Q1 2024 AEye Inc Earnings Call
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Good afternoon, and thank you for joining Ani's first quarter 'twenty 'twenty four earnings call with me today are Matt Fish, Chief Executive Officer, and Conor Ginnie Chief Financial Officer.
unknown: Earlier today, we announced our financial results for the first quarter 2020 for a copy of our press release can be found on our website at investors Dot AI AI before we begin I would like to remind participants that today's discussion may include forward looking statements as defined in the securities laws and regulations of the United States with reference to future.
<unk> future operating results or financial performance.
Forward looking statements are based on our current expectations and assumptions regarding our business the industry and other conditions. These forward looking statements are subject to inherent risks uncertainties and changes in circumstances that are difficult or impossible to predict.
Our actual results may differ materially from those contemplated by these forward looking statements.
Caution you therefore against placing undue reliance on any of these forward looking statements.
You can find more information about the risks uncertainties and other factors in our reports filed from time to time with the Securities and Exchange Commission, including in our most recent periodic report.
unknown: All information discussed today is as of May 14th 2024, and we do not intend and undertake no obligation to update any forward looking statements, whether as a result of new information future developments or otherwise, except as may be required by law.
unknown: In addition, today's discussion will include references to certain non-GAAP financial measures. These non-GAAP measures are presented for supplemental informational purposes, only and should not be considered as a substitute for financial information presented in accordance with GAAP.
unknown: A reconciliation of the measures to the most directly comparable GAAP measures is available in our press release and you should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures in our earnings release.
Speaker Change: Now, let me pass the call over to Matt.
Matthew Fisch: Thanks, Lee and thank you all for joining us for the first quarter 2024 conference call.
Matthew Fisch: We have made excellent progress across multiple fronts since our last update.
Matthew Fisch: On this quarter's call I am pleased to announce that we achieved a key milestone whether foresight flex platform.
Matthew Fisch: Announced our new tier one partner light on.
Matthew Fisch: Formed a three way partnership that gives us access to the China market.
Matthew Fisch: Made remarkable progress in our cash reduction initiative and overall created significant additional company value.
light on: Our engagement with light on is off to a strong start and they have completed their technology and supply chain audits.
Matthew Fisch: They have reported that they were pleased with our fore sight technology its performance and overall maturity.
Matthew Fisch: As we continue to work with them.
Matthew Fisch: Leaf that they're the right partner for us is only reinforced.
Matthew Fisch: They haven't innovative spirit are obsessed with delivering the most cost effective solutions and bring cutting edge manufacturing capabilities that they were already delivering to automotive Adas.
Matthew Fisch: Thanks to their decades of experience in the delivery of optical devices, our partnership with light on puts us on an immediate path to deliver unparalleled performance for an adas product at our price point.
Matthew Fisch: As mentioned in our last update we are already working jointly with light on on multiple OEM opportunities.
Matthew Fisch: Similarly, our collaboration with Nvidia has yielded significant advances in high speed long range detection performance.
Matthew Fisch: And we believe we are ultimately on track for future integration with the Nvidia High Purion platform.
Matthew Fisch: We are also thrilled to announce a key strategic partnership that will bring AI is lidar into the China automotive trucking and rail safety markets were.
Matthew Fisch: Working with Axa life technologies, known as ATI and light Tech ton technology, Ai's foresight Lidar solution will be available to address the ultra long range detection needs in these key transportation areas.
Matthew Fisch: ATI is a global company and manufacturer of fiber optic passive and active plug a hole modules used in fiber optic networks for various high tech markets.
Speaker Change: Light Tech time is our research development and manufacturing company that is developing lidar based technologies for autonomy.
Speaker Change: A T I in light Tech tonne are ideal partners for this effort and we are thrilled to collaborate with them to help solve transportation challenges, whether fore sight technology.
Speaker Change: Both companies see the clear value in AI is lidar technology and Hei already has an established footprint in China.
Speaker Change: It is worth noting that because of AI software defined architecture.
Speaker Change: We're able to work with ATI in light Tech time to enter these markets by simply Reconfiguring, our existing solution without requiring changes to the hardware.
Speaker Change: This partnership also reflects our consistent belief that the most logical path to the mainstream market for Lidar will be built on partnerships with seasoned manufacturing organizations, especially in the automotive space.
Speaker Change: Shifting to the product itself, our next generation product Apollo that we announced late last year has now passed its first power on milestone and continues to exceed all of our performance expectations.
Speaker Change: As you recall Apollo as the inaugural member of our fore sight flex family and gives Oems a compact <unk>.
Speaker Change: Ara long range Lidar sensor that facilitates diverse mounting options, including Unparallel performance when mounted behind the windshield.
Speaker Change: Apollo demonstrates the power of 15, 50 nanometer Lidar technology, and we expect to unveil the first samples of Apollo to automotive Oems in the second quarter.
Speaker Change: Apollo came out a mere four months after we announced foresight flex, which demonstrates the power of our software defined lighter architecture.
Speaker Change: By focusing our efforts on software development improvements happened very quickly, especially when you're backed by an incredibly capable and talented engineering and operations team.
Speaker Change: This team has been outstanding and driving hard to get Apollo into the hands of Oems.
Speaker Change: We believe we have the most compact design and the ultra long range performance category, which provides a compelling alternative to the pump on the roof design.
Speaker Change: Our behind the windshield Lidar is getting very positive OEM reactions from a vehicle design perspective.
Speaker Change: We believe that our $15 15 nanometer based technology is critical to delivering the required safety and performance that overcomes the additional challenge of penetrating the windshield.
Speaker Change: Oems will need to include Lidar in future vehicles and are looking for creative ways to seamlessly integrate the sensors into the vehicle design as opposed to designing around them. We are particularly encouraged by <unk> recent ruling mandating automatic emergency braking AEP.
Speaker Change: Standard and all passenger cars Suvs and light trucks by September of 2029.
Speaker Change: We believe that knits his ruling ultimately favors the adoption of lidar across the passenger vehicle market.
Amit: We are confident that our lighter Amit knits is tougher standards, including the 90 miles per hour forward collision warning requirement.
Amit: Lastly, our capital light model enables us to focus on the key fundamentals that advance our technology attract partners and drive company value.
Speaker Change: We see some of our competitors are coming around to this realization that are capital intensive manufacturing model isn't going to be viable for the foreseeable future.
Speaker Change: Winning in the automotive industry requires a stable and reliable supply chain.
Speaker Change: The approach we use with Apollo is a great example of this because of its high reuse of the existing supply chain.
Speaker Change: This coupled with our software defined approach enabled rapid advancements in the capabilities of the product.
Speaker Change: We've been able to accomplish a lot in the first quarter, all while staying on track and even outperforming our burn rate targets, which Conor will discuss in greater detail with that I'm pleased to turn the call over to Conor.
Conor B. Tierney: Thanks, Matt.
Speaker Change: Everyone I am excited about our new strategic partnership with ATI, which will provide us with direct access to the Chinese automotive rail and trucking markets.
Conor B. Tierney: What's even more important is that we believe China accounts for a significant portion of the estimated $3 billion global Lidar market.
Speaker Change: China is making large investments in bringing lidar technology into its transit systems and is moving much more aggressively than the western market and lidar adoption.
Speaker Change: Matt mentioned were making steady progress with light on and working jointly with them on multiple OEM opportunities.
Speaker Change: Further substantial reduction in estimated Bom costs will provide us with a pricing edge that will be a major competitive advantage once production scales.
Speaker Change: I'm also pleased to announce that we are actively pursuing multiple strategic investment opportunities. This speaks volumes about the progress AI has made on the execution side and shows that both investors and partners are bullish on the opportunities ahead of us.
Speaker Change: We are now proving that we can deliver on both our product development goals and execute commercially at a burn rate that's up to 10 times lower than our peers. Thanks.
Speaker Change: Thanks to a capital light business model, we have more resilience to write out the industry headwinds.
Speaker Change: Now turning to our first quarter financial results.
Speaker Change: First and most importantly, I am pleased to report that we reduced our net cash burn by an additional $1 8 million.
Speaker Change: To $7 $6 million from the prior quarter's cash burn of $9 4 million, despite paying out $2 4 million in one time personnel related costs during the first quarter of 2024.
Speaker Change: This is our fourth consecutive quarter of cash burn reductions.
Speaker Change: The focus on pivotal automotive milestones and the wind down of our industrial product line, we believe that comparisons of our first quarter 2024, and fourth quarter 2023 revenues are not helpful in evaluating our performance.
Speaker Change: First quarter GAAP operating expenses were $10 $5 million down 52% from the prior quarter due primarily to cash restructuring charges related to the reduction in force and noncash impairment charges incurred in the fourth quarter of 2023.
Speaker Change: non-GAAP operating expenses were $7 5 million up sequentially from $6 $5 million in the fourth quarter of 2023, due primarily to the timing of audit related fees and onetime legal fees.
Speaker Change: We reported a first quarter GAAP net loss of $10 2 million or $1 61 per share versus a GAAP net loss of $27 8 million or $4 44 per share in the fourth quarter of 2023.
Speaker Change: The decrease in GAAP net loss was mainly due to the impairment of long lived assets inventory write downs and associated reduction enforce initiatives last quarter.
Speaker Change: On a non-GAAP basis, our net loss was $7 2 million or $1 13 per share in the first quarter compared to a non-GAAP net loss of $6 $9 million or $1 10 per share in the fourth quarter of 2023 due to the G&A costs discussed earlier.
Speaker Change: Net cash used for operating activities decreased to $7 9 million in the first quarter from $9 $2 million in the fourth quarter of 2023.
Speaker Change: We closed the first quarter with $28 $9 million of cash cash equivalents and marketable securities and no debt.
Speaker Change: As an additional source of liquidity, we have access to our equity line of credit facility and our shelf registration statement, which allows us to raise up to $200 million through September of 2026.
Speaker Change: Turning our attention to 2024 guidance. We're pleased to report that our diligent efforts in implementing various cost reduction initiatives continues to yield significant results.
Speaker Change: In the first quarter, we surpassed our cash guidance and remain on course to achieve our target cash burn of $25 million for the full year 2024.
Speaker Change: By the end of the year. This will represent a remarkable 75% reduction in our cash burn rate compared to the first quarter of 2023.
Speaker Change: Testament to our commitment to prudent financial management is the recent achievement of negotiating an annual reduction of $500000 for certain professional services fees.
Speaker Change: This exemplifies our dedication to optimizing expenses, while maintaining the integrity of our financial processes.
Speaker Change: Our overarching objective is to continue identifying and pursuing cost reduction opportunities, while ensuring that we sustain the core aspects of our business that drive company value.
Speaker Change: We're also bullish about the partnership revenue opportunities discussed earlier I would expect to recognize revenues from these initiatives later this year.
Speaker Change: We see exciting times ahead for AI.
Speaker Change: Our new three way partnership with ATI provides an opportunity to enter the China market with compelling Lidar solutions.
Speaker Change: Our new light on partnership should enable us to slash Bob costs, putting us in prime position to attract additional OEM interest.
Bob: Our ongoing commitment to financial stewardship, including further cuts to fixed operating costs extends our cash runway deep into 2025.
Speaker Change: We are also actively pursuing bringing new investors to the cap table. We believe we are strategically positioned to seize the immense opportunity with our OEM partners, making us bullish about the future of AI.
Speaker Change: With that I'll pass it back to Mike to wrap things up.
Mike: Before we open the floor for questions I want to express how proud I am of the AI team and the progress we've made since the beginning of the year.
Mike: Our resilience focus and determination have propelled us forward gaining momentum in attracting new partners and investors along the way.
Mike: The progress we've made and the accolades we received regarding our technology make us confident that we are on the right path.
Mike: We believe that we have a lidar solution that is highly adaptable and that delivers unparallel performance at its price point.
Mike: We accomplished a lot in the last year and interest in our product and company has picked up in the last three months, making us excited for what's ahead.
Speaker Change: We look forward to updating you as this momentum continues.
Speaker Change: Now I'd like to open the floor for questions operator.
Speaker Change: Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone and wait planning to be announced to withdraw your question simply press Star one again.
Speaker Change: One woman on the compile the Q&A roster.
Speaker Change: And we have a question coming from the line of Kevin Garrigan with Westpac capital. Your line is now open.
Speaker Change: Yeah, Hey, good afternoon Mcintyre, Thanks for taking my questions and congrats on the partnerships.
Kevin Garrigan: So just first you have the partnership with light on now are you still looking to expand partnerships with other tier one suppliers or do you feel pretty comfortable with your partnership with light on.
Kevin Garrigan: Hey, Thanks, Kevin and welcome back.
Speaker Change: And just just to start the discussion on this topic.
Speaker Change: Remember we came out of last year. Thanks to a lot of hard work that got put in with a very mature product and that that work resulted in a certain level of maturity, which has allowed us to jump in.
Kevin Garrigan: With light on very quickly and they are sharpening their pencils and really looking at.
Kevin Garrigan: Ways to bring the product cost downs.
Kevin Garrigan: It's looking.
Kevin Garrigan: They have some very strong ideas in that regard.
Kevin Garrigan: However, as we said in the past that our business model is designed to scale with multiple tier ones and we're continuing to explore that pipeline. We are in active discussions on those and look forward to sharing more progress on that in the coming earnings calls, but also would like to.
Kevin Garrigan: Remind that today.
Kevin Garrigan: Now, it's very strategic partnership with Hei to get us into the China market.
Kevin Garrigan: And.
Kevin Garrigan: You can see that the model is already starting to scale and we expect to be having more discussions on that in the future.
Kevin Garrigan: Okay.
Got it got it okay that makes sense and then kind of going after those partnerships can you just give kind of some more color on that.
Trucking and railway system partnerships counter I think you mentioned you should see some revenue generation potentially later this year from them. So is that is.
Is that you guys selling your lidar to these partners or is this for customers that these partners already have.
Kevin Garrigan: Okay. So the nature of this partnership is very similar we're going to be very consistent on our business model, Kevin When we talk about for example, trucking and rail in the China market.
Kevin Garrigan: Accompanied by light Tech ton boots on the ground in China will be driving the detailed discussions providing local support for those customers. So it's very similar to the type of business model. We've used in the past, where we're aligning with partners that can do both manufacturing.
Kevin Garrigan: And also the sales channel element it'll be very similar approach here with the work that we're doing with ATI.
Kevin Garrigan: And Kevin just to add some color on.
Kevin Garrigan: That's obviously a market that currently exists today, that's why we're very bullish about the opportunity.
What I would say is we now have multiple shots at goal from a revenue opportunities perspective, obviously, there's room for opportunities with light on the <unk> side, and then as Matt alluded to we have plenty of opportunities in China, and then of course.
Speaker Change: We're going to be opportunistic about selling through our inventory as well on.
Speaker Change: On the industrial side too.
Speaker Change: Got it okay that makes sense thanks, guys.
Thank you.
And I'm showing no further questions at this time, ladies and gentlemen that Telefonica conference for today. Thank you for your participation and you may now disconnect.
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