Q4 2024 MicroVision Inc Earnings Call
Operator: Good afternoon, and welcome to the MicroVision fourth quarter and full year 2024 Financial and Operating Results Conference call. At this time, all participants are in a listen-only mode. At the end of today's presentation, there will be an opportunity to ask questions via a chat Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone. For analysts to ask a question on the phone line, please press star 1 on your telephone keyboard. A confirmation tone will indicate your line is in the question queue.
Good afternoon, and welcome to the Microvision fourth quarter and full year of 2024 financial and operating results conference call. At this time all participants are in a listen only mode. At the end of todays presentation, there will be an opera.
Charity to ask questions via chat line.
Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen.
Speaker Change: Analysts, who publish research they ask questions on the phone line.
Speaker Change: To ask a question on the phone line. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. Please note. This event is being recorded.
Operator: Please note, this event is being recorded.
Drew Markham: I will now turn the conference over to Drew Markham, please go ahead. Thank you, John. Good afternoon.
Speaker Change: I will now turn the conference over the drew Markham. Please go ahead.
Speaker Change: Thank you John and good luck.
Drew Markham: I am here today with our Chief Executive Officer, Sumit Sharma, and our Chief Financial Officer, Anubhav Verma, and also I'm very happy to welcome to the call our incoming Chief Technology Officer, Glenn DeVos.
Speaker Change: Afternoon.
Speaker Change: Im here today, with our Chief Executive Officer Sumit Sharma.
Speaker Change: Our chief Financial Officer on a bulk Birla Birla and also I'm very happy to welcome to the call our incoming Chief Technology Officer Glen de Vos.
Drew Markham: Following their prepared remarks, we will open the call to questions.
Speaker Change: Following their prepared remarks, we will open the call to questions. Please note that some of the information you will hear in todays discussion will include forward looking statements, including but not limited to statements regarding our business product and go to market strategy customer and partner engagement cash liquidity and the E&ps.
Drew Markham: Please note that some of the information you'll hear in today's discussion will include forward-looking statements, including, but not limited to, statements regarding our business, product, and go-to-market strategies, customer and partner engagement, cash, liquidity, and the impacts of our recent financing activities, market landscape opportunities and program volumes and timing, development and performance of our products and solutions, product sales and future demand, projections of future operations, cash flow and financial results, availability of funds, as well as statements containing words like believe, expect, plan, and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statement.
Speaker Change: <unk> of our recent financing activities.
Speaker Change: Landscape opportunities and program volumes and timing.
Speaker Change: <unk> and performance of our products and solutions product sales and future demand projections of future operations cash flow and financial results availability of funds as well as statements containing words like believe expect plan and other similar expressions.
Speaker Change: These statements are not guarantees of future performance.
Speaker Change: Actual results could differ materially from the future results implied or expressed in the forward looking statements.
Drew Markham: We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K, and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking states. All forward-looking statements are made as of the date of this call and accept as required by law. We undertake no obligation to update this information.
Speaker Change: We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K, and quarterly reports on Form 10-Q.
Speaker Change: These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward looking statements.
Speaker Change: All forward looking statements are made as of the date of this call and except as required by law, we undertake no obligation to update this information.
Drew Markham: In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure, As well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC filings tab.
Speaker Change: In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC regulation G for a reconciliation.
Speaker Change: <unk> of each non-GAAP financial measure to the most directly directly comparable GAAP financial measure.
Speaker Change: As well as for all the financial data presented on this call. Please refer to the information included in our press release and in our Form 10-K, sorry form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at IR Dot Microvision dot com under the SEC filings tab.
Drew Markham: This conference call will also be available for audio replay on the investor relations section of our website.
Speaker Change: This conference call will also be available for audio replay on the Investor Relations section of our website now I'd like to turn the call over to our CEO Sumit Sharma Smith.
Sumit Sharma: Now, I'd like to turn the call over to our CEO, Sumit Sharma. Thank you, Drew, and welcome, everyone, to this review of our fourth quarter 2024 results. I would like to start by providing an update on our customer engagements for automotive and industrial opportunities we've been working on through 2024.
Speaker Change: Thank you drew and welcome everyone to this review of our fourth quarter 2024 results.
Speaker Change: I would like to start by providing an update on our customer engagements for automotive and industrial opportunities we've been working on through 2024.
Sumit Sharma: Additionally, I will give an out. New Engagements in 2025 for Potential Automotive, Industrial, and Military Operations. Still a very exciting time for our technology.
Additionally, I will give an outlook on new engagements in 2025 for potential automotive industrial and military opportunities.
Speaker Change: It's still a very exciting time for our technology.
Sumit Sharma: First. I would like to begin with our engagements with automotive RFQs and industrial operators. There are four areas that our technology engagement has focused on through 2024. We focus on automotive OEM programs with seven R. and a few custom development proposals. In the industrial space, we focused on three areas. Automated Guided Vehicles, AGVs, and Autonomous Mobile Robots, AMRs. These platforms typically operate in a geofence environment, require low power perception software, integrated solutions, embedded localization, among other. And number two, collaborative robot. These robots share the environment with humans and operate in a semi-structured environment with humans in charge, and again, require integrated perception software on the sensor.
Speaker Change: First.
Speaker Change: I would like to begin with our engagements with automotive RF skews and industrial opportunities.
Speaker Change: There are four areas that are technology engagement has focused on through 2024.
Speaker Change: We focus on automotive OEM programs with seven Skus and a few custom development proposals.
Speaker Change: In the industrial space, we focused on three areas.
Speaker Change: Automated guided vehicles, Suvs and autonomous mobile robots amr's.
Speaker Change: These platforms typically operate in a geo fenced environment require low power perception software integrator solutions embedded localization among other features.
Speaker Change: Number two collaborative robots.
Speaker Change: These robots here the environment with humans and operating in a semi structured environment with humans in charge and again require integrated perception software on the sensor.
Sumit Sharma: Number three, mobile. These include commercial vehicles for industrial and military applications with multimodal sensors. We remain engaged in seven RF... Automotive Programs and make incremental progress. Automotive OEMs are still adjusting to their new timelines for product It is abundantly evident that LiDAR is an integral part of the sensor suite required to deliver a reliable ADAS experience.
Speaker Change: Number three mobile autonomous vehicles. These include commercial vehicles for industrial and military applications with multimodal sensor suites.
Speaker Change: We remain engaged in seven RF skus for automotive programs and make incremental progress.
Speaker Change: Automotive Oems are still adjusting to their new timelines for product launch.
Speaker Change: It is abundantly evident that lidar is an integral part of the sensor suite acquired to deliver a reliable <unk> experience.
Sumit Sharma: What all of us.
Speaker Change: What all of US are adjusting to their updated timelines two launched decisions for their platforms.
Sumit Sharma: www.microsoft.com. We continue to explore opportunities for customized development with our OEM engagement. With ripples and expected future trading conditions for OEMs and their product timelines, we have remained actively close to them in their process. Their plans for future models of EV and ADAS are taking a parallel priority to their near-term goals of fielding models with traditional power that launch faster and in affordable price. into AGV and AMR. we made progress on multiple engagements through 2024 with our MOVIA-L.
Speaker Change: We continue to explore opportunities for customized development without OEM engagements.
Speaker Change: With referrals and expected future trading conditions for Oems and their product timelines, we have remained actively close to them and their process.
Speaker Change: There are plans for future models of EV, and Adas or taking a parallel priority with our near term goals of building models the traditional powertrains.
Speaker Change: That launch faster.
Speaker Change: Affordable price points.
Speaker Change: And the HIV in EMR space.
Speaker Change: We made progress on multiple engagements from 'twenty to 'twenty four without <unk> with.
Sumit Sharma: Integrated Perception and Application Solving. This gave us the confidence to enter into an agreement with our partner, ZF, to increase our production capacity. Basically, we are offering a sub-8 watt sensor. which has our perception and application software on board the sensor and talks directly to the customer's controller. This is an advanced solution which is frictionless for our customers to integrate. We continue to make great progress in this space, and I expect these engagements will lead to commercial wins for us. There are more than 20 well-established companies for this segment that already have their products implemented and are actively looking to upgrade their platforms with LiDAR implemented in industrial ADAS software.
Speaker Change: With integrated perception and application software.
Speaker Change: This gave us the confidence to enter into an agreement with our partners that F.
Speaker Change: Increase our production capacity.
Speaker Change: Basically we are offering a sub <unk> sensor.
Speaker Change: Which has a perception and in application software onboard the sensor and cost directly to the customer's controllers.
Speaker Change: This is an advanced solution, which is frictionless to our customers to integrate.
Speaker Change: We continue to make great progress in this space and expect these engagements will lead to commercial wins for us.
Speaker Change: There are more than 20, well established companies for this segment that already have their products implemented and are actively looking to upgrade their platforms with lidar implemented and industrial Adas software.
Sumit Sharma: The TAM for this segment is lower than automotive, but we have much faster line of sight to significant revenues for multi-year programs from hardware and software. I am very excited about our multiple engagements in this sector. In 2024, we deliver software integrated solutions to multiple potential collaborative robot partners as well.
Speaker Change: The Tam for this segment is lower than automotive, but we have much faster line of sight to significant revenues for multiyear programs from hardware and software solutions.
Speaker Change: I am very excited about our multiple engagements in this segment.
Speaker Change: In 2024, Redeliver software integrated solutions to multiple potential collaborative robot partners as well.
Speaker Change: These evaluations are in flight.
Sumit Sharma: This is a slower moving segment for evaluation and large commercial. With the current potential ripples in international trade, we expect large-scale decisions to be more fluid in 2025. We continue supporting and developing strong park In this segment, we again expect to have lower TAMs but higher margins. This is a segment we watch through 2025 to add layers of recurring revenue. Another segment we started engagement in 2024 was Mobile Autonomous Robots in Military and Commercial Vehicles with our LiDAR products. The larger opportunities in this segment is for long-term partnerships where we could enable our potential customers with our mature perception software and advance their multimodal platform development.
Speaker Change: This is a slower moving segment for evaluation and <unk>.
Speaker Change: Large commercial agreements.
Speaker Change: With the current potential ripples international trade, we expect large scale decisions to be more fluid in 2025.
Speaker Change: We continue supporting and developing strong partnerships.
Speaker Change: In this segment, we again expect to have lower <unk>, but higher margins.
Speaker Change: This is a segment we watched through 225 to add layers of recurring revenues.
Speaker Change: Another segment, we started engagement in 2024 was mobile autonomous robots and military and commercial vehicles with our lidar products.
Speaker Change: The larger opportunities in this segment is for long term partnerships, maybe we could enable our potential customers with our mature perception software and advance their multimodal platform development.
Sumit Sharma: This is an important area for partnership to be expected to develop. This allows us to showcase the breadth of our technology in enabling autonomous driving and aid us outside the traditional automotive OEM. These partnerships will certainly come with revenue and the broader play is to show that we are already a company with parts that are more valuable.
Speaker Change: This is an important area for partnership we expect to develop.
Speaker Change: This allows us to showcase the breadth of our technology, and enabling autonomous driving and Adas outside the traditional automotive Oems.
Speaker Change: These partnerships will certainly come with revenue and the broader play is to show that we are already a company with parts that are more valuable.
Sumit Sharma: what I see reflected in our market capitalization. This year, we have already started working on expanding our partnership.
Speaker Change: And what I see reflected in our market capitalization.
Speaker Change: This year, we have already started working on expanding our partnership opportunities.
Sumit Sharma: The world is changing. A new era of opportunity for our advanced technology is military applications has appeared. with expansions expected in defense spending under the current administration and lots of realignment happening with this sector. Our mature technologies in augmented reality and space systems, as well as perceptive LIDAR solutions, will be promoted for defense programs. I would say that it is early times and we are actively working on pursuing all opportunities. As investors will recall, for over 30 years, MicroVision has delivered technology for various military programs. The company was founded for this. We have participated in programs for U.S.
Speaker Change: The world is changing.
Speaker Change: New era of opportunity for our invest technology as military applications has appeared.
Speaker Change: With expansion expected in defense spending under the current administration and lots of realignment happening with this sector.
Speaker Change: Mature technologies, and augmented reality and space systems as well as perceptive Lidar solutions will promote it for defense programs.
Speaker Change: I would say that it is early times and we are actively working on pursuing all opportunities.
Speaker Change: As investors will recall for over 30 years Microvision has delivered technology for various military programs.
Speaker Change: The company was founded for this segment, we have participated in programs for U S Army virtual Copilot program for high resolution full color helmet mounted display.
Sumit Sharma: Army, virtual co-pilot program for high-resolution, full-color helmet monitor display. to U.S. Military General Dynamics Mounted Warrior Program with Helmet Mounted Display for Armored Vehicles. Number three, U.S. Army Aviation and Missile Command Program for Boeing for binocular helmet mounted display for Comanche helicopter. Four, U.S. Air Force full-color head-mounted display for Air Force eyewear. Five, U.S. Military Battle Command Battle Lab for head-mounted display. And most recently, we were part of the HoloLens product developed for the military. We are very strong in this area and expect to bring a military advisor that will help us partner with larger companies in space for a partnership.
Speaker Change: Two U S military general dynamics mounted warrior program with helmet mounted display for armored vehicle use.
Speaker Change: Number three U S Army Aviation and missile command program for Boeing for binocular helmet mounted display for Comanche helicopter.
Speaker Change: For U S Air Force full color head mounted display for Air Force eyewear.
Speaker Change: Five.
Speaker Change: U S military Battle command Battle lab for head mounted display.
Speaker Change: And most recently, we were part of the holo lens product developed for the military.
We are very strong in this area and expect to bring in military adviser that will help us partner with larger companies in space for our partnership.
Sumit Sharma: I expect to talk about this more as these opportunities continue to develop.
Speaker Change: I expect to talk about this more as these opportunities continue to develop.
Sumit Sharma: I'm going to keep my prepared remarks brief today as we received a large list of questions from our shareholders. And I would like to address that as the main narrative.
Speaker Change: I'm going to keep my prepared remarks brief today as we received a large list of questions from our shareholders now I'd like to address that as the main narrative.
Glenn DeVos: I would like to now turn the call to Glenn DeVos, our new CTO. I'm excited that Glenn has joined MicroVision to advance our products. and help us grow to provide more advanced software and hardware integrated solutions for automotive and industrial market sectors. Glenn and I have had a chance to get to know each other over the past six months and it has been great to mutually share the excitement for MicroVision.
Speaker Change: I would like to now turn the call to Glen de Vos, our new CTO.
Speaker Change: I'm excited that Glenn has joined Microvision to advance our product solutions and help us grow to provide more advanced software and hardware integrated solutions for automotive and industrial market segments.
Speaker Change: Glenn and I have had a chance to get to know each other over the past six months and has been great mutually shared their excitement for microvision.
Speaker Change: Glen.
Glenn DeVos: Thank you, Sumit. I appreciate the introduction.
Glen: Thank you Sumit I appreciate the introduction I'd like to start by saying how excited I am to be with you today and to be joining the microvision leadership team as the CTO.
Glenn DeVos: I'd like to start by saying how excited I am to be with you today and to be joining the MicroVision leadership team as their CTO. Over the course of my career at GE, Delphi, and Inaptiv, I've had the opportunity to both lead significant global technology development as well as to manage high-growth automotive business units. As Aptus CTO, I led the development of smart vehicle architecture and our advanced autonomous mobility technology, which incorporated radar, vision, and LiDAR as part of our advanced perception system, which powered the 2015 launch of the Las Vegas RoboTaxi fleet during CES that year, as well as our cross-country autonomous drive that occurred in April of 2015.
Glen: For the course of my career at GE, Delphi, and then active I've had the opportunity to both lead significant global technology development as well as to manage high growth automotive business units.
Glen: CTO I led the development of smart vehicle architecture, and our advanced autonomous mobility technology, which incorporated radar vision and Lidar as part of our advanced perception system, which powered the 2015 launch of the Las Vegas Robo taxi fleet during CES.
Glen: <unk> as well as our cross country Autonomous drive that occurred in April of 2015.
Glenn DeVos: As president of the Advanced Safety and User Experience Business Unit, I manage the introduction of global, large-scale ADAS programs for our leading OEM customers, resulting in the accelerated growth of that business unit into a multi-billion dollar business, with annual bookings in excess of $5 billion. I understand what it takes to identify, industrialize, and then successfully commercialize these disruptive technologies. And this is exactly why I'm joining the MicroVision team. Building on MicroVision's proven technology portfolio, I believe that we are perfectly positioned to not only successfully commercialize our current LiDAR products within the automotive market, but also able to extend and deliver the complete perception system as well as a rich set of features suitable for the industrial, defense, and commercial vehicle market.
Glen: As president of the advanced safety and user experience business unit and manage the introduction of global large scale Adas programs for our leading OEM customers.
Glen: <unk> and the accelerated growth of that business unit into a multibillion dollar business with annual bookings in excess of $5 billion.
Glen: I understand what it takes to identify industrialized and then successfully commercialize these disruptive technologies.
Glen: And this is exactly why I'm, joining the microvision team.
Glen: Building on micro Vision's proven technology portfolio I believe that we are perfectly positioned to not only successfully commercialize our current lidar products within the automotive market, but also able to extend and deliver the complete perception system as well as a rich set of features suitable for the industrial defense and commercial vehicle market.
Glen: <unk>.
Glenn DeVos: Now, to successfully capitalize on these opportunities, we have an important year ahead where we will be showcasing the complete MicroVision Industrial Autonomous and Advanced Driver Safety Platform, which will utilize multimodal perception with a scalable software-defined set of advanced features. Now, while these adjacent markets represent important near-term opportunities, we remain committed to the autonomous ADAS and the autonomous applications within the automotive sector. MicroVision's technology will be a key enabler to unlocking additional L2 plus and L3 features for our OEM customers. Maven, Movia S, and Mosaic are the right products at the right time for the automotive market.
Glen: Now to successfully capitalize on these opportunities we have an important year ahead, where we will be showcasing the complete microvision industrial autonomous and advanced driver safety platform, which will utilize multiple modal perception with a scalable software defined set of advanced features.
Glen: Now while these adjacent markets represent important near term opportunities, we remain committed to the autonomous Adas and autonomous applications within the automotive space Micro Vision's technology will be a key enabler to unlocking additional <unk> plus an ultra features for our OEM customers may have and move your <expletive> and mosaic.
Glen: Are the right products at the right time for the automotive market.
Glenn DeVos: As I mentioned earlier, I couldn't be more excited about joining the MicroVision team and being part of this journey.
Speaker Change: As I mentioned earlier I couldnt be more excited about joining the microvision team and big part of this journey. Thank.
Anubhav Verma: Thank you, and I'll now turn it over to Anubhav to talk about our financials. Anubhav. Thanks Glenn. We took many transformational steps in 2024 to adapt to the dynamic nature of the industry, including the macroeconomic conditions and geopolitical factors.
Speaker Change: Thank you and I'll now turn it over to honor Bob to talk about our financials on above.
Bob: Thanks Glenn.
Bob: We took many transformational steps in 2024 to adapt to the dynamic nature of the industry, including the macroeconomic conditions and geopolitical factors.
Anubhav Verma: The three notable achievements of the company are, number one, expanded near-term revenue opportunities in the industrial and defense sectors as timelines continue to evolve in the automotive industry. Fierce automotive OEM competition from China, both in terms of price and features, continue to drive U.S. and European automotive OEMs to quickly find a way to progress their ADAS and EV initiatives. While this means revenues at scale from this industry are delayed, the certainty of LiDAR adoption, especially given its success in China, has never been higher. To adapt to the changing landscape, we successfully positioned the company to focus on near-term revenue from industrial verticals, with a focus on AMR, AGV in the warehouse and factory automation space, and also cobots or collaborative robots.
Bob: Three notable achievements of the company are number one expanded near term revenue opportunities in the industrial and defense sectors as timelines continue to evolve in the automotive industry.
Bob: Fewer automotive OEM competition from China, both in terms of price and features.
Bob: To drive U S and European automotive Oems to quickly find a way to progress their adas and EV initiatives.
Bob: While this means revenues at scale from this industry are delayed the certainty of lidar adoption, especially given its success in China has never been higher.
Bob: To adapt to the changing landscape, we successfully positioned the company to focus on near term revenue from Industrial award that goes with a focus on EMR Adv in the warehouse and factory automation space and also co bot or collaborative robots.
Anubhav Verma: The revenue potential is immediate and significant given the need to reduce the cost in this industry. In addition, we're now actively pursuing opportunities in the defense vertical, especially given the focus of the Trump administration to prioritize defense spending on cutting-edge technologies by leveraging our existing technologies and products in the AR and the VR space.
Bob: Our revenue potential is the immediate and significant given the need to reduce the cost in this industry.
Bob: In addition, we're now actively pursuing opportunities in the defense vertical.
Bob: Especially given the focus of the Trump administration to prioritize defense spending on cutting edge technologies by leveraging our existing technologies and products in the ER and the VR space.
Anubhav Verma: Number two, disciplined cost management and added a world-class leadership team. We adjusted the workforce last year to focus on resources on near-term revenue opportunities. While the entire market executed several rounds of restructuring to conserve cash, our cash burn continues to be one of the lowest in the marketplace.
Bob: Number two disciplined cost management and added a world class leadership team.
Bob: Readjusted the workforce last year to focus on resources on near term revenue opportunities.
Bob: While the entire market executed several rounds of restructuring to conserve cash our cash burn continues to be one of the lowest in the marketplace.
Anubhav Verma: Also in line with our focus on operational excellence, we are thrilled that Glenn has joined us. His experience, energy, and perspective will help usher in transformational advancements in our solutions and go-to-market as we prioritize the expansion of our end markets, including industrial and defense.
Bob: Also in line with our focus on operational excellence, we are thrilled that Glenn has joined us.
Bob: His experience energy and perspective will help usher in transformational advancements in our solutions and go to market as we prioritize the expansion of our end markets, including industrial and defense.
Anubhav Verma: Number three, strengthened our balance sheet with two rounds of investments from a strategic financial partner. With the raised capital and a further streamlined cash burn, we extended our cash runway into 2026. With near-term revenue opportunities and our expansion in the industrial and defense sectors, we believe we have improved our timelines to achieve cash flow breakeven. This is the first time in the history of the company that one single investor has committed to invest an aggregate of over 90 million dollars of capital. This $90 million includes a $75 million convertible facility entered into in October 2024 and then a subsequent $17 million common equity transaction executed in February 2025.
Bob: Number three strengthen our balance sheet with two rounds of investments from a strategic financial partner.
Bob: With the raised capital and are further streamlined cash burn we extended our cash runway into 2026 with near term revenue opportunities and our expansion in the industrial and defense sectors. We believe we have improved our timelines to achieve cash flow breakeven.
Bob: This is the first time in the history of the company that one single Investor has committed to invest an aggregate of over $90 million of capital.
Bob: This $90 million includes the $75 million convertible facility entered into in October 2024, and then a subsequent $17 million.
Bob: Common equity transaction executed in February 2025.
Anubhav Verma: We believe these back-to-back financing transactions signal a strong vote of confidence. This has also been reflected in the MicroVision training volumes that are significantly higher, three, four times of the historical levels, driven by both institutional and retail. If I can summarize this, securing an institutional financial partner to make an over $90 million commitment signals a strong vote of confidence in MicroVision's future.
Bob: We believe these back to back financing transactions.
Bob: A strong vote of confidence.
Bob: <unk> has also been reflected in the Microvision trading volumes that are significantly higher three four times of the historical levels.
Bob: Even by both institutional and retail.
Bob: If I can summarize this.
Bob: Securing an institution financial partner to make and over $90 million commitment signals, a strong vote of confidence in micro vision's future.
Anubhav Verma: Last fall, we ran a competitive process to select institutions for a capital raise and received term sheets from multiple quality institutional investors that reinforced the market perception of MicroVision's technology. As a result of this, we have achieved a strong market cap, bypassing several of our peers. We remain one of the highest valued U.S.-based LiDAR companies with high average daily trading volume with elevated levels of institutional trading. These are all reflective of MicroVision's market position and strong staying power with low cash burn and high revenue potential from automotive, industrial, and defense sectors.
Bob: Last fall, we ran a competitive process to select institutions for a capital raise and received a term sheet for multiple quality institutional investors that reinforced the market perception of micro vision's technology.
Bob: As a result of this we have achieved a strong market cap bypassing several of our peers.
Bob: We remain one of the highest valued U S based lidar companies with high average daily trading volume with elevated levels of institutional trading.
Bob: These are all reflective of micro vision's market position and strong.
Bob: Staying power with low cash burn and high revenue potential from automotive industrial and defense sectors.
Anubhav Verma: Now let's review our Q4 financial performance. For the fourth quarter revenue, we reported $1.7 million. After backing out the one-time Microsoft revenue in Q4 last year, the revenue grew from half a million dollars to 1.7 million dollars year over year, primarily driven by customers in the industrial vertical.
Bob: Now, let's review, our Q4 financial performance.
Bob: For the fourth quarter revenue, we reported $1 7 million.
Bob: After backing out the onetime Microsoft revenue in Q4 of last year. The revenue grew from $5 million to $1 $7 million year over year, primarily driven by customers in the industrial vertical.
Anubhav Verma: While we did see momentum in industrial verticals, the Q4 revenue came short of our expectations as one customer delayed its decision to 2025, though we remained significantly engaged. On the expenses side, our fourth quarter 2024 expenses were in line with our expectations. For Q4, we had $14.7 million of R&D and SG&A expenses. These include two million dollars of non-cash charges related to stock-based compensation expense and 1.7 million in non-cash charges related to DNA. Backing out these non-cash charges, our R&D and SG&A expenses were only $11 million in the quarter.
Bob: While we did see momentum in industrial verticals. The Q4 revenue came short of our expectations as one customer delayed its decision to 2025 Dolby remains significantly engaged.
Bob: On the expense side, our fourth quarter 2024, and expenses were in line with our expectations.
Bob: For Q4, we had $14 $7 million of R&D and SG&A expenses.
Bob: These include $2 million of noncash charges related to stock based compensation expense and $1 7 million in noncash charges related to DNA.
Bob: Backing out these noncash charges, our R&D and SG&A expenses were only $11 million in the quarter.
Anubhav Verma: In line with our expectations, our expenses have trended down sequentially since the first quarter 2024, primarily due to the reductions in force we implemented to focus the company on Maven and Mobia products and away from Mosaic and SensorFusion in response to the automotive projects being pushed to the right. We believe our workforce and expenses are well positioned to execute on the current business strategy. The current engineering talent pool is sufficient to remain engaged with the automotive OEMs and simultaneously scale faster with industrial and defense revenue opportunities in near term.
Bob: In line with our expectations, our expenses have trended down sequentially since the first quarter 2024, primarily due to the reductions in force we implemented to focus the company on Maven and mobile products and away from mosaic and sensor fusion and response to the.
Bob: <unk> projects being pushed to the right.
Bob: We believe our workforce and expenses are well positioned to execute on the current business strategy.
Bob: Engineering talent pool is sufficient to remain engaged with the automotive Oems and simultaneously scale faster with industrial and defense revenue opportunities in near term.
Anubhav Verma: We believe that the go-forward annual run rate of our R&D and SG&A expenses will be $48 to $50 million for 2025.
We believe that the go forward annual run rate of our R&D and SG&A expenses will be $48 million to $50 million for 2025.
Anubhav Verma: Q4 CapEx was $0.1 million in line with our expectations.
Bob: Q4, Capex was <unk> 1 million in line with our expectations.
Anubhav Verma: So let's talk about Balaji. We finished the year with $75 million in cash and cash equivalents. We're pleased with how our relationship with Hytrail has developed over the last six months. In February this year, we raised another round of equity investment from them.
Bob: Now, let's talk about our balance sheet.
Bob: We finished the year with $75 million in cash and cash equivalents.
Bob: We're pleased with how our relationship with Hydro <unk> has developed over the last six months.
Bob: In February this year, we raised another round of equity investment from them.
Anubhav Verma: Subsequent to these financings, the company now has access to a total of $235 million as of December 31, 2024, with the following four components. Number one, the cash-in-cash equivalence of $75 million. Number two, $114 million availability under our current ATM facility. Number three, $30 million of unjoined capital under the convertible note facility. And lastly, the $17 million of new equity capital from Hytral. In addition to the equity capital raise in February, Hytrail also converted over 20% of their note into common stock.
Bob: Subsequent to these financings the company now has access to a total of $235 billion as of December 31, 2024, but the following four components number one the cash and cash equivalents of $75 million.
Bob: Number $214 million availability under our current ATM facility number $330 million of Undrawn capital under the convertible notes facility.
Bob: And lastly, the $17 million of new equity capital from Hydro.
Bob: In addition to the equity capital raise in February High Trail also converted over 20% of their notes into common stock in.
Anubhav Verma: In addition, the June to August redemption payments on those notes were deferred. We're pleased to have found a strategic partner whose confidence in MicroVision's future has motivated an alignment of economic interests in step with our management team, employees, and other shareholders. This makes the overall cost of capital for the convertible quite attractive. We believe that the benefits to the company spurred by the investment significantly outweigh the costs.
Bob: In addition, the June to August redemption payments on those north where before you were.
Bob: We're pleased to have found a strategic partner, who has confidence in microvision future has motivated and alignment of economic interest in step with our management team employees and other shareholders.
Bob: This makes the overall cost of capital for the convertible quite attractive.
Bob: We believe that the benefits to the company spurred by the investments significantly outweigh the cost.
Anubhav Verma: We sold about $9 million worth of common stock under the current ATM in the fourth quarter. We have $114 million available. On the convertible note, we have approximately 33 million outstanding that could convert at a fixed price of $1.59. The 30 million second tranche remains undrawn and available for future drawdowns subject to certain limitations.
Bob: We sold about $9 million worth of common stock under the current ATM in the fourth quarter, we have $114 million available.
Bob: On the convertible notes, we have approximately $33 million outstanding that could convert at a fixed price of $1 59.
Bob: The $30 million second tranche remains undrawn and available for future dropdowns subject to certain limitations.
Anubhav Verma: Now, let's talk about 2025 targets. We have already secured production commitments from our manufacturing partner at ZF to fulfill the anticipated demand from the customer projects we remain deeply engaged in. We expect this demand to be in the $30 to $50 million range, just from this vertical only, over the next 12 to 18 months.
Bob: Let's talk about 2025 targets.
Bob: We have already secured production commitments from our manufacturing partner AD <unk> to fulfill the anticipated demand from the customer projects, we remain deeply engaged in.
Bob: We expect that demand to be in the $30 million to $50 million bridge just from this vertical only over the next 12 to 18 months.
Anubhav Verma: As we expand our TAM into defense and other related areas and work together with Glenn to expand our solutions and accelerate our go-to-market strategy, we will provide more color on financial and business milestones for 2025 and 2026 in the upcoming events. To summarize, we're really excited about 2025 and beyond as MicroVision drives forward with A. Significantly higher temps, including defense and industrial. B. Expansive and broadening solutions advancement. see a solid balance sheet with superior trading methods.
Bob: As we expand our Tam into defense and other related areas and work together with Glenn to expand our solutions and accelerate our go to market strategy, we will provide more color on financial and business milestones for 2025 and 2026.
Bob: In the upcoming events.
Bob: To summarize we're really excited about 2025 and beyond as Microvision drive forward with <unk>.
Bob: A significantly higher temps, including defense and industrial.
Bob: Expansive and broadening solutions advancements.
Bob: Our solid balance sheet with superior trading metrics.
Anubhav Verma: And lastly, a well-experienced team to execute the strategy.
Bob: And lastly, a very experienced team to execute that strategy.
Operator: With this, Jon, I would now like to open the line for questions. Thank you. At this time, we will be conducting a question and answer session. Investors can submit their questions within the meeting webcast by typing them into the QA button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone line. For analysts to ask questions on the phone line, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.
Bob: With that John I would now like to open the line for questions.
Bob: Thank you at this time, we will be conducting a question and answer session.
Bob: <unk> can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen.
Bob: Analysts, who publish research may ask questions on the phone line for analysts to ask questions on the phone lines. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.
Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.
Bob: Pressing the star Keys, one moment, please while we poll for questions.
Casey Ryan: Our first question is from Casey Ryan of West Park Capital. Good afternoon, everybody. Thank you for the...
Casey Ryan: Our first question is from Casey Ryan of West Park capital.
Speaker Change: Good afternoon everybody.
Bob: For the.
Bob: Exciting update I was curious if we could start with the discussion of the $1 $7 million in revenue in the quarter.
Casey Ryan: I was curious if we could start with the discussion of the $1.7 million in revenue in the quarter. How much of that would we characterize as sort of commercial shipments versus say NREs or some sort of R&D work done in conjunction with partners?
Bob: How much of that would we characterize the sort of commercial shipments versus say <unk> or some sort of R&D work done.
Bob: Done in conjunction with partners.
Anubhav Verma: Hi, Casey. Thank you for your question. This is Anubhav here. The $1.7 million in the fourth quarter was primarily the revenue derived from the sale of sensors to our customers. There is very minimal NRE in this. The NRE that we were expecting to get in Q4, we expect that to be pushed out in 2025 because of the customer Okay, terrific. Would you describe the 1.7... Whatever portion was sort of commercial, was that sort of to a single customer or maybe potentially to multiple customers, because that would be...
Speaker Change: Hi, Casey. Thank you for your question. This is on above the $1 7 million in the fourth quarter was primarily the.
Revenue derived from the sale of sensors to our customers there is very minimal.
Speaker Change: The NRT that we were expecting to get in Q4.
Speaker Change: We expect that to be pushed out into 2025 because of the customer decision.
Speaker Change: Okay terrific.
Speaker Change: Would you describe the via one seven.
Speaker Change: Whatever portion what sort of commercial.
Speaker Change: Was that in order to a single customer or maybe potentially to multiple customers because that would be.
Speaker Change: Exciting if it works.
Anubhav Verma: www.microsoft.com. Thank you. Correct. So, it was to multiple customers, not just one, because I think here, I would like to differentiate, however, the number of customers that comprises 1.7 million is less than 10, because our strategy has always been to pursue high volume industrial customers, because that significantly drives a higher ROI, because we have to, we can get those revenue without inflating our SG&A expenses. And that has been the model of the company to go after industrial customers with significantly higher volume estimates to either retrofit their existing robots or for new robots that are going to be deployed in the future.
Speaker Change: Correct. So it was a two multiple customers not just one because I think.
Speaker Change: I would like to differentiate however, the number of customers that comprises $1 $7 million is less than 10, because our strategy has always been to pursue high volume industrial customers because that significantly drives a higher ROI because we have to we can get those revenue without.
Speaker Change: Inflating, our SG&A expenses and that has been the model of the company to go after industrial customers with.
Speaker Change: Significantly higher volume.
Speaker Change: <unk> to either retrofit their existing.
Speaker Change: Existing robots or for new robot that are going to be deployed in the future.
Casey Ryan: Okay. Terrific. That's helpful. Color, I think.
Speaker Change: Okay terrific.
Speaker Change: Full color I think.
Casey Ryan: It feels new that the dimension of defense opportunities for the company, which, you know, I agree is exciting. I have two questions around that, I guess. Is it fair for us to think that those opportunities are related to, say, ground-based or movable objects, or are they also aerial objects? I guess I'm trying to understand maybe. how big the opportunity is if it's sort of. Multitheater, essentially.
Speaker Change: It feels new.
Speaker Change: The dimension of defense opportunities.
Speaker Change: For the company, which I agree is exciting.
Well.
Speaker Change: Two questions around that I guess.
Speaker Change: Is it fair for us to think that those opportunities are related to say ground based or movable objects or are they also aerial objects I guess I'm trying to understand maybe.
Speaker Change: How big the opportunity is if it's sort of.
Speaker Change: Multi theater essentially.
Speaker Change: What.
Sumit Sharma: What, let me take that one. I think the focus is if you think about our core products, the core product we've been working on five years since I've been CEO is the LIDAR product with the perception and expanding that into platforms and automotive and certainly, you know, with the team here in Hamburg combined, you know, we have something we can offer to people developing vehicles that are non-automotive and happens to be that in the military space there are multiple programs on this. So we engaged on that last year. So primarily, that's the product we're working on.
Speaker Change: I'll take that one.
Speaker Change: I think our focus is if you think about our core products. The core products. We were working on five years since I've been CEO is the lighter product with the perception and expanding that into platforms in automotive and certainly with the team here in Hamburg combined.
Speaker Change: Have something we can offer to.
Speaker Change: People developing vehicles that are non automotive and happens to be that in the military space. There are.
Speaker Change: Multiple programs on this so we engaged on that late last year.
Speaker Change: So primarily that's the product we're working on but of course, the pedigree of the company 25 years plus before that is of course display systems.
Sumit Sharma: But of course, the pedigree of the company, 25 years plus before that, is, of course, display systems. And, you know, given the current environment, you know, as opportunities arise, we want to make sure that all the assets of the companies are made available for potential revenue.
Speaker Change: And given the current environment.
Speaker Change: Those opportunities are.
Speaker Change: We want to make sure that all the us as the companies are made available for potential revenue.
Speaker Change: So nothing nothing nothing missile related right.
Sumit Sharma: of the world.
Speaker Change: Ground based and of course.
Sumit Sharma: directly related to our soldiers.
Speaker Change: Directly related to our soldiers.
Casey Ryan: Okay. Um, So... Not to harp too much on it, but it is exciting.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: Not to harp too much on it but it is exciting are you sort of aligned with a a sort of partner as you.
Sumit Sharma: Are you sort of aligned with a sort of partner, as you, you know, sort of work to sort of penetrate via defense space, or are you able to go directly because of your past history and past relationships? We've actually never gone direct. I think if you think about the size of the company we are, we build one part of the subsystem of something larger. So we tend to work, you know, with partners that can be part of the bigger program.
Speaker Change: Yeah.
Speaker Change: Sort of worked its way to penetrate the defense space or are you able to go directly because of your past history in past relationships.
Speaker Change: We've actually never gone direct I think if you think about the size of the company. We are building one part of the subsystem of something larger so we tend to work.
Speaker Change: With partners that can be part of a bigger program as I mentioned on earlier right, we intend to bring on some.
Casey Ryan: As I mentioned earlier, right, you know, we intend to bring on some military advisors to help us through the process. Okay, all right, terrific.
Speaker Change: Military advisors to help us through the process.
Speaker Change: Okay.
Speaker Change: Alright, terrific and then.
Casey Ryan: And then. The circling back to the last question is sort of... you know, less than 10, but more than one sort of commercial customers in for queue is pretty exciting. For all those opportunities, are you finding that you're competing against a lot of the names that we would think about, or are you finding that it's really, maybe MicroVision is being sought out for its unique capabilities? What's the competitive nature of these sort of wins, essentially, in terms of building relationships? And the customers are, you know, all the customers know who the parties are not going to comment like, you know, who's in the mix.
Speaker Change: <unk>.
Speaker Change: Circling back last question sort of.
Speaker Change: Less than 10, but more than one sort of commercial customers in <unk> is pretty exciting.
Speaker Change: For all those opportunities are you finding that you're competing against a lot of the names that we would think about or are you finding that it's really.
Speaker Change: Maybe you want Microvision is being sought out for its unique capabilities are.
Speaker Change: What's the competitive nature of these sort of wins essentially in terms of building relationships with these customers.
Speaker Change: And the customers are.
Speaker Change: All the customers know who the parties are.
Speaker Change: I'm not going to comment like who is in the mix that's not appropriate but are also.
Sumit Sharma: That's not appropriate for also. That's their confidential information. But one thing that, uh, you know, that's just my general view of, uh, talking to other people, uh, with. You know, with the potential of Some trade barriers that may come up in the future, working with, you know, Chinese based ladder companies, you know, that has ups and downs, they navigate. Most recently, somebody said that, yeah, having a company that is You know, here at home, you know, give that definitely gives us a warm and a fuzzy, right? So that restricts that limits not restricts, but, you know, that narrows down the number of companies you compete against, but to them, make a LIDAR.
Speaker Change: They're confidential information.
Speaker Change: But.
Speaker Change: One thing that.
Speaker Change: Just my general view of talking to other people.
Speaker Change: With.
Speaker Change: Yeah.
Speaker Change: With the potential of <unk>.
Speaker Change: Some trade barriers that may come up in the future.
Speaker Change: Working with Chinese based larger companies.
Speaker Change: Has ups and downs.
Speaker Change: They navigate.
Speaker Change: Most recently somebody said that you are having a company that is.
Speaker Change: Here at home.
Speaker Change: Definitely gives us a warm and fuzzy right so that that limits that restricts that narrows down the number of companies to compete against.
Speaker Change: But to them make a lidar somebody else, making different lidar you have software suddenly got software how well can you integrate how well does your application how well does the application software solve our problems real time low power.
Sumit Sharma: Somebody else makes a different LIDAR. You have software software. How well can you integrate, you know, how well does your application? How well does the application software solve our problems in a real time? Low power. They want choices, right? They don't want to lock themselves in because some of the decisions that people make are seven years programmed lifetimes. They may be a smaller volume compared to automotive, but.
Speaker Change: They want choices right, they don't want to lock themselves in because.
Speaker Change: Like some of the decisions that people make our seven years.
Speaker Change: Program lifetimes, and maybe smaller volume compared to automotive but.
Speaker Change: Pretty big decision. So typically there is more than one company involved.
Sumit Sharma: Anand Balaji, Drew Markham, Anubhav Verma, Sumit Sharma, Kevin Garrigan, Casey Ryan, Anand Balaji, Drew Markham, Anand Balaji, MicroVision Inc.
Speaker Change: And.
Speaker Change: They tried to just like every situation we walk into the automotive we try to understand the uniqueness, but also what's really something that can count on on your technology. So.
Speaker Change: In our case offering 25000 hours worth of life.
Speaker Change: Low power software integrated onboard not requiring ecu's those are the kind of value proposition and unique selling points that could promote so we remain competitive.
Speaker Change: And others will have a different unique point, but they are lighter companies that software.
Speaker Change: Narrower.
Speaker Change: Subset of companies competing.
Jesse Sobelson: Terrific, thank you for all that color and I think Andres Sheppard, Drew Markham, Anubhav Verma, Sumit Sharma, Kevin Garrigan, Casey Ryan, Anand Balaji, MicroVision Inc Our next question is from Jesse Sobelson of D'Borough Capital. Please proceed. Hey, everyone. Thanks for the update here. Thanks for taking our questions. The first I was just wondering on is this ZF contract. You know, you mentioned $30 to $50 million over 12 to 18 months.
Speaker Change: Terrific. Thank you for all that color and I think your.
Speaker Change: You're painting, a very positive outlook for 2025. So thank you I will drop off the line now.
Speaker Change: Our next question is.
Jesse Olson: As from Jesse Olson of <unk> capital.
Speaker Change: Please proceed.
Speaker Change: Hey, everyone. Thanks for the update here and thanks for taking our questions first I was just wondering on is the size of that contract.
Speaker Change: <unk> $30 million to $50 million over 12 months to 18 months could you provide a little bit more clarity on exactly what the deal is potentially what kind of products you expect to deliver and if this is an ongoing.
Anubhav Verma: Could you provide a little bit more clarity on exactly what the deal is, potentially what kind of product you expect to deliver, and if this is an ongoing and consistent delivery contract or some type of lump sum agreement? Go ahead, please. No, no, go ahead, Anand. Okay, Jesse, so I just wanted to clarify a few things. So this $30 million to $50 million is what we expect as the demand from our customers in the next 12 to 18 months. So to fulfill that demand, we have already secured production commitments from ZF, who is our manufacturing partner, to ensure that we have an uninterrupted supply to our customers.
Speaker Change: Consistent delivery contract or some type of lump sum agreement.
Speaker Change: Please yes.
Speaker Change: Go ahead of it.
Speaker Change: No no go ahead.
Speaker Change: Okay.
Speaker Change: So I just wanted to clarify a few things. So this 30% to $50 million is what we expect as the demand from our customers in.
Speaker Change: In the next 12 to 18 months, so to fulfill that demand we have already secured production commitments from <unk>.
Speaker Change: With our manufacturing partner to ensure that we have an uninterrupted supply.
Speaker Change: To our customers because I think <unk> described.
Anubhav Verma: Because I think, as Sumit described, one of the important reasons for some of these commercial discussions with industrial customers that we're engaged in, it's a priority for them to make sure a company like ours can deliver solution at scale, and unpredictable volume, and predictable schedules. And hence, that's why, for the of fulfilling that demand, we ensured that we have a locked in production commitment from ZF, so that when the demand comes and arrives, we're able to fulfill that sufficiently well. Great. Thanks for the explanation. I'm sorry for the mistake, but I appreciate the clarification. It's good to hear that you've been able to secure this type of production capacity for potential demand.
Speaker Change: One of the important reasons for some of these commercial discussions with industrial customers that we're engaged and it's a priority for them to make sure a company like ours can deliver solution at scale.
Speaker Change: And.
Speaker Change: Predictable volume and predictable schedules and hence that's why too for the certainty of fulfilling that demand.
Speaker Change: We ensured that we have locked in production commitment from that asset so that when the demand comes in arise, we're able to fulfill that sufficiently well.
Speaker Change: Great. Thanks for the explanation and then I'm sorry for the mistake, but I appreciate the clarification, if it's good to hear.
Speaker Change: <unk> been able to secure this this type of production capacity for potential demand.
Sumit Sharma: Looking to one piece of the puzzle here that's been consistent with the business is the automotive RFQs. You mentioned some continued engagement with several OEMs, and there have been delays. It is just across the board, but could you just give us an idea on maybe some update on realistic timelines for these RFQs converting into revenue-generating contracts? Sumit, do you want to talk about that? Yeah, you broke up there for a second. Could you just repeat that for a second, please? You broke up for me. On RFQs, I'm just curious for in the automotive segment of the business, you know, the industry's experienced delays, but was just curious for some potential update on when we could expect that business to degenerate.
Speaker Change: Looking to one piece of the puzzle here.
Speaker Change: And consistent with the business as the automotive are accused you mentioned some continued engagement with several.
Speaker Change: Oems and there have been delays.
Speaker Change: Got it.
Speaker Change: Just across the board, but could you just give us an idea on maybe some potential update on realistic timelines for these RF queues converting into revenue generating contracts could potentially be.
Speaker Change: Okay.
Speaker Change: So unless you want to talk about that.
Speaker Change: You broke up there for a second could you just repeat that for a second please.
You broke up for me.
Speaker Change: On RF queues I'm, just curious for the automotive segment of the business.
Speaker Change: The industry has experienced delays, but was just curious for some potential update on when we could expect that business to chip degenerates.
Sumit Sharma: Yeah, I think, I think in general, you know, the RFQs timeline for their start-up production is moving out. So the technical evaluation goes on. And to be honest, right, even on the OEM side, there's a churn, you know, as you can, you know, we all read the news. They have churned, their tier ones have churned, but the programs by themselves, right, are seeing some, you know, elongation in their timeline. So as RFQs go in, you know, technically, lots of new items come out always, like, you know, how about this? How about that? But the decision, it's not clear when it's going to get made, right?
Speaker Change: Yes, I think I think in general.
Speaker Change: <unk> the timeline for.
Speaker Change: Their startup production is moving out.
Speaker Change: So the technical evaluation goes on.
Speaker Change: And to be honest right, even on the OEM side Theres a churn as you can.
Speaker Change: I'll read the news they have churn tier ones, our churn, but the programs by themselves are seeing some.
Speaker Change: Elongation in their timelines.
Speaker Change: So as Rfps go in technically lots of lots of known new items come out always like okay. How about this how about that but the decision is not clear when it's going to get made right, they're not driving towards this isn't as fast as they were in previous years.
Sumit Sharma: They're not driving towards decision as fast as they were in previous years. That's at least our experience, right? And I know like, you know, we feel a lot of questions from our investors that are your best in class. How is it that, you know, you're not winning? One could get an award, but that doesn't mean it goes to SOP. So lots of variables, right? So, you know, I guess like everybody wants to win, do the press release, stock goes up, and it's great. But nobody can actually talk about, you know, is that actually going to go into production or not and where that program is.
Speaker Change: At least our experience right and I know like you feel there's a lot of questions from our investors and are your best in class how is it that.
Speaker Change: Youre not winning.
Speaker Change: Part of it is there's a process that you are part of and you have to go through it to get to.
Speaker Change: The commercial side of it right so that.
Speaker Change: Good reviews go in you want to get to the Green Park that quickly green, but any of the commercial side of it.
Speaker Change: It will be very hard for me or anybody else to predict when those timelines are and if those programs are actually going to go up to fruition.
Speaker Change: One could get an award but that doesn't mean it goes to Sop.
Speaker Change: So lots of variables right. So I guess like everybody wants to win do the press release.
Speaker Change: That goes up and it's great, but nobody can actually talk about is that actually can go into production or not and where that program is and I would I would argue that a lot of our competition has announced wins.
Sumit Sharma: And I would argue that, you know, a lot of our competition has announced wins, but it's really hard for them to say, you know, where they will be in the long term, you know, that those programs are going to actually be maintained. So we're in a different stage.
Speaker Change: But it's really hard for them to say, whether it would be.
Speaker Change: <unk> terminals that those programs are going to actually be maintained so we are in a different stage.
Sumit Sharma: You know, we made a bigger bet, which is to reduce everything in size and go for passenger vehicles early on. We started incorporating the perception software, you know, by bringing on the team here in Hamburg. And, you know... The bigger contracts would take longer, in my opinion. It's a developing process with these guys, and I think it's just across the industry.
Speaker Change: We've made a bigger bet, which is to reduce everything in size and go for.
Speaker Change: Passenger vehicles early on.
Speaker Change: We started incorporating the perception software by bringing on the team here in Hamburg.
Speaker Change: <unk>.
Speaker Change: No.
Speaker Change: Bigger contracts, we take longer in my opinion.
Speaker Change: Okay.
Speaker Change: Sure understood.
Speaker Change: It's a developing developing process with these guys and I think it's just across the industry.
Glenn DeVos: I guess, you know, lastly, I'm just kind of curious, there's been some discussion here. Actually, if I... Oh, sure. Go on. If I can interrupt, right? We have a new CTO who comes from this space. He's probably got far more experience than I do. So perhaps, Glenn, you can give a little color of what you're... You know, we talk about this a lot, so I think we should be candid about what we think, right? Yeah. Yeah, I mean, it's a good question. And I think what you're seeing now is a period where there's a lot of reformulation within the OEM community about exactly what their, you know, what their higher content ADAS and, you know, level two plus and level three systems are going to be.
Speaker Change: I guess lastly, I am just kind of curious blacks in some discussion if I <unk> sure. If I can drop drive revenue CTO, who come from this space is probably we've got far more experience than I do so perhaps Glen you can give a little color of what you are.
Speaker Change: We've talked about this a lot I think we should be candid about what we think right now.
Speaker Change: Yes, it's a good question and I think what Youre seeing now is a period, where there's a lot of re formulation.
Speaker Change: Within the OEM community about exactly what they are what they are higher content Adas and level, two plus and level III systems are going to be I think we've seen a couple of consistency.
Glenn DeVos: I think we've seen a couple of consistencies in that, and that LiDAR is clearly a part of that. So as you talk about level two plus plus or level three, LiDAR is part of the perception system, which is great for us. But it's very clear, you know, after that kind of first generation of level three systems came out and really underperformed in the market, many were not, you know, were just simply not... Were not adopted to the extent that the OEMs wanted. There's been somewhat of a, like I said, a reformulation of what are those strategies.
Speaker Change: And that in that lighter is clearly a part of that.
Speaker Change: So as you're talking about level, two plus plus for level three and then later as part of the perception system, which is which is great for us but.
Speaker Change: But it's very clear after that kind of first generation of <unk> III systems came out and really underperformed in the market many were not.
Speaker Change: Just simply not.
Speaker Change: We're not adopted to the extent that the Oems wanted.
Speaker Change: Been somewhat ever.
Speaker Change: I have a reformulation of what are the strategies, but.
Glenn DeVos: But... And that's the process they're going through now. And so, you know, there's some exploratory work that they're doing as well as... trying to figure out what's the right formula, what's the right value prop for their customers. But it's clearly coming. I don't think there's any debate about that. Where those systems have seen success with some of the OEMs, it's been good. So I think you're going to see that developing. That's certainly going to happen. LiDAR will be a part of that solution. And so we're supporting them and staying very engaged with that process and hopefully able to accelerate their adoption.
And that's and that's the process, we're going through now and so no. There is some exploratory work that they're doing as well as.
Speaker Change: I'm trying to figure out what's the right Formula was fair value prop for their customers, but it's clearly coming I don't think theres any there's any debate about that.
Speaker Change: Where those systems have seen success with some of the Oems. It's been good so I think youre going to youre going to see that developing.
Speaker Change: Suddenly going to happen later will be a part of that solution.
Speaker Change: And so we're supporting them and staying very engaged with that process.
Speaker Change: Able to hope we were able to accelerate there.
Speaker Change: Sure.
Jesse Sobelson: Great, thanks for the detail there.
Speaker Change: Alright, thanks for the detail there.
Jesse Sobelson: You know, one last one for me and I can jump back in the queue. You know, it sounds as if MicroVision does have some something of a focus on potentially expanding its perception solutions.
Speaker Change: And last one from me and I'll jump back in the queue.
Speaker Change: It sounds as if Microvision does have some something of a focus on potentially expanding its perception solutions. So would you say are there any strategic opportunities to accelerate growth through acquisition and potential potentially in complementary technologies are there with sensor fusions or some type of software and then just a follow up.
Sumit Sharma: So would you say are there any strategic opportunities to accelerate growth through acquisition potentially in complementary technologies, either with sensor fusions or some type of software? And then just to follow up, are you actively evaluating potential M&A opportunities? And how would you go about doing? I think let me start with that just to establish what we've done already. With our acquisition of the IBAO... several years ago. I believe, and I think it's, you know, part of the reason why, like, Glenn has actually taken a big look at it and he wanted to join. The perception core is probably pretty mature.
Are you actively evaluating potential M&A opportunities and how would you go about doing so.
Speaker Change: Yes, let me, let me start with that Mr. Establish what we've done already with.
Speaker Change: With our acquisition of the <unk> team.
Speaker Change: Several years ago.
Speaker Change: I believe and I think it's.
Speaker Change: Part of the reason why like Glenn has actually take a look at it any water to join the perception core is probably pretty mature. It is actually very very mature. It was developed for outer years ago very close collaboration.
Sumit Sharma: It is actually very, very mature. It was developed for Audi years ago in very close, you know, collaboration with them. It's at a very high level of maturity. And on top of that, we're very, you know, very quickly, we're able to build out different application software to support different customers. But it was for LIDAR. I think what Glenn mentioned just now, and I think, you know, I don't want the subtlety to be lost. There's a whole space of multi-modal, it's just words, but it's like radar, camera, LiDAR. There's a group of sensors in combination and software that will get to the high level.
Speaker Change: Collaboration with them, it's been a very high level of maturity on on top of that we're very very quickly were able to build out different application software to support different customers.
Speaker Change: But it was for Lidar specific.
Speaker Change: Think what Glen mentioned, just now and I think.
Speaker Change: I don't want the subtlety to be loss.
Speaker Change: Theres a whole space of multimodal will just words, but it's like radar camera lidar.
Speaker Change: As a group of sensors and combination and software that.
Speaker Change: We'll get to the high level. So I think your question is about M&A I'm, just giving you a context that we have quite a lot of things build out.
Anubhav Verma: So I think your question about M&A, I'm just giving you context that we have quite a lot of things built out. The best thing would be for cheap and efficiently, if we can build more out internally. But like any company in this space, right? Yeah, if there's an opportunity, I mean, our focus right now is to get revenue, to get partnerships, to get those paths where, you know, everybody feels that it's somewhat sustainable. And growth comes different ways. So certainly we wanna home grow everything, you know, it'll be cheaper and be faster. But if the right opportunity comes along, I think, you know, everybody would wanna become a stronger company, especially if that allows you to get.
Speaker Change: The best thing would be for cheap and efficiently if we can build more out and currently.
Speaker Change: But like any company in this space right. Yeah. If there is an opportunity I mean, our focus right now is to get revenue to get partnerships to get to a path where everybody feels that is somewhat sustainable.
Speaker Change: <unk> growth comes different ways. So certainly we want a homegrown everything.
Speaker Change: For them to be faster, but if the right opportunity comes along I think everybody would want to become a stronger company, especially if that allows you to get.
Speaker Change: Customer support if you can actually get a program that faster of course, we would work on that right. So I think everything is up on the table always but generally we have something very valuable built out already.
Anubhav Verma: Anand Balaji, Drew Markham, Anubhav Verma, Sumit Sharma, Kevin Garrigan, Casey Ryan, Anand Balaji, MicroVision Inc And I think, Jesse, if I could just add, recapping what Sumit was describing, the strategy of the company is to truly become the ADAS solution provider for the industrial commercial vehicle space as well. So I think the idea is to build a full solution to be offered to these customers, and that's what we're looking to get to either organically or inorganically.
Jesse Olson: And I think Jesse if I could just add.
Speaker Change: Recapping, what Tim it was describing.
Jesse Olson: The strategy of the company is to truly become a das.
Jesse Olson: Solution provider for the industrial commercial vehicle space.
Jesse Olson: As well so I think the idea is to build a full solution.
Jesse Olson: All forward to these customers and that's what we're looking to get to either organically or inorganically.
Jesse Sobelson: Great, I appreciate the details there. Thanks for taking the questions and thanks for the time. Thank you.
Jesse Olson: Great I appreciate the details there thanks for taking my questions and thanks for the time.
Jesse Olson: Thank you.
Jesse Olson: Okay.
Anubhav Verma: I will now turn this call back over to Anubhav Verma to read questions submitted through the webcast. Thank you. Thanks, John.
Speaker Change: I will now turn this call back over to Andrew Bob Vermont to read questions submitted through the webcast. Thank you.
Speaker Change: Thanks, John.
Anubhav Verma: Right, so the first question we have is, Sumit, what are the factors that delayed the signing of this industrial deal? If you think about industrial customers... They really don't get much attention and much love from a lot of the bigger companies. You know, you can go to another lidar company, buy what's off the shelf, get integrated, you work through all that. you know, to a certain level, which means you'd have to have a software team. So it gets to a certain level of adoption. Yes, you could. What we did was we had a very unique thing.
Speaker Change: Right. So the first question we have is.
Speaker Change: So, but what are the factors that delayed the signing of this industrial deal.
Speaker Change: Okay.
Speaker Change: If you think about.
Speaker Change: Industrial customers.
Speaker Change: They really don't get much attention much love from a lot of the bigger companies you can go to the latter accompanied by what's off the shelf got integrated you worked through all that.
Speaker Change: To a certain level, which means you'd have to have a software team. So it gets to a certain level of adoption, yes, you could do that.
Speaker Change: What we did was we had a very unique thing. So our team has the perception not running on a big.
Sumit Sharma: So our team has the perception, not running on a big. NVIDIA platform. We actually have this high-level perception running inside our sensor on our And this is actually a very, very big advantage, because for that small power, it's not just the LiDAR, it's the LiDAR with the perception run. So when you have that much software you're providing, all the interfaces are provided, you have to collaborate with the customer. It's their application, can they sell more product and their platforms can go faster, much more adoption with their customers with this new technology. So there's a period of time they wanna qualify.
Speaker Change: Nvidia platform, we actually have this high level perception running inside our sensor on our <unk> Soc.
Speaker Change: And this is actually a very very big advantage because for that small power. It's not just the lidar it's the law.
Speaker Change: Or would the perception running.
Speaker Change: So when you have that much software you're providing.
Speaker Change: The interfaces are provided.
Speaker Change: To collaborate the customer is their application.
Speaker Change: They sell more product and their platforms can go faster.
Much more adoption with their customers with this new.
Speaker Change: New technology. So there's a period of time they want to qualify they want to make sure that we're bringing hardware which to be Frank with you. Some of them don't even understand how do we do this how is the central model work, where does the noise go away does that point cloud looks so clean.
Sumit Sharma: They wanna make sure that we're bringing hardware, which to be frank with you, some of them don't even understand how do we do this? How does the sensor model work? Where does the noise go? Why does the point cloud look so clean? They understand how to test LiDAR, but they don't understand how it really works. And then on top of that, the software is doing things that everybody acknowledges that, oh, that looks great. I mean, you got everything on board here. You can do ground plan. You can do this. All the things are ready to go now.
Speaker Change: They understand how to test lidar, but they don't understand how it really works.
Speaker Change: And then on top of that the software is doing things that everybody acknowledges that out that looks great. I mean, you've got everything onboard here you can do ground plan you can do this you can do this all the things are ready to go now and the application. There. So just are.
Sumit Sharma: And the application there, so just their own qualification part of it takes longer. And I think that is the bigger 1 that the qualification timeline. That we were tracking to the day we're tracking to saying, hey, this is how long it's going to take us. They have far exceeded that. Right? Because you just get deeper and deeper into it because the decisions are bigger. These are not like small projects for hundreds of units. Um, you know, whenever you do thousands of units, right? I mean, think about automotive is like hundreds of thousands units. So you go through a huge amount of qualification.
Speaker Change: Their own qualification part of it takes longer and I think that is the bigger one that the qualification timeline that we were tracking to that they were tracking to saying Hey. This is how long it's going to take us they have far exceeded that because you just get deeper and deeper into it because of decisions are bigger these are not like small projects for.
Speaker Change: For hundreds of units.
Speaker Change: Whenever you do thousands of units right I mean think about automotive is like hundreds of thousands units. So you go through the huge amount of qualification steps so orders of magnitude less but again theyre getting features that were available in the automotive space in the industrial space. So they are finally seeing some love from different companies that we're bringing mature technology that runs 425.
Sumit Sharma: So orders have increased less, but again, they're getting features that were available in the automotive space, in the industrial space. So they're finally seeing some love from different companies, and we're bringing in mature technology that runs for 25,000 hours worth of life. Imagine, you know, in industrial space, you're making something that was redesigned robustly and software. that can, you know, essentially, they would never have to develop any softwares. They have to rely upon us.
Speaker Change: <unk> thousand dollars worth of life imagine and industrial space, Youre, making something that was redesigned robustly and software.
Speaker Change: No.
Speaker Change: Essentially that would never have to develop any software staff to rely upon us. So that's what takes the most time is the full blown qualification part of it.
Sumit Sharma: So that's what takes the most time is the full blown qualification part. Thanks, Sumit.
Amit: Thanks, Amit.
Anubhav Verma: The next question is, can you comment on the recent deal announcements by several other LiDAR companies with global OEMs? If MicroVision had the best sensor with the lowest price point, why did the company not win these RFQs? Is it too late for MicroVision? How does MicroVision plan to differentiate itself from competing effectively against these competitors, including the Chinese LiDAR players?
Speaker Change: The next question is.
Speaker Change: Can you comment on the recent deal announcements by several other lidar companies with global Oems.
Speaker Change: If if microvision had the best sensor with the lowest price point why did the company not Wendy's RF skews is it too late for Microvision.
Speaker Change: How does microvision plan to differentiate itself from competing effectively against these competitors, including the Chinese light our players.
Glenn: Yeah, I'm going to I'm going to answer one part of it but just to give context, and then I'm going to actually have Glenn add more to it it's going to give a broader more brought up.
Sumit Sharma: I'm going to I'm going to answer one part of it, which is to give context. And then I'm going to actually have Glenn add more to it. He's going to give a broader, more broader perspective. I think, like, you know, the question always comes up. You have this best in class. Like people have asked me, I think it was at the investor event a couple of years ago, what's best in class? And I think it's still not clear to everybody what's really awesome about our technology. People ask the question about FMCW versus Time of Life.
Speaker Change: Perspective I.
Speaker Change: I think like another question always comes up you have this best in class people have asked me I think it was at the Investor event, a couple of years ago, What's best in class and I think it's still not clear.
Speaker Change: Clear to everybody was really awesome about our technology.
Speaker Change: People ask the question about FMC W versus.
Speaker Change: Im a flight at a base level.
Sumit Sharma: At a base level. It's going to be in a car. It has to be low power. It has to be small. It has to have lots and lots of features. They need to see small object detection at 150 meters or higher, or all the different attributes they need to see, and you have to go create data. So this is things that I've already shared in the past. And on top of that, they want to make sure that the industrialization is to a level where it's fully automated, you can deliver it.
Speaker Change: Going to be in a car.
Speaker Change: Has to be low power it has to be small lots.
Speaker Change: Lots and lots of features they need to see small object detection at a 150 meters or higher or.
Speaker Change: All the different activities need to see and you have to go create data. So this is things that I've already shared in the past and on top of that they want to make sure that the industrialization is to a level, where it's fully automated you can deliver it.
Glenn DeVos: and you know the features are you know kind of set then on top of that is financial health of the company how many years of runway so I think from a technical standpoint we get to the green very quickly and when it comes to the you know the health of the company and the strength you know why does Anubhav work so hard to find great investors that you know show them that yeah we can actually support ourselves and that is a lower risk so you have to try to get through that so best in class in technology as an engineer of course you want to be excited about that company has the best technology but a decision is beyond just technical part of it it is a lot of the commercial industrialization part of it over a long period of time others are announcing it so I think I'm going to turn it over to Glenn because we recently had a very interesting conversation about some announcements you know we're not going to talk about anybody specific that's their confidential data we're just going to talk about in general how you know we don't get nervous why this is still early times for this technology Glenn Yeah, thanks, Sumit.
Speaker Change: And the features are kind of set that on top of that is how the financial health of the company. How many years of runway. So I think from a technical standpoint, we get to the green very quickly and when it comes to the health of the company and the strength why it doesn't work so hard to find great investors that shows them that we can actually support ourselves.
Speaker Change: And that is a lower risk. So you have to try to get through that so best in class technology as an engineer of course, you want to be excited about that your company has the best technology, but a decision is beyond just the technical part of it has been a lot of the commercial industrialization part of it over a long period of time.
Speaker Change: Others are announcing it so I think I'm going to turn it over to Glenn because we recently had a very interesting conversation about some announcements.
Glenn: We're not going to talk about anybody specifics that they're confidential data, we're just going to talk about in general.
Speaker Change: Paul.
Speaker Change: We don't get nervous while this is still early times for this technology Glenn.
Sumit Sharma: Yes, Thanks Sumit.
Glenn DeVos: I think to build on Sumit's comments, I mean, you, as I said earlier, you are seeing this continued commitment to using LiDAR for these advanced systems. to Level 2++, Level 3 systems, which is great. I think you're seeing some announcements as people kind of solidify maybe part of what they're trying to do across their portfolio. Not uncommon, but you're really not seeing yet concrete plans for broad adoption. And so, you know, over the last probably 10 years, we've seen this occur on a regular basis. So for us, It's a matter of, you know, making sure that we're focused on the right customers, the right opportunities within those customers that really will bring volume.
I think to build on <unk> comments.
Speaker Change: Sure.
Speaker Change: As I said earlier you are seeing this continued commitment to using ladder for these advanced systems to level, two plus level three systems, which is which is great.
Speaker Change: Youre seeing some announcements.
Speaker Change: People will kind of solidify maybe part of what they are trying to do across our portfolio.
Speaker Change: But youre really announcing yet concrete plants are brought adoption and so.
Speaker Change: Over the last probably 10 years, we've seen this this occur on a regular basis so for us.
Speaker Change: It's a matter of.
Speaker Change: Making sure that we're focused on the right customers the right opportunities within those customers that really will bring volume.
Glenn DeVos: And not just, you know, chasing engagement or announcements. So, as Sumit said, you know, at this point, not really concerned with what's been announced so far. It's, again, a lot, a lot yet to play out there. And I think when we look at what we have with Maven, what we look at what we have with Movia and Movia's coming, these are going to be the right products that as the OEMs really solidify their broader plans, I think we're coming in at just the right time, not too early, and really when they're ready to start moving on larger programs. And I think, you know, you'll see more of this, but announcements in the coming months, I'm sure, but it's really not going to take us out of our focus.
Speaker Change: Not just chasing at Rosemary announcements so similar setup at this point.
Speaker Change: Not really concerned with what's been announced so far.
Speaker Change: Again, a lot a lot yet to play out there.
Speaker Change: And I think when we look at what we have with Megan what we look at when we have a movie and movie is coming.
Speaker Change: They're going to be the right product set as the Oems really solidify their broader plans.
Speaker Change: I'm not sure.
Speaker Change: Okay.
Speaker Change: Coming in at just the right time not too early.
Speaker Change: Really when they are ready to start moving on larger programs and I think youll.
Speaker Change: Youll see more of this but.
Speaker Change: Announcements in the coming months I'm sure.
Speaker Change: It's really not going to take us off our focus so.
Glenn DeVos: So, at this point, not really overly concerned with.
Speaker Change: At this point not really overly concerned with it.
Glenn DeVos: Thanks, Len.
Glenn: Thanks Glenn.
Glenn DeVos: Next question, do you think the NHTSA's requirement for the U.S. Automatic Emergency Braking Rule due by 2028 is unrealistic? When is the latest date an OEM would need to sign a series production deal to ensure their cars were meeting this requirement for 2028? And can MicroVision LiDAR sensors enable OEMs to meet this? Yeah, maybe I'll maybe I'll start so that you can certainly add color to it. So the 2028-29 requirement by NHTSA, it is achievable, but it's going to, for each OEM, if you think about an OEM, they'll have a portfolio, you know, a number of vehicle platforms that have different levels of capability.
Speaker Change: Next question do you think the nits requirement for the U S automatic emergency breaking the rule due by 2028 is unrealistic.
Speaker Change: When is the latest data and OEM would need to sign a series production deal to ensure their cars. We're meeting that requirement for 2028, and Ken Microvision Lidar sensors enable Oems to meet this.
Yes, maybe I'll, maybe I'll start with some of them you can certainly add color to it.
Speaker Change: So the 'twenty 'twenty eight 'twenty nine requirement Vanessa.
Speaker Change: It is achievable and but it's going to for each OEM. If you think about the portfolio.
Speaker Change: A number of a number of vehicle platforms that have different levels of capability.
Glenn DeVos: So, and really one of the key focuses on the NHTSA ruling was vulnerable road users, pedestrians, so you able to detect pedestrians up to certain speeds and make sure that AEB is functioning and avoid the accident. So if you're an OEM, you're going to look at your fleet of vehicles and your platforms. And for some of those, it'll be relatively simple to implement these changes. It may just be software. And those will tend to be the higher-end systems that have more sensors, more capability to them. For the lower-end or value segment vehicles, you know, maybe vision-only based, A, B, it may not have that ability to discriminate pedestrians required by NHTSA.
Speaker Change: And really one of the key focuses on the initial ruling was portable road users could SRAM sorry.
Speaker Change: Tech pedestrians after certain speeds and make sure that AEP is functioning and avoid the accident.
Speaker Change: So if youre, an OEM youre going to look at your fleet of vehicles and your platforms and for some of those it will be relatively simple to implement these changes it may just be software.
Speaker Change: And those tend to be the higher end systems that have more sensors more capability to them for their lower end value segment vehicles may be vision only dose.
Speaker Change: It may not have that ability to discriminate restrooms required by NASDAQ and so for those platforms, it's going to take longer and in some cases. They may struggle, even though there was four years from a ruling was about a year ago. That's a ruling was made.
Glenn DeVos: And so, for those platforms, it's going to take longer. And in some cases, they may struggle, even though there was four years from the ruling, it was about a year ago that the ruling was made. They may struggle to get those platforms updated. So, you're going to see, you know, don't, I would expect to see some negotiating between NHTSA and the OEMs to try to, you know, stage that so they're not disrupting their vehicle platform plans. But fundamentally, the technology is there. NHTSA will continue to evolve, you know, in terms of their requirements and become more stringent.
Speaker Change: <unk> struggled to get those platforms updated so youre going to see I would expect us to have some negotiating between loopnet semi and.
Speaker Change: And the Oems to try to stage that so they're not disrupting their vehicle platform plans, but fundamentally the technology is there.
Speaker Change: <unk> will continue to evolve in terms of their requirements and become more stringent and you can look at.
Glenn DeVos: They look at, in particular, NCAP, Euro NCAP, US NCAP. LiDAR can be a tremendous advantage to doing that because of its ability to discriminate, detect through space, and really determine where that object or that pedestrian is. But it's, you know, for each OEM, it's going to be a bit of a different type of challenge. Generally speaking, it's doable for most of the platforms. For some, they'll struggle. And I would expect them to try to negotiate with NHTSA to give them either more time on those platforms or as they try to figure out what to do to comply.
Speaker Change: In particular end cap Euro end cap U S end cap from Lidar can be a tremendous advantage to doing that because of its ability to discriminate the taxi space and really determine what that objects in a pedestrian is.
Speaker Change: But for each OEM and it's going to be a bit of a different type of challenge.
Speaker Change: Generally speaking it's durable for most of the platforms for some will struggle and I would expect them to try to.
Speaker Change: Negotiated with net so to give them even more time on those platforms.
Speaker Change: I was trying to figure out what to do to compliant.
Glenn DeVos: Thanks, Glenn.
Glenn: Thanks Glenn.
Anubhav Verma: Next question, how does MicroVision plan to compete with FMCW LiDAR technology given its increasing adoption by OEMs like AVA's recent win with the Top 10 Passenger OEM? Are there plans to transition or integrate FMCW technology into MicroVision's product portfolio to align with the trend? Maybe if you want to start, I can certainly add my perspective to it as well. Yeah, I think I'll start. I think I've talked about this in the past a little bit. At the OEMs, they'll always make the right choice, which is the lowest cost, the highest fidelity system. At the end of the day, you know...
Next question.
Speaker Change: How does microvision planned to compete with FMC W. Lidar technology, given its increasing adoption by Oems like <unk> recent win with the top 10 best engines Oems are there plans to transition our integrate FMT W technology into microvision its product portfolio to align with the trends.
Glenn: <unk>.
Speaker Change: If you want to start I can I can certainly add my perspective to it as well.
Speaker Change: Yes, I think I'll start I think I've talked about this in the past a little bit.
Speaker Change: At the Oems will always make the right choice, which is.
Speaker Change: The lowest cost the highest fidelity.
Speaker Change: System.
Speaker Change: At the end of the day.
Sumit Sharma: Time-of-Flight versus FMCW, one of the big differentiator is you go velocity. Well, they already have, as Glenn mentioned early on, like five radar on the car. They have velocity that they are integrating into features that are pretty mature and they're shipping right. At the end of the day, the technology that drives the lasers in a time-of-flight 905 nanometer versus the FMCW is significantly different. There's cost barriers. In one case, tens of billions of dollars would have to be invested to make FMCW more affordable in very, very high volume. There is no other technology out there.
Speaker Change: A time of flight versus that from GW one of the Big differentiator is you go velocity right, while they already have as as Glenn mentioned earlier like five radar on the car velocity that they are integrating into features that are pretty mature in their shipping right now.
Speaker Change: At the end of the day, the technology that drives the lasers in a time of 595 nanometer versus the FMC W significantly different there.
Speaker Change: Cost barriers and one cases tens of billions of dollars would have to be invested to make us some CW more affordable and very very high volume. There is no other technology out there.
Speaker Change: Any demand out there that requires them to make that investment there is no hard disk drive industry that needs. This kind of lasers or anything else right. So therefore, I think it's great right I think.
Sumit Sharma: Thank you all. If there's more sensors in the market, people are feeling it, that's great. But in general, I think you have to look at it like, is it going to be cost competitive? If you're going to put a device in the cabin behind a windshield or something like that, and it consumes tens of watts, significantly higher than a time of flight. You know, imagine if you have, you know, 20, 25 watts, 15 to 25 watts in there, you're going to need cooling and it's not going to be fans. So, there's lots of variables that go into it.
Speaker Change: If theres more sensors in the foot.
Speaker Change: In the market people are feeling it thats great.
Speaker Change: But in general I think you have to look at it like is it going to cost competitive if youre going to put a device in the cabin behind the windshield or something like that and it consumes tens of watts.
Speaker Change: Significantly higher than our time of flight.
Speaker Change: Imagine if you have $2025 $50 25, what's in their cooling and it's not going to be fans.
Sumit Sharma: So there's lots of variables that go into it I think this keeps the nervousness that our investors may feel given the fact that we have not had a commercial success with an OEM I appreciate that I respect that I think is totally warranted, but at the moment I don't think the physics does not dictate that anything has changed specifically that all of a sudden there's a paradigm shift.
Sumit Sharma: I think this keeps, you know, the nervousness that our investors may feel. Given the fact that we have not had a commercial success with an OEM, I appreciate that. I respect that. I think it's totally warranted. But at the moment, I don't think, you know, the physics does not dictate that anything has changed specifically that all of a sudden there's a paradigm shift. You know, mounting it on top of a truck with, you know, ample airflow. Yeah, that, you know, anybody could see. Miniaturizing that for that situation. Yep. Anybody could see. But starting to put into a passenger vehicle, right?
Speaker Change: To get on top of a truck.
Speaker Change: With ample airflow, yes that anybody could see minutes rising that for that situation, yet anybody could see but starting to put into a passenger vehicle right. I mean, they are feeling it.
Sumit Sharma: I mean, they're fielding it, you know, our competitors, they're showing it at CES and other shows. I think that's totally fair. But let's see, you know, how far the adoption goes, right? But we're going to focus on ours because we know our core technology works.
Speaker Change: Our competitors, they're showing at CES and other shows I think that's totally fair.
Speaker Change: But let's see how far the adoption goes right, but we're going to focus on ours, because we know our core technology works in the Midland rates you don't.
Sumit Sharma: In the middle of a race, you don't switch shoes and say, I'm gonna run a different race before we entered this. We had actually thought through I'm a 5 versus W, you know, we made a conscious decision to a time. Because if you recall, MicroVision's core technology was not LiDAR. Only in 2011, we started with this. So the team at MicroVision at that point really thought about it as what made the most sense from an energy standpoint. Glenn?
Speaker Change: So it shows us that we would run a different rate before we entered this we had actually thought through time of five years with <unk>.
Speaker Change: We made a conscious decision to a time of flight because if you recall microvision core technology was not lidar only in 2011, we started with this so the team at Microvision at that point really thought about it is what made the most sense from an energy standpoint.
Speaker Change: Glen.
Glenn DeVos: Yeah. If you think about LIDAR as a sensing modality, it's not going to operate alone. It's going to be combined with radar and vision. So, you have camera systems as well. Radar, which is a big part of my background, you get relative velocity very accurately. So, I don't need LIDAR as part of a perception system to also be calculating that. And really, you're looking to operate each of these systems into their sweet spots. So, LIDAR with time of flight, very proven, very robust technology. As Sumit said, lower power and power consumption is hugely important from a packaging standpoint.
Speaker Change: Yes.
Speaker Change: Think about lighter as a sensor modality, that's not gonna offering alone is going to be combined with radar and vision care.
Speaker Change: <unk> systems as well great.
Speaker Change: Radar, which is a big part of my background, you get relative velocity very accurately.
Speaker Change: So I don't need Lidar and as part of a perception system to also be calculating.
Speaker Change: And you really are looking to operate each of these systems into their into their sweet spot. So lidar with time of flight.
Speaker Change: Very proven very robust technology, and <unk>, lower power and power power conversion and power consumption.
Glenn DeVos: And from a where do you place this in the vehicle standpoint, it means you can actually make it smaller. So, you know, when I think about a multimodal perception system, time of flight with LIDAR gives me exactly what I from the LIDAR modality. Radar gives you relative velocity. It gives me object detection in all weather conditions. Camera gives object classification information, you know, those types of things. So, each modality operating in its sweet spot, when you think about it, you know, that's why time of flight, it works really well in that combined environment.
Speaker Change: There is really important from a packaging standpoint, and from a where do you place us in the vehicle standpoint means you cannot make a smaller.
Speaker Change: So when I think.
Speaker Change: Think about a multimodal perception system.
Speaker Change: However, lighter gives me exactly what I need from the lighter modality radar can you relative to velocity gives me.
Speaker Change: The detection.
Speaker Change: In all weather conditions camera gives object classification information.
Speaker Change: Those types of things so each modality operating in the sweet spot.
Speaker Change: When you think about it.
Speaker Change: That's why Thomas Slide and it works really well and that combined environment. So for US I think <unk> still.
Glenn DeVos: So, my final way to prefer to approach.
Speaker Change: My final where the preferred approach.
Glenn DeVos: Thank you, Glenn.
Glenn: Thank you Glenn.
Anubhav Verma: How does the recent announcement of cooperation between Volkswagen, Valeo, and Mobileye impact MicroVision as the three parties look to cooperate to enhance driver assistance by integrating hardware and software sourcing together? What does that mean? Yeah, I can, I can speak to this. Very familiar with the, with all the parties involved. You know, the announcement of it was, I think, described as or branded as Surround 8S. And this is where you use combination of six cameras to a megapixel cameras forward and back and then for three megapixel cameras for the kind of the parking the bird's eye view function.
Speaker Change: How does the recent announcement of cooperation between Volkswagon Vallejo, and mobile I impact Microvision as the three parties look to cooperate to enhance driver assistance by integrating hardware and software sourcing together what does that mean.
Glenn: Yes, I can.
Speaker Change: I can speak to this.
Glenn: <unk> with the <unk>.
Glenn: With all the parties involved.
Glenn: The announcement of it was.
Glenn: Described yours are branded as surround Aaas and this is where you use.
Glenn: A combination of six cameras to eight megapixel cameras forward and back and forth through megapixel cameras for the kind of the parking the birds eye view function.
Anubhav Verma: combined with five radar, corner radar, which tend to be more short-range, and one forward-looking radar, which is longer-range. And then all packaged together, and it's public. It's running on the IQ6 high that Mobileye provides. And what I would tell you is a couple things that's interesting about the announcement. One is it kind of ends the debate relative to base-level ADAS systems. If you think about the platforms that that system will go on, the MQB platform, It's got a value segment vehicle. It's the Golf. It's the smaller vehicles. And so, you know, highly cost-sensitive market. It'll have limited, you know, it's kind of level two functionality, not unlike what's provided today by a lot of the systems that have been launching.
Glenn: And with five radar core Cornell radar, which tend to be more short range and one forward looking radar, which is longer range.
Glenn: And then all packaged together and its public is running on the IQ six high.
Glenn: Mobile I provides and.
Glenn: What I would tell you there is couple of things so what's interesting about the announcement one is.
Glenn: It kind of engines into bay relative to base level Adas systems. If you think about the platforms that goes.
Glenn: System will go on the <unk> platform.
Glenn: And so I was kind of a value segment vehicle score.
Glenn: Small smaller vehicles and so highly cost sensitive market. It will have limited kind of level two functionality not unlike what's provided by a lot of the systems have been launching.
Anubhav Verma: And basically, it combines radar and camera. And it, you know, kind of eliminates the debate now, you know, that, hey, can you do everything with a camera? Can you do, you know, no, you need radar and camera to have a truly robust ADAS system. Now, that sets the floor. So, if you think about it, as I mentioned, that's a level, you would call it a level two system. It has lane assist. It has some other things. that goes with it. And so that that now sets the floor and what that means for the broader ADAS market.
Glenn: And basically it combines radar and camera.
Glenn: It kind of eliminates the debate now that hey can you do everything with the camera can you do now you need radar and camera to have a fairly robust.
Glenn: Adas system now that sets the floor so to think about it.
Glenn: As I mentioned, that's a level you would call it a level two system in his lane assist it has some other things that goes with it.
Glenn: And so that now sets the floor and what that means for the broader Adas market.
Anubhav Verma: is that the value segment vehicles now have level two systems, so you've moved up from level one, so content per vehicle continues to grow as it relates to the ADAS market, broadly speaking. For the OEMs, what that means is to differentiate. Now, you need to be providing level 2 plus plus to level 3 systems that are different and differentiated versus what I would refer to as kind of a commoditized ADAS. That's essentially the commodity level. And why that's exciting for MicroVision is that means you're pulling, you're now looking at having to pull in LiDAR and more advanced systems as part of those level three offerings, not just at the very premium level.
Glenn: Is that the value segment vehicles now have level two systems. So you've moved up from level. One so content per vehicle continues to grow as it relates to the E&S market broadly speaking.
Are the Oems what that means is to differentiate now you need to be providing level, two plus plus or level three systems that are different and differentiated versus what I would refer to as kind of commoditized data has that's essentially the commodity level.
Glenn: And why that's exciting for Microvision is that means you are pulling you are now looking at having to pull in lidar and more advanced systems as part of those levels free offerings.
Glenn: Not just at the very premium levels.
Anubhav Verma: but really at the more mainstream level of vehicles, above value segment.
Glenn: But at the but really add any more.
Glenn: The more mainstream level of vehicles above value segment.
Anubhav Verma: And so that's where volume is, that's where you're gonna get differentiation for the OEM, and that's where LiDAR will really enable the OEMs to deliver those systems. When I look, when I step back and look at those announcements, that's, for me, it's exciting because it just, it raises content per vehicle, it raises the floor for ADAS systems within the automotive space, and it really pushes the OEMs to start incorporating more advanced features to be able to differentiate their higher content vehicles.
Glenn: And so that's where volume is that's where youre going to get differentiation for the OEM and Thats, where a lighter will really will really enable the Oems to deliver those systems. So.
Glenn: When I look when I step back and look at those announcements for me, it's exciting because it just raises content per vehicle.
Glenn: <unk> the floor for Adas systems within the automotive space.
Glenn: And it really pushes the Oems to start incorporating more advanced features to be able to differentiate their hearts content vehicles.
Anubhav Verma: Thanks, Len.
Speaker Change: Thanks Glenn.
Anubhav Verma: Next question, if MicroVision were to see an increase in demand for AR products, when would the company communicate that to the market? Let me take that question. Obviously, since this is a new sector that we're looking to pursue opportunities in, any material purchase orders that come in or any significant transaction if there is an offer made to purchase our IP and other assets related to the existing technology to our AR and VR products, so that's what we're most excited about. Next question, it is publicly known that Microsoft previously had a contract with MicroVision for HoloLens 2 and that the iWAS headset is based on HoloLens 2 technology.
Speaker Change: Next question, if macro vision, where to see an increase in demand for <unk>.
Speaker Change: Our products when would the company communicate that to the market.
Speaker Change: Let me take that question <unk>.
Speaker Change: New sector that were looking to pursue opportunities in any material purchase orders that come in or any significant transaction. If there is an offer made to purchase our IP and other assets related to the existing technology.
Speaker Change: Two our AR and VR products. So that's what we're most excited about.
Speaker Change: Next question.
Is publicly known that Microsoft previously had a contract that microvision for Holland too.
Speaker Change: And that the <unk> headset.
Speaker Change: Based on holidays to technology.
Sumit Sharma: As your intellectual property was used in HoloLens 2, would other parties be interested in starting a collaboration again? Yeah, I think, I think in this call, I think some investors have known this for a while, this question has come up over the last five years, we had not focused, you know, spending our raised capital on anything but LiDAR. But it's in our blood, you know, believe it or not, I've been, I've done AR longer than I've done LiDAR in my own personal career. I know a lot about this space. I think, as far as partnerships are concerned, we stand ready, whatever problems may exist on an existing system, I think we have the talented people in the company that we can solve them very quickly.
Speaker Change: As your intellectual property was used in Holland to with other parties be interested in starting our collaboration again.
Speaker Change: Yes, I think I think in this call I think some investors have noticed for a while as questions come up over the last five years, we had not focused spending are.
Speaker Change: The raise capital on anything but lidar.
Speaker Change: But it's in our blood believe it or not I've been I've done a longer than I've done in.
Speaker Change: My own personal career I know a lot about this space.
Speaker Change: I think as far as partnerships are concerned we stand ready whatever problems may exist on an existing system I think we have the talented people within the company that we can solve them very quickly.
Sumit Sharma: You know, developing potentially new technologies for, you know, anything next generation, you know, certainly we can do that. And of course, we have reference ideas for what we would do. On top of that, you know, of course, what we've matured into is we're more of a systems company. So beyond just the display technology, there's other things in the headset that we can innovate on, that we can add. If you think about some of the biggest problems that come into space, it is really motion sickness, right? And as you think about motion sickness, it's a hard problem to solve.
Speaker Change: Developing potentially new technologies for anything that generation certainly we can do that and of course, we have referenced ideas for what we would do.
Speaker Change: On top of that of course will be matured into as we're more of a systems company. So beyond just the display technology. There is other things in the headset.
Speaker Change: That we can innovate on that we can add to.
Speaker Change: If you think about some of the biggest problems that come in this space.
Speaker Change: Israeli motion sickness rate and as you think about motion sickness, it's a hard problem to solve.
Sumit Sharma: But if you have the right eye tracking, and of course you want the entire system to be low power, you know, you get like, you know, instead of talking about LIDAR and sensor models, you start talking about like eye boxes and, you know, color uniformity. So . But at the end of the day, there's a bunch of software that we believe that we have still, beyond just the display that we had done in the past, we have more to offer. and the some of the perception technology that we talk about in the space of automotive.
Speaker Change: But if you have the right eye tracking and of course, you want the entire system would be low power you get like instead of talking about Lidar sensor models, you start getting talking about like I boxes in.
Speaker Change: Color uniformity so.
Speaker Change: But at the end of the day there is a bunch of software that we believe that we have scale beyond just the display that we had done in the past we have more to offer now.
Speaker Change: Some of the perception technology that we talk about in the space of automotive there are things that we're doing there.
Sumit Sharma: There's things that we do in there. that if you were to add a very miniaturized LiDAR and be mapping near the field, you could do a much better job overlaying the information from a AR to XR side. integrating that with some really, really fast and slick, low cost. head tracking gear that goes on an existing helmet. So we can offer more than what's there just in the display technology. So therefore, I think, you know, we will collaborate and we can fix existing products. And of course, we can go on and actually add more value by making something next generation that was not visualized in the past.
Speaker Change: That if you were to add a very miniaturized lidar.
Speaker Change: On top of the helmet.
Speaker Change: The mapping near the field you can do a much better job overlaying the information from.
Speaker Change: <unk> XR side.
Speaker Change: Integrating that with some really really fast and slick low cost.
Speaker Change: Head tracking gear that goes on in existing home. It. So we can offer more than what's there just in the display technology.
Speaker Change: So therefore, I think we will collaborate and we can fix existing products and of course, we can go on and actually add more value by making something next generation that was a visualized in the past.
Speaker Change: Okay.
Operator: Thanks, Sumit. I think we have gone over the hour. We again thank you to all our investors for joining us on our Q4 earnings call. We look forward to talking to you, speaking with you again very soon. Thank you so much. Thank you.
Speaker Change: Thanks, Amit.
Speaker Change: I think we have gone over the hour we again thank you.
Speaker Change: To all our investors or joining us on our Q4 earnings call. We look forward to talking to you speaking with you again very soon thank you so much.
Speaker Change: Thank you. This concludes today's conference all parties may disconnect and have a great day.
Operator: This concludes today's conference. All parties may disconnect and have a great day.
Speaker Change: Yeah.