Q3 2025 Aeva Technologies Inc Earnings Call
Speaker #1: Your program will begin momentarily . Please stand by . Your program will begin momentarily . Good day . My name is David , and I will be your conference facilitator .
Speaker #1: I would like to welcome everyone to the Ava technologies third quarter 2020 Earnings Conference call . During the opening remarks , all participants will be in a listen only mode .
Speaker #1: Following the opening remarks , we will conduct a question and answer session . As a reminder , today's conference call is being recorded and simultaneously webcast .
Speaker #1: I would now like to turn the call over to Andrew Fung Senior Director of Investor Relations and Corporate Development . Andrew , please go ahead .
Speaker #2: Thank you and welcome , everyone to Ava's third quarter 2020 earnings conference call . Joining on the call today are Suru Salagean , Ava's co-founder and CEO .
Speaker #2: And Saurabh Sinha Ava , CFO . Ahead of this call , we issued our third quarter 2025 press release and presentation , which we will refer to today and can be found on our Investor Relations website at investors .
Speaker #2: Please note that on this call , we will be making forward looking statements based on current expectations and assumptions , which are subject to risks and uncertainties .
Speaker #2: These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date .
Speaker #2: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations . For a further discussion of the material risks and other important factors that could affect our financial results , please refer to our filings with the SEC , including our most recent form 10-q and form 10-K .
Speaker #2: In addition , during today's call , we will discuss non-GAAP financial measures , which we believe are useful as supplemental measures of Ava's performance .
Speaker #2: These non-GAAP measures should be considered in addition to , and not as a substitute for or in isolation from GAAP results . The webcast replay of this call will be available on our company website under the Investor Relations link .
Speaker #2: And with that , let me turn the call over to Soroush . Thanks , Andrew , and good afternoon , everyone . It has .
Speaker #3: Been an incredibly busy and productive quarter here at Ava . Following Ava Day this summer , where we shared how our breakthrough unified perception platform is enabling new levels of perception for customers across a broad range of applications .
Speaker #3: Interest for Ava's technology has continued to grow significantly . Our focus has been on achieving important milestones for our partners and positioning Ava to meet the expanding demand to adopt our differentiated Fmcw technology .
Speaker #3: The key highlight this quarter is our progress with the top ten global passenger OEM . At the start of the year , we announced that the OEM had selected Ava for a development program and also issued Ava a letter of intent for production , whereupon successful completion of the development program .
Speaker #3: The engagement with transition to a serious Production award opportunity . I am very pleased to share that we have completed this development program ahead of plan , and are now in late stage contract negotiations for a series Production Award and more on that later .
Speaker #3: We also continue to make good progress on the diamond truck production program . Ava's deliverables for the initial vehicle builds have been completed , and we are now shifting our focus to support Daimler Trucks growing vehicle fleet in 2026 , and have already received the initial orders for next year's shipments of our Atlas final samples .
Speaker #3: And overall , we remain on track for diamond trucks planned market entry in 2027 . Outside of automotive , we are pushing deeper into precision sensing .
Speaker #3: We have already started shipping against our first 1000 plus units orders for our Eve 1d sensors , and in just a few months we have expanded our precision sensing product line with unveiling of our EAV 1D sensor .
Speaker #3: This builds on the Eve 1D product by adding motion measurements to our product line to address what we believe is more of the multibillion dollar manufacturing automation market .
Speaker #3: Reception has been really strong , with multiple customers already placing initial orders with the opportunity to incorporate Eve 1D , and 1D into their product portfolios .
Speaker #3: In Q3 , we completed installation and bring up of the production line for our Eve sensors in Thailand . The first sensors have come off the line and shipped to customers , and we believe we now have the capacity ahead of time to fulfill next year's volume and will continue to increase the capacity as the demand grows .
Speaker #3: Now , to support our growing commercial traction across multiple segments and are scaling today , we announced a $100 million investment from one of the world's leading investment firms , Apollo Global Management .
Speaker #3: In the form of convertible notes . This comes at a defining time in the industry , and we believe it further positions Ava to support not only the scaling of our existing programs , but to also win additional programs .
Speaker #3: This also follows our partnership and strategic investment from LG Innotek that we announced earlier this year . Further reinforcing Ava's leadership position in next generation of sensing and perception .
Speaker #3: So to sum up , this quarter , Ava continues to execute on the exciting and vast opportunities we highlighted at Ava de . We believe that we are positioned to finish the year strong , including closing the top ten global passenger OEM production program decision .
Speaker #3: And with our differentiated technology and strong balance sheet , we see this as just the beginning . With significant potential to continue our momentum into 2026 and forward .
Speaker #3: Now let's go into more detail on our key business developments , starting first with our engagement with the top ten global passenger OEM .
Speaker #3: As we shared at the start of this year , this OEM selected Ava for a development program using our Atlas Ultra sensor for the OEMs .
Speaker #3: Next generation global production platform . We expect to complete the development program by the end of this year , and I am pleased to say that we have successfully completed it in Q3 ahead of plan .
Speaker #3: The development program was focused on packaging and integration to be able to incorporate our Atlas Ultra as one standard platform across the OEMs and multiple vehicle model lines.
Speaker #3: This is a global production program with a worldwide rollout plan across geographies excluding China and the OEM plans to offer level three across a broad range of their global vehicle models lineup .
Speaker #3: Not just the top of the line models . As part of our joint development , we also successfully completed key performance testing to help ensure that Atlas Ultra enables the OEM to introduce new functions of level three driving , including both highway and city driving .
Speaker #3: In addition , we completed comprehensive manufacturing audits with our partner LG Innotek for this OEM and detailed out our industrialization plan for the OEMs planned production .
Speaker #3: All of this now paves the way for the OEM to make the series production award . As we disclosed earlier this year , we secured a letter of intent from this OEM toward the series production Program award .
Speaker #3: Where upon successful completion of the development program , the engagement would transition to a global production program opportunity for Ava . We are now in late stages of contract negotiations and believe that Ava is well positioned to supply for this series production program .
Speaker #3: Beyond this particular program . We believe that the top ten OEMs selection of Ava for their global series production program would represent one of the strongest validations of our technology platform .
Speaker #3: In particular of the superior performance and maturity of our technology . This OEM has a long history of leading in the automotive industry with significant influence and a reputation for excellence , and introducing industry defining features in automotive and mass volume on a global scale .
Speaker #3: This would also be the first time a passenger OEM would transition from time of flight to Fmcw . To enable level three for both highway and city driving .
Speaker #3: As such , we believe their vote of confidence in Ava has the potential to accelerate the interest in Fmcw technology . As a blueprint for other fast follower passenger car makers .
Speaker #3: To that end , we are already engaged with a number of OEMs and industry players across RFP and RFQ stages looking to leverage 4D LiDAR for passenger vehicles , trucking and mobility .
Speaker #3: Over the course of this year , our pipeline has continued to grow and we expect our first passenger OEM win to further increase interest in Ava .
Speaker #3: As other OEMs view , the top ten OEMs decision as a reference design for implementing level three automated driving functionality . Turning to our production program with Diamond Truck , we are progressing well on the OEMs milestones , keeping us on track to meet Diamond Trucks planned market entry in 2027 .
Speaker #3: We have now completed sensor deliveries for the OEMs . Initial vehicle builds and dump truck . Together with its subsidiary torque , are operating this fleet of trucks on large routes to validate production intent .
Speaker #3: Hardware and autonomous capabilities ahead of commercialization . Ava is the exclusive long range and ultra long range lidar supplier for diamond trucks , autonomous truck production program .
Speaker #3: With our Atlas 4D LiDAR playing an important role as the primary detection center . We are now preparing for next year to support the expansion of vehicle fleet rollout by truck and talk , and we have already received the first orders for 2026 and planned to deliver our Atlas C samples to fulfill Diamond truck scaling of vehicle builds throughout next year and ahead of launch .
Speaker #3: Now moving to precision sensing with the introduction of our Eve one V motion sensor , Ava is expanding into whole new category of applications within the multibillion dollar manufacturing automation market .
Speaker #3: Eve one V uses our core fmcw leader on chip technology to deliver high precision contactless motion sensing , which means we can consistently do this more accurately , faster , and without the wear and tear challenges of traditional encoders and tactile sensors that are used to measure an object's motion .
Speaker #3: In manufacturing today . We also designed Eve one V for a wide range of applications and flexibility for users across multiple processes . This has the potential to be a game changer for the industry and reception so far has been very encouraging .
Speaker #3: We have already received initial orders from multiple customers for our Eve one V sensor . Now more broadly , the number of engagements for our precision sensing capabilities continue to increase .
Speaker #3: Since we first announced our product line this year , precision sensing is a unique market opportunity for Ava due to our technology's ability to achieve the needed micron level accuracy .
Speaker #3: That is not really possible with traditional time of flight leader . We are working aggressively now to meet the growing interest , including ramping up manufacturing and importantly , over time , we plan to expand our product lines for industrial , manufacturing and robotics to new categories beyond 1D and one V to address even more of this major market opportunity .
Speaker #3: Key to enabling this is the Precision sensor manufacturing line at our partner Fibernet , a leader in the manufacturing of optical components . This quarter , we completed installation and bring up of our line with the first sensors produced and shipped to customers .
Speaker #3: We now have the capacity in place to fulfill next year's expected volumes for Eve , 1D and building capacity for our one V sensors .
Speaker #3: Following its introduction . We have also started shipping against our initial orders of over 1000 units that we received just a few months ago .
Speaker #3: Our ability to scale is driven by our chip based architecture , which we designed specifically for fully automated assembly process steps by integrating all optics onto a silicon photonics module .
Speaker #3: We have significantly reduced the number of components within a leader that can be manufactured with greater efficiency and quality , and through our partnership with global manufacturing leaders , we believe that we can lean on their expertise and scale to ramp production quickly without the need to invest significant levels of CapEx .
Speaker #3: With that , let me now turn the call to Saurabh , who will discuss our financial results .
Speaker #4: Thank you . Soroush , and good afternoon , everyone . Let me share more about Ava's third quarter 2020 financial results . Starting with revenue , it was 3.6 million in Q3 with contribution from ongoing sensor shipments to multiple customers , as well as Nr such as for the Daimler Truck Program .
Speaker #4: Moving to non-GAAP operating loss for this quarter , it declined by 13% year over year to 27.2 million , which largely reflects our target to reduce full year 2025 .
Speaker #4: non-GAAP operating expense by 10 to 20% year over year . Ava's gross cash use , which we define as operating cash flow less CapEx , was 33.6 million in Q3 , which is higher than the prior quarter due to timing of certain payments and working capital adjustments .
Speaker #4: In addition , we have received cash of 32.5 million in gross proceeds from LG Innotek . Upon closing of their strategic equity investment .
Speaker #4: This brought total available liquidity at end of September to 173.9 million , excluding the Apollo investment , we announced today . This is comprised of 48.9 million in cash .
Speaker #4: Cash equivalents and marketable securities and a $125 million in undrawn facility that is fully available to draw at Ava . Sold discretion . Let me talk a bit more about the capital raise we announced today .
Speaker #4: The 100 million in convertible senior notes will provide incremental capital for Ava to continue to accelerate our ongoing growth . The notes have a coupon of 4.375% , payable in cash or stock , at the option of the company and conversion price of 115% to the stock price .
Speaker #4: The notes are due in seven years in November 2022 . This represents a flexible source of unsecured capital with no financial or maintenance covenants , and we will retain the flexibility to settle the convertible in cash , shares or any combination at our election .
Speaker #4: Upon a conversion for additional details , please refer to the related 8-K . Including the new investment , our total pro forma liquidity position now stands at approximately 270 million , which we believe provides Ava strong competitive advantage to support existing programs as well as secure more wins .
Speaker #4: As we detained at Ava this summer , Ava's unified perception platform enables us to bring new levels of perception to a broad range of large markets and applications .
Speaker #4: Our momentum has only grown since then , and as we continue to execute , we believe that we are in a strong position to convert additional opportunities into wins .
Speaker #4: With that , let me turn the call back to search for closing remarks .
Speaker #3: Thanks , Saurabh . At a pivotal time for the industry , Ava is increasing its leadership position in next generation sensing and perception .
Speaker #3: We are firing on all cylinders , achieving major milestones on existing programs , progressing towards additional wins and strengthening our balance sheet to scale multiple programs across many markets .
Speaker #3: I would like to thank the Ava team for their continued dedication and our stakeholders for their ongoing support . Together , we are in a strong position to realize Ava's vision to bring the next wave of perception to all devices .
Speaker #3: And with that , we will now move to Q&A .
Speaker #5: Thank you .
Speaker #1: At this time , if you'd like to ask a question , please press the star and one keys on your telephone keypad . Keep in mind you may remove yourself from the question queue at any time by pressing star and two .
Speaker #1: In the interest of time , we do ask that you limit yourself to one question . Again , it is star and one to ask a question .
Speaker #1: Today . We'll take our first question from Colin Rush with Oppenheimer and Company . Please go ahead . Your line is open .
Speaker #6: Thanks so much , guys . Can you talk a little bit about the ramp and metrology sales ? I mean , certainly it looks like you have a pretty meaningful opportunity there .
Speaker #6: And a number of number of applications . I'd just love to understand how that that cadence of product rollout really starts to hit as we get through the balance of this year and into 2026 .
Speaker #3: Yeah . Hi , Colin . This is happy to answer that . So obviously as you know , we're you know , as I said we're firing multiple senators here .
Speaker #3: So you know we announced our Eve 1D sensor just a few months ago . Earlier this year since then we talked about how the attraction , the market has been very strong following that , we started getting initial orders .
Speaker #3: We talked about the first 1000 plus units orders , and since then a couple of things that we've done in the past 2 or 3 months .
Speaker #3: One , we pulled forward our setup of our manufacturing line for the Eve sensor . Due to this increasing demand . You know , our team is engaged with , you know , multiple tens of customers in this space alone .
Speaker #3: Each one represents a significant opportunity . Volumes for us . And in this quarter , what we talked about just earlier today was .
Speaker #3: But we've now been able to set up the line quickly within a couple of months time frame . And also start building out the units off of this line .
Speaker #3: And we started to ship the first units against those 1000 plus units . Order already . So that's very important for us , which means , you know , we're starting to now crank that gear around shipping units towards those customers .
Speaker #3: Separate from that , as we also get into market , we're also getting feedback from customers about the capabilities of our sensors . Beyond measuring micron level accuracy for distance sensors , we have also been able to provide .
Speaker #3: Initial SKU or new type of product with our F1-v sensor , which is now measuring the speed of things on the on the manufacturing line .
Speaker #3: The very high level of accuracy . Right . So submillimeter per second precision . So that is what provides additional opportunities for us .
Speaker #3: We already started getting some orders for that as well from existing customers . Also some new customers . But you know , just to give you a rough sense of that , the market for this for this industry , as we talked earlier , is about 2 million sensors a year for these kind of displacement sensors .
Speaker #3: And it's , you know , roughly ASPs are higher than automotive . So it's multi-billion dollar , $4 billion going to about 6 billion in the coming years .
Speaker #3: And we are partnering already with some of the key leaders in the space , including SIG and LMI . And others that are coming down the pipe that we can talk about .
Speaker #3: Hopefully as , as as we go forward . And those themselves represent double digit percent of the market share here . Right ? So you're talking about , for example , SIC , maybe shipping 2 or 250,000 250,000 sensors annually every year .
Speaker #3: Right . So when you when you , when you look at that , I think for us , the way we see the ramp up is obviously it's not going to be overnight , but it's going to be faster also than some of the automotive applications .
Speaker #3: So it helps us kind of also fill in that , that , that revenue growth and pipeline for the company as we go along .
Speaker #3: So we're very encouraged by the reception that we're seeing from the market . Importantly , we're now shifting gears on focus on building the units and bringing up the manufacturing line and getting ready for the demand ahead of time for for next year .
Speaker #3: Right . So that's that's what I can share at this point . And as we are able to get additional information from the customers and orders , of course we'll be talking about that as well .
Speaker #6: Okay . Perfect . And then as a follow up , just the L2 Adas and your kind of , you know , L2 plus Adas opportunity on the trucking side , it seems pretty substantial .
Speaker #6: You know , obviously those are some longer sales cycles , but also , you know , the articulation of the insurance needs and all the other value capture for the truck OEM seems pretty substantial .
Speaker #6: Can you talk about the breadth and depth of customers looking at your solution for that ? L2 and L2 plus sort of application in the trucking market ?
Speaker #3: Yeah , absolutely . So as I mentioned on the call earlier , you know , we've been focused on the one unified perception platform that can allow us to enter multiple market segments with one core technology without a ton of optimizations using the same hardware platform with with adaptive software that can go into addressing these multiple markets across automotive , both for level three and plus driving , as well as entering to level two plus , especially on the commercial vehicles , which is your question .
Speaker #3: I'll get to that in a second . But also then applying that to other markets , including industrial , that we just talked about .
Speaker #3: So specifically on L2 plus , one of the biggest debates that we have talked about over and over again in the past few years is the need for lidar .
Speaker #3: And then , you know , you know , the , the , the famous quotes around , you don't need lidar for even going into level two , level three applications , maybe .
Speaker #3: But level two , I think over time that that argument has fallen . I think level three is very clear with our progress and the successful completion of this top ten OEM , that level three with LiDAR is going to be standard and it's going to be the key enabling feature for making these these vehicles and driving the customer's choice of purchase .
Speaker #3: But on the level two plus , I think we have a unique opportunity to Ava due to our unique technology , which is because of the fact that we can measure velocity because of the fact that we can do some of the perception on the sensor , we've been able to demonstrate that we can do more , reducing the need and maybe the cost of other modalities in the level two traditional stack , which is today , especially for commercial vehicles , tends to be camera image sensors .
Speaker #3: Plus maybe radar and then some compute box . So one of the partnerships that we have there that we talked about earlier is with Bendix , which is the market leader in North America , part of a large tier one company around providing level two plus Adas is really automatic emergency braking .
Speaker #3: These this this company is , you know , shipping already in the 2 to 300,000 fusion systems every year . These automatic emergency braking systems every year .
Speaker #3: And they're really standard as the technology of choice for the flagship models of of of many of the top vehicle OEMs , right .
Speaker #3: Volvo , Paccar , Navistar , even Daimler and some some examples . So we see , you know , an opportunity here together with Bendix to provide a next generation level two plus solution that leverages our 40 LiDAR technology , reducing the need of some of those other components and having the combination of image camera plus 4D information with processing on the edge and edge device that I think is going to be bringing the cost down .
Speaker #3: But because we use leverage , the same core unified platform chip technology , we can use the economies of scale to then also provide those benefits .
Speaker #3: And the flywheel effect into other markets . So we think that's a massive opportunity . We're working towards that . We introduced this partner earlier in the year , but we think that could be another marquee win for us , especially as we close out .
Speaker #3: You know , this top ten passenger OEM . We think that that is going to set the reference as a blueprint for other OEMs in level three for passenger and level four in trucking , but also maybe in level two plus for certain commercial vehicle trucking applications as well .
Speaker #1: We'll take our next question from Suji da Silva with Roth Capital . Please go ahead . Your line is open .
Speaker #7: Hi , Cyrus . Hi , Saurabh . Congratulations on the progress here . My question is really around the length of the design cycle .
Speaker #7: For additional customer opportunities . You know , looking at the tier one , you're on the brink of signing with . I'm wondering this this step of having to proliferate the the design across their model line .
Speaker #7: I'm curious what's involved there and how detailed a process that is . And if there can be learnings from what you're doing here .
Speaker #7: Kind of building a catalog of placements and tweaks and software updates that would be leverageable to shorten the design cycle for future customers .
Speaker #3: Yeah . So happy to answer that . This is so look , I think first of all , I hope you can hear in her voice , we are very excited about the progress that we've made and the successful completion of this top ten passenger OEM program to give a quick recap , earlier in the year , we we announced and said that we were awarded the a development program from this top ten passenger OEM , along with a letter of intent for the series production award .
Speaker #3: And we set out that , you know , there's going to be a number of milestones that we're going to be working together to really develop a scalable , modular platform for their global production platform .
Speaker #3: And that's going to be applied to multiple vehicle model lines . So since then , we have completed all the key milestones satisfactorily .
Speaker #3: We which includes , as I mentioned earlier around packaging and integration of our sensors to make sure that really works across the OEMs , multiple vehicle model lineup .
Speaker #3: And this is not intended to go into one top . You know , top trim or premium model only . It's intended to be really as a standard platform across there , multiple vehicle models and two was around aligning our performance , making sure that it really addresses the key use cases .
Speaker #3: Most importantly , to enable level three driving from the get go both across then also eventually highway and around city driving , which is we think is going to be a key driver .
Speaker #3: And then the third piece was around really the industrialization and manufacturing in which , together with our partnership with LG Innotek , which we secured along with a strategic investment , we then got to work and we did comprehensive audits of our manufacturing line with a manufacturing partner , LG Innotek .
Speaker #3: And desktop ten OEM . And really defined a clear industrialization plan of how we're going to go to production . So in some ways , this was really the first phase of the series production .
Speaker #3: Development and what what we have now is , we said at the beginning of the year , we're going to complete this by the end of the year .
Speaker #3: We are seeing now the OEM is very eager to also move , move forward faster , and they're pulling forward that timeline . So we were able to successfully complete this a quarter early , which is now in Q3 .
Speaker #3: We have completed that and the work from here really is around . You know , we're in late stages of commercial negotiations and that .
Speaker #3: So we're feeling good about that . Obviously , it's not done until the ink is dry , but we have we are feeling confident about our position about securing this program .
Speaker #3: So that's that's what I would say . And I think you asked an important question , which is what is the you know , what is the work from here ?
Speaker #3: The cycles of additional wins . And how could this OEM be relevant ? This OEM is a major OEM , a top ten OEM globally .
Speaker #3: We we see that this program is for worldwide deployment , excluding China . They are making millions of vehicles every year . They're known as a leader to bring in new technology , but also do it at scale .
Speaker #3: So that's very important . So I think that what we believe that does , as they have shown time and again over the many decades , is that it's going to provide a blueprint and a reference design for other OEMs that are looking to provide this level .
Speaker #3: Three functionality really with with Fmcw technology . We believe to to use that and also implement that . So that there's going to be basically from a competitive , competitive landscape .
Speaker #3: We think that is going to be critical . So we believe that this could be a defining moment . You know , when we would have that award around our company .
Speaker #3: But also the industry for the adoption of level three technology in the next three plus years . Right ? So that's I think is , is is very important in our plans ahead .
Speaker #3: So that's a quick background on that .
Speaker #7: Okay . A quick follow up there . On the applicability to to mobility as urban scenarios . Where is time of flight . You know , time of flight sufficient or versus fmcw curious your thoughts there as you sound like you're kind of addressing both highway and mobility in your comments ?
Speaker #3: Yeah , I think look , the way I think the OEMs and this OEM and others kind of see it is they're making a platform technology choice that they're going to be working with in hardware , hopefully for many years to come .
Speaker #3: This obviously will be a long term kind of production going into the next decade . And the idea is that , you know , we've talked about it .
Speaker #3: You know , you need to future proof the stack , right ? And we believe we are at this inflection point where this is one of the first times it will be the first time , actually , that an OEM in the passenger car space will be transitioning from time of flight leader to Fmcw .
Speaker #3: And you know , this obviously is a testament to both the technology capability as well as maturity of our products . But also it is important because they .
Speaker #3: We think that is going to lead up to other , of course , of course programs . My personal opinion is that in a few years from now , you know , consumers , when they buy vehicles , not going to be just based on any more specs on feeds or speeds or infotainment .
Speaker #3: It's going to really be also , importantly , around the ease of use and , and , and saving us time and our daily commutes and our day to day life .
Speaker #3: And that , I think , is going to be one of the key enablers . By level three , like level three , driving is going to be the key driver for the sales of cars , not these other things .
Speaker #3: So that that is why I think , you know , we're going to see that as your son , to see some of that in Asia .
Speaker #3: We're going to see that for the rest of the world . That is going to be the key driver for , I think most OEMs to to go to really have level three from the get go .
Speaker #3: And this means it needs to be end to end , right ? Like you get in the car and you get to a destination from point A to point B , which includes city driving as well as highway .
Speaker #3: So long form of that is , yes , we believe that they're choosing one hardware and they're going to use it for all use cases .
Speaker #3: And you know , use a software approach of upgrade over time to be able to enable highway city driving . But most importantly , that level three functionality , end to end .
Speaker #1: And we'll take our next question from George Janaka's with Canaccord Genuity . Please go ahead . Your line is open .
Speaker #8: Hey everyone . You have Matt here on for George . Congrats on the quarter and thank you for taking my questions .
Speaker #3: Of course Matt , go .
Speaker #5: Ahead . So just to start off .
Speaker #8: Could you guys just provide a little more color on the timeline with Daimler . Like what's what's kind of needed for the program to , you know , reach validation ahead of production and then , you know , maybe just a little bit about the torque relationship .
Speaker #8: It looked like they were looking for for a capital partner for that . You know , with that potential slipping of funding , do you foresee any slippage in the timeline ?
Speaker #3: Yeah , sure . Happy to answer that . I think you have some questions . I think you have some questions that I think , you know , maybe for Daimler , but I can tell you high level .
Speaker #3: Look , first of all , Dharma truck and talk , you know , they have been very clear and public about their commitment to autonomy .
Speaker #3: This is one of their key drivers of growth . If you look at that , you know , from Karen and the management team at Daimler talking even on their public earnings .
Speaker #3: And they have been very clear and consistent about their messaging . 2027 market entry is on track as they go . For us , we are obviously a key portion for the technology and perception detection .
Speaker #3: So as I mentioned , we're the exclusive supplier for LiDAR on long range and ultra long range for truck and talk . We are progressing on track .
Speaker #3: They are also progressing on track and and delivering on their milestones . We have clear line of sight with 2026 vehicle build plans and the growing of that .
Speaker #3: We actually have received initial orders already and we're going to start shipping our samples against that . So that's important . I think , just to also , you mentioned about capitalization , obviously , I think that's a question for for Daimler and talk .
Speaker #3: But as you know , talk is an independent subsidiary of Daimler Truck . Right . And they're investing heavily in in this very committed .
Speaker #3: So we don't think that that is a risk topic for us to really worry about . I think overall the program is really progressing well .
Speaker #3: And I think , look , if any OEM has the scale to really make this happen and resources , including capital is really down the track and others , of course , are also working on it .
Speaker #3: We are also engaged with a number of other OEMs in the commercial vehicle space . So overall , I think we're feeling good about that .
Speaker #3: I think just to also mention , Daimler Truck has publicly talked about , I think even recently about the outlook for autonomy because of the use cases and the business case of over a think about $3 billion of annual revenues and 1 billion profit by 2030 .
Speaker #3: Just from autonomous trucking . So that I think it's important for the industry that players including Daimler Truck and others make this happen .
Speaker #3: And we think the timeline remains in 27 and the scaling is going to is going to go from there . So we're feeling confident about that and our ability to deliver against it .
Speaker #8: Great . Thanks . And maybe just to switch gears here , you know , looks like you guys obviously raised the 100 million investment from Apollo .
Speaker #8: Could you provide a little more color on what you intend to use that for and how that's going to help you push commercialization faster?
Speaker #4: Hey , Matt , this is Saurabh . Happy to take your question . So the 100 million in convertible notes is for general corporate purposes .
Speaker #4: We are already , as we mentioned in our prepared remarks , making tremendous progress with our customers and potential customers . And we use a unified platform , perception platform , which helps us to execute on multiple wins and bring new customers on board without any step function increase in our expenditure .
Speaker #4: In fact , we have been very disciplined in our capital allocation and spending , and this year we are coming down from last year in the range of 10 to 20% on a non-GAAP basis , despite increasing our commercial momentum .
Speaker #4: So we feel pretty good about it . It's for general corporate purposes .
Speaker #3: Yeah . And just to add to that , I think , you know , obviously Apollo by themselves , name is one of the leaders in the in financial investments .
Speaker #3: We're excited to have them as partners . I think it sends a clear signal as you know . So investors and party to , you know , really support our growth and momentum here .
Speaker #3: And it comes at an important time, I think, for our company, but also an inflection point in the industry. You know, I think we have all the pieces in place.
Speaker #3: We have methodically , as we talked about , set out our plan to grow from each segment , establish a leadership position within key players .
Speaker #3: We are executing on that and we're looking forward to execute that well . Right . So from automotive , from trucking with a truck passenger , top ten OEM and others that we're working on , industrial with SIC , LMI , we have the LG Innotek around that for industrial as well as robotics applications .
Speaker #3: And then expanding from that so that we're very excited about the progress so far . And obviously , you know , we're looking forward to continue this momentum .
Speaker #1: And we'll take our next question from Richard Shannon with Craig-hallum . Please go ahead . Your line is open .
Speaker #9: Well , thanks , Cyrus , for taking my questions . Apologize for the ambient noise rolling through an airport here tonight . I guess I'll ask .
Speaker #9: Kind of a two parter on the top ten OEM . Just want to make sure that the that you're in an exclusive negotiation position .
Speaker #9: There aren't any other competitors here . I think you've alluded to . That's probably the case , but just want to make sure that that is accurate .
Speaker #9: And then also maybe if you can elaborate , hopefully you didn't mention this before when I was on the call , but what kind of time frame are we looking at for for ramping here ?
Speaker #9: I would assume it's earlier than 27 , but just want to get your take on that source . Thank you .
Speaker #3: Yeah , absolutely . Look , I don't want to comment on anything that is , you know , sensitive or confidential information obviously here , but I you know , I think hopefully you can see from the updates we provided , we feel that we are the only party here that is , you know , going through this late stage negotiations .
Speaker #3: But I will stop at that . I think we're feeling good about securing this production program . And importantly , I think , you know , the timeline of that is pulled forward .
Speaker #3: So to to really get going on on this . So you asked about kind of what , what it looks like from here and kind of the timing .
Speaker #3: I think look , the point of this initial development program was to ensure that we have a solution jointly that's going to be applicable to the OEMs broad vehicle lineup is going to be , you know , from a integration standpoint , it works across multiple trims , multiple models that the performance enables .
Speaker #3: Level three driving for both highway as well as city and to also make sure that we have the proper initialization plan and comprehensive audits and all of that so that we can really get the ground running .
Speaker #3: The team is working very diligently on that . This is in , you know , another way or form , really the first stage of the series development already .
Speaker #3: So we are really hitting the ground running and , you know , we think that we are on track for this . You know , late 17 , early 28 timeline for the launch of of this OEM .
Speaker #3: So that's that's been the timeline that we have been working with . And we are excited to deliver on it .
Speaker #9: Okay . Appreciate that detail . My last question here is just from this comment in the press release , I suspect you may be address this in the prepared remarks that I didn't get it early to here , but you just talking about growing interest and engagements from other major OEMs leveraging for L3 automotive applications here .
Speaker #9: Is there some sort of catalyst or other event here driving this, related either to the market or to Aeva's products and technology development?
Speaker #9: Maybe just clarify what you meant by that . Thank you .
Speaker #3: Yeah , absolutely . Look , I think we have been obviously engaged with a number of programs across various stages , from RFI to Rfqs and multiple segments within automotive , as well as industrial .
Speaker #3: Your question , I think , is around automotive . Within automotive includes passenger , multiple programs there and trucking . I think one , you know , there's multiple I think factors that have been happening , of course , the industry as well as I think , you know , with Ava , so first of all , we have laid out a clear foundation of our path to winning business and delivering on it , which , you know , includes partnering with the leaders in each respective space , which means they have to also want to partner with us and select us and to leveraging our perception platform .
Speaker #3: And the chip based technology to scale that according to their timelines . And three , be able to apply that without having to invest heavily in a bunch of new CapEx or a bunch of new teams for different product lines and segments .
Speaker #3: Using this approach . Of the one platform . So we've been able to do that . I think obviously with our progression and the success of completion of this development program with the top ten passenger OEM , and we hope that upon a production win , this would be the first time that a passenger car maker would be transitioning from time of flight to Fmcw to enable a key use case that's differentiated for the end customers .
Speaker #3: And we think that that is a key driver for some of the uptick in engagements for us. We believe that this has the potential to provide us with additional wins in a faster time frame than we experienced in the first one.
Speaker #3: As you know , first one is always the toughest . But I think importantly , because this OEM is really seen as a leader in automotive , introducing new technology , but doing so at scale .
Speaker #3: You know , they ship millions of vehicles every year . We think that that is going to be a catalyst and really a blueprint or a reference design for other OEMs .
Speaker #3: And fast followers to also enable that functionality . So I think that's that's part of the main interest in the space . The second piece , also I think is around some of consolidation in the market .
Speaker #3: We have always talked about that even though Ava came as one of the last players in the space , we took a contrarian path , but one that we believe is going to have the future proof technology and similar to , you know , radars who transitioned from kind of pulse based systems to fmcw , which we have always believed and talked about , that that will be a transition that will happen over time as well .
Speaker #3: So I think that is , you know , with both the developments in the market , some of the consolidation and the players as well as the transition of OEMs to technology here , that is more fmcw based , we think are going to be the catalysts and our growing momentum with an automotive and also additional markets .
Speaker #1: Thank you. That does conclude the final question we have for today, and this will conclude Aeva Technologies' third quarter 2025 earnings conference call.