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indie Semiconductor(INDI) - 2024 Q4 - Earnings Call Transcript

Financial Performance - In Q4 2024, the company achieved total revenue of $58 million, marking a sequential growth of 7.5% and consistent with the midpoint of guidance [5][13] - Non-GAAP gross profit was $29.2 million, resulting in a gross margin of 50.4%, flat sequentially [13] - The company reported a non-GAAP operating loss of $14.2 million, an improvement of 16% sequentially, with a net loss of $15.4 million and a loss per share of $0.07 [14][15] Business Line Performance - The flagship iND880 Vision Processor was selected for applications by a large Korean OEM for a new electric vehicle platform, starting production in 2027 [8] - The company continues to progress with major design wins for General Motors, Toyota, and Ford for its Vision products, with production expected to commence later this year [9] - The 77 GHz radar program is on track for production launch with multiple OEMs, with initial shipments expected in late 2025 [9][10] Market Data - The ultrasonic and radar-based automotive sensing market is projected to grow from $4 billion in 2024 to $6 billion by 2029 [9] - The company noted that inventory levels have significantly improved, although some pockets of inventory still exist [34][40] Company Strategy and Industry Competition - The company is well-positioned to capitalize on long-term megatrends in ADAS, in-cabin user experience, and electrification, leveraging a differentiated product technology portfolio [7][11] - M&A remains a key strategy to enhance technology and IP portfolio, with a strong balance sheet allowing for potential acquisitions [12] Management Commentary on Operating Environment and Future Outlook - Management acknowledged ongoing market uncertainties due to tariffs and inventory issues, but remains optimistic about growth drivers from new product launches in 2025 [16][17] - The company expects Q1 2025 revenue to be between $52.5 million and $57.5 million, down 5% sequentially but up 5% year-over-year [16] Other Important Information - The company issued $218.5 million in convertible notes, strengthening its cash position to $284.5 million, up from $107.2 million in the prior quarter [15] - The company has initiated an OpEx review, resulting in a $2 million reduction in quarterly non-GAAP operating expenses [17] Q&A Session Summary Question: Impact of new products in H2 2025 - Management highlighted multiple products ramping, particularly Vision products and radar, which are expected to significantly contribute to revenue [22] Question: OpEx management program - Management indicated that further reductions in OpEx are expected, with an anticipated $1 million to $2 million in run rate reductions as they approach the second half of 2025 [27] Question: Geopolitical impacts and tariffs - Management noted that current turbulence is short-term, with potential long-term implications still uncertain, but they are prepared for short-term impacts [29][30] Question: Inventory and macro demand - Management acknowledged mixed feedback from peers regarding inventory levels and macro demand, with their own inventory levels having improved [33][34] Question: Geographic performance and policy uncertainty - Management indicated that while the U.S. market is facing significant policy uncertainty, they have seen relative strength in the China market [40][41] Question: Radar launch timeline - Management confirmed that the radar program is still on track for the same schedule as previously indicated, with positive momentum expected [47][48] Question: Gross margin expectations - Management expects incremental improvements in gross margins as the year progresses, although achieving 55% by the end of 2025 remains uncertain [49]