Q3 2023 Luminar Technologies Inc Earnings Call and Business Update

Speaker 1: since update call. My name is Aileen Smith and I am Luminar's Head of Investor Relations. With me today are Austin Russell, founder and Chief Executive Officer and Tom Fennimore, Chief Financial Officer.

And I am luminaire, its head of Investor Relations with me today are often Russell founder and Chief Executive Officer, and Tom Fenimore, Chief Financial Officer as a quick reminder, this call is being recorded and you can find the press release and shareholder letter that accompany this call and investors that aluminum attack dotcom.

Speaker 1: As a quick reminder, this call is being recorded, and you can find the press release and shareholder letter that accompanies this call at investors.luminortech.com.

Speaker 1: We ran into some hiccups with Business Wire in getting our press release out on time, but hopefully most of you folks were able to have a chance to review our inaugural letter to shareholders and our press release that were issued via an AK as well as uploaded to our IR website.

We ran into some hiccups with business wire and getting our press release out on time, but hopefully most of you folks were able to have a chance to review our inaugural letter to shareholders and our press release that were issued via an 8-K as well as uploaded to our IR website as we've communicated we are piloting a new format for our call. This earnings there.

Speaker 1: As we've communicated, we are piloting a new format for our call on this earnings. The shareholder letter was meant to replace our historical earnings deck and prepared remarks so that we can dedicate more time to addressing questions from our investor community, including retail investor questions posted to the platform, institutional investor questions emailed to our investors inbox and live questions from our analyst community.

Shareholder letter it was meant to replace our historical earnings stuck in prepared remarks, so that we can dedicate more time to addressing questions from our investor community, including retail investor questions posed to the Facebook, one institutional investor questions emailed to our investors in box and last questions from our analyst community, we will be checking each of these platforms are minutely.

Speaker 1: We will be checking each of these platforms intermittently throughout the duration of our call to address any that come in real time.

Throughout the duration of our call to address any of that come in real time.

Speaker 1: Before we begin the Q&A, let me remind everyone that during the call, we may refer to GAF and non- GAAP financial measures. Today's discussion also contains four of the statements based on the environment as we currently see it, and as such does include risks and uncertainties. Please refer to our press release and business update shareholder letter for more information on specific risk factors that could cause actual results to differ materially.

Before we begin the Q&A, let me remind everyone that during the call. We may refer to GAAP and non-GAAP financial measures. Today's discussion also contains forward looking statements based on the environment as we currently see it and as such does include risks and uncertainties. Please refer to our press release and business update shareholder letter or more information honest.

Specific risk factors that could cause actual results to differ materially.

Speaker 1: We plan to alternate questions asked on our SAFE platform or via email with questions asked from our live research analyst community. With that said, let's jump right into Q&A and start with some of the top questions from our SAFE platform. Austin, the first question is for you. Recently, the- You guys OK? Yep, everything's good.

We plan to alternate questions asked on our safe platform or by email with questions asked from our lives. Our research analyst community with that said, let's jump right into Q&A and start with some of the top questions from our safe platform often the first question is for you recently these cigarettes, okay yep.

Yep Everything's good.

Thanks.

Speaker 1: So recently, the successful run-at-rate test with Volvo was a major milestone accomplishment for Luminar. What else is left to do with Celestica and Volvo before the green light is given to start production? And when do we expect serious production orders?

Recently be successful run at rate test with Volvo was a major milestone accomplishment for women or what else is left to do with slapstick Guy and Volvo before the Green light is given to start production and when do we expect series production corridors.

Speaker 2: Yeah, so it's been great collaborating with Volvo and leading up to this huge culmination and milestone that we have for as it relates to run at rates. So this was sort of the key and fundamental milestone when it comes to testing the capacity and quality for product leading up to startup production. So that's something that obviously we're proud to have passed, you know, and an incredible effort and thank you to the team and as well as Volvo's team in helping push that across the line. With the next.

Yeah. So it's been great cooperating with Volvo and leading up to this huge culmination and milestone that we have profitably used to run at rates that this was sort of the key fundamental milestone when it comes to testing the capacity and quality you know her bought up leading up to startup production. So that's something that obviously we're.

We're proud to have all passed.

Incredible effort and thank you for your team.

As well as volvo's team and helping push that across the line.

With the Mexico battery, what's left to go.

Speaker 3: So.

Speaker 2: That's been great. There's obviously still work to do from a finalization and industrialization standpoint in conjunction with Volvo, leading up to the start of production next year and getting everything queued up for what they have launched. But that was really the big major push in terms of demonstrating the capacity. So that really starts and shows that you can scale well into the tens of thousands and then setting the stage up for hundreds of thousands.

No.

That's been great.

Obviously still work to do from a finalization of industrialization.

Standpoint in conjunction with Volvo, leading up to the start of production next year and getting everything.

Queued up for what they have launched but that was really the big major push in terms of demonstrating the capacity.

So that really starts.

It shows that you can scale well into the tens of thousands and then setting the stage up for hundreds of thousands.

Speaker 2: And I think we said that the Mexico facility would support up to 250,000 centers or corresponding.

Thereafter, and I think we said that the Mexico facility would support up to 250000 et.

Centers are corresponding vehicles per year. So it's been a great starting point with that and then we will have ultimately a similar test.

Speaker 2: So that's, it's been a great starting point with that. And then we'll have ultimately a, you know, a similar test, you know, with TPK and Mercedes and everything down the line as that, uh, that all plays out accordingly. So, um, yeah, we're excited for the future. And it's, uh, really all systems go with Volvo. It's going to be a huge game changer as they, uh, want to scale this EX9.

TDK and Mercedes and everything down the line is that right.

All.

Plays out accordingly, so.

Yeah, we're excited for the future and it's.

Really all systems go with Volvo, it's going to be a huge game changer as they walk in scale with the X 90 next year.

Speaker 1: Great. Our second question from the retail shareholders. Can you add some color to your relationships with Mobileye and NVIDIA? How does Luminar benefit from the relationship? What kind of future revenues do you expect from them as they launch various products with your LIDAR, in particular Mobileye's show for our program and FullStar?

Great second question from the retail shareholders can you add some color to your relationships with mobile Ly and Nvidia how does limit our benefit from the relationship what kind of future revenues do you expect from them as they launch various products with your Lidar and particular mobilized shelf for our program and we will start.

Speaker 2: Yep, absolutely. So when it comes to NVIDIA and Mobileye, they're incredible technology partners that we have that we've been collaborating with Well, I guess each now for years so that they really selected us as their respective partner when it comes to LIDAR systems and Odessa associates technologies

Yeah, absolutely so when it comes to Nvidia and mobilize.

Credible technology partners that we have that we've been collaborating with well.

Well I guess each now for years, so that they realize selected us as their respective partner when it comes to Lidar systems and.

Associates technologies, and even get some components of it.

Speaker 2: software as well that we've been collaborating with them as OEMs. So that's something that we really see as a clear integrated partnership and Springboard as well to be able to address the respective OEM opportunities that are out there. We know, mobilize bin an incredible leader when it comes to assisted driving systems and that's continuing to extend and to view for their advanced capabilities. And Nvidia has really been establishing themselves in the industry as well. And like I said, just think.

Software as well that we've been.

Collaborating with them at the Oems. So that's something that we really see is a clear.

Greater partnership in springboard as well to be able to address the respective OEM opportunities that are out there. We know mobilized been an incredible leader when it comes to assisted driving systems and Thats continuing to extend into further advanced capabilities and in video has really been establishing themselves in the industry as well.

And like I said, just incredible success that we've seen so to be a part of that and be selected to be their partners with respect to these next generation automotive technologies as automakers really strived to be able to adopt this is very very meaningful to us.

Speaker 2: So to be a part of that and be selected to be their partners with respect to, you know, these next generation automotive technologies as automakers. Really strive to be able to.

Speaker 2: Very, very meaningful to us. And like I said, we couldn't ask for better partnerships in the industry to be able to help successfully realize that. So we're all in, they're all in. And we're, I think, really now starting to see the fruits, the labor of the collaboration that we've had for years. So that's that, I think probably yet another inflection point that we're at where you can start seeing that transition from.

And like I said, we couldnt ask for better partnerships in the industry to be able to help successfully realize that so we're all in they're all in.

And we're.

Really now starting to see the fruits of the labor of the collaboration that we've had for years. So that's I think probably get another inflection point that we're at where you can start seeing that transition from.

Speaker 2: you know, development work that we've been doing with these guys, you know, into the automotive industry and to production vehicles. And, you know, you take a look at the Mercedes program, for example, you know, in the collaboration that we have with them on that, you know, with Nvidia, you know, that's something that's obviously been public.

Development work that we've been doing with these guys.

Into the automotive industry into production vehicles and you take a look at like the Mercedes program. For example, you know in the collaboration that we have with them on that.

With the video you know that's something that's obviously been public and.

Speaker 2: Again, it goes to show what you can do when you combine the respective leading technology companies together to create incredible.

Again, it goes to show what you can do when you combine the respective leading technology companies together to create incredible solution.

Alright. Our next question is going to be per ton and that is luminaire in danger of bankruptcy.

Speaker 1: All right, our next question is going to be for Tom. And that is, is Luminar in danger of bankruptcy?

Alright.

Speaker 4: Uh, alien the, the short answer is no, I understand why some shareholders would ask that question.

I mean the.

The short answer is no I understand why some shareholders would ask that question given the recent stock price performance.

Speaker 4: But when you actually look at our most recent results for Q3, we cut our non-gap gross loss.

When you actually look at our most recent results for Q3.

We cut our.

non-GAAP gross loss almost in half, which puts us on trajectory to get to positive by the end of the year as those launch related costs.

Speaker 4: and half, which puts us on trajectory to get it to positive by the end of the year as those want to relate at cost, continue to wind down as we successfully industrialize our risk. We cut our free cash spend by nearly $20 million during the quarter, which puts us on track to kind of get it into that $35 to $40 million.

<unk> to wind down as we successfully industrialized the iris.

We cut our free cash spend by nearly $20 million during the quarter, which puts us on track to kind of getting into that $35 million to $40 million range for Q4.

Speaker 4: work. We had over $320 million of cash and liquidity as a quarter end. We're on track to have over $300 million of cash and liquidity at the end of the year. So when you kind of look at where will you, our targets for ending the year, we're going to have over two years of runway. We believe that that's going to be enough to get us the profitability. We have the bulk of business in place.

We had over $320 million of cash and liquidity as of quarter end, we're on track to have over $300 million of cash and liquidity.

At the end of the year.

So when you kind of look at where we are targets for ending the year, we're going to have over two years of runway. We believe that that's going to be enough to get us to profitability.

The book to business in place.

Speaker 4: that will drive strong revenue growth. Once we reach that high volume SOP next year, so that gives us a credible way to start growing our revenues in profits to help our...

That will drive strong revenue growth once we reach that high volume next year. So that gives us a credible way to start growing our revenues and profits to help or reduce our cash spend even more so.

Speaker 4: our cash spend even more. And so, you know, once again, I understand the source of the question, but that's clearly not the case. We have the most cash liquidity of any publicly traded LiDAR company. And God forbid if we find ourselves in a scenario where we need more. I have planned a BCD EF and many more ways ready to go. You know, always have...

Once again I understand the source of the question, but Thats clearly not the case, we have the most cash and liquidity of any publicly traded lidar companies and God forbid if we find ourselves in a scenario, where we need more.

We have planned ABCD.

Many more ways ready to go always have contingency plans to build that put those in place way before you need them.

Speaker 4: to put those in place way before you need them. And, you know, we're doing that if, you know, God forbid.

We're doing that if God forbid we ended up.

To do something on that end.

Great Alright, we are going to transition to some questions from our retail or sorry research analyst.

Speaker 1: All right, we are going to transition to some questions from our research analyst. Because we are trying to offer more time for Q&A, we would ask that our research analyst ask one question and we will allow for another two, three follow-ups. Our first question is going to come from Josh McCulcer at PD Cowling.

We are trying to offer more time for Q&A, we would ask that our research analysts ask one question and we will allow for another two to three follow ups.

First question is going to come from Gaspar culture at TD Cowen.

Speaker 5: Hey guys, thanks for taking my question and thanks for letting me go after the bankruptcy question. It's a nice way to warm up the room. I want to follow up on the mobile I comments from earlier. It's been hard.

Hey, guys. Thanks for taking my question and thanks for letting me go after the bankruptcy question it's nice.

Warm up the room.

I wanted to follow up on the mobile I commented on earlier.

It's been our.

Speaker 5: We've observed that luminars been the lighter of choice on mobilize chauffeur platform while they work on their internally developed product. There have been some.

Observe that Luna has been the lighter of choice on mobilize.

<unk> platform, while they work on their internally developed product there have been some.

Speaker 5: recently announced his own wins for chauffeur. I mean, can you guess is it safe to assume that Luminor has a very decent shot on goal? Can you maybe expand on that relationship and what chauffeur wins mean for your business?

Recently announced design wins for chauffeur I mean can you I guess is it safe to assume that luminaire has a very decent shot on goal can you maybe expand on that relationship and what chauffeur wins mean for your business.

Speaker 2: I mean, do you think that or you want to take it? Yeah, no, I mean, I think it's fair to say. It's hard to comment specifically, further at this time as it relates to the ongoing work and collaboration, but I could think it's been as successful as we could have hoped for. And again, everything that we set out when we originally announced partnership with mobile I that we wanted to ultimately achieve, we've been pushing that full speed ahead and that's been absolutely fantastic but

And you want me to take that or you want to take it.

No.

I think it's fair to say.

It's hard to comment specifically.

Further at this time as it relates to.

The ongoing.

Work and collaborations.

I can tell you it's been as successful as we could have hoped for and you know again everything that we set out when we originally announced the partnership with.

<unk> that we wanted to ultimately achieve we've been pushing that full speed ahead, and thats been absolutely fantastic.

Or is it really I think it was three years ago.

Speaker 2: I think it was like three years ago.

One.

Speaker 2: I think probably to the month, you know, three years ago, when we were out there with it. And at the same time, you know, same within video terms of, you know, what we can hope to achieve. So, I think, I think we wish all of the best possible success to these respective companies. And I think it's in any scenario, a key component of it, you know, we don't make the company.

I think probably probably to the month.

Three years ago.

When we were out there with it and at the same time.

Same with Nvidia in terms of what we can hope to achieve so.

I think.

We wish all of the best possible success to these respective companies and I think it is.

In any scenario a key component of it we don't make the computer systems and module right. So that's something that Ah.

Speaker 2: right, you know, so that's something that I think will be an important part of that of that collaboration. Now, obviously, you know, the internal effort, I think, was a little unique to mobile I rather than Nvidia, you know, specifically, but there obviously hasn't been any change, as a relief.

I think will be an important part of that of that collaboration now obviously.

The internal effort and I think it was unique to mobile I, rather than Nvidia you know specifically, but.

There, obviously hasn't been any change as it relates to.

Realizing and using us when it comes to that from a platform standpoint. So.

Speaker 2: platform standpoint. So, you know, building line arses and creating new breakthrough technologies is really, really hard. And as we know, it takes a lot of time effort, you know, a decade and a lot of capital along the way to be able to make that make that happen assuming you have the right technology path and roadmap for the first place. But that's why we spent all these years building up from the chip level up to have these level of capabilities, you know, performance economies of scale and at the same time doing what's needed to be able to achieve these automaker requirements.

Building Lidar.

Creating new breakthrough technologies is really really hard as we know it takes a lot of time effort.

A decade and a lot of capital along the way to be able to make that make that happen assuming you have the right technology and roadmap in the first place.

But that's why we spent all these years building up at the chip level up to have these level capabilities performance economies of scale and.

Same time doing what what's needed to be able to achieve these automaker requirements.

Speaker 2: getting out there. So that's been good. And I think they are, you know, ultimately we'll also help drive the, you know, the long-term aspects, you know, of our order book and contracts as well, respectively, with autumn.

Getting out there so that's been.

That's been good and I think they are.

Ultimately will also help drive the long term aspects of our order book and contracts as well respectively with automakers there.

Speaker 2: You know, we said by the end of the decade, you know, with ultimately a target would be to get towards, you know, 60 billion, you know, contracts, you know, for the order book, you know, which is, in terms of their respective opportunities that we have ahead of ourselves by, you know, capturing what that was like three to four percent mark of penetration. So that's something that, you know, those companies are going to be very helpful to us to be able to.

We said by the end of the decade.

Ultimately the target would be to get towards 60 billion.

Contracts for the order book.

Which is that in terms of their respective opportunity that we have ahead of ourselves by Catherine what that was like three or 4%.

Market penetration. So that's something that those companies are going to be very helpful to us to be able to.

Hopefully achieve beyond that.

Thanks for that Austin and for my follow up.

Speaker 5: Thanks for that, Austin. And for my follow up, you know, in the shareholder letter, I think you mentioned your on track to achieve a billion dollars of order book wrote this year, but some of the contracts might slip into next year. Maybe you could elaborate on how much has already been won. I guess how much of that is new versus existing customers. And you know, what's driving, you know, a billion dollars was roughly, I believe, what you added last year. It's a, you know, what's driving, I guess, the bit of a slowdown in the amount of business that you're finding this year versus last year. Thank you.

In the shareholder letter I think you mentioned you're on track to achieve a $1 billion of order book growth. This year, but some of the contracts might slip into next year. Maybe you can elaborate on how much has already been won I guess, how much of that is new versus existing customers and.

What's driving.

$1 billion with roughly I believe what you added last year.

Whats driving I guess.

Bit of a slowdown in the amount of business that youre signing this year versus last year. Thank you.

Speaker 4: Yeah, Josh, I like to look where, as we said in a letter, we're still on track to add a billion.

Yes, Josh look we're as we said in the letter we're still on track to add 1 billion. We do the formal tally at the end of the year, we kind of don't do it along the way, but we already have.

Speaker 4: We do the formal tally at the end of the year. We kind of don't do it along the way, but we already have

Speaker 4: A few wins and there, some from existing customers, some from new customers.

Few wins and there is some from existing customers some from new customers.

Speaker 4: You know we'll talk about stuff once our once our customers are ready to talk about them

We'll talk about stuff once or once our customers are ready to talk about them. So we remain confident that we're going to get to that $1 billion.

Speaker 4: so we remain confident that we're going to get to that billion. You know, we're sitting here on November 8th, so you know, we have a lot of things already in the year. There's a there's a few things that we're hoping to wrap up here.

Here on November eight.

A lot of things already in the year Theres, a theres a few things that we're hoping to wrap up here in a few weeks left in the year whenever you get to that there's always a risk that some things slipped into into Q1, but there's also a little bit of a cushion in there. So we remain confident in it.

Speaker 4: left in the year, whenever you get to that, there's always a risk that something slip into Q1, but there's also a little bit of a push in there. So we remain confident in it. Look, these things that the longer-term opportunity continues to remain and exist. I would say almost every major automaker is now having serious conversations.

Look these things that the longer term opportunity continues to remain an exist.

I would say almost every major automaker is now having serious conversations about implementing.

Speaker 4: about implementing, you know, lidar technology on their vehicles. It's a question of when, not if, and the timing of them kind of making these formal awards can be a little lumpy.

Lidar technology on their vehicles, it's a question of when not if and the timing of that and kind of making these formal awards can be a little lumpy and so.

Speaker 4: So, you know, I wouldn't read anything in particular to kind of I would say overall, you know, in this...

I wouldn't read anything in particular to kind of I would say an overall.

History slowdown, but I would say, we still remain satisfied with the with the pace of our commercial activity and discussions both with new and existing customers.

Speaker 4: but I would say we still remain satisfied with the pace of our commercial activity.

Speaker 2: Okay, thank you. I'll hop back in the queue up. Sorry, Austin. Please. Yeah, I was going to say one one other thing to say is I'm sure as you know, Josh, but just as a general reminder, the way that we calculate our order books.

Okay. Thank you I'll hop back in the queue, sorry, Austin. Please I was just going to say one other thing.

I'm sure as you know Josh with this as a as a general reminder, the way that we calculate our order buckets is also generally.

Speaker 2: is also generally a substantially more conservative standard than some of what we've seen out there in the broader industry. It's probably like a, you know, would be a multiple of this, you know, as I've significant multiple of this. If we did that, but, you know, we wanna do it right and we wanna show really what's actually there, you know, in the bag and what we can have that clear, you know, one-to-one conversion with in revenue over the...

Substantially more conservative standard than some of what we've seen out there in the broader industry, it's probably all I got.

Would be a multiple of this.

A significant multiple of this.

If we did that but we want to do it right and we want to show up.

Really what what's actually there you know.

In the bag and what we can have that clear one to one conversion with in revenue over the <unk>.

Speaker 2: relative near term here in terms of opportunity that we have that will obviously start to use. So starting to realize with these mobile data clutches here soon.

Relative near term here in terms of opportunity that we have that will obviously start to starting to realize where these are global leaders in watches yourself.

Got it thank you Austin dominantly I appreciate it.

Okay.

Speaker 1: Next up in our queue from the analyst will be Winnie Dong at Doorshipping.

Next up in our queue from the analysts will be Winnie dong at Deutsche Bank.

Speaker 4: Thank you so much. I was wondering if you can provide a current update on the TPK facility around in China, where that might stand, and then can you just remind us on the target volume and timeline. Thanks. So I was actually over in China last week spending some time with...

Thank you so much.

I was wondering if you can provide.

Okay.

Switching cases, Lee around in China, where that might stand and then can you just remind us on.

The target volume and timeline.

Sure.

So.

I was actually over in China last week spending some time with the <unk> team as well as some other customers over there.

I would say that things are proceeding very well so far with TDK, we're starting right now for Irish plus we're.

Speaker 4: starting right now for Iris Plus. We're making those B samples internally at our Orlando Manufacturing Facility and sometime next year we'll actually transfer.

We're making those be samples internally at Orlando manufacturing facility and some time next year, we'll actually transfer production of the <unk> samples to them and so we're starting to ramp that up.

Speaker 4: So, you know, we're starting to ramp that up, you know, buying the necessary equipment, putting in place in necessary clean rooms and the TPK team is doing a very good job on that. You know, we've been pleased so far with the TPK.

<unk> the necessary equipment, putting in place necessary clean rooms, and the <unk> team is doing a very good job on that.

We've been pleased so far with the with the TDK relationship and I wouldn't be surprised if that's something that continues to expand over time.

Speaker 4: with regards to timeline, they're planning to, as I said, start see sample production for us in the first part of the next year. And then the plan is to have that facility ready for first start.

With regards to timeline they are planning to as I said start she sample production for us in the first part of next year.

And then the plan is to have that facility ready for start of production by the end of 2025. The initial capacity that we're planning that out for US is about 600000 units.

Speaker 4: the initial capacity that we're planning that out for is

Speaker 4: or 1000 units or lidars and you know we also have the ability to to grow that

<unk> and <unk>.

Also have the ability to to grow that as we continue to win more business over there.

Speaker 6: Thank you for the very detailed response. And then I was wondering if you can elaborate a little bit more on the gross margin improvement headwind that was stating the shareholder letter. Obviously still targeting gross margin positive and thankful but I was wondering if you can just elaborate a little bit on the cost and efforts associated with IWRSPOTS and how that might impact the improvement there.

Thank you for the detail on response.

And then I was wondering if you can elaborate a little bit more.

The gross margin improvement when those data in the shareholder letter, obviously still targeting gross margin positive in Q4, but I was wondering if you can just elaborate a little bit.

The cost and effort associated with response.

That might impact things.

Speaker 4: Yeah, sure. And, you know, as a reminder, we're kind of, you know, wanting to probably, you know, two major products of

Yes sure.

As a reminder, we're kind of.

Launching two products two major products that one.

Speaker 4: One is IRIS where our lead customer is is Volvo. That's what we're building out our new facility down in Mexico to produce that's what we're, you know, preparing for high-bye.

Yes.

High risk, where our lead customer is Volvo.

That's what we're building out our new facility down in Mexico to produce that's what we're preparing for high volume SLP next year.

Speaker 4: next year. And I would say we're kind of in the tail end of those initial industrial

And I would say, we're kind of in the tail end of those initial.

Initial industrialization.

Speaker 4: of that product and so as we kind of reach that SOP there's going to be a fair amount of launch and other related costs.

That product and so as we kind of reached that Sop theres going to be a fair amount of launch and other related costs start to come out of the system and we're doing that for Irish plus where in that B sample base rates. So we're making those <unk> at our advanced.

Speaker 4: for IRIS Plus we're in that B sample phase, right? So we're making those light hours at our advanced manufacturing facility down in Orlando. And what you're doing during the B phase is you're kind of building those light hours and then you do a fair amount of testing on them and then you kind of have to modify.

Manufacturing facility down in Orlando.

And what Youre doing during the phase as Youre kind of building those <unk> and then you do a fair amount of testing on them and then you kind of have to modify the design.

Speaker 4: As you do that testing and identify issues, that's very typical

As you do that testing and identify issues thats very typical during the BMC sample phase.

Speaker 4: by the issues you encounter. It's difficult to predict until you actually...

The issues you encountered.

It's difficult to predict until you actually get them in there and so they were a little higher than we were expecting I think the good news is is that the team has done a good job of identifying.

Speaker 4: So, they were a little higher than we were expecting. I think the good news is that the team has done a good job of identifying the necessary modifications we need to make to fix them.

The necessary modifications, we need to make to fix them.

Speaker 4: And so, you know, I think we kind of made those. But the cost for that was a little bit higher than the record casting. That flows through our COBS line. And so while the iris industrialization falls are starting to come down.

So.

We've kind of made those but the cost for that was a little bit higher than we were forecasting that flows through our Cogs line and so while the Irish industrialization costs are starting to come down the Iris plus industrial location cost continue to remain high and will do so until we reach the.

Speaker 4: The IRIS Plus industrial allocation costs continue

Sorry for that.

A little bit behind the Irish.

Speaker 4: for the initial Irish launch. And so, as you're kind of industrializing a product, the issue's you encounters in the cost of kind of fixes are a little bit.

For the initial <unk> launch and so.

As you are kind of industrializing.

Product.

The issues you encountered in the cost of kind of fixes are a little bit unpredictable and thats, what we kind of at an Irish plus once again nothing significant there. The team has identified and made the necessary design changes.

Speaker 4: Once again, nothing significant there the team has identified and meet the...

Speaker 4: You know, when you go through the necessary testing and validation to prove it out, but that's what kind of happened.

We need to go through the necessary testing and validation and prove it out.

But that's what kind of happened on the plus side during Q3.

Speaker 2: Basically, what you see is that because you have a cost variance, they're of color, it's very hard to predict the exact, so the plus or minus 10%. When it comes to that, but because the way that this happens, with the contracts of the avid automakers, the revenue recognition pre-production is percentage of completion as a relative cost. So that when things go up or down by 5%, here they're plus 5% there, adjust the timing of the revenue recognition, N???.

So basically what you see is that because you have sort of a cost variance thereof call. It.

Very hard to predict the exact like what it as to the exact like so it will be plus or minus 10% when it comes to that but because the way that has happened.

With the contracts that we have with automakers and the revenue recognition preproduction needs percentage of completion as it relates to the relative costs, so that when things go up or down by.

5% here they apply fiber there adjust the timing of revenue recognition and then.

That's kind of as we go through them.

Speaker 2: questions, you know, it's like, well, why does this input affect this or whatever it may be? But from a business management standpoint, you know, we're on track to our RC milestones and what we've laid out, including, you know, to the important part for start a production. And that lines up with both with both Iris and ultimately, Iris plus as well that comes thereafter for the respective additional programs for SOP.

So you've got the same kind of questions.

Why why does this what does this input effectiveness or whatever it maybe but.

From a business management standpoint, we're on track to our R&D milestones and what we bought.

<unk> laid out including to the the important part for start of production and that lines up with bolt with both Iris and ultimately Iris plus as well that comes.

Thereafter further perspective additional programs for Sop.

Thank you both.

It's going to come from John Fox from Bank of America.

Speaker 7: Hi, good evening, that's for the afternoon. I guess that's my question. You know, the performance that you've seen at this quarter and then what are expecting to the rest of the year. Is there anything we should take from that and how that impacts your longer term outlook? I know you guys reiterated it, but just want to see if this poses any risk or if there are any other factors that we should keep in mind as we're thinking about that.

Hi.

Good evening good afternoon.

I guess, that's my question.

Performance that you've seen this quarter and then what you're expecting through the rest of the year is there anything we should take from that and how that impacts your longer term outlook. I know you guys reiterated that but just wanted to see if this process is any risk or if there are any other factors that we should keep in mind as we're thinking about that.

Speaker 4: You know, the answer to that question is John , we don't see anything while these are bumps on the road and the revenue came in a little bit lighter than expected. And we talked about some of the gross margin headwinds as you kind of industrialize your product and kind of go from the B to C sample phase.

The answer to that question is John we don't we don't see anything while these are our bumps on the road in the revenue came in a little bit lighter than expected and we talked about some of the gross margin headwinds as you kind of industrialize your product and kind of go from the BDC sample phase <unk> design.

Speaker 4: the time, you know, and actually reach serious production. A lot of those launch related costs wind down.

And actually reach series production a lot of this launch related costs wind down.

Speaker 4: until as you successfully industrialize, those kind of bumps on the road costs that were higher costs that were seeing in COD.

And so as you successfully industrialize those kind of bumps on the road costs that were higher costs that we're seeing in Cogs those should dissipate, we're seeing it on Iris where we are.

Speaker 2: those should dissipate. We're seeing it on Iris where, you know, we're, you know, a year plus or minus ahead in terms of development line there, you know, Iris plus is just a little bit, uh, behind that. Uh, and, you know, as you're going through that industrialization process, you know, the cost can be a little bit unpredictable, uh, on the revenue side, you know, once again, so, Oh yeah. Plus or minus like 5 or 10%, like we're not talking, you know, I mean, because then basically that, that again feeds into the respective revenue line.

A year plus or minus ahead in terms of development line, there Irish pluses, just a little bit.

Behind that.

As you go into that industrial lasers in process the cost can be a little bit unpredictable on the revenue side. Once again, so, yes, plus or minus like five or 10% like we're not talking.

Because then basically that that again feeds into their respective revenue line, but thats, okay, plus or minus 5% or 10% or whatever it is so if anything that then get offset respectively to now like it's not like lost it's just based on the economy. It gets offset to respectively. The next year. So it doesn't accurately effect.

Speaker 2: 5% or 10% or whatever it is. So if anything, that then gets offset respectively too. Now, like it's not like the loss. It's just based on the economy gets offset to respectively the next year.

Speaker 4: So John , it doesn't change the size of the order above. You know, we're still on track for the SOP target dates that our customers want to be on. And so you just need to make it to there and then start converting.

Long term outlook, so John it doesn't change the size of the order book.

On track for the Sop target dates that that our customers want to be on.

So you just need to make it to their and then start converting.

Speaker 4: the water buck into real annual revenue. So these bumps on the roads over hitting there, don't impact that. And some of the revenue lightness we experienced in Q3 is related to, I would say, a couple things particularly with these issues. One, we had to move some of our LSI engineers off revenue for external projects to help implement some of these design changes.

The order book.

Into real annual revenue and so these bumps on the roads that were hitting their don't impact that.

And some of the revenue likeness, we experienced in Q3.

Is related to I would say a.

A couple of things, particularly with these issues one we had to move some of our LSI engineers off revenue for external projects to help.

Implement some of these design changes.

Speaker 4: And so, you know, that's revenue where, you know, didn't come in during the school room when those engineers free up and work on it, you'll get that in the future.

So that's revenue were didn't come in during this quarter when Theres engineers free up and work on it youll get that in the future and then the way that we account for the revenue we receive for the development work. It's based upon percentage completion and so we're still going to recognize the same amount of revenue you just because of percentage completion methods have to recognize.

Speaker 4: And then, you know, the way that we account for the revenue, we receive for the development work it's based upon percentage completion. And so, we're still going to recognize the same amount of revenue you just, because of percentage completion methods, have to recognize less in this specific order, you know, as your cost goes up, your percentage of...

Yes in this specific quarter.

As your cost goes up your percentage of completion goes down.

Speaker 7: Okay, thanks for that. And then just one quick follow up here. You know, as it pertains the next generation, why are how much of that investment has already been made versus how much has still have to be done? And then also, how where have you made OEMs of this product with capabilities, et cetera? And has this flowed through into your older book?

Okay. Thanks for that.

And then just one quick follow up here.

As it pertains to the next generation wide or how much of that investment has already been made versus how much is still have to be done and then also how where have you made Oems on this product with capabilities et cetera has this flowed through into your order book at this point.

Speaker 2: Yeah, so I think we're really just starting to successfully get that off the ground of where we've we spent years with a work on the background of the technology development standpoint, creating the fundamentals of what's there. So, you know, I would say the I mean the majority of the time, investment for what's required to create the fundamental bit of technology for the next 10, wide art is already done. The real question at this point is, you know,

Yes, So I think we're really just.

Turning to successfully get that off the ground, where we spend years worth of work on the backend from a technology development standpoint, creating the fundamentals of what's there. So I would say the I mean, the majority of the time and investment for what's required to create the fundamentals of the technology for the next Gen. Lidar is already done.

The real question at this point is.

Speaker 2: being able to progress throughout this coming year.

Being able to.

Progress throughout this coming year.

Speaker 2: to get to a stage where we can really set this up to be a wider system that can fundamentally be on every mute.

Got to a stage, where we can really set us up to be the lidar system that can fundamentally on every vehicle produced and Thats really the goal is that we talk about standardizing and democratizing safety and economy.

Speaker 2: And that's really the goal is that we talk about standardizing and democratizing safety and N

Speaker 2: And, you know, I think we, we recognize that as fantastic as the products are today, you know, that it's meant for millions of sensor scale, not, you know, tens of millions of sensors in terms of. Respective scale that we can be able to get out there with, and this is exactly what this is designed for. So we can really capture. Uh, the larger automotive industry, and also not just, you know, the initial vehicle launch.

I think we recognize that.

As fantastic as the products are today.

It's meant for millions of center scale not.

Tens of millions.

Sensors in terms of respective.

Scale that we can be able to get out there with and this is exactly what this is designed for us. So we can really capture.

The larger automotive industry and also not just the initial vehicle launches.

Speaker 2: that some of these automakers have, but also when you start going towards, you know, even very mainstream of Google models as well, this will be particularly helpful. So that's really what we're seeing, and then when it comes to

Some of these automakers high but also when you start going towards you know <unk> been very mainstream vehicle models as well this will be particularly helpful. So that's really what.

What we're seeing and then when it comes to.

Speaker 2: that investment standpoint. I mean, you take a look at like most the investment is actually goes into the infrastructure that's required for both development, as well as the call of manufacturing infrastructure and getting that set up right to be able to successfully produce this. And that's really what we've been doing.

That investment standpoint, I mean, you take a look at like most of the investment is actually goes into these into the infrastructure that's required for both development.

As well as the call it the manufacturing infrastructure and getting those set up getting that set up right to.

To be able to successfully producers and that's really what we've been doing.

Speaker 2: in partnership of course with Flustga and TFTK respectively. So setting that groundwork is very, very helpful. The level of efficiency, and so just from a development cost perspective.

And partnership of course with less guidance, respectively. So setting that groundwork is very very helpful. The level of it like efficiency I would say just from a development cost perspective.

Speaker 2: Um, you know, dramatically higher for each iterative product thereafter.

Dramatically higher for each iterative product thereafter.

Speaker 2: and that's something that's also particularly helpful when we have the economies of scale and the supply chain to be able to support it. If you didn't have that, with like $1,000,000 of business and you know, shipping. It's Lee,??. Why do we want to be able to connectivity so that we can successfully develop this issue?

And Thats something Thats also particularly helpful. When we have the economies of scale in the supply chain to be able to support it if you didn't have that.

With like billions of dollars of business in.

Being able to.

Speaker 2: have a million of supply chain along the way, then that's a very different scenario and outcome than if we did it. And that's what we're able to leverage successfully. So with that said, there's more work to do obviously on this, but we're very excited to have an opportunity to unveil.

The unit supply chain, along the way then that's a very different scenario and outcome than if we did and that's what we're able to leverage successfully so.

With that said there is more work to do obviously on this but we're very excited to have an opportunity to unveil.

Speaker 4: details, respectively next year about the next generation product. And in John while we haven't been talking a lot publicly about the details of our next generation product, we have been talking about it with some of our customers and with your question about water book. There was nothing for our next generation product in the order book. At the end of last year, I'm pretty confident. Some of the positive growth you'll see in the order book this year will include we're okay.

Details respectively next year.

The next generation products and then John when we haven't been talking a lot publicly about the details of our next generation product we have been talking about it.

With with some of our customers and with your question about order book.

There was nothing for our next generation product in the order book.

At the end of last year.

Confident.

The positive growth Youll see in the order book this year will include.

Some portion of it from our next generation product.

Speaker 4: And as Austin Fed will, we'll talk about that in the future and hopefully near future here.

And as Austin said, we'll talk about that in the future and hopefully near future here.

Okay. Thank you appreciate it.

Speaker 1: Our next question is going to come from Natalia Wainzler at Dreffer.

Our next question is going to come from Natalia Winckler at.

Jefferies.

Speaker 4: Hi, thank you for taking my question. So the one I just wanted to clarify, Tom, on those two contracts that you highlighted in the letter that you've been pushed up, could you explain a little bit more how do these work? And also maybe part of that, how should we think about that sequential growth that you guys are seeing in the revenues in the fourth quarter? Yeah, so Natalia, there were two contracts in particular that were supposed to get done in Q3. You know, one of them who's actually done, you know, it got done.

Hi, Thank you for taking my question.

The one I just wanted to clarify Tom on those two contracts that you highlighted in the letter.

Been pushed out could you explain a little bit more how do these work and also maybe part of that like how should we think about the sequential growth that you guys are seeing.

The revenues in the first quarter. So in Italia, there were two contracts in particular.

They were supposed to get done in Q3.

One of them is actually done.

It got done in October instead of September and the other one is going to be get done here I would say in the coming days.

Speaker 8: get done here.

Speaker 4: And so, you know, once again, that's just revenue that will that will start to

Once again, that's just revenue that will that will start to recognize in Q4 as opposed to Q3. When you kind of look at where we ended up in Q3 from a revenue perspective, and then you look at kind of what the implied Q.

Speaker 4: when you kind of look at where we ended up in Q3 from a revenue perspective.

Speaker 4: of what the implied Q4 revenue is, it's about 10 million of additional revenue. That's...

Q4 revenue is its about $10 million of additional revenue of that $10 million of additional revenue.

Speaker 4: About 70% of that is is I would say coming from contracts

Hi.

About 70% of that is I would say coming from contracts that we've already executed.

Speaker 4: So we feel pretty good about that strong sequential growth from Q3 to Q4. And most of that revenue we've kind of already have a lot.

And so we feel pretty good.

About that strong sequential growth from Q3 to Q4 and most of that revenue, we've kind of already have locked and loaded and contracts that we've executed.

Speaker 4: Thank you, that would be like, what I mean, over 50% growth from Q3 to Q4. Yeah, I would say 10.

Thank you that would be like I mean at over 50% growth from Q3 to Q4.

Yes, I would say 10 over 2017, I think it's somewhere around 60%.

Don't have my calculator with.

Speaker 9: This is very helpful. And then the second question had what kind of a little bit longer term strategic. This one, I'm sure you guys can provide some more color on the China market, right? Like what kind of competition are you seeing there? And how do you think, you know, how do you consider those dynamics of Chinese OEMs maybe getting incrementally more successful in Southeast Asian Europe ? Does that basically kind of change your view, your opportunity, your view and the opportunity going forward? Yeah.

That's very helpful. And then the second question I had was kind of a little bit longer term strategic just wondering if you guys can provide some more color on the China market right like what kind of competition that you're seeing there and how do you think how do you consider those dynamics of Chinese Oems, maybe getting incrementally more successful in southeast Asia and Europe.

Does that kind of change your view your opportunity.

Your view on the opportunity going forward.

Yes look we.

Speaker 4: We are, you know, the China market, I would say, is moving very fast both in terms of the automakers they're adopting a LiDAR technology, particularly some of these new EV companies. I would say as well as the pace at which Chinese companies move. And so from a human or perspective, one of the things that's very important to us is to kind of be able to move at that China.

We are.

The China market I would say is moving very fast both in terms of.

The automakers, they're adopting lidar technology, particularly some of these new <unk>.

Companies I would say as well as the pace at which Chinese companies moved in so.

From a luminaire perspective, one of the things thats very important to us as to kind of be able to move it that China's speed.

Speaker 4: to make sure that we can continue to win in that market. We've so far been really the only Western LiDAR company that's had success in China.

To make sure.

That we can continue to win in that market, we've so far been.

Really the only western Lidar company that has had success in China, and we think that that success is going to continue.

Speaker 4: that success is going to continue. But we need to make sure that we operate in China at the right way to make sure that we can appropriately serve the local Chinese customers both in China, but as they start to serve.

But.

We need to make sure that we operate in China at the right way to make sure that we can appropriately serve the local Chinese customers, both in China, but as they start to serve there.

Speaker 4: start to expand globally. That's why the second manufacturing plant we opened up is in China with T.P.K. and I think you're gonna continue to see us increase our business in China as well.

I would say start to expand globally. That's why the second manufacturing plant. We opened up is in China with TDK and I think youre going to continue to see us.

Increase our business in China, as well as our presence in China.

Speaker 4: Thank you. And if I may, we're just one full op on this. How do you guys think about ASD's longer term, you know, for China market and outside of China market? And also like, how should we think about the ASDs that you guys are considering for the order book, the one billion. Whatever's been in the order book, is already about pricing of RE2 with our...

Thank you and if I mean, we're just one follow up on this.

How do you guys think about asp's longer term.

For China market.

Outside of China market and also like.

How should we think about the Asp's that you guys are considering for the order. The order book the 1 billion whatever it is in the order book is already.

Pricing agreed to with our customers.

Speaker 4: And so that's kind of, you know, already contractually put in place. You know, we're always going to get pressure from our customers and automakers, whether they're in China or globally to lower our prices.

And so that's kind of.

Already contractually put in place.

Look we're always going to get pressure from our from our customers and automakers, whether they're in China or globally to lower our prices, but the one thing that we continue to impress upon with our customers is you've got to look at the value that our lidar providers and that's both in terms of unique technology to enable this next generation Adas system as well as by way of autonomy we will.

Speaker 4: to impress upon with our customers is you got to look at the value that our LiDAR provides. And that's both in terms of unique technology to enable this next generation.

Speaker 4: We'll continue to be able to bring our costs down with our next generation LiDAR, but really the value that we create in the A. Because...

To be able to bring our costs down with our next generation Lidar, but really the value we create in the ecosystem is where we'd like to.

Speaker 4: You know, we tend not to compete on, you know, business where it's.

Focus the conversations on.

We tend not to compete on.

Is this where it is.

Speaker 4: cost lighter, we like to compete on business where you can provide the best value to the system that our

Can provide the cheapest cost lighter we'd like to compete on business, where who can provide the best value to the system that our customers are trying to build it.

Speaker 2: I think it's also very important to note that, and again, this is our obviously the foundation because it's been a live, but we've really been focused on how we

I think it's also very important to note that.

And again this is where obviously the foundation of the business has been a while but we've really been focused on how we can continue to monetize the ecosystem around the ceridian, our software and AI developments that we've had some success.

Speaker 2: around this through our software and AI developments that we've had.

Speaker 2: that's what has through, you know, for example, these mapping products that, you know, you know, have been able to be out there with through all the different parts of the entire supply chain. These are all the way down to the semiconductor level, you know, at the wide arc how we've been able to successfully to those products.

Let it through for example, these are mapping products. That's now been able to be alpha went through all the different parts of the entire supply chain either went all the way down to the semiconductor level.

Or and how we've been able to successfully sell.

Those products, even just outside of what.

What we do with the core business. So I think thats important as part of this ultimately insurance will play a significant role in I think supporting very significant long term asp's associated with safety improvements.

Speaker 2: So, you know, I think that's important. As part of this, ultimately insurance will play a significant role and I think supporting very significant long-term AS.

Speaker 2: or the safety improvement will ultimately be king when it comes to the kind of value proposition that you can be able to provide. And this is where we are also, and are successfully launching a new test protocol and system is actually a Swiss re is going through an independent third party test. There are exclusive insurance partner here to be able to quantify the benefits.

The safety improvements will ultimately became when it comes to the kind of value proposition that you can be able to provide and this is where we are also.

Our successfully launching.

A new test protocol and system is actually Swiss re is going through an independent third party tests, there are exquisite reinsurance partner.

So you have to be able to quantify the benefits.

Speaker 2: and safety improvements, what the LiDAR can have, to be able to basically correlate that into respective insurance savings and costs. And I've said, you know, I'm located before that the respective savings and value that's being provided from that alone, from a safety saving standpoint, you know, it's expected to be significantly more than even just thinking of the LiDAR in and of itself. So I think this will be, you know, certainly on premium vehicles and even main

And safety improvements with Lidar can have to be able to be able to correlate that into perspective of <unk> savings and cost.

And I've said.

Mobile vacated before that the respective.

Savings and value that's being provided.

From that alone from a safety savings standpoint.

It is expected to be significantly more than even just the shift to higher cost the lidar.

Itself. So I think this will be.

Certainly on premium vehicles, and even mainstream vehicles. So.

Speaker 2: So actions are expensive, vehicle collisions are expensive, and even if you ever go over time and probability.

Accidents are expensive.

Vehicle collisions are expensive and even if you averaged over over time and probability weighted it's extremely expensive so preventing that makes a huge difference and thats why I think.

Speaker 2: preventing that makes it easier to difference. And that's why I think it's very clear that over the long term for a value proposition, the ASP standpoint, it all comes down to the technology, the product in terms of, welcome be supported. And that's why we're obviously proud to be the leading technology company in that respect and have the performance capabilities for why we're seeing all this leading adoption from the top automakers out there.

It's very clear that over the long term.

From a value proposition and ESP standpoint.

It all comes down to the technology of the product in terms of what can be supported and that's why we're obviously proud to be the leading technology company in that respect and hobby performance capabilities for why we're seeing all this.

Leading adoption from the top automakers out there.

Thank you for what is it Tim.

Speaker 1: Thanks, Taya. We're gonna transition back to some questions from our investors. The next one is going to be for Austin. Going by three-year design labels, 2024 RFQs will be for the 2027 model year. Will these RFQs be pitched with the next-gen ladder?

Thank you, Tim we're going to transition back to some questions from our investors. The next one is going to be for us. The only my three year design cycle 2024 are accused will be for the 2027 model year will these rfps be patched with the Nextgen Lidar.

Speaker 2: Yeah, so I would say that, you know, when we're talking about the second half of the decade here.

Yes, so I would say that.

When we're talking about the second half of the decade here.

Speaker 2: Absolutely that you know that will incorporate our next generation light are as well. You know we have iris and we have iris plus That are you know continuing to scale accordingly, you know with automakers as well, so that's not stopping But when it comes to the next generation systems and models, you know that ultimately streamline and into the respective road maps and the cup

Absolutely.

That will incorporate our next generation Lidar as well you know we have iris and we have iris plus.

That are continuing to scale accordingly, with automakers as well so that is not solving but when it comes to the next generation systems and models that ultimately streamline into the respective roadmap the customers.

Speaker 2: For both, existing customers and new customers, we're all so making sure the dissenters are, so to say, backwards compatible, as it relates to this respective automakers as well, to make sure that ultimately, when they launch new models, what not they can have an easy and straight forward transition with both the hardware and software, respectively to the new sensor technologies that we have. So that's, yeah, we'll be great to be able to see that.

For both.

Existing customers or new customers, we're also making sure.

The sensors are so to say backwards compatible.

As it relates to the respective automakers as well to make sure that ultimately as they launch new models or whatnot. They can how about an easy and straightforward transition with both the hardware and software.

Respectively to the new sensor technologies that we have so that's.

Yes, it will be great to be able to see that realized and.

Speaker 2: And, you know, I would just say as well, you know, there's obviously

I'd, just say as well there's obviously.

Speaker 2: you know, RFG processes and whatever it may be that's there, but I think what's um...

Our a few processes and whatever it may be that's there, but I think what's.

Speaker 2: Our cues are cheap. You know, to be able to send out what's important is that the automaker that are investing, you know, billions of dollars with us to be able to develop these kinds of new holistic systems and deployment that can go out onto their production vehicles and sort of show what's possible when it comes to the implementation of this technology. And that's really what we're seeing and gonna continue to emphasize on. So it should be a smooth transition.

Our skus are cheap.

To be able to send out what's important is that the automakers that are investing billions of dollars with us to be able to develop.

These kinds of news holistic systems and deployments that can go out onto their production vehicles and sort of show what's possible. When it comes to the implementation of this technology and that's really what we're seeing and going to continue to emphasize on so it should be a smooth transition ultimately as people as people scale and that will unlock.

Speaker 2: as people scale and that will unlock as it was alluded to before. Even wider spread, you know, adopts.

Mark as I was alluding to before.

Even wider spread adoption of dispatch capabilities.

Speaker 4: And I have followed questions from Tom from one of those that was asked earlier. What specific risks are present given limiter participation in the China market and the U.S. crackdown on sensitive technology? Yeah, so you know, I already talked about how.

And a follow up question per tonne from one month that was asked earlier what specific risks are present, given limit our participation in the China market and the U S crack down on some of your technology.

Yes, so I already talked about how important China is to us as a market as well.

Speaker 4: over there and we acknowledge that the world is...

Some of the success, we've had over there and we acknowledge that the world is becoming a more dynamic and complicated.

Speaker 4: a more dynamic and complicated place from a geopolitical.

Place from a geopolitical tensions and relationships perspective, and so as we continue to build and expand globally, we need to keep that in mind.

Speaker 4: effective and so as we continue to build and expand globally, you know, we need to keep that in mind, you know, as we grow. Having said all that for our core, light our business.

As we grow.

<unk> said all that for our core Lidar business in our core automotive market that there are no limitations on us to operate anywhere in the world.

Speaker 4: in our core automotive market that there are no limitations on us to up.

And we don't see that changing anytime in the near future.

Speaker 4: You know, there are, I would say, obstacles more on the software data collection mapping side, depending upon.

There are I would say obstacles more on the software data collection mapping side, depending upon on the specific region.

Speaker 4: region, you know, and where we do face those, you know, limitations in the certain geography we looked at, partnered with the right people, but on our core, led our business and our core automotive market.

And where we do face those limitations in a certain geography, we look to partner with the right people, but on our core lidar business in our core automotive market.

Speaker 4: our goal is to be a major automotive player and in order to achieve our goal of saving a hundred million lives over the next hundred years we need to be in every

Our goal is to be a major automotive player.

In order to achieve our goal of saving 100 million lives over the next three years, we need to be in every major region with our Lidar technology.

Speaker 2: I think the risk is actually more the other way around in terms of not, you know, it would be let's, let's show the US not allowing technology to China or China not allowing US technologies into China. It would be the US not allowing Chinese technology.

I think the risk is actually more more of the other way around in terms of not.

You know.

It would be.

So the U S, not allowing technology to China, or China, and U S technologies into China, It would be the U S not allowing Chinese technologies into.

Speaker 2: The West or Mark, I think those are some of the dynamics that were actually you know, that I think those are the questions that are being posed that I'm sure everybody.

Western market I think thats those are some of the dynamics that we're actually.

I think those are the questions that are being posed that I'm sure everybody is.

<unk> seen so that's that's the relevant factor.

Doctors I think can play right now.

Speaker 1: Next one from retail shareholders before we switch back to the South Adanilist. Lidar technology is evolving to replace work competitors, or making similar products for cheaper. They've been your current assets. What's the long-term plan to deal with saturation in the Lidar market? And are there plans to broaden R&D into other related technology?

Next one from retail shareholders. The FRB such back Tim It's up at Analyst latter technology is evolving to a place where our competitors are making similar products for cheaper based on your current assets. What's the long term plan to deal with penetration in the latter market and are there plans to broaden R&D into other related technologies.

Speaker 2: Yeah, so, you know, I mean, and so is that what about the saturation for the light on market?

Yes so.

I mean I'm.

So are you saying is it.

What about the saturation for the Lidar market, what I'm, saying there.

Speaker 4: There's like a lot of LIDAR companies, you know, a lot of them are raising the bottom like, you know, here's what I would say, you know, when it comes to, you know, getting our LIDAR price point where it accelerates mass marketer.

Certainly a lot of Lidar companies you know a lot of them are racing to the bottom line.

Here's what I would say when it comes to.

Getting our lidar pricing.

Getting our lidar to a price point, where it accelerates mass market adoption.

Speaker 4: you know that's a core tenant of our of our next generation lidar and making sure that it is at a cost point where it can you know penetrate the mass market at a rate so in terms of you know you know keeping the same technology and not better at a lower price point we achieved that strategy with our next generation. You know we are confident that we are going to be a winner if not the winner in in in the lidar landscape. you know what we are investing in outside.

That's a core tenant of our of our next generation Lidar and making sure that it is at a cost point.

It can.

Penetrate the mass market at a rate so in terms of.

Keeping the same technology that not better at a lower price point, we achieved that strategy with our next generation.

We are confident that we are going to be a winner if not the winner.

In the Lidar landscape, what we're investing in outside.

Speaker 4: of our LIDAR business is not to create a hedge.

<unk> business is not to create a hedge.

Speaker 4: you know in case we're not successful it's actually to build those tools

In case, you're not successful, it's actually to build those tools to monetize the value that we create that's why we're getting and the software that is are we getting the mapping and thats why were getting into insurance and Thats why we are.

Speaker 4: to monetize the value that we create. That's why we're getting in the stalker, that's why we're getting in mapping that.

Speaker 4: insurance and that's why we're, you know, selling the components that we make in our LSI business for a LIDAR into the non-automotive market.

Selling the components that we make in our LSI business for a lidar.

The non automotive markets.

Speaker 4: And so, you know, we're confident that our next generation, LIDAR is going to have the price point to accelerate the massive option. And we're confident we're going to be winner and we're confident that the tools that we're investing in are going to...

And so we.

We're confident that our next generation <unk> is going to have the price point to accelerate the mass adoption and we're confident we're going to be a winner and were confident that the tools that we're investing in Oregon.

We're going to allow ourselves in our customized and our customers to monetize the value of the ecosystem that we create.

Speaker 2: And I think the important part here is like when we see saturation for everything, like like the relevant

I think the important part here is like when we see saturation for everything like the relevant.

Speaker 2: factor here and again we have to take a step back all the like the numbers in this auto like in automotive

Factor here again, we have to we have to take a step back although like the numbers in this like in automotive and in this industry and just the sheer scale is absolutely massive that's why as we talked about it it's like okay.

Speaker 2: And it's this year's scale is absolutely massive. That's why, you know, as we talk about, it's like, okay, just, you know,

Speaker 2: 3 to 4% market penetration can be game changing in terms of like increasing the value.

3% to 4% market penetration can be game changing in terms of like increasing the value and business value by like orders of magnitude because look the point is is there right now it's not like you know.

Speaker 2: and business value by like orders of magnitude. Because like the point is, is there right now, it's not like, you know, 75% of cars are shipped with this new technology on it, and it's a trillion dollar industry right now. You know, it's something that, uh,

75% of cars are shipped with like new technology on it and it's a trillion dollar industry right now.

It's something that.

Hi.

Speaker 2: Well, less than like only a fraction of 1% of cars and even like what the number is the percentage of the market cars, the light hours officially being actively integrated into.

Well less than like only a fraction of 1%.

Cars and even like what the number the percentage of the market of course, the lidar officially being.

<unk> actively integrated into.

Speaker 2: you know, in terms of the vehicle models right now is still, you know, what like, a couple percent. So, you know, and most of it probably captured by us. So I think the thing is, is that...

In terms of the vehicle models right now is still.

A couple of percent.

So.

Most of it probably captured by us. So I think the thing is is that when you take a look at the overall market opportunity, it's not a matter of over saturation. At this point there is an over saturation of R&D efforts that in terms of people trying to create different systems and technologies to be able to get into the market.

Speaker 2: When you take a look at the overall market opportunity, it's not a matter of oversaturation at this point. There is an oversaturation of R&D efforts that in terms of people trying to create different systems and technologies to be able to...

Speaker 2: of which obviously the substantial and vast majority of which all have not been successful in that, which is made.

Of which obviously the.

Substantial and vast majority of which all have not have not been.

Successful of that which is maybe no surprise and consistent with the message that we've given for years.

Speaker 2: that in terms of the challenges and difficulties associated with this much less meaning of a formal inter-acquirement.

That's in terms of the challenges and difficulties associated with this much less meeting the performance requirements and specifications safety requirements and being able to scale our business accordingly to do this but when it comes down to it.

Speaker 2: requirements and being able to scale a business accordingly to do this. But when it comes down to it, I think it

I think.

It's.

Speaker 2: the less about the slice the pie, you know, at this point of how big can we make this pie and how how much adoption can we get as an industry how quickly. And I think that's the most important metric. Now, when it comes down to it, the other relevant factor is you have to survive to see this through. And that's where, like obviously, if you don't survive.

Less about.

The slice the pie.

No at this point about how big can we make this tie in how much adoption can we get as an industry how quickly and I think thats. The most important metric now when it comes down to it the other relevant factor is you have to survive.

To see this through and Thats, where because obviously if you don't have you don't survive.

Speaker 2: there's no market penetration on anything. But this is where I think that consolidation factor obviously serves as an advantage to us. And that respect, in terms of the long-term outlook for what we can do. But we're building Luminars to last for decades. And.

Theres no market penetration on anything.

But this is where I think that consolidation factor, obviously serves as an advantage to us.

In that respect.

In terms of the long term outlook for what we can do but.

<unk>.

We are building alumina to last for decades.

Speaker 2: Hopefully well over that 100 year, I mean, there's a reason why I have a 100 year goal. Well over to the goal is to have it be a long term company that outlives ultimately all of us and do towards realizing that life saving objective and being on all.

Yeah.

Hopefully.

Well over that 100 year I mean, there's a reason why we have 100 your goal well over.

The goal is to have it be a long term company that outlives ultimately all of us and do towards realizing that life saving objective and being on all of these.

Speaker 2: you know vehicles for decades or centuries to come. So I think that's really what we're doing. And...

Vehicles for <unk>.

For decades centuries to come so I think thats really what were doing and.

Speaker 2: In the immediate term, the focus is to continue to meet those respective goals, the smile stones, you know, survive it through, and you know, that's exactly what we've been set up for success and deliver on what we promised that we would do from the beginning.

In the immediate term the focus is to continue to meet those respective goals business milestones survive at throw and.

That's exactly what we've been set up for success and deliver on what we promised that we would do from the beginning.

Next question comes from Jamie Brad that RF Lafferty.

Speaker 10: Hey everybody, how's everything going? Thanks for taking my question. I know you've spoken a lot about Volvo and Mercedes. How about one or any other customers post or I think?

Hey, everybody how is everything going on.

Thanks for taking my question.

I know you've spoken a lot about Volvo and Mercedes how about.

One of the other customers Pulsar I think.

Speaker 10: A couple months, it was announced that a poll store is gonna be equipped with LiDAR, Luminea LiDAR, but I mean, a poll store has a pretty aggressive series of models coming out from the poll store, five, four, five, and six coming out. So can you tell me, give a little bit of color on the relationship between you guys and poll store and the outlook for that, you know.

A couple of months.

It was announced that a pulse on what's going to be quick with lidar.

But.

<unk> also has a pretty aggressive series of.

Models coming out from the pulse, a 545 or six coming out so it could you tell me.

Give a little bit of color on the relationship between you guys and impulse star in.

The outlook for that.

Speaker 2: The poll starts great and they're like a fantastic company. They've been producing some, you know, very real product and starting to really...

Relationship.

The pulsar is great and they were like a fantastic company they've been producing some.

Very real product and starting to really.

Speaker 2: scale that up successfully and you know, first with tens of thousands of deliveries now going into hundreds of thousands of deliveries. You know, very impressive as a-

Scale that up successfully in first with tens of thousands of deliveries now going into hundreds of thousands of deliveries.

You know very impressive.

Speaker 2: New? World Ez.

As a company in terms of what they will do in that corner more new new World EV company.

Speaker 2: You know, obviously there's like the lucid and the rivians and everything out there, you know, we have to sort of pick one up to be able to start out with You know again contribute to this focus and our resources. I think Polestar was the best partner to be able to do that and give us

Obviously, there is like the lucid and <unk> and everything out there, we got to sort of pick one up to be able to start out with.

Again contributed just focusing our resources.

Pollstar was the best partner to be able to do that and gives us the biggest.

That kind of revenue and order book opportunity associated with the business of contracts there. So so.

Speaker 2: So I think it should be public out there with, we're following the announcement that we had with the poll start three and the poll start five and what they're planning with us. And again, this incredible partner, incredible team on this, I would suggest and everyone here should.

So I think it's.

Should be public out there, what we're calling it off but do we added with the polestar three and post our five in terms of what they are.

What theyre planning with us.

And again, just incredible partner incredible team on this.

I would suggest in.

Everyone here should.

Speaker 10: to an inferrer poll star day as well. They actually do have it out. We're going on tomorrow. So it'll be great. All right. Thanks for my question.

Tune in for Robert Pulsar day, as well they actually they have it up.

What's going on tomorrow, so there'll be there will be great.

Alright, thanks, so much.

Yes.

Absolutely. Thank you.

Our next question is going to come from Mark Delaney from Goldman Sachs.

Speaker 11: Yes, good afternoon. Thank you very much for taking my questions. I hope you can give some more color on the path to being gross margin positive next quarter. Maybe Tom, you can help us better understand how much of the COG in 3Q were launch related costs and where those launch costs may go to in the fourth quarter. And then what the other factors are sequentially the bridge to being at positive gross margin in 4Q.

Yes. Good afternoon. Thank you very much for taking my questions I'm, hoping you can give some more color on the path to be gross margin positive next quarter, maybe Tom you can help us better understand how much of the Cogs and <unk> launch related costs and where those launch costs may go to in the fourth quarter and then what the other factors are sequentially to bridge to being a positive gross margin and <unk>.

Speaker 4: You know, we had about a $9 million gross loss during Q3 of that about 17 million was a lot of related costs. That was down.

We had a about a $9 million gross loss during Q3 of that about $17 million was launch related cost that was down from about $24 million.

Speaker 4: in Q2. And so the path areas is to really...

In Q2.

So Pat.

There is to really.

Speaker 4: continue to bring those launch related costs down so that we reach a gross growth.

To bring those launch related costs down so.

So that we reach gross.

Gross margin positive in Q4.

Speaker 11: That's awful color. My second question was just trying to better understand is any work women are still need to do in order to help Volvo get ready for the launch of the EX90 or is everything you guys need to do now ready after having successfully done the run at rate test. And then maybe just more broadly, you know, operationally, what does women are need to do in order to be flexible depending on when that vehicle may launch just, you know, in light of some of the delays Volvo encountered on their side, but hopefully we'll be results soon.

That's helpful color.

Question I was just trying.

Trying to better understand is there any work lumen are still need to do in order to help Volvo get ready for the launch of the <unk> 90 or is there anything you guys need to do now ready after having successfully done the run at rate test and then maybe just more broadly operationally what does limit our need to do in order to be flexible depending on one when that.

Vehicle May launch just in light of some of the delays volatile encountered on their side, but hopefully will be resolved soon.

Speaker 2: So I mean, we're working with them obviously hand in hand to be able to ensure successful launch on that. I'm sure.

So I mean, we're working with them, obviously hand in hand to be able to ensure a successful launch on that I'm sure.

Speaker 2: probably maybe more appropriate task than in terms of the details there, but we're supporting with everything we had. We also, there's the hardware side that we have for the run at rate that we successfully did with them. And then there's also the software side, which I think we also said that we completed the successful integration of the software with the ZEN-SACS system and middleware associated on the vehicle.

Probably maybe more appropriate to ask them in terms of the details there, but we're supporting with everything we had we also.

There's the hardware side that we have for the run it right.

What we did with them and then there's also the software side, which I think we also said that we completed the.

Successful integration of.

The software with the <unk>.

System and middleware associated on the vehicle and then on top of that.

Speaker 2: And then on top of that, we actually now successfully implemented everything that it takes to be able to actually, when you have the center, then on the vehicle, on the production line, in this case it started out in Charleston, South Carolina, the end of one calibration, all these.

We actually now successfully implemented.

Everything that it takes to be able to actually when you have the sensor than on the vehicle on the production line in this case it started out in Charleston, South Carolina.

The end of the pool, and one calibration all the intrinsic and extrinsic metrics and auto calibration associated with that specific factory in line that will then scale from there on out so well.

Speaker 2: associated with that specific factory in line that will

Speaker 2: from there on out. So we're in a great position to be able to support, you know, as they successfully launched, you know, obviously, Iris as a product is independent of just Volvo alone, like Volvo is the first kind of global, large scale launch that we have with this, that we think is that very clear and watch and point. And this run array was really that fundamental milestone of what's needed.

We're in a great position to be able to support.

As they as they successfully launched obviously <unk> has a product is independent of just mobile alone like Volvo is the.

First kind of global large scale.

Launch that we have with this that we think is that very clear in watch and point and just run it right was really that fundamental milestone.

Speaker 2: So, you know, we're excited for this. You know, obviously we've already, we have dozens of customers.

What's needed to support so we're excited for this.

Obviously, we've already.

We have dozens of customers that.

Speaker 2: You know, use IRIS, but this is where it starts again in the big leagues when you, you know, you have hundreds of, you know, hundreds of thousands of, you know, there are quick cars driving around and then you also...

Use iris, but this is.

Where it starts to get into the big leagues when U 100.

Thousands of.

Lunar quit cars driving around and then ultimately scaling.

Scaling to $1 billion and beyond with Mercedes.

Everything thereof.

That's great. Thank you.

Speaker 1: All right, we'll transition back to a few from our investors. The next one is, how does women think about accountability in terms of recent business performance and financial losses? Are there any review processes for unsatisfactory performance?

Alright, we'll transition back to a few from our investors.

First one is how does limit our thinking around accountability in terms of recent business performance and financial assets are there any review processes for unsatisfactory performance.

Speaker 2: These are all the say questions for the retail platform.

I assume these are the same questions for the retail platform.

Yeah, Okay, great. Thank you.

Speaker 2: Yeah, so, you know, I say from an accountability standpoint, you know, we have a high performance culture and, you know, management within that culture. I think that's something that, you know, we've structured women are very much of the meritocracy on this.

Yeah. So.

I would say from an accountability standpoint, we have a high performance culture.

Management within that culture, I think that's something that we've structured limit are very much is a meritocracy on this.

Speaker 2: You know, and I think it's a sinker swim type of road as people come in and certainly can attest to it in terms of what needs to be done or what you need to be able to make the happen. But when it comes to the overall goal, like when talking about accountability and the overall goals and everything, I mean, I think we, in terms of the business goals,

You know.

I think it's a sink or swim type type of approach as people come in and certainly can attest to it in terms of what.

What needs to be done and what you can do to be able to make that happen, but when it comes to the overall like when talking about accountability and the overall goals and everything I mean, I think in terms of the business goals.

Speaker 2: for what we set out into the key company level milestones that we had for 2020, 2021, 2022, and 2023. I mean, we've effectively achieved all of those respective milestones that we laid out, plus or minus, we actually beat many of them along the way in terms of what we laid out from the beginning and overall have set up as a business to put us on a...

For what we set out in terms of key corporate company level milestones that we had for 2020 in 2021 2022 and 2023.

We achieved all of those respective milestones that we've laid out.

Plus or minus we'd actually be.

Any of them along the way in terms of what we laid out from the beginning on an overall have setup as a business to put us on a great trajectory. There. So like obviously overall of our over performance standpoint, that's been fantastic.

Speaker 2: So like, obviously, over all of our requirements standpoint, that's been fantastic. We all know the frustrations for the capital markets on that and reflecting that execution and success. But when it comes to the actual court business performance there, we have the relevant KPIs, that for...

We all know the frustration with respect to capital markets on that and reflecting that execution and success, but when it comes to the actual core business performance. There you know we have the relevant kpis.

Speaker 2: each respective leader in OKRs that we have. And that task fades down throughout the entire company. That role.

For <unk>.

With respect to the leader in <unk> that we have.

And that Cascades down throughout the entire company that rolls up.

Speaker 2: Like I said, we largely met those along the way. So I think nevertheless, again, I have this thing internally, it's going to never stop it good enough. And that's something where we always keep putting the bar and keep pushing the battery of what's possible and what's achievable in this company. And we'll continue.

I said, we largely met that was along the way so.

I think nevertheless, again.

I have been saying internally, it's going to never stop good enough.

That's something where we all we keep pushing the bar and keep pushing the battery of what's possible and what's achievable in this company.

We'll continue to do so with everything that we got into the foreseeable future.

Speaker 1: All right, and our next question from one of our investors. There's been some rumors and some talk about some management turnover within the company, including Tanner Obleck and Jason Eichenfult. Can you provide some color or comment?

Alright, and our next question from one of our investors.

Some remarks to talk about some management turnover within the company, including <unk> <unk> and Jason If I can can you provide some color or comment.

Speaker 4: Yeah, the Jason Lincoln Ols, that's that's taking is Jason. He's been a key part of Lumenar as our co-founder since the beginning. He has been is and you know, my mind always will be a critical part of our.

Ed.

Hey, Jason.

That's fake news Jayson.

He has.

Ben.

Key part of Illumina are as our cofounder since the beginning.

He has been is in <unk>.

<unk> will be a critical part of our team Jason.

Speaker 2: Jason I don't know where that rumor came from, you know, he's that woman are he's Terry I think I think I think it's probably because you know people like this you know They wear different hats in the business along the way in terms the business cycle and gurning all this So, you know, we recently appointed him as a chairman of the Luminars Company

I don't know where that rumor came from <unk> He's chairman.

I think it's.

Probably because people like this they were different hats in the business along the way in terms of the business cycle and joining all of them. So you know, we recently appointed him as the chairman of the maritime market.

Speaker 2: So, you know, the day I get used to basically overseeing that side of it. When it comes to, you know, the operational aspects of the business, you guys may be aware we recently hired, you know, Kevin Hinge, who's been taking charge of the respective operation.

Did I hear that he's he's basically overseeing that side of it.

When it comes to the operational aspects of the business you guys may be aware, we recently hired.

Kevin hinge on who's been taking charge of their respective operations and scaling of some of the core aspects of the business and he has been already off to the races. After that two for an incredible start.

Speaker 10: scaling, this is the core aspects of the business. And he's been already off to the races, off to the bat, to an incredible start. So that's been fantastic. We actually have as well. I think I had the same time that we also announced Emily, who's here, who's came from leading our...

So thats been fantastic actually.

Absolutely.

Well I think that at the same time that we announced and we also announced Emily whose is here who as you know came from leading our our marketing and it was doing so at a leading a respected marketing that spacex before but.

Speaker 2: But, um, Vagolius of Tanner, yeah, he's no longer with the

But it is always a tender yet he is no longer with the company.

Speaker 2: That's where, you know, we're thankful to have Kevin to be able.

So.

That's where we are.

Were thankful to have Kevin to be able to come on in.

The room some of those responsibilities.

Speaker 1: Okay, our next question we are going to take from Kevin Cavity at Rose Lott.

Okay.

Next question, we're going to take from Kevin Cassidy at reservoir.

Speaker 12: Okay, thanks. Maybe if you could remind us or maybe tell us so what the strategy is for expanding your footprint in other models that you're current customers, say at Volvo and Mercedes and Nissan, how do you get into more models and what would be the timeline for that?

Okay. Thanks.

Maybe if you could remind us or maybe tell us what the strategy is for expanding your.

Footprint and other models that your current customers say at mobile and Mercedes.

Nissan how do you get into more models and what would be the timeline for that.

Speaker 4: You know, Kevin, we've already started to do it, you know, at, you know, Volvo.

Kevin and we've already started to do it.

Ed.

Although.

Speaker 4: We did it at Mercedes. You know, we've done it at a pole start when we're initially at the 3.

Yeah.

We did it at Mercedes.

We've we've done in our poster and we initially up to three and then we went to the to the five earlier this year.

Speaker 4: five earlier this year. And so as you get in with that initial win with the customer, can you execute, it kind of happens naturally. Now look, they're always gonna make sure that

So.

As you get in with that initial win with the customer and can you to execute it kind of happens naturally now look there are always going to make sure.

Speaker 4: you're being honest and competitive on pricing. And so they'll run RFUs to kind of test the market.

Youre being honest and competitive on pricing and so they'll run RFG used kind of test the market and keep you honest, but as you execute.

Speaker 4: you honest, but as you execute, as you deliver, as you build the relationship, as they kind of design their salt.

As you deliver as you build the relationship as they design their software and autonomous systems around you.

Speaker 4: around you, execute, you have a real good shot at the next.

Execute you have a real good shot at the <unk> business.

Speaker 4: The, you know, that business comes as they renew certain vehicle lines or, you know, renew the platforms. And so, you know, the timing of that is more driven by kind of their product launch cycle. But I think you're, you're going to see us, you know, we've done it already. And I think you're going to continue to see us.

The that business comes as they.

Renew certain vehicle lines or renew the platforms.

And so.

The timing of that is more driven by kind of their product launch cycle.

But I think you are.

Youre going to see us we've done it already and I think youre going to continue to see us expand our business with our existing customers and I think the timeline on that is going to vary depending upon the customer and what their internal timelines are for each of their different products.

Speaker 4: very depending upon the customer and what their internal crime lines are.

Speaker 2: Like the perfect example that is like Mercedes, right? You know, where we start off like, you know, with...

Like the perfect example of that is like Mercedes right, where we started off like you know what.

Speaker 2: One, one vehicle line, you know, and one vehicle model, you know, like an S class. Okay, this is a high end thing.

One one.

One vehicle line and one vehicle model S class. Okay. This is the high end thing it's always.

Speaker 2: You know, it's real volume, but you know, it's only so much, you know, there and you see it, you know, an expansion by like 20x in terms of the respective volume and across the vehicle models and line up and everything as they continue to your successful, you know, technology execution.

It's real volume, but it is only there's only so much there and you'll see expansion by like 20 acts in terms of the respective volume across the vehicle models in line up and everything as they introduce New York successful technology execution and the details around that to be able to.

Speaker 2: The details around that to be able to make that decision.

To make that decision.

Speaker 2: six months ago to be able to really expand it across there and once they're in, you know, you're in to be able to make that I've no obviously

Six months ago to be able to really expanded across there and once they are in your end to be able to make that make that happen. Now. Obviously. These these vehicles do ultimately have some kind of respective lifetime as Tom pointed out but these are like.

Speaker 2: vehicles do ultimately have some kind of respective lifetime as Tom pointed out, you know, but these are like, you know, five to ten years cycles.

Five to 10 year cycles on their on the platforms. There. So that's really why also we have such confidence around the prospect of order book and contracts that.

Speaker 2: That's really why also we have such confidence around, you know, the perspective, order book and contracts that we can scale the company.

And that we can scale the company with.

Speaker 12: Okay, great. Yeah, that was my next question was around the competition. And even if they change their domain controller, you're in with all the different domain controllers. So it wouldn't matter much to you.

Okay. Great that was my next question was around the competition and even if they change their domain controller.

You are in with all the different domain controllers. So.

Wouldn't matter much to you.

Speaker 4: You know, look, we try to plan as many seeds in the market as we can, whether it's directly with the automakers or some of the large text, you know, you wouldn't have seen where the temperatures got as low sleep.

Yes look we.

We tried to plan as many seeds in the market as we can whether it's directly with the automakers are some of the large text.

System companies, whether that's in video mobile and what have you.

And we think that that's going to maximize the add backs and ultimately the wins, we get in the industry.

Okay, great. Thanks.

Thank you.

Speaker 1: I think that that we are through most of our research analyst questions before we get to our final question from the industrial community. We do want to make a note that we received many great questions through all of our platforms with quarter. So considering we could not get to all of them within the 60 minutes that we had, we will look to provide answers and commentary through other mediums in the future. But with that, our most popular question coming through the state platform.

I think that that we are through most of our research analyst questions before we get to our final question from me and Thats Fair community would you want to make a note that we received many weight question for all of our platforms. This quarter. So considering we could not get to all of them within 60 minutes that we have we will have to provide answers and commentary to other mediums in the future.

That our most popular question coming through the same platform, that's pretty repetitive the stock has been moving in one direction for much of the last two years, while it's not unusual for our start up there still seems to be a little information on what we are doing development partnerships or other it is one of management's strategy to raise confidence in the future.

Speaker 1: as pretty repetitive. The stock has been moving in one direction for much of the last two years. While it's not unusual for startups, there still seems to be little information on what one is doing, development, partnerships, or other news. What has management strategy to raise confidence in the future?

<unk>.

Speaker 2: No, I think it's a great question around all of this and the broader capital markets, you know, this, of course, on what's in our control and what we've really been focused on is actually.

No I think I think it's a great question around all of this in the broader capital markets. This of course, what's in our control and what we've really been focused on its execution to the key milestones in terms of what we laid out.

Speaker 2: milestones and what we laid out from those past couple of years. You know, we've largely executed too. You know, we are going to continue to be able to execute along the way with this.

From those past couple of years, we've largely executed too.

We are going to continue to be able to execute along the way with this.

Speaker 2: When it comes to, you know, turning updates news, everything we're always welcome to feedback in terms of like...

When it comes to.

Turning to updates news everything we're always welcome to feedback in terms of like frequency level.

Speaker 2: frequency level and what we can do in terms of further insight into the business. These are also, you know, as we kind of think about some of these things, this is like one of the drivers, for example, why, you know, was restarted to help commission this, this, you know, independent study of the efficacy of the technology in terms of, you know, how...

What we can do in terms of further insight into the business.

These are also as we kind of think about some of these things. This is like one of the drivers for example, why.

Swiss re starting to help commission. This this.

<unk> study of the efficacy of the technology in terms of how you quantified the respected safety benefits associated with <unk> versus <unk>.

Speaker 2: want to buy the respective safety benefits associated with this versus, you know, say the, like, does how much substantially better is it than the existing assisted driving systems? How much better is it, you know, how?

Sandy I, just how much substantially better is it than the existing assisted driving systems is how much better is it how.

Speaker 2: forced the hands of automakers as well to be able to ensure that their cars aren't, you know, unnecessarily taking lives out there. So I think this is where it's really important to be able to, you know, obviously continue to share different aspects of the world. Again, we're always open to feedback.

How do you sort of.

Of course, the hands of automakers as well to be able to ensure that.

Their cars arent unnecessarily taking lives out there. So I think this is where it's really important to be able to.

You know obviously continues to show different aspects of the well again, we're always open to feedback.

Speaker 2: When it comes to the overall business and the key thing that we all have confidence in is that we have this long-term view and outlook that I think is as strong as ever. In terms of this, nothing, for example, even just, and I think Tom knows.

When it comes to the overall business and the key thing to reality have competence in is that we have this long term view and outlook that I think is as strong as ever in terms of does nothing for example, even just you know and I think I think Tom noted this in the shareholder letter.

Speaker 2: shareholder letter, there's obviously been insane amount of all this. I think it was like a 50% difference in the like

There's obviously been an insane amount of all so I think it was like 50% difference and the like.

Speaker 2: the market trading where it was this quarter versus literally what it was three months ago. Like, nothing has fundamentally changed in our business, but like there's like arbitrarily different value implied valuations there that, you know, are irrational and gotten to a point of where there's a complete market dislocation.

Trading where it was this quarter versus literally what it was three months ago, nothing has fundamentally changed in our business, but like there's like arbitrarily different value implied valuations there.

Our irrational and gotten to a point or whether it's just a complete market dislocation.

Speaker 2: you know, implied value relative to fundamental value of what we've had, what we've delivered. I think the point is that at some point, as you continue to execute on this and really prove this out, there's a reversion to rationality and reversion, you know, to the mean on that in terms of what it can do. And obviously like I said, it's impossible to predict every hedge fund short to, you know, and market dynamic and it would overflow and everything.

Implied value relative to fundamental value of what we had what we deliver I think the point is that at some point as we continue to execute on this and really prove this out.

Reversion to rationality in reversion.

On that in terms of what we can do and obviously like I said, it's impossible to predict every hedge fund shortly.

Market dynamic in order flow and everything that goes along the way.

Speaker 2: But what is absolutely relevant and what we have the very clear commitment and promise to be able to do is to be able to execute, to be able to meet these longer term targets as well as our near term targets too for that matter to support that. And that's what really all in to be able to make successfully happen. So I think there's really no two questions about this that we can build this.

But what is absolutely relevant and what we have the very clear commitment and promise to be able to do is to be able to execute to be able to meet these.

Longer term as well as our near term targets too for that matter to support that.

And that's what we're really all in to be able to make successfully happened. So I think theres really no two questions about this that we can build this.

Speaker 2: you know, into hopefully one of the most, you know, valuable businesses or technology companies of our generation and, you know, in the industry as we do this and do this right. And I don't think that's a doubt in anyone's mind.

Into hopefully.

One of the most.

Valuable businesses or technology companies of our generation and in the industry as we do this and do this right and I don't think Thats a doubt in anyone's mind.

Speaker 2: Obviously, the key consideration here is having greater credibility around these different aspects in key metrics. For example, I can one thing that we'll take a look at is that how we can get greater.

Obviously.

The key consideration here is having greater credibility around these different aspects and key metrics.

For example, I think one thing that we will take a look at.

Is that how we can get greater confidence in terms of People's view and ability around like say for example, the order book metric.

Speaker 2: view and ability around, like, say, for example, the order book metric. I think

I think.

Speaker 2: As it stands right now, take for example from the capital market perspective, we're probably getting little to no credit. No, respectively for order bucket for if or value that even just a fraction of that order book alone. You know, as a point in terms of the client value. So it would do which is kind of a joke. So then the question is, is that how can you instill for the home and say, okay, did they use that one to one conversion in terms of what happens to the order book to what ultimately makes this way into the company's revenue?

As it stands right now take for example from a capital markets perspective, we're probably getting a little to no credit.

Respectively for order bucket or if a valued at even just a fraction of that order book alone.

At this point in terms of it by value.

So which is kind of a joke. So then the question is is that how can you still put up haul, but it's okay to use that one to one conversion in terms of what happened to the order book to what ultimately makes its way into the company's revenue.

Speaker 2: what does that look like as you continue to execute, how do you continue to scale all these different aspects of the business and not just the lighter, but beyond the light art itself. And, you know, trying to leave little nuggets all along the way like, for example, this great partnership that we have, you know, with Gatic, you know, that we have this, you know, I don't know if anybody has a question on that, but that's...

What does that path look like as you continue to execute how do you continue to scale all of these different aspects of the business and not just the wider but beyond the lidar itself.

And try and leave a little Nuggets, along the way like for example, this great partnership that we have with our with <unk>.

We have the I don't know if anybody asked the question on that but that's something that's not been the shareholder letter that we have in their deliver it will be now delivering our product a great customers like Wal.

Speaker 2: a letter that we have in their, you know, deliver, it will be now delivering our product to great customers like

Speaker 2: the Wal-Mart's and Crowlers and everything in the world for the next generation.

Wal Mart and krogers and operating in the world for their next generation.

Speaker 2: vehicles. So, you know, I mean, we're doing stuff the the intermediate stuff along the way. But when it comes to long-term outlook, you know, that's where we're going to continue to emphasize and really just be all in to help support. We're doing everything to be able to make this as big of a success as we all know it can be and will be

Vehicles, so I mean.

We're doing stuff the intermediate steps along the way, but when it comes to long term outlook, that's where we're going to continue to emphasize and.

Really just be all in to help support we're doing at <unk>.

Thing.

To be able to make this as big of a success as we all know it can be and will be.

Speaker 1: All right, with that, I think we are at the top of the hour. We would like to thank everyone for their participation on the call and the great question submitted. We look forward to seeing everyone at our next quarterly business update and we thank you for your continued interest in Luma.

Alright with that I think we are at the top of the hour we would like to thank everyone for their participation on the call and the great questions submitted and look forward to seeing everyone. At our next quarterly business update and we thank you for your continued interest in Luna.

Thank you everyone.