Q1 2024 Mobileye Global Inc Earnings Call

April 25, 2024

Operator: Greetings and welcome to Mobileye's first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Galves, Chief Communication Officer. Please, you may begin.

Operator: Greetings, and welcome to Mobileye's Q1 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Galves, Chief Communications Officer. Please, you may begin.

Greetings and welcome to mobile is first quarter 2024 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host Dan Gallagher Chief Communication Officer. Please.

Dan Gallagher: Please be please you may begin.

Daniel V. Galves: Thanks, Maria. Hello, everyone, and welcome to Mobileye's first quarter 2024 earnings conference call for the period ending March 30, 2024. Please note that today's discussion contains forward-looking statements based on the business environment as we currently see it. Such statements involve risks and uncertainties. Please refer to the accompanying press release, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally, on this call, we will refer to both GAAP and non-GAAP figures. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release.

Dan Galves: Thanks, Maria. Hello, everyone, and welcome to Mobileye's Q1 2024 earnings conference call for the period ending 30 March 2024. Please note that today's discussion contains forward-looking statements based on the business environment as we currently see it. Such statements involve risks and uncertainties. Please refer to the accompanying press release, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally, on this call, we will refer to both GAAP and non-GAAP figures. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release. Joining us on the call today, as always, are Professor Amnon Shashua, Mobileye's CEO and President, and Moran Shemesh, Mobileye's CFO. Also joining today for the Q&A session is Nimrod Nehushtan, Mobileye's Executive Vice President of Business Development and Strategy. Thanks, and now I'll turn the call over to Amnon.

Dan Gallagher: Thanks, Maria Hello, everyone and welcome to mobilize first quarter 2024 earnings conference call for the period ending March 30 of 2024. Please note that today's discussion contains forward looking statements based on the business environment as we currently see it such statements involve risks and uncertainties. Please refer.

Dan Gallagher: Prior to the accompanying press release, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally on this call. We will refer to both GAAP and non-GAAP figures a reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release, joining us on the call today as always are.

Daniel V. Galves: Joining us on the call today, as always, are Professor Amnon Shashua, Mobileye's CEO and President, and Moran Shemesh, Mobileye's CFO. Also joining today for the Q&A session is Nimrod Nehushtan, Mobileye's Executive Vice President of Business Development and Strategy. Thanks, and now I'll turn the call over to Amnon.

Speaker Change: So I'm not so sure mobilized CEO and president.

And Mara and SMS mobile is CFO also joining today for the Q&A session is Nimrod and his name is Stan mobilize executive Vice President of business development and strategy. Thanks, and now I'll turn the call over to online.

Amnon Shashua: Hello, everyone, and thanks for joining our earnings call. From a revenue and income perspective, Q1 was fully aligned with the outlook we provided in January, and I am pleased that inventory consumption is tracking as we expected. Based on information from our tier one customers and our own analysis, we believe that 70-75% of excess inventory was consumed in Q1 this year. Adjusting for that, as well as some level of inventory growth in Q1 of last year, our volume growth in the core ADAS would have been mid-single digits, which is very solid performance in the current environment. In terms of business development and executing on our strategy, we continue to make meaningful progress across our portfolio. This starts with our eyes on, hands-on ADAS business and extends throughout our advanced product portfolio, including supervision, chauffeur, and drive. Starting with eyes-on, hands-on systems, or what we generally refer to as base and cloud-enhanced data.

Amnon Shashua: Hello, everyone, and thanks for joining our earnings call. From a revenue and income perspective, Q1 was fully aligned with the outlook we provided in January, and I am pleased that the inventory consumption is tracking as we expected. Based on information from our tier one customers and our own analysis, we believe that 70% to 75% of excess inventory was consumed in Q1 this year. Adjusting for that, as well as some level of inventory growth in Q1 of last year, our volume growth in the core ADAS would have been mid-single digits, which is very solid performance in the current environment. In terms of business development and executing on our strategy, we continue to make meaningful progress across our portfolio. This starts with our eyes-on, hands-on ADAS business and extends throughout our advanced product portfolio, including SuperVision, Chauffeur, and Drive.

Online: Hello, everyone and thanks for joining our earnings call.

Speaker Change: From a revenue and income perspective, Q1 was fully aligned with the outlook. We provided in January and I am pleased that the inventory consumption is tracking as we expected based on information from our tier one customers and our own analysis, we believe that 70% to 75% of excess inventory was consumed in Q1 this year.

Amnon Shashua: Adjusting for that, as well as some level of inventory growth in Q1 of last year, our volume growth in the core ADAS would have been mid-single digits, which is very solid performance in the current environment. In terms of business development and executing on our strategy, we continue to make meaningful progress across our portfolio. This starts with our eyes on, hands-on ADAS business and extends throughout our advanced product portfolio, including supervision, chauffeur, and drive. Starting with eyes-on, hands-on systems, or what we generally refer to as base and cloud-enhanced data.

Speaker Change: Adjusting for that as well as some level of inventory growth in Q1 of last year.

Speaker Change: Volume growth in core <unk>.

Speaker Change: With have been mid single digits, which is very solid performance in the current environment.

In terms of business momentum executing on our strategy, we continue to make meaningful progress.

Amnon Shashua: In terms of business development and executing on our strategy, we continue to make meaningful progress across our portfolio. This starts with our eyes-on, hands-on ADAS business and extends throughout our advanced product portfolio, including supervision, chauffeur, and drive. Starting with eyes-on, hands-on systems, or what we generally refer to as base and cloud-enhanced data, our sustained success in this business has always been about providing incremental safety features to meet the constantly expanding regulatory and ratings requirements, while leveraging scale and purpose-built hardware to maintain a consistent overall cost to the automaker. In Q1, we had our best ever design win quarter for base and cloud enhanced data, generating 26 million units of future projected volume across many OEMs and all key geographic regions. DesignWin activity, so you shouldn't annualize this number, but we believe this should address any open questions on whether the excess inventory indicated some weakening of our position and opportunities for continued growth. It did not.

Speaker Change: Our portfolio this starts with our eyes on our hands on Adas business and extend throughout our advanced product portfolio, including supervision shop floor right.

Amnon Shashua: Starting with eyes-on, hands-on systems, or what we generally refer to as base and cloud-enhanced ADAS. Our sustained success in this business has always been about providing incremental safety features to meet the constantly expanding regulatory and ratings requirements while leveraging scale and purpose-built hardware to maintain a consistent overall cost to the automaker. In Q1, we had our best-ever design win quarter for base and cloud-enhanced ADAS, generating 26 million units of future projected volume across many OEMs and all key geographic regions. Design win activity, so you shouldn't annualize this number, but we believe this should address any open question on whether the excess inventory indicated some weakening of our position and opportunities for continued growth. It did not. We believe a key driver of this elevated design win volume was the start of production of our next generation high volume ADAS chip, the EyeQ6 Lite.

Speaker Change: Starting with eyes on hands on systems, or what we generally referred to as based on cloud enhanced Adas our.

Amnon Shashua: Our sustained success in this business has always been about providing incremental safety features to meet the constantly expanding regulatory and ratings requirements, while leveraging scale and purpose-built hardware to maintain a consistent overall cost to the automaker. In Q1, we had our best ever design win quarter for base and cloud enhanced data, generating 26 million units of future projected volume across many OEMs and all key geographic regions. DesignWin activity, so you shouldn't annualize this number, but we believe this should address any open questions on whether the excess inventory indicated some weakening of our position and opportunities for continued growth. It did not.

Speaker Change: Our sustained success in this business has always been about providing incremental safety features to meet the constantly expanding regulatory and rating requirements.

Speaker Change: While leveraging scale and purpose built hardware to maintaining consistent overall cost to the automaker.

Speaker Change: In Q1, we had our best ever design win quarter for based on cloud enhanced Adas generating 26 million units of future projected volume across many Oems.

Amnon Shashua: In Q1, we had our best-ever design win quarter for base and cloud enhanced data, generating 26 million units of future projected volume across many OEMs and all key geographic regions. Design win activity [inaudible], so you shouldn't annualize this number, but we believe this should address any open questions on whether the excess inventory indicated some weakening of our position and opportunities for continued growth. It did not.

Speaker Change: And all key geographic region.

Speaker Change: When activity.

Speaker Change: Shouldn't annualize this number but we believe this should address any open question.

Speaker Change: The excess inventory indicated some weakening of our position and opportunities for continued growth.

Speaker Change: It did not.

Amnon Shashua: We believe a key driver of this elevated design win volume was the start of production of our next generation high volume ADAS chip, the EyeQ6 low. This system on chip packs 4.4x the processing power of its predecessor, the EyeQ4, into half the packaging size and supports many incremental safety and convenience features that are aligned with a global regulatory and NCAP safety rating roadmap for the next many years to come. And this was accomplished without any material price increase to our customer or cost increase to Mobileye.

Speaker Change: We believe the key driver of this elevated design win volume was the start of production of our next generation high volume <unk> chip the IQ six low.

Amnon Shashua: This system on chip packs 4.4x the processing power of its predecessor, the EyeQ4, into half the packaging size and supports many incremental safety and convenience features that are aligned with the global regulatory and NCAP safety rating world roadmap for the next many years to come. This was accomplished without any material price increase to our customer or cost increase to Mobileye. Turning to Mobileye's advanced product portfolio, we see three waves of future growth. Initially, eyes-on, hands-free navigation on pilot through SuperVision. This system is in production now with more than 200,000 systems on the road and has customer wins that imply significant scaling over the next few years. Progressing towards eyes-off, we have Chauffeur for consumer-owned vehicles and Drive for network-deployed driverless vehicles.

Speaker Change: This system on chip tax for four extra processing power of its predecessor, the IQ for it to have the packaging size and supports many incremental safety and convenience features that they are aligned with the global regulatory and Cup safety rating growth roadmap for the next many years to come and this was accomplished without any material pricing.

Speaker Change: Increase to our customer or cost increase globally.

Amnon Shashua: Turning to Mobileye's advanced product portfolio, we see three waves of future growth: initially eyes-on, hands-free navigation, on-pilot through SuperVision. This system is in production now with more than 200,000 systems on the road and has customer wins that imply significant scaling over the next few years. Progressing towards eyes-off, we have Chauffeur for consumer-owned vehicles and Drive for network-deployed driverless vehicles. Each are still in development but have serious production wins that will begin to scale in 2026.

Speaker Change: Turning to mobilize advanced product portfolio, we see three waves of future growth initially.

Speaker Change: Initially is on hands free navigation on pilots through supervision.

Speaker Change: <unk> is in production now with more than 200000 systems on the road and have some customer wins that imply significant scaling over the next few years.

Speaker Change: Progressing towards is off we have shall form for consumer owned vehicles and drive for network deployed driverless vehicles. Each are still in development, but how serious production wins that will begin to scale in 2026.

Amnon Shashua: Each are still in development but have serious production wins that will begin to scale in 2026. From a revenue per unit perspective, we believe products can accelerate our growth in a meaningful manner. For example, our future projected revenue from design wins in 2023 was $7.4 billion. Approximately 40% of this future projected revenue was accounted for by SuperVision and EyeQ, and 20% by Chauffeur, yet those products combined accounted for only 4% of the future volume. Over the last 12 months, we have observed an increasing consensus among automakers that eyes-on, hands-free across a broad operational design domain is a must-have feature to be competitive over the rest of the decade and beyond. What's new since the start of the year is that we have seen a diffusion of this interest from primarily premium brands to more mainstream brands.

Amnon Shashua: From a revenue per unit perspective, we believe [inaudible] products can accelerate our growth in a meaningful manner. For example, our future projected revenue from design wins in 2023 was $7.4 billion. Approximately 40% of this future projected revenue was accounted for by SuperVision, and 20% by Chauffeur. Yet those products combined accounted for only 4% of the future volume. Over the last 12 months, we have observed an increasing consensus among automakers that eyes-on, hands-free across a broad operational [inaudible] domain is a must-have feature to be competitive over the rest of the decade and beyond. What's new since the start of the year is that we have seen a diffusion of this interest, from primarily premium brands to mainstream brands. We have also seen additional prospects reach out to Mobileye due to challenges with their current direction, whether that be fully in-house development or collaboration with our competitors.

Speaker Change: From a revenue per unit perspective, we believe product can accelerate our growth in a meaningful manner. For example, our future projected revenue from design wins in 2023 was $7 4 billion.

Approximately 40% of this future projected revenue was accounted for by supervision in 'twenty and 20% by chauffeur, yet those products combined accounted for only 4% of the future of module.

Amnon Shashua: Over the last 12 months, we have observed an increasing consensus among automakers that eyes-on, hands-free across a broad operational domain is a must-have feature to be competitive over the rest of the decade and beyond. What's new since the start of the year is that we have seen a diffusion of this interest, from primarily premium brands to mainstream brands. We have also seen additional prospects reach out to Mobileye due to challenges with their current direction, whether that be fully in-house development or collaboration with our competitors.

Speaker Change: Over the last 12 months, we have observed an increasing consensus among automakers at ice on hands free across a broad operational handling is a must have feature to be competitive over the rest of the decade and beyond.

Amnon Shashua: What's new since the start of the year is that we have seen a diffusion of this interest, from primarily premium brands to more mainstream brands. We have also seen additional prospects reach out to Mobileye due to challenges with their current direction, whether that was fully in-house development or collaboration with our competitors.

Speaker Change: What's new since the start of the year is that we have seen a diffusion of this interest.

Speaker Change: From primarily premium brands to more mainstream brands. We have also seen additional prospects reach out to mobilize due to challenges with with their current direction, whether that was fully in house development or collaboration with our competitors.

Amnon Shashua: We have also seen additional prospects reach out to Mobileye due to challenges with their current direction, whether that was fully in-house development or collaboration with our competitors. We now have design wins or in advanced discussions with 14 OEMs, representing 46% of the industry production, as compared to 11 OEMs, representing 37% of industry production at the end of 2023. We continue to make steady progress with more mature prospects we have been working with since mid- to late 2023 and see the likelihood of converting a number of these during H2 2024. In the aggregate, Mobileye is now bidding on RFQs, representing a multiple of the approximately $4.5 billion of pipeline revenue generated in 2023 from supervision and Chauffeur design wins.

Amnon Shashua: We now have design wins or are in advanced discussions with 14 OEMs, representing 46% of industry production, as compared to 11 OEMs representing 37% of industry production at the end of 2023. We continue to make steady progress with more mature prospects; we have been working with since mid- to late- 2023 and see the likelihood of converting a number of these during the second half of 2024. In the aggregate, Mobileye is now bidding on RFQs representing a multiple of the approximately $4.5 billion of pipeline revenue generated in 2023 from SuperVision and Chauffeur design wins. There are several reasons for this significant expansion in interest, and I'll elaborate on five driving factors.

Speaker Change: We now have design wins are in advanced discussions with 14, Oems representing 46% of the industry production as compared to 11 Oems represented 37% of industry production at the end of 2023.

Speaker Change: We continue to make steady progress with more mature prospects, we have been working with since mid to late 2023 and feed the likelihood of converting a number of days during the second half of 2024.

Speaker Change: And the aggregate mobilized now bidding on RF skus, representing a multiple of approximately $4 $5 billion of pipeline revenue generated in 2023 from supervision and so for design wins.

Amnon Shashua: There are several reasons for this significant expansion in interest, and I'll elaborate on five driving factors. Number one, the public announcement by Volkswagen Group for their alignment with our SuperVision, Chauffeur, and Drive products was very important, both in terms of a large global OEM moving forward on these product categories with conviction, and an endorsement of our capability and ability to execute. As expected, their announcement led to incremental traction with other OEMs. Number two, we believe that Mobileye has significant and somewhat unique advantages in delivering an optimal balance of performance and cost.

Amnon Shashua: There are several reasons for this significant expansion in interest, and I'll elaborate on five driving factors. Number one, the public announcement by Volkswagen Group for their alignment with our SuperVision, Chauffeur, and Drive products was very important, both in terms of a large global OEM moving forward on these product categories with conviction and an endorsement of our capability and ability to execute. As expected, the announcement led to incremental traction with other OEMs. Number two, we believe that Mobileye has significant and somewhat unique advantages in delivering an optimal balance of performance and cost. Our SoC cost is a fraction of competing high-end SoCs. Very importantly, our SoC comes with the full software stack validated for production readiness with a proven record of quality. Moreover, REM enables geographic scalability at very low cost.

Speaker Change: The reasons for this significant expansion in interest and others operate on five driving factors number one the public announcement by false working group for their alignment with our supervision short foreign derived products was very important.

Amnon Shashua: Number one, the public announcement by Volkswagen Group about their alignment with our supervision chauffeur and drive products was very important, both in terms of a large global OEM moving forward on these product categories with conviction and an endorsement of our capability and ability to. As expected, the announcement led to incremental traction with other OEMs. Number two, we believe that Mobileye has significant and somewhat unique advantages in delivering an optimal balance of performance and cost.

Speaker Change: Both in terms of a large global Oems moving forward on these product categories with conviction and an endorsement of our capability and the ability to execute as expected the announcements led to incremental traction with other Oems.

Amnon Shashua: Number two, we believe that Mobileye has significant and somewhat unique advantages in delivering an optimal balance of performance and cost. Our SOC cost is a fraction of competing high-end SOCs. And, very importantly, our SOC comes with the full software stack validated for production readiness with a proven record of quality. Moreover, REM enables geographic scalability at very low cost. Overall, our eyes-on, hands-off performance is best-in-class, despite running on low-cost silicon and requiring many fewer sensors than the competition. Number three, as IQ6HIGH approaches production in mid-2025, we are now able to utilize late-stage SOC and ETU samples in test. The software stack built to run on these next-generation ECUs includes state-of-the-art, novel AI systems, including end-to-end perception and end-to-end actuation, running in parallel for the purpose of redundancy to the networks powering our current generation of supervision. Our target for the camera-based subsystem for perception is 1,000 hours of driving on highway roads without intervention, and our testing shows that we are on the right path to achieving those targets.

Speaker Change: We believe that mobile is significant and somewhat unique advantages in delivering an optimal balance of performance and cost.

Amnon Shashua: Our SOC cost is a fraction of competing high-end SOCs. And, very importantly, our SOC comes with the full software stack validated for production readiness with a proven record of quality. Moreover, REM enables geographic scalability at very low cost.

Speaker Change: Our <unk> cost is a fraction of competing high end associates at.

And very importantly, our SLC counts with the full software stack validators for production readiness with a proven record of quality.

<unk>.

Speaker Change: Well enabled to geographic scalability at very low cost overall.

Amnon Shashua: Overall, our eyes-on, hands-off performance is best-in-class, despite running on low-cost silicon and requiring many fewer sensors than the competition. Number three, as IQ6HIGH approaches production in mid-2025, we are now able to utilize late-stage SOC and ETU samples in test. The software stack built to run on these next-generation ECUs includes state-of-the-art, novel AI systems, including end-to-end perception and end-to-end actuation, running in parallel for the purpose of redundancy to the networks powering our current generation of supervision. Our target for the camera-based subsystem for perception is 1,000 hours of driving on highway roads without intervention, and our testing shows that we are on the right path to achieving those targets.

Amnon Shashua: Overall, our eyes-on, hands-off performance is best in class, despite running on low-cost silicon and requiring many fewer sensors than competition. Number three, as EyeQ6 High approaches production in mid-2025, we are now able to utilize late-stage SoC and ECU samples in testing. The software stack built to run on these next generation ECUs includes state-of-the-art novel artificial intelligence systems, including end-to-end perception and end-to-end actuation, running in parallel for purpose of redundancy to the networks powering our current generation of SuperVision. Our target for the camera-based subsystem for perception is 1,000 hours of driving on highway roads without intervention, and our testing show that we are on the right path of achieving those targets. I would mention that those meantime between intervention targets are expected to be industry leading at quite a large gap. We believe that's number four.

Speaker Change: Overall, our eyes on hands off performance is best in class, despite running on low cost silicon and requiring many fewer sensors that competition.

Amnon Shashua: Number three, as IQ6HIGH approaches production in mid-2025, we are now able to utilize late-stage SOC and ETU samples in test. The software stack built to run on these next-generation ECUs includes state-of-the-art, novel AI systems, including end-to-end perception and end-to-end actuation, running in parallel for the purpose of redundancy to the networks powering our current generation of supervision. Our target for the camera-based subsystem for perception is 1,000 hours of driving on highway roads without intervention, and our testing shows that we are on the right path to achieving those targets. I would mention that those mean time between intervention targets are expected to be industry leading, at quite a large scale. We believe that, number four, we believe that supervision provides a validated bridge to a true eyes-off system across a wide domain, which is seen by many OEMs as the true value driver along, But the performance requirements for EIDOF are really underappreciated by the public and also by certain OEMs who are throwing everything they have at an EIDOON system with seemingly no clear plan on how to boost mean time between failure from one safety intervention every few hours to one every hundreds of thousands of hours.

Amnon Shashua: Number three, as EyeQ6 High approaches production in mid-2025, we are now able to utilize late-stage SOC and ETU samples in testing. The software stack built to run on these next-generation ECUs includes state-of-the-art, novel artificial intelligence systems, including end-to-end perception and end-to-end actuation, running in parallel for purpose of redundancy to the networks powering our current generation of SuperVision. Our target for the camera-based subsystem for perception is 1,000 hours of driving on highway roads without intervention, and our testing show that we are on the right path of achieving those targets. I would mention that those mean time between intervention targets are expected to be industry leading at quite a large gap.

Speaker Change: Number three as IQ six high approaches production in mid 2025.

Speaker Change: Now able to utilize late stage, <unk> and acu samples and testing.

Speaker Change: The software stack built to run on these next generation Acos include state of the art novel artificial intelligence systems, including <unk> perception and end to end actuation running in parallel for a purpose of redundancy to the networks power rate our current generation of supervision our targets for the camera based subsystem for <unk>.

Speaker Change: <unk> is 1000 hours of driving on highway roads without intervention and are testing show that we're on the right path of achieving those targets.

Amnon Shashua: I would mention that those mean time between intervention targets are expected to be industry leading, at quite a large scale. We believe that, number four, we believe that supervision provides a validated bridge to a true eyes-off system across a wide domain, which is seen by many OEMs as the true value driver along, But the performance requirements for EIDOF are really underappreciated by the public and also by certain OEMs who are throwing everything they have at an EIDOON system with seemingly no clear plan on how to boost mean time between failure from one safety intervention every few hours to one every hundreds of thousands of hours.

Speaker Change: You mentioned that those meantime between intervention targets are expected to be industry, leading.

Speaker Change: At that quite a large gap.

Amnon Shashua: We believe that, number four, we believe that supervision provides a validated bridge to a true eyes-off system across a wide domain, which is seen by many OEMs as the true value driver along, But the performance requirements for EIDOF are really underappreciated by the public and also by certain OEMs who are throwing everything they have at an EIDOON system with seemingly no clear plan on how to boost mean time between failure from one safety intervention every few hours to one every hundreds of thousands of hours. Mobileye, on the other hand, has a unique methodology and offering, including crowd-sourced mapping that boosts perception performance, redundant perception layers, a market-leading imaging radar to support our true redundancy concepts, RSS, and purpose-built efficient compute. These areas of vertical integration experience, in our view, are considerable assets. Number five, we've already seen an initial positive impact from Tesla's decision to double down on FSD and Robotaxi, which adds to the desire for other OEMs to have competitive offerings but also is seen as an area where our legacy customers can utilize, mobilize strength to introduce far-reaching intelligent driving. Overall, I'm very pleased with the progress of our technology and business building with OEMs. I look forward to more updates through the year and now turn the call over to Moran.

Amnon Shashua: We believe that--number four, we believe that SuperVision provides a validated bridge to a true eyes-off system across a wide domain, which is seen by many OEMs as the true value driver long term. But the performance requirements for eyes-off are really underappreciated by the public, and also by certain OEMs who are throwing everything they have at an eyes-on system with seemingly no clear plan on how to boost mean time between failure from one safety intervention every few hours to one every hundreds of thousands of hours. Mobileye, on the other hand, has a unique methodology and offering, including crowd-sourced mapping that boosts perception performance, redundant perception layers, a market-leading imaging radar to support our true redundancy concepts, RSS, and purpose-built efficient compute. These areas of vertical integration experience, in our view, are considerable assets.

We believe that number four we believe that supervision provides it validated bridge to a true <unk> system across a wide domain, which has seen but which is seen by many Oems that the true value to try for a long time.

Amnon Shashua: We believe that SuperVision provides a validated bridge to a true IDOF system across a wide domain, which is seen by many OEMs as the true value driver long term. The performance requirements for IDOF are really underappreciated by the public and also by certain OEMs who are throwing everything they have at an IDON system with seemingly no clear plan on how to boost mean time between failure from one safety intervention every few hours to one every hundreds of thousands of hours. Mobileye, on the other hand, has a unique methodology and offering, including crowdsourced mapping that boosts perception performance, redundant perception layers, a market-leading imaging radar to support our true redundancy concept, RSS, and purpose-built efficient compute. These areas of vertical integration experience, in our view, are considerable assets.

Speaker Change: But the portfolio requirements for eyes off a really underappreciated by the public.

Speaker Change: And also by certain Oems, who are throwing everything they have it in either one system with seemingly no clear plan on how to boost meantime between failure from one safety intervention every few hours to one every hundreds of thousands of hours.

Speaker Change: Multi line or the other as a unique methodology and offering including Crowdsourced mapping that boost perception of performance boost perception performance.

Amnon Shashua: Mobileye, on the other hand, has a unique methodology and offering, including crowd-sourced mapping that boosts perception performance, redundant perception layers, a market-leading imaging radar to support our true redundancy concepts, RSS, and purpose-built efficient compute. These areas of vertical integration experience, in our view, are considerable assets. Number five, we've already seen an initial positive impact from Tesla's decision to double down on FSD and Robotaxi, which adds to the desire for other OEMs to have competitive offerings but also is seen as an area where our legacy customers can utilize, mobilize strength to introduce far-reaching intelligent driving. Overall, I'm very pleased with the progress of our technology and business building with OEMs. I look forward to more updates through the year and now turn the call over to Moran.

Speaker Change: Without this perception layers, a market leading imaging radar to support our true redundancy concept Rss and purpose built sufficient compute.

These areas of virtually vertical integration experience and I'll review our considerable assets.

Amnon Shashua: Number five, we have already seen an initial positive impact from Tesla's decision to double down on FSD and robotaxi, which adds to the desire for other OEMs to have competitive offerings, but also is seen as an area where our legacy customers can utilize Mobileye's strengths to introduce far-reaching intelligent driving systems. Overall, I'm very pleased with the progress of our technology and business building with OEMs. I look forward to more updates through the year. Now turn the call over to Moran.

Speaker Change: Number five we have already seen an initial positive impact from Tesla decision to double down on FSD, a robo taxi, which adds to the desire for other Oems to have competitive offerings, but also is seen as an area, where our legacy E. Commerce can utilize mobilized strength to introduce far reaching intelligent driving systems.

Amnon Shashua: Number five, we have already seen an initial positive impact from Tesla's decision to double down FSD and Robotaxi, which adds to the desire for other OEMs to have competitive offerings, but also is seen as an area where our legacy customers can utilize Mobileye's strength to introduce far-reaching intelligent driving systems. Overall, I'm very pleased with the progress of our technology and business building with OEMs. I look forward to more updates through the year and now turn the call over to Moran.

Speaker Change: Overall, I'm very pleased with the progress of our technology and business building with Oems I look forward to more updates towards the year and now I'll turn the call over to Lauren.

Moran Shemesh Rojansky: Thank you, Amnon, and thanks for joining the call, everyone. Before I begin, please be aware that all my comments on profitability will refer to non-GAAP measurements. The primary exclusion in Mobileye non-GAAP numbers is amortization of intangible assets, which is mainly related to Intel's acquisition of Mobileye in 2017. We also exclude stock-based compensation. Starting with Q1 results, they were closely aligned with the Q1 outlook we provided back in January. I'll provide a brief summary and then get into a bit more detail. The severe year-on-year decline in the key metrics was almost exclusively isolated to EyeQ volumes, which were impacted by the inventory correction. During the quarter, we delivered 3.5 million EyeQ chips. In addition to these new shipments, our customers used a significant amount of EyeQ inventory to satisfy the demand for our products during the quarter.

Moran Shemesh: Thank you, Amnon, and thanks for joining the call, everyone. Before I begin, please be aware that all my comments on profitability will refer to non-GAAP measurements. The primary exclusion in Mobileye non-GAAP numbers is amortization of intangible assets, which is mainly related to Intel's acquisition of Mobileye in 2017. We also exclude stock-based compensation. Starting with Q1 results, they were closely aligned with the Q1 outlook we provided back in January. I'll provide a brief summary and then get into a bit more detail. The severe year-on-year decline in the key metrics was almost exclusively isolated to EyeQ volumes, which were impacted by the inventory correction. During the quarter, we delivered 3.5 million EyeQ chips. In addition to these new shipments, our customers used a significant amount of EyeQ inventory to satisfy the demand for our products during the quarter.

Lauren: Thank you.

Lauren: Joining the call.

Lauren: Before I begin please be aware that all my comments on profitability will refer to non-GAAP measurement and is planning to mobilize non-GAAP numbers is a recognition of intangible assets, which is mainly related to the acquisition of <unk>. In 2017, we also exclude stock based compensation.

I think with Q1 results they will closely align with the Q1 outlook we provided back in January.

Lauren: Provide a brief summary, and then get to a bit.

Lauren: In more detail.

Lauren: Year on year decline in the key metrics well almost exclusively isolated to IQ volumes, which were impacted by the inventory correction during the quarter. We delivered $3 5 million. In addition to these new shipments our customers used a significant amount of isolate inventory to satisfy the demand.

Speaker Change: Ill try that.

Moran Shemesh: Starting with Q1 results, they were closely aligned with the Q1 outlook we provided back in January. I'll provide a brief summary and then get into a bit more detail. The severe year-on-year decline in the key metrics was almost exclusively isolated to EyeQ volumes, which were impacted by the inventory correction. During the quarter, we delivered 3.5 million EyeQ chips. In addition to these new shipments, our customers used a significant amount of EyeQ inventory to satisfy the demand for our products during the quarter. The approximately 4.6 million units year-over-year decline, which was converted at our high gross margin, essentially accounted for substantially all of the reduction in gross profit. Our cost is nearly all viable. The fixed component is very minimal.

Moran Shemesh Rojansky: The approximately 4.6 million units year-over-year decline, which converted at our high gross margin, essentially accounting for substantially all of the reduction in gross profit. Our cost is nearly all variable. The fixed component is very minimal. The balance of the year-over-year decline in operating income was driven by some growth in operating expenses, but this was relatively minor. Our operating expenses do not flex with revenue, as R&D spending is correlated with the execution of our advanced product strategy and is not impacted by short-term fluctuation in revenue. Beyond the volume decline, we also saw some modest decline in EyeQ ASP and gross margin related to mix. SuperVision was pretty strong in the quarter. We delivered 39,000 units compared to 25,000 units in the year ago period. This was above expectation, but this was due to timing.

Moran Shemesh: The approximately 4.6 million units year-over-year decline, which converted at our high gross margin, essentially accounting for substantially all of the reduction in gross profit. Our cost is nearly all variable. The fixed component is very minimal. The balance of the year-over-year decline in operating income was driven by some growth in operating expenses, but this was relatively minor. Our operating expenses do not flex with revenue, as R&D spending is correlated with the execution of our advanced product strategy and is not impacted by short-term fluctuation in revenue. Beyond the volume decline, we also saw some modest decline in EyeQ ASP and gross margin related to mix. SuperVision was pretty strong in the quarter. We delivered 39,000 units compared to 25,000 units in the year ago period. This was above expectation, but this was due to timing.

Speaker Change: Ultimately for <unk> unique.

Speaker Change: Ian decline, which converted this our high gross margin secondly accounted for substantially all of the reduction in gross profit.

Speaker Change: Policies nearly all possible the fixed component is very minimal and the balance of the.

Moran Shemesh: The severe year-on-year decline in the key metrics was almost exclusively isolated to IQ volumes, which were impacted by the inventory correction. During the quarter, we delivered 3.5 million IQ chips. In addition to these new shipments, our customers used a significant amount of IQ inventory to satisfy the demand for our products during the quarter. The approximately 4.6 million units year-over-year decline, which was converted at our high gross margin, essentially accounted for substantially all of the reduction in gross profit. Our cost is nearly all viable. The fixed component is very minimal.

Speaker Change: The decline in operating income was driven by some growth in operating expenses, but this was relatively minor.

Speaker Change: Operating expenses were not flex.

Speaker Change: And R&D spending is correlated with execution to what Vince.

Speaker Change: That strategy and as nothing short.

Speaker Change: Short term fluctuation in revenue.

The volume decline, we also saw a modest decline in <unk> gross margin related to mix.

Moran Shemesh: The approximately 4.6 million units year-over-year decline, which converted at our high gross margin, essentially accounted for substantially all of the reduction in gross profit. Our cost is nearly all variable. The fixed component is very minimal. The balance of the year-over-year decline in operating income was driven by some growth in operating expenses, but this was relatively minor, and our operating expenses did not flex with revenue. As R&D spending is correlated with the execution of our advanced product strategy and is not impacted by shorter fluctuations in revenue. Beyond the volume decline, we also saw some modest declines in IQ, ASD, and growth margin related to mixed income. Supervision was pretty strong in the quarter. We delivered 39,000 units compared to 25,000 units in the year-ago period. This was above expectation, but this was due to timing.

Moran Shemesh: The approximately 4.6 million units year-over-year decline, which converted at our high gross margin, essentially accounted for substantially all of the reduction in gross profit. Our cost is nearly all variable. The fixed component is very minimal. The balance of the year-over-year decline in operating income was driven by some growth in operating expenses, but this was relatively minor, and our operating expenses did not flex with revenue. As R&D spending is correlated with the execution of our advanced product strategy and is not impacted by shorter fluctuations in revenue. Beyond the volume decline, we also saw some modest declines in EyeQ ASD and growth margin related to mix [inaudible].

So provision was pretty strong in Macquarie.

Speaker Change: The 39000 unique compared to 25000 units in the year ago period. This was above expectation.

Speaker Change: This was due to timing we continue to see the first half deliveries totaling around 770000.

Moran Shemesh: The balance of the year-over-year decline in operating income was driven by some growth in operating expenses, but this was relatively minor, and our operating expenses did not flex with revenue. And R&D spending is correlated with the execution of our advanced product strategy and is not impacted by shorter fluctuations in revenue. Beyond the volume decline, we also saw some modest declines in IQ, ASD, and growth margin related to mixed income. Supervision was pretty strong in the quarter. We delivered 39,000 units compared to 25,000 units in the year-ago period. This was above expectation, but this was due to timing.

Moran Shemesh Rojansky: We continue to see the H1 deliveries totaling around 770,000 units, in line with our initial expectations, but with Q1 slightly higher than expected, Q2 slightly lower. SuperVision gross margin improved somehow in Q1, both sequentially and year over year. The more meaningful increase into the low 40 range is expected in Q2, as close to 100% of our volume will be with the new low-cost domain controller. On an overall blended gross margin basis, the lower than normal percentage was related to the fact that SuperVision was around 20% of revenue in Q1, compared to an average of 6% in 2023 calendar year.

Moran Shemesh: We continue to see the H1 deliveries totaling around 770,000 units, in line with our initial expectations, but with Q1 slightly higher than expected, Q2 slightly lower. SuperVision gross margin improved somehow in Q1, both sequentially and year over year. The more meaningful increase into the low 40 range is expected in Q2, as close to 100% of our volume will be with the new low-cost domain controller. On an overall blended gross margin basis, the lower than normal percentage was related to the fact that SuperVision was around 20% of revenue in Q1, compared to an average of 6% in 2023 calendar year.

Speaker Change: Isn't it.

Speaker Change: 70000 is in line with our initial expectation that with Q1 slightly higher than expected Q2 slightly lower.

Gross margin improved somehow in Q1, both sequentially and year over year more meaningfully increase into the low 40 range is expected in Q2, it's close to 3% while volume will deal with the new low cost domain controllers.

Moran Shemesh: Beyond the volume decline, we also saw some modest declines in EyeQ ASD and growth margin related to mix [inaudible]. SuperVision was pretty strong in the quarter. We delivered 39,000 units compared to 25,000 units in the year-ago period. This was above expectation, but this was due to timing. We continue to see first half deliveries totaling around several hundred, 70,000, 70,000. This is in line with our initial expectations, but with Q1 slightly higher than expected, and Q2 slightly lower. Supervision gross margin improved somehow in Q1, both sequentially and year-over-year. A more meaningful increase into the low 40 range is expected in Q2, as close to 100% of our volume will be with the new low-cost domain control. On an overall blended gross margin basis, the lower-than-normal percentage was related to the fact that supervision was around 20% of revenue in Q1, compared to an average of 6% in the 2023 calendar year.

Moran Shemesh: Beyond the volume decline, we also saw some modest declines in EyeQ ASD and growth margin related to mix [inaudible].

Moran Shemesh: SuperVision was pretty strong in the quarter. We delivered 39,000 units compared to 25,000 units in the year-ago period. This was above expectation, but this was due to timing. We continue to see first half deliveries totaling around seven hundred--70,000--70,000 units, in line with our initial expectations, but with Q1 slightly higher than expected, Q2 slightly lower. SuperVision gross margin improved somehow in Q1, both sequentially and year-over-year. The more meaningful increase into the low 40 range is expected in Q2, as close to 100% of our volume will be with the new low-cost domain control. On an overall blended gross margin basis, the lower-than-normal percentage was related to the fact that SuperVision was around 20% of revenue in Q1, compared to an average of 6% in the 2023 calendar year. While SuperVision volumes grew year-over-year, the mix of supervision was exaggerated by the temporary reduction in IQ volumes in the quarter, which will return to a more normalized level in Q2 and even more so in the back. Despite the operating loss, operating cash flow was modestly positive in the quarter.

Speaker Change: And then offer a blended gross margin basis.

Speaker Change: Would a normal percentage was related to defend this supervision was around 90% of revenue in Q1.

Speaker Change: <unk> never age of 6% in 'twenty three Kevin do you want.

Moran Shemesh: We continue to see first half deliveries totaling around several hundred, 70,000, 70,000. This is in line with our initial expectations, but with Q1 slightly higher than expected, and Q2 slightly lower. Supervision gross margin improved somehow in Q1, both sequentially and year-over-year. A more meaningful increase into the low 40 range is expected in Q2, as close to 100% of our volume will be with the new low-cost domain control. On an overall blended gross margin basis, the lower-than-normal percentage was related to the fact that supervision was around 20% of revenue in Q1, compared to an average of 6% in the 2023 calendar year.

Moran Shemesh Rojansky: While supervision volumes grew year over year, the mix of supervision was exaggerated by the temporary reduction in EyeQ volume in the quarter, which will return to more normalized level in Q2 and even more so in H2. Despite the operating loss, operating cash flow was modestly positive in the quarter. One item to note here is that our balance sheet inventory rose sequentially. This has nothing to do with inventory at the tier one customers. Our balance sheet inventory rose modestly due to low shipments in the quarter and the need to maintain somehow steady purchasing of EyeQ chips over the course of the year. By the end of 2024, we would expect our balance sheet inventory to be consistent with the 2023 year-end figure. Looking ahead, we believe that the inventory consumption process is on track.

Moran Shemesh: While supervision volumes grew year over year, the mix of supervision was exaggerated by the temporary reduction in EyeQ volume in the quarter, which will return to more normalized level in Q2 and even more so in H2. Despite the operating loss, operating cash flow was modestly positive in the quarter. One item to note here is that our balance sheet inventory rose sequentially. This has nothing to do with inventory at the tier one customers. Our balance sheet inventory rose modestly due to low shipments in the quarter and the need to maintain somehow steady purchasing of EyeQ chips over the course of the year. By the end of 2024, we would expect our balance sheet inventory to be consistent with the 2023 year-end figure. Looking ahead, we believe that the inventory consumption process is on track.

Speaker Change: Supermini volumes grew year over year, the mix of supervision was exaggerated by the temporary reduction in volume in the quarter, which really turn to more normalized level in Q2, and even more so in the back half.

Speaker Change: Despite the operating loss.

Speaker Change: Turning to cash flow was modestly positive in the quarter.

Speaker Change: One item to note here is that the balance sheet inventory rose sequentially. This has nothing to do with inventory at the tier one customers on our balance sheet inventory rose modestly due to low shipments in the quarter and the need to maintain some hold steady purchasing of IQ chips over the course of the year by the end of 2024.

Moran Shemesh: On an overall blended gross margin basis, the lower-than-normal percentage was related to the fact that SuperVision was around 20% of revenue in Q1, compared to an average of 6% in the 2023 calendar year. While SuperVision volumes grew year-over-year, the mix of SuperVision was exaggerated by the temporary reduction in EyeQ volumes in the quarter, which will return to a more normalized level in Q2 and even more so in the back half. Despite the operating loss, operating cash flow was modestly positive in the quarter.

Speaker Change: We would expect our balance sheet inventory to be consistent with the 2023.

Speaker Change: And Seagate.

Looking ahead, we believe that the inventory consumption process is on track at this point the vast majority of Q2 volume is based on binding purchase orders from our customers.

Moran Shemesh Rojansky: At this point, the vast majority of Q2 volume is based on binding purchase orders from our customers. There is always some level of uncertainty regarding timing of late quarter shipments, but we are comfortable in projecting approximately 7.4 million units, up more than 100% as compared to Q1. Based on our own analysis and information from our customers, we expect that inventory at our tier one customers will be back around normal levels by end of Q2. Please note that we may not continue to give as much specification on quarterly unit volume outlooks, but given the unusual cadence of this year, we think it is worthwhile. We expect gross margin to move higher to around 67% and for operating expenses to continue to grow steadily on a sequential basis.

Moran Shemesh: At this point, the vast majority of Q2 volume is based on binding purchase orders from our customers. There is always some level of uncertainty regarding timing of late quarter shipments, but we are comfortable in projecting approximately 7.4 million units, up more than 100% as compared to Q1. Based on our own analysis and information from our customers, we expect that inventory at our tier one customers will be back around normal levels by end of Q2. Please note that we may not continue to give as much specification on quarterly unit volume outlooks, but given the unusual cadence of this year, we think it is worthwhile. We expect gross margin to move higher to around 67% and for operating expenses to continue to grow steadily on a sequential basis.

Moran Shemesh: While supervision volumes grew year-over-year, the mix of supervision was exaggerated by the temporary reduction in IQ volumes in the quarter, which will return to a more normalized level in Q2 and even more so in the back. Despite the operating loss, operating cash flow was modestly positive in the quarter.

Speaker Change: There is some level of uncertainty regarding timing of late quarter shipments, but we are comfortable in projecting approximately seven 4 million units up more than 100% as compared to Q1.

Speaker Change: Based on a refined analysis and information from our customers, we expanded inventory of tier one customers will be back around the normal by end of Q2.

Moran Shemesh: One item to note here is our balance sheet inventory rose sequentially. This has nothing to do with inventory at the tier one customers. Our balance sheet inventory rose modestly due to low shipments in the quarter and the need to maintain somehow steady purchasing of EyeQ chips over the course of the year. By the end of 2024, we would expect our balance sheet inventory to be consistent with the 2023 year-end figure. Looking ahead, we believe that the inventory consumption process is on track.

Please note that we may not continue to give us much specification quarterly unit volume outlook, but given the unusual cadence of this year.

Speaker Change: It is worthwhile.

We expect gross margin to move higher to Iran, 67% and for operating expenses to continue to grow steadily on a sequential basis.

Moran Shemesh Rojansky: Overall, our revenue and adjusted operating income expectation for Q2 are well aligned with the current analyst consensus. In terms of the full year guidance, it is unchanged from the outlook we provided on 25 January. From a volume perspective, we are assuming 31 to 33 million EyeQ shipments and 175,000 to 195,000 SuperVision shipments in 2024. On the EyeQ side, the midpoint of our guidance implies around 21 million units in H2. This is supported by regularly updated indications from our customers, which have been quite stable over the last couple of months. It also appears to be reflective of the true level of demand in H2 of 2024, based on our own analysis of OEM production forecasts.

Moran Shemesh: Overall, our revenue and adjusted operating income expectation for Q2 are well aligned with the current analyst consensus. In terms of the full year guidance, it is unchanged from the outlook we provided on 25 January. From a volume perspective, we are assuming 31 to 33 million EyeQ shipments and 175,000 to 195,000 SuperVision shipments in 2024. On the EyeQ side, the midpoint of our guidance implies around 21 million units in H2. This is supported by regularly updated indications from our customers, which have been quite stable over the last couple of months. It also appears to be reflective of the true level of demand in H2 of 2024, based on our own analysis of OEM production forecasts.

Overall, our adjusted operating income expectation for Q2.

Moran Shemesh: Looking ahead, we believe that the inventory consumption process is on track. At this point, the vast majority of Q2 volume is based on binding purchase orders from our customers. There is always some level of uncertainty regarding the timing of late-quarter shipments, but we are comfortable in projecting approximately 7.4 million units, up more than 100% as compared to Q1. Based on our own analysis and information from our customers, we expect that inventory at our T1 customers will be back around normal levels by the end of Q2.

Speaker Change: The other line did they kevin's analysts' consensus.

Moran Shemesh: At this point, the vast majority of Q2 volume is based on binding purchase orders from our customers. There is always some level of uncertainty regarding the timing of late-quarter shipments, but we are comfortable in projecting approximately 7.4 million units, up more than 100% as compared to Q1. Based on our own analysis and information from our customers, we expect that inventory at our T1 customers will be back around normal levels by the end of Q2.

Speaker Change: In terms of the full year guidance is unchanged from the outlook. We provided on January 25th from a volume perspective, we are assuming if you wanted to $33 million ICU shipments and 75000 to 195000 supervision in shipments in 2024.

The midpoint of your guidance implies around 21 million units in the back half of this is supported by regularly updated indication for market.

Speaker Change: Which has been quite stable over the last couple of months.

Speaker Change: Also with this to be reflected in all of them to a level of demand in the back half of 2024 based on an analysis of OEM production forecast.

Moran Shemesh: Please note that we may not continue to give as much specification on quarterly unit volume outlooks, but given the unusual cadence of this year, we think it is worthwhile. We expect gross margin to move higher to around 67% and for operating expenses to continue to grow steadily on a sequential basis. Overall, our revenue and adjusted operating income expectation for Q2 are well aligned with the current analyst consensus. In terms of full-year guidance, it is unchanged from the outlook we provided on January 25th.

Moran Shemesh Rojansky: If we isolate average system price for the single chip EyeQ business, we expect it to be down slightly in 2024 on a year-over-year basis, consistent with our view in January. The modest weakening in vehicle mix that impacted somewhat in 2023 is expected to continue in 2024. This is compared to a very rich mix we saw in 2021 and 2022 due to overall automotive industry production constraints. Higher priced chips or Cloud-Enhanced ADAS and other advanced programs are providing an offset, but we do not view this tailwind as very material in 2024, as Cloud-Enhanced ADAS volume are still not a meaningful portion of the total, and the base of vehicles paying us annual REM-related license payments continue to build.

Moran Shemesh: If we isolate average system price for the single chip EyeQ business, we expect it to be down slightly in 2024 on a year-over-year basis, consistent with our view in January. The modest weakening in vehicle mix that impacted somewhat in 2023 is expected to continue in 2024. This is compared to a very rich mix we saw in 2021 and 2022 due to overall automotive industry production constraints. Higher priced chips or Cloud-Enhanced ADAS and other advanced programs are providing an offset, but we do not view this tailwind as very material in 2024, as Cloud-Enhanced ADAS volume are still not a meaningful portion of the total, and the base of vehicles paying us annual REM-related license payments continue to build.

If we isolate everybody system price.

Speaker Change: Single cheap IQ business, we expect it to be down slightly in 2024, when the year over year basis, consistent with our view in January the modest weakening in the economy impact is somehow through 2023 is expected to continue in 2024. This is compared to February each makes me selling 2021.

Speaker Change: In 2022 due to overall automotive industry production higher.

Speaker Change: Higher price chips cloudiness Ada and other areas you guys programs are providing an offering.

Moran Shemesh: In terms of full-year guidance, it is unchanged from the outlook we provided on January 25th. From a volume perspective, we are assuming 31-33 million EyeQ shipments, and 175,000-195,000 SuperVision in shipments in 2024. On the EyeQ side, the midpoint of our guidance implies around 21 million units in the back half. This is supported by regularly updated indications from our customers, which have been quite stable over the last couple of months, and it also appears to be reflective of the true level of demand in the back half of 2024, based on our own analysis of the OEM production forecast. If we isolate every rate system price for the single-ship IQ business, we expect it to be down slightly in 2024 on a year-over-year basis, consistent with our view in January. The modest weakening in vehicle mix that impacted sales somehow in 2023 is expected to continue in 2024.

Speaker Change: But we do not view this down.

Speaker Change: It's very material in 2024 is colonized Adas volume are still not a meaningful portion of <unk>.

Moran Shemesh: From a volume perspective, we are assuming 31 to 33 million IQ shipments and 175,000 to 195,000 supervision in shipments in 2024. On the IQ side, the midpoint of our guidance implies around 21 million units in the back half. This is supported by regularly updated indications from our customers, which have been quite stable over the last couple of months.

Speaker Change: And the base of vehicles, gaining us annual rent related license payments continue to be.

Moran Shemesh Rojansky: On the SuperVision side, these volumes can be more difficult to precisely predict, given that we are currently only on five models that are all in the EV space, which has been in a period of volatility. The increase in volumes in H2 2024 versus H1 2024 is supported by several factors, including number one, the recent mid-cycle refresh of Zeekr 001, which caused a significant uptick in demand. Number two, incremental scaling of Zeekr 001 volumes in Europe. Number three, an additional version of the Zeekr 009 with enhanced features. Number four, the start of Polestar deliveries in Europe and US in H2 2024. And number five, continued ramping of smart #1 and Volvo EM90 volumes.

Speaker Change: On the supervision size. These volumes can be more difficult to precisely predict given that we have currently five models that are all in the EV space, which has been a period of volatility.

Speaker Change: Do you think volumes in the second half of 2024 versus the first half of 2024. It is supported by several factors, including number one the recent mid cycle refresh of Zika 001, which caused a significant uptick in demand number two incremental scaling of because wind volumes in Europe.

Moran Shemesh: And it also appears to be reflective of the true level of demand in the back half of 2024, based on our own analysis of the OEM production forecast. If we isolate every rate system price for the single-ship IQ business, we expect it to be down slightly in 2024 on a year-over-year basis, consistent with our view in January. The modest weakening in vehicle mix that impacted sales somehow in 2023 is expected to continue in 2024.

Number three and additional version of the Zika assay zero nine with enhanced features number for each type of costs are for deliveries in Europe and U S. In the second half and number five continued ramping of smart number one inflow Volvo M 19 volumes.

Moran Shemesh: If we isolate every rate system price for the single-ship EyeQ business, we expect it to be down slightly in 2024 on a year-over-year basis, consistent with our view in January. The modest weakening in vehicle mix that impacted [inaudible] in 2023 is expected to continue in 2024. This is compared to a very rich mix we saw in 2021 and 2022 due to overall automotive industry production constraints. Higher priced chips or cloud-enhanced ADAS and other advanced programs are providing an offset, but we do not view this tailwind as very material in 2024, as cloud-enhanced ADAS volumes are still not a meaningful portion of the total, and the base of vehicles paying as annual REM-related license payments continues to build. On the supervision side, these volumes can be more difficult to precisely predict, given that we are currently only on five models that are all in the EV space, which has been in a period of volatility.

Moran Shemesh Rojansky: On a total company basis, we expect average system price to rise to approximately $55 in 2024 from $53 in 2023, based on SuperVision growth, with set gross margin in the range of 67% to 68% for the remainder of the year, based on current expectations for the mix of SuperVision and EyeQ revenue. We continue to expect adjusted operating expenses to grow approximately 25% on a year-over-year basis as we execute on our advanced product portfolio in preparation for substantial numbers of SuperVision, Chauffeur, and Drive product launches in upcoming years. We continue to believe that our operating expenses in the near and long term should be structurally lower than we expected as of a year ago, and that OpEx percentage growth in 2025 and beyond should be significantly lower than in 2024.

Moran Shemesh: On a total company basis, we expect average system price to rise to approximately $55 in 2024 from $53 in 2023, based on SuperVision growth, with set gross margin in the range of 67% to 68% for the remainder of the year, based on current expectations for the mix of SuperVision and EyeQ revenue. We continue to expect adjusted operating expenses to grow approximately 25% on a year-over-year basis as we execute on our advanced product portfolio in preparation for substantial numbers of SuperVision, Chauffeur, and Drive product launches in upcoming years. We continue to believe that our operating expenses in the near and long term should be structurally lower than we expected as of a year ago, and that OpEx percentage growth in 2025 and beyond should be significantly lower than in 2024.

On a total company basis, we expect FAA system price to rise to approximately $55 in 2024 from $53 in 2023 maintenance supervision growth.

Moran Shemesh: This is compared to a very rich mix we saw in 2021 and 2022 due to overall automotive industry production constraints. But we do not view this tailwind as very material in 2024, as cloud and ice ADAS volumes are still not a meaningful portion of the total, and the base of vehicles paying as annual RAM-related license payments continues to build. On the supervision side, these volumes can be more difficult to precisely predict, given that we are currently only on five models that are all in the EV space, which has been in a period of volatility.

Speaker Change: Gross margin in the range of 67, 68% range for the remainder of the year based on current expectations for the mix of supervision and IQ revenue.

Speaker Change: We continue to expect adjusted operating expenses to grow approximately 25% on a year over year basis, as we execute on our advanced portfolio in preparation for substantial numbers of supervision and drive product launches in upcoming years, and we continue to believe that our operating.

Moran Shemesh: On the SuperVision side, these volumes can be more difficult to precisely predict, given that we are currently only on five models that are all in the EV space, which has been in a period of volatility. The increase in volumes in the second half of 2024 versus the first half of 2024 is supported by several factors, including, number one, the recent mid-cycle refresh of Zikr001, which caused a significant uptick in demand. Number two, incremental scaling of Zikr001 volumes in Europe. Number three, an additional version of Zikr009 with enhanced features. Number four, the start of postal delivery for deliveries in Europe and the US in the second half. And number five, continued ramping of Smart Number One and Volvo EM90 volumes. On a total company basis, we expect every system price to rise to approximately $55 in 2024 from $53 in 2023 based on supervision growth. We expect gross margin in the range of 67-68% for the remainder of the year based on current expectations for the mix of supervision and IQ revenue.

Moran Shemesh: On the SuperVision side, these volumes can be more difficult to precisely predict, given that we are currently only on five models that are all in the EV space, which has been in a period of volatility. The increase in volumes in the second half of 2024 versus the first half of 2024 is supported by several factors, including, number one, the recent mid-cycle refresh of ZEEKR001, which caused a significant uptick in demand. Number two, incremental scaling of ZEEKR001 volumes in Europe. Number three, an additional version of ZEEKR009 with enhanced features. Number four, the start of postal for deliveries in Europe and the US in the second half. And number five, continued ramping of Smart #1 and Volvo EM90 volumes.

Speaker Change: Dentists in the near or long term should be structurally lower than we expected as of a year ago and the opex percentage goes to 25 and beyond to be significantly lower than in 2024 last.

Moran Shemesh Rojansky: Lastly, in terms of tax rate, we continue to assume a non-GAAP effective tax rate of 15% and 17% for 2024 in comparison to 11% in 2023. Thank you, and we will now take your questions.

Moran Shemesh: Lastly, in terms of tax rate, we continue to assume a non-GAAP effective tax rate of 15% and 17% for 2024 in comparison to 11% in 2023. Thank you, and we will now take your questions.

Speaker Change: Lastly in terms of tax rate, we continue to assume a non-GAAP effective tax rate of 15% to 17% for 2024 in comparison to 11% in 2023. Thank you and we will now take your questions.

Moran Shemesh: The increase in volumes in the second half of 2024 versus the first half of 2024 is supported by several factors, including, number one, the recent mid-cycle refresh of Zikr001, which caused a significant uptick in demand. Number two, incremental scaling of Zikr001 volumes in Europe. Number three, an additional version of Zikr009 with enhanced features.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. We ask that you limit yourself to one question and a follow-up so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from James Picariello with BNP Paribas. Please proceed with your question.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.

Moran Shemesh: Number four, the start of postal delivery for deliveries in Europe and the US in the second half. And number five, continued ramping of Smart Number One and Volvo EM90 volumes. On a total company basis, we expect every system price to rise to approximately $55 in 2024 from $53 in 2023 based on supervision growth. We expect gross margin in the range of 67-68% for the remainder of the year based on current expectations for the mix of supervision and IQ revenue.

Speaker Change: We ask that you limit yourself to one question and a follow up so that others may have an opportunity to ask questions.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the starkey.

Speaker Change: One moment, please while we poll for questions.

Speaker Change: Our first question comes from James Picariello with BNP Paribas. Please proceed with your question.

Moran Shemesh: On a total company basis, we expect every system price to rise to approximately $55 in 2024 from $53 in 2023, based on SuperVision growth. We expect gross margin in the range of 67-68% range for the remainder of the year, based on current expectations for the mix of SuperVision and EyeQ revenue. We continue to expect adjusted operating expenses to grow approximately 25% on a year-over-year basis, and we execute on our advanced product portfolio in preparation for substantial numbers of SuperVision, Chauffeur, and Drive product launches in the upcoming years. And we continue to believe that our operating expenses in the near and long term should be structurally lower than we expected as of a year ago, and that OPEX percentage growth in 2025 and beyond should be significantly lower than in 2024. Lastly, in terms of tax rates, we continue to assume a non-GAAP effective tax rate of 15% and 17% for 2024 in comparison to 11% in 2023. Thank you, and we will now take your questions.

James Picariello: Hi, good morning, everybody. Good evening. Good afternoon, probably.

James Picariello: Hey, good morning, everybody.

Speaker Change: Good evening good afternoon.

Moran Shemesh Rojansky: Hey, James.

Moran Shemesh: Hey, James.

James Picariello: Hey, Jay just on.

James Picariello: Just on the gross margin guide. Was it declared that it's 67% to 68% as the range through the remainder of the year, or was that a full year number for gross margins?

James Picariello: On the gross margin guide.

James Picariello: Was it was it declare that at 67% to 16% is the range through the remainder of the year or was that a full year number for gross margins.

Moran Shemesh: We continue to expect adjusted operating expenses to grow approximately 25% on a year-over-year basis, and we execute on our advanced product portfolio in preparation for substantial numbers of supervision chauffeur and drive product launches in the upcoming years. And we continue to believe that our operating expenses in the near and long term should be structurally lower than we expected as of a year ago and that OPEX percentage growth in 2025 and beyond should be significantly lower than in 2024. Lastly, in terms of tax rates, we continue to assume a non-gap effective tax rate of 15% and 17% for 2024 in comparison to 11% in 2023. Thank you, and we will now take your questions.

Moran Shemesh Rojansky: Yeah. This is for the remainder of the year. I believe I also mentioned the full year that approximately 67%. This quarter, of course, was lower due to mix of SuperVision. As I mentioned, SuperVision was 20%, so it's not a representative gross margin.

Moran Shemesh: Yeah. This is for the remainder of the year. I believe I also mentioned the full year that approximately 67%. This quarter, of course, was lower due to mix of SuperVision. As I mentioned, SuperVision was 20%, so it's not a representative gross margin.

Jay: Yeah. This is this is for the remainder of the year I believe I also mentioned on the full year that is approximately 67%.

Jay: But at this point are of course was lower.

Jay: Lower due to mix of supervision as I mentioned with supervision was 20%. So it's not a representative of gross margin.

James Picariello: Right. Yeah. My follow-on question: can you just confirm, and apologies if I missed it, the SuperVision shipment number in Q1? Can you just walk through, for OpEx, what drives the, you know, somewhat material step-up through the remainder of the year on the OpEx side to get to the 25% year-over-year OpEx growth? Thanks.

Speaker Change: Right right yes.

But my follow up question can you just confirm the and I apologize if I missed it the supervision and ship the number in the first quarter and then can you just walk through for Opex what drives the somewhat.

Speaker Change: Not material step up through the remainder of the year on the Opex side to get to the 25% year over year Opex growth. Thanks.

Moran Shemesh Rojansky: Yeah. In the first quarter, we deliver 39,000 units. I also said we are expected to deliver 70,000 for H1 for SuperVision units. The rest of the year, again, is on track with our guidance. As for the OpEx, the main bucket for increase is headcount.

Moran Shemesh: Yeah. In the first quarter, we deliver 39,000 units. I also said we are expected to deliver 70,000 for H1 for SuperVision units. The rest of the year, again, is on track with our guidance. As for the OpEx, the main bucket for increase is headcount.

Speaker Change: Yes, so in the in the first.

Speaker Change: In the first quarter, we delivered 39000 units and I also said we are expected to deliver 70000 for the first half.

Speaker Change: For supervision units.

And the rest of the year again is on track with our guidance.

Speaker Change: As for the Opex. So are the main buckets for increases in head count So has come to support our IR activities, our RF design wins and the new advanced programs.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press *2 if you would like to remove your question from the question queue. We ask that you limit yourself to one question and a follow-up so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Our first question comes from James Picarello with BNP Paribas. Please proceed with your question.

Nimrod Nehushtan: Head count to support our activities, our design wins and the new advanced programs. That's approximately $100 million of head count growth and some compensation inflation. The other element is R&D related to head count and then again to support the advanced program, EyeQ6, EyeQ7, LIDAR, radar, and also the software related to these new programs, building the hardware. All these R&D is around maybe $80 or $90 million, but offset with some higher NRE reimbursements, mainly related to our new programs and also related to Drive, that offset some of this amount. We also have approximately $20 or $30 million as a result of occupancy, the new campus and other sites, including depreciation.

Moran Shemesh: Head count to support our activities, our design wins and the new advanced programs. That's approximately $100 million of head count growth and some compensation inflation. The other element is R&D related to head count and then again to support the advanced program, EyeQ6, EyeQ7, LIDAR, radar, and also the software related to these new programs, building the hardware. All these R&D is around maybe $80 or $90 million, but offset with some higher NRE reimbursements, mainly related to our new programs and also related to Drive, that offset some of this amount. We also have approximately $20 or $30 million as a result of occupancy, the new campus and other sites, including depreciation.

Speaker Change: Approximately a $100 million of had fun relevant some compensation inflation.

Speaker Change: Other element is the R&D related to head count I'm going to.

Speaker Change: Again to support the advanced our programs in the ICU seeks IQ seven Lidar radar and also duh software related to to design your programs building the the hardware so.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. Our first question comes from James Picarello with BNP Paribas. Please proceed with your question.

Speaker Change: All of these R&D around maybe 80 or 90 million, but offset.

Operator: Our first question comes from James Picariello with BNP Paribas. Please proceed with your question.

Speaker Change: With some higher reimbursement mainly related to our new programs and also related to drive.

James Picariello: Hey, good morning, everybody. Or good evening--good afternoon. So just on the gross margin guide, so was it declared that 67-68% percent is the range through the remainder of the year, or was that a full year number for gross margin?

Speaker Change: Offset some of this amount we also have approximately 20 or 30 million as a result of occupancy.

The new chemicals and other sites, including depreciation. So these are the main drivers for cost increases in our Opex increase in 2025.

Nimrod Nehushtan: These are the main driver for cost increase in OpEx increase in 2024.

Moran Shemesh: These are the main driver for cost increase in OpEx increase in 2024.

Moran Shemesh: Yeah, this is for the remainder of the year. I believe I also mentioned on the full year that approximately 67%. But this quarter, of course, was lowered into a mix of SuperVision. As I mentioned, SuperVision was 20%, so it's not a representative gross margin.

Speaker Change: Our next question comes from Joshua Hill Culture with TD Cowen <unk> Company. Please proceed with your question.

Operator: Our next question comes from Joshua Buchalter with TD Cowen. Please proceed with your question.

Joshua Buchalter: Hey, guys. Thank you for taking my question. For my first one, any more details you can provide on the 14 advanced engagements, and in particular, the incremental 3 that you added in the quarter, whether by geographic mix, drivetrain, and most importantly, any updates on timelines to conversion for the advanced engagements? Thank you.

Speaker Change: Hey, guys. Thank you for taking my question.

Speaker Change: For my first one any more details you can provide on the 14 advanced engagements and in particular, the incremental three that you added in the quarter, whether by geographic mix drivetrain or.

James Picariello: Right, right. Yeah, and so my follow-on question: can you just confirm the, and apologies if I missed it, the SuperVision shipment number in the first quarter, and then can you just walk through for OPEX what drives the somewhat material step up through the remainder of the year on the OPEX side to get to the 25% year-over-year OPEX growth? Thanks.

Speaker Change: And most perhaps most importantly in any updates on timelines to conversion for the the advanced engagements. Thank you.

Nimrod Nehushtan: I'll take this. In general, we have been making steady progress with our activities as mentioned, and the increase comes from a mix of geographies, European, American, and also in Asia. The progress we're making is in three fronts, on commercial fronts, technical fronts, and also on the legal fronts in order to make sure that all aspects related to these agreements are addressed. We continue to expect to get to a convergence within H2 of the year. I just want to maybe refer to the Volkswagen partnership, which took us between a year and a year and a half to conclude.

Speaker Change: I'll take that so.

Speaker Change: In general we have been making steady progress with our activities as mentioned and the increase comes from a mix of geographies European American and and also in in Asia.

Moran Shemesh: Yeah, so in the first quarter, we delivered 39,000 units. And I also said we are expected to deliver 70,000 for the first half for Supervision units. And the rest of the year, again, is on track with our guidance. As for the OPEX, so the main bucket for increase is headcount. So headcount to support our activities, our design wins, and the new advanced programs; that's approximately 100 million of headcount growth and some compensation inflation. The other element is R&D related to headcount, again, to support the advanced programs EyeQ6, EyeQ7, LiDAR, radar, and also the software related to design new programs, building the hardware. So all these R&Ds are around maybe $80 or 90 million, but offset with some higher NRE reimbursement, mainly related to our new programs, and also related to Drive, that offset some of this amount. We also have approximately $20 or 30 million as a result of occupancy: the new campus, and other sites, including depreciation. So these are the main drivers for cost increase in--OPEX increase in 2024.

Speaker Change: The progress, we're making is in three fronts.

Speaker Change: On commercial front technical France, and also the legal fronts in order to make sure that's all aspects related to these.

Speaker Change: <unk> agreements are addressed and we continue to expect to make.

Moran Shemesh: As for OPEX, the main bucket for increase is headcount. So headcount to support our activities, our design wins, and the new advanced programs, that's approximately 100 million in headcount growth and some compensation inflation. The other element is R&D related to headcount, again, to support the advanced programs IQ6, IQ7, LIDAR, RIDAR, and also the software related to designing new programs and building the hardware. So all these R&Ds are around maybe 80 or 90 million, but offset with some higher NRE reimbursement, mainly related to our new programs, and also related to drive, that offset some of this amount. We also have approximately 20 or 30 million as a result of occupancy, the new campus, and other sites, including depreciation. So these are the main drivers for the cost increase in OPEX.

Speaker Change: Get you a convergence within the second half of the year.

Speaker Change: And I just wanted to maybe to refer to the Volkswagen partnership, which took us between a year and a year and a half to conclude we just see shorter timeframes.

Nimrod Nehushtan: We do see shorter time frames in the existing engagements, but so I still think that H2 of the year will be a good point in time to start to see more convergence there.

Speaker Change: Engagements, but.

Speaker Change: So I still think that second half of the year will be a good point in time to start to see more convergence there.

Speaker Change: Yes.

Joshua Buchalter: Thank you for that. For my follow-up, I just wanted to ask about the EyeQ6 Lite, obviously some good initial design win metrics there. Could you maybe spend a minute or two talking about what are the features that customers can use on the EyeQ6 Lite, and also, you know, how are you able to, I guess, extract incremental ASP from the part? Because I assume, you know, you mentioned the ASP doesn't change all that much. I guess I was a bit surprised given you're moving from 28 nm to 7 nm on that chip, so that should allow for a good amount of performance uplift. I'd just be curious to hear about some more details on the engagements there in core ADAS as EyeQ6 Lite becomes a more meaningful part of the mix over time.

Speaker Change: Thank you for that for my follow up.

Speaker Change: But the IQ six al obviously, some good initial design win metrics there could you maybe spend a minute or two talking about what are the features that customers can use in the six out and also.

Speaker Change: How are you able to I guess extract incremental AFP from apart because I assume you mentioned the F. B doesn't change all that much I guess I was a bit surprised given you're moving from 28 nanometer to seven nanometer on that ship.

Speaker Change: So that should it should allow for a good amount of performance uplift is I'd just be curious to hear about some more details on the engagement there in core aid at six.

Speaker Change: Shakes out will become a more meaningful part of the mix overtime. Thank you.

Joshua Buchalter: Thank you.

Speaker Change: Yeah.

Amnon Shashua: Okay. The ASP is driven by the functional bundle and not, you know, the process node of the chip. You know, the bundles are increasing due to a regulatory expansion, and also NCAP rating expansion. Many of these programs that we win also include a Cloud-Enhanced. Right now, the programs that we won in Q1 have a similar A-ASP to the existing generation. We do see a drive towards higher bundles, which would increase the ASP. You know, the big ASP jump comes from the advanced product portfolio, the SuperVision, Chauffeur, and Drive. Any A-ASP increase in base ADAS is really an incremental.

Speaker Change: Okay.

Speaker Change: ASP is.

Speaker Change: Is driven by the functional bundle and not you know the process node of the chip.

Operator: Our next question comes from Joshua Buchalter with T.D. Cowan and Company. Please proceed with your question.

The bundles are increasing due to a regulatory expansion and also incorporating expansion.

Joshua Buchalter: Hey guys, thank you for taking my question. For my first one, any more details you can provide on the 14 advanced engagements and, in particular, the incremental three that you added in the quarter, whether by geographic mix, drivetrain, and, perhaps most importantly, any updates on timelines to conversion for the advanced engagements? Thank you.

Speaker Change: Many of these programs also a program that we weigh in also include the cloud enhanced.

Speaker Change: So right now the programs that we won in Q1 to have a similar ASP.

Speaker Change: ASP too.

Speaker Change: To to the existing generation, but we do see a drive towards higher.

Speaker Change: Your bundles, which would increase the increase in ASP, but.

Speaker Change: But the big ISP jumped comes from the advanced product portfolio, the supervision and so for <unk> and then drive any ASP increase in base eight us it's really an incremental.

Nimrod Nehushtan: I'll take this. So in general, we have been making steady progress with our activities, as mentioned, and the increase comes from a mix of geographies, European, American, and also in Asia. The progress we're making is in three fronts. On commercial fronts, technical fronts, and also legal fronts in order to make sure that all aspects related to these agreements are addressed, and we continue to expect to make, to get to convergence within the second half of the year. And I just want to maybe to refer to the Volkswagen partnership, which took us between a year and a year and a half to conclude. We do see shorter timeframes in the existing engagements, but so I still think that the second half of the year will be a good point in time to start to see more convergence there.

Speaker Change: Okay.

Speaker Change: And our next question follow up.

Operator: Our next question comes.

Dan Galves: Can I just make one follow up? Sorry, Maria.

Speaker Change: Sorry, sorry, sorry, I'll, just make one follow up to that just to reinforce is kind of historically each generation.

Operator: Go ahead.

Dan Galves: I just make one follow-up to that just to reinforce. It's kinda historically, you know, each generation, the goal is really to provide incremental features that, you know, allow the OEMs to meet regulatory and NCAP requirements without changing the price. This has really been kind of our strategy, you know, over time. Obviously, the higher performance gives you the potential for increased bundles, which can drive higher ASP. In general, what we're trying to do is kinda keep pricing and keep costs the same for each successive generation, but provide incremental features.

Speaker Change: The goal is really to provide incremental features that allow the Oems to meet regulatory and end cap requirements without changing the price. So this has really been kind of our strategy you know over time, obviously the higher performance gives you the potential for increased bundles, which can drive higher asps, but and <unk>.

Unknown Executive: And I just want to maybe refer to the Volkswagen partnership, which took us between a year and a year and a half to conclude. We do see shorter timeframes in the existing engagements, but so I still think that the second half of the year will be a good point in time to start to see more convergence there.

Speaker Change: General what we're trying to do is kind of keep pricing and keep cost the same for each successive generation provides incremental features.

Operator: Our next question comes from Shreyas Patil with Wolfe Research. Please proceed with your question.

Dhaval Patel: Our next question comes from <unk> Patel with Wolfe Research. Please proceed with your question.

Shreyas Patil: Hey, thanks so much for taking the questions. Maybe just firstly, as we think about SuperVision profitability, I think you're indicating a low 40% gross margin by Q2, I believe, and the long-term target is closer to 50%. How should we think about the progression towards that long-term target, you know, over the next few quarters or even beyond?

Patel: Hey, thanks, so much for taking the questions maybe just firstly as we think about supervision profitability I think youre, indicating a low 40% gross margin by the second quarter I believe.

Joshua Buchalter: Thank you for that. And for my follow-up, I just wanted to ask about the EyeQ6L. Obviously, some good initial design win metrics there. Would you maybe spend a minute or two talking about what are the features that customers can use on the 6L? And also, you know, how are you able to, I guess, extract incremental ASP from the part? Because I assume, you mentioned the ASP doesn't change all that much, which I guess I was a bit surprised, given you're moving from 28 nanometers to 7 nanometers on that chip. So, that should allow for a good amount of performance uplift. So, I'd just be curious to hear about some more details on the engagement there in core ADAS as EyeQ6L becomes a more meaningful part of the mix over time. Thank you.

Patel: And the long term target is closer to 50%. So how should we think about that.

Patel: The progression towards that long term target.

Patel: You know over the next few quarters or even beyond.

Amnon Shashua: No, we are on track for increasing the gross margin. We have a second generation domain controller, which is now in production and on the road, and in a few months, will completely replace the generation one of domain controller, and that increases the gross margin considerably. The future products with the EyeQ6 are also designed with a gross margin approaching our target of 50%. We are converging.

Joshua Louis Buchalter: I guess I was a bit surprised given you're moving from 28 nanometers to 7 nanometers on that chip. So, that should allow for a good amount of performance uplift. So, I'd just be curious to hear about some more details on the engagement there in Core ADAS as IQ6L becomes a more meaningful part of the mix over time. Thank you.

Speaker Change: No we are on track.

Speaker Change: Increasing the gross margin, we have a second generation <unk>.

Speaker Change: The main controller, which is now in production and on the road and in few months, we will completely replace the generation one of domain controller.

Speaker Change: That increases the gross margin considerably.

Amnon Shashua: Okay, the ASP is driven by the functional bundle and not the process node of the chip. The bundles are increasing due to regulatory expansion and also NCAP rating expansion. Many of these programs also, programs that we win also include cloud-enhanced, so right now the programs that we won in Q1 have a similar ASP to the existing generation, but we do see a drive towards higher bundles, which would increase ASP. But, you know, the big ASP jump comes from the advanced product portfolio, the SuperVision, Chauffeur, and Drive. Any ASP increase in base ADAS is really an incremental.

Speaker Change: The future of products with the IQ six.

Speaker Change: Also designed with the gross margin.

Protein target of 50%, so we work on Virginia.

Shreyas Patil: Okay. Maybe this is a bit of a longer-term question, but you know, I'm curious how you think about some of the trends that we see in markets like China, for example, with some of the automakers seemingly willing to invest and deploy quite expensive systems, but to kind of own the data or try and develop the software in-house. I know you've talked before about the challenges those automakers will have in terms of scaling outside of China.

Speaker Change: Okay.

Speaker Change: And then maybe maybe this is a bit of a longer term question, but.

Speaker Change: I'm curious how you think about some of the trends that we see.

In <unk>.

Speaker Change: Markets like China for example.

Speaker Change: With some of the automakers.

Speaker Change: Seemingly willing to invest.

Speaker Change: And deploy quite expensive cyst.

Unknown Executive: Our next question comes from... Sorry, sorry, I just want to make one follow-up to that just to reinforce that kind of historically, you know, each generation, the goal is really to provide incremental features that allow the OEMs to meet regulatory and NCAP requirements without changing the price. So this has really been kind of our strategy over time. Obviously, higher performance gives you the potential for increased bundles, which can drive higher ASP. But in general, what we're trying to do is kind of keep prices and keep costs the same for each successive generation but provide incremental features.

Operator: Our next question comes from-- go ahead.

Daniel V. Galves: Sorry, sorry, I just want to make one follow-up to that just to reinforce--kind of historically, you know, each generation, the goal is really to provide incremental features that allow the OEMs to meet regulatory and NCAP requirements without changing the price. So this has really been kind of our strategy over time. Obviously, higher performance gives you the potential for increased bundles, which can drive higher ASP. But in general, what we're trying to do is kind of keep pricing and keep costs the same for each successive generation but provide incremental features.

Systems, but to kind of own the data.

Speaker Change: I'll try and develop the software in house.

I know you've talked before about the challenges those automakers will have in terms of scaling outside of China.

Shreyas Patil: I guess I'm curious if you see that as a risk inside China, if more automakers are willing to pursue those approaches, albeit at a more expensive cost to what SuperVision can deliver. Do you see potentially automakers in other regions working on internal systems as well, in a similar way? Thanks.

Speaker Change: Yeah.

Speaker Change: Do you see.

Speaker Change: I guess I'm curious if you see.

Speaker Change: That is a risk inside China.

Speaker Change: It's more automakers are willing to pursue those those approaches, albeit.

Speaker Change: At a more expensive cost to what supervision.

Speaker Change: Can can deliver.

Speaker Change: And do you see it.

Operator: Our next question comes from Shreyas Patil with Wolfe Research. Please proceed with your question.

Speaker Change: Do you see potentially automakers in other regions working on internal systems as well.

Shreyas Patil: Hey, thanks so much for taking the questions. Maybe just firstly, as we think about SuperVision profitability, I think you're indicating a low 40% gross margin by the second quarter, I believe, and the long-term target is closer to 50%. So how should we think about the progression towards that long-term target, you know, over the next two quarters or even beyond?

Speaker Change: In a similar way.

Speaker Change: Thanks.

Amnon Shashua: Our view also historically is that competition is good because it creates more demand for those high-end solutions. In-house development in China exists. We work hand in hand with those OEMs. They have some car models that are in-house development, some car models are Mobileye equipped. All the models you see out there are eyes-on systems. With eyes-on systems, what wins at the end of the day is cost versus performance. No one will pay higher cost for the same performance. Mobileye SuperVision system is about 50% of the cost of competing systems. Some of those systems have three LIDARs. We have a SuperVision without any LIDAR. It's not necessary to have a LIDAR in our SuperVision system.

Speaker Change: Yes.

Speaker Change: Our view also historically is that competition is good because it creates more demand for those high end solutions.

Speaker Change: In house, our in House development in China exists.

Speaker Change: We work hand in hand with hand with those Oems. So they have some some car models are in house development some car models.

Speaker Change: Equipped with all the medical just see out there.

Amnon Shashua: We are on track of increasing the gross margin. We have a second generation domain controller, which is now in production and on the road, and in few months will completely replace generation one of domain controller. And that increases the gross margin considerably. And the future products with the EyeQ6 are also designed with a gross margin approaching our target of 50%. So we are converging.

Speaker Change: ISR systems now with eyes on systems.

Speaker Change: <unk> wins at the end of the day, it's cost versus performance.

Speaker Change: No one will pay higher cost for <unk> for the same performance.

Speaker Change: <unk> supervision system is about 50% of the cost of competing systems. Some of those systems have $3. We.

Speaker Change: We have the supervision without any leather is not necessarily to help elaborate out with supervision system. So.

Shreyas Patil: Okay. And then maybe this is a bit of a longer-term question, but, you know, I'm curious how you think about some of the trends that we see in markets like China, for example, with some of the automakers seemingly willing to invest and deploy quite expensive systems, but to kind of own the data or try and develop the software in-house. I know you've talked before about the challenges those automakers will have in terms of scaling outside of China. Do you see, I guess, I'm curious if you see that as a risk inside China, if more automakers are willing to pursue those approaches, albeit at a more expensive cost to what SuperVision can deliver. And do you see potentially automakers in other regions working on internal systems as well in a similar way? Thanks.

Amnon Shashua: When you look at it systematically, for an eyes-on system it is cost needs to move performance and not first performance and then cost. We have a great advantage there. Another advantage we have in China is our rapid expansion of REM. This allows to enable hands-free driving also in urban settings. We're going to launch in, I think, next month or in the next six weeks the first urban drive in Shanghai, which is going to be deployed on all the 200,000 vehicles that are currently on the road. This is going to be really industry leading experience. Then we can expand throughout China quite quickly.

Speaker Change: But when you look at it and particularly it is for an ISR system. It is cost needs to performance and up.

Speaker Change: <unk> performance and then and then cost and we have the great advantage there and other advantage we have in China.

Speaker Change: Our rapid expansion of rim.

Speaker Change: This allows us to enable hands free driving also an orphan settings, where are going to launch and I think next month or the next six weeks.

Unknown Executive: I guess, I'm curious if you see that as a risk inside China if more automakers are willing to pursue those approaches, albeit at a more expensive cost to what supervision can deliver. And do you see potentially automakers in other regions working on internal systems as well in a similar way?

The first two urban the drive in Shanghai.

Which is going to be deployed on all the 200000.

Speaker Change: Nichols that are currently on underground and that's going to be really.

Speaker Change: Industry, leading.

Speaker Change: Experience and then we can expand throughout China quite quite quickly and this is something that if you don't have the crowdsourced technology should do that it's very very difficult to scale high definition maps.

Amnon Shashua: This is something that if you don't have the crowdsourced technology to do that, it's very, very difficult to scale high-definition maps, you know, across urban areas. Comes the next generation, which is eyes-off. None of our competitors have a concrete plan on how to get to an eyes-off system. Mobileye the only company, only supplier that has eyes-off production programs, and not only one, multiple production programs, especially with a leading car company like Audi, which also generates volume, not only credibility. I think putting everything together, the kind of competition we see in China is not a risk.

Amnon Shashua: Our view also, historically, is that competition is good, because it creates more demand for those high-end solutions. In-house development in China exists; we work hand-with-hand with those OEMs, so they have some car models are in-house development, some car models are Mobileye-equipped. But all the models you see out there are eyes-on systems. Now with eyes-on systems, what wins at the end of the day is cost versus performance. No one will pay higher cost for the same performance. The Mobileye SuperVision system is about 50% of the cost of competing systems. Some of those systems have three LiDARs. We have SuperVision without any LiDAR. It's not necessary to have a LiDAR in our SuperVision system. So, in a way, when you look asymptotically, it is for an eyes-on system, it is cost needs to move performance and not first performance and then and then cost, and we have a great advantage there. Another advantage we have in China is our rapid expansion of REM. This allows to enable hands-free driving also in urban settings. We're going to launch in, I think, next month or in the next six weeks, the first urban Drive in Shanghai, which is going to be deployed on all the 200,000 vehicles that are currently on the road, and this is going to be a really industry-leading experience. And then we can expand throughout China quite quickly. And this is something that, if you don't have the crowdsourced technology to do that, it's very, very difficult to scale high-definition maps over across urban areas. And then comes the next generation, which is eyes-off. And none of our competitors have a concrete plan on how to get to an eyes-off system. Mobileye is the only company, only supplier that has eyes-off production programs and not only one, but multiple production programs, especially with a leading company like Audi, which also generates volume, not only credibility. So I think putting everything together, the kind of competition we see in China is not a risk. We see this as an advantage because it puts pressure on other OEMs, also outside of China, to deploy these kinds of advanced systems. The In-House Development Outside of China.

Speaker Change: Across urban.

Speaker Change: Areas and then come to the next the next generation, which is either off and none of our competitors have a concrete plan on how to get to an ice off system.

Unknown Executive: No one will pay higher costs for the same performance. The Mobileye supervision system is about 50% of the cost of competing systems. Some of those systems have three LADARs. We have supervision without any LADAR. It's not necessary to have a LADAR in our supervision system.

Speaker Change: Is the only company on the supplier that has is off to a production program to not only won multiple production their programs, especially with a leading <unk> company like like Audi.

Speaker Change: Which also generates a volume not only credibility. So I think putting everything together that kind of competition, we see in China is not a risk we see this as an advantage because it puts pressure on other Oems.

Unknown Executive: So, in a way, when you look at it symptotically, it is for an eyes-on system, the cost needs to move performance and not first performance and then and then cost, and we have a great advantage there. Another advantage we have in China is our rapid expansion of rental. This allows us to enable hands-free driving also in urban settings.

Amnon Shashua: in a way, when you look asymptotically, it is for an eyes-on system, it is cost needs to move performance and not first performance and then and then cost, and we have a great advantage there. Another advantage we have in China is our rapid expansion of REM. This allows to enable hands-free driving also in urban settings. We're going to launch in, I think, next month or in the next six weeks, the first urban Drive in Shanghai, which is going to be deployed on all the 200,000 vehicles that are currently on the road, and this is going to be a really industry-leading experience. And then we can expand throughout China quite quickly. And this is something that, if you don't have the crowdsourced technology to do that, it's very, very difficult to scale high-definition maps over across urban areas. And then comes the next generation, which is eyes-off. And none of our competitors have a concrete plan on how to get to an eyes-off system. Mobileye is the only company, only supplier that has eyes-off production programs and not only one, but multiple production programs, especially with a leading company like Audi, which also generates volume, not only credibility. So I think putting everything together, the kind of competition we see in China is not a risk. We see this as an advantage because it puts pressure on other OEMs, also outside of China, to deploy these kinds of advanced systems. The In-House Development Outside of China.

Amnon Shashua: We see this as an advantage because it puts pressure on other OEMs also outside of China, you know, to deploy these kinds of advanced systems. The in-house development outside of China, we see that declining considerably. Many OEMs that, you know, made announcements of in-house developments have taken a step back, and we are starting to have a serious engagement on adopting SuperVision and so forth.

Speaker Change: Also outside of China too.

Speaker Change: Not to deploy these kinds of advanced systems.

Speaker Change: The in house development outside of China, we see that declining considerably many Oems that made the announcements of in house development. So it's taken a step back and we are starting to have this year.

Unknown Executive: We're going to launch, I think, next month or in the next six weeks, the first urban drive in Shanghai, which is going to be deployed on all the 200,000 vehicles that are currently on the road. And this is going to be a really industry-leading experience. And then we can expand throughout China quite quickly. And this is something that, if you don't have the crowdsourced technology to do that, it's very, very difficult to scale high-definition maps.

Speaker Change: On adopting get supervision and potential for if I my follow up I think.

Nimrod Nehushtan: If I may, follow up. I think what's important for us in this dynamics in China is that it's an evidence that when OEMs seek for differentiation, autonomy is kind of the most important aspect for them to invest in to ensure that they have a competitive product. While some OEMs lean towards in-house development with expensive systems and investing significant capital, it still says that they believe that autonomy will be the key differentiator in the future for them. This was recently supported also by statements that Tesla made in their earnings call earlier this week, that this is going to be kind of the next big thing for OEMs who seek to kind of escape from the price challenges that today are kind of ruling the world in China.

Speaker Change: What's important for us in this dynamics in China.

Speaker Change: That is an evidence that when oh.

Speaker Change: I am a sink for differentiation.

Speaker Change: <unk> economy is kind of the most important aspect for them to invest in to ensure that they have a competitive product or some oems named towards in house development with expensive systems and investing significant capital.

Amnon Shashua: And then comes the next generation, which is eyes-off. And none of our competitors have a concrete plan on how to get to an eyes-off system. Mobileye is the only company, only supplier that has eyes-off production programs and not only one, but multiple production programs, especially with a leading company like Audi, which also generates volume, not only credibility. So I think putting everything together, the kind of competition we see in China is not a risk. We see this as an advantage because it puts pressure on other OEMs, also outside of China, to deploy these kinds of advanced systems. The in-house development outside of China, we see that declining considerably. Many OEMs that made the announcement of in-house development have taken a step back, and we are starting to have a [inaudible] on adopting SuperVision and Chauffeur.

Unknown Executive: of production programs and not only one, but multiple production programs, especially with a leading company like Audi, which also generates volume, not only credibility. So I think putting everything together, the kind of competition we see in China is not a risk. We see this as an advantage because it puts pressure on other OEMs, also outside of China, to deploy these kinds of advanced systems. The In-House Development Outside of China.

Speaker Change: It still says that they believe that the economy will be the key differentiator in the future for them.

Speaker Change: This was recently supported also by statements that desktop made in their earnings call earlier. This week that this is going to be kind of the.

Speaker Change: Next big thing for Oems, who seek to escape from the price challenges today.

Speaker Change: Kind of a ruling the world in China. So we see this as a very important development because it solidifies our.

Nimrod Nehushtan: We see this as a very important development because it solidifies our long-term perspective. Most OEMs, we expect, will lean towards competitive products with short time to market, with competitive cost, and with the best-in-class performance. We believe we have the product that best suits this need at this point in time. This is what stands behind the increase in the amount of engagements we've had in the last quarter.

Speaker Change: Our long term perspective, and most Oems we expect.

Nimrod Nehushtan: If I may follow up, I think what's important for us in this dynamics in China is that it's an evidence that when OEMs seek for differentiation, autonomy is kind of the most important aspect for them to invest in to ensure that they have a competitive product. While some OEMs lean towards in-house development with expensive systems and investing significant capital, that still says that they believe that autonomy will be the key differentiator in the future for them. And this was recently supported also by statements that Tesla made in their earnings call earlier this week that this is going to be kind of the next big thing for OEMs who seek to kind of escape from the price challenges that today are kind of ruling the world in China. So we see this as a very important development, because it solidifies our long-term perspective, and most OEMs, we expect, will lean towards competitive products with short time to market, with competitive cost, and with best-in-class performance; and now that they need to compete within the next couple of years, and we believe we have the product that best suits this need at this point in time. So this is what stands behind the increase in the amount of engagements we've had in the last quarter.

<unk> leaned towards competitive products with short time to market with a competitive cost and with the best in class performance and know that they need to compete within the next couple of years and we believe we have the product that best suit their needs at this point in time. So this is what this is what stands behind the increasing the mouth of engagements we've had interest at quarter.

Unknown Executive: And this was recently supported by statements that Tesla made in their earnings call earlier this week that this is going to be kind of the next big thing for OEMs who seek to kind of escape from the price challenges that today are kind of ruling the world in China. So we see this as a very important development because it solidifies our long-term perspective, and most OEMs, we expect, will lean towards competitive products with short time to market, with competitive cost, and with best-in-class performance.

Speaker Change: Okay.

Shreyas Patil: Thanks.

Speaker Change: Thanks.

Amnon Shashua: Okay.

Operator: Our next question comes from Tom Narayan with RBC. Please proceed with your question.

Speaker Change: Our next question comes from Tom Narayan with RBC. Please proceed with your question.

Amnon Shashua: Yeah, thanks for taking the questions. The first one is kind of high level. You mentioned the Tesla announcement this week or recent weeks seems to be a pivot towards

Tom Narayan: Yeah, thanks for taking the questions. The first one is kind of high level. You mentioned the Tesla announcement this week or recent weeks seems to be a pivot towards

Gautam Narayan: Yeah, Thanks for taking the questions.

Gautam Narayan: First one is kind of high level you mentioned, the you know Tesla.

Gautam Narayan: Tesla announcement this week.

Gautam Narayan: Recent weeks seems to be a pivot towards more on the robo taxi front.

Tom Narayan: More on the robotaxi front. Certainly FSD is a big driver of that, their version 12. I guess the question is, it seems like, from talking to them, there's a reluctance to engage in this level two plus. For some reason now there's this movement towards potentially a level four as a proof of concept when a consumer sees a level four that they believe in it more, sees the robotaxis on the road, maybe then it's a halo effect on autonomy in general. I guess the question is, do you agree with them that maybe, that the robotaxi, the level four, side of things isn't some far distant thing?

Gautam Narayan: Certainly <unk> is a big driver of that their version 12, but.

Unknown Executive: And now we know that they need to compete within the next couple of years, and we believe we have the product that best suits this need at this point in time. So this is what stands behind the increase in the amount of engagements we've had in the last quarter.

Gautam Narayan: Yes.

Gautam Narayan: It seems like.

Gautam Narayan: I'm talking to them, there's a reluctance to engage in this level two plus but for some reason now there's this movement towards potentially a level four as a proof of concept when it when a consumer sees a level four that they believe in it more.

Operator: Thanks. Our next question comes from Tom Narayan with RBC. Please proceed with your question.

Shreyas Patil: Thanks.

Operator: Our next question comes from Tom Narayan with RBC. Please proceed with your question.

Tom Narayan: Yeah, thanks for taking the questions. The first one is kind of high level. You mentioned the, you know, Tesla announcement this week, or the recent week, seems to be a pivot towards more on the Robotaxi front. Certainly, FSD is a big driver of that, their version 12, but, I guess the question is, it seems like from talking to them, there's a reluctance to engage in this Level 2+. But for some reason, now there's this movement towards potentially Level 4, as a proof of concept, when a consumer sees a Level 4, that they believe in it more; see the Robotaxis on the road, maybe then it's a halo effect on autonomy in general. I guess the question is, do you think, do you agree with them that maybe the Robotaxi, the Level 4 side of things, isn't some far distant thing, maybe this is pulled forward a little bit, and it's a proof of concept that could potentially be a catalyst for Level 2+, or do you view these two things as completely separate animals?

Gautam Narayan: See the Robo taxis on the road, maybe then it's a halo effect in autonomy in general I guess the question is.

Gautam Narayan: Do you think do you agree with them that maybe.

Gautam Narayan: The robo taxi the level four.

Gautam Narayan: Side of things do you think some far distant thing maybe this is pulled forward a little bit.

Tom Narayan: Maybe this is pulled forward a little bit, and it's a proof of concept that could potentially be a catalyst for Level 2+, or do you view these two things as completely separate animals?

Gautam Narayan: And it's a proof of concept that could potentially be a catalyst for level, two plus or do you view. These two things as completely separate animals.

Amnon Shashua: Well, you know, Tesla FSD is level two plus. They call it now FSD supervised. This is a level two plus. We're all in favor of, you know, Tesla accelerating their robotaxi plans because we have also robotaxi in production with Volkswagen on the ID. Buzz coming out in 2026. Any uplift in the demand for robotaxis is also an uplift for us. Now, whether they could introduce robotaxi using only cameras, we are kind of skeptical, but no, we don't know what they are going to introduce. They may introduce a robotaxi with additional active sensors, not only camera.

Gautam Narayan: Well, that's not the SSD as level two plus they call it the supervised.

Gautam Narayan: The level two plus.

Speaker Change: We're all in.

Speaker Change: Now with Tesla accelerating the robo taxi plans, because we have also a robo taxi in production.

Unknown Executive: Do you think, do you agree with them that maybe the Robotaxi, the level four side of things, isn't some far distant thing, maybe this is pulled forward a little bit, and it's a proof of concept that could potentially be a catalyst for level two plus, or do you view these two things as completely separate animals?

Speaker Change: With false if I can on the IV buzz coming out in the 2026.

Speaker Change: Any.

Speaker Change: Any any uplift in the demand for robot taxis, there's also an uplift for us.

Speaker Change: Whether they could introduce robo taxi using only cameras, we are kind of skeptical, but no. We don't know what theyre going to introduce me to just say a robo taxi with additional active sensors not only.

Amnon Shashua: Well, you know, Tesla's FSD is Level 2+. They call it now FSD supervised. This is a Level 2+. We're all in favor of, you know, Tesla accelerating the Robotaxi plans, because we have also robotaxis in production, with Volkswagen on the ID Buzz coming out in 2026. So any uplift in the demand for robotaxis is also an uplift for us. Now, whether they could introduce Robotaxi using only cameras, we are kind of skeptical, but no, we don't know what they are going to introduce. Maybe they will introduce Robotaxi with additional active sensors, not only cameras.

Unknown Executive: We're all in favor of, you know, Tesla accelerating the robotaxi plans because we have robotaxis in production, with Volkswagen on the ID buzz coming out in 2026. So any uplift in the demand for robo-taxis is also an uplift for us. Now, whether they could introduce Robotaxi using only cameras, we are kind of skeptical, but no, we don't know what they are going to introduce. Maybe they will introduce Robotaxi with additional active sensors, not only cameras.

Speaker Change: Not only can.

Amnon Shashua: We believe that hands-off systems, rather than calling this robotaxi, let's call it hands-off systems, because hands-off means that you can drive autonomously on selected type of roads, not necessarily on every type of road. It's still a great value. Hands-off system, which is our Chauffeur product line, has a great value proposition. We also believe that in time it will even overtake the Level 2+ in terms of the volume, but we see that something for the next decade in terms of the volume ramp. SuperVision is this decade, and hands-off would be in terms of scaling and overtaking Level 2+, we see that as something for the next decade. We'll be very happy to be proven wrong and to have this accelerated.

Speaker Change: We believe that either off systems, rather than calling this robo taxi, let's call. It the eyes off systems, because eyes off means that you can do.

Speaker Change: Drive autonomously on select the type of growth.

Speaker Change: No not necessarily on every type of road is still a great value is off system, which is our shift forward a product line has a great value proposition.

Speaker Change: We also believe that.

Speaker Change: In time, it will even overtake the level two plus in terms of the volume, but we see that something for the next decade in terms of the volume ramp supervision is this decade.

Amnon Shashua: We believe that eyes-off systems, rather than calling this "robotaxi," let's call it eyes-off systems, because eyes-off means that you can drive autonomously on selected types of roads, not necessarily on every type of road. It's [inaudible] great value. The eyes-off system, which is our Chauffeur product line, has a great value proposition. And we also believe that, in time, it will even overtake Level 2+ in terms of volume, but we see that as something for the next decade in terms of the volume ramp. SuperVision is this decade, and eyes-off would be in terms of scaling and overtaking Level 2+, we see that as something for the next decade, but we'll be very happy to be proven wrong and to have this accelerated.

Speaker Change: And either off would be in terms of scaling and overtaking level two plus we see that as something for the next decade, but it will be very happy to be proven wrong.

Speaker Change: Have they accelerated.

Tom Narayan: Okay. My quick follow-up, you know, the 14 OEMs you're talking to, obviously 5 of them you've already won, and there's 3 new ones. There's obviously SuperVision, the regular SuperVision where you've won, and there's obviously the kind of more light version of SuperVision. Just curious if, you know, of those 14 OEMs you're talking to, outside of the ones you've already won, are the majority of those the regular kind of SuperVision or are those different kind of varieties, you know, kind of a SuperVision light product? How do you think about that on that distribution?

Speaker Change: Okay, and then my quick follow up.

Unknown Executive: Supervision is this decade, and eyes off would be in terms of scaling and overtaking Level 2+. We see that as something for the next decade, but we'll be very happy to be proven wrong and to have this accelerated.

Speaker Change: Yeah.

Speaker Change: The 14 Oems Youre talking to obviously five of them you've already won.

Speaker Change: There's three new ones.

Speaker Change: Theres, obviously theres supervision the regular supervision, where you've won and there is obviously the kind of more light version of supervision. Just curious of those 14 Oems you are talking to you.

Tom Narayan: Okay, and my quick follow-up. The 14 OEMs you're talking to, obviously, five of them you've already won, and there's three new ones. There's obviously SuperVision, the regular SuperVision, where you've won, and there's obviously the kind of more Lite version of SuperVision. I'm just curious, you know, of those 14 OEMs you're talking to, outside of the ones you've already won. Are the majority of those the regular kind of SuperVision or those different kinds of varieties, you know, kind of a SuperVision Lite product. How do you think about that on that distribution?

Speaker Change: Outside of the ones you've already won the majority of those the regular kind of supervision or are those different kind of varieties.

Speaker Change: Kind of a supervision light product how do you think about that on that on that distribution.

Amnon Shashua: Well, first of all, the answer is it's a mix between SuperVision, Chauffeur and SuperVision light. It's kind of a very balanced mix, I would say. What we see is that OEMs are trying to build their vehicle lines such that some of the vehicle lines will have a full SuperVision or Chauffeur or both. Then maybe the bulk of the volumes will have, instead of just a front camera, a SuperVision light type of system, which has 5 cameras and 5 radars or 6 cameras and 5 radars, but still offers very advanced functions compared to the base ADAS we have today, which will improve their competitiveness in the low-cost cars, will offer new value propositions to consumers, but at controllable cost.

Speaker Change: Well first of all the answer is it's a mix.

Speaker Change: And supervision chauffeur end.

Speaker Change: So provision light.

Speaker Change: And it's kind of a very balanced mix I would say what we see is that Oems are trying to build their.

Speaker Change: Vehicle lines, such that some of the vehicle lines will have a full supervision or chauffeur or both.

Speaker Change: And then maybe the bulk of the volumes will have instead of just the front camera will have a supervision lifestyle system, which has five cameras and five radars are six cameras and five radars.

Nimrod Nehushtan: Well, first of all, the answer is it's a mix between SuperVision, Chauffeur, and SuperVision Lite. And it's kind of a very balanced mix, I would say. What we see is that OEMs are trying to build their vehicle lines such that some of the vehicle lines will have full SuperVision or Chauffeur or both. And then maybe the bulk of the volumes will have, instead of just the front camera, will have a SuperVision light type of system, which has five cameras and five radars, or six cameras and five radars, but still offers very advanced functions compared to the base datas we have today, which will improve their competitiveness in the low-cost cars, will offer new value propositions to consumers, but at controllable costs., and this kind of lives in parallel to the SuperVision of Chauffeur, which will be for other car lines. And this is what we see in our engagements with OEMs. And this is, for us, really kind of changes the way we're looking into base ADAS in the future, because we actually think it will potentially diverge to two streams. One will continue to be a low-end front camera only, just to meet kind of the lowest cost possible with regulation, and in addition to that, we see a growing demand for SuperVision Lite as the next generation for the base ADAS segment, let's say. So it's kind of an extension, and lives, it coexists next to SuperVision. That's what I was looking for. Yeah, just to clarify, most of the engagement

Unknown Executive: What we see is that OEMs are trying to build their vehicle lines such that some of the vehicle lines will have full supervision or chauffeur or both. And then maybe the bulk of the volumes will have, instead of just the front camera, will have a supervision light type of system, which has five cameras and five radars or six cameras and five radars but still offers very advanced functions compared to the base data we have today, which will improve their competitiveness in the low-cost cars and will offer new value propositions to consumers, but at controllable costs.

Speaker Change: Still offers.

Speaker Change: Advanced function as compared to the base eight as we have today.

Speaker Change: <unk> will improve their competitiveness and the low cost cars.

Speaker Change: Offer new value propositions to consumers, but at controllable costs and this kind of legs.

Amnon Shashua: This kind of lives on like in parallel to the SuperVision and Chauffeur, which will be for other car lines. This is what we see in our engagements with OEMs. This is, for us, really kind of changes the way we're looking into base ADAS in the future because we actually think it will potentially diverge to two streams. One will continue to be low-end front camera only, just to meet kind of the lowest cost possible with regulation. In addition to that, we see a growing demand for SuperVision light as the next generation for the base ADAS segment, let's say. It's kind of an extension and coexists next to SuperVision. That's what I was looking for.

Speaker Change: And like in parallel to the supervision is your firm, which will be for other car lines and this is what we see in our engagements with Oems.

Speaker Change: And this is for US let me kind of changed the way, we're looking into base aid us in the future because we actually think it will.

Speaker Change: <unk> diverse to two streams, one will continue to be low low end front camera only just to meet some of the lowest cost possible with regulation.

Unknown Executive: And this kind of lives in parallel to the supervision of chauffeurs, which will be for other car lines. And this is what we see in our engagements with OEMs. And this, for us, really kind of changes the way we're looking into base ADAS in the future, because we actually think it will potentially diverge into two streams. One will continue to be a low-end front camera only, just to meet kind of the lowest cost possible with regulation.

Speaker Change: In addition to that we see a growing demand for.

Speaker Change: Supervision light as the next generation.

Speaker Change: Basically the segment, let's say, so it's kind of an extension in the.

Speaker Change: Linda.

Speaker Change: All exist next to supervision that's what it was so important.

Speaker Change: Yes, just to clarify.

Dan Galves: Yeah. Just to clarify, most of the engagements and, you know, the vast majority of the engagements are including, you know, discussions around multiple of these products, right? Just like the Volkswagen Group design win.

Speaker Change: Most of the engagements.

Speaker Change: The majority of the engagements are including.

Unknown Executive: And in addition to that, we see a growing demand for supervision light as the next generation for the base ADAS segment, let's say. So it's kind of an extension, and it coexists next to supervision. That's what I was looking for. Yeah, just to clarify, most of the engagement

Speaker Change: Discussions around multiple of these products right just like the Volkswagen group.

Speaker Change: To find oil.

Tom Narayan: Got it. Thanks.

Speaker Change: Got it thanks.

Speaker Change: Our next question comes from Dan Levy with Barclays. Please proceed with your question.

Operator: Our next question comes from Dan Levy with Barclays. Please proceed with your question.

Dan Levy: Hi. Good morning. Thank you for taking the questions. Wanted to start with a question on Volkswagen now that that's more publicly known. So maybe you could just give us a little more on the parameters of the program. You know, what's the software versus hardware components? How much of this is actually using your domain controller? What's the extent of the functionality that's gonna be enabled, the regional split? And then, in the release, I think there was some commentary that at some point, VW would eventually use in-house solutions. Maybe you could just comment on, I guess, the stickiness of your agreement with them, or is this, you know, maybe a bridge solution for that?

Dan Meir Levy: Hi, Good morning, Thank you for taking the questions.

Dan Meir Levy: Wanted to start with a question on Volkswagen now that that's more publicly known.

Nimrod Nehushtan: Yeah, just to clarify, most of the engagement

Daniel V. Galves: Yeah, just to clarify, most of the engagements, and the vast majority of the engagements are including, you know, discussions around multiple of these products, right, just like the Volkswagen group design win. Got it, thanks.

Dan Meir Levy: So maybe you could just give us a little more on on the parameters of the program.

Dan Meir Levy: The software versus hardware components, how much of this is actually using your domain controller.

Dan Meir Levy: What's the extent of the functionality that's going to be enabled.

Dan Meir Levy: On the regional split and then in the in the release I think there was some commentary that at some point VW would eventually use in house solutions, maybe you could just comment on I guess the stickiness.

Tom Narayan: Got it, thanks.

Operator: Our next question comes from Dan Levy with Barclays. Please proceed with your question.

Dan Levy: Hi. Good morning. Thank you for taking my question. I wanted to start with a question on Volkswagen. Now, that's more publicly known. So, maybe you could just give us a little more on the parameters of the program, what the software versus hardware component homicides actually using your domain controller, what's the extent of the functionality that's going to be enabled the regional split? And then in the release, I think there was some commentary that at some point, VW would eventually use in-house solutions. Maybe you could just comment on, I guess, the stickiness of your agreement with them? Or is this maybe a bridge solution for that?

Dan Meir Levy: Of your agreement with them or is this ah.

Dan Meir Levy: Maybe a bridge solution.

Dan Meir Levy: Okay.

Dan Meir Levy: So in terms of the parameters of the deal with the Volkswagen group and mobilized.

Amnon Shashua: In terms of the parameters of the deal with the Volkswagen Group, Mobileye is in the position of a tier one supplier. We're responsible end to end for the hardware, and we have other tier two suppliers working with us, for example, for the parking system. We are a full tier one supplier. I don't expect us to be a full tier one supplier in many additional programs. But for this program, we are a full tier one supplier. We are responsible for the entire system end to end. That includes the perception in terms of software, the driving policy, the control.

Dan Meir Levy: She is in the position of a tier one supplier. So we're responsible.

Dan Meir Levy: End to end for the hardware and we have other tier two suppliers.

Dan Meir Levy: Working.

Dan Meir Levy: With Us for example for the parking.

Dan Meir Levy: Systems. So we are a full tier one supplier I don't expect us to be a full tier one suppliers and many additional programs, but for this program. We are at full tier one supplier. So we are responsible for the polar system end to end and that includes the perception in terms of software the perception of the driving policy.

Dan Meir Levy: The control there is a DXP component to fine tune and customize the driving experience to way to each to each brand.

Amnon Shashua: So, in terms of the parameters of the deal with the Volkswagen Group, Mobileye is the position of a Tier 1 supplier. So, we're responsible end-to-end for the hardware, and we have other Tier 2 suppliers working with us, for example, for the parking systems. So, we are a full Tier 1 supplier. I don't expect us to be a full, Tier 1 suppliers and many additional programs. But for this program, we are a, full Tier 1 suppliers. So, we are responsible for the progress end-to-end. And that includes the perception in terms of software, the perception, the driving policy, the control, there's a DXP component to fine tune and customize the driving experience to each brand. In terms of the comment about them at some point, moving to an in-house development, I think that's what they've - that was on the table for many, many years. They have a Software Division called CARIAD and that software division is still in operation, in full force.

Amnon Shashua: There is a DXP component to fine-tune and customize the driving experience to each brand. In terms of the comment about them at some point moving to an in-house development, I think that's what that was on the table for many years. They have a software division called CARIAD, and that software division is still in operation in full force. At some point, maybe they will be able to deliver the kind of system that we deliver. But we believe that the stickiness of our systems are very strong. The validation required to reach the very high levels of the performance of SuperVision are enormous. The validation required for eyes-off is beyond anything that the industry has experienced so far.

Dan Meir Levy: In terms of the comment about them at some point moving to an in house development I think that but that wasn't on the table for many many years. They have a software division cold call, yet and that software division is still in operation.

Dan Meir Levy: In full force and two at some point.

Dan Meir Levy: Maybe that will be able to deliver the kinds of systems that we deliver but we believe that.

Dan Meir Levy: So the stickiness of our systems are very very very very strongly.

Dan Meir Levy: Elevation required to reach the very high levels of performance of supervision are enormous validation required for eyes off is.

Unknown Executive: In terms of the comment about them at some point moving to in-house development, I think that was on the table for many, many years. They have a software division called Carriot, and that software division is still in operation in full force. And at some point, maybe they will be able to deliver the kind of systems that we deliver, but we believe that the stickiness of our systems is very, very, very, very strong.

In terms of the comment about them at some point moving to in-house development, I think that was on the table for many, many years. They have a software division called Carriot, and that software division is still in operation in full force.

Dan Meir Levy: Is beyond anything that the industry has the <unk>.

Dan Meir Levy: <unk> experienced so far so I believe the stickiness is very very strong do you have to say yes.

Amnon Shashua: I believe the stickiness is very strong. Do you have something to add, Amir?

Nimrod Nehushtan: Yeah. If I may add just a little bit more color. First of all, the partnership we announced includes SuperVision, Chauffeur, and Drive, as Amnon mentioned, and it's going to be deployed overall in 17 car models, and it includes most of the brands in the Volkswagen Group, the premium brands, Audi, Porsche, Bentley, Lamborghini, and so on. But just to maybe sharpen the stickiness aspect, this partnership addresses the existing architecture or the next generation architecture that Volkswagen plan to launch in 2026 onwards. There is a kind of a plan to deploy specific car models that are all allocated today with this product for many years to come after the start of production.

Speaker Change: Uh huh.

Dan Meir Levy: A little bit more color.

Dan Meir Levy: First of all the partnership we announced concludes.

Amnon Shashua: And at that point, maybe they will be able to deliver the kind of system that we deliver, but we believe that the stickiness of our systems are very, very, very strong. The validation required to reach the very high-levels of the performance of SuperVision are enormous. Stabilization required for eyes-off is beyond anything that the industry has experienced so far. So, I believe the stickiness is very strong. Do you have a something to add?

Dan Meir Levy: Asian Chauffeur drive is as I mentioned and.

Dan Meir Levy: It's going to be deployed overall in 17.

Dan Meir Levy: <unk> models and it includes most of the brands and the Volkswagen group the premium brands.

Unknown Executive: The validation required to reach the very high levels of the performance of supervision is enormous. The validation required for eyes off is beyond anything that the industry has experienced so far. So I believe the stickiness is very, very strong. Do you have something? Yeah, if I may add a little bit more color.

The validation required to reach the very high levels of the performance of supervision is enormous. The validation required for eyes off is beyond anything that the industry has experienced so far. So I believe the stickiness is very, very strong. Do you have something?

Dan Meir Levy: Audi Porsche Bentley, Lamborghini and so on but just to maybe sharpen the stickiness aspect.

Dan Meir Levy: This partnership addresses the existing architecture or the next generation architecture. This fall selling and plan to launch in 2026 onwards, and there is a kind of a plan to deploy specific car models that are <unk>.

Nimrod Nehushtan: Yes, if I may add a little bit more color. First of all, the partnership we announced includes SuperVision, Chauffeur, and Drive, as Amnon mentioned, and it's going to be deployed overall in 17 car models, and it includes most of the brands in the Volkswagen Group, the premium brands, Audi, Porsche, Bentley, Lamborghini, and so on. But just to maybe sharpen the stickiness aspect, this partnership addresses the existing architecture or the next-generation architecture that Volkswagen plan to launch 2026 onwards. And there is kind of a plan to deploy specific car models that are allocated today with this product for many years to come after they started production. Their in-house activity that still exists today is for a future architecture that maybe in some point in time will mature. It includes many other things that they're working on, but it's not that it will replace our product in case it will mature. It will live in a different architecture in different cars, some parts in the future in case did materialize. So, in terms of the stickiness once it reaches production, many, many cars that are - will be deployed with this for many years after this year's production.

Unknown Executive: First of all, the partnership we announced includes Supervision, Chauffeur, and Drive, as Amnon mentioned, and it's going to be deployed overall in 17 car models, and it includes most of the brands in the Volkswagen group, premium brands, Audi, Porsche, Bentley, Lamborghini, and so on. But just to maybe sharpen the stickiness aspect, this partnership addresses the existing architecture, or the next generation architecture, that Volkswagen plans to launch in 20 And there is a plan to deploy specific car models that are all allocated today with this product for many years to come after the start of production. Their in-house activity that still exists today is for a future architecture that maybe at some point in time will mature. It includes many other things that they're working on, but it's not that it will replace our product in case it matures. It will live in a different architecture and different cars in some part in the future, in case it will indeed materialize. So in terms of the thickness, once it reaches production, there are many, many cars that will be deployed with this for many years after the series production.

Dan Meir Levy: And today with this product for many years to come after the start of production there in house activity that still exist today is for a future architecture that.

Nimrod Nehushtan: Their in-house activity that still exists today is for a future architecture that maybe in some point in time will mature. It includes many other things that they're working on, but it's not that it will replace our product in case it will mature. It will live in a different architecture in different cars some point in the future in case it will indeed materialize. In terms of the stickiness, once it reaches production, there are many cars that will be deployed with this for many years after the series production.

Dan Meir Levy: Maybe at some point in time, we will mature it includes many other things that they're working on but it's not it's not that it will replace our product in case it will mature it will live in a different architecture and different cars. Some parked in the future in case it will indeed materialized.

Dan Meir Levy: So in terms of the stickiness wanted to purchase production there.

Unknown Executive: Their in-house activity that still exists today is for a future architecture that maybe at some point in time will mature. It includes many other things that they're working on, but it's not that it will replace our product in case it matures. It will live in a different architecture and different cars in some part in the future, in case it will indeed materialize. So in terms of the thickness, once it reaches production, there are many, many cars that will be deployed with this for many years after the series production.

Dan Meir Levy: Many many cars that are will be deployed with this for many years after the series production.

Speaker Change: Great. Thank you.

Dan Levy: Great. Thank you. As a follow-up, I wanted to go to some of your China commentary, and I think just some time ago, you noted that Zeekr was offering a free 12-month trial of SuperVision. I don't know if you could provide any feedback, but is there any way to get a sense of what the take rate is going to be in the future of this functionality? Is this something where you have confidence that this could be fairly high take rate or even maybe a standard fit throughout the Zeekr lineup or Zeekr 001?

Speaker Change: And then as a follow up.

Speaker Change: Wanted to go to.

Speaker Change: Some of your China commentary and I think you some time ago, you noted that.

Speaker Change: Zika was offering a free 12 month trial of highway supervision I don't know if you could provide any any feedback but is there any way to get a sense of what the take rate is going to be in the future of this functionality is this something where you have confidence that this can be fairly high take rate are we there.

Dan Meir Levy: And then, as a follow-up, I wanted to go to some of your China commentary, and I think just some time ago you noted that Zeker was offering a free 12-month trial of highway supervision. I don't know if you could provide any feedback, but is there any way to get a sense of what the take rate is going to be in the future for this functionality? Is this something where you have confidence that this could be a fairly high take rate or even maybe a standard fit throughout the Zeker lineup or Zeker 301? But we are in this kind of situation

Dan Levy: Great. Thank you. And then, as a follow-up, I wanted to go to some of your China commentary. And I think just some time ago, you noted that ZEEKR was offering free 12-month trial of highway SuperVision. I don't know if you could provide any feedback. But is there any way to get a sense of what the take rate is going to be in the future of this functionality? Is this something where you have confidence that this could be a fairly high take rate or we can maybe standard fit throughout the ZEEKR lineup or [inaudible]?

Speaker Change: Maybe Stanford standard fit throughout the Zika lineup.

Speaker Change: There's a one.

Amnon Shashua: We are in discussions with Zeekr to make it really a standard fit, rather than a take rate type of functionality because of the rising competition in China. I believe the convergence would be that it will be standard fit.

Speaker Change: We are in discussions with zika or to make it through the standard fit.

Speaker Change: Rather than they are rather than it take rate type of functionality because of the rising competition in China I believe the convergence would be that it would be standard fit.

Dan Levy: Good. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from sneak chatter G with J P. Morgan. Please proceed with your question.

Operator: Our next question comes from Samik Chatterjee with J.P. Morgan. Please proceed with your question.

Joe Cardoso: Hi. Thanks for the question. This is Joe Cardoso on for Samik Chatterjee. Maybe a follow-up on the OEM engagements myself. You know, you guys have shown good progress moving from 3 to 14 OEMs now, production now covering 46% versus 9% a year ago. Just curious, when you think of the headroom that you have left to go after, like, how would you characterize it? Has your views relative to, let's call it, a ceiling change relative to 6, 9 months ago or even a year ago, given the developments in the ecosystem and now that you're approaching 50% of production, at least in kind of the engagements that you have already under your purview? Thank you.

Speaker Change: Thanks for the question. This is Joe Cardoso on for stomach.

Amnon Shashua: We are in discussions with ZEEKR to make it really a standard fit, rather than a take rate type of functionality because of the rising competition in China. I believe the convergence will be that it will be standard fit. Okay. Thank you.

Joseph Robert Spak: Maybe a follow up on the OEM engagements OEM engagements myself you know you guys have shown good progress moving from 3% to 14 Oems now production now covering 46% versus 9% a year ago.

Unknown Executive: We are in discussions with Zikr to make it really a standard fit. I believe the convergence would be that it would be standards-based.

Dan Levy: Okay. Thank you.

Operator: Our next question comes from Samik Chatterjee with JP Morgan. Please proceed with your question.

Joseph Robert Spak: Just curious when you think of the headroom that you have left to go after like how would you characterize it and has your views relative to let's call. It a ceiling changed relative to six nine months ago or even a year ago, given the developments in the ecosystem and now that you're approaching 50% of production at least in kind of the engagements that you have already underway.

Joe Cardoso: Hi, thanks for the question. This is Joe Cardoso on for Samik. Maybe a follow-up on the OEM engagements myself. You guys have shown good progress moving from three to 14 OEMs now, production now covering 46% versus 9% a year ago. Just curious, when you think of the headroom that you have left to go after, like how would you characterize it? And has your views relative to, let's call it, a ceiling change relative to six, nine months ago or even a year ago, given the developments in the ecosystem and now that you're approaching 50% of production, at least in kind of the engagements that you have already under your peripherals? Thank you.

Unknown Executive: Maybe a follow-up on the OEM engagement, OEM engagements myself, you guys have shown good progress moving from three to 14 OEMs now, production now covering 46% versus 9% a year ago. Just curious, when you think of the headroom that you have left to go after, like, how would you characterize it? And has your views, relative to, let's call it a feeling, changed relative to six, nine months ago, or even a year ago, given the developments in the ecosystem? And now that you're approaching 50% of production, at least in the kind of the engagements that you have already under your, your peripherals. Thank you.

Joseph Robert Spak: Your.

Speaker Change: Peripherals. Thank you.

Nimrod Nehushtan: Yeah. I think that there is a flywheel effect that we're seeing in which the more we have engagements with OEMs and the more we announce partnerships with OEMs, the more it builds our credibility on these advanced product line. We are also more prepared today, let's say, in terms of our business development activities in supporting 14 engagements in parallel, and we have the capacity to support this, and we have the capacity to support even more than this. What happened last year are multiple factors Amnon laid out at the beginning. Number one, competition in China and also outside of China is moving towards this hands-off as the next differentiators for cars. Number two, we build our credibility.

Joseph Robert Spak: Yes, I think that there is a a flywheel effect that we're seeing in which the more we have engagements with Oems in the war.

Joseph Robert Spak: We announced partnerships with Oems.

Joseph Robert Spak: Is it more.

Joseph Robert Spak: It builds our credibility on these advanced product line and.

Joseph Robert Spak: We are also more prepared today, let's say in terms of our.

Nimrod Nehushtan: Yes. I think that there is a flywheel effect that we're seeing in which the more we have engagements with OEMs and the more we announced partnership with OEMs, the more - it builds our credibility on these advanced product line. And we are also more prepared today, let's say, in terms of our business development activities and supporting 14 engagements in parallel, and we have the capacity to support this and we have the capacity to support even more than this. What happened last year are multiple factors - Amnon laid out at the beginning. Number one competition in China and also outside of China is moving towards this hands-off as the next differentiators for cars. Number two, we build our credibility, more announcements kind of helps us to reinforce our position as leaders in this front. And I think, we know more today about what needs to be done in order to secure these engagements after a year-long negotiation with one of the biggest car companies in the world. So, I think this is what stands behind this increase. And also, this is kind of the adoption curve where today, what's interesting as Dan mentioned, is that we are working with kind of the early majority and the middle of the pack back of OEM, not just the innovators of the market today on these engagements, which kind of shows us that in '26, '27 time frame, these hand-off products will become very available in terms of the amount of OEMs to launch them.

Joseph Robert Spak: Business development activities, and supporting 14 engagements and fire them in.

Joseph Robert Spak: We have the capacity to support this and with the capacity to support even more than this.

Joseph Robert Spak: What happened in the last year or multiple factor determining laid out at the beginning.

Joseph Robert Spak: Number one competition in China and also outside of China is moving towards this hands off as the differentiator for cars.

Joseph Robert Spak: Number two we build our credibility more announcements kind of helps us to reinforce our position as leaders in this and this.

Nimrod Nehushtan: More announcements kind of helps us to reinforce our position as leaders in this front. I think we know more today about what needs to be done in order to secure these engagements after a year-long negotiation with one of the biggest car companies in the world.

Joseph Robert Spak: <unk>.

Joseph Robert Spak: And I think we know more today about what needs to be done in order to secure these engagements after a year long negotiation with one of the biggest car companies in the world.

Unknown Executive: Number one, competition in China and also outside of China is moving towards this hands-free as the next differentiator for cars. Number two, as we build our credibility, more announcements kind of help us to reinforce our position as leaders in this front. And I think we know more today about what needs to be done in order to secure these engagements after a year of negotiation with one of the biggest car companies in the world. So I think this is what stands behind this increase. And also this is kind of the adoption curve where today, as Dan mentioned, we are working with kind of the early majority and the middle of the pack type of OEM, not just the innovators of the market today on these engagements, which kind of shows us that in the 26, 27 timeframe, these hands-off products will become very available in terms of the number of OEMs that launch them.

Amnon Shashua: I think this is what stands behind this increase, and also this is kind of the adoption curve, where today what's interesting, as Ben mentioned, is that we are working with kind of the early majority and the middle of the pack type of OEM, not just the innovators of the market today on these engagements, which kind of shows us that in 2026-2027 timeframe, these heads-up products will become very available in terms of the amount of OEMs that launch them.

Nimrod Nehushtan: I think this is what stands behind this increase, and also this is kind of the adoption curve, where today what's interesting, as Ben mentioned, is that we are working with kind of the early majority and the middle of the pack type of OEM, not just the innovators of the market today on these engagements, which kind of shows us that in 2026-2027 timeframe, these heads-up products will become very available in terms of the amount of OEMs that launch them.

Joseph Robert Spak: So I think this is what stands behind this increase and also this is kind of the adoption curve where today. What's interesting is as Dan mentioned is that we are working with kind of the early majority and the.

Joseph Robert Spak: Middle of the pack that from what we have not just the innovators of the market today on these engagements, which kind of shows us that in 'twenty six 'twenty seven timeframe of these has a product will become.

Joseph Robert Spak: Very available in terms of the amount of Oems to launch them.

Unknown Executive: So I think this is what stands behind this increase. And also this is kind of the adoption curve where today, as Dan mentioned, we are working with kind of the early majority and the middle of the pack type of OEM, not just the innovators of the market today on these engagements, which kind of shows us that in the 26, 27 timeframe, these hands-off products will become very available in terms of the number of OEMs that launch them.

Joseph Robert Spak: Okay.

Joe Cardoso: Maybe just a quick follow-up. My second question rather. I just wanted to touch on the destocking situation. You know, it sounds like you've made great progress. Can you just talk to maybe some of the changes or processes that you have put into place to improve your visibility around inventory at your customers and how they're tracking or working to date? Thanks for the questions.

Speaker Change: Then maybe just a quick follow up.

Speaker Change: Just wanted to Mark My second question, rather I just wanted to touch on the Destocking situation. It sounds like you've made great progress.

Speaker Change: Can you just talk to maybe some of the changes or processes that you have put into place to improve your visibility around inventory at your customers and how they are tracking are working today. Thank you for the questions.

Moran Shemesh Rojansky: Yeah. I think we actually discussed it in the last call, that you know, this is a situation that we haven't experienced before, so we did put some processes in place. For this year, I can say for Q1, we actually based on global production, actual production, and ADAS fitment rates, production per OEM, we've actually analyzed the gap between what we actually shipped in Q1 and what we would expect to ship if we didn't have the inventory issue. You know, that has give us kind of the comfort, and also looked, of course, at the years year-over-year growth to see that it makes sense. We did the same exercise for the full year.

Moran Shemesh: Yeah. I think we actually discussed it in the last call, that you know, this is a situation that we haven't experienced before, so we did put some processes in place. For this year, I can say for Q1, we actually based on global production, actual production, and ADAS fitment rates, production per OEM, we've actually analyzed the gap between what we actually shipped in Q1 and what we would expect to ship if we didn't have the inventory issue. You know, that has give us kind of the comfort, and also looked, of course, at the years year-over-year growth to see that it makes sense. We did the same exercise for the full year.

Speaker Change: Yeah. So.

Speaker Change: I think we actually is.

Joe Cardoso: And then, maybe just a quick follow-up. Just one - or my second question rather. I just wanted to touch on the destocking situation. It sounds like you've made great progress. Can you just talk to maybe some of the changes or processes that you have put into place to improve your visibility around inventory at your customers and how they're tracking are working today? Thanks for the question.

Speaker Change: And then in the last fall.

Speaker Change: This is a situation that Oh, we haven't experienced before so we did put some.

Speaker Change: Some processes in place.

Speaker Change: For this year I can say for Q1.

Speaker Change: <unk>.

Speaker Change: Based on our global our production actual production and Ada statements right.

Speaker Change: Production per OEM.

Speaker Change: We've actually analyzed the gap between what we actually shipped in Q1, and what we would expect to ship. If we didn't have the inventory issue and that gives us kind of the conflict and also looked of course of the year.

Moran Shemesh: Yes. So, I think we actually discussed it in the last call that this is a situation that we haven't experienced before. So, we did put some processes in place. For this year, I can say, for Q1, we actually based on global production, actual production and ADAS fitment rates, production per OEM, we've actually analyzed the gap between what we actually shipped in Q1 and what we would expect to ship if we didn't have the inventory issue. And that gives us kind of the comfort and also looked, of course, the year-over-year growth to see that it makes sense. We did the same exercise for the full year, so for the full year, taking again the expected lower volume, which looks pretty good. So, it's increasing for our top customers. Looking at Q3, Q4 and the outcome that we get compared to our customers' order indications for Q3, Q4, we get to approximately similar numbers, which is encouraging in that aspect. So, it's a step-down analysis versus other indications. In terms of receiving data or some visibility for our customers, we get some verification from them, but only indication, not something - we don't have full visibility to that. But with the process we have in place with the top down, we can, again, verify the data that we received and have actually a comparison between the two to make sure we are aligned with expectations.

Speaker Change: Year over year growth to perceived that it makes sense.

Speaker Change: We did the same exercise for the full year. So for the full year thinking again expected the volume, which we.

Moran Shemesh Rojansky: For the full year, taking again the expected global volume, which looks pretty good, so it's increasing for our top customers. Looking at Q3, Q4 and the outcome that we get compared to our customers' order indications for Q3, Q4, we get to approximately similar numbers, which is encouraging in that aspect. It's a top-down analysis versus the orders indications. In terms of receiving data or some visibility for our customers, we get some verification from them, but only indication, not something, we don't have full visibility to that.

Moran Shemesh: For the full year, taking again the expected global volume, which looks pretty good, so it's increasing for our top customers. Looking at Q3, Q4 and the outcome that we get compared to our customers' order indications for Q3, Q4, we get to approximately similar numbers, which is encouraging in that aspect. It's a top-down analysis versus the orders indications. In terms of receiving data or some visibility for our customers, we get some verification from them, but only indication, not something, we don't have full visibility to that.

Speaker Change: Which looks pretty good so it's increasing four four of our top customers.

Unknown Executive: And, you know, that gives us kind of comfort and also looks, of course, at the year-over-year growth to see that it makes sense. We did the same exercise for the full year. So for the full year, taking, again, the expected global volume, which looks pretty good, so it's increasing for our top customers. Looking at Q3, Q4, and the outcome that we get compared to our customers' order indications for Q3, Q4, we get to approximately similar numbers, which is encouraging in that aspect. So it's a top-down analysis versus the order indications. In terms of receiving data or some visibility for our customers, we get some verification from them, but only an indication, not something we don't have full visibility on. But with the process we have in place for the top-down, we can, again, verify the data that we receive and have an actual comparison between the two to make sure we are aligned with the expectations.

Speaker Change: Looking at Q3, Q4, and the outcome that we get.

Speaker Change: Compared to our customers or the indications for <unk>.

Speaker Change: Q3, Q4, we get to approximately.

Speaker Change: Similar numbers, which is encouraging in that aspect.

Speaker Change: That was analyses mentioned, though.

Speaker Change: Indications.

Speaker Change: In terms of.

Speaker Change: In terms of receiving.

Speaker Change: That's all with some visibility for our customers.

Speaker Change: We get some verification from them, but only indications not something.

Speaker Change: We don't have full visibility.

Speaker Change: Did that but with the process we have in place with the top down we can again verify that that says it can't be received and have actually come.

Unknown Executive: So it's a top-down analysis versus the order indications. In terms of receiving data or some visibility for our customers, we get some verification from them, but only an indication, not something we don't have full visibility on. But with the process we have in place for the top-down, we can, again, verify the data that we receive and have an actual comparison between the two to make sure we are aligned with the expectations.

Moran Shemesh Rojansky: With the process we have in place for the top-down, we can again verify the data that we receive and have actually a comparison between the two, to make sure we're aligned with expectations.

Moran Shemesh: With the process we have in place for the top-down, we can again verify the data that we receive and have actually a comparison between the two, to make sure we're aligned with expectations.

Speaker Change: Paris in between the two.

Speaker Change: To make sure we are aligned with explanation.

Speaker Change: Sure.

Speaker Change: Our next question comes from another or a loop capital markets. Please proceed with your question.

Operator: Our next question comes from Ananda Baruah with Loop Capital Markets. Please proceed with your question.

Speaker Change: Hey, guys. Thanks for taking the question.

Ananda Baruah: Hey. Yeah, guys. Thanks for taking the question. Just two quick clarifications for me, if I could. The first was, you guys commented on expecting mix to normalize into H2. I guess the clarification is it back to mid-single-digit SuperVision, or will it look something different, you know, sort of given the SuperVision ramp? I have a quick clarification follow-up as well. Thanks.

Speaker Change: Just two quick clarifications for me if I could.

Operator: Our next question comes from Ananda Baruah with Loop Capital Markets. Please proceed with your question.

The first was you guys commented on expecting mix to normalize into the second half of the year.

Unknown Executive: Hey, yeah, guys, thanks for taking the question. Just two quick clarifications for me, if I could. The first is, you guys commented on expecting MIX to normalize into the second half of the year. And I guess the clarification is, is it back to mid-single-digit supervision, or will it look something different, you know, sort of given the supervision ramp? And then I have a quick clarification follow-up as well. All right

Ananda Baruah: Hey guys. Thanks for taking the question. Just two quick clarifications for me, if I could. The first was, you guys commented on expecting mix to normalize into the second half of the year. And I guess the clarification is, is it back to mid-single-digit SuperVision or look something different, sort of given the SuperVision ramp? And then I have a quick clarification follow-up as well. Thanks.

Samik Chatterjee: I guess, a clarification is it back to mid single digit supervision, Oh look something different.

Speaker Change: I sort of get involved with supervision ramp and then I have a quick quick clarification follow up as well. Thanks.

Amnon Shashua: Yeah. I think the issue that we have with inventory is not related to SuperVision.

Speaker Change: No I think the issue that we have with inventory is not related to supervision the answer to the iqs supervision is on track this quarter.

Moran Shemesh Rojansky: Yeah.

Moran Shemesh: Yeah.

Amnon Shashua: It's related to the EyeQs. SuperVision is on track. This quarter, the volume we shipped, 39,000, was above expectation, but we believe that the number for H1 would follow our guidance, which is about 70,000. The full guidance of the year we have remaining H2 is according to the guidance we gave at the beginning of the year.

Unknown Executive: The volume, we shipped 39000 towards above expectation.

Speaker Change: So we believe that the number for the first half of the year with a full of our guidance, which is about 70000.

Amnon Shashua: I think the issue that we had with inventory is not related to SuperVision, related to the EyeQ. SuperVision is on track. This quarter was the volume we shipped 39,000 was above expectation, but we believe that the number for the first half of the year would follow our guidance, which is about 70,000. And the full guidance of the year, we have the remaining second half is according to the guidance we gave at the beginning of the year.

Unknown Executive: I think the issue that we have with inventory is not related to supervision; it's related to the IQs. Supervisory training is on track. This quarter, the volume we shipped, 39,000, was above expectation, but we believe that the number for the first half of the year would follow our guidance, which is about 70,000. And the full guidance for the year, we have remaining second half, is according to the guidance we gave at the beginning.

Unknown Executive: And the full guidance of the year, we have remaining second half. According to the guidance we gave at the beginning of the year.

Unknown Executive: And and then for the second clarification is around Asps.

Ananda Baruah: The second clarification is around ASP. I heard, and this may just be me mishearing what was said or not hearing completely, but I heard on the one hand, ASP for 2024 being $55 up from 2023. I thought I also heard another comment about 2024 ASP being down year over year.

Speaker Change: I heard and this may just be a just eat me Mitch.

Speaker Change: This hearing what we said, we're not hearing completely but I heard.

Unknown Executive: I heard on the one hand asps for 2024.

Unknown Executive: Being $55 up from 2023, then I thought I also heard another comment about 2020 for ASP being down year over year.

Ananda Baruah: And then for the second clarification is around ASP. I heard - and this may just be me, just hearing what we said or not hearing completely. But I heard on the one hand, ASP for 2024 being $55, up to 2023. And then I thought I also heard another comment about 2024 ASP being down year-over-year. So -

Moran Shemesh Rojansky: Yeah.

Moran Shemesh: Yeah.

Ananda Baruah: So just-

Ananda Prosad Baruah: So yeah. So.

Moran Shemesh Rojansky: Yeah.

Moran Shemesh: Yeah.

Ananda Baruah: Mix.

Moran Shemesh Rojansky: Yeah. The 55 versus 53, that takes into account the mix of SuperVision and EyeQ. SuperVision, of course, with a higher ASP, as we are also the vendor for the hardware. The ASP is significantly higher. Again, overall ASP of 53 or 55 in 2024 is mainly driven by the mix of SuperVision revenue as a percentage of the total revenue. It's much higher in this segment. As for EyeQ ASP, that was my comment.

Moran Shemesh: Yeah. The 55 versus 53, that takes into account the mix of SuperVision and EyeQ. SuperVision, of course, with a higher ASP, as we are also the vendor for the hardware. The ASP is significantly higher. Again, overall ASP of 53 or 55 in 2024 is mainly driven by the mix of SuperVision revenue as a percentage of the total revenue. It's much higher in this segment. As for EyeQ ASP, that was my comment.

Unknown Executive: Yeah. So the PT Fi versus 53 that takes into account the mix of supervision and IQ. So supervision of course with a higher ASP.

Unknown Executive: And then I thought I also heard another comment about 2024 ASP being down year over year. Yeah, so the 55 versus 53 that takes into account the mix of supervision and me. So, supervision, of course, with a higher ASP, as we are also the vendor for the hardware.

And then I thought I also heard another comment about 2024 ASP being down year over year.

Ananda Prosad Baruah: We are also in the window for the hardware so.

Unknown Executive: The ASB is significantly higher than and again overall ASP of $53 55.

Moran Shemesh: Yes. So, the 55 versus 53, that takes into account the mix of SuperVision and EyeQ. So, SuperVision of course with a higher ASP, as we are also - the vendor for the hardware. So, the ASP is significantly higher. And again, overall ASP of 53 or 55 in 2024, is mainly driven by the mix of SuperVision revenue as a percentage of the total revenue. Again, it's much higher in the segment. As for EyeQ and ASP and that was my comment, the EyeQ, ASP - yes, the EyeQ ASP was lower in Q1 specifically. We don't believe this is - this ASP represents the normal ASP for this year. And for Q1, we shipped only 3.5 million chips. So, the mix is obviously has changed. So for example, if some of the low cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP is lower. So, it's very volatile in such a quarter when we deliver only 3.5 million chips. So, we do expect an increase in Q2 and Q3 of the ASP for EyeQ. About €0.40 or €0.50. On the total year, yes, we expect EyeQ ASP to go down as it did in 2023 and approximately $0.50, $0.75 year-on-year, continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. So, this had a modest impact in 2023, and we expect a similar impact in 2024 for the full year.

Unknown Executive: In 2024, and is mainly driven by the mix of supervision revenue as a percentage of the total revenue.

Unknown Executive: So, the ASP is significantly higher. And again, overall, the ASP of 53 or 55 in 2024 is mainly driven by the mix of supervision. But revenue is a percentage of the total revenue. Again, it's much higher in the segment. As for IQASP, and that was my comment, the IQASP, yeah, the IQASP was lower in Q1 specifically. We don't believe this ASP represents, you know, the normal ASP for this year. As for Q1, we shipped only 3.5 million chips. So, the mix is obviously has changed. So, for example, if some of the low-cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP, you know, is lower. So, it's very volatile in such a quarter when we deliver only 3.5 million chips. So, we do expect an increase in Q2 and Q3 of the ASP for IQ by about 40 or 50 cents. On the total year, yeah, we expect IQASP to go down as it did in 2023 by approximately 50 cents, 75 cents year-on-year, continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. So, this had a modest impact in 2023, and we expect a similar impact in 2024 for the full year ahead.

Moran Shemesh: And again its much higher in this segment.

Unknown Executive: As for Accuray SP and that was my comment.

Ananda Baruah: Mm-hmm.

Unknown Executive: The I joists be.

Moran Shemesh Rojansky: The EyeQ ASP was lower in Q1 specifically. We don't believe this ASP represents you know the normal ASP for this year. As for Q1, we shipped only 3.5 million chips, so the mix is obviously has changed. For example, if some of the low-cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP you know is lower, so it's very volatile in such a quarter when we deliver only 3.5 million chips. We do expect an increase.

Moran Shemesh: The EyeQ ASP was lower in Q1 specifically. We don't believe this ASP represents you know the normal ASP for this year. As for Q1, we shipped only 3.5 million chips, so the mix is obviously has changed. For example, if some of the low-cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP you know is lower, so it's very volatile in such a quarter when we deliver only 3.5 million chips. We do expect an increase.

Unknown Executive: As for IQASP, and that was my comment, the IQASP, yeah, the IQASP was lower in Q1 specifically. We don't believe this ASP represents, you know, the normal ASP for this year. As for Q1, we shipped only 3.5 million chips. So, the mix is obviously has changed. So, for example, if some of the low-cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP, you know, is lower. So, it's very volatile in such a quarter when we deliver only 3.5 million chips. So, we do expect an increase in Q2 and Q3 of the ASP for IQ by about 40 or 50 cents. On the total year, yeah, we expect IQASP to go down as it did in 2023 by approximately 50 cents, 75 cents year-on-year, continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. So, this had a modest impact in 2023, and we expect a similar impact in 2024 for the full year ahead.

Unknown Executive: <unk> was lower in Q1, specifically.

Unknown Executive: We don't believe this is a this.

Unknown Executive: This ASP represents our you know the normal ASP for this year and for Q1, we shipped the only $3 5 million chips. So the mix is obviously has changed for them. So for example, if in some of the low cost programs in China.

Unknown Executive: So, for example, if some of the low-cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP, you know, is lower. So, it's very volatile in such a quarter when we deliver only 3.5 million chips. So, we do expect an increase in Q2 and Q3 of the ASP for IQ by about 40 or 50 cents. On the total year, yeah, we expect IQASP to go down as it did in 2023 by approximately 50 cents, 75 cents year-on-year, continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. So, this had a modest impact in 2023, and we expect a similar impact in 2024 for the full year ahead. Very helpful. Thank you. I appreciate it.

So, for example, if some of the low-cost programs in China became a higher percentage out of these 3.5 million chips, then the ASP, you know, is lower. So, it's very volatile in such a quarter when we deliver only 3.5 million chips. So, we do expect an increase in Q2 and Q3 of the ASP for IQ by about 40 or 50 cents. On the total year, yeah, we expect IQASP to go down as it did in 2023 by approximately 50 cents, 75 cents year-on-year, continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. So, this had a modest impact in 2023, and we expect a similar impact in 2024 for the full year ahead.

Unknown Executive: It became a higher percentage of all of these $3 5 million chips.

Unknown Executive: Then the ASB is lower so it's very volatile in such a quarter when we deliver on the $3 5 million.

Unknown Executive: So we do expect an increase in Q2 and in Q3 of the ASB for IQ, It's about 40 or 50.

Nimrod Nehushtan: In Q2 and Q3 of the ASP for EyeQ, it's about $0.40 or $0.50. On the total year, we expect EyeQ ASP to go down as it did in 2023, in approximately $0.50, $0.75, year-on-year. Continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. This had a modest impact in 2023, and we expect a similar impact in 2024 for the full year.

Moran Shemesh: In Q2 and Q3 of the ASP for EyeQ, it's about $0.40 or $0.50. On the total year, we expect EyeQ ASP to go down as it did in 2023, in approximately $0.50, $0.75, year-on-year. Continuing the normalization of the mix as compared to a very rich level that we had in 2021 and 2022. This had a modest impact in 2023, and we expect a similar impact in 2024 for the full year.

Unknown Executive: On the total year, Yeah, we we expect.

Unknown Executive: ICU ASP to go down.

Unknown Executive: In 2023.

Speaker Change: Approximately 57.

Unknown Executive: 75 cents.

Unknown Executive: Yeah.

Unknown Executive: Continued continuing an amortization of the mix as compared to a very rich.

Unknown Executive: A level that we had in 2021 'twenty two so this had a modest impact in 2023, and we expect the similar impact in 2024.

Speaker 15: That's very helpful. Thank you. Appreciate that.

Ananda Baruah: That's very helpful. Thank you. Appreciate that.

Unknown Executive: The full year.

Speaker Change: Very helpful. Thank you I appreciate that.

Unknown Executive: Our next question comes from Adam Jonas with Morgan Stanley. Please proceed with your question.

Operator: Our next question comes from Adam Jonas with Morgan Stanley. Please proceed with your question.

Ananda Baruah: Very helpful. Thank you. I appreciate that.

Adam Michael Jonas: Our next question comes from Adam Jonas with Morgan Stanley. Please proceed with your question.

Speaker 16: Well, first, I just wanna share my thoughts to the Mobileye team and the community and people of Israel during the ongoing situation. Amnon, seven months ago, you posted on LinkedIn that Tesla's decision to adopt an end-to-end generative AI approach to full self-driving to train neural networks was, I'm quoting, "Neither necessary nor sufficient for full self-driving, driving programs." Do you still feel the same way today, Amnon?

Adam Jonas: Well, first, I just wanna share my thoughts to the Mobileye team and the community and people of Israel during the ongoing situation. Amnon, seven months ago, you posted on LinkedIn that Tesla's decision to adopt an end-to-end generative AI approach to full self-driving to train neural networks was, I'm quoting, "Neither necessary nor sufficient for full self-driving, driving programs." Do you still feel the same way today, Amnon?

Adam Michael Jonas: Well first I just want to share my thoughts.

Adam Michael Jonas: Two the mobile I team and the community.

Adam Jonas: Well, first, I just want to share my thoughts to the Mobileye team and the community and people with Israel during the ongoing situation in and [inaudible]. On seven months ago, you posted on LinkedIn that Tesla's decision to adopt an end-to-end generative AI approach to full self-driving to Triannual Networks was "neither necessary, nor sufficient for full self-driving programs." Do you still feel the same way today, Amnon?

Adam Michael Jonas: People with Israel during the ongoing situation and.

Speaker Change: Okay excellent.

Speaker Change: Non seven months ago, you posted.

Amnon Shashua: On a linked and that Tesla's decision to adopt.

Amnon Shashua: And and and generative AI approach to full self driving to train neural networks was I'm quoting neither necessary.

Amnon Shashua: Nor sufficient for full self driving driving programs do you still feel the same way today I'm done.

Amnon Shashua: Yes, indeed. Now, in my prepared remarks I mentioned that on the EyeQ6 we're going to have end-to-end both perception and actuation, and that does not contradict the point that we made. The Tesla end-to-end is the sole technology. Our end-to-end is just one engine on top of multiple engines in order to create a decomposable system that is explainable, that is modifiable, that you can explain what it does to regulatory bodies, that you can customize the driving experience for OEM. And if you look at some of our competitors like Waymo, they have the same view, that there's a very, very strong reliance on neural networks, on data-driven networks, language models, but at the end of the day it needs to be a system that is designed to be explainable and modifiable. So, we're not against end-to-end. We're against end-to-end being the sole engine for the system. So, I'm back at the CES a few months ago in January. I presented, mobilized the end-to-end perception engine, what I call the multi, by the power of five, how to build a end-to-end perception engine, and this is running on the EyeQ6, and we have also another engine which also includes actuation. So, this is going from videos to actuation as an end-to-end, but it's a component, it's a subsystem of a more complex system.

Amnon Shashua: Yes, indeed in my prepared remarks, I mentioned that on the IQ six we're going to have end to end, both perception and actuation and that does not contradict the point that we made.

Amnon Shashua: Yes, indeed. Now, in my prepared remarks, I mentioned that on the EyeQ6 we're going to have end-to-end both perception and actuation, and that does not contradict the point that we made. The Tesla end-to-end is the sole technology. Our end-to-end is just one engine on top of multiple engines in order to create a decomposable system that is explainable, that is modifiable, that you can explain what it does to regulatory bodies, that you can customize the driving experience for an OEM. You know, all.

Amnon Shashua: The Tesla end to end is the soul.

Amnon Shashua: As the sole technology.

Amnon Shashua: Our end to end is just one engine on top of multiple engines and other two created the compatible system that is explainable that as well.

Amnon Shashua: Modifiable.

Amnon Shashua: That you can explain what it does to regulatory bodies that you can customize the driving experience for.

Amnon Shashua: If you look at some of our competitors, like Waymo, they have the same view that there's a very, very strong reliance on neural networks, on data-driven networks, and language models, but at the end of the day, it needs to be a system that is designed to be explainable and modifiable. So we're not against end-to-end; we're against end-to-end being the sole engine. I'm back at CES. A few months ago, in January, I presented Mobileye's end-to-end perception engine and what I call the multi by the power of five. How to build an end-to-end perception engine. And this is running on the IQ6 and we have another engine which also includes actuation. So this is going from videos to actuation as an end-to-end, but it's a component, a subsystem of a more complex... of a more complex...

Amnon Shashua: Oh, yes.

Amnon Shashua: And.

Amnon Shashua: And you know of.

Amnon Shashua: If you look at some of our competitors like Waymo, they have the same view that, you know, there's a very strong reliance on neural networks, on data-driven networks, language models. But at the end of the day, it needs to be a system that is designed to be explainable and modifiable. We're not against end to end. We're against end to end being the sole engine for the system. Back at the CES a few months ago in January, I presented Mobileye's end-to-end perception engine, right? What I call the multiplied by the power of five, how to build an end-to-end perception engine. This is running on the EyeQ6. We have also another engine which also includes actuation.

Amnon Shashua: If you look at some.

Amnon Shashua: Some of our competitors like Weibo they have to stay even though they have the same view of that.

Amnon Shashua: If theres a very very strong reliance on the neural networks on data driven networks language models, but at the end of the day it needs to be a system that is designed to be explainable modifiable.

Amnon Shashua: So we're up against end to end, we're against end to end being the sole engine.

Amnon Shashua: For the.

Amnon Shashua: For the system, so a backup at CES a few months ago in January.

Amnon Shashua: Presented mobilize the end to end perception engine.

Amnon Shashua: Alright.

Amnon Shashua: I called the multi go by the power of five.

Amnon Shashua: How to build an end-to-end perception engine. And this is running on the IQ6 and we have another engine which also includes actuation. So this is going from videos to actuation as an end-to-end, but it's a component, a subsystem of a more complex... of a more complex...

Amnon Shashua: How to build a end to end a perception that perception of engine and this is running on the IQ six and we have also another engine, which also includes actuation. So this is going from videos to actuation as an end to end, but it is a component it's a sub system of a more complex offering.

Amnon Shashua: This is going from videos to actuation as an end to end, but it's a component, it's a subsystem of a more complex system.

Amnon Shashua: More complex system.

Adam Jonas: Thanks, Amnon, for clarifying, and just as a follow-up, I know you've said that some of your design wins are also for supervision, include internal combustion architectures, and some people on this call might be a little skeptical as to whether their OEM customers would have software-defined internal combustion vehicles. So, I guess my question is, when would you actually - well, theoretically and practically possible, when would you expect, based on your visibility of today to see a supervision fitment in production internal combustion architecture vehicle?

Speaker 16: Thanks, Amnon, for clarifying. Just as a follow-up, I know you've said that some of your design wins are also for SuperVision, include internal combustion architectures. You know, there's some people on this call might be a little skeptical as to whether your OEM customers would have software-defined internal combustion vehicles. So I guess my question is, when would you actually, while theoretically and practically possible, expect, based on your visibility of today, to see a SuperVision fitment on a production internal combustion architecture vehicle?

Speaker Change: Oh, Thanks, Nonpareil, clarifying and just as a follow up.

Adam Jonas: Thanks, Amnon, for clarifying. Just as a follow-up, I know you've said that some of your design wins are also for SuperVision, include internal combustion architectures. You know, there's some people on this call might be a little skeptical as to whether your OEM customers would have software-defined internal combustion vehicles. So I guess my question is, when would you actually, while theoretically and practically possible, expect, based on your visibility of today, to see a SuperVision fitment on a production internal combustion architecture vehicle?

Adam Michael Jonas: I know you you said that some of your design wins are also for our first supervision.

Adam Michael Jonas: Our include internal combustion architectures.

Adam Michael Jonas: Architectures and some some people on this call might be a little skeptical of the weather.

Adam Michael Jonas: Your OEM customers would would have software defined internal combustion vehicles.

Adam Michael Jonas: So I guess my question is when would you actually well theoretically and practically possible when would you expect.

Adam Michael Jonas: Based on your visibility today to see.

Adam Michael Jonas: Ah supervision fitment on.

Adam Michael Jonas: Put in production internal combustion architecture vehicle.

Amnon Shashua: So, the 12-target group wins with 17 models, nine of them are combustion engine models. So, 50% of the models is going to be combustion engine, and it doesn't have to be a software-defined vehicle. It's a system, just like ADAS is a system, it's really encapsulated in our ECU, so it doesn't have to be a software-defined vehicle, and all the air updates is done through our ECU, so everything is self-contained.

Amnon Shashua: The Volkswagen Group win was 17 models. Nine of them are combustion engine models, right? 50% of the models is going to be combustion engine and doesn't have to be software-defined vehicle. You know, it's a system just like ADAS is a system. You know, it's really encapsulated in our ECU. It doesn't have to be a software-defined vehicle. All the over-the-air update is done through our ECU. Everything is self-contained.

Adam Michael Jonas: So the folks are going to grow up.

Amnon Shashua: So it was 17 models nine of them are combustion engine models so 50%.

Amnon Shashua: Of the models is going to be combustion engine. It doesn't have to be software defined vehicle.

Amnon Shashua: It's a system just like asos as a system, we love it it's a really encapsulated in our east to you. So it doesn't have to be a software defined the gold.

Amnon Shashua: All the over the air update.

Amnon Shashua: It is done through our acu, so everything yourself very self contained.

Moran Shemesh: If I may follow up on this, I think that maybe a few years ago, some OEMs said that their future plans in terms of future architecture software-defined vehicles will be based on EVs, under the assumption that EVs will become the leading powertrain for their cars and towards the back half of the decade. What has changed for some OEMs in the last year is that the plans are today maybe a little bit more moderate in terms of the EV percentage versus combustion engine, or a hybrid, but this still means that they are kind of aligning their architectures to the powertrain in a more balanced way, as opposed to going all-in on EVs for future technologies.

Nimrod Nehushtan: If I may follow up on this. I think that maybe a few years ago, some OEMs said that their future plans in terms of future architecture software-defined vehicles will be based on EVs under the assumption that EVs will become kind of the leading powertrain for their cars towards the back half of the decade. What has changed for some OEMs in the last year is that the plans today may be a little bit more moderate in terms of the EV percentage versus combustion engines or hybrid. This still means that they are kind of aligning their architectures to the powertrain in a more balanced way, as opposed to going all in on EVs for future technologies.

Speaker Change: I may follow up on this I think that may be a few years ago.

Unknown Executive: Some Oems said that their future plans in terms of future architecture software defined get those won't be based on these other than the assumption that evs will become the leading.

Unknown Executive: Powertrain for their cars in that towards the back half of a decade.

Unknown Executive: Just for some of them pushed into last year is that the plans are today, maybe a little bit more moderate in terms of the EBIT percentage versus combustion engine or.

Unknown Executive: Or a hybrid.

Unknown Executive: But this still means that they are kind of aligning their architectures to the powertrain and a more balanced way as opposed to going all in on Evs for for future technologies.

Daniel V. Galves: Thank you. Thank you, Adam. We can take one more question, Maria.

Unknown Executive: Okay.

Speaker 16: Thank you.

Adam Jonas: Thank you.

Speaker Change: Thank you. Thank you Adam we can take one more question Mario.

Amnon Shashua: Thank you.

Operator: Thank you, Adam. We can take one more question, Maria.

Amnon Shashua: Thank you, Adam. We can take one more question, Maria.

Operator: Okay. Our last question comes from Chris McNally with Evercore ISI. Please proceed with your question.

Speaker 15: Okay. Our last question comes from Chris McNally with Evercore ISI. Please proceed with your question.

Operator: Okay. Our last question comes from Chris McNally with Evercore ISI. Please proceed with your question.

Christopher Patrick McNally: Okay. Our last question comes from Chris Mcnally with Evercore ISI. Please proceed with your question.

Chris McNally: Thanks so much, team. Last but hopefully not least. Maybe we could dive into some of the supervision detail on the potential wins for second half. Would love to know if we look at the wins by type with the RFPs, is it sort of the old model-by-model RFP approach where we've seen the legacy OEMs kind of bid this out in the past? Or maybe DXP or sort of the wider Audi push deployment has led to a broader fleet deployment for the potential RFPs, i.e., could we have hundreds of thousands of vehicles in the per OEM and the 27-plus time frame?

Speaker 17: Thanks so much, team. Last but hopefully not least. If maybe we could dive into some of the SuperVision details on the potential wins for H2. Would love to know if we look at the wins by type or the RFPs, is it sort of the old model-by-model RFP approach where we've seen the legacy OEMs kind of bid this out in the past? Or maybe DXP or sort of the wide Audi, Porsche deployment has led to a broader fleet deployments of the potential RFPs, i.e., could we have hundreds of thousands of vehicles per OEM in the 2027+ timeframe?

Chris McNally: Thanks so much, team. Last but hopefully not least. If maybe we could dive into some of the SuperVision details on the potential wins for H2. Would love to know if we look at the wins by type or the RFPs, is it sort of the old model-by-model RFP approach where we've seen the legacy OEMs kind of bid this out in the past? Or maybe DXP or sort of the wide Audi, Porsche deployment has led to a broader fleet deployments of the potential RFPs, i.e., could we have hundreds of thousands of vehicles per OEM in the 2027+ timeframe?

Christopher Patrick McNally: Thanks, so much.

Christopher Patrick McNally: But hopefully not.

Christopher Patrick McNally: Not really.

Christopher Patrick McNally: Maybe we could dive into some of the supervision and detailed on the potential winters like the second half we would love to know if we look at the wind Bye Bye bye type of the RFP is it sort of the old model by model RFP approach, where we've seen the legacy Oems kind of laid this out in the past or maybe DXP or.

Unknown Executive: We'd love to know if we look at the wins by type or by RFPs, is it sort of the old model by model RFP approach where we've seen the legacy OEMs kind of bid this out in the past? Or maybe DXP or the wide Audi-Porsche deployment has led to a broader fleet deployment for the potential RFPs, i.e. Could we have hundreds of thousands of vehicles per OEM in the 27 plus timeframe?

Unknown Executive: The white Oak Audi Porsche deployment has led to our broader fleet deployments of the potential Rfps I E could we have hundreds of thousands of vehicles.

Unknown Executive: Our OEM and the 27 plus timeframe.

Nimrod Nehushtan: Normally what we do is to see kind of the plans for OEMs in launching specific vehicle models, but it's more a platform question as opposed to specific vehicle models. Normally if a platform will include few vehicle models that will be launched according to their plans, and then we're not kind of going one by one in kind of a rigorous process with each OEM, it's a bundle of cars and car models that can be, you know, the volumes can vary according to the OEM, of course.

Unknown Executive: Yes.

Unknown Executive: As for.

Amnon Shashua: Yes. So that - I have is for - and normally, what we do is to see kind of the plans for OEMs in launching specific vehicle models, but it's more a platform question as opposed to specific vehicle models. So normally, a platform will include a few vehicle models that will be launched according to their plans. And then we're not kind of going one by one in kind of a rigorous process with each OEM. It's a bundle of cars and car models that can be - the volumes can vary according to [inaudible] of course. But when we have a deal, it can include multiple car models as we had with Volkswagen Group, which with one announcement we covered 17 car models with multiple brands and then with all geographies and so on and so forth.

Unknown Executive: And normally what we do is to see kind of the plans for Oems and launching specific vehicle models, but it's more of a platform question as opposed to specific vehicle model. So.

Christopher Patrick McNally: Normally our platform will include two vehicle models that will be launched according to their plans and then.

Christopher Patrick McNally: We're not kind of going one by one and kind of a rigorous process with each OEM.

Christopher Patrick McNally: A bundle of cars and car models that can be the volumes can very important to do I am of course, but.

Nimrod Nehushtan: When we have a deal, it can include multiple car models as we had with Volkswagen Group, which with one announcement we covered 17 car models with multiple brands and with, you know, all geographies and so on and so forth.

Christopher Patrick McNally: When we have when we have a deal. It can include multiple car models as we had with Volkswagen group, which we're quite announcement, we covered a 17 car models with multiple brands and then with all.

Christopher Patrick McNally: All geographies okay.

Chris McNally: Really appreciate that. And maybe just a follow-up. If we could follow on to Adam's question and sticking to this topic of at least for now supervised eyes-on performance, autonomous evolution to the side. Amnon, in the past, I think Mobileye has discussed something like you were hoping for 10 times better miles per disengagement from supervision when we compare it to something like full self-driving. I think a lot of those comments were pre-version 12. Any thought on how you think supervision, again, as a supervised eyes-on system, the competitive statistics stacks up today?

Speaker 17: Really appreciate that. Maybe just a follow-up, if we could, you know, follow on to Adam's question and, you know, sticking to this topic of at least for now supervised eyes-on performance, you know, autonomous evolution to the side. Amnon, in the past, I think Mobileye has discussed something, you know, like you were hoping for 10 times better miles per disengagement, you know, from supervision, you know, when we compare it to something like full self-driving. You know, I think a lot of those comments were pre-version 12. You know, any thought on how you think supervision as, again, as a supervised eyes-on system, you know, the competitive statistics stacks up today?

Unknown Executive: Really appreciate that and maybe the follow up is if we could follow on to Adams question sticking to this topic of at least for for now supervised eyes on performance.

Chris McNally: Really appreciate that. Maybe just a follow-up, if we could, you know, follow on to Adam's question and, you know, sticking to this topic of at least for now supervised eyes-on performance, you know, autonomous evolution to the side. Amnon, in the past, I think Mobileye has discussed something, you know, like you were hoping for 10 times better miles per disengagement, you know, from supervision, you know, when we compare it to something like full self-driving. You know, I think a lot of those comments were pre-version 12. You know, any thought on how you think supervision as, again, as a supervised eyes-on system, you know, the competitive statistics stacks up today?

Unknown Executive: Autonomous evolution to the side.

Unknown Executive: In the past I think mobile is discuss something.

Unknown Executive: You were hoping for 10 times better miles per disengagement from supervision when we compare it to something like full self driving.

Unknown Executive: I think a lot of those comments were pre version 12.

Unknown Executive: Any thoughts on how you think supervision again as a supervised ISR system.

Unknown Executive: The competitive statistics stacks up.

Unknown Executive: Today.

Amnon Shashua: No. We are targeting the current generation with EyeQ 5 is improving all the time, but we have over-the-air update every two months or so. We are close to achieving a 100 hour mean time between interventional highways less so in urban, but it's more than 1 or 2 hours of mean time between intervention. On the EyeQ 6 system, as I mentioned in my prepared remarks, just for the camera subsystem, it's about 1,000 hours of mean time between intervention on highways. Now, I don't know what is the mean time to intervention on Tesla's Version 12. I don't know if anyone measured that, but these are the kind of things that we measure in terms of KPIs on how we progress.

Amnon Shashua: Look, no. We are targeting the current generation with an EyeQ5 is improving all the time, right? We have over-the-air updates every 2 months or so. We are close to achieving a 100-hour meantime between intervention on highways. Less so in the urban, but it's more than 1 or 2 hours of meantime between intervention. On the EyeQ6 system, as I mentioned in my prepared remarks, just for the camera subsystem, it's about 1,000 hours of meantime between intervention on highways. Now, I don't know what is the meantime between intervention on Tesla's version 12. I don't know if anyone measured that, but these are the kinds of things that we measure in terms of KPIs on how we progress.

Amnon Shashua: Well you know we are targeting.

Unknown Executive: The current generation with the IQ five is.

Unknown Executive: Is improving all the time, we have over the air updates every every two months or so.

Unknown Executive: We are close to achieving a 100 hour meantime between intervention on highways.

Unknown Executive: Less so in the urban but its more than one or two hours of mean time between intervention on the IQ six system as I mentioned in my prepared remarks.

Unknown Executive: Just for the camera sub system, it's about 1000 hours of the meantime between intervention.

Unknown Executive: On the on highways.

Unknown Executive: Don't know what is the meantime between intervention on Tesla.

Unknown Executive: <unk> version.

Unknown Executive: 12.

Unknown Executive: I don't know if any one measure of that but these are the kinds of things that we that we measure in terms of kpis on how we progress.

Operator: There are no further questions at this time. I would now like to turn the floor back over to Dan Galves for closing.

Operator: There are no further questions at this time. I would now like to turn the floor back over to Dan Galves for closing comments.

Daniel V. Galves: There are no further questions at this time I would now like to turn the floor back over to Dan <unk> for closing comments.

Daniel V. Galves: Thanks, everyone, for your time, and we will talk to you next quarter, and thanks to the Mobileye team for the session. Thank you.

Speaker 17: Thanks everyone for your time, and we will talk to you next quarter. Thanks for the Mobileye team, for the session. Thank you.

Dan Galves: Thanks everyone for your time, and we will talk to you next quarter. Thanks for the Mobileye team, for the session. Thank you.

Daniel V. Galves: Thanks, everyone for your time, and we will talk to you next quarter and thanks for the mobile I team.

Daniel V. Galves: For the session. Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Daniel V. Galves: [music].

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Daniel V. Galves: Okay.

Operator: [music].

unknown: ..........

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