Q2 2024 Aeva Technologies Inc Earnings Call

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Chloe: Good day my name is Chloe and I will be your conference facilitator I would like to welcome everyone to the Ava technologies second quarter 2024 earnings Conference call.

Unnamed Speaker: .....

Chloe: Good day, my name is Chloe, and I will be your conference facilitator. I would like to welcome everyone to the Aeva Technologies second quarter 2024 earnings conference call. As a reminder, today's conference call is being recorded and simultaneously webcast.

Chloe (Conference Facilitator): Good day, my name is Chloe, and I will be your conference facilitator. I would like to welcome everyone to the Aeva Technologies second quarter 2024 earnings conference call. During the opening remarks, all participants will be in a listen-only mode.

During the opening remarks, all participants will be in a listen only mode.

Chloe (Conference Facilitator): Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference call is being recorded and simultaneously webcast. I would now like to turn the call over to Andrew Fung, Senior Director of Investor Relations and Corporate Development. Andrew, please go ahead.

Following the opening remarks, we will conduct a question and answer session.

As a reminder, today's conference call is being recorded and simultaneously webcast I would now like to turn the call over to Andrew Fung Senior director of Investor Relations and corporate development. Andrew. Please go ahead.

Speaker Change: Thank you and welcome everyone to <unk> second quarter 2024 earnings Conference call.

Andrew Fung: Thank you and welcome everyone to Ava's second quarter 2024 earnings conference. Joining us on the call today are Soroush Dallaiyyaan, Ava's co-founder and CEO, and Saurabh Sinha, Ava's CFO. Ahead of this call, we issued our second quarter 2024 press release and presentation, which we will refer to today and can be found on our investor relations website at investors.aeva.com. Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainty. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent.

Chloe: Thank you, and welcome everyone to Aeva's second quarter 2024 earnings conference, which are subject to risks and uncertainty, including our most recent Form 10-Q and Form 10-K, which we believe are useful as supplemental measures of Ava's performance.

Siri: Joining me on the call today are serious.

Speaker Change: <unk> co founder and CEO and <unk> <unk> CFO.

Speaker Change: Ahead of this call we issued our second quarter 2024 press release and presentation.

Speaker Change: Which we will refer to today and can be found on our Investor relations website at investors <unk> com.

Speaker Change: Please note that on this call we will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties.

Soroush Dardashti: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10-Q and Form 10-K. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Ava's performance.

Speaker Change: These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent dates.

Speaker Change: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

Speaker Change: For a further discussion of the material risks and other important factors that could affect our financial results. Please refer to our filings with the SEC, including our most recent Form 10-Q and Form 10-K.

Speaker Change: In addition, during today's call, we will discuss non-GAAP financial measures.

Speaker Change: Which we believe are useful as supplemental measures of <unk> performance.

Soroush Dardashti: These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAP. The webcast replay of this call will be available on our company website under the investor relations section. And with that, I will turn the call over to Soroush.

Speaker Change: These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

Speaker Change: The webcast replay of this call will be available on our company website under the Investor Relations link.

Speaker Change: And with that let me turn the call over to Suresh.

Soroush Dardashti: Thank you, Andrew, and good afternoon, everyone. In Q2, we achieved key milestones on our existing production programs while also meaningfully advancing on a number of additional opportunities. Importantly, we secured wins with new customers, highlighting the broadening interest in Aeva's unique 4D Vidar. I also would like to share our key accomplishments in Q2. We continue to strengthen our partnership with Daimler Trucks. We remain on track with Daimler Trucks program models, including continued sensor shipments to build out the OEM's fleet of on-road vehicles.

Suresh: Thank you Andrew and good afternoon, everyone.

Suresh: Q2, we achieved key milestones on our existing production program, while also meaningfully advancing on a number of additional opportunities.

Suresh: Accordingly, we secured wins with new customers highlighting the broadening interest for Eva unique 40 vital.

Speaker Change: I also like to share our key accomplishments in Q2.

Speaker Change: We continue to strengthen our partnership with Daimler truck, we remain on track with Daimler trucks program milestones.

Soroush Dardashti: We continue to strengthen our partnership with Diamond Trucks. We remain on track with Diamond Trucks' program model. With one top passenger OEM, we continue to expect their award decision later this year.

Suresh: <unk> continued sensor shipments to build out the Oems freed up on road vehicles.

Soroush Dardashti: Down the Truck also publicly unveiled the Autonomous Freightliner Vehicle and Technology Demonstrator, which incorporates AEVA's 4D LiDAR as the exclusive long-range and ultra-long-range LiDAR and highlights the OEM's progress and commitment to deploying autonomous vehicles at scale. In the automotive industry, we have made significant progress on opportunities with multiple global top 10 passenger vehicle OEMs. With one top passenger OEM, we continue to expect their award decision later this year.

Suresh: Download truck also publicly unveiled the autonomous Freightliner vehicle technology demonstrator, which incorporates a boss 40, lidar as the exclusive long range and ultra long range Lidar and highlights the Oems progress and commitment to deploying autonomous vehicles at scale.

Suresh: In automotive we have made significant progress on opportunities with multiple global top 10 passenger vehicle Oems.

Suresh: With one top passenger OEM, we continue to expect the reward decision later this year.

Soroush Dardashti: And with another top passenger OEM, we began a new collaboration around four-divider vehicle integration. In industrial, we completed a final validation of our LiDAR on chip and Nikon's product ahead of our first industrial launch in Q4 this year. And lastly, Aeva continues to broaden the reach of FortiLiDAR with our expansion into security. We are proud that a top U.S. national defense security organization selected Aeva 40 LiDAR as a primary detection sensor to help protect some of the nation's critical energy infrastructure.

Suresh: With another top passenger OEM, we began a new collaboration around 40 bide our vehicle integration.

Suresh: In industrial we completed the final validation of our lighter on chip and icons product ahead of our first industrial launch in Q4 this year.

Suresh: And lastly, <unk> continued to broaden the reach of 40 lidar with our expansion into security.

Suresh: Proud that a top U S National Defense Security organization selected Eva 40, Lidar as a primary detection sensor to help protect some of the nation's critical energy infrastructure.

Suresh: Let's now discuss in more detail about our recent business developments.

Soroush Dardashti: Let's now discuss in more detail our recent business development. With Diamond Truck, we continue to work closely together and remain on track with the OEM's milestones and the start of production timelines. In Q2, we continue scaling sensor shipments to dynamic truck and torque for deployment on additional vehicles for on-road data collection and development. The Aeva team is working very closely together with TORC and Dunlap Truck on important use cases for the safe operation of trucks at highway speeds.

Suresh: With Diamond truck, we continue to work closer together and remain on track with the Oems milestones and the startup production timeline.

Suresh: In Q2, we continued scaling sensor shipments to Dana truck and torque for deployment on additional vehicles for on road data collection and development.

Suresh: <unk> team is working very closely together with torque and on the truck on important use cases for safe operation of trucks at highway speeds.

Suresh: In the last quarter.

Soroush Dardashti: In the last quarter, Diamond Truck also publicly unveiled its Battery Electric Autonomous Freightliner eCascadia Technology Demonstrator, which incorporates multiple Aeva40 LIDARs as the exclusive long-range and ultra-long-range LIDAR. This vehicle highlights the significant progress Diamond Truck is making to commercialize autonomous trucks on U.S. highways and is part of the OEM's broader strategy to deploy a propulsion-agnostic autonomous truck platform for scaling automated trucks to significant volumes.

Suresh: And their truck also publicly unveiled its battery electric autonomous Freightliner, Cascadia technology demonstrator, which incorporates multiple Ava 40 light ours as the exclusive long range and ultra long range of ours.

Soroush Dardashti: This vehicle highlights the significant progress Salmon Truck is making to commercialize autonomous trucks on U.S. highways and is part of the OEM's broader strategy to deploy a propulsion-agnostic autonomous truck platform for scaling automated trucks to significant volumes. Following our production program win with Dyma Truck, Aeva is experiencing this in exciting and tangible ways across a broad range of applications from passenger vehicles to mobility. Over the quarter, we successfully completed the final validation of our LiDAR on-chip module in Nikon's product and are now preparing for our delivery to Nikon in Q4.

Suresh: This vehicle highlights the significant progress down that truck is making to commercialize autonomous trucks on U S highways and as part of the Oems broader strategy to deploy a propulsion agnostic autonomous truck platform for scaling automatic trucks to significant volume.

Speaker Change: Looking ahead, our focus is on supporting the rollout of additional Donna truck vehicles and related ongoing development as well as preparing for startup production in 2026 and time for Daimler trucks market entry.

Soroush Dardashti: Looking ahead, our focus is on supporting the rollout of additional Diamond Truck vehicles and related on-road development, as well as preparing for Aeva's start-up production in 2026, in time for Diamond Truck's marketing. Beyond Dominant Truck, our engagements for additional automotive programs continue to solidify in Q2 as we advance on a number of opportunities expected to be decided in the coming months and expanded otherwise. In particular, we made significant strides with multiple global top 10 passenger OEMs. This includes one we discussed in the last quarter.

Suresh: Beyond on their truck our engagements for additional automotive programs continued to solidify in Q2 as we advanced on a number of opportunities expected to be decided in the coming months and expanded other ones.

Suresh: In particular, we made significant strides with multiple global top 10 passenger Oems.

Suresh: This includes one we have discussed in the last quarter.

Soroush Dardashti: De Silva's team continues to advance in close collaboration with this OEM, and we continue to expect the OEM to make an award decision for this production program later this year. With another Global Top 10 Passenger OEM, we have started on a collaboration for 40 LiDAR vehicle integration. This OEM is experienced with time-of-flight LiDAR and increasingly appreciates the benefits of FMCW for next-generation capability.

Suresh: <unk> team continues to advance in close collaboration with this OEM and we continue to expect the OEM to make an award decision for this production program later this year.

Suresh: With another global top 10 passenger OEM, we have started on a collaboration for 40 light our vehicle integration. This OEM is experienced with time of flight Lidar and increasingly appreciate the benefit of Mcw for next generation capabilities. We.

Soroush Dardashti: We look forward to further demonstrating the perception and integration capabilities of our differentiated 40-Ladder. More broadly, we are highly encouraged by the industry's growing recognition that FMCW can help enable more advanced capabilities, including automated driving at highway speeds. Following our production program with Thyma Truck, Aeva is experiencing this in exciting and tangible ways across a broad range of applications from passenger vehicles, commercial vehicles, and mobility. Our focus is on meeting the growing interest for Aeva 40 Lidar and the multiple opportunities to convert production wins in the near term.

Suresh: We look forward to further demonstrating the perception and integration capabilities of our differentiated multi lateral technology.

Suresh: More broadly we are highly encouraged by the industry's growing recognition that FMC W. Can help enable more advanced capabilities, including automated driving at highway speeds.

Suresh: Following our production program win with Daimler truck everybody is experiencing this exciting and tangible ways across a broad range of applications from passenger vehicles commercial vehicles to mobility.

Suresh: Our focus is on meeting the growing interest for Ava 40 ladder and the multiple at which you need to convert production wins in the near term.

Suresh: Turning now to industrial <unk> on schedule for our first industrial launch in the fourth quarter.

Soroush Dardashti: Turning now to industrial, Aeva is on schedule for our first industrial launch in the fourth quarter. During the quarter, we successfully completed the final validation of our LiDAR on-chip module in Nikon's product and are now preparing for our delivery to Nikon in Q4. In support of this, we have also successfully scaled up our dedicated LiDAR chip manufacturing line at Fabrinet. This first collaboration with Nikon is for industrial metrology applications, where Nikon's existing customers across automotive, aerospace, and renewable energy already use Nikon's high-precision inspection products in the manufacturing processes, including some of the leading OEMs and automotive players, with Aeva's LiDAR on-chip module.

Suresh: Over the quarter, we successfully completed the final validation of our lighter on chip module <unk> product and are now preparing for our deliveries to an icon in Q4.

Suresh: In support of this we have also successfully scaled up our dedicated Lidar chip manufacturing line at fabricate.

Nikon: This first collaboration with Nikon is for industrial metrology applications, where nikon existing customers across automotive aerospace and renewable energy already use <unk> high precision inspection products in the manufacturing processes, including some of the leading Oems.

Suresh: And automotive players in this space.

Speaker Change: With Eva lighter on chip module.

Soroush Dardashti: We will together offer micron-level accuracy in a faster, smaller, and lower-cost solution that we believe will open new opportunities. This upcoming launch will mark a pivotal milestone for Aeva as we progress from the development stage to commercialization for the first time in industrial automation. While we plan to scale our dedicated manufacturing production line at Fabrinet over time, we believe this transition has the potential to accelerate our other ongoing engagements. We continue to engage with industrial leaders on expanding into additional opportunities where we can leverage the same Aeva LiDAR on-chip module and our perception platform software for industrial metrology and automation across a broad range of applications.

Speaker Change: We will together offer micron level accuracy, and a faster smaller and lower cost solution that we believe will open new opportunities.

Speaker Change: This upcoming launch of a market pivotal milestone for Eva as we progressed from the development stage to commercialization for the first time in industrial automation.

Soroush Dardashti: This upcoming launch will mark a pivotal milestone for Aeva as we progress from the development stage to commercialization for the first time in industrial automation. We continue to engage with industrial leaders on expanding into additional opportunities where we can leverage the same Aeva LiDAR on-chip module and our perception platform software for industrial metrology and automation across a broad range of applications. Now, speaking of new applications, we recently announced Aeva's first expansion into security.

Suresh: While we plan to scale, our dedicated manufacturing production line at <unk> over time, we believe this transition has the potential to accelerate our other ongoing engagements.

Suresh: We continue to engage with industrial leaders on expanding into additional opportunities, where we can leverage the same ava lighter on chip module and our perception platform software for industrial metrology and automation across a broad range of applications.

Suresh: Now speaking of new applications, we recently announced <unk> first expansion into security.

Soroush Dardashti: Now, speaking of new applications, we recently announced Aeva's first expansion into security. Our 4D LiDAR was selected by a top U.S. national defense security organization to help protect critical U.S. energy infrastructure. Aeva sensors are expected to be a primary detection sensor to protect sensitive locations in various facilities from intrusion, such as water entries and exits and a perimeter fence.

Suresh: Our 40 Lidar was selected by a top U S National Defense Security organization to help protect critical U S energy infrastructure.

Suresh: <unk> sensors are expected to be a primary detection sensor to protect sensitive locations and various facilities from an intrusion.

Suresh: As water entries and exits.

Suresh: In our perimeter fences.

Soroush Dardashti: We expect to deliver the first set of sensors later this year. This selection comes after evaluation of other technologies, including 3D Time-of-Flight LiDAR. Because of its instant velocity data, immediate interference, and ultra-long range, Aeva 40 LiDAR was selected to enable faster and more reliable detection.

Suresh: We expect to deliver the first set of sensors later this year.

Suresh: This selection comes after evaluation of other technologies, including <unk> time of flight Lidar.

Suresh: Because of our incident velocity data immediately interference and ultra long range, Eva <unk> was selected to enable faster and more reliable detection.

Speaker Change: <unk> mission is to bring the next wave of perception to a broad range of applications and this one is another example of the increasing interest to adopt our technology across a diverse mix of end markets, including for some of the most demanding and high Stakes physical security applications.

Soroush Dardashti: Aeva's mission is to bring the next wave of perception to a broad range of applications, and this one is another example of the increasing interest in adopting our technology across a diverse mix of end markets, including for some of the most demanding and high-stakes physical security applications. We look forward to supporting this important application and helping to protect some of our nation's critical infrastructure. Lastly, I would like to share a bit more about our new collaboration in Rail. Aeva 40 Lidar has been selected for Germany's automated train program.

Soroush Dardashti: We look forward to supporting this important application and helping to protect some of our nation's critical infrastructure. Aeva 40 Lidar was selected for Germany's automated train program. This program is funded by the German Federal Ministry of Economic Affairs and Climate Action. The group is developing driverless, fully automated passenger train dispatch and parking functionality by 2020, including 3D Time-of-Flight Vitals.

Suresh: We look forward to supporting this important application and helping to protect some of our nation's critical infrastructure.

Suresh: Lastly, I would like to share a bit more about our new collaboration and rail.

Speaker Change: However, 40 <unk> was selected for Germany automated training program.

Soroush Dardashti: This program is funded by the German Federal Ministry of Economic Affairs and Climate Action and managed by Germany's national rail operator Deutsche Bahn in collaboration with other industry leaders such as Bosch and Siemens. The group is developing driverless, fully automated passenger train dispatch and parking functionality by 2026. Aeva's 40 LiDAR was selected after evaluation of other sensors, including 3D Time-of-Flight Lidar. Our ability to instantly detect velocity enables faster and more reliable detection of hazards, which can add critical reaction time to avoid obstacles surrounding train tracks.

Speaker Change: This program is funded by the Germany Federal Ministry of Economic Affairs, and climate action and managed by Germany National Rail operator, Deutsche Bond in collaboration with other industry leaders, such as Bosch and Siemens.

Speaker Change: The group to devoting driverless fully automated passenger train dispatch and parking functionality by 2026.

Speaker Change: <unk> was selected after evaluation of other sensors, including <unk> time of flight later.

Speaker Change: Our ability to incent, the detector velocity enables faster and more reliable detection of hazards, which can add critical reaction time to avoid obstacle is surrounding train tracks.

Speaker Change: In addition, <unk> unique ability to offer precise real time location state estimation without the use of GPS means that he can provide accurate positioning even where GPS can be compromised such as tunnels urban canyons and other areas where trains regularly operate.

Soroush Dardashti: In addition, Aeva's unique ability to offer precise, real-time location state estimation without the use of GPS means we can provide accurate positioning even where GPS can be compromised, such as tunnels, urban canyons, and other areas where trains regularly operate. We are excited to work with some of the rail industry leaders on this project and leverage 40L's perception to bring new levels of automation to this end market. With that, let me turn the call over to Saurabh to discuss the finances. Thank you Soroush and good afternoon, everyone.

Soroush Dardashti: We are excited to work with some of the rail industry leaders on this project and leveraged 40 ladders perception to bring new levels of automation to this end market.

Speaker Change: With that let me turn the call over to Sarath to discuss the financials.

Chloe: Thank you Soroush and good afternoon everyone. Let us now turn to Aeva's Q2 financial results.

Saurabh Sinha: Let us now turn to Aeva's Q2 financial results. Revenue in Q2 was $2 million, driven by sensor shipments to multiple customers and an R.E. from Daimler Trucks. Non-GAAP operating loss was $32 million as we maintained a deliberate and disciplined approach to spending.

Sarath: Thank you <unk> and good afternoon, everyone, let us now turn to our Q2 financial results.

Speaker Change: Revenue in Q2 was $2 million driven by sensor shipments to multiple customers and Ari from Daimler truck.

Speaker Change: non-GAAP operating loss was $32 million as we maintained a deliberate and disciplined approach to spend.

Saurabh Sinha: In Q2, gross cash use, which we define as operating cash flow, less capital expenditure, was $29.9 million. At the end of the quarter, our total liquidity stood at $285.2 million, of which $160.2 million was in cash, cash equivalents, and marketable securities, and $125 million in an undrawn facility. We believe this capital position will continue to enable us to support our existing production partners and, together with our unique 4D LiDAR technology, convert more of our commercial momentum to additional production program wins in the coming months. With that, let me turn the call back to Soroush for closing remarks. Thank you, Saurabh.

Speaker Change: In Q2, gross cash yield, which we define as operating cash flow less capital expenditure was $29 9 million.

Sarath: At the end of the quarter, our total liquidity stood at $285 2 million of which $162 million was in cash cash equivalents and marketable securities and $125 million and an undrawn facility.

Speaker Change: We believe this capital position will continue to enable us to support our existing production partners and together with our unique 40, Lidar technology convert more of our commercial momentum to additional production program wins in the coming months.

Speaker Change: With that let me turn the call back to solution for closing remarks.

Rob: Thank you Rob.

Soroush Dardashti: To wrap up, in Q2, we continued to deliver on key milestones for our production partners, including Diamond Truck and Nikon, and secured additional customers in new applications such as security and railways. I'd like to thank the Aeva team for their determination to advance our commercial momentum in tangible ways in just three months. And I would also like to express our appreciation to all of our stakeholders for their ongoing support. Our increasing list of wins and the significant progress on new opportunities are further indications of the growing demand for our products across a diverse mix of markets and Aeva's leadership position to drive this adoption with our 40-Liter technology.

Chloe: To wrap up in Q2, we continued to deliver on key milestones for our production partners, including Daimler truck and Nikon and secured additional customers and new applications, such as security and railway.

Speaker Change: I'd like to thank the <unk> team for their determination to advance our commercial momentum in tangible ways in just three months.

Chloe: And I'd also like to express our appreciation to all of our stakeholders for their ongoing support. Aeva is in the final stages on a number of key opportunities and will continue to advance on other engagements across automotive and beyond.

Chloe: And I also like to express our appreciation to all of our stakeholders for their ongoing support.

Chloe: Our increasing list of wins and a significant progress on new opportunities are further indication of the growing demand for our products across a diverse mix of markets and.

Speaker Change: Enabled leadership position to drive this adoption without 40, let our technology.

Soroush Dardashti: Aeva is in the final stages on a number of key opportunities and continues to advance on other engagements across automotive and beyond. We believe we remain in a strong position to continue converting a portion of these opportunities to win this year and continue to further Aeva's mission to bring the next wave of perception to a broad range of applications from automotive to industrial automation and beyond. With that, we will now open the line up for questions. At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2.

Chloe: Eva is in the final stages on a number of key opportunities and continue to advance on other engagements across automotive and beyond.

Chloe: We believe we remain in a strong position to continue converting a portion of these opportunities to win this year and continue to further <unk> mission to bring the next wave of perception to a broad range of applications from automotive to industrial automation and beyond.

Chloe: With that we will now open the line up for questions.

Chloe: At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2. We do ask that you limit yourself to one question to allow everyone to get their ask.

Speaker Change: At this time, if you would like to ask a question. Please press star one on your telephone keypad.

Chloe: You may withdraw yourself from the queue at any time by pressing star to.

Chloe: We do ask that you limit yourself to one question to allow everyone to get theirs.

Chloe: Yes.

Operator: We do ask that you limit yourself to one question to allow everyone to get their ask. And once more, that is star and one. We'll move to Colin Rusch with Oppenheimer. Your line is open. Thanks so much, guys. You know, it's great to see you move into the security space. And I'm curious how leverageable that opportunity is for you. It seems like it's potentially relatively robust pricing. And getting through the vetting process there could mean, you know, that there's other doors open. Just want to get a sense of the total scope of that in the case in which you might be able to attack. Thank you, Colin. Sure. I'm just so happy to answer that.

Speaker Change: Well have one more that is star one will move to Colin Rusch with Oppenheimer. Your line is open.

Speaker Change: So much guys.

Speaker Change: It's great to see you move into the security space and I'm curious how leverage goals that opportunity is for you. It seems like that's essentially relatively robust pricing.

Speaker Change: And getting through the vetting process there could mean.

Speaker Change: As other doors open just want to get a sense of total scope of that and the cadence at which you might be able to attack it.

Chloe: Hey, Collyn sure happy to answer that I look youre, absolutely. We are actually very excited about this is our first expansion in security.

Soroush Dardashti: Look, you're absolutely right. We are actually very excited about this. This is our first expansion in security. We're excited to grow in the market here. First of all, a little bit of background.

Speaker Change: Excited to grow in the market here.

Speaker Change: First of all those are background.

Speaker Change: This top national Security Defense organizations selected US has really gone through a whole gamut of testing for a number of different technologies.

Speaker Change: Including a valid and other type of flights flight hours.

Speaker Change: And really I think what they realize is we have been talking about for some time now is.

Speaker Change: This additional capability that 40, lidar and FMC that'd be technology brings to the table.

Speaker Change: <unk> beyond automotive and other applications, including basically longer range section better resolution and enabling faster and it really comes down to faster and more reliable detection. So.

Speaker Change: I think overall as you mentioned.

Speaker Change: This is significantly.

Speaker Change: Significantly higher asps than automotive for tomo.

Speaker Change: On an order of magnitude higher.

Chloe: It is.

Speaker Change: Near term, it's part of our plan, you've always talked about diversifying bringing applications, including not just progressing automotive, which we really showed this quarter not just the solid progress solidifying with our one top 10 OEM, adding another top 10 OEM in the engagements.

Speaker Change: <unk>, but also now extended this new application I think importantly.

Speaker Change: We think there's just a startup Eva and security.

Speaker Change: <unk> engaged in a number of other opportunities in defense and security, where we see that.

Speaker Change: Expanding this win I think importantly provides a vote of confidence in our technology for others to also start adopting that and we really hope to capitalize on this and work with additional opportunities that we can convert over time.

Speaker Change: Again this is consistent with our mission to bring really next wave of perception across broad applications and the key focus here is being able to do so means we are really.

Speaker Change: Using the same investment we've made on our 40 layer on chip module in technology in automotive and then taking that expanding to maybe with different algorithms, but the same core technology without really having to now then.

Speaker Change: Make significant additional investments or spend to go tackle those other applications and I think as we are going towards production as we scale, we see our ability to extend these opportunities too I think meaningfully further increase as well.

Speaker Change: Great and then with the scale up of the ticket to the committed line.

Soroush Dardashti: And then, you know, with the scale-up of the dedicated line and getting full validation for the Nikon products, can you talk about any sort of surprises, whether positive or negative, in terms of performance, efficiency of that production, and anything within that validation process that maybe we want to be thinking about as, you know, a tailwind or a headwind here for you? Yeah, I think, you know, we have been working with our manufacturing line at Fabrina for some time outside of Thailand.

Speaker Change: Full validation for the Nikon products can you talk about sort of surprises whether positive or negative in terms of performance efficiency of that production.

Speaker Change: Anything within that validation process that maybe we want to be thinking about as a tailwind or headwind here for you guys.

Unnamed Speaker: Yeah, I think, you know, we have been.

Soroush Dardashti: And, and I think we said at the beginning of the year that we're going to be working on creating this dedicated manufacturing line for our LiDAR on chip module. I think this is one of the advantages of having everything integrated at the chip level, right? We're not using any fiber, reducing the bomb cost, and making the process as automated as possible.

Speaker Change: Yes, I think we have been working obviously with our manufacturing line at family now for some time out of Thailand.

Speaker Change: And I think we said at the beginning of the year that we're going to be working on creating this dedicated manufacturing line for our wider on a chip module I think this is one of the advantages of having everything integrated at the chip level right. We are not using any fiber or reducing the bom cost, making the process of the automated as possible.

Speaker Change: And so.

Speaker Change: While we see here now is actually we were able to deliver on.

Soroush Dardashti: And so, what we see here now is that we were actually able to deliver on getting this dedicated line up and running a bit ahead of schedule. So that's actually important. We're planning for this around, you know, Q3, ahead of the Q4 timeframe. Now we're in Q2, and already we have completed this, which means really things have been going pretty smoothly. So, you know, we are starting to, you know, turn up the production on here with the dedicated line.

Speaker Change: This dedicated line up and running a bit ahead of schedule. So that's actually important we're panning for this around Q3 ahead of Q4 timeframe now or Q2 already has completed this.

Speaker Change: Which means really thing has been going actually pretty smoothly. So we are.

Speaker Change: Starting to turn up.

Speaker Change: Production on here with the dedicated line. This is going to of course support all of our production programs, we're already scaling shipments for <unk> in which they're onto a vehicle is ongoing we're going to be eating that also for Nikon shouldn't that start in Q4, and then hopefully others go.

Soroush Dardashti: This is going to, of course, support all of our production programs. We are already scaling shipments for Damatruck, where their on-board vehicle is ongoing. We're going to be using that also for Nikon shipments starting in Q4, and then hopefully others as we go along that we talk about. But I think having that is obviously a critical milestone for us.

Speaker Change: All along that we talked about but I think having that.

Speaker Change: Obviously, a critical milestone for us.

Soroush Dardashti: So that allows us to have this production readiness on time. I think beyond manufacturing also, we have been able to, in the past quarter, continue our automotive Tier 1 readiness as a direct supplier. We achieved this ISO 27001 certification, which is information security, that builds further confidence for not just our existing production customers but others to work with us on additional programs. One more thing I want to highlight about Nikon specifically: you know, this is just the beginning of our collaboration with Nikon. Obviously, this is a multi-year program.

Speaker Change: So that allows us to add the production readiness on time I think beyond manufacturing also we have been able to in the past quarter, continuing our automotive tier one readiness as a direct supplier we achieved ISO 27001 certification, which is an information security.

Speaker Change: That builds further confidence for not just our existing production customers to others to work with us on additional programs.

Speaker Change: One more thing I want to highlight on eikon specifically.

Speaker Change: This is just the beginning of our collaboration with Nikon obviously, it is a multiyear program.

Soroush Dardashti: Again, as you mentioned, similar to security, you know, this is a program where ASVs are higher, similar, maybe a little bit higher in the automotive industry. It's also near-term. And, you know, we're working together with Nikon that over time, as we ramp up, the potential to grow in additional new opportunities. And more broadly, in industrial automation, we also see the ability for sensing technology to really use the same core chip module, different algorithms, and different software to achieve micron-level accuracy and precision. That is something that's not really possible with any other LIDAR technology.

Speaker Change: Again as you mentioned is.

Speaker Change: Similar to security.

Unnamed Speaker: No.

Speaker Change: This is a program where asps are higher similar maybe over a nice hire in automotive.

Speaker Change: Also near term.

Unnamed Speaker: And.

Speaker Change: We were working together as an icon that over time as we ramp up for potential to grow.

Speaker Change: Additional new opportunities and more broadly in industrial automation, we also see that the ability for our sensing technology.

Speaker Change: Really to use the same core chip module with different algorithms different soffer achieve micron level accuracy and precision that is something thats not really possible to do with any other lighter technology. So this is a market that we see is in some ways pretty pretty interesting and ripe for Eva to go after.

Soroush Dardashti: So this is a market that we see is, in some ways, pretty interesting and ripe for Aeva to go after. We have been executing on this, and the fact that we have been able to now complete this validation, the final icon product, gives us that further confidence to then go after expanding in this market as well. So we're doing all of this, just to be clear, while we are making significant progress and not letting up on the traction that we see in the automotive industry and actually increasing that. Great. Thanks so much. Joe Moore with Morgan Stanley.

Speaker Change: We have been executing on this.

Unnamed Speaker: And.

Speaker Change: The fact that we have been able to now completed validation to final eikon product gives us further confidence to then go after expanding in this market as well. So we're doing all of this just to be clear, while we are making significant progress and not letting up on the traction that we see in automotive and actually increasing that as well.

Speaker Change: Alright, thanks, so much.

Unnamed Speaker: We'll move next to Joe Moore with Morgan Stanley. Your line is open.

Soroush Dardashti: Your line is open. Great, thank you. I wonder in terms of the top 10 passenger OEM that you're talking about, do you know if the opportunity there is kind of an OEM option? Is it more standard?

Speaker Change: Great. Thank you I wonder in terms of the.

Speaker Change: Top 10 passenger OEM that you are talking about.

Speaker Change: Do you know if the.

Speaker Change: <unk> there is kind of an OEM option is it more standard.

Speaker Change: And then you mentioned other progress with other top 10 Oems, maybe if you could talk about.

Soroush Dardashti: And then you mentioned other progress with other top 10 OEMs; maybe, you know, if you could talk about how much energy you're putting into customers beyond the sort of big two that you've sort of talked about with Daimler as well as the big passenger opportunity. Yeah, sure, Joe. Happy to answer that. So, obviously, as you know, we've been focused on, of course, delivering on Daimler for the first OEM SOP and automotive.

Speaker Change: How much energy you are putting into customers beyond.

Speaker Change: Just sort of big.

Speaker Change: Two that you've sort of talked about the Daimler as well as the big.

Speaker Change: Passenger opportunity.

Speaker Change: Yeah sure happy to answer that so obviously as you know we have been focused on of course delivering on down there for first Oems op automotive are of course, working on and I kind of mentioned I think with this top 10 OEM that you talked about last quarter. We have continued to solidify our position on our progress.

Soroush Dardashti: We're, of course, working with Nikon, as mentioned. I think with this top-end OEM that we talked about in the last quarter, we have continued to solidify our position and our progress together. We've completed the – you know, of course, that completed the evaluation of our product. We completed the audit, which contributed to the continuous maturity gain of our company as a Tier 1 status.

Unnamed Speaker: Together.

Speaker Change: We've completed.

Speaker Change: Of course that completed their validation of our product, we completed the audit which each.

Speaker Change: Contributed to continuous maturity gain.

Speaker Change: Our company has a tier one status we finish FY 2000, 27001 information security as well further commitment to our readiness I think at this point I would say.

Soroush Dardashti: We finished our ISO 27001 information security as well, further commitment to our readiness. I think at this point, I would say it's important because we have continued in close collaboration with them aligning with the technical perception requirements. We're actually starting commercial discussions and negotiations as well. And this is kind of the second time that we've been doing this, right? So, the first time with Daimler truck, and now a passenger car with this OEM. To your question about the option or not, what I can say is that this is an OEM that has experience with Daimler Flight Lidar.

Speaker Change: It's important because we have continued in close collaboration with them aligning on the technical perception requirements, we're actually starting to commercial discussions and negotiations as well.

Speaker Change: And this kind of a second time that we've been doing this right. So first time with Daimler truck and now a passenger car with this OEM to your question about the auction are not what I can say is that.

Speaker Change: There's an OEM that has experienced already per ton slide lidar they have.

Soroush Dardashti: They have done that and understand what they can and probably what they cannot do, and they're looking at mass production volumes across multiple vehicle lines, which we see as significant production volume opportunities for enabling highway speed automation. So, the way you think about this is not that it's like some very niche, full, only level 4 autonomy that is on some portion of vehicles. It is the next generation ADAS capability, assisted driving capability, where it extends it to highway autonomy for higher speed.

Speaker Change: Done that and understand what they can and importantly, what they cannot do and they are looking at a mass production volume across multiple vehicle lines, which we see as significant production volume opportunities.

Speaker Change: For enabling highway speed automation. So the way you think about this is not that it's like some very niche full only level four autonomy.

Speaker Change: That is on some portion of vehicles. It is the next generation Adas capability.

Speaker Change: This is driving capability, where it extends it to highway autonomy for higher speeds, and we're really encouraged and our collaboration that we see.

Soroush Dardashti: And we're really encouraged in our collaboration that we see their interest in using FMCW to enable that higher speed automation, but they're also seeing that it's not quite really quite there yet with the technology they're working with. So, that's what I can say. So, we're encouraged by that and their appreciation of our technology and will continue to obviously work with them with expectation that a decision will be made later this year. Great, thank you. We'll move next to Richard Shannon with Craig Hallam. Your line is open.

Speaker Change: Their interest around using mcw to enable that higher speed automation, which theyre also seeing does not quite really that by dare yet with days and technology. They are working with so that's what I can say.

Speaker Change: So we're encouraged with that and their appreciation of.

Speaker Change: Our technology and continue to obviously work with them.

Speaker Change: With the expectation that the decision we've made later this year.

Speaker Change: Great. Thank you.

Unnamed Speaker: Next to Richard Shannon with Craig Hallum. Your line is open.

Speaker Change: Hi, guys. Thanks for taking my questions let's.

Soroush Dardashti: Hi guys, thanks for taking my questions. Let's hear about maybe touching on a Nikon here. See the first row customer getting just a nice volume here. Wonder if you can kind of discuss what you have from them, whether it's a forecast or even orders so far. And how do we think about a kind of revenue run rate as you get into production, presumably sometime next year? I'm not sure if we have a good way of understanding the scale here.

Speaker Change: Let's see here, maybe touching on a Nikon here, obviously interesting to see the true kind of peripheral customer getting into some nice volume here.

Speaker Change: I'm wondering if you can kind of discuss what's your what you have from them, whether its forecast or even orders so far here and how do we think about a kind of a revenue run rate as you get into production, presumably sometime next year I'm not sure. If we have a good way of understanding the scale are clearly smaller than what you might look for a larger automotive pro.

Soroush Dardashti: Clearly, it's smaller than what you might look for for a larger automotive program, but I'm not really sure I have a good sense of scale here. So maybe we can kind of couch that in some terms. I think that'd be helpful. Sure, let me answer that question, and of course, Ron can add.

Unnamed Speaker: Graham, but not really sure have a good sense of scale here. So maybe you can kind of couch that and sometimes I think that'd be helpful.

Ron: Sure. Let me let me answer that question in the <unk> SaaS Ron can add so.

Soroush Dardashti: So obviously, this is a multi-year program with long commitments from Nikon. As I mentioned, you know, the strong ASBs. What do you think about that? There are multiples, you know, higher than automotive. From a volume standpoint, obviously, you know, what we can't share and be careful there, but think of it as a long-term maybe mobility program, right? So when you look at the net net of it, you know, things bounce out from volume versus ASB, obviously.

Speaker Change: Obviously this is a multiyear program with volume commitments with Nikon as I mentioned.

Speaker Change: Strong Isps do you think about that is.

Speaker Change: As multiples order of magnitude higher than automotive from vault.

Speaker Change: <unk> standpoint, obviously, we'll be cancer and to be careful there, but think of it similar to maybe a mobility program right. So when you look at the net net of it things balance out from volume versus ASP, obviously so.

Speaker Change: And as mentioned we are starting at the end of this year with the launch and then map over time.

Unnamed Speaker: I think.

Speaker Change: The way we think about this is this is again, a first program opportunity with Nikon.

Speaker Change: We are working across other opportunities and we see the potential to grow over time and beyond that industrial automation. This is as this is being vetted as the first product that actually can deploy into industrial automation, we see the similar need with another of other customers and others from an industrial automation on metrology standpoint, I believe to get to kind of micron level precision.

Speaker Change: That we think can actually further expand on that so that's kind of what I can share about kind of the size of course and the opportunity we're pretty excited about that and obviously, having dedicated line to help us manufacturer for everybody, including Nikon down there others at fab and it helps us to expand on this growth and capitalize on it but that's that's what I can say.

Unnamed Speaker: Okay.

Speaker Change: Okay. That's helpful and maybe a quick follow on question here regarding your top 10, OEM that you talked about here for the last few quarters <unk> been seeing some delays in terms of decision, making on wider and broader autonomy programs here.

Soroush Dardashti: Maybe a quick follow-on question here regarding your top 10 OEM that you talked about here for the last few quarters. I've seen some delays in terms of decision making on wider and broader autonomy programs here, and you repeated the language that expected a decision sometime this year. Some delays there, is there any risk of that moving into 2025 at all? Yeah, good question.

Unnamed Analyst: Okay, that's helpful. Maybe a quick follow-on question here regarding your top 10 OEMs that you talked about here for the last few quarters. Seems like we've been seeing some delays in terms of decision making on wider and broader autonomy programs here. I know you repeated the language of expected a decision sometime this year. Has there been any delays there? Is there any risk of that moving into 2025 at all? Yeah.

Unnamed Analyst: I know you repeated the language you expect a decision sometime this year, but any delays there is there any risk of that moving into 2025 at all.

Soroush Dardashti: Yeah, good question. I think, you know, what's interesting, what we see in the market is that in, I would say, an environment where we see some of the maybe others in the space either reducing some of the activities around RFQs or some of the timelines pushing out, we have always maintained and talked about that the industry is transitioning from kind of time of flight towards FMCW and Fort Eliard. We think this actually has been helpful for us, as evidenced by the fact that, one, we are on track with Diamond Truck.

Soroush Dardashti: I think, you know, what's interesting, what we see in the market, is that in, I would say, an environment where we see some of the maybe others in the space, either reducing some of the activities around RFQs or some of the timelines pushing out, we've always maintained and talked about that the industry is transitioning from kind of time of flight towards FMCW and FortiLiart. We think this actually has been helpful for us, as evidenced by the fact that, one, we're on track with Diamond Truck.

Speaker Change: Yeah. Good question I think.

Soroush Dardashti: You know what's interesting what we see in the market is that and I would say an environment, where we see some of that maybe others in this space either reducing some of the activities around our skus or some of the timelines pushing out we've always maintained I talked about that the industry is transitioning from kind of come applied towards mcw afford a lawyer.

Soroush Dardashti: We think this actually has been helpful for us as evidenced by the fact that one we're on track with Daimler truck, we talked about RSV timeline remaining between 26% because you're hitting milestones we're strengthening our partnership there too with this top 10 OEM, we talked the last quarter. We are continuing on track as I mentioned with.

Soroush Dardashti: We talked about our SOB timeline remaining in 2026. We're hitting milestones. We're strengthening the partnership there. Two, with this top 10 OEM we talked about last quarter, we're continuing on track, as I mentioned, with further engagement with the technical team, completion of the audits, and now starting the commercial negotiation discussions there, and we've maintained that what we believe is the timing for the decision still remains to be this year. Of course, we don't control their timeline, but this is all the indications and the feedback we have, and we're very encouraged by our progress so far.

Soroush Dardashti: We talked about our SOV timeline remaining in 2026. We're hitting milestones. We're strengthening a partnership there. Two, with this top 10 OEM we talked about last quarter, we're continuing on track, as I mentioned, with further engagement with the technical team, completion of the audits, and now starting the commercial negotiation discussions there, and we've maintained that what we believe is the timing for the decision still remains to be this year. Of course, we don't control the right timeline, but this is all the indications and the feedback we have, and we're very encouraged by our progress so far.

Soroush Dardashti: Further engagement with the technical team completion of the audit and now starting the commercial negotiation discussions there and we've maintained what we believe is the timing for the zinc still remains to be this year of course, we don't control their own timeline, but this is all the indications and the feedback we have and we're very encouraged by our progress so far.

Soroush Dardashti: We're continuing to work with them around how we actually integrate and our technology also at the vehicle level. Now, importantly, we have now added a new engagement from another top 10 passenger OEM. This is another OEM that's working with a time of flight solution.

Soroush Dardashti: We are continue working with them around.

Soroush Dardashti: How we actually integrate in our technology also in the vehicle level. Now importantly, also we have now.

Soroush Dardashti: We're continuing working with them around how we actually integrate our technology also at the vehicle level. Now, importantly, we have now added a new engagement from another top 10 passenger OEM. This is another OEM that's working with a time of flight solution and is also looking to potentially transition to FortiLiner. So, there's another major program, and major volumes globally. Timelines are similar in line with the other top 10 passenger OEMs. And, you know, we are, I think, importantly, very encouraged by the OEM's desire to only work with Aeva on this kind of deep-level vehicle integration concept.

Soroush Dardashti: Added a new engagement from another top 10 passenger OEM. This is another OEM, that's working with our time of flight solution.

Speaker Change: <unk> is also looking to potentially transition to 40 aligner. So theres. Another major program major volumes globally timelines and are similar in line with the other top 10 passenger OEM.

Soroush Dardashti: And we are.

Soroush Dardashti: Importantly, very encouraged by the Oems desire to only work with Eva on the kind of deep level of vehicle integration concept, so thats something that.

Soroush Dardashti: So, that's something that, you know, gives us some indication around where there might be some reduction activities, we're seeing an increase in activities. And obviously, some of these are transitions from other technologies. And this is consistent with what we have talked about in the past and the broader trend that we're seeing in the industry. Obviously, look, we're not expanding everything, but we are seeing increasing interest in technology, we're progressing on the right track, and we have maintained our timelines as we have talked about it.

Soroush Dardashti: It gives us.

Soroush Dardashti: Some indication around.

Soroush Dardashti: Where there is maybe some reduction activities, we're seeing an increase in activities and obviously some of these are transitions from other technologies and this is consistent with what we have talked about in the past and the broader trend that we're seeing in the industry. Obviously look we're not extended we got them in everything, but we are seeing increasing interest in our technology, we're progressing on the right track.

Soroush Dardashti: We have maintained our timelines as we have talked about it and.

Soroush Dardashti: And that's something that we see as important. So overall, I would say, while maybe some others may have pushed out with what we are involved and active with, we are seeing our current programs on time, and other programs coming up, giving us multiple shots at goal that we feel good about securing at least one program.

Soroush Dardashti: That's something that we see as important so.

Speaker Change: Overall I would say.

Speaker Change: While maybe some some of those others have may have pushed out with what we are involved in active with we are seeing our current programs on time and other programs coming up giving us multiple shots on goal that we feel good about securing at least one program that in the next months.

Speaker Change: Okay, great. Thanks, Bruce.

Operator: Okay, great. Thanks, Soroush. And it does appear there are no further questions at this time. This does conclude today's program. Thank you for your participation. You may disconnect at any time.

Speaker Change: And it does appear there are no further questions. At this time. This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful evening.

Unnamed Speaker: Have a wonderful evening! [music] OOOOOOOOOOO BF-WATCH TV 2021, Aeva Tech, Aeva Tech, Aeva Tech, [inaudible] Hi. [inaudible] The Ultimate Parody Site! BF-WATCH TV 2021, [inaudible]

Soroush Dardashti: Hum.

Soroush Dardashti: [music].

Operator: [music]

Soroush Dardashti: Hum.

Speaker Change: Mhm mhm.

Operator: Hum.

Operator: [music].

Operator: Mhm.

Operator: Hum.

Operator: Hmm.

Operator: Hello.

Operator: Oh.

Operator: [music].

Operator: Oh.

Operator: [music].

Unnamed Speaker: Aeva Tech, Aeva Tech Aeva Tech, Aeva Tech, Aeva Tech, Aeva Tech, Aeva Tech, Aeva Tech, Aeva Tech, Aeva Tech, Aeva Tech, Andrew Fung, Saurabh Sinha, [inaudible] Aeva Tech, Aeva Tech, Aeva Tech [inaudible] OOOOOOOOOOOO FFFFFFFFFFFFFFF [inaudible] Aeva Tech, Aeva Tech, Aeva Tech, [inaudible]...

Soroush Dardashti: So, and as mentioned, we're starting at the end of the year with the launch and then will map out over time. I think, you know, the way we think about this is that this is again, a first program opportunity with Nikon. We are working across other opportunities, and we see that potential to grow over time. And beyond that, industrial automation, this is, as this is being vetted as the first product that can actually deploy into industrial automation, we see the similar need with other customers and others from an industrial automation and metrology standpoint.

Soroush Dardashti: This top national security defense organization selected us as really going through a whole gamut of testing for a number of different technologies, including evaluating other types of flight light hours. And really, I think what they realized, which we have been talking about for some time now, is this additional capability that 45 GHz and FMCW technology brings to the table that does apply beyond automotive other applications, including basically longer range sections, better resolution, and enabling faster and really comes down to faster and more reliable sections. So, I think overall, as you mentioned, this is, you know, significantly higher ASBs than automotive. We're talking about, you know, an order of magnitude higher.

Soroush Dardashti: It is obviously near term. It's part of our plan. You've always talked about diversifying and bringing applications, including not just progressing automotive, which we really showed this quarter, not just the solid progress, solidifying with our one top 10 OEM adding another top 10 OEM in the engagements process, but also now expanding the application. I think importantly, we didn't just start up in security.

Soroush Dardashti: It will give you kind of my fund level precision that we think can actually further expand on that. So that's kind of what I can share about the size, of course, and the opportunity. We're pretty excited about that, and obviously, having a virtual production line to help us manufacture for everybody, including Nikon, down there. Others have helped us to expand on this growth and capitalize on it, but that's what I can say. Okay, that's helpful.

Soroush Dardashti: We were actually engaged in a number of other opportunities and defense security where we see that, you know, expanding this win, I think importantly, provides a lot of confidence in our technology for others to also start adopting it. And we really hope to capitalize on this and work with additional opportunities that we can convert over time. And again, you know, this is consistent with our mission to bring the next wave of perception across broad applications.

Soroush Dardashti: And the key focus here is being able to do so means we are really using the same investment we've made on our folio letter on chip module and technology in automotive. And then taking that, expanding it, maybe with different algorithms, but the same core technology was definitely having to make significant additional investments or spend to go tackle those other applications. And I think as we are going towards production, as we scale, we see our ability to expand these opportunities to, I think, meaningfully further increase as well.