Q3 2023 Innoviz Technologies Ltd Earnings Call
Development and Investor Relations at <unk>, and I want to welcome you to our earnings conference call joining us today are Omer K laugh.
Good morning. This is Rob Moffitt, Vice President of corporate development Investor Relations at <unk> and I want to welcome you to our earnings conference call joining.
Today, our Omer Kalif, Chief Executive Officer, and elder Segue Chief Financial Officer.
Following their opening remarks, we will open the call to your questions I would like to remind everyone that this call is being recorded and will be available on the Investor Relations section of our website at IR Dot in a is dot tech.
Before we begin I would like to remind you that our discussion today will include forward looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of intimates.
Actual results could differ materially from those anticipated in the forward looking statements.
Forward looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them.
For a discussion of some important risk factors that could cause actual results to differ materially from any forward looking statements. Please see the risk factors section of our form 20-F filed with the SEC On March 9th 20, twenty-three I will now turn the call over to Omer. Please go ahead.
Thank you, Rob and good morning, everyone and thank you for joining us.
Before we begin our business commentary I wanted to spend a moment on the situation in Israel.
The safety and security of Brian employees is of the utmost importance.
And I can report that everyone is innovative.
With a small portion of the local workforce serving in the reserves. The rest about team stepped up and recover what is needed and I want to thank them for their incredible focus on.
At this challenging time.
Enemies was able to remain open with no meaningful operational impacts as a reminder, we are located in the center of the country. It goes distance away from the continental.
All of our automotive customers are located outside of Israel, and our high volume manufacturing sites are in the United States and Germany with the sales plan for Asia.
Determined to not let the situations laws down during the week of the deck, we achieved an important milestone on time delivering the final S&P version of the persistence of tumor of the BMW seven series launched.
We work closely with the teams at Magna and BMW, the complete testing and look the final version of the software that will be installed on the vehicles in the coming weeks.
Since then we've also delivered on milestones both opposed wagon group program and the BMW Gen II program.
All while managing all this ethane negotiating with multiple Oems in our RFP pipeline.
Staying on track to deliver record revenues for the fourth quarter.
With that said, let's turn.
So our BMW ESOP.
In the early weeks of the third quarter moved forward on a very important milestone in our company's history moving into S. Opioid with our BMW, Jim One program.
The components are shipped to Magna for final Assembly plant in Michigan and down had to BMW for installation on the seven seas.
And as I mentioned earlier, we also locked in the final ESOP ready version of our AI enabled perception of sulfur and shifted on time to BMW as well.
We've been pointing to the back half of 'twenty three launch for awhile.
So to get to this phase is a huge win and I believe we are building a track record of credibility that includes delivering on our goals and timelines.
I mentioned this on the last call, but we still get a lot of questions from investors of BMW plentiful lighter level III driving BMW blogged at a wonderful article and video and go with summarizing BMW group's plan for the level three seven series.
In the video you can see the car driving seamlessly through a variety of scenarios and hear more about <unk>.
Ws plans and timeline for deploying the technology.
Have a squash it together encourage you to go to BMW blogs dot com or search for it on Youtube.
Let me go through the rest of the year I'm sure you'll you'll continue to hear more details about bmw's throughout the day for automated driving.
I also suspect you'll see a growing amount of media coverage on the vehicles, particularly as they start to arrive in dealerships and goes on the road.
We continue to expect vehicles on the road later this year.
We will also be amplifying this huge milestone on our N, particularly at CES, where we plan to have a version of the library enables seven theaters with our own book.
If you are going to be in Las Vegas for the show we would love to have you stop by.
While the seven series was always planned to be our initial flagship launch for the <unk>. One we've said in the past about technology was certified on several models and volumes within the BMW group and our airports are now shifting towards integration with additional models.
We hope to be able to update you with more development of this subject in the coming quarters.
Needless to say moving forward on this important program is a source of great pride that innovate not only internally, but also externally.
A strong signal to other Oems that we which enriches therapy and hit our goals and milestones.
It also further differentiates us from our competition there are a number of other liner companies out there claiming to compete with us in the automotive lidar space, but some don't even have even a single series production awarded that some have awards, but have yet to execute on SLP related milestones.
From our experience those who haven't executed on these milestones don't even know how much they don't know at this point.
And as we transition from ESOP preparations are steady state manufacturing it frees up a lot of bandwidth, both physically and mentally enabling us to consistent even more of our airports on winning next round of business that are currently in our RFID and RF Q pipeline.
The other program that.
He is moving into recipes are softer program. As a reminder, this is a full level four program. The customer is a leading automotive supplier who is building. This vehicle directly in order to become an early leader in the rapidly growing autonomous shuttle market.
We expect this program to be fully driverless electric vehicles capable of carrying over 20 passengers and their ability to operate 24 hours a day.
These applications are likely to be people movers in environments like airports College Congresses, private communities and corporate campuses.
But the shot that is also expected to be capable of operating in mixed traffic and dedicated lands.
This opens it up to urban centers, and possibly even suburban environments, where it could become a lower costs were much more flexible adaptive to legacy public transportation model.
The bulk of provision operating model has barely changed since the move tool from trolley and cable cars to gossip nearly 100 years ago.
This is the end market and end markets that we believe is primed for disruption through automation.
The initial stages, the south African complement existing Boston train competition systems, possibly linking different modes of transportation together or connecting otherwise uneconomical routes.
Although the time, it's not hard to imagine the oklahoma's fluids increasingly dislocating the legacy roots as adoption grows.
These secular growth opportunity could also extend to the other have level four programs that we are working on the light commercial vehicle program that we meant that we announced during the first global therefore.
The program remains on track for a mid Nicholas Okay.
With the healthy growth in samples between now and death.
Another thing to keep in mind with these level four programs is that they utilize multiple lighter units most level for typically deploy anywhere between three to six litres per vehicle.
The shopper program that were is hoping later this year initially planned to four full idose TR vehicles, one image corner of the shuttle, but they have since moved to six out of design after incorporating for additional units on the sides.
With us a wider field of view.
Not only does this increase the dollar content per vehicle, but it also shows the possibility of both our lidar are able to bring to the table ranging from ultra long range or based in lighter to wide field of view mounted lidar and anything in between.
With only a minimal change to our hardware or software.
And while we're on the topic of growing content per vehicle I wanted to offer a little more color on our second generation program that we're developing for BMW.
At quarter, Michelle that we have begun development of an all new second generation platform that is built around innovation to central and our AI enabled perception software stack.
We also spoke in detail about how we have the potential to meaningfully grow our sulfur content and dollar volume.
And this quarter I wanted to give you a little bit more color on what we know what the overall change in the content per vehicle could look like.
A key part of our long term strategy is to drive the price of the LIFO central lower in order to drive adoption rates higher.
Aylwin from potentially rapid increases in volumes as we move up the S curve have the potentially of the opportunity to be meaningfully positive net computed contributor to both the revenue and profit line.
But as we drive central costs lower our goal is to continue to drive content per vehicle higher by expanding into new product categories.
Or a particular at this point I think it would be helpful to compare how our business model and CPB has evolved over time.
In the first generation program with BMW, we were operating as a filter supplier.
Selling only components to magna not not at full liars or BMW.
Magnetic north components integrate them into other parts of the hardware and then fill and finish and the finished lighter to BMW.
We were only capturing a portion of the total system value around 600 to $700 BELBUCA.
Since winning that contract in 2018, we've undergone two transformative changes.
Paris, we transitioned from a tier two supplier to a few one capturing a much larger portion of the economics in moving from selling components to selling full systems.
This move is also increases the amount of nonrecurring engineering or <unk> revenues available to us.
The second position was moving from INO with wanted to innovation. Thanks to several technological and engineering breakthroughs. We moved from a design that was built on four lasers and folded that those who are design built on a single laser singular temple.
This along with the host of other changes resulted in a bill of material bomb that was roughly 70% lower than in Opus one.
For the massive reduction in costs and these changes were key catalysts for tier one design win.
With both wagon in 'twenty, 'twenty, two and the big acceleration in commercial activity.
We have seen some of them. Despite the 70% reduction in material costs with field, we were still able to grow the total content per vehicle into the 500 to $1000 range. Thanks for our pivot being to being a tier one which enabled us to capture the full system volume.
Looking forward, we believe we can use the gen. Two system that we are developing as a potential template for future private programs here, we would continue to lever the 70% lower Bom of the Inova stupid drive higher lighter adoption, while period billing, it's with a higher volume.
And moral bus version of a persistent softer and all new products like the <unk> score AI compute models and the minimum risk maneuver.
Offer.
By providing more volume of functionality to customers. We believe we can set we can get.
Simply being nicely over the $1000 Mark.
While also increasing our mix of higher margin software revenue.
We are very focused on making this template for future customers.
Next I want to give a quick update on fourth vegan overall, our program with BW continues to progress nicely.
In the Central suite for the initial program continues to evolve.
We moved from the Asa voted to be sample back in March and we continue to depth and fine tune within the B sample stage.
Having released our new B two samples during this quarter.
Each new version unlocks incremental levels of performance functionality industrialization and the newest version is based on our second generation custom ASIC that quarter was showed a few that were finished the tape out of the ASIC. The new chip has two key benefits first.
Is that it unlocks a configuration that enables much more orange, taking our maximal detection range. The deca detection from 300 meters to 450 and the second is that it can support much higher resolution the more powerful cheap enables us to produce millions of more points. In fact, we were able to nearly double the total.
Number of the points that we can process per second.
This can power higher than higher density point loud with even better resolution than before.
Continuous improvement like this in both our central and sulfur Smith are adding our conversations with Oems with Volkswagen specifically, we are in advanced conversations exploring the put the potential addition of multiple platforms.
It would be incremental to our initial series production level.
We hope to have more to share on this in the coming quarters.
But as I always say PD.
Video speaks better than words.
I'm excited to share with you some of the early points out footage from the new ASIC last quarter when I share. The update we said that we hope to get.
Loss to high definition camera like levels of resolution with the added benefit of through three dimensional Lidar based map as you can see in the video we're essentially there.
There is still and this is still an early version of the points out we're confident that it will only continue to improve from here.
We are working quickly to bring this new level of functionality into the hands of our customers and prospects customer interest has been strong and in August two shipments were 102% up quarter over quarter in the third quarter.
Keep in mind, the benefits are injecting the central side, the dramatically higher range and resolution prostate into more points of data that data fuels, our AI tools, including the neural networks that are critical part of our software development faster neural network Swain intersecting to better perception sulfur and political deference author unlock new features like enabling vehicles to travel it.
Speeds or operate in more complex environments.
Continuous environment improvements like this.
In both of our sensor and software suites are a big part of why we're seeing so much commercial momentum, including in our fine art coupon.
As a reminder, we had a record number of programs more from the Ali fight of the osteoporosis in the first quarter of chemistry.
And now over half of the 10 to 15 programs in the pipeline are indeed, our SKU stage. There are big differences between a dollar by request for information in our in and out of Q westberg rotation and RFID much less structured process and we've seen some programs mainly the outlet by stage for over two years, whereas others have transitioned to the outlet.
You will be left in six months.
And the RFID stage Oems may just be testing systems performing colleagues. The activity is collecting data typically the programs are working towards a production launch, but they don't move into the RFP stage until until a clear decision.
Gulfport with the program.
We made.
At that point the OEM is typically fully decided that the book is going to fill that production committed to a timeline for production and has decided the vehicle will include the lighter there.
The OEM dedicate cost and resources to the program, including entire engineering supply chain finance input and product management teams.
This represents a meaningful investment from the OEM and it's much more tangible signal of our commitment to the program.
The step up in Dallas Skus that we've seen in 'twenty three appears to be a strong signal that the lighter industry is maturing.
And maturing and the level three autonomy Mega frame is beginning.
We believe with a solid evidence that the Oems are increasingly in a race to deploy technology failure to stay ahead of the curve particular rate for luxury brands.
The risk of potentially competitive irrelevancy, and resulting market share losses, and could do long term damage to our brand.
It also runs the risk of missing an important source of profit and the transition to recurring revenues for Oems missing the opportunity to deploy massive consumer tech like level three autonomy may not only resulted result lost volumes and market share, but it could also translate into lost profit dollars on advanced features.
Many of the Oems that we talk to are looking for opportunities to quote took hold in the current revenue streams with biggest left increasingly longer than with EBIT potentially driving that trend even further it.
It seems that the Oems are hungry for opportunities to complement their one time sell with recurrent revenues.
The industry has had some success with products like telematics and connectivity, but in my opinion the single best opportunity for return revenues lighting in monthly subscription for autonomous driving packages and the ongoing over the air software that will underpin them in the future of software defined vehicles.
I believe this has been part of the driving force behind multiple Oems pivoting from our advisers, who are accused more or less at the same time.
I think there is a growing fear of missing this opportunity this potentially massive megatrend basically its corporate pool.
In fact, if you look at our RF skews the majority of the programs are with a top 10 global OEM.
This is a lot of shots on goal, we don't need to win them. All we already have been double cord blood and group as customers and they collectively represent 15% of global automotive production.
We believe that if we can secure just one or two more major Oems as customer and we will have a substantially in what we expect will be a winner takes most market.
These programs converted two I'll ask you a different points and are moving along the foot timelines all of the programs have moved onto various stages of audits of the technology focusing on quality sulfur supply chain anymore.
First phase typically revolves around the product itself focusing on the sensor and software suites. There can often be appointing to move their will to all at most three players are sold listed and the focus moves away from the technology and more towards them and electronic strategy and operations.
Within the group about Q3 of the programs are moving faster and went through the financial audit and certification of high volume manufacturing stage in the early fall.
These programs have since moved into the final stage, which includes definitely price negotiations and detailed planning of course nomination milestones.
This was a critical factor behind our capital raise in August when we look at who who are we competing against most often in these other fuels. It's not the early stage that are pure play companies. Most investors typically assume instead at the Mo established coupons.
And while they try to compete on the operating history Recompete on our technology and this is a match up and if we will take all day long.
Because we are often told by customers that our technology is better.
And we've won against this fewer bigger tier one before we've gone on BMW with one point of again based on our technology and I am confident that we can do this again and again.
With that in mind, we felt it was important to keep any bidding process focused on the technology advantage that is why we undertook the capital raise that was successful for us as it accomplished three critical things one.
Ray.
Additional $65 million, giving us an even longer cash runway to it as it showed that we have continued support from our largest existing institutional shareholders and three it allows us to move into the final stages of several of our Qs.
And as a signal of our confidence several of US participated in the deal My fellow Copano Cohen with scalar and I, both boss stopped during the transaction and our chairman of the board of Mackay Steinfeld made an open market purchase the week after.
We are heavily invested and innovate alongside you.
We are confident that if we win even just one or two of these deals with the help of the capital raised the long term outcome will have been worth the short term volatility.
Because when we look at the library industry. We believe our next one to two deals have the potential to put her permanently shaped the industry.
You've heard me talk about the flywheel effect before in this industry. We believe that wins will lead to more wins first of all this is a safety critical technology and each time, an OEM chooses us as a partner that can send a message of confidence to other Oems and make it easier for chosen over there can be a tremendous amount of signal valuing every win.
We've already have serious production awards with two out of three main autonomy platform providers that we're quoting and RF Q right now with the third.
Being already integrated into the platform software makes it less costly and less risky to choose us as the lighter vendor and it can speed up the OEM time to market.
Is there more waste translate into higher volumes, leading to more purchasing power and lower unit costs unit costs.
In fact, I think you can already see some of the early proof of the flywheel effect.
And most important after winning BMW wait 18, it took us over three years to when our next production award from there. It took us a full year to announce the next one you can see the pace of the activity is clearly accelerated in the past year and if we can finalize this advanced stage or excuse it will offer even more evidence that the flywheel effect.
Is working in our favor.
Turning to our 2023 targets.
We have raised portions of our guidance twice a year to date.
In the first quarter, we raised the high end of the range of our targets for additional programs from existing customers. Following our announcement of the light commercial vehicle and in the second quarter. We raised our revenue guidance for an increased visibility into higher volumes in MLD revenues.
We also took the upper end of the net new and a Rebooking ranch higher falling progress, we're still seeing in our RFP pipeline, coupled with the scope of the MLA Awards.
Being quoted on the programs that are all the thing the fastest.
Today, we are reiterating our targets, including guidance for 'twenty players three revenue of $15 million to $20 million, which represents year over year line growth of 150% to 230%.
Coming into the year, we flagged that the revenue would drop in the first quarter as our BMW program piping transition from central pricing to production pricing, which was more of photonics declining are initially asp's, but would be an offset by higher volumes in the later quarters.
Knowing that reset in pricing, we said revenues would grow meaningfully quarter over quarter, particularly in the back half of the year as we approach SLP and unlock NRA revenues.
Revenue proceeds to grow 45% sequentially in the second quarter, and we were followed by an even stronger 138% quarter over quarter in the third quarter.
If you consider all $15 million to $20 million of serving the targets. The range. The success year to date revenue of around $6 million. It implies the fourth quarter revenue in the range of $9 million to $14 million.
At the midpoint that would represent roughly 230% quarter over quarter and over 600% year over year growth. It has the potential to not only be allowed us quarter, ABL, but larger than any of our buyer full year revenue numbers.
I said is not only because I'm proud of what we are delivering but also is a further evidence but delivering on what we say we're going to do we said that Q1 was the trough we deliver two quarter of strong sequential growth and we are now in the process of potentially the little note allows us quarterly revenue number.
And with that I will turn the call over to Adele.
Thank you Omer good morning, everyone.
Starting with cash we ended Q3 2023 reached approximately $164 million in cash bank deposit market that broke securities and short term restricted cash on the balance sheet.
We're into our cost structure being largely mature our operating cash outlays remain must be favored during the quarter on a normalized basis, we did defer roughly $2 9 million of R&D expenses as a result of booking in RV revenue.
While this drove lower than normal operating expenses in the third quarter, we expect to recognize the deferred expenses in the coming quarter as Cogs.
At a higher level on a normalized basis, you can see that our cost structure has been mostly flat expense the spectrum off of Brent it rented to the bulk of the growth in our cost structure occurred during our transition from <unk> to direct you one relating to the Volkswagen Group Award in 'twenty.
Huntington.
We have said before.
Victor.
Richard translation.
Third every February before winter progression through a tier one mostly behind US we do not expect material increase in our cost structure.
One of the project are behind this flexibility is our transition to SLP retainer with one.
As this program transitioned from development stage into high volume manufacturing it freed up head count to work on the entire retired they are sorry.
Sorry.
It frees up head count to work or either the RFP pipeline or the interface to absorb this gives us meaningful flexibility going forward without the need to have significant growth in our fixed cost.
Moving to the income statement revenue in Q3 2023 came in at $3 $5 million compared to Q2, 2023 revenues of $1.5 million.
Delivering a 138% quarter over quarter increase.
On a year over year basis, as compared to Q3, 2022 revenue, which were impacted by our head quarters more of.
Of zero point $9 million delivering growth of nearly 300% year over year.
The cost side operating expenses for Q3, 2023 where rent is $7.8 million a decrease from $31.3 million in Q3, 2022.
As I mentioned earlier Q3 attractive 23 operating expenses of $2 $9 million of R&D expenses defer into future quarters and will be record magnetic card to match cost with future energy revenues.
This quarter's operating expenses included $5 million of share based compensation compared to four or $9 million in Q3, 2022 research and development expenses for Q3 2023, we're at $27 million.
A decrease from $24.2 million in Q3, 2022.
The quarters R&D expenses, including included $3.1 million attributed attributable to share based compensation compared to $3 $2 million in Q2 of drank in 'twenty. Two in conclusion, we are delivering on the growth guidance that we laid out coming into the year.
<unk> Q1, 2023 was the drop we delivered a 45% quarter over quarter growth in Q2, 138% in Q3 and have line of sight to another meaningful step up in the fourth quarter.
Even more importantly, we are executing on this growth while dealing with record levels of RFP activity, we expect to finish the year on a very strong note with continued momentum for 'twenty 'twenty, four and beyond and with that I will turn the call back to Omar. Thank you.
No.
Before turning the call over to the Q&A I wanted to offer a few final remarks.
2022 we hinted at a major new OEM customer and months later, we delivered caused by them.
Coming into the year, we said that we're working on a program expansion and we delivered on the light commercial vehicle program in the first quarter and announced development of the second generation system for BMW last quarter.
And then in the third quarter, we delivered on our BMW ESOP timeline, but also moving threep or excuse past financial in high volume manufacturing audits and into final phases of price negotiation and post nomination milestone alignment.
My team and I spent a lot of time visiting Oems across Europe, Asia, and North America, the past few months.
In the past few months and we have several more grips plans before year end.
We will be in Germany next week taken our new B tube sample with the with the new customer ASIC to existing customers and new one and and prospects.
We are very excited about what we achieved and I want to personally deliver these new samples we have things that we really want to deliver on for you.
That we think we are very close at hand, and we will not we will work nonstop until we accomplish them.
Thank you very much and we can move to the Q&A.
Thank you.
In order to ask a question. Please raise your hand, using your mobile or desktop application and wait for your name to be announced.
Once again, please raise your hand, using your mobile or desktop application and wait for your name to be announced.
Our first question comes from the line of Mark Delaney from Goldman Sachs. Please go ahead.
Yes, good morning, and good afternoon. Thank you very much for taking my questions you spoke about having a very active RFID in RFG pipeline I'm, hoping you can share your latest views on the potential timing for new wins and your confidence in reaching that two new series production awards with new customers. This year.
Yeah. So as I said in doing my my talk and the team is working.
Intensively on several fronts with different Oems.
As we speak we are.
Putting an audit we have several audits already in this month.
We are expecting at least two of these three customers that we talked about Italy later stage to make a decision still this year.
According to their plans.
So we are.
Working towards that.
I understood. Thank you Omar and then my other question was around the shuttle program and hoping to better understand how that's developing.
You mentioned a more lighter is now being used in with them, making that change and also being relatively close to the start of production can you help us understand if that is going to impact either the timing or magnitude of the ramp and also could you clarify if the additional whitehurst that will be used are those definitively going to an event or is that something that's still being evaluated.
Weighted by the customer.
Okay.
Possibly I did not describe it.
Right. This is a decision made.
More than six months ago, or maybe more than that.
We were just reflecting the fact that several that every level core program uses more than one lidar and that was an example of a program that initially started with more but later became six but some time ago. So that's not the it's obviously, it's a little bit lighter and update anyone else.
And it's not affecting the timing.
Understood I'll pass it on thank you.
Our next question comes from the line of in dress Shepard from Cantor. Please go ahead.
Hey, guys.
Good morning, and good afternoon can you hear me okay.
Wonderful, thank you and congrats on the quarter and all of the developments and congrats on the SPV finally here.
Wanted to maybe just ask you know how should we be thinking about that BMW contracts continuing to ramp up as we head into next year. You know you provided revenue guidance for Q4, which is very helpful. Just kind of curious.
Maybe you can give us a little bit more color as to how and what we should expect.
Into 2024, thank you.
Yeah, I'll start and probably still down it takes a little later.
BW is currently launching with the <unk> seven.
The additional volume would starting in moderate manner, we do expect another module to be launching next year. That's the plan right now.
In terms of the guidance I'm not sure that we are providing such.
No.
Definitely we'll provide guidance going forward, but.
We do.
We are hopeful based on the pipeline that we see that.
We will have.
Our growing revenue cadence going forward the global.
Okay. That's helpful.
And maybe can.
Can you give us a sense some of you know around gross margins there was a.
Pretty significant improvement in this quarter as evidenced by the BMW contract.
Our ramping up.
Any sense on kind of how we should continue to think about gross margins for next quarter and again into next year, you know I don't I know, you're not providing guidance, but would you expect those to continue to gradually improve quarter over quarter or whats the best way to think about that thank.
Thank you.
So obviously as we get to production volume and as the products mature we are expecting that the gross margin due to these factors on the production.
And the favorable fly drones will improve this is one factor that comes into play.
And the second factor, which is also very.
<unk> been dominant.
Is that the NRA recognition as we.
Gain more and more in an eerie and are able to recognize more tomorrow and arena and this will be an important factor of boats.
For this year next year.
We will see that positive impact on our gross margin.
Very helpful. Eldar, Thank you and just maybe if I could squeeze in one last one.
With the 164 million now in cash and equivalents.
Remind me what is the expected run rate with that cash on hand surgery.
So so.
As you said, we have a strong balance sheet readjust their buy in August we raised.
Additional funding to have this strong balance sheet. In addition.
Its balance sheet you know if you.
You take it linearly breathe as well.
Well into 'twenty 'twenty five. In addition, we are have growing revenues, which will balance off some of the expenses. We are expecting to win additional programs as we've said before our pipeline and current pipeline with over a $150 million potentially man I read through once we win.
These additional program this mean additional.
And the reason that brings us far and beyond to where we need.
Thanks, again, guys and congrats on the corner I'll pass it on.
Our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.
Yes, Thanks for taking my question and congratulations on the great progress.
That's the the number of Rfps that you're working on now and if you are close on two of those.
Other ones are still in play as we get into 'twenty 'twenty four they're just being delayed.
Can you maybe just.
Maybe give a timeline on some of the other programs.
So.
We said that we.
We expect.
Sam to make a decision this year.
I think that by the progress we're seeing.
With the other RF queues.
I would say they are split between the David the first quarter in the second quarter also taking into account.
The timeline in which they plan to launch so I would expect that it will not take longer than that but that's how I see it right now.
Okay, great and maybe.
Just so to understand a little more what would it be six light hours being controlled by the perception software.
Is there a maximum number of lidar they software can handle.
It's not about the software is about the compute platform that eventually needs to process.
The the point cloud, which of course says you will increase.
The the point density and frame rates do you require.
Stronger computes.
Oh platforms.
But I can also share that one of the things that the team.
As.
Essentially improved.
When the first generation the second generation is also the architecture in.
Of which there are performing their algorithms.
There is one.
The transition from INO with Barnes <unk> nobles two was quite meaningful we were able to improve the performance by.
More than 50 times, and we were able to reduce the cost by 70%.
Obviously once you will improve the density so significantly.
You'll need to take into account that.
The computer that cannot improve by that fact.
So of course, you do need to take.
I would say almost evolutionary.
Step.
And I think.
Many of the learnings that the team had during the first program when we developed the perception software for BMW.
It was very much about understanding the I would say the the.
The boundaries and how with them.
Significantly optimize it.
So we are eventually the the number of platforms that are used by our customers and have not many there are primarily two or three main platforms that everyone is using nvidia.
<unk> mobile ly or.
Qualcomm.
We also witnessed us so we're very familiar with all of these platforms. Some of our work with these got compares ease in order to learn about their hardware accelerators. So we can make use of them.
As best as possible. So we can we don't need to exhaust the power consumption and the processing power.
I would say it's part of the reason why the company that is developing a liner needs to have its hand very much involved in the software development I think that doing that in a split between different windows.
The outcome was very likely not be a very very good.
And our Capex last explanation and just.
One other question as you look at the competitive landscape.
We've been talking about this market is going to consolidate them.
Are there assets out there that would help in a S. R.
Is there any plan.
Plan, where you know your competitors start falling off the pace that maybe you can pick up some.
Some assets to help you move forward.
So I mean of course, when we are.
We're all aware of the different companies in the space.
I would say that the motivation for renal booth to possibly look on the assets that are done by others.
Thrilled that there is a complementary solution that we're missing.
So far since our focus is primarily automotive and winning those RF skus.
Don't see a gap in <unk>.
Our offering.
But we continue to.
Look on the difference.
Come to Boston, but so far I don't see a good fit.
Okay. Thanks, Congratulations again thank.
Thank you.
Thank you. Our next question comes question comes from the line of Kevin Garrigan from West Park Capital. Please go ahead.
Yeah, Hey, Omer and elder Thanks for taking my questions. Let me Echo my congrats on the progress.
Going back to Mark's question regarding hitting your targets for this year and you know when youre in.
The final stages of these are accusing just kind of waiting at this point in time, just kind of wondering if if the decisions don't get me in the next few months would be a potential cause for a delay I mean.
What do you view programs now working out for some companies call. It the way it all or you know something that you might have seen with Volvo, where the software doesn't develop.
And Alex maybe.
Maybe to explain.
With all the complexities.
Related to Enel X Q and what might cause a delay.
So you can understand that once you get the nomination.
Essentially you need to start executing on our plan.
Was.
The line between both sides. This means that the plan is to consider everything that needs to happen.
<unk> nomination to S&P, So you can imagine that.
The amount of details that need to be decided in line between the two sides is quite meaningful.
The integration of the central into the curve, including the connectivity the software.
Thermal.
<unk>.
Interfaces et cetera, really the the amount of data that are needed to be considered.
When taking that plant into account our movie and it is important to align on everything because once the car maker is choosing a supplier.
They basically cannot change anything in the plan otherwise it drives change requests that are quite expensive usually to the OEM.
No.
The outlet cure process, while they'll auditing the supplier.
Part of the process is also to get to a clear alignment between both sides and all of the details and that takes sometimes.
Local time because.
It also requires some.
Things are.
Become more clear to the OEM on things that he needs to do and take into account and sometimes is not aware of it and sometimes it takes for them.
A more holistic view and talk with other parts of the vehicle.
Wow.
Teams.
But generally.
Even if the decision is pushed it mostly technical and even.
Even if it's not done in one quarter than maybe it had done in the second quarter, it doesn't necessarily and by the way they usually when they changed the RFP timing they don't change.
The ESOP time.
It adds pressure to all sides.
I wouldn't say.
Middle.
Push off another appeal decision is.
It is a meaningful element in the in the industry.
Okay got it got it that makes sense.
And then I know you have a strong relationship with burn Adas compute platform companies Qualcomm Maguire Nvidia. However, how these partnerships in a beneficial if at all and in helping with potentially capturing some of your shots on goal.
So every program that we're competing on.
We are trying to understand which platform the targets to us sometimes they already know sometimes they are still assessing.
These are important.
Details because.
On the I'll ask you process it.
As I said, a big part of that of Q is aligning on the on the tasks and the costs that are involved also related to those tasks.
When we show that.
We have already.
Doing some of those task we on one side, we lowered the risk related to potentially integration risks.
And we sold them, obviously the timeline, but in some cases, we can also share share costs of these activities was the OEM and the overall providing them.
Better than our <unk> offering.
So right now we are already working with two out of those three that you mentioned.
And with some of the Oems if we're competing.
These are the plants platforms.
This is also by the way. This is also the motivation of the platform they're talking with.
The head of one of them was clear he.
He made it very clear to me that they'll motivation is similar.
One one of the things that our platform will play out is providing is it.
It's called Hill hardware in the loop, which means that it's a full hardware emulation.
Entire platform to very costly.
Setup.
Thanks.
Time and money and their motivation of using the same song central on different platforms is high but.
So I think it's a mutually beneficial for us and the platform clear.
The other Oems would use the same central.
We said also that we are currently working with Astellas towards an <unk> decision and I believe we have a good chance.
Chancy and getting.
Okay perfect I appreciate the color congrats again on the progress thanks guys.
Sure.
There are no further questions. Thank you for your participation. This concludes our call today you may now disconnect.
Yeah.