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indie Semiconductor(INDI) - 2024 Q1 - Quarterly Results

First Quarter 2024 Results Overview Q1 2024 Financial Performance Summary indie Semiconductor reported a 29% year-over-year revenue increase to $52.4 million in Q1 2024, with a Non-GAAP gross margin of 50.3% | Metric | Q1 2024 | Q1 2023 | YoY Change | | :-------------------------- | :---------- | :---------- | :--------- | | Revenue | $52.4 million | $40.452 million | +29% | | Non-GAAP Gross Margin | 50.3% | 52.2% | -1.9 ppts | | GAAP Operating Loss | $(49.6) million | $(37.0) million | -34.05% | | Non-GAAP Operating Loss | $(17.2) million | $(16.8) million | -2.38% | | GAAP Loss Per Share | $(0.19) | $(0.55) | +65.45% | | Non-GAAP Loss Per Share | $(0.10) | N/A | N/A | CEO Commentary CEO Donald McClymont highlighted indie's significant outperformance relative to peers and its capitalization on Autotech market technology deployment - indie Semiconductor significantly outpaced its industry peer group, capitalizing on technology deployment momentum in the Autotech market3 - Despite contracting automotive end market units, the company achieved 29% year-over-year top-line growth to a record first-quarter level3 - Management believes the company has passed its trough and expects a resumption of outsized sales growth in the second half of 2024, driven by new product ramps and key global flagship car launches3 Business Highlights indie Semiconductor achieved several key milestones in Q1 2024, including ramping new solutions for major automotive OEMs and securing strategic design wins - Ramped Occupant Monitoring System (OMS) solutions for BMW7 - Enabled Cadillac Escalade Augmented Reality (AR) navigational systems7 - Secured Image Signal Processor (ISP) wins at a leading Japanese OEM for blindspot monitoring and captured strategic camera design wins at Valeo7 - Supported Xiaomi's SU7 electric vehicle launch with multiple User Experience solutions7 - Achieved production readiness with a mixed-signal solution for Ultrasonic Intrusion Detection applications at Volkswagen7 Q2 2024 Outlook and Future Growth For Q2 2024, indie Semiconductor anticipates sequential revenue growth of flat to 5% and gross margin expansion to 51-52% | Metric | Q2 2024 Outlook | | :-------------------- | :-------------------- | | Revenue (Sequential) | Flat to up 5% | | Non-GAAP Gross Margin | 51% to 52% | - The company expects to offset current market softness from industry-wide inventory rebalancing6 - Gross margin expansion is expected due to a richer product mix and flat expenses, leading to a narrower operating loss sequentially68 - indie plans to return to high growth mode in the back half of 2024 and resume its industry-leading growth trajectory into 2025 and beyond, supported by new product pipeline strength and general market recovery8 Company Information About indie Semiconductor indie Semiconductor is an Autotech solutions innovator focused on developing high-performance, energy-efficient automotive semiconductors and software platforms - indie Semiconductor empowers the Autotech revolution with next-generation automotive semiconductors and software platforms10 - Focus areas include ADAS, user experience, and electrification applications, with mixed-signal SoCs enabling edge sensors (Radar, LiDAR, Ultrasound, Computer Vision)10 - Their embedded system control, power management, and interfacing solutions enhance the in-cabin experience and support automated and electrified vehicles10 Q1 2024 Conference Call Details indie Semiconductor hosted a conference call on May 9, 2024, to discuss Q1 2024 results and business outlook - A conference call was held on May 9, 2024, at 5:00 p.m. Eastern time to discuss Q1 2024 results and business outlook8 - Conference call access was available via the Investors page of indie's website or by telephone (domestic: 1-888-886-7786, international: 416-764-8658, Conference ID: 34978665)8 - A replay was available from May 9, 2024, to May 23, 2024, via the website or by calling (844) 512-2921 (domestic) or (412) 317-6671 (international), Replay Pin Number: 349786659 Media & Investor Relations Contact information for media and investor inquiries is provided - Media inquiries can be directed to media@indiesemi.com14 - Investor relations inquiries can be directed to ir@indiesemi.com14 Legal Disclosures Safe Harbor Statement This section contains forward-looking statements regarding future business and financial performance, subject to significant uncertainties and risks - The communication contains forward-looking statements regarding future business and financial performance, including expectations for financial outlook, market recovery, product ramps, gross margin expansion, and revenue growth12 - These statements are based on current beliefs and expectations but are subject to significant business, economic, and competitive uncertainties and contingencies, many of which are difficult to predict and beyond the company's control12 - Key risk factors include macroeconomic conditions (inflation, interest rates), ongoing conflicts, reliance on contract manufacturing, competitive pressures, ability to achieve design wins, impacts of acquisitions, ability to develop new products, trade restrictions, and political/economic instability12 - Investors are cautioned not to place undue reliance on forward-looking statements, and the company does not undertake to update them except as required by law13 Preliminary Condensed Consolidated Financial Statements Statements of Operations The condensed consolidated statements of operations show indie Semiconductor's financial performance for the three months ended March 31, 2024 | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | | Product revenue | $48,578 | $33,653 | | Contract revenue | $3,775 | $6,799 | | Total revenue | $52,353 | $40,452 | | Cost of goods sold | $30,089 | $24,056 | | Research and development | $49,589 | $36,563 | | Selling, general, and administrative | $22,322 | $16,814 | | Total operating expenses | $102,000 | $77,433 | | Loss from operations | $(49,647) | $(36,981) | | Total other income (loss), net | $14,315 | $(48,691) | | Net loss before income taxes | $(35,332) | $(85,672) | | Income tax benefit | $1,109 | $3,706 | | Net loss | $(34,223) | $(81,966) | | Net loss attributable to indie Semiconductor, Inc. | $(31,179) | $(72,746) | | Net loss per share attributable to common shares — basic | $(0.19) | $(0.55) | | Weighted average common shares outstanding — basic | 164,602,608 | 131,490,221 | Balance Sheets The condensed consolidated balance sheets present indie Semiconductor's financial position as of March 31, 2024, compared to December 31, 2023 | Metric (in thousands) | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :--------------- | :---------------- | | Assets | | | | Cash and cash equivalents | $138,174 | $151,678 | | Accounts receivable, net | $52,418 | $63,602 | | Inventory, net | $37,899 | $33,141 | | Total current assets | $263,750 | $271,820 | | Property and equipment, net | $29,399 | $26,966 | | Intangible assets, net | $198,635 | $208,134 | | Goodwill | $290,397 | $295,096 | | Total assets | $803,648 | $818,876 | | Liabilities and stockholders' equity | | | | Accounts payable | $18,955 | $18,405 | | Contingent considerations | $75,122 | $83,903 | | Total current liabilities | $151,666 | $138,875 | | Long-term debt, net of current portion | $156,996 | $156,735 | | Total liabilities | $342,177 | $341,851 | | indie's stockholders' equity | $432,877 | $446,149 | | Noncontrolling interest | $28,594 | $30,876 | | Total stockholders' equity | $461,471 | $477,025 | | Total liabilities and stockholders' equity | $803,648 | $818,876 | Non-GAAP Financial Measures Reconciliation and Discussion Reconciliation of Preliminary Non-GAAP Measures to GAAP This section provides a reconciliation of indie Semiconductor's preliminary GAAP financial measures to non-GAAP measures by adjusting for specific expenses Non-GAAP Gross Margin Reconciliation | Metric (in thousands) | Q1 2024 | Q1 2023 | | :-------------------------- | :------ | :------ | | GAAP revenue | $52,353 | $40,452 | | GAAP cost of goods sold | $30,089 | $24,056 | | Acquisition-related expenses | $(110) | $(2,648) | | Amortization of intangible assets | $(3,735) | $(2,019) | | Inventory cost realignments | $(145) | — | | Share-based compensation | $(100) | $(68) | | Non-GAAP gross profit | $26,354 | $21,131 | | Non-GAAP gross margin | 50.3% | 52.2% | Non-GAAP Operating Loss Reconciliation | Metric (in thousands) | Q1 2024 | Q1 2023 | | :-------------------------- | :------ | :------ | | GAAP loss from operations | $(49,647) | $(36,981) | | Acquisition-related expenses | $1,195 | $5,133 | | Amortization of intangible assets | $5,771 | $3,423 | | Inventory cost realignments | $145 | — | | Share-based compensation | $25,384 | $11,626 | | Non-GAAP operating loss | $(17,152) | $(16,799) | Non-GAAP Net Loss and EBITDA Reconciliation | Metric (in thousands) | Q1 2024 | Q1 2023 | | :------------------------------------------------------------------ | :------ | :------ | | GAAP Net loss | $(34,223) | $(81,966) | | Non-GAAP Net loss | $(17,699) | $(16,269) | | Non-GAAP Net loss per share | $(0.10) | N/A | | Non-GAAP share count | 185,710,540 | N/A | | Non-GAAP EBITDA | $(15,616) | $(15,842) | Discussion Regarding the Use of Non-GAAP Financial Measures indie Semiconductor uses non-GAAP financial measures to provide supplementary information to investors, believing they offer a clearer view of ongoing business operations - Non-GAAP financial measures are used to provide useful supplementary information to investors, evaluate operating performance, make operating decisions, and forecast future periods23 - Key exclusions from GAAP measures to derive non-GAAP figures include: acquisition-related expenses, amortization of intangible assets, inventory cost realignments, share-based compensation, gains/losses from changes in fair value changes of warrants/contingent considerations, non-cash interest expense, and income tax benefit/expense2425 - Non-GAAP EBITDA was added starting in Q4 2023 to remove non-recurring, irregular, and one-time items that may distort EBITDA34 - The company emphasizes that non-GAAP measures should not be considered in isolation or as a substitute for GAAP results and may have limited value for comparisons due to varying calculation methods across companies33