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Cepton(CPTN) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $2.6 million, representing a 186% increase year-over-year and a 72% increase sequentially, consisting of $1.4 million in product revenue and $1.1 million in development revenue [24] - Gross profit was slightly negative due to supply chain shortages and a mix shift between automotive and smart infrastructure revenue, which resulted in lower overall average selling prices (ASPs) [25] - GAAP net income was $0.8 million or $0.01 per share, while non-GAAP net loss was $14.5 million or $0.09 per share [26] - Adjusted EBITDA was negative $13.7 million, with available liquidity of approximately $146 million as of June 30, 2022 [27] Business Line Data and Key Metrics Changes - The automotive segment is on track with the first firm production order received from Koito for the OEM series production program, marking a significant commercial milestone [19] - Development revenue increased due to achieving incremental milestones on outstanding projects, while product revenue reflects ongoing production readiness efforts [24][25] Market Data and Key Metrics Changes - The smart infrastructure market is experiencing delays in deployment timelines due to economic conditions, but demand remains strong for the long term [22][24] - The company is expanding its presence in Detroit to strengthen relationships with automotive OEMs and support ongoing engagements [14] Company Strategy and Development Direction - The company is focusing on executing automotive programs and has revised its full-year revenue guidance for 2022 to between $7 million and $9 million, primarily due to delays in smart infrastructure projects [28] - The strategy includes expanding collaboration with Koito and securing manufacturing capabilities to accelerate time to market for lidar technology [10][13] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the automotive sector, expecting unit volume contributions from automotive to more than double in 2023 compared to 2022 [30] - The company anticipates achieving positive gross margins in the mid-single-digit range for the remainder of the year [33] Other Important Information - The company achieved ISO-26262 SOP certification on its first basic lidar product, enhancing its technology roadmap [17] - The partnership with Fabrinet is expected to support both automotive and non-automotive applications, indicating a diversified approach to market opportunities [12][58] Q&A Session Summary Question: Outlook for gross margin for the rest of the year - Management expects positive gross margin in the mid-single-digit range for the year [33] Question: Context on units and ASPs between automotive and smart infrastructure - Automotive ASPs are generally lower than smart infrastructure, with automotive being approximately two-thirds of the ASP of smart infrastructure [35] Question: Total units shipped in the quarter - The company shipped approximately 400 units in the quarter [37] Question: Progress on commercial talks with GM for Ultra Cruise vehicles - Discussions with GM are positive, with trends indicating extensions and additional models for lidar applications [39][40] Question: Delays in smart infrastructure projects - Delays are primarily due to longer proof-of-concept phases and deployment timelines, but demand remains strong [42][44] Question: Impact of automotive on revenue guidance - The decline in revenue guidance is mainly from smart infrastructure, with no significant impact from automotive [48] Question: Characterization of automotive volume doubling next year - The expectation is based on initial production orders, with potential upside for automotive volumes [51] Question: Expected cash burn in the second half of the year - Operating expenses are expected to remain between $55 million and $65 million for the year, with minimal gross profit contribution [53]