Q2 2023 Innoviz Technologies Ltd Earnings Call
Sirius was planned to be our initial flagship launch.
What we've said in the past that our technology was satisfied from several models and volumes within the BMW group, representing integration and additional movement with traditional models.
This includes supporting their recently announced localized development efforts of level, three autonomous driving including within China.
While all of the news about the first generation of this.
Platform with one platform is obviously exciting the bigger than yours today is around this morning announcement that we are entering an all new development phase of a second generation lateral platform for the BMW group that is built around the <unk> to central and our AI enabled perception software stack and then opportunity for a second platform with <unk>.
W.
Our first generation program included selling <unk> components and perception software to BMW. The lighter components were shipped magna the tier one on that program and then manufactured into finished lidar and shipped two big ones.
But the second generation platform that we're developing is a remarkably different.
First of all we are quoting the programme now is a tier one this means that instead of selling lateral components and only getting part of the economics, we could have the opportunity to sell the entire package, including the lighter and the AI compute model directly to the customer.
And since this new platform is being developed around the much more advanced these two lidar sensor and explain to run on our newest custom ASIC, which I'll talk more about shortly it is expected to be able to offer a much more robust perception software package, including several new AI enabled features without going into too much detail.
This stronger version of our perception software is designed to do much more than earlier versions.
One of the Best example of that is the new minimum risk maneuver all MRM software that we can that we plan on developing within W. And we planned for this more robust software to sit on the dedicated dedicated AI compute model offering more compute power than we've ever had before.
Going into this in more details in the coming slides.
BMW group has been an amazing partner for us they operate with some of the highest engineering and design standards in the industry. We have set a high bar together with a seven series launch and I believe we're both excited to continue that work on developing our next generation platform.
As part of this process BMW is making a meaningful investment in terms of time and resources and is embedding a dedicated team of engineers within <unk>. So that we can move quickly on this next phase of development.
Second generation program as planned to target a much broader range of models than the first generation program and we have a hiring full rates that should result in higher and larger volumes, we believe that lottery technology and level III driving is going to become much more common over the next decade as it trickles down from cutting edge <unk> and <unk>.
Ultra luxury models and more into mainstream vehicles. This opportunity for <unk> doesn't exist just at BMW or horse buggy, but across the entire industry.
We can see the level of opportunity that is out there in our RFID RFP pipeline level three vehicles are increasingly going to become a reality.
Next I want to introduce you to the end of this quarter, our new AI compute model. This is the dedicated compute model that I mentioned earlier as part of the solution that has been developed for BMW.
Want you to think about the core as a new base for us to grow our suite of AI machine learning powered software. It offers decentralized compute power dedicated entirely to the lighter and lighter based software solutions.
Leveraging the core we can reduce the total compute load of the central issue. This can reduce the cost of the central issue to the OEM and free up resources for other applications all by creating a dedicated if you will for the lighter and other land based solutions. This is a critical component of the BMW solution, which we are developing due to the.
A more robust perception software and entirely new application built offerings, such as the new MLM software.
Having a second complete resource should allow for more total processing power, which can unlock analysis at higher resolution and increased frameworks and with that it does the overall bandwidth and simplify the system architecture. It also separated the hardware from the central this year, adding a layer of redundancy that is critical for our level III or higher.
<unk> system.
The core is designed to be connected to the VITAS operating system discount.
This can enable a number of functions, including over dinner uptake data sharing and high definition really mapping. It also enables connectivity to dedicated parts to other sample such as the camera radar.
While we are not integrating camera radar data into our software offerings today.
<unk> is a platform it will be possible to begin working on solutions that can integrate this functionality in the future.
This gives us a path for ongoing future software product development and extensions.
I want to revisit our MRM solution.
Last quarter, we introduced the concept of the MRM too and this quarter, we announced this we have begun development of the solution with BMW as part of our offering.
As a quick reminder, the MLS system. The software that is designed to sit on top of the score AI compute model within a vehicle and operate as a backup system.
Event of the complication with the primary system, the MLM, who take over control of the vehicle offering a transition period, while the driver to retain control of the vehicle and offered the ability to safely pull the vehicle to the side of the road.
Driver does not retain control within a specific timeframe.
MRM systems are not new they have been around for several years, but historically.
They have been cover our business, we believe that operating a lateral based system should offer a key structural advantages over <unk> tomo systems, including a true three D image, along with reduced risk and low light an extreme situation as well as an environmental consideration like rain or snow.
Customers have told us that in order to be able to drive is increasingly faster highway speeds.
<unk> system likely needs to be based on a higher resolution three D sensing modality, replacing the <unk> solution being used.
With MRM solution is developed fuels AI deep learning and classic computer processing per object detection and classification landmark in lane, marking detection Eggo motion estimation path planning and maneuvering. The dedicated positive processing pipeline is expected to ensure safe execution of any need.
At risk with them.
Successfully building out this product category will be a natural extension of the success. We have already demonstrated in perception software and will help us to move further up the stack potentially offering additional incremental opportunities down the road.
The benefits of having a larger software offering are clear first that can build upon and further expand the value that a lot of our central technology brings to the table and second the gross margin profile on the software is much higher than hardware.
In the automotive end markets, where you have more than 90 million units of volume per year, you can generate meaningful leverage and strong returns on invested capital from a growing software suite.
And we're talking about the intersection between hardware and software I wanted to talk a little bit about our second generation custom ASIC, which was taped out a few months ago and is now in our best.
And <unk> as an application specific integrated circuit with a very high level. It's a custom built chip designed specifically for one use.
It's a 16 nanometer chip mixed signal automotive process design that has nearly 50 processor with multiple dedicated proprietary. This is a process that is a fixed dose simultaneously at the speed of light.
Our first generation ASIC, let's take 2009 2019 that ship has clear served its purpose having won multiple serious production awards. Since then and building a substantial RFID RF SKU pipeline for US. This is the chip that is going to into SLP vehicles. This year, but we believe the second generation chip is going to.
Take our performance of the next level leveraging several additional years of learning in R&D.
There are two key benefits of this second generation ASIC, the first because it unlocks much more range.
Taking our maximum range detection range to over 450 meters up from 300 meters before and the second is to have better resolution the more powerful chip enables us to produce millions of more points. In fact, we were able to nearly double the total number of points that we can process the second.
We can power that higher density pointed out with even better resolution than before.
Together this dramatically higher range and resolution translates into more points of data.
That data is what fuels, our AI tools, including the neural networks that are critical part of our social development.
Faster neural network training translates into better perception software better perception software can unlock new features like enabling.
Because the driver at higher speeds or operate in more complex environments.
Moving faster than competitors and unlocking features like this.
Ideas can drive higher resilient production wins rates for our sales force and higher dollar value for our software packages, all while deepening our embedded relationships with customers.
While we're on the topic of resolution I want to take one to take you through a quick trip throughout.
Through our company's history on the right hand side of the slide you can see the progress the progression of our bond cycles with time as.
As I mentioned earlier, we didnt have the first generation custom ASIC until 2019, so the point clouds, we pulled them, we're a much more limited.
And as you can see in 2020 with that vision of our first customer coupled with our improvements in the optics hardware and software we took a big step forward in 2022, we had another big leap forward with the development of this tool.
We didn't stop there.
Video Youll see on the screen as one of the latest point clouds on VW is still with the first generation EC we can.
You can see it has continued to improve since last year and it is at the point, where we are approaching high definition camera like resolution.
With the added benefits of the two or three different levels.
I am confident that once we get the second generation ASIC fully integrated we will take another major step forward and broadened the gap between us and the competitors in terms of our timeline. We expect the first samples with this new chip to shift this fall, so our customers, including Volkswagen and BMW, including our recently announced July promotion diesel.
Program partner, and we're beginning automotive quantification of the part which should be ready for mass production by mid late 2012.
And while we're on the topic I just want to make one more point.
That said there are a number of other players out there in the lateral in the lighter industry. These are still using FPGA instead of customers. It while it's true that you can build a lateral with FPGA is at interface. We strongly believe that you won't be able to scale, a lidar company indefinitely.
We tried to producing we still with FPGA is it would take somewhere between four to six very expensive fpga's, adding hundreds of dollars of cost to the finished product it would be heavier take more space with this more head and consume much more empowered and while not really matching our current performance since on a custom ASIC allow us for the power and Prost.
Assessing of dozens of channels of data, which is the source of the ire pixel rate and improved resolution I believe that our first generation customer ASIC has been a major source of competitive advantage that we have demonstrated thus far and this next chip is going to take a relief to the next level.
One of the other benefits of our custom ASIC.
I wanted to touch on is the ability to support multiple lighter configuration with just quantity picture.
We designed our chip to have the flexibility to be able to offer a wide area of configurations across all different types of ranges resolutions filled abuse and frame rates, we can with the product with only minor changes that can mostly be done through the software as a result, we can create end to end solution for a variety of use cases from four.
Longhorn commercial truck that will prolong range for highway speeds, all the way down to wide field of view static smart city applications with this benefit we can go to the market with one architecture built around our royalty cost advantage 905 nanometer based single laser singular takes a solution and fulfill.
Most end use case across automotive trucking robo taxis buses charter smart cities at.
All of the same optics same hover in the same basis.
This will enable us to run much higher volumes through the same components rapidly lowering our cost per unit.
Driving attractive unit cost economics, and delivering potentially a meaningful structural cost advantage.
Next I want to give a quick update on the new light commercial vehicle program that we announced last quarter. As you recall, we said that this program, where we are moving on a faster than normal timeline due to the fact that we're displacing a development stage competitor mid project I am happy to share that we have already begun shipping sample units to the customer with the first unit.
Towards the end of the second quarter with additional shipments expected to ramp towards the back half of the year.
Those units now with the customer hands.
Spec that you will be able to see the new test because on the roads in the coming months with our lighter offering additional tangible evidence of <unk> ongoing commercial momentum.
Moving onto our pipeline, even with the two of the platform moving from our pipeline through our awards and programs category year to date, we're still solidly in the middle of the 10 to 15 range of programs and an efficient RFID RFP process, and we still have roughly half half in the more advanced RFP stage.
And while the first half of the year has been defined by success, primarily with existing customers. We believe that the back half of the year and the fourth quarter in particular could be defined by new customers.
One interesting insight that they have to offer from some of our RFP Award this quarter as the final customer has indicated they are only considering 900 nanometer solutions and another has decided to shortlist is 905 solutions as the only 905 solutions.
For both disposals their previous experience with other solutions and the challenges they face with power consumption and resolution.
As we disclosed in the past we are working on more than five active RF skus in Poland, which is the highest level of activity in the company's history. There is appears to be a very robust level of activity all targeting the 25% to 2028 Oems want to compete on technology and we believe the next big differentiation factor.
He is going to be level III driving exactly like BMW is bring it to the roads now.
And between the programs, we've already announced and the 10% to 15 in the RFID and the RFP pipeline.
Either already won business are actively quoting new awards with eight out of the top 10 global automakers.
We will ultimately believe that this is likely going to be a winner takes most.
Kind of market the technology safety critical they are very high levels of tech differentiations and declared that wins. The most business is ultimately going to have a scan cost leadership incentives that is likely going to be difficult to match.
Given the fact that most of these programs will be on their own or 10, four eight to 10 years, we believe that the major portion of the industry market share is going to be determined in the next 12 to 18 months.
With that I will turn the call over to them.
Thank you Omer and good morning, everyone, starting with cash we ended Q2 2023 with approximately $130 million in cash bank deposits marketable securities and short term restricted cash on the balance sheet.
With our cost structure being largely mature our operating cash outlays remain mostly stable during the quarter with cash operating expense roughly flat quarter over quarter and in line with our 2023 budgets.
Moving.
Our cost structure being larger.
Moving to the income statement revenues in Q2 2023 came in at $1 $5 million compared to Q1, 2023 revenue of $1 million delivered a 45% quarter over quarter increase.
On a year over year basis, compared to Q2 2022 revenues of $1 8 million.
<unk> was impacted by our 2023, <unk> with BMW, which weighed on deferred half of the year as we transition from selling larger sample units 70, just the components to magna.
Tier one for the BMW program.
That step down was most evident in Q1 2023, and since then our quarter over quarter revenue cadence has accelerated nicely with sequential revenue growth of 45% in the second quarter supported by 47% quarter over quarter increase in total unit.
Chip.
As we think about revenue cadence for the year, we expect revenues in the third quarter to approximately doubled versus the second quarter.
Driven by a combination of high NRI service revenues, coupled with additional unit volume growth. In fact, we have already secured orders for the third quarter, surpassing the revenues in Q2, and we are only in the five weeks into the quarter.
And looking forward to the fourth quarter, we expect an even more meaningful step up in sequential revenues repair Williams from improving production volumes revenue based on <unk>.
Increased shipment through new program.
Moving forward down to the income statement on the cost side operating expenses for Q2, 2023 were $34 million, an increase from $28 $8 million in Q2 2022.
Q2, 2023 operating expenses included $5 million of share based compensation compared to $4 $4 million in Q2 2022.
The increase in quarterly operating expenses compared to the last year in Q2 operating expenses was primarily due to the higher R&D expenses, mainly on <unk> II costs, a general increase in head count associated with share based compensation and facilities costs research and development expenses for Q2 2020.
Three were 23 $8 million, an increase from 21 9 million.
Q2 2022.
In the quarter included $3 $4 million attributable to share based compensation compared to $2 $7 million in Q2 2022.
In conclusion, we are delivering on the growth cadence that we outlaid.
Coming into the year Q1, 2023 was the drop we delivered 45% quarter over quarter growth in Q2 and have a line of sight to approximately 100% quarter over quarter growth in Q3.
A very strong Q4.
Importantly, we are delivering on the milestones that we have set for the company, we kicked off <unk> with BMW and the charter program is around the corner.
We just kicked off the <unk> sample phase of a second generation of Liza development for Oregon, with BMW and we are diligently going after all of the programs.
Our robust pipeline, we expect to finish the year on a very strong note with continued momentum for 2024 and beyond and with that I will turn the call back to Omar.
Thanks Linda.
I wanted to wrap up with some more good news, which is our guidance is as Don noted, we delivered 45% quarter over quarter growth in the second quarter and we have line of sight to double our revenues sequentially in the third quarter and deliver even stronger results in the pool.
And with that kind of trajectory in mind, we are taking our revenue focused kind of raising it from 12 to 15 million to $15 million to $20 million. This is driven by both volume and earnings.
Our unit volumes are accelerating from the first quarter's growth fueled by two drivers, our BMW and southwest of the launches and shipments to our new secure improvements, including the new light commercial vehicle program.
Additionally, as a result of increased activity in our RFP program and program expansions and increased confidence even more likely to convert some of these will come based on the progress that we have made year to date.
We are also raising the midpoint of our new NRM booking guidance range as well increasing from $20 million to $40 million, so $20 million to $70 million this year.
The wider range represents the wide variety of outcomes that is out there and the sheer scope of some of the energy awards at the end.
I recall.
We are asking for on the different RF tools and other program extensions from existing customer because they are indicated that decision should come. This year, we can come to the number that is over doubled the high end.
End of the range, but these awards are very lumpy with a typical range of $20 million to $40 million each with some as large as $60 million given the fact that we can control the timing of the decisions of the customer the customers, we feel that the need to discount the range, but given that the increase in the total amount of dollars that we're competing on since.
<unk>.
We first set the targets from the beginning of the year, we felt the need to communicate the opportunity set that is in front of us.
On the customer side.
<unk> remains the same we continue to expect one to three additional programs from existing customers and continue to target, adding at least two series production awards with new customers. These are ambitious goals, but we're moving fast and making solid progress towards making them a reality and plenty of 'twenty three.
Before turning the call over to the Q&A I wanted to offer a few final remarks, it's always important for us to share with you. The roadmap of the company is on 2022, we hinted at the major new OEM customer and months' data with vehicles on Portland.
Coming into this year, we ended up at the program expansion in the next quarter, we deliver the light commercial vehicle announcements last quarter. We said we are working on the MRM solution for a customer in this quarter, we announced that expanded BMW offering with MLM and our AI compute model.
And for the last year, we've been talking to the 2023 and we just began shipping production units a few weeks ago, we want investors to recognize that we are delivering on the things that we say that we're going to do that we consistently work very hard to make them happen.
There were a lot of additional new milestones for us to deliver on shares on this vehicle and I am confident that we can continue our track record of executing on what we say we're going to do.
With that operator, please turn it over to the Q&A. Thank you.
Thank you.
So ask a question. Please raise your hand, using your mobile or desktop application and wait for your name to be announced.
Once again, please raise your hand, using your mobile or desktop application and wait for your name to be announced our first question today comes from the line of Mark Delaney of Goldman Sachs. Please go ahead.
Yes. Thank you very much for taking my questions. Congratulations on the start of production with BMW seven series, which I realize is a big milestone for the company now that you're at S&P I'm, hoping to better understand how quickly that may ramp up in terms of your own revenue opportunity and what the key variables are as you understand it they may determine the cadence in terms of that ramp.
So.
BMW is going to launch with the seven series, we are expecting additional models to follow in terms of the volumes of the severance serious I cannot share more information, we expect a smooth launch at the beginning and ramping up in Poland.
Okay.
Appreciate that and then second question was.
Something you brought up last quarter. You mentioned you are in discussions with Nvidia to be integrated into serious production programs leveraging the high Purion platform is there any update you can share on progress there.
We actually started the OEM in which this is related to we started the <unk>.
<unk> to become their tier one.
Still working process, but going well.
Okay.
That's helpful. And then just lastly from me today, you spoke about the MRM system and also developing higher value software in conjunction with BMW and then maybe exclusive product categories for BMW, given the co development, Oregon individually all those sorts of products for other Oems and then if so how much of the engineering work can you potentially leverage that you are currently working on.
W or do you need to do that from scratch, so actually that the MRM discussion was first introduced by from BMW.
And.
We are approaching other Oems with this kind of solution to privacy. Because this is something that can fit into their architecture I would say that we are getting good feedback from customers, which this comes as a very interesting on proposition having debt.
The MLM based on that either have better potential in terms of safety.
There are synergies some of this development is tailored to BMW. There is a lot of integration related to the beacon itself. When it comes off of the control.
Expect that there should be some synergy.
This is really early stage.
Mark any further comment no. Thank you very much.
Our next question today comes from the lineup Andreas Schaeffer of Cantor. Please go ahead.
Hey, good morning, guys. Good afternoon can you hear me okay.
Yes.
Wonderful congratulations on the quarter and thanks for taking our question.
Was wondering if perhaps you can give us a little more color on the <unk> bookings obviously the increase in the targets there is excellent.
Just wondering if you maybe have any more visibility in terms of whether this will be.
Recognizing to either revenue or contra expense, just a little more color there and when do you see this.
<unk> places this Q4 event or perhaps gradual through Q3 and Q4. Thank you.
Yes focus so.
Booking of NRT trying always through a contract to push them.
<unk>.
Into the revenue line.
Some of the some of them will definitely be already recognized in Q3.
And I think more so even in Q4.
Sure.
There will be a significant.
But also for next year.
Got it thanks Eldar.
And then maybe just on liquidity with.
Roughly 130 million now in total liquidity, just remind us what is the run rate.
With that liquidity in hand, that's.
Joseph obviously through S&P.
Later, this year, but just remind us kind of what the run rate. There is thank you.
Yes, so our run rate as you probably noted from.
From this quarter and looking back on the previous quarter, we are not spending more money.
Really going down.
And it's but it's roughly stable in Greenfield space papers on the other side, we do expect these.
Revenues coming in.
In addition through the <unk>.
Supporting our cash flow so.
We think this will support us and maybe we'll see.
Over time, a better and better cash flow, maybe I can add to this so we are expecting some in our Rio already this year and we're talking about bookings of <unk>.
The other end of it.
And our targets of $70 million.
In front of US there is a bigger opportunity.
Which is very meaningful in our ability to fund our activities I would add that and part.
We are in discussion with our strategic customers and discuss the pooling.
Prepayments and emery's.
In order to strengthen our balance sheet.
Got it Okay. That's super helpful and maybe just one last one if I may.
Any color on kind of what gross margins might look like for the second half of the year, obviously with the significant ramp up in revenue.
Is it safe to assume.
Big improvement around gross margins. Thank you.
Yes, so as we are able to recognize.
<unk> this would be a great contribution to our gross margins.
I am optimistic that the trend that you are seeing now would it be even a stronger towards the second half of the year.
Got it. Thank you so much guys and congratulations on the quarter again I'll pass it on thank you.
As a reminder, in order to ask a question. Please raise your hand, using your mobile or desktop application and wait for your name to the enough our next.
And today comes from the line of Cemig Chatterji of Jpmorgan. Please go ahead.
And we were able to meet yourself.
No.
So make your line is on the unit. Please go ahead.
Our next question today comes from the line of Kevin Cassidy of Rosenblatt Securities. Please go ahead.
Yes, Thanks for taking my question and congratulations on that.
Sop starting.
Yes.
Very interesting.
<unk> core.
Is that.
Is that custom Asics inside there also you said that GPU and CPU or are those merchant supply that you're designed for this.
Hmm.
So.
The ACP I was referring to on the call is amazing that comes and goes into the later into the <unk>, one or <unk> two.
The chip that we're using in our.
Core is.
As a chip that's coming from from a supplier.
Which has very strong.
Empower.
About 35 tops.
And multiple.
Processing accelerators.
Haven't yet disclose who the policy.
Okay.
Okay, great. Thanks.
Just as your your R&D spending.
Whats the split and what do you expect the split to be in the future hardware versus software.
So roughly speaking.
I would say, 60% of the hardware, 40% from the software.
At this point, obviously the hardware team.
It's not only headcounts, we are spending also.
On the.
The hardware itself.
The difference being in glass and so on so software is a little bit.
Less cost currencies I would want to add to that maybe because I think that it's very interesting to see companies like utilities.
Usually when you are developing and enabling technology.
Such as the laser then you obviously have a certain.
Wait on the on the hardware.
Of course, when those sensor technology materialize and becomes more mature the software becomes a bigger part of the company.
And the services upon it will drive the company forward. So at this point, we are building the enabling technologies.
The hover around it but actually foresee that in the long run on the software will become a bigger pump.
Okay, great. Thanks.
If I can get in one more question just a point of clarification.
Last quarter, you mentioned you had one program that was in late stage discussion.
Maybe just to be clear is this was this the announced BMW program or was that the new light vehicle program.
It was actually the noncommercial vehicle was announced last quarter, we're actually referring to the BMW program.
If we were kicking off this this time.
The purpose of this joint development.
To get the architectural more mature nodes.
The expected launch of the program serious production towards dental deal.
Okay, great. Thanks.
Thanks.
Final question today comes from the line of Kevin Garrigan of West Park Capital. Please go ahead.
Yeah, Hey, good morning, Omar Elder and let me Echo my congrats on the announcements today.
As you and you guys kind of move up the software stack I know you guys are the first slide our company for MRM, but are you finding the conversations youre, having with Oems in this kind of area more difficult than for Lidar production agreement and that there is more increased competition in this kind of area.
So again the MLM solution was first introduced from the side of BMW.
Since then we've been working with them on the definition of the product.
<unk> been gone for the last more than six months.
There are other customers, we are approved without let's say introducing this solution to them.
Not yet.
New requirements from other Oems. This is different as a perception software, which was always part of the discussion comes up and it comes up in many RF queues and I believe that this part of the education that we're doing is allowing the customers to understand the potential of using the MLM and that might lead to additional business on it.
Okay got it that makes sense.
And then just I know there was an announcement recently about BMW BMW doing R&D in China for level. Three can you guys give us a sense of what you guys are doing in China beyond the agent based OEM to capture any any other production awards over there.
Sure so generally when when you.
When youre validating your perception software you need to do it based on the data that comes from the from the targets I would say area in which you want to operate your system since.
As you probably know there are limitations and the ability to extract.
Peter.
From China from China, So we have.
Our compliance room, where we are operating engineers that are working on data in China that are people that.
Our strong China.
In order for us to support.
And possible launch in China by them by BMW and also other customers that we had also planned to launch in China.
Okay got it thanks guys.
We have a follow up question from the lineups that Mick challenging from Jpmorgan. Please go ahead.
Okay.
So Nick are you able to on mute.
Hey, guys can you hear me now yes.
Okay.
Great.
So I guess I jumped on a bit late but if I can ask you about the expansion of the program you have in regards to BMW on <unk> one.
One I'm just wondering why.
As a company taking the action to extend the association of extended modules Honey was one is it really more of a time to market position rather than sort of weak.
To integrate in with two or how youre thinking about why you sort of walk with the older generation product and not wait for the new one is it a more of a time to market constraints and I have a follow up.
So maybe just to make sure.
So I think the announcements we've made today is related to <unk>.
The new the new platform is going to focus on the integration.
Element of features around which do not include these one.
Great.
Model N variants that you announced for.
For the first generation platform. My question was more around that as to why you could then be model vehicles. So it would be both generation and not wait for the second one what is the driver of that decision from company. Okay. Okay. So this is related still to the first platform. This is victor.
We've been testing for some time.
The asphalt of integrating the latter too so it can launch with level three takes a very long time.
And testing the platform is adopted and tested and validated we singled this one and therefore the launch was expected.
To follow the seven series.
I would still use individual.
Okay, Great Alright.
Just in terms of the extent of the relationship that you're extending with BMW to now do more parts of the software stack.
Sort of box as well.
It sounds like a great opportunity, but I'll say, if you sort of extend that to other Oems as well. It does seem like you need more resources more need.
People will sort of support those additional Oems with the customization.
Need to drive.
Are you thinking about sort of the call.
Overall, Philip how are you thinking about the Opex here, just given that that deal with a lot more customization, then probably if fiorelli, we're shipping the lidar module right.
So.
So I'm curious in regards to the interface compute model.
That's actually an activity that we are working on for some time, we already have I.
I would say an early version of it.
In terms of.
The R&D effort, it's not a fairly extensive one.
Most of the effort does that is into the to the perception softer.
Which we already are doing we are offering the computer model to other customer other customers. This is in regards to the computer vision MLM sofa, most most of our Skus.
We have do include perception software some of them require.
And compute model, so thats very I would say beneficial also for other programs in regards to the MLM.
This is this effort.
I mean, obviously supported by <unk>.
Collecting focuses on the customer in order to support it and we see it as an opportunity an opportunity to strengthen our R&D capabilities and offer it to other customers.
Okay.
Thank you thanks, Tony Bartel.
Thank you sure. Thank you we have no further questions.
Great.
Thank you everyone.
At the time this expense with US we have we are.
We are working very very hard to make this progress with customers such as BMW Volkswagen and we're.
We're expecting to give you let's say.
More.
Our first of all thank you very much.
Bye bye.
<unk>.