Q4 2024 Innoviz Technologies Ltd Earnings Call
Good morning, I would like to welcome you to our Q4 and full year 2024 earnings conference call. Joining us today are <unk>, Chief Executive Officer, and El Derrick Zeigler, Chief Financial Officer, I would like to remind everyone that this call is being recorded and will be available on the Investor Relations section of our website at IR at <unk> Dot Tech.
Before we begin I would like to remind you that our discussion today will include forward looking statements are subject to risks and uncertainties relating to future events and the future financial performance actual results could differ materially from those anticipated in the forward looking statements.
Looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them for a discussion of some important risk factors that could cause actual results to differ materially from any forward looking statements. Please see the risk factors section of our form 20-F filed with the FCC on March 12, 2024 Omer.
Please go ahead.
Yeah.
Thank you <unk> and good.
Speaker Change: Everyone. Thank you all for joining us on this call.
Today I would like to tell you about some of our recent financial developments.
Speaker Change: This accomplishment.
Speaker Change: Route how views.
Speaker Change: And then from strong financial and operational position.
Speaker Change: 25 and beyond.
Speaker Change: In 2024 interviews recorded another strong year of financial performance.
Speaker Change: Quarterly revenues were $4 3 million.
Speaker Change: Versus $21 million in 2023 and.
Speaker Change: And exceeded the midpoint of our guidance range.
Speaker Change: During the year, we feel decreased our cash use in operations and capital expenditures to $81 $4 million.
Speaker Change: $99 6 million in 2023.
Speaker Change: In the past two months, we've taken significant steps to strengthen our financial position, we entered into approximately $80 million and a repayment plan with our key customers.
Speaker Change: We ended 2024 with $68 million in cash and cash equivalents. Additionally in February of this year, we completed a registered direct offering of our securities.
Speaker Change: Generated gross proceeds of approximately $40 million.
Speaker Change: We also announced an opportunity too.
Speaker Change: Of operator that should deliver approximately $12 million in savings on an annualized basis.
Speaker Change: Altogether, we expect our newly strengthened liquidity position to now be a competitive advantage for <unk>.
Speaker Change: On the customer side, we are a recently unbilled partnership with Mobilise has resulted in programs with several new Oems and our integration with Nvidia High Purion H platform means that we have the potential to serve customers across all three major <unk> platforms.
Speaker Change: We continue to work with a number of different programs and are expanding our production capacity by an order of magnitude in 2025 to meet customers' future demands.
Speaker Change: Heading into 2025, we believe that <unk> is in an excellent position to execute on our pipeline with additional programs and accelerated growth with bow market, leading lateral technology.
Speaker Change: We also feel that the time is right to begin exploring opportunities outside the automotive industry as well.
Speaker Change: We believe that our financial position and our prudent cash management will enable us to cross expected recipes and expected.
Speaker Change: Ramp volumes in 'twenty six 'twenty seven.
Speaker Change: Let me begin by telling you more about the multi year $80 million and a repayment plan that we announced in December.
Speaker Change: Under this plan, we expect to receive payments totaling approximately $80 million between 2025, and 27 with the bulk in 2025, and 2026 and over $40 million already in 2025.
Speaker Change: We see the potential for this payment plans to be Upsized is working to expand our scope of business with these and other new customers.
Speaker Change: Going into 2024, we had said that we expected $20 million to $70 million of binary bookings.
Speaker Change: During the year, we've also announced several new programs will be stated started work with commercial discussions pending.
Speaker Change: These are our recent payment amounts are from customers. We have been in discussion for quite some time and where we converted on the programs. We see this as a testament to the confidence our customers have in us and the scale of the programs.
Speaker Change: The payments are expected to fund the development work on a lighter.
Speaker Change: Before the production ramp.
Speaker Change: This does not mean, we have we are increasing our spending on these programs. The entries are going to cover its potential based on ongoing previously planned therefore, allowing us to further reduce our cash burn.
Speaker Change: It is important to note that the payments are incremental to the revenues, we expect to generate <unk> five sales of all later based on existing engagements and.
Speaker Change: And oldest home protection Newport.
Speaker Change: Two weeks ago, we announced the registered direct offering of $40 million.
Speaker Change: Most of our securities. This investments from two significant multibillion dollar institutions enhances our financial position that will support the company's business growth moving forward we.
Speaker Change: We believe it enhances our resilience provides additional operational runway.
Speaker Change: It'll be a competitive advantage.
Speaker Change: It will help us reach key Emory milestones close expected slp's and ramp volumes in 2006, and 47 investments should also buffer potential lumpiness related to the timing of repayments and has the potential to reinforce the markets and our customers.
Speaker Change: Confidence in our market position.
Speaker Change: In addition to the annual repayments than in our offering we recently announced an accumulation of operation.
Speaker Change: This is expected to result in savings of approximately $12 million.
Speaker Change: On an annualized annualized basis.
Speaker Change: In all we believe that in a risk strategic investment and operational optimization will enable innovative trajectory to Midland our recipes and ramp up the enormous due to mass production volume.
Speaker Change: So that then we have reached a see simple phase and froze the design of the lighter.
Speaker Change: With us we remain confident in our ability to achieve our long term goals position in August reached profitability and deliver significant value as we look to the end of the decade and beyond.
Speaker Change: Moving on to one of our major achievements last quarter, we disclosed that we've entered into several new OEM programs. Following our engagement with a major lever for platform.
Speaker Change: In December we were very happy.
Speaker Change: The analysis that partner is mobilized and the platform is mobilized drive AP level four.
Speaker Change: Earlier last year mobile I announced that they've continued internal work on later.
Speaker Change: And our pivot into a third party time of flight lighter provider.
Speaker Change: We are very pleased that mobilized chosen of insiders as a key feature of the product.
Speaker Change: And we're very excited to be working with an industry leader as the world embraces our almost like.
Speaker Change: In overseas to lighter with its unique capabilities, including ambient they are is a proposition that customers appreciate.
Speaker Change: And our engagements with mobilized on this platform is a testament to that.
Speaker Change: <unk> drive is a comprehensive driverless system that enables fully autonomous robot taxis right pulling vehicles public transport and goods delivery.
Speaker Change: Testing is already underway in Europe, and North America.
Speaker Change: By leveraging <unk> expertise in Lidar technology.
Speaker Change: <unk> builds have demobilized drive platform will deliver safest smooth driving performance in those domains.
Speaker Change: Each vehicle is play doh.
Speaker Change: Nine <unk> lighters, and we expect the volumes from these programs to be very significant.
Speaker Change: We believe this will drive substantial revenue growth prospects for the company as road testing is planned to commence in 2025 with our Sop fees in 2026.
Speaker Change: Let me now go into the details of some of these programs.
Speaker Change: First the VW and Emt Ied bus.
Speaker Change: The technological capabilities that we've demonstrated in this platform were key to the expansion of our relationship with mobilized.
Speaker Change: We've been engaged with VW on this program for some time.
Speaker Change: After initially displacing the original long range Lidar last year, we've also displays the full fledged shutter provider.
Speaker Change: For the program was to introduce two short range.
Speaker Change: Which covers the short and medium range.
Speaker Change: Based on our existing <unk> architecture.
Speaker Change: This vehicle was both in our booth and mobilized booth during CES and drew a lot of attention. It has three roof bounces in August to long range laterals in the front of the vehicle and six interface to Floorplan gyros around the vehicle to provide a full we're 60 view of what's happening.
Speaker Change: This is critical because in level four vehicles there is no driver.
Speaker Change: And so the car needs to be able to operate fully independently in all directions and understand its surroundings.
Speaker Change: The Iot bus is plentiful operation in Europe, North America, and the Middle East.
Speaker Change: That vehicles are already in operation in Austin, Texas Hangover in Hamburg in Germany, SLP is expected in mid 2026.
Speaker Change: The next engagement I'll tell you about is the Holland people mover.
Speaker Change: It's made by a division of venture Corporation of Germany, and its intent for public transportation. The configuration here is very similar to the IV Buzz with the suite time is too short and long range drivers in addition to radars and cameras.
Speaker Change: We expect our Sop in 2026, and the sneakily slated to rollout globally across North America, Europe, the middle East and Asia.
Speaker Change: The next vehicle, we will look at is a public transportation shuttle by Shuffler, which is the traditional German tier one in the first test vehicles are expected to come out come out this year.
Speaker Change: The last example of the L. Four drive platform that I'll show you. Today is this two theater luxury robotics is converting is.
Speaker Change: It's quite different from the vehicles that I just show you and it's a testament to the versatility of the L for mobilized drive AAV platform and the <unk> offerings.
Speaker Change: As a fully autonomous electric vehicle designed for safety and comfort from our new European OEM.
Speaker Change: The Adas systems sensor suite is quite similar to what's in the IV buzz in the other vehicles with nine <unk> two litres.
Speaker Change: The validation phase is scheduled for this year with S&P at the end of 2006 in Zagreb, and then expanding to Germany, the U K and Saudi Arabian 27.
Speaker Change: We're excited to be involved with mobile line on the ongoing adoption and proliferation of the drive platform.
Speaker Change: That's $9 per vehicle the drive platform is expected to grow to hundreds of thousands of Flyers per year, a significant revenue opportunity for <unk>.
Speaker Change: In addition to the VW IV bags living for program that we've talked about earlier, we are continuing to work with VW <unk> programs on the chauffeur platform.
Speaker Change: I'm happy to share the development process is moving forward nicely across these programs. We continue to move move through virus development gains successfully and are on track to meet the plan that ourselves of production timelines.
Speaker Change: Another recent developments that I'd like to bring to your attention is in regards to our relationship with <unk> video.
Speaker Change: We're working closely with <unk> team and are engaging with Oems, who are exploring and VDI purion H, one platform, which now incorporates these too.
Speaker Change: At CES, we also demonstrated that our perception software has been optimized to run with the EDF drive <unk> or in platform.
Speaker Change: With Mobilise welcoming video.
Speaker Change: <unk> is fully agnostic towards the major AAV bustle and we can meet the needs of our OEM customers regardless of their platform of choice. This is a critical value proposition and something we're very proud of.
Speaker Change: Shifting now to our pipeline. We are encouraged by the continued progression of the opportunities ahead of us and our confidence in our product positioning.
In talks with multiple Oems on our size and Rfps across Europe, North America and Asia.
Speaker Change: <unk> three and level four platforms. This program's encompasses a variety of vehicles, including passenger cars trucks shuttles and robo taxis, we've been able to display the advantages of our technology and we successfully completed a variety of technologic technical and commercial assessments and are now.
Speaker Change: We are in various stages of sourcing process with a number of major corporations.
Speaker Change: A lot to look forward to and the entire team is working hard to convert these opportunities.
Speaker Change: Additional design wins, having just returned from Europe in the next few weeks.
Speaker Change: <unk> into Detroit in the Silicon Valley to meet many of these potential customers.
Speaker Change: In addition to the automotive opportunities that I've outlined earlier I'd like to touch on some of the smart applications that we envision down the line more and more we're seeing our unique technology as being highly preferable to areas outside of automotive domain, we see a variety of applications.
Speaker Change: In development, such as security Smart software airports and ground through.
Speaker Change: We continue to be laser focused on the automotive facilities directly in front of us and on pursuing our strategy of targeting the market with the largest number of available units. However, we're also aware of longer term markets that we can create for ourselves with our Boston material later products.
Speaker Change: And our position as a geopolitically neutral lighter supplier into markets, where staff safety and security are critical.
Speaker Change: As we expand our capacity we think the time is right for exploring this.
Speaker Change: We look forward to sharing more with you about this in the future.
Speaker Change: Before I hand over the call to adopt I'll provide you with some color on our financial performance in 2024, and our revenue guidance for 2025.
Speaker Change: In 2024 weeks at the midpoint of our revenue guide of $23 5 million to.
Speaker Change: So $25 million and our energy bookings were in line with spark Spectation full year in.
Speaker Change: In 2024, we also met our operational targets of adding new programs.
Speaker Change: We believe that the enter repayments.
Speaker Change: We expect in 2025 combined with sales of <unk> will drive a more than twofold increase in our revenues year over year for 2025 at $50 million to $60 million with.
Speaker Change: Positive gross margin.
Speaker Change: The expected increase in.
Speaker Change: In revenue will further drive down our cash burn.
Speaker Change: On the operational front in 2025 targeting one to three new programs and expect $20 million to $50 million in additional NRA bookings incremental to what we've already announced.
Speaker Change: And with that I'll turn the call over to <unk> to review, our 2020 for financials.
Speaker Change: Thank you Omer and good morning, everyone.
Speaker Change: Since our last earnings call, we have strengthened the financial foundation of the company.
Speaker Change: A meaningful strides on our path to breakeven and profitability on October 12 story on October on February 12, we closed a registered.
A direct offering of our securities.
Speaker Change: Gross proceeds of approximately $40 million.
Speaker Change: This funding enhances our resiliency and extends our operation on a run rate.
Speaker Change: He will help us reach key milestones.
Speaker Change: Or for SRP and volume production rate in 'twenty six 'twenty seven.
Speaker Change: And our repayments planned already discussed earlier demonstrates customers' commitment to innovation and trust in our technology further the realignment we announced this February improves our cost structure in support of our ongoing efforts to streamline the company.
Speaker Change: We ended 2024 with approximately $68 million in cash.
Speaker Change: Cash and cash equivalents bank deposits marketable security and short term restricted cash on the balance sheet, not including the $40 million gross funding I just mentioned.
Speaker Change: We're continuing to drive sequentially decreased cash burn, resulting from our continued prudent management of our company focused on a single interface to lidar platform and our strong revenue performance.
Speaker Change: I'm very proud of our trend of consistent improvement in cash burn.
Speaker Change: Deliberate over the course of the year, while there may be continued lumpiness on a sequential basis on full year basis, we expect to see considerably lower year over year burn.
Speaker Change: Looking into 2025 and beyond we remain confident in our ability to manage our expenses effectively and keep our burn down on an annualized basis.
Speaker Change: Gross margins continued to improve quarter over quarter and in Q4, we generated gross profit for the first time.
Speaker Change: Going forward, we expect margins will continue to be somewhat lumpy as we ramp unit to volume production and as Emory revenues continue to fluctuate from quarter to quarter based on our customers' milestone towards the full year, we do expect gross margins to be.
Speaker Change: That's it.
Speaker Change: Now turning to the income statement, our full year 2020 for revenues of $24 $3 million was above the midpoint of our guidance range of $23 $5 million to $25 million versus $29 million in 2023. This represents another year in <unk>.
Speaker Change: We delivered on the top line.
Speaker Change: Extending our record of revenue execution.
Speaker Change: Our operating expenses for 2020.
Speaker Change: We're approximately $101 million a decrease of 17% from $121 million in 2023. This year's operating expenses included $17 million of share based compensation compared to a $27 million in 2000.
Speaker Change: 23 research and development expenses for 2024 were $73 $8 million, a decrease from $92 7 million in 2023.
Speaker Change: There is the years R&D expenses included $11 $2 million of share based compensation compared to $13 $7 million in 'twenty three 'twenty 'twenty four R&D expenses reflected a reallocation of R&D expenses to cost of goods sold as part of the <unk> revenue recognition.
Speaker Change: Process to conclude 2024 represents a transformative year for <unk>.
Speaker Change: Performance from both revenue and cash.
Speaker Change: We are encouraged by the ongoing strength of our expense management and the ability to consistently meet or exceed our revenue guidance.
Speaker Change: Looking into Q1, we expect a strong start for the year as referred to ramp the interviews to and work to secure additional design wins and with that I'll turn back the call to o'meara for closing remarks.
O'meara: Thanks Jordan.
O'meara: Before I wrap up the call and open for Q&A I wanted to recap some of the amazing achievements in the past year.
O'meara: We added several new level for Oems through our partnership with mobilized drive.
O'meara: We are continuing our work on a level three mobilized fair programs, we're collaborating on bringing solutions to the month with test vehicles inside 25 launches in 2006, our list of platform partners now, including video and we can serve Oems across all major platforms.
O'meara: We have a robust pipeline of RFID and RF skus with a broad based set of Oems on level, three and level four programs and we believe that our next few wins within which.
O'meara: From a financial standpoint, the $80 million and our repayments than the $40 million registered direct offerings and our prudent cash management are expected to enable us to cross sell Sop is and ramp.
O'meara: <unk> in 2006 and 2007.
O'meara: And let me just add.
O'meara: We had a lot of news today that we've covered and we couldnt get to all of our technology updates rest assure that we're continuing to make significant breakthroughs and broaden our competitive advantage our superior technology and strengthened balance sheet gives us confidence that we can achieve our goals of becoming the leading tier one automotive.
O'meara: Letter supplier.
O'meara: And with that operator, please open up.
O'meara: For Q&A.
O'meara: Thank you in order to ask a question. Please raise your hand, using your mobile or desktop application.
O'meara: <unk> on your telephone keypad and wait for your name to be announced once again.
O'meara: Raise your hand, using your desktop or mobile application.
O'meara: <unk> on your telephone keypad and wait.
O'meara: Our next P&L.
Speaker Change: Our first question today comes from the line of Mark Delaney with Goldman Sachs.
O'meara: Uh huh.
O'meara: Okay.
Speaker Change: Thank you very much for taking my questions and nice to see all the progress that the company was able to realize over the last quarter.
Speaker Change: On the last earnings call you spoke about one potential nomination with the top auto OEM.
Speaker Change: And you said that <unk> had passed on the audit and was in final legal negotiations can you give us an update on where that potential nomination stance.
Speaker Change: Yes, so actually I think we've with past discussions.
Speaker Change: Discussions and.
Speaker Change: We are waiting for the customer final alignment.
Speaker Change: So we'll make.
Speaker Change: Once we will learn about the OEM next steps.
Yeah.
Speaker Change: Very helpful.
Speaker Change: For that and my other question was around cash flow you said the NRT revenue has positive implications for margins and cash and Youre also taking cost actions. So given those factors can you give us more detail on your expectation for free cash flow this year and how much you can reach to burn in 2025 compared to 2009.
Speaker Change: So we we said that this year, we are expecting to continue with.
Speaker Change: With the trend.
Speaker Change: Reducing cash burn.
Speaker Change: <unk>.
Speaker Change: Definitely positive.
Speaker Change: Contributors to that.
Speaker Change: We expect this trend to continue this year next year.
Speaker Change: Okay, and any any quantification of the degree of improvement that you can share alder.
Speaker Change: Not at this point of time, but.
Speaker Change: <unk>, an improvement quarter over quarter year over year.
Speaker Change: We are excited about.
Speaker Change: The realignment is going to help us save.
Speaker Change: Now, we'll open the doors on an hourly basis and of course, then areas another contribution protesting.
Well noted I'll pass it on thank you.
Speaker Change: Kim.
Speaker Change: Thank you. Our next question today comes from the line of Josh J.
Speaker Change: J P Morgan.
Speaker Change: Uh huh.
Speaker Change: Hi, Good morning, Thanks for taking my questions I was wondering if you could share some insights around potential tariff implications from a direct and indirect.
Speaker Change: Impac standpoint from a direct impact perspective, I believe you are engaged with domestic Israeli and non Chinese Asian manufacturing partners. So maybe any incremental color on production exposure around flexibility would be helpful. And then from an indirect standpoint, which I believe could be more meaningful for the business could you.
Speaker Change: Talk about how some of the RFID RF Q procedures have been impacted as a result of.
Speaker Change: You know potential tariff disruptions and uncertainty, especially for the North American manufacturers.
Speaker Change: Thanks, and I will follow.
Speaker Change: Sure.
Speaker Change: So we are still waiting for the dust to settle to see where things land.
Speaker Change: And checking the news daily basis.
Speaker Change: As of now we don't see an impact.
Speaker Change: On us as you stated.
Speaker Change: Our partner on our plan.
Speaker Change: <unk> partner.
Speaker Change: As in.
Speaker Change: In Asia.
Speaker Change: China.
Speaker Change: And so far we're not seeing any impact.
Speaker Change: In terms of our advisors.
Speaker Change: <unk>, we see an uptick of interest in <unk>.
Speaker Change: Yes.
Having debt to the variety of Flyers that can actually serve.
Speaker Change: That market is.
Speaker Change: Now, obviously more limited with Pheno.
Speaker Change: Being geopolitically neutral.
Speaker Change: So its actually I believe it's actually serves us and treatment at.
Speaker Change: At this point.
Speaker Change: Understood that's helpful color.
Speaker Change: And then just as a follow up you mentioned test vehicles are already on the road for some of the customers involved in the mobile I drive platform.
Speaker Change: Just wondering if you have any data insights on the involvement of flight hours and driving and perception decisions are not sure. How you would like to cut it but any way to get a sense of the percentage of driving decisions that are primarily controlled by the lidar sensor on these vehicles as opposed to automate a center like the cameras on.
Speaker Change: <unk>.
Speaker Change: Thank you.
Speaker Change: Okay. So actually I think thats, probably a question to mobilize in there.
Speaker Change: Perception.
Speaker Change: Software.
Speaker Change: So I can't share with you kind of like the analysis of their system.
Speaker Change: Let me say that.
Speaker Change: Our experience working.
Speaker Change: With different customers, we always hear about the importance of letters in.
Speaker Change: Very complex driving scenarios winter conditions.
Speaker Change: Cetera, as I said is I think on last quarter when talking with.
With way more they talk about the ladder, taking more than 90% weight of the decision, making coming from the lighter meaning very lighter centric.
Speaker Change: On mobile I will I will let them comment.
Omar: Understood Omar Thank you and good luck.
Omar: As a reminder, in order to ask a question. Please raise your hand, using your mobile or desktop application for press star one on your telephone keypad.
Omar: For your name to Vietnam.
Speaker Change: Our next question today comes from the line of Casey Ryan of West Park Capital. Please go ahead.
Speaker Change: Due to on mute.
Speaker Change: Yes.
Speaker Change: Thank you you guys are too high Tech for me I'm still back in the old Man found can you hear me now yes, okay perfect.
Speaker Change: So I wanted to touch on one thing you mentioned briefly at our ease of $20 million to $50 million that could be booked in 'twenty. Five can you just tell us what getting in and already booked means.
Speaker Change: Now as far as like what it looks like and then.
Speaker Change: What triggers those payments to actually recognize it seems like those might be two different banks.
Speaker Change: Sure. So whenever we are in.
Speaker Change: Okay.
Bill the customer.
So.
Once we are nominated and we kick off this activity as these <unk> are paid to us.
It could paint over milestones that could be paid over quarters.
These are things that are discussed with the customer in terms of how we recognize OLS recognized I'll, let I'll hand, it over to adapt to talk.
Talk about it basically we are trying to do.
And so far we succeeded to have all the NR <unk> recognized those revenues and we do so based on the milestones.
Our songs, we get acceptance from the client and then we can.
Hold nicely.
As an example, so to say.
First we have an alignment with customer bias.
<unk> planned to meet.
This year and those are very tangible to define.
<unk>.
No.
Deliveries.
That are used by the customer to succeed.
Deliveries of course.
Accordingly.
It's a good alignment between the different teams and helping us to push things forward.
Okay. Thank you.
Paul One thing you noted about the $80 million of earnings I think close from existing.
OEM partners, if I'm remembering the press release correctly.
We didn't say that about these new potential Irene so can we optimistically and first something about where this additional <unk> might come from this.
This could come also from the existing but also would come from new ones.
So once you are engaging to our program the continuous changes and sometimes even new requirements.
Coming from customer.
They want to and you either the short range, but not just long range and that this activity is.
<unk> require additional effort by us, which means that we will need to be.
<unk> get more than a reasonable.
So these $20 million to $50 million that we expect to book this year it could be from the existing customers for additional tasks that will go to have all from new customers that will go into the spot.
Okay terrific that's helpful.
And then just a couple more questions quickly.
On the mobile I drive platform.
Can we infer things at.
Mobile I talked about wins and customers and opportunities.
And we always associated and events with those wins or are there potentially other lidar vendors that are sort of part of that platform.
So is mobilized and AWS announced when we made the announcement that the mobilized drive is using only <unk> to <unk>.
<unk>.
There is.
And Thats mobilized.
Fitness recall.
There is no exclusivity, we know that mobile add on either side of course working with others.
Now to work with others as well, but.
Mobile is now in the <unk>.
So that's the case, where they are using <unk>.
<unk> poster different customers.
We started our collaboration with mobile I on the Volkswagen platform and we're mobilized made a local sense.
To develop the same platform for all of their other customers and offload it too.
We use it to other customers and Thats, what led to that to get to an agreement and they benefit from that and then obviously from the volume.
That will drive lower cost for both sides.
And as the press release mentioned that.
Future customers of mobile I would use the same platform.
Generation was used.
We still and.
I think that's.
Alex.
Okay great.
And then one positive comment you made eldar about gross margins across clear for 25 years back on the positive.
Hi.
Is it fair for us to think that sort of positive for the whole year not necessarily every quarter I realize you have sort of fluctuations.
Production per quarter, but.
Just wanted to make sure that that really we're just talking about the year in aggregate.
On an annualized basis again because.
To create fluctuations we might.
Experience.
Because of hitting these milestones and doing full in which quarter. So it's been good.
Look through it quite a bit.
So on an annualized basis.
Would you expect a positive gross margin.
Yes.
I'll comment also on the on the guidance for the year. I mean, we were also contemplating again about the guidance between quarter and quarter and year, because it's always very difficult to foresee all of the opportunities that might come up during the year.
There are many things that happened to us during 2024, which allows us to actually see additional opportunities to secure more wins and expand our in our repayment et cetera.
We still decided to put out.
Our revenue guidance.
<unk>, which we feel that we can commit to we do see several opportunities.
Being able to book additional wins and additional in arrears.
And then we'll update you as we go along.
That's terrific.
That's helpful color, but like item sorting climbed to very likely like quarterly.
Targets are less meaningful than the annual target of being positive for gross margin I think.
You know.
If we're saying there is a possibility to being.
Maybe your next guidance is too conservative I think we'll all be happy with that so.
Very exciting quarter and thank you for the update.
Thank you Jim.
Our next question comes from the line of Kevin Garrigan of Rosenblatt Securities.
Go ahead.
Yeah, Hey, Omar Thanks for taking my questions and let me Echo my congrats on all the progress.
For the for the VW Rd program, what if any milestones you still have to reach in preparation for S&P.
Oh, Okay. So we're approaching the C sample.
In August.
And we are in a ramp up both our high volume manufacturing science with our manufacturing partner.
Basically just to extend what I just said in terms of see sample. So we moved from the beat to the system.
These sample is wherever you are.
Completing all of the design validation with the design.
See sample means that you are already producing units in the production that is going to serve customer which is meeting all of the automotive requirements to see sample stages, where you are testing all of the production of litigation elements tolerances related disciplined batches of components.
Producing and higher volumes to see.
The latter two later.
Currency and the stability of the processes.
And once the collection validation is completed then you can actually you can reach their COPD, which is targeted for us.
Beginning of next year.
Basically the last milestone for us before we can serve our customer and launch.
<unk> already met.
The design freeze, which means that we are also mixed.
What is referred to as a <expletive> clouds freeze it is a very important milestone because it actually allows the customer who ramp up its fleet.
South doing data collection.
Maybe one of the most important times in the development stage of the program the cause.
Equipped with equipping vehicles in southwest and data, which are going to be debased.
<unk> the dose.
Golar point of this of the overall software of the car.
This is a very critical point because at some point you learned that will sell for any reason something needs to be changed in the lidar in the points out.
Basically need to scrap.
Data that was collected.
Very expensive I would say.
Paul.
Therefore, reaching design freedom concept breezes as very critical point in time, which I would say probably the most.
Speaker Change: Influential on the ability of the <unk> prevention the launch.
Speaker Change: Time on time because.
Speaker Change: There is a very long process of data collection of different environments and different set of conditions use cases, where the customer is actually a need to develop its own software validated.
Speaker Change: From our perspective in terms of.
Speaker Change: Enabling our.
Speaker Change: Customers to meet their SLP on time.
Speaker Change: Our lineup for data collection of already crossed the point in a very good way I'm very happy and very pleased with.
Speaker Change: Quality.
Speaker Change: Ah laterally.
Speaker Change: Turning to our customer we have crossed with the take the ice.
Speaker Change: <unk> is very high quality in terms of the image quality.
Speaker Change: Saying all of the range and.
Speaker Change: Really different thomasville, thats, a very challenging, especially in different weather conditions, and 30 window and really.
Speaker Change: I've seen the test reports that were present in just a few days ago is actually too.
Speaker Change: One of our new customers that we would try to show them that we bridge the bunker.
Speaker Change: I think the level of professional.
Speaker Change: Before <unk> really gives us a huge compliment and different customers and I think it's really due to the fact that this is actually the second time casino business has met that point. This is not our first.
Speaker Change: We're going to the market with the Lidar with missed the point.
Speaker Change: Okay.
Speaker Change: And we know the importance of suites.
Speaker Change: We feel that at this point of time into this too.
Speaker Change: He is actually enabling our customers too.
Speaker Change: Even cost.
Speaker Change: In the past.
Speaker Change: Targets in terms of being able to fulfill their take guys viewers' experience.
Speaker Change: Hi.
Speaker Change: I think that was a great product and we look forward to see the progress of our customers, which by the way we already committed to.
Speaker Change: Time to time feedbacks from the leaders of these Oems telling me how great experience. It is.
Speaker Change: Using the getting demos from either mobilize other customers and thanking us for the great work that we do so.
Speaker Change: This is exciting.
It's great to see our product on the road and that our customers are enjoying it.
Speaker Change: Yes, absolutely that's that's fantastic and I appreciate the color on that.
Speaker Change: And then just as a follow up there's been an awful lot of new spending.
Speaker Change: Thomas driving kind of coming out of China, and Chinese Oems, making progress with their platform.
Speaker Change: Can you just give us an update on BMW, China, and how you see.
Speaker Change: This platform being competitive versus Chinese Oems.
Speaker Change: Sure. So first of all I would say that I think China is always the crystal ball.
Speaker Change: And I'll say the rest of the market.
Speaker Change: Way that they're pushing the envelope in terms of bringing new capabilities and more sensors into the call is something that I think many Oems around the world are very much aware of and in a way also helped.
Speaker Change: The push things forward.
Speaker Change: BMW levels.
Speaker Change: But corn, which was developed and also for the level three.
Speaker Change: Rose.
Speaker Change: <unk> is basically waiting for the approval levels beyond the road.
Speaker Change: I'll, let BMW announced.
Speaker Change: Yeah.
Speaker Change: I would say.
Speaker Change: Their plans once that happens.
Speaker Change: I believe that right now there is no level three.
Speaker Change: Our global owned on the road with the experienced a BMW has using our lighters.
Speaker Change: There is a huge huge huge difference between a level II system and the level.
Speaker Change: I'll go as far as saying that you are using a lighter for level two car.
Speaker Change: <unk> 10, possibly resets every five minutes.
Speaker Change: Nobody cares.
Speaker Change: <unk>.
Speaker Change: Eventually the call is still supervised by the driver.
Speaker Change: To allow level three where the driver is not putting on the roads.
Speaker Change: Order of magnitude higher quality.
Speaker Change: Basically the only time, where the driver is as it should be asked to leading cages, when latter might be dirty or something and you have 10 seconds.
Speaker Change: We act.
Speaker Change: With our lidar.
Speaker Change: Possibly was instead it in previous quarters.
Speaker Change: Even that is not required because of our labor in the <unk>.
Speaker Change: So we believe that with the central that individual provided the user experience of level three and level four would be substantially better.
Speaker Change: Okay perfect. Thank you.
Speaker Change: Okay.
We have no further questions. Please proceed.
Speaker Change: Great. Thank you thanks, everyone for joining us today, we look forward to updating you on our next quarter and continued progress we're making here at <unk>. Thank you very much.