Q4 2023 Innoviz Technologies Ltd Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. Our conference call will begin shortly. Yeah. Good morning.

Ladies and gentlemen, thank you for standing by our conference call will begin shortly.

Yeah.

Okay.

Yes.

Rob Moffitt: This is Rob Moffitt, Vice President of Corporate Development and Investor Relations at Innoviz, and I want to welcome you to our earnings conference call. Joining us today are Omer Calaf, Chief Executive Officer, and Elder Segla, Chief Financial Officer. Following their opening remarks, we will open the call to your questions.

Good morning. This is Rob Moffitt, Vice President of corporate development Investor Relations at and it is and I want to welcome you to our earnings conference call. Joining us today are 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.

Rob Moffitt: 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.innoviz.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 Innoviz. The actual results could differ materially from those anticipated in the forward-looking statements.

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 <unk>.

Actual results could differ materially from those anticipated in the forward looking statements.

Rob Moffitt: 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 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, 2023. I will now turn the call over to Omer. Please go ahead.

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 2023, I will now turn the call over to Omer. Please go ahead.

Omer: Thank you, Rob. And good morning, everyone. And thank you for joining us today. We have a lot to talk about. Q4 was a record quarter for us, and there has been some important customer progress since CS and since the quarter ended. The first thing I want to highlight is the amazing revenue performance; full-year revenues of nearly $21 million were up 246% year over year. And even with raising guidance mid-year, we came in above the high end of the guidance. In addition to that, we delivered Q4 2023 revenues of nearly $15 million, an increase of nearly 850% year over year and also above the high end of our quarterly guidance range. The strong revenue performance came from a combination of production revenues, robust sample shipments, and NREs.

Thank you, Rob and good morning, everyone and thank you for joining us.

We have a lot to talk about today Q4 was a record quarter for US there has been some important customer cohorts since he S and since the quarter has ended.

The first thing I want to highlight the amazing revenue performance.

Full year revenue was up nearly $21 million.

246% year over year in.

And even with raising guidance mid year, we came in above the high end of the guidance range.

In addition to that we delivered Q4 2023 revenues of nearly $15 million in.

An increase of nearly a congress and 50% year over year.

And also above the high end of our quarterly guidance range.

The strong revenue performance game protocol, a combination of production revenue robot sample shipments in a read and it validates our three pronged approach to growing future revenue streams.

Omer: And it validates our three-pronged approach to growing future revenue streams. We also saw positive customer development in the quarter with BMW and Ford, and built a new shared program with Mobileye as a platform partner. And I'll build a strategic realignment to maintain our cost discipline and extend our cash runway as we position the business for rapid transformational growth. The combination of strong revenues and disciplined cost management led to an impressive cash performance, with our quarterly cash burn at just $14.5 million, a record low since Innoviz became a public company, which allowed us to finish the year with approximately $150 million in cash and equipment, leaving us with a strong runway that we I'll go through each one of these.

We also saw positive customer developments in the quarter with BMW in both buckets.

Unveiled a new shared program with mobilized and the protein as a platform partner and I'll deal that a strategic realignment to maintain our cost discipline and extend our cash runway as we position the business for rapid for transformational growth.

The combination of strong revenues and disciplined cost management led to an impressive cash performance with our quarterly cash burn of just 14 and a half million dollar.

Record lows since <unk> became a public company.

Which allowed us to finish the year with approximately $150 million in cash and liquid leaving.

Leaving us with a strong runway that we expect to last through the market share capture window.

<unk> III through each one of these topics.

Omer: Let's start with the news we shared today on BMW. In this morning's earnings press release, we disclosed that we are working on a second vehicle, a geography for the Innoviz One deployment. When we first announced the production awards several years ago, we said that the Innoviz One was tested and certified on three vehicles, the 7-series, the 5-series, and the IEX. But to date, we've only been able to share details on the 7th, which is now on sale in Germany with delivery scheduled to begin in the upcoming weeks in March of 2024.

Let's start with the news we shared today on BMW.

In this morning's earnings press release, we disclosed that we are working on a second vehicle the geography for the enormous one deployment.

When we first announced the production award several years ago, We said that <unk>, one was tested and certified on three vehicles.

Seven theaters, the five series and the IDEXX.

But to date, we have only been able to share details on the seven theaters.

Which is now on sale in Germany with deliveries scheduled to begin in the upcoming weeks in March of 2024.

Omer: Today's news is that we are working on an Innoviz One deployment on the BMW 5 Series in China, a very important geography. BMW recently received approval to begin level three testing in China. And we are working closely with the teams performing road testing and software development specific to the Chinese market. If all goes well, we could see the technology deployed on a locally built spy. It is still early to share a lot of details at this point, but we expect that we'll have more to say in the coming quarter.

Today's news is if we are working on and it'll be one deployment on the BMW five series in China or.

A very important geography.

BMW recently received an approval to begin levels pre testing in China, and we are working closely with the deal is performing on road testing and social development specific to the Chinese market.

If all goes well, we could see the technology deployed on the locally built five years.

It is sealed air as a share of local details at this point, but we expect it will have more to say in the coming quarters.

Omer: Moving on to Volkswagen. At CES, we unveiled the ID.Bus light commercial vehicle program as our second program with the Volkswagen Group. This represents an important development for three reasons. First, it shows our relationship with Volkswagen.

Moving on to portfolio.

At CES, we unveiled Daiichi by light commercial video vehicle program is our second program with defaults volume group.

This represents an important developing for three reasons first it shows our spread of our relationship with Volkswagen.

Omer: Our progress towards SOP with our first program is tracking well, and they have confidence in our ability to bring a second program to the market within the same time frame. Second, the volumes from these programs are incremental to the award that we announced in 2022, supporting additional revenue growth and accelerating our past post-break-even. And lastly, it deepens our relationship with Mobilife, who is working as an autonomy platform partner for the VW Group. The ID badge is a live commercial vehicle aimed at the mobility market. It will be a level four program with multiple riders per vehicle. A test fleet of vehicles is being deployed in Austin, Texas, and Munich, Germany.

Progress towards SLP with our first program is tracking well and they have confidence in our ability to bring our second program for the market within the same timeframe.

Second the volumes from these programs are incremental who they work with that we announced in 2022.

The bolting additional revenue growth and accelerating our best those breakeven.

And lastly in ZIP is our relationship with mobilized.

Who is working is that autonomy platform partner for the VW group.

The IV Basel is a light commercial vehicle age.

Aimed at the mobility market.

It will be 11, four program with multiple items per vehicle.

Desperate of vehicles is being deployed in Austin, Texas, and Munich, Germany, and we expect the program to become increasingly visible to the public as we go through 2024 and the definitely grows as it progress toward the planned 2026 commercial launch.

Omer: And we expect the program to become increasingly visible to the public as we go through 2024, and the test fleet grows as it progresses towards the planned 2026 commercial launch. Additionally, development with our first Volkswagen award is progressing. I flew to Germany to deliver the first batches of our Innoviz 2B sample with our second generation ASIC, custom ASIC, and our partners at BW couldn't be happier.

Additionally, development with our birth, both bug and our work is progressing nicely.

I thought the Germany to deliver the first batches of our innovate you'll be sample with our second generation ethic custom ASIC and our partner that VW couldn't be happier.

Omer: We're gearing up for advanced weekend testing in Germany and Sweden, and we'll remain focused on the B-sample phase in 2024 before moving to the C-sample and D-sample phase in 2025 as we progress those SOPs later in the year. All in, I'm very excited with the progress we're making with this important customer. Throughout 2023, we said we believed there were additional opportunities for us at Volkswagen beyond the series production award we secured in 22. And with the IDBUD announcement at CES, we delivered on that. But we're not stopping there.

We are gearing up for advanced Wheaton testing in Germany, and Sweden, and we remain focused on the beef samples phase.

In 2024 before moving to the fee simple and disciple phase in 2020 five as we progress towards SLP later in the year.

Ali I am very excited with the progress, we're making with this important customer.

Throughout 2023, we said we believe there are additional opportunities for us its close button beyond this year's production award with secured in 'twenty two.

And with the IV by the announcement at the end we delivered on that promise.

But we're not stopping there we are actively working on an additional one to two programs within the port by the group encompassing multiple brands multiple platforms and multiple vehicles.

Omer: We are actively working on an additional one to two programs within the Volkswagen Group encompassing multiple brands, multiple platforms, and multiple vehicles. It's too early to share any further details than that, but we hope to be able to disclose more as we go through 2024. Volkswagen is the world's second largest automotive OEM, capable of producing over 10 million vehicles per year. We believe that there is a long runway for growth, www. InnovizTech.com, Wow. We also see a long runway for growth with Mobileye as an autonomy platform partner. As you've heard us talk about before, there are three leading autonomous driving platforms in the automotive industry, from Mobileye, Qualcomm, and NVIDIA. These partners operate the compute hardware and software that integrates the sensing and perception inputs from the various ADAS components, such as LiDAR, radar, and camera, and play an important role in the sensor fusion and driving decision layers of software. We currently have series production awards with two of these players, Mobileye and Kwasi.

It's too early to share any further details in that but we hope to be able to disclose more as we go through 2024.

Cosmogony divorced second largest automotive OEM capable of producing over 10 million vehicles per year.

We believe that there is a long runway for growth with them.

Wow.

We also see a long runway for growth with Mobilise has an autonomy personal gardner.

As you've heard US talk about before there are three leading autonomous driving platform in the automotive industry.

For mobilized glaucoma and video these partners operate.

The computer hardware and software that integrates the fencing and perception inputs from the various adas components, such as Lidar radar and camera.

And play an important role in the sensor fusion and driving decision there of sulfur.

We currently have serious production awards with two of these they're more rely on quad.

Omer: And we're working on several NVIDIA programs, you know, the RFI and RFQ pipeline for the Ethereum platform. For Innoviz, integrating with these platforms establishes a meaningful competitive advantage that can reduce friction in the LIDAR selection process and increase our odds of winning additional business from audience. Being already integrated, the major compute platforms on existing programs can significantly reduce the time, cost, and risk that it takes for additional automakers to deploy the same system. We're essentially becoming an off-the-shelf solution that makes it increasingly easy for OEMs, additional This is better enhanced by the work that we are doing ahead of our Volkswagen SOP. In order to be ready to launch on time, we are planning our Innoviz 2 production capacity to be ready to ship by late 2025.

And we're working on several Nvidia program, RFID and RFP pipeline for the Purion Russell.

Greenough base integrating with these baffles establishes a meaningful competitive advantage that can reduce friction in the lighter selection process and increase our odds of winning additional business from OEM.

Being already integrated with the major compute platforms on existing programs can significantly reduce the time cost and risk that it takes for additional automakers to deploy the same system.

We're essentially becoming an off the shelf solution make it increasingly easy for Oems. These are the Oems the choice innovation is there like a supply.

This is Ben are enhanced by the work that we're doing ahead of our boat bug in SLP in.

In order to be ready to launch on time, we are planning our innovative production capacity will be prepared to ship by late 2025.

Omer: There are many OEMs targeting launches in 2026, 27, and 28, and the fastest, least expensive, and lowest risk way to prepare for this is with an autonomy platform partner like Mobileye, Qualcomm, or Nvidia, and with a LiDAR supplier that has already proven it can deliver on SOP milestones and with the technological capabilities, price points, and SOP timeline of Innoviz Tech.

There are many OEM targeting launches in 2026 47.

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And the fastest lease expensive and lowest risk way to prepare for this is women autonomy platform partner like mobile I welcome or is video.

And with a lighter supplier that has already proven they can deliver on SLP milestone and with the technology technological capabilities.

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Omer: Next, I will provide some thoughts on the global regulatory environment and discuss some important updates, both globally and in China, and how we see these developments shaping the lighter industry. As many of you know, the United States Department of Defense continues to be very active in terms of identifying companies that may have ties to the Chinese military, to the extent that the DoD places specific ladder companies on its 1260 age list, which could make it more difficult for these companies to win business with global OEMs that sell into the U.S. market. Conversely, similar actions were to be replicated within the Chinese regulatory environment could make it difficult for U.S. lighter companies to be deployed on vehicles and the domestic Chinese market. This is where Innoviz has another competitive advantage; as an Israeli company, we're not caught up in the politics on either side of this debate. I'd like to say that Innoviz is the Switzerland of gliders.

Next I will provide some thoughts on.

The global regulatory environment and discuss some important updates.

Both globally and in China, and how we see these developments shaping the lighter industry.

As many of you know the United State deposit called Defense continues to be very active in terms of identifying companies that may have tied to the Chinese military.

To the extent of the deal deep latest specific liner companies on a 12 68 lift it.

It could make it more difficult for these companies to win business with global Oems that sell into the U S market.

Conversely, if similar accidents, where it could be replicated within the Chinese regulatory environment could make it difficult for the U S liner companies.

To be deployed on vehicle enter the domestic Chinese market.

This is where innovation has another competitive advantage.

As an Israeli company, we're not caught up in the politics.

On either side of this debate.

I'd like to say that <unk> is the Switzerland of riders were neutral and can serve customers globally.

Omer: We are neutral and can serve customers globally. We have plans to operate in China with both BMW and Volkswagen. We're actively quoting multiple RFIs and RFQs with global OEMs that plan to sell into the US and the Chinese market with the same technology stack. The cost of bringing a level three or level four program to the market is substantial. And it will be extremely expensive for OEMs to run duplicated tech stacks in different markets with different titles.

We have plans to operate in China with both BMW Volkswagen, we're actively quoting multiple RFID and arguing with global Oems the plan to sell into the U S and the Chinese market with the same technology stack.

The cost of bringing a level three or liver SCOR program, where the market is substantial.

And it would be extremely expensive for OEM Quran duplicated textbooks.

And different market with different lighter rental.

Omer: They need to absorb those costs across as many units as possible with the global ladder. And with that, let's segue into what I think is some very positive news out of China. In addition to BMW, multiple other OEMs have received permits to begin level 3 testing in China in late 2023. Today, China has been a level two market.

They need to absorb those cost across as many units as possible with the global auto platform.

And with that let's segue into what I think is some very positive news out of China.

In addition to being W. Multiple other Oems have received permit the.

The biggie levels, we'd testing in China in late 2023.

Today, China has been delivered to market.

Omer: What we are seeing on the ground is a rapid pivot towards accelerating the development of Level 3 autonomy. The Chinese automotive market moves very fast, as does technology. If regulators there decide to embrace level 3 autonomy, it can be done in very short order. And, similar to the prior topic, this could have implications globally. Chinese OEMs have proven themselves as very competitive manufacturers of highly capable vehicles at affordable prices, particularly when it comes to EVs. And while Chinese exports haven't found their way to the U.S. market, they are starting to have an early impact in some parts of Europe and the rest of the world.

What we're seeing on the ground is our rapid pivot towards accelerating the development of level three autonomy.

The Chinese automotive market moves very fast as does technology.

The regulator, there decided to embrace levels reaffirming it can be done in a very short order.

And similar to the prior topic this could have implications globally.

Chinese Oems have proven himself is very competitive manufacturer of highly capable vehicles at affordable prices, particularly when it comes to even.

And while Chinese exports have been found their way to the U S market. They are starting to have an early impact in some parts of Europe and the rest of the world.

Omer: This is a topic that OEMs are paying close attention to. If China rapidly pivots towards embracing level 3 autonomy, in the same way that it's rapidly shifted towards embracing EV technology, this could add another layer to the global competitive environment. At a high level, we foresee Western OEMs accelerating their Level 3 Autonomous Platform timelines in order to get ahead of incremental competitive threats from Chinese OEMs. This has the potential to accelerate Level 3 timelines globally and could create a Level 3 Gold Rush.

This is a topic that Oems are paying close attention to.

If China rapidly pivot towards embracing level three autonomy in the same way that is rapidly pivot the doors embracing EV technology. This could add another layer to the global competitive environment.

At the high level, we foresee western Oems accelerating their level three autonomous platform timeline.

In order to get the head of incremental competitive threats from Chinese Oems.

This has the potential to accelerate levels with timeline globally. It could create a levels green gold rush.

Omer: Next, I want to talk a little bit about the strategic realignment we announced at the end of January. As we have talked about in the past, with both the Innoviz 1 and Innoviz 2 programs in the development stages, we have been running two power and cost.

Next I want to talk a little bit about the strategic realignment, we announced at the end of January.

As we have talked about in the past we've bought the <unk> one an innovative program either development stages.

We had been running to power their cost structures.

Omer: But as the Innoviz-1 sensor and perception software shifted into series production late last year, much of that development work was completed, with Innoviz One Workstream winding down. We initially reallocated headcount towards development projects like the LiDAR-based Minimum Risk Maneuver, or MRM software, and the Innoviz Core AI compute model. In discussing these technologies with new customers, it became clear that most OEMs are hyper-focused on more mature solutions like the Innoviz 2 sensor and perception software and bringing those technologies to the market as soon as possible before focusing on other products. With that in mind, we made a decision to concentrate the majority of our future investment on the Innoviz 2 sensor and Perception software platform and bring that to the market with the rich RFI and RFQ pipeline We allocated as much of our staff as possible to either of these two focus projects.

But as the inner with Monsanto and perpetual software shifted into film production late last year much of that development work was completed.

Within <unk>, one work stream winding down.

We initially reallocated head count towards development projects like the lighter base minimum risk maneuver of MRM sulfur and the MLB score AI compute model.

In discussing these technologies with new customers. It became clear that most Oems are hyper focused on more mature solutions like the universe to sample and perception soccer and bringing those technologies to the market as soon as possible before focusing on either product.

With that in mind, we made a decision to concentrate the majority for Gulfport investment on the <unk> to central and Pacific filter possible.

And bringing that to the market with the rich I'll refine in our Q pipeline that we already have.

We allocate is as much of our stuff as possible to innovate to focused project by the transition offer an opportunity to train some planned expenses to help reduce our burn and extend our cash runway.

Omer: But the transition offered an opportunity to trim some planned expenses to help reduce our burn and extend our cash runway. As a result of these changes, roughly 13% of the company headcount was reduced, along with some related expenses. The cost actions are expected to be fully completed by the end of the first quarter and are expected to reduce our planned cash outlays by $22 to $24 billion on an annualized basis. We also use this position as an opportunity to integrate our hardware and software development departments into one unified R&D unit, which has been running separately. The new combined group will be led by Avishai Moscovici, who has served as our head of software reporting to me for the past several years. As part of that transition, Oren Busquela, our current Chief R&D, will be moving on to pursue a new opportunity outside the ladder industry. We thank him for his many years of service and wish him the best of luck.

As a result of these changes roughly 30% of the company head count was reduced.

Along with some relaxed related opex and Capex.

The cost of risk Akshay actions are expected to be fully completed by the end of the first quarter and are expected to reduce our planned cash outlays by 22 of the $24 million on an annualized basis.

We also use the position as an opportunity to integrate our hardware and software development departments into one unified R&D unit, which had been running separately.

In the combined group will be led by our beside with Covid GE, who has served as our head of sulfur reporting to me for the past several years.

As part of that position Owen Koskela, our current chief R&D women moving on to pursuing new opportunities outside our industry. We thank him for his many years of service and wish him the best of luck.

Omer: Avishai has already begun his work on integrating the two departments and reorganizing the work streams in a more efficient way that allows for faster product development and simplifies customer planning across both hardware and software. This is not just a reorganization of a few teams. It's about entirely different workflows and processes aimed at positioning the company for rapid transformative growth across multiple customers. It's an important precept of organizational structure that will allow us to serve a much larger number of clients in the coming year. One example of how we are focusing our go-forward investment on the Innoviz 2 sensor and software platform includes a new slim design sub-variant the team developed. We have a customer in the pipeline that is focused on going to the market with lighter, behind-the-windshield solutions. It would sit in the area around the rear view mirror.

Vishay has already begun his work on integrating the two department and reorganizing the work streams in a more efficient way that allows for better product development, the simplified customer planning across both hardware and software.

This is not just a reorganization of our fuel team, it's about entirely different workflows and processes aimed at positioning the company for rapid performative grow across multiple customers.

It's an important reset of our organizational structure that will allow us to serve a much larger number of clients in the coming years.

One example of how we are focusing our go forward investment on the innovate two sensor and software platform includes a new slim design sub via the tunable.

We had a customer in the pipeline that is focused on going to the market with behind the windshields with better solution.

It would fit in the area around the rearview mirror and deployment like this requires a very clean profile.

Omer: A deployment like this requires a very slim profile because there are already other sensors and technology in the same part of the car. And because it's easier to integrate it into the windshield due to the curve of the glass. The customer is a top 10 global automaker with potential for meaningful ladder volume, so the team worked on how to develop a hardware solution that could meet their strict physical requirements without sacrificing performance or requiring a meaningful reengineering of the interior components. This part was critical from our perspective, as we want to share as much of the interior engineering cost with customers as possible to reduce bespoke hardware work, driving volume-based costs lower, and incremental margins higher. It took some time to solve for, but ultimately, there were several creative solutions that overcame the challenges. In the end, this resulted in a new exterior design that reduced the height of the sensor from 45 millimeters to potentially as small as 25 millimeters.

There are already other sensors and technology in the same part of the car and because it's easier to integrate it into the windshield do that occur of the glass.

The customer is a top 10 global automaker.

And you'll have meaningful letter volume. So the team worked hard to develop halbur solution that could make their three physical requirements without sacrificing performance or requiring a meaningful reengineering of the interior components.

This part was critical from our perspective, as we want to share as much of the Intuit engineering cost customer as possible to reduce bespoke Harbour war driving volume based costs lower incremental margins higher.

It took some time to solve for but ultimately there were several creative solutions that overcame the challenges in the EM. It resulted in a new exterior design that reduced the hype of the FEMSA for 45 millimeter to potentially as small as 25 millimeter cut.

Omer: The customer was impressed with our solution, and we have continued to move forward in the building process. And this work isn't specific to just one customer. We think it can be broadly relevant to future programs interested in behind-the-windshield or slimmer roofline deployments where the new profile could be appropriate.

Customer hedging Brett was impressive with our solution and we have continued to move forward in the bidding process.

And this work is specified to just one customer we think it can be broadly relevant to future program interested in behind the windshield or slimmer offline deployment, where the new profile could be appropriate.

Eldar: This is just one example of how concentrating our time, focus, and investment and leveraging the strengths of the Innoviz II platform can result in solutions with a broad market fit, an earlier potential payoff, and a likely higher overall return on investment. And with that, I will turn the call over to Eldar to review our Q4 23 and 23.3 right now. Thank you, Omer. And good morning, everyone.

This is just one example of our concentrating all time glucose and investment and leveraging the strength of the innovate two platform and resulting solutions with a broad market big.

And Elliot potential payoff and likely higher overall return on investment and.

And with that I will turn the call over to a dollar to review our Q4 23 and 23 three.

Financial thank.

Thank you Omer and good morning, everyone.

Eldar: Starting with cash, we ended Q4 2023 with approximately $150 million in cash, bank deposit, marketable securities, and short-term restricted cash on the balance. The combination of strong revenues coupled with disciplined cost management led to the lowest quarterly cash burn in our history since becoming a public company. Cash used in operations and capital expenditures came in at roughly $14.5 million, which compares to prior trends in the $27 to $29 million range.

Starting with cash we ended Q4, 2023 with approximately $150 million.

Cash bank deposit marketable securities and short term restricted cash on the balance sheet.

The combination of strong revenues, coupled with disciplined cost management led to the lowest quarterly cash burn in our history since becoming a public company.

Cash used in operations and capital expenditures came in at roughly 14, and a half million dollars, which compares to prior trends in the $27 million to $29 million range Needless to say, we were excited with this outcome and it demonstrates.

Eldar: Needless to say, we were excited with this outcome, and it demonstrates the impact that growing revenues coupled with cost management can have on the trajectory of the cash line. Looking to the income statement, revenues in Q4 2023 came in at $14.9 million compared to Q3 2023 revenues of $3.5 million, delivering a 328% quarter-over-quarter increase. On a year-over-year basis, it compared to Q4 2022 revenues of $1.6 million, delivering a growth of nearly 850% year-over-year. This led to a full year 2023 revenue of $20.9 million, well ahead of the high end of our guidance range, coming in at a very strong 245% year-over-year growth in revenue. On the cost side, operating expenses for Q4 2023 were $29.5 million, a decrease of 12% from $33.5 million in Q4 2022.

The impact that growing revenues, coupled with cost management can have on the trajectory of cash line.

Looking to the income statement revenues in Q4, 2023 came in at $14.9 million compared to Q3 of 'twenty Trinketry revenue of $3.5 million.

Delivering a 328% quarter over quarter increase.

On a year over year basis, it compared to Q4, 'twenty tricky to revenues of $1.6 million delivering a growth of nearly 850% year over year.

This led to a full year directed during Q3 revenue of $20.9 million well ahead of the high end of our guidance <unk> guidance range coming in at a very strong 245% year over year growth in revenue.

On the cost side operating expenses for Q4, 2023 or three hour 29 points at $5 million.

A decrease of 12% from $33.5 million in Q4 2022.

Eldar: And on a full year basis, 2023 operating expenses of $121 million came in roughly $4 million lower than the full year of 2022 for a 3% decline. This quarter's operating expenses included $5.5 million of share-based compensation compared to $5.3 million in Q4 2024. Research and development expenses for Q4 2023 were $22.1 million, a decrease from $26.2 million in Q4 2023.

And on a full year basis regulatory kicks re operating expenses of $121 million, Jamie and roughly $4 million lower than the four year of 2022 for a 3% decline.

This quarter's operating expenses included $5.5 million of share based compensation compared to $5.3 million in Q4, 'twenty 'twenty four.

Q do a Q4 2020 twos are brief.

Research and development expenses for Q4, 2023 whereas rented to point to a $1 million a decrease from $26 $2 million in Q4, 2022.

Eldar: The quarter's R&D expenses included $3.6 million attributable to share-based compensation compared to $3.4 million in Q4 2022. In conclusion, the financial performance in the fourth quarter and the full year of 2023 was stellar. We exceeded our revenue target all while controlling our costs and executing on critical milestones like the BMW SLP. And it led to a fourth quarter cash burn that was our lowest in history since becoming a public company. Going forward, the strategic realignment shows a continued focus on the disciplined management of costs, which when coupled with continued revenue growth, has the potential to extend our cash runway through the remainder of the market share capture window. And with that, I will turn the call back to Omar. Ahem. Thank you, Eldar.

The quarter's R&D expenses included three pouring $6 million attributable to share based compensation compared to $3.4 million in Q4 'twenty to 'twenty two.

Conclusion, the financial performance in the fourth quarter and the full year of 2023 was stellar reaccelerate, our revenue target all while controlling our cost and executing on critical milestones like the BMW SMP and it led to a fourth quarter cash burn.

That was our lowest in history since becoming a public company.

Going forward the strategic realignment shows a continued focus on a disciplined management of costs, which when coupled with continued revenue growth and the potential to extend our cash runway through the remainder of the market share capture window and with that I return.

The call back to Omar.

Thank you a dar looking back at 2023, I'm proud to say that we have delivered on many accomplishments.

Omer: Looking back at 2023, I'm proud to say that we have delivered on many accomplishments. Our most meaningful progress was on the existing customer side. With BMW, we successfully managed to transition into full series production on the i7 with the Innoviz One, making us the only other pure play company with a level three passenger car on the road. And for the Innoviz II, we initiated the B-sample work.

Our most meaningful progress was on the existing customer sites with BMW with a separately managed to transition into full series production on the I seven with the Inova is one.

Making us the only other pure play company with the level three passenger car on the road.

And for the it'll be still we initiated the <unk> Award, we announced in August, which we expect to be a foundation for an expansion of additional development work packages.

Omer: We announced in August that we expect to be the foundation for an expansion of additional development work packages. On the Volkswagen side, we disclosed a second program with the ID button. And we made meaningful progress on securing one to two additional programs that we think we can get over the finish line in 2024. As a reminder, the ID badge is complementary to the Volkswagen Award that we announced in 2022. And the additional one to two programs that we hope to convert soon could be meaningfully incremental to our existing Volkswagen volume. Growing our contracted production volumes is our number one goal. We are indifferent where the volumes come from, whether it's from an existing customer or a new customer. Each brings its own benefits.

On the boardwalk in sight, we disclose a second program with the IV bug and.

And we made meaningful progress on securing wanted two additional programs that we think we can get over the finish line in 2024.

As a reminder, the IV bags is incremental to the Volkswagen Award that we announced in 2022 and the additional one to two programs that we hope to convert ceiling could be meaningfully incremental to our existing codes volume volumes.

Growing our contracted production volumes is our number one good.

We are indifferent, where the volumes come from whether it's from an existing customer or new customer H.

Which brings its own benefit additional volumes and energy service revenues with an existing customer can require less incremental work and relationship management, along with other synergies, resulting in a stronger margin profile overtime.

Omer: Additional volumes and NRE service revenues with an existing customer can require less incremental work and relationship management, along with other synergies resulting in a stronger margin profile over time, and volumes with new customers can offer entry points for new growth and additional vehicles and platforms down the road, in addition to locking up incremental market share. Volume from either source helps absorb our fixed costs and bring us closer to being break-even and ultimately free cash flow positive. 2023 was very productive in terms of growing our relationships with new customers. And while we made meaningful progress, particularly on the RFQ side of our pipeline, we didn't reach time-series production awards with new customers before the end of 2023, though we hope to convert them in 2024. Out of the 10 to 15 programs in the pipeline, and the roughly half that are in the more advanced RFQ stage, we had three programs in particular with new customers that were further along than others and were planned to make a decision by year Two of the programs are for the global deployment of Level 3 vehicles.

And volumes with new customer can offer entry points for new growth and additional vehicles and platforms down the road. In addition to locking up incremental market share.

Volume from either source health absorb our fixed costs and bring us closer to being breakeven and ultimately free cash flow positive.

2023 was very productive in terms of growing our relationships with new customers and while we made meaningful progress, particularly on the RFP side of our pipeline. We didn't waste time series production awards with new customers before the end of 'twenty three though we hope to convert them in 'twenty 'twenty four.

Out of the 10 to 15 programs in the pipeline and the roughly half that are in the more advanced our FQ stage, we had three programs in particular with new customers that we're further along than others and more planned to make a decision by year end.

Towards the programs are for global deployment of level three vehicles. Those programs Division Diamond has been pushed into 2024, and we remain very active on the programs in advance our SKU pasta, which we believe includes earliest part a few final blur.

Omer: Those programs' decision timings have been pushed into 2024, and we remain very active on the programs in an advanced RFQ process that we believe includes only a few final players. We remain confident that we have a strong position in these RFQs, and that we have good odds of converting them into a production award. One of the three programs was targeting a global deployment of LiDAR-enabled Levels 2. However, very late in the year, the customer pivoted to this program to be a China-only vehicle and is now exploring a separate global level 3 program for a different vehicle at a different date. We were not the natural choice for a China-only, basic level 2 deployment, and the award went to a local Chinese company.

We remain confident that we have a strong position in these are acute and if we have a we have good odds of converting them indoor production pool.

One of the three programs was targeting a global deployment of lighter enabled liver scope vehicles.

Very late in the year the customer people to the program to be a China only vehicle and he is now exploring a separate global level three program Paul at this point vehicle at a different date.

We were not the natural choice for a China only basic labor through deployment and they'll worth went to a local Chinese bus.

Omer: But through the process, we have built a solid relationship with the customer, and they appreciate and respect our technology. And we are expecting the RFI process for the new global level three vehicles in the coming months. While the revised China-only RFQ has moved out of the pipeline, we had two new RFIs from major global OEMs come in, resulting in a net positive gain of one program.

But through the process, we have built a solid relationship with the customer and they appreciate that and respect our technology.

And we are expecting the other five posters for the new global level three vehicles in the coming months.

While the revised China on the RF SKU has moved out of the pipeline. We have two new RFID for major global Oems come in resulting in a net positive gang of Wankel, leaving the pipeline still in the range of 10 to 15 program with roughly half steel into argue.

Omer: And leaving the pipeline still in the range of 10 to 15 programs, we roughly have still in the RFQ of 10. As for the NRE booking, while we were able to secure only roughly $12 million of new bookings, having the new customer program decision move into 2024 made it difficult for us to hit our $23,000. But similar to our new customer target, we simply view these metrics as pushed out. We roll this target over into our 2024 outlook, where we are confident that we can meet an ideal exceeded. There are many deals on the table, and we believe that we are in a strong position to bring at least several of them over the line. For the cash collection target, two of the payments planned for December 23 for work completed in 23 came in a few weeks later, arriving in early 24.

If all the energy bogey, while we were able to secure on a roughly $12 million of new booking having the new customer programs decision move into 'twenty 'twenty four made it difficult for us to hit our 23000, but similar to our new customer target. We simply view this metrics is pushed out.

We enrolled the target over into 'twenty 'twenty four outlook, where we are confident that we can meet an ideal exceed there are many deals on the table and we believe that we are in a strong position to bring it at least.

All of them over the finish line.

For the cash collection targets towards the payment plan for December 'twenty three for work completed in 23 came in a few weeks later, arriving in the illiquidity for these late payments would've been pushed us towards the midpoint of the guidance range.

Omer: These late payments would have pushed us towards the midpoint of the guidance. On the revenue side, 23 was very profitable; full-year revenues of nearly $21 million were up 246% year-over-year. And even with raising guidance mid-year, we came in above the high end of the guidance. We accomplish that through a combination of production revenues, sample shipments, and NRE service revenues. And while customer decision timelines, which are outside of our control, didn't conclude before year end, I feel like the outperformance on the revenue line is a proof point of our desire to build a longer-term track record of under-promising and over-delivering. Based on the conversations we are having with customers, OEMs are still very much focused on making autonomy a reality. In fact, we are seeing a shift in OEMs' priority away from electrification and towed autonomy. OEMs know that consumers are increasingly buying cars based on technology, not horsepower.

On the revenue side 23 was very strong full year revenues of nearly $21 million were up 246% year over year, and even with raising guidance mid year. We came in above the high end of the guidance range.

We accomplished that through a combination of production revenues sample shipments and entering service red.

And while customer decision timelines, which are out of outside of our control didn't conclude before year end I feel like the outperformance on the revenue line is a proof point of our desire to build a longer term term track record of under promising and over delivering.

Based on the conversations we are having with customers. All young are still very much focused on making economy. A reality in fact, we are seeing a shift in audience priority away from electrification and towards autonomy.

Oems know that consumers are increasingly buying cars based on technology, not horsepower and market share trends will be awarded to those that are on the cutting edge.

Omer: And market share trends will be awarded to those that are on the cutting edge. With the EV evolution stalling, OEMs are eager to pivot to the next big megatrend, and there appears to be a growing consensus that it will evolve around level two plus and level three autonomous.

With the EV evolution stalling Oems are eager to pivot to the next big Mega trend.

And there appears to be a growing consensus that it will evolve around level, two plus and level three autonomy.

Omer: On the competitive side, we are seeing other LIDAR players struggling with their technology and SOP timelines. Meanwhile, their customers see the progress that's occurring with Innoviz at BMW and Volkswagen. As a reminder, ID.Buzz was a competitive conquest win.

On the competitive side, we are seeing other light up they're struggling with their technology and S&P timeline. Meanwhile, there are customers see the progress that the corn that occurring with inner with a BMW and Ford volume as a reminder, the idea about what the competitive conquest win looking forward to 2024 and beyond we believe.

Omer: Looking forward to 2024 and beyond, we believe there could be additional opportunities for conquest. For 2024, we're simplifying our guidance structure to three metrics. Since much of the activity that we are expected to conclude in late 2023 is still ongoing and very active, we're essentially rolling over those targets into 2024. If the scope of activity that we think is possible plays out, we are confident that they will prove conservative.

There could be additional opportunities for Congress.

For 2024, we're simplifying our guidance fracture two three metrics.

Since much of the activity that were expected to conclude in late 2023 is still ongoing and very active we're essentially rolling over those target into 'twenty four.

If the scope of activity that we think is possible plays out we are confident that they will prove conservative and we could have the ability to raise them during the year as we did with revenues during 2023.

Omer: And we could have the ability to raise them during the year as we did with revenues in 2023. On the customer front, we expect 2 to 3 additional programs from both existing and new customers. On the NRE service revenue side, we expect it will translate into $20 to $70 million of new NRE bookings in 2024. For revenue, we are going to reverse to quarterly guidance. Last year was the first year we gave annual guidance, and it was a little premature for where our business is. There are many factors that can influence Foulier numbers, including lumpy NRE income that may be recognized as either revenue or a contract expense to R&D, depending on the accounting treatment, which is difficult to know in advance at the beginning of the year.

On the customer front, we expect two to three additional programs from both existing and new customers on the MLP service revenue side, we expect that will translate into a $20 million to $70 million of unit energy bookings in 2024.

For revenue, we are going to reverse the quarterly guidance last year was the first year, we gave annual guidance and it was a little premature but will our business is.

There are many factors that can influence full year number including lumpy in a REIT income that may with major recognize it either revenue or contract expense to R&D, depending on the accounting treatment.

Which is difficult to know in advance.

At the beginning of the year.

Omer: It is also difficult to know in advance what take rates on the i7 in Germany might look like and the timeline for adding additional vehicles on vehicles or additional geographies, such as the five series in China, to the Innoviz One deployment. We saw how this played out in 2023. We initially set the bar too low at $12 to $15 million.

It is also difficult to know in advance what take rates on the ice even in Germany might look like and the timing for adding additional vehicles on vehicles or additional geographies.

Such as the five series in China through the end of his one deployment.

We saw how this played out played out in 'twenty two 'twenty three we initially set the bar too low with at $12 million to $15 million.

Omer: Then we raised it to $15 to $20 million, and even that proved to be conservative by year end. We don't want to set the bar too high, but we don't want to set it too low. And we feel that quarterly guidance will ultimately be a more prudent and accurate way to approach revenue targets at this point. With this in mind, we are targeting revenue of $5 to $6 million in the first quarter of 2024, which would be up roughly 400% to 500% year-over-year. Similar to 2023, we expect revenues to be more back half-weighted based on seasonality, channel feed, and customer. All in all, we are off to another exciting year in 2024.

Then we raised it to $15 million to $20 million and even that proved conservative by year end, we don't want to set the bar too high but we have with but we don't want to set it globe and we feel like quarterly guidance will ultimately be more prudent and accurate way to approach revenue target at this point.

With this in mind, we are targeting first quarter 'twenty four revenue of $5 million to $6 million, which would be up roughly 400% to 500% year over year similar to 2023.

We expect revenues to be more back half weighted based on seasonality chartered channel field customer activity.

All in all we are off to another exciting year in 'twenty 'twenty four we're extremely busy pursuing additional programs with both new and existing customers.

Omer: We are extremely busy pursuing additional programs with both new and existing customers, and we know that we have a lot to deliver. We are also ramping up our work towards the Innoviz 2 SOP, which is right around the corner. We are already deep into the first quarter of 24.

And we know that we have a lot to deliver them. We are also ramping up our work towards Medina with <unk> S. A big which is right around the corner.

We are already deep into the first quarter of 2004 and two.

To be ready for 'twenty 'twenty six shipments were preparing to innovative product roadmap and production capacity to be ready for late 2025, this would be tier sooner than you expected.

Omer: And to be ready for 2026 shipments, we are preparing the Innoviz 2 product roadmap and production capacity to be ready for late 2025. This will be here sooner than you expect. This is obviously important for our existing customers, but it also gives us a critical competitive advantage that is becoming a point of increasing focus in our conversations with new customers. Even though OEM's decisions are moving slower than planned, their SOP timelines mostly haven't changed. We have multiple RFQs that are still working towards 2026 and 2027 SOP targets. And for those OEMs, engaging with a lighter supplier where the wheels are already in motion to be ready for production in late 2025 is a significant advantage. We also have the benefit of our contract with a veteran strategy.

This is obviously important for our existing customers, but it also gives us a critical competitive advantage.

It is becoming a point of increasing focus in our conversations with new customers.

Even though OEM decisions are moving slower than planned their S&P timelines, mostly haven't changed.

We have multiple RF skews that are still working towards 'twenty, 'twenty, six and 'twenty 'twenty seven S&P targets that both those Oems engaging we put out a supplier where the wells are already in motion to be ready for production in late 2025 is a significant advantage.

We also have the benefit of our contract with the veterans strategy.

This allows us to be instantly.

Flexible If addition awards come in.

We can rapidly ramp up new lines of dominant desperately bothering any region of the world that a customer would want us to produce without the disruption delay or a capital requirement of building our own factories.

Operator: This allows us to be instantly, flexible if additional awards come in; we can rapidly ramp up new lines at our manufacturing power plant in any region of the world that the customer would want us to without the destruction, delay, or capital requirements of building our own factories. Capital needs would be minimal, and the pace at which we could deploy capacity would be substantial. We are in a great position heading into 2024, and I'm confident that we will be that we will have With that, Operator, please turn it over to 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.

The capital needs would be minimal and the pace at which we could deploy capacity would be substantial.

We are in a great position heading into 2024 and I'm confident that we will be that we will have a lot more to talk about in the coming quarters.

With that operator, please turn it over to 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.

I repeat in order to ask a question. Please raise your hands using your mobile or desktop application and wait for your name to be announced.

Okay.

Our first call or first question.

Comes from the line of Mark from <unk> Delaney from Goldman Sachs. Mark. Please go ahead.

Operator: I repeat, in order to ask a question, please raise your hand using your mobile or desktop application and wait for your name to be announced. Our first question comes from Mark Delaney from Goldman Sachs. Mark, please go ahead.

Yes. Thanks, so much for taking the questions at Starz, hoping that you could comment on how the forward looking order book has evolved which at one point I think it was estimated to be north of 6 billion and to what extent the order book and our future revenue pipeline has been impacted by slower projected customer sales I E D's using your lidar. Thank.

Mark Delaney: Yes, thanks so much for taking the questions. To start, I was hoping you could comment on how the forward-looking order book has evolved, which at one point was estimated to be north of $6 billion. And to what extent is the order book and future revenue pipeline being impacted by slower projected customer sales of EVs using your LiDAR? Thank you. We didn't update the order book knowing that the main change in the order book comes from the addition of the ID bus.

Thank you.

We didn't update the order book, having that the.

Main change inaudible console. The addition of the IV bus.

As we said in the past we would not make updates to the order book are based on a single customer in order to not reflect the program size in respect to our customer confidentiality.

So we will make updates are ones, who bring more programs and then we can communicate them.

Omer: As we said in the past, we would not make updates to the order book based on a single customer in order to not reflect the program size in respect to our customer confidentiality. So we will make updates once we bring in more programs, and then we can communicate them. I guess though, if you could talk more about how you would see revenue progressing over the next two to three years, given some of the changes and projected EV sales from some of the models that may be using your LiDAR. Have you seen any shifts in customer plans around volumes that you can share, even if on a qualitative basis? Sure, I mean, I would say that we are not getting any feedback from customers concerning their slowdown of EV or not EV. The LiDAR platform is not correlated specifically to EVs; they can operate on combustion engines just as well.

I guess, though if you if you could talk more around how you see revenue progressing over the next two to three years, you get give us on the changes and.

Are you protected E V sales from from yes at some of the models that may be using your lidar have you have you seen any shifts in customer planned around arrow volumes that you can share even if on a qualitative basis.

I mean, I would say that we were not getting any feedback from customers and concerning their slow down more E V or not TV.

The the Lidar platform is not there.

Correlated is specifically to E Bay that can operate on combustion engines that adjusted will.

So so far we didn't get any communication around EV slowdown related to the volumes that they expect.

I understand one last one for me if I could please I really not guiding 'twenty 'twenty four revenue body I'm, hoping to better understand how you're thinking of the shape of the year or would you anticipate first quarter revenue to be the low point of the year, given what you know about customer schedules and battery operated opportunities or is there any other qualitative Colorado shape of the year that you may be able to share. Thanks.

Omer: And so, so far, we didn't get any communication around the EV slowdown related to the volumes that they expect. Okay. One last one for me, if I could, please.

Omer: I realize you're not guiding 2024 revenue, but I'm hoping to better understand how you think of the shape of the year. Would you anticipate first quarter revenue to be the low point of the year, given what you know about customer schedules and NRE opportunities? Or is there any other qualitative color on the shape of the year that you may be able to share?

So yeah, so specifically as we said on the on the.

On the earnings call previously.

We are expecting.

The second half will be more meaningful, but we don't give any specific hmm.

For each quarter since it is very lumpy because the structure of the revenues that we are expecting.

Thank you.

Okay. Thank you and our next question comes from the line of Andros Shepard from Cantor.

Omer: Thanks. So yeah, specifically, I'd like to add on to that. On the earnings call previously, we were expecting that the second half would be more meaningful, but we don't give any specifics for each quarter since it is very lumpy because of the structure of the revenues that we are. Thank you. Okay, thank you. Our next question comes from the line of Andrew Sheppard from Tantor. Andres, please go ahead. Yes, good

Andress. Please go ahead.

Yes, good afternoon, everyone congratulations on the quarter and thanks for taking our questions.

And maybe to follow up on that last question.

Specifically regarding the <unk> 20 to 70 million in new energy bookings that you're targeting for 'twenty 'twenty four.

I'm wondering if you have a sense, there's just too.

Operator: Congratulations on the quarter. And thanks for taking our questions. Maybe to follow up on that last question, specifically regarding the 20 to 70 million in new NRE bookings that you're targeting for 2024, I'm wondering if you have a sense as to when the majority of this will be recognized. Is this a Q4, Q3 story, or is this something that maybe will be expected gradually throughout the year? And if you have a sense of whether some of it or most of it will likely be recognized as revenue versus contract expense.

When.

The majority of this will be recognized in this that Q4 Q3 story or is this something that maybe will be expected gradually throughout the year and if you have a sense of whether some of it or most of it will be likely be recognized as revenue versus a contract expense. Thank you.

Yeah, so the Emory and there is booking a will be recognized over the lifetime of the program up to ESOP that which means basically whatever we book.

Eldar: Thank you. Yeah, so the NRE booking will be recognized over the lifetime of the program up to SOP, which means basically whatever we book this year will probably be recognized over a few, a couple of years, maybe two to four years until SOP. And as we mentioned before, it's difficult to say how you recognize it and at what point in time and if it will be recognized as revenue or rather treated as an expense. I mean, when we talk with customers, we try to draft the agreement in a way that we can recognize it as revenue. And then you can give examples of ways to kind of, Yeah, I don't want to go into the accounting side.

This year it will probably be recognized over a few a couple of years, maybe two to four years until they are so Pete.

And as as we.

Before it's difficult to say, how you recognize it and what point of time and if it will be recognized as revenue or rather a contra to the expense side I.

I mean, when we talk with customers we try to.

Drafts the agreement in a way that we can recognize it as revenue.

Maybe you can give examples on waste.

Hello, IRA I don't want to go into their dog counting cyber physics, usually you look at the specific contract if it's specific to Erika.

Customer or it's more generic and then based on that you are able to recognize them accordingly.

Eldar: But if it's usually you look at a specific contract, if it's specific to a cut, a customer, or it's more generic, and then based on that, you are able to recognize it according to, Okay. Okay, that's helpful. As a follow-up, I'm wondering if you can maybe give us some direction on your path to break even gross margins. You know, I know, I know you're not guiding gross margins, but, you know, do you anticipate this could potentially be a 2024 time frame, or are we looking more into perhaps next year and onwards? Thank you. So I think you need to look at the trend that we have shown over the past year in 2023. So Q1 was roughly almost 400 negative margins. And then Q4 was a negative 15 percent margin.

Got it Okay. That's helpful maybe as a follow up.

I'm wondering if you can maybe give us some direction.

Direction on your path to a breakeven gross margins you.

You know I don't I know, you're not guiding gross margins, but.

You know do you anticipate basket potentially be a 20th twenty-four timeframe or or are we looking more into perhaps next year and onwards. Thank you.

So I'd say I think you need to look at the trend that we have shown over the past year in 2023 so Q Q1 was roughly a almost 400 negative the margins and then Q4 was a negative 15.

Present, the margin so I think you'll see a nice trend here.

Eldar: So I think you see a nice trend here. We are hoping that the trend will continue. I don't want to say when we expect to be positive, but we are expecting or we are hoping that this trend will continue. And at least we will be flat this year.

We are hoping that the trend will continue I E. I don't want to say when we expect to be positive about that.

We are expecting or we are hoping that this trend will continue and net lease we will be flat.

This year.

Eldar: Got it. Okay. And maybe one last one, if I could, just in regards to your liquidity, so you now have roughly 150 million. Just curious as to how you're thinking about future capital raising opportunities. What is your run rate with the current liquidity on hand?

Got it okay.

And maybe one last quantified could.

Just in regards to your liquidity. So you have now a roughly 150 million and just curious as to how you're thinking about future capital raising opportunities what is the run rate with the current liquidity on Paul. Thank you.

Eldar: Thank you. So, I think that in terms of liquidity, we were able to end the year with $150 million. We started the year with $186 million.

Oh I think that.

Terms of liquidity, we were able to end the year with a $150 million, we started the year with a $186 million.

Eldar: And so we were able to put some additional cash on our balance sheet. In the last quarter, we were able, as we said, to start collecting NRE, which we said will balance off our expenses significantly. So as we win more programs, we will be able to continue to balance off our expense side. And our goal is, A, to be viable all through the window of opportunity that we are seeing in front of us, the capture. And each program that we win expands our runway with additional NRE. What I can add to this, so we're seeing in front of us several big opportunities that we have been working on for quite a long time. And that can unlock opportunities for us for, let's say, the next two years. We've been spending a lot of effort and time trying to bring those opportunities and unlock them. And I believe that.

So.

We were able to group some additional cash on our balance sheet on the last quarter, we were able as we said add to start collecting in our <unk>, which we said will balance off significantly our expense. So as we win more programs, we will be able to continue to balance off.

Sure.

Expense side and our goal is a to b.

We are to be viable all through the window of opportunity that we are seeing a bronco club the capture in each program that we ran expands our runway with additional work.

But what I can add maybe to this so.

So we're seeing in front of us several big opportunities that we are working on for quite a long time and that can unlock opportunities for us.

All I can say for the next two years.

We've been spending a lot of effort and time and trying to bring those opportunities are now locked them and I believe that.

Eldar: Innoviz is positioned very strongly to make that a reality, and I feel that if we continue to be successful as we have been in the last two years, I believe that our technology is currently leading the pack in many ways. I believe that our experience, our customer base is giving us many advantages. I think some of the dynamics in the, Geopolitics, etc.

Innovative positioned very strongly to.

To make that a reality and I feel that if we will continue to be successful as we were.

In the last two years.

I believe that our technology is currently.

Leading the pack in many ways, we believe that our experience.

Our customer base is giving us.

Many advantages.

I think some of the dynamics in the.

Geopolitical et cetera gives us a big step up right now.

Eldar: gives us a big step up right now. So I feel that there are several opportunities in front of us that could be very meaningful. I'm positive that we'll be able to reach. Thank you. That's very helpful. Congratulations again on the quarter.

So I feel that there are several opportunities in front of us that could be very meaningful.

I'm I'm.

Positive that we'll be able.

To reach them.

Got it. Thank you that's very helpful. Congratulations again on the quarter I'll pass it on thank you.

Operator: I'll pass it on. Thank you. Thank you. Our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Kevin, please go ahead and unmute.

Thank you. Our next question comes from the line of Kevin Cassidy from Rosenblatt Securities and Kevin. Please go ahead.

Kevin Edward Cassidy: Yeah, thank you for letting me ask the question and congratulations on the progress. Just on the RFI and RFQ processes, you mentioned there are delays. Can you go into more detail on what the delays are?

You can on mute Sir.

Yeah. Thank you for letting me ask the question and congratulations on the progress.

Just on the RF INR acute process. You know you mentioned there are delays can you go into more details on what the delays or is it is about additional competition or Oems, just more cautious or Oh technical obstacles.

Omer: Is it additional competition, or are OEMs just more cautious or, you know, technical obstacles? Maybe just give some details on that. So it depends on the OEM. There are several discussions with one customer related to their desire to, I would say, continue discussions on www.kevincassidy.com. Sounds very technical, but eventually, this... This requires strong integration between us and the compute platform they are using, and it requires, I would say, good alignment before they can feel comfortable with the nomination based on this architecture. So there are several technical discussions about this, and you need to understand that once you kick off a project, the customer needs to feel very confident that nothing changes. For any reason, they might learn they need to change something in the product, on either side, whether it's the LIDAR or the compute platform.

Just give some details on that.

So it depends on the on the OEM.

Our several discussions with one customer related to their desire to.

I would say continued discussions on.

Some interface.

Cyber security I mean that is specifically what we're doing are having that they wanted to to check if we can support a different kind of interface.

Sounds very technical but eventually this is.

This requires a strong integration between us and and the compute platform they are using and they it.

It requires I would say.

Good alignments before they can.

Feel comfortable with the nomination based on this architecture. So there is several technical discussions on this.

And.

And to understand that once you kick off a project the customer needs can feel very confident that nothing changes.

If for any reason they learn they need to change something in the product.

On either side, whether it's the lidar owned all the compute platform.

Omer: I would say it's a very expensive decision to make, and therefore they are cautious about kind of freezing the design and kicking it off. Another, OEM, I think it's mostly related to their internal kind of change of teams. They added a new team coming from another activity they stopped working on, and that team had to be integrated into the team, which, of the year, but I can say that the progress in the last few weeks was very on steroids, I would say.

So I would say, it's a very expensive decision to make and therefore they are they are cautious on of a.

Freeze into design and kicking off.

One and.

Another OEM.

I think it's mostly related to their internal comp change of teams.

They added a new team coming from another activity. They they they stopped working on and that team had to be integrated into the team which.

Kind of clear slowdown things towards the end of the year.

But I can say that.

The progress in the last few weeks, what Larry on on steroids, and I would say.

Omer: So I think that we're catching up there, www.innoviztech.com. Yeah, I mean. Okay, great. Maybe you touched on something there about the platforms, and I wanted to ask about that. You had mentioned you're on a Qualcomm and a Mobileye platform, and that's great news, but is the decision still? I guess they're not packaged together. It's still the OEM can decide on one platform with Qualcomm and then even choose a competitor's LiDAR. Yeah, definitely. I mean, eventually, it's the OEM decision on which library to use, but, I would say the following: eventually, when they make those decisions, there are many different metrics they look at before making that decision. And one of them is the risk related to doing something that someone else didn't do.

So I think that they were catching up there I mean, they're approaching.

Yeah.

Uh huh.

Yeah I mean.

Okay.

Yeah.

Okay great.

Maybe you touched on something there about the platforms.

Wanted to ask about that you had mentioned that you're on a qualcomm and their mobile AD platform and that that's great news, but it's a decision still.

I guess, they're not packaged together, it's still the OEM can decide one platform with Qualcomm and then even choose the competitors lidar.

Yeah definitely eventually is the OEM decision on which laggard for us but.

I would say the following eventually when they make those decisions.

There are many different metrics the deluca before making that decision and one of them is a risk related to doing something that someone else they didn't do.

Omer: The second is cost. I mean, obviously, when someone would ask to start developing their platform based on another liner, that would be a very expensive effort. And I'm sure they would not just carry the cost themselves; they would just throw that back at the OEM. And I think that from a cost perspective, I don't think there is a lot of motivation for anyone to do that. But it's never the decision of the platform player.

The second is that cost I mean, obviously when someone would ask.

Robot global or mobilized.

Developing their platform.

Platform based on another light on that would be a very expensive therefore.

And I'm sure they would not just carry the cost themselves. They would just roll that back into the to the to the OEM.

And I think that on cost perspective, I don't think there is a lot of their motivation for anyone to do that but it's never the decision of the platform there.

Omer: But they have ways to, I would say, give the motivation to the OEM not to add too much effort when it's not needed. Right. Thank you. Thank you. Our next question comes from the line of Kevin Kerrigan from West Park Capital, and Kevin, please go ahead. I think you unmuted the wrong Kevin.

They they have ways.

Two I would say give.

Do you have the motivation to the OEM not too.

Add too much airports when it's not music.

Great. Thank you.

Thank you. Our next question comes from the lineup haven't Kerrigan from West Park capital.

Kevin. Please go ahead.

I think you're on mute the wrong Kevin.

Operator: I think I did. Now, please go ahead. Yeah. Hey, Omar, and Elder.

I think I did know please go ahead.

Yeah, Hey, Omar another thanks for taking my question and let me Echo my congrats on the progress.

Operator: Thanks for taking my question. And let me echo my congratulations on the progress. Can you talk a little bit more about your contract manufacturing strategy? You know, just remind us how many manufacturing partners you have. You know, what have you learned working with them?

Can you talk a little bit more about your contract manufacturing strategy, just remind us how many manufacturing partners you have.

What have you learned working with Bam and any thoughts on eventually building kind of your own manufacturing facility or if your contract manufacturers are kind of the best strategy.

Omer: And any thoughts on eventually building kind of your own manufacturing facility? Or do you feel contract manufacturers are kind of the best strategy? So, you know, it always depends on the return on investment that you're making compared to the market volume. Eventually, right now, we're trying to be elastic in terms of supporting different OEMs in different locations. We don't want to be committed to one geography while we are trying to scale.

So you know it.

It always depends on the readout on investment that you're making.

Compared to the market volume.

Volume eventually right now we're trying to be elastic in terms of supporting different Oems in different locations.

We don't want to be.

Committed to one geography, one monthly while we're trying to scale.

Omer: Our ability to work with contract manufacturers is, I think, one of our strengths today because we have access to different facilities that we don't need to make investments in ramping them up. Another thought, which I think is maybe, you know, I think it's important. When you go through an audit with an OEM, this is primarily for the top 10 OEMs, as I said, quality standards of the highest. When you are audited for a program, they cannot audit you.

Our ability to work with our contract with receptor is ice I think it's one of our strengths today, because we have access to different facilities that we don't need to make investment in ramping them up.

Another policy, which I think is maybe you know I think if you bought them.

When you go through an audit with an OEM and this primarily Florida top 10, OEM that said Paul.

And it is tangible are the highest.

When you're audited or a program they cannot Aussie cube. They cannot nominate you based on the facility does not exist.

Omer: We cannot nominate you based on a facility that does not exist. When you're certified as a Tier 1 by an OEM and nominated for series production, the teams need to be in the facility and audited, and make sure that the activity and the operation is meeting the standard. You cannot be nominated based on a future facility that one day will meet their requirements.

When you were certified as if you'll want to an OEM and nominated for series production.

Isn't it too.

B.

In the inner facility an oddity.

And make sure that the activity in operation is meeting those standards.

You cannot be nominated based on a future to be facility that one day will meet their requirements.

Omer: We did not have any alternative other than working with conscientious manufacturers, because, for example, when we were audited by Audi at the time. They wanted to be in the facility that would eventually serve them, and they wanted to make sure. And we provided them with five options of different contract manufacturers. They had preference for one specific because of their previous engagement.

We did not have any alternative other than work with quantify or better.

Because for example, when we were audited by Audi Guy.

They wanted to be in the facility that eventually were served in a month to make sure and we provided them five auctions of different quantifying investor They had referenced to one specific because of their previous engagement.

Omer: All the three of you can successfully manage to go through. Now, that specific contract manufacturer has different facilities in different areas around the world, and that gives us that flexibility. I believe that once the program volumes reach several millions a year in production, it would start to make sense for innovators to make those investments.

They did it in a successful.

Really.

Minutes.

Go through.

Now that's specific contract with receptor has different facilities in different areas around the world and that gives us that flexibility.

I believe that was the the program volumes with rich the.

Several millions a year in production it will start to make sense for INO is to make those investments, but I think at this point of time.

Omer: But I think at this point of time, it makes more sense, and I think it's part of our advantage. Yeah. Got it. Got it. Okay. Yeah, that makes sense. I appreciate the color on that. My second question, just with BMW getting ready for deliveries, can you just talk about how unit projections change from when you originally win the contract when you're about a quarter out or so from kind of the start of production? I mean, I'm assuming you kind of get more color on the units, but do you kind of go from yearly projections to the OEM giving you weekly or quarterly estimates, or do they kind of stick with the yearly projections?

It makes more sense.

And I think it's about parvovirus and advantages.

Sure.

Yeah got it got it okay, yeah that makes sense and I appreciate the color on that on our.

My second question, just with BMW getting ready for our deliveries can you just talk about how unit projections changed from when you originally when the contract when you're about a quarter out or so from kind of start of production I mean, I'm, assuming you kind of get more color on a unit spikes you kind of go from yearly projections set of OEM, giving you weekly or quarterly.

Estimates are they kind of stick with kind of a yearly projections.

Omer: So, I mean, eventually, we, you know, BMW is launching their Level 3 program for the first time. As expected, that will be a soft launch, kind of filling the water. There are plans to launch additional vehicles. As I mentioned, one of them is also in China, but I cannot say right now the volumes.

So I mean, eventually we it'll bmw's launching for the first time, though their level three program as expected.

That will be a soft launch kind of filling the water.

They'll our plans to launch additional vehicles as I mentioned one of them is also in China.

But I cannot say right now the volumes I mean, I would I believe that with <unk> over the course of the following quarters, we will see the ramp.

Omer: I mean, I believe that over the course of the following quarters, we'll see the ramp, and probably we'll get a better understanding of how fast it will get to maximum capacity. Yeah. Okay, perfect. Thanks, guys. OK. There are no further questions, so thank you all for your participation, and this concludes our call. Thank you. Goodbye.

And and and probably will get the better understanding of how fast it will get.

So the maximum capacity.

Yeah, Okay perfect. Thanks, guys.

Okay.

Yeah.

And there are no further questions. So thank you all for your participation and this concludes our call you may now disconnect.

Yeah.

Yes.