Q2 2022 Aeva Technologies Inc Earnings Call
Information not achievable with legacy technologies.
With aerie to our engagements are simultaneously solidifying and broadening.
We are engaged on a number of programs that span across applications and passenger and mobility vehicles commercial vehicles as well as industrial automation targeting between the 2024 to 226 timeframe.
Based on our progress, we anticipate Aries to evaluation to drive a growing number of additional programs towards production over the next 12 months.
Now, let's move to slide 11, which highlights a new strategic collaboration that solidifies <unk> expansion into industrial automation.
We are thrilled that TIK had decided to partner with Eva to bring 40, Lidar today industrial sensing applications.
Headquartered in Germany, <unk> is a global leader in logistics factory and process automation technology with major global accounts across a diverse mix of industries driving about 2 billion euros and annual revenues.
Our multi year collaboration will start with Aries do for applications within six logistics automation and factory automation businesses, which together totaled around $1 6 billion euros in segment revenues and.
A number of applications within those segments currently used to D and three D lidar, but after working with Teva for the past two years sick will expand to leveraging Eva for D. Lidar and our unique <unk> technology to deliver superior performance and automation applications that limit the use of cameras and <unk>.
For Eva this collaboration will enable us to leverage <unk>, leading market position and large sales force to efficiently scale 40, lidar across a wide range of industrial testing applications for numerous customers worldwide.
We look forward to work closely with thick toward our target startup production in 2024.
Turning to slide 12, you can see some examples of our target applications with sick.
This includes a variety of outdoor sensing for logistics automation, including ports Crane airports and mining where long range instant velocity addiction, and immunity to the Sun and Retroreflector blooming are critical advantages Eva 40 about our offers that can enable a safer operation as <unk>.
In particular, our legacy solutions achieved today.
Importantly, we plan to use the same foundational lighter on chip architecture that we have developed for automotive with adaptable software to deliver the specific performance requirements required by six diverse mix of customers worldwide.
Let's now turn to slide 14, where I will provide an update on our key objectives for 2022.
We have made great progress in the first half of the year and have completed a number of critical steps that we believe lays the foundation to achieve our key objectives for 2022.
I would like to share a bit more on each one.
First on areas to deployment in qualification with customers, we began shipping units to our strategic customers in late Q2 on plan and consistent with the timeline that we provided at the beginning of the year.
Moving forward, we will be working closely on qualification in the second half of 2022, as well as bringing up manufacturing.
Second on converting two additional programs towards production one of the two programs was met with the <unk> collaboration.
And that we are progressing with multiple other engagements as well as receiving new inbound interest in both automotive and non automotive applications.
Third on accelerating the release of our first non automotive applications.
With a sick collaborations we have further solidified our expansion into industrial automation and we also remain on track with our first industrial precision product with Nikon launching in 2024 <unk>.
Meanwhile, we are on schedule to complete development of the comment letter on chip perception platform for industrial automation by Q4 of this year, which we expect to further drive momentum in these markets.
And fourth on preparing the supply chain and processes for commercial deployments. We continue to work closely with our supply chain partners to scale up manufacturing and efforts also continue on working towards certification and automotive space.
And with that let me turn the call over to Rob who will discuss the financials.
Thank you <unk> and good afternoon, everyone I would like to review, our second quarter financial results, which are on slide 16.
Revenue of $1 5 million in the second quarter was driven by the progress on our customers' development milestones and product sales.
non-GAAP operating loss was $29 3 million in the second quarter, which reflects the combination of continued R&D expenses for product development and ongoing disciplined capital investment.
Second quarter gross cash, which we define as operating cash flow less capital expenditures.
$34 million.
As a result, we continue to maintain a strong cash cash equivalents and marketable securities position reached ordered $378 9 million at the end of the second quarter.
And lastly weighted average shares outstanding in the second quarter was.
$216 9 million.
So to summarize in the first half of the year, we executed well on our plan for 2022 in terms of both product and commercial objectives.
In the second half of the year, we aim to continue to execute on our plan and believe we have the financial resources to continue to invest to bring <unk> to market.
And with that I will hand, the call back to solution for closing remark.
Thank you Rob I am incredibly proud of our accomplishments in Q2 and want to especially thank and congratulate David team on achieving this significant milestone of delivering the first areas two units to our strategic customers.
<unk> is a major step forward towards bringing our unique mcw lidar technology to production.
I would also like to thank all of our stakeholders and customers for their ongoing support.
Looking ahead, we continue to see growing commercial momentum for our technology, our collaboration with <unk> AG is another example of the diverse and significant opportunities ahead as.
As we work towards scaling up <unk> and our protection solutions, we look forward to working with our partners and responding to the growing demand to enable next generation of perception in automotive and beyond.
Thanks, everyone for your time today, we will now open up the line for questions.
Okay. We will now be conducting a question and answer session. We would like to ask a question. Please press star one on your telephone keypad will properly in some time.
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First question comes from Anthony <unk> with New Street research.
Hi, guys. Thanks for taking our question.
Congratulations on the move to your contract with <unk> with <unk>.
You've announced a number of deals outside.
We've segmented.
I can.
Are the non auto businesses tracking in line or ahead of your initial expectations and in particular.
Any update on how you see auto versus non auto opportunities ramp in your revenues.
There on timing and relative size of each opportunity would be very helpful. Thank you.
Yeah. So thanks for the question. So first of all yes, we're absolutely excited by the win we have with <unk> that we announced earlier. So obviously, we're seeing a growing demand across the board for in auto but also in non automotive as to your question about non automotive.
As a matter of fact, it is accelerating and is really driven by a lot of inbound interest as we said with the collaboration also with Nikon and where we were able to pull that forward by one year at the beginning of this year for 'twenty 'twenty four and now with Sig. We're further establishing a solidifying that so which we are also targeting the same 2024.
Start of production. So overall were highly encouraged with our ability to really use aries too and leverage the additional growing demand.
With our customers to also qualify areas too and be able to lock in additional program opportunity right.
Right now of course with areas two are about our own chip.
<unk> deployment, we continue to see growing momentum in the market and we're looking forward to lock those opportunities in the next few months.
Great. Thank you and maybe as a quick follow up.
You provided more color on why we chose CW technology over time of flight any details on the accordion states, who I'm talking about secure.
Yeah, absolutely so.
Obviously.
From <unk> standpoint, maybe I'll give you a little bit of color on six versus cig actually as a <unk>.
<unk> strategic agreement that we have as I mentioned, we're targeting startup production in 224. This offers a meaningful revenue opportunity for Eva. So <unk> is a leader one of the foremost theaters and logistics that factory automation with major global accounts.
Across diverse mix of customers and industries. They had over 11000 employees and a large sales force, which we really plan to leverage to efficiently scale, our 40 lidar to a broad range of customers.
In general.
To give you a rough.
Also a idea of the size of the scale, we're talking about opportunities here that <unk> is already providing as a supplier and <unk> lidar sensors and <unk>.
This is for the logistics that factory automation businesses in.
That segment already has over $1 6 billion.
Our opportunity so.
With sick and they have been working with us for the past two years and we have looked at other lidar technologies and ended up deciding to go with us because of the fact that FMC W provides unique advantages, including long range measurements in some velocity and ability to actually not have things like dosing a blooming effects.
On metro sectors, which is really critical especially for outdoor applications.
We're initially focused on it and we start with Ares to work there with them and really from there.
We're looking to bring this out to a number of applications pretty much anything that the outdoor so but just to answer that question specifically sick.
Has.
As a believer in the advantages of FMC W. Similar we have seen in automotive, but now also we are seeing that further solidify into the industrial applications.
Great. Thanks, a lot for the color there.
Helpful.
Next question from Ronny with Piper Sandler.
Hi.
Thanks for taking my question.
I just wanted to ask I mean, yes.
Certainly.
From the beginning kind of unique.
Unique approach to.
Uh huh.
Later, and you're starting to see what.
Kind of progressed with different clients.
I talked about earlier on the call.
Kind of recommendation or you're able to sort of move forward.
Or sort of pulling forward some multiyear deals.
Can you can you talk a little bit more about like.
Should we see sort of further progression as it is.
Is there a broader rationalization in the industry.
People are recognizing your defense differentiated approach and should we continue to see like some.
Is that a pull forward.
Having an impact on your Florida on revenue.
Sure Yeah. Thanks for the question. So first of all as I mentioned before there is growing consensus that FMC W will play a key role in enabling next of automation are really due to the superior performance versus three lidar, but also because of the fact that we have been able to now integrate the lighter on chip and the areas too so.
So with that we've been able also to demonstrate our ability to reduce costs dramatically since they sample as I mentioned on the call over 55% right. So with that we really expect too.
Work with the Oems both in auto as well as on auto to continue to enable them to progress on the next phase of development and qualifications. We've already start shipping the first areas to units and the feedback there has been quite positive so.
We are sick and I'll spend this is one of our recent wins.
An example of the solidification expansion that we see for the growing consensus around Mcw, but also as we continue to scale up manufacturing and bring areas to two customers. We expect that to continue to drive and capitalize on the new inbound interest.
For both auto and auto applications. So we expect it to drive additional programs for production over the summer months.
Okay perfect perfect and then just a quick follow up on that.
Yes.
You started on this journey a couple of years back.
And some of your competitors are they kind of looking at what you've done.
Or kind of deeper right.
To kind of follow yard production on your approach.
Will they be able to sort of catch up or do you think that sort of.
Too far along.
Right.
Little bit more challenging for some of the.
The competitor to to.
To sort of patch update to our approach.
Yeah, No. That's a good question so generally obviously.
With M CW.
As you know it is a technology that we see growing consensus at the same time. It is a technology that is not easy.
Easy or trivial to achieve and that's evidenced by the fact that it was really the only public company, that's actually able to provide this level of technology at this level of innovation and performance to our knowledge.
Hum.
We have been able to make significant progress in the past number of years.
And also.
Be able to actually get us to a level of maturity with a b sample stage that I am not aware of anybody else, having yet so that by itself is the fruit of labors of multiple years of development and so there are certain things that you have to really do that he cannot just bypass in terms of <unk>.
Developing the core components.
And more importantly, also validating them with customers in the real world scenarios on the road or industrial settings, and all of that is time that it takes and the second is actually around technology and IP.
M CW the conventional way of doing it is very different from what <unk> done and we have been able to address some of the key challenges that anybody who tries to go.
Actually develop those ancillary technologies would face and so with that we have.
<unk> one of the largest.
Portfolio patents relevant to FMC W and we continue to.
Add on additional IP on a regular ongoing basis so.
That being said obviously there are folks now that are going towards mcw, including some of the largest players that you know when you started with vision based sensors moved to three D. Lidar and now have publicly talked about going to a mcw that's important but we also see that as validation for the.
Technology, So for US we will continue our focus on making sure that we make the best perception technology on the planet with our FMC there'll be approach and that's going to be our focus so and we hope that others follow suit.
Perfect.
That's really helpful. Thank you very much.
Next question, Richard Shannon with Craig Hallum.
Great guys. Thanks for getting me in the queue here I appreciate it.
Maybe I'll follow up on the question of your.
Partnership I didn't hear any comments about whether this was an exclusive arrangement or whether they are able to work with other.
Minor players and then kind of an ancillary question.
The technology, we're developing with Nikon seems potentially relevant to that kind of a partnership and is that something in future products beyond areas too that you might be able to use in that relationship.
Yes, thanks for the question Richard So.
First of all I'm not going to go into details of the commercial arrangement that we have first with thick, but.
And I really believe this is a strong collaboration to enable us to expand further industrial automation in terms of.
The application of course again <unk> has been.
King at.
Many of the players in the space for the past two plus years and decided to converge 40 to expanded portfolio from <unk> to <unk> 40, and decided unable to do that so that's important I think in terms of the differences between the collaboration that we already have an icon in cig.
Obviously.
Nikon is different in the sense that it's an industrial metrology for precision measurements. So there we're really focused on is to leverage our ability to achieve micron level precision for applications, which include manufacturing inspection quality inspection on the assembly lines, starting with actually automotive manufacturing aerospace and others.
Whereas with <unk>.
<unk> is about.
The scanning applications as well as outdoor and longer range sensing.
But.
<unk>.
All of the applications, we have talked about including Nikon sick and automotive applications. All use the same foundation a lot arent chip module.
With different optimizations for algorithms and software to enable us to achieve these very different performance.
Performance levels and perception capabilities, which has been critical and crucial for our ability to be able to address these very different sets of requirements and now with sick we have the ability.
Reliable qualified and really reputable partner to be able to scale, our technology as a channel partner to a number of applications and we don't have to go and make.
Partnerships with many many other.
Smaller companies to do that so that's hopefully that gives you an answer that question.
Yes, that's very helpful. Thanks for that my follow up question here.
You use this language I think since you came public more than your robot moving programs toward production.
You said you wanted to do that by the end of the year I Wonder if you could give.
Kind of a thought process of what this really means are we going to see a press release with some important milestone potentially even say named customer.
Sure.
We're not be able to do that by that by that point in time I don't know what.
What exactly toward production needs, maybe provide more clarification that'd be great. Please.
Sure Yeah, absolutely so obviously.
With.
In terms of the progress of our production. So first of all I don't want to clarify with Sig. This represents one of our two programs that we have targeted for this year towards production as I said this is a meaningful opportunity that we're working towards with targeted production starting in 224, so that that really focuses on that and in general.
Obviously as I mentioned.
An earlier question, we're continuing to make good progress with customers both existing as well as.
New engagements and working towards them to really now qualify Aries too for the next phase of development, we have already providers due to a number of customers that we're going to continue to do that and even a disposable continued to upgrade their platforms to use that and we.
Our goal is of course to continue using areas to unlock an additional program wins in the next number of months. So that's that's really where we're focused but again.
From the types of.
The two ones that we talked about it already represents models.
Great. Thanks Bruce.
Okay.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.