loss per share for Q1 2022 was to send based on the net loss, excluding $3 $1 million of stock based compensation and depreciation expenses divided by the 97 2 million shares.
The iron number of should outstanding is the result of the conversion of our preferred shares into ordinary shares.
Shares issued as part of the transactions related to our listing and options exercised into shares during the period.
Turning to the balance sheet.
We ended Q1 2022 with a strong balance sheet with cash cash equivalents and short term deposits of $166 million and no debt.
As we stated in the past, we intend to use our strong balance sheet to fund the development and commercialization of next generation products as a reminder.
For new products, the time from design initiation and manufacturing I'm Kimi generates revenue can be lengthy typically.
In three years in the audio visual market and up to five years in the automotive space.
Inventory increased by $3 million from the end of 2021, driven by two main factors first the anticipated increase in the number of chipsets, we intend to sell this year and second.
The constrained supply chain environment resulted in higher cost materials and services from our supply chain as well as the need to place longer term purchase orders and the crude oil inventory to serve our customers' needs on a timely basis, considering the strong backlog, we believe the $12 five.
$6 million of inventory will be consumed during 2022.
Now I would like to provide our guidance.
For the second quarter of 2022, we expect revenues in the range of 21 $6 million to $22 million.
We expect gross margins to be in the range of 66, 3% to 67, 3% and adjusted EBITDA to be a loss in the range of $9 eight to $8 $8 million.
For modeling purposes. Please note that as of today, we have $97 2 million outstanding shares as Gil said earlier, we are raising our guidance for the full year 2022, we now expect revenues to range between $86, five and $88 million up from $83 million to $85 million provide.
And in March.
Further increasing demand in audio video and the continued expansion of article noted revenues, which we expect to essentially doubled from 2021 drove our 2022 projections we.
We expect gross margins to be in the range of 66% to 67, 3%.
New gross margin range is up from the previously guided range of 65, 5% to 67, 2% we are.
So improving our projected adjusted EBITDA loss to be between 37 to $35 5 million up from a range of $38 four to $37 eight millions of it all we will continue to invest in enhancing our current product offering and developing and commercializing.
<unk> next generation products.
Summary, Q1 was a strong start to the year positioning us for a better than anticipated 2022, as we look further out we are seeing growing demand and adoption of our next generation connectivity solutions in multiple industries together with a robust balance sheet. This should further business to breakeven and be.
John .
I'll now turn the call back to Jim for his closing remarks before opening the call for Q&A. Thank.
Thank you Dror.
Our continued success demonstrates once again why we believe <unk> is well positioned to create value for our stakeholders.
Vanessa operates in two large and fast growing addressable market automotive and audio video second bolus enjoy a first mover advantage for its wireless high speed connectivity solution over a simple and low cost infrastructure by setting industry standards.
Sprint did the audio video market, having established our leadership position in audio video and we're now replicating this success in the automotive market.
Our business model offers compelling financial metrics.
Sockets semiconductors company, we're driving environmentally responsible growth.
I would also like to take this opportunity to thank our incredibly talented team of employees around the world for their exceptional dedication and execution.
Made it very impressive start of 2022 possible and I am confident that they will drive continued success operator, I would now like to open the call for questions.
Okay.
Thank you.
Ladies and gentlemen at this time, we will begin the question and answer session.
If you have a question. Please press star one if you wish to cancel your request. Please press star two if you are using speaker equipment currently with the handset before pressing the numbers.
Please ask your question in a loud and clear voice questions will be pulled in the order. They RSC. Please standby, while we poll for your questions.
The first question is from.
<unk> Malik of Citi. Please go ahead.
Hi, Thank you for taking my questions and good job in raising the full year guidance and I have two question.
Dror drove that two to 3 million increase in <unk>.
And then people that the annual guidance can you break that out.
We can argue with you.
Awesome.
Sure. Thank you very much.
For the question. So this is we raised the guidance for the full year.
And I would say to us.
The major contribution for this increase is mainly come from the biggest state while we still see that we're going to double.
Motive revenue compared to 2021, if you remember last year in 2021, we did $8 million into Motiva, we assume that we're going to double this year, but the main change in the guidance for the revenue for this year supposed to come from the ODP computers.
Great and then you commented that the gross margins on the auto side are benefiting from higher Asp's and I just wanted understand what is the.
The assumptions, you're making on the pricing.
For the full year as we continue to hear a foundry.
<unk> pricing even into next year. So what is what is the how are you thinking about it.
In your full year guidance.
Hey.
So it's a question that involves both the.
Price adjustments or price increase that we see from our supply chain vendors and the price adjustment that we've made shortly after our customers. So.
Let's start with the supply chain of price adjustment of price increase.
I would say to us unlike what we assumed last year in 2021, and primarily in Q2 Qs in the third quarter of 2021.
Today, we see more kind of an off price increases from our supply chain vendors.
At the same order of magnitude that we've seen last year.
I remember starting from <unk> January this year, we implemented the price adjustments to the price increase.
So our customer to compensate on what we've seen with respect to our supply chain and part of this price increase also referred to deal to Blue chip customers.
I must admit that it occurs.
Current circumstances, we don't believe that the price will go down in the foreseeable future. It doesn't seem like that so I believe that we reach some kind of a status quo that I believe that to be with us at least.
Through the end of 2022.
Yeah, and one last one forgive me and get in the market.
Auto peers have talked about an inflection in second half and in autos.
Okay.
Video or Qualcomm I.
I understand you guys have.
Do you have incubation time Paul.
Thank you chip.
How are you looking at the auto market do you also see some.
Inflection happening in second half and into next year.
Yeah.
Well.
Can you. Please elaborate the question I'm not sure I didn't understand the question yes.
I'm, just trying to understand the trajectory of King.
Auto sales are you seeing second half meaningfully higher or I'll get the workforce back into next year.
Actually yes, we did.
That makes perfect for the questions I think it's very important to elaborate here.
We see D a.
Deepa lens solution for this market is something that it doesn't matter whether it's in with your other debt they will need to transfer data from sensors to D. C. So would ever be.
Ecosystem, you mentioned with the one when we believe it's most of them would need us to complete the solution now there is in our as you know in our market the times are not fast.
In automotive, it's slower than the audio video and the time it takes between.
The design win to when Youll see the not the big numbers the ramp up is longer.
So if you're looking at whether in the second half of 2023, we will see.
Ramp up from those numbers then the answer from me.
The answer is no if looking for whether we are going to continue with the ramp up with the existing we think the answer is yes.
I hope I answered you.
Got it thank you.
Maybe just to add two to answer given Senate.
If we if we take a.
2022, as a reference here so.
I just mentioned that.
We do believe that we're going to double the revenues from automotive in 2022 compared to 2021.
In this year by the way 2022, a steel most all I would say all of the revenues that we anticipate will come mainly from the business that we have with <unk>.
We continue to see the deployment of our chipsets in more and more models with.
These Oems and as we mentioned in the past. We also have the projects that will run together with the trucking company called Stoneridge, We mentioned that we anticipate the production ramp up at the beginning of next year. So I can say that everything is progressing.
According to the plan it seems on track with respect to the.
To be in mass production production and currently these are the two main projects that contribute to our 2020 to put too much revenues.
Thanks Charles.
The next question is from Rick Schafer of Oppenheimer. Please go ahead.
Thank you.
Congratulations.
And so maybe my first question, if I could giving them congratulations from my observation partnership you highlighted on the call.
I believe you only began sampling their last quarter and <unk>, but I could be wrong.
Was that a long a longer stay.
Ending relationship or is this an indication of how fast future design wins could could happen.
Well I think the answer is both.
We know those companies for a while but the time it takes once they see the cheapened once they see that it's working.
Then it was really really fast.
I will say, the convincing stage looks shorter and shorter and.
People.
They see the concrete of how these chips sold the real problem P&C installed their future problem of powder delivered data from sensors to the computer the convincing time looks is shrinking from a from a customer to customer as you know there is not the first one.
Who are committed to us.
On the EPA fine, but definitely the Omnivision was very encouraging and we're very happy about it.
Oh, Thank you thanks for that color and maybe for <unk>.
Believe you came into this year, which was $78 million or so in backlog.
I'm curious if you could kind of update us on where backlog is now maybe give a sense of how that split.
Between.
And Ah AP and auto and.
And how much of that I don't know if you see how much you can share, but how much of that would be would be shippable.
Let's say this year.
So I would say that we continue to see strong bookings and backlogs that are better than our internal projections.
I would say that our backlog remains robust contributing to our increased forecast for this year 2022. This is part of the reason that we raised the guidance to date.
We see the progress in the booking and the backlog in both <unk> and the two noted.
It is very encouraging and it's very positive trend.
And I would just say that we are already starting to see backlog that is scheduled for shipment in 2023 that further increase our confidence in our revenue growth trend. So we.
We feel very confident with respect to 2022.
And we start to see more and more activities for the first half of 2023.
Thanks, John and maybe if I could sneak one more in.
And I'll revisit the gross margin question, particularly as it pertains specifically to auto I know you talked about that's improving the scale.
And I know you also mentioned that you think prices are pretty stable here pretty firm. So does this change your long term target.
For auto for gross margin for that segment over time. Thanks.
So I would say that.
In a way it changed a bit.
The revenue.
Projections that we see part of it is reflected in the call. It in the guidance that we provided today and we are now.
Which I understand and analyzing what would be the long term impact.
All of this.
Increasing prices.
Respect to gross margin you know.
I think that what we see two data to motive and we see some improvement in due to merger gross margin as well. It's also part of the fact that we see ramp up in volume and we see that the business has scale and Thats one of the outcome of this increasing volume is the improvement of gross margin the semiconductor business.
Having said that if you remember the basic of our business. You know you remember that we are dealing with audio video and automotive both of them are growing very fast, but still we anticipate that automotive business will grow faster than the OTT video.
And given the fact that our gross margins in audio video or IRA and the automotive I would say that it's fair to say that the weighted average gross margin that we anticipate going forward is expected to decline a bit.
As most of it will contribute more to our top line, having said that I think that in overall the stay.
<unk> gross margin of the company will still be above.
The number that we traditionally convey to you which would be north of 60%.
Okay.
Thanks.
The next question is from <unk> de Silva of Roth Capital. Please go ahead.
Hi, good in hydro congratulations on the progress here.
So.
The revenue quick a quick question for any impact on the from the supply chain in terms of under shipping demand in the first quarter or second quarter guide or is that not an issue.
So thanks for the question.
Alright to talk again, I would say that.
By the very challenging supply chain environment.
We still manage to fulfill on a timely basis all of our customer demand.
And we're very proud about it so we have not seen any negative impact of the <unk>.
Current circumstances in the in the semi business on our business, we do not by the way.
Any any negative impact on our second quarter and to be honest.
We believe that we will also be able to fulfill the guidance the revenue guidance that we provided.
To date, I think that we navigate successfully with our vendors.
So we managed our inventory level is the right way, having said that it comes with some issues that we've mentioned in the past today, we see a longer or extended lead times.
Our supply chain vendors.
Obviously, we add to extend our lead time to customers and right now we don't see any programs in this space, we talked about the price adjustment with the price increases that we've received from our vendors that we pass onto our customers and more than this.
You see that we had to increase our inventory.
So we just reported that we increased the inventory by $3 million compared to the end of last year part of it is obviously the fact that we intend to sell more this year. That's part of it is because.
Our <unk>.
And those of our suppliers are telling us that they don't see any recovery in the lead time. Therefore, the recommended we will place longer purchase soldier and will commit to capacity and again, it's part of the penalty that we pay today.
Every year our centers.
Thank you Dror and I would like to hear a sentence. This also created a kind of an opportunity because in order to be on time and all of that our customers would not suffer from what happens in the world. We had to tighten their relationship in defense of discipline of giving the forecast and even giving the orders and at the end of the day, we see you have to.
Some benefits even in things and actually we did.
And I think this also created some I would say increase and the intimacy between the companies the supplier as a supplier to them as a customer.
Okay, well that sounds like really good execution through a tough environment.
On the the Avs business.
Can you talk about what the content opportunities for you in our system pre and post Covid I'd imagine the hybrid systems that are coming out of post COVID-19 have many more peripherals attached displays Mike. So forth, maybe you can give us some order of magnitude of how much that content per system has increased and the designs that are coming out post COVID-19.
Sure.
As I said I guess in one of the previous first it's a great question and thank you for the question I want to actually give them the opportunity to elaborate a little bit.
The common created.
New phenomenon some of them will not expire of the Colgate I believe for instance, working from home will not expire the hybrid indication is just increasing after the COVID-19.
<unk>.
The phenomena of fourth called a hub a huddle room that creates for us great opportunities for <unk> extension and other extension.
All of them are post COVID-19 phenomena that.
Create.
And also some in the U S.
<unk>.
Product and some of those products require new chips from us.
Were not in our plan.
I would.
Actually we did we did give some.
No.
The information in the past about future development of future products and they will.
We see especially in the extension actually all of them require expansion another thing, which happened after post COVID-19 is that we see more and more security for automotive chips to find the ways to the up to the audience lead the world.
Some of the expansions that would be needed. The automotive solution are very suitable to give solution for <unk>. So yes be paid.
Post COVID-19.
<unk> effects of something Thats catheter and the covenant will not expire.
And some things, which gave them new thinking.
I believe we'll never change it back.
Hopefully I answer you.
That was great. Thank you.
And last question, if I can sneak it in.
I presume trucking is included in auto correct me, if I'm wrong and I'm curious what the timing of that revenue is if it's already contributing and more importantly, as you do the asymmetric application, which is very abundantly clear how valuable you are in terms of the.
Backup camera does this symmetric product gets swept in there because the customer wants a single.
Platform across the two.
Okay.
Maybe I'll take it so with respect to these to the revenue maybe to give you the.
How we build our revenue to date.
As of today, the product that we sell to the market as the 6000. This is the symmetric solution right. Now this is the product that we sell into.
This is Ben.
We talked about the numbers and this by the way.
St product.
We operate will be deployed as part of the overall solution to the system that would be deploying the trucks with some reach for the connectivity of the rear camera display in the dashboard.
And I believe that this this product will be the main contributor to the the iron ore of our automotive business at least through the next two to three years.
<unk>, we assume that the VA seven thousands which provides the nonsymmetric solution. This is distributions for the sensor to <unk> connectivity. Only then we will start to see significant ramp up of revenue coming from this product.
Okay. Thanks for Thanksgiving.
The next question is from Brian Dobson of Sheridan.
Please go ahead.
Hi, Thanks, so much for taking my question.
So maybe you could just touch on on your partnership with Sumitomo.
Could you elaborate on some of the opportunities that that relationship for the 14th.
Okay.
So first of all thank you for the question Brian .
<unk> tomo.
It's another good example of the way that the momentum that we see for <unk> in the market.
These new standards of a fine.
We see that more and more players from different disciplines are joining this.
Joining this journey.
So Tom all electric being.
The leader the world's leader provider of cables honor in vehicle honest also realize that they need to be part of this ecosystem. So this is the basis for the collaboration between somebody telling the lens, we announced it in the previous quarter.
Sure.
And by the way semi tomo is one name that we mentioned in the past Omnivision joined this policy.
This week, but also want to mention auto companies like mobilized Elgin taxonomy all of them are good evidence to the to the very strong momentum that we see for <unk> in the market.
Great excellent and then just following up on the trucking market as it pertains to retrofitting existing trucks do you think you can give us.
A picture of how large that market opportunity.
That opportunity is.
Thanks for the question and truck is very important and we see.
As a real opportunity for us and I will elaborate in a second why it's a big opportunity, but I will answer first the question.
There are 20 million trucks that are in the world.
More than 2 million new trucks every year.
And one of the Phenomenons of truck and like a car. That's when someone has a traffic keeps improving it even when it's holes because it's a safety thing and because of other reasons. So exited unlike other markets where people would put money in their car only in the first one or two years and trucks, it's different and B.
Second thing is that we are touching here.
Safety think which cost money, which cost money from from <unk>.
A view of insurance and the kind of cost of accidents.
In trucks, which is very very expensive.
So we're speaking about a market of more than 2 million new.
Trucks, a year plus after market of over $20 million moving trucks at the moment.
Great. Thank you very much.
Is there any additional questions. Please press star one if you wish to cancel your request. Please press star two please standby, while we poll for more questions.
Okay.
There are no further questions at this time.
Mr. Bernstein would you like to make your concluding statement.
Yes. Thank you very much for all the questions and for all your attention to <unk> and we hope to hear from you again in the next quarter and we hope to keep surprising you with good news is all the time and.
While the macro thank you.
Thank you. This concludes the Valens semiconductor first quarter 2022 results conference call. Thank you for your participation you May go ahead and disconnect.
[noise].