indie Semiconductor(INDI) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved total revenue of $51.6 million in Q2 2025, exceeding the midpoint of its outlook, reflecting solid performance amid challenging automotive market conditions [5][16] - Non-GAAP gross margin was reported at 49.1%, and non-GAAP operating loss was $14.5 million, an improvement from $17.2 million a year ago, indicating progress towards profitability [16] - The net loss for the quarter was $16.2 million, with a loss per share of $0.08 based on 215.3 million shares [16] Business Line Data and Key Metrics Changes - The company is focusing on Advanced Driver Assistance Systems (ADAS) as a core growth driver, with strong momentum in RADAR and vision programs [7][9] - The flagship 77 GHz RADAR chipset is nearing production ramp, with positive feedback from lead Tier 1 customers [9] - The IND880 processor for vision applications is set to enter production at a leading Chinese OEM, showcasing rapid design-to-production cycles [10] Market Data and Key Metrics Changes - Automotive market analysts have become more optimistic, with forecasts for global light vehicle sales expected to show modest growth in 2025 compared to 2024 [5] - The company is expanding into adjacent industrial markets, including robotics and quantum communications, which are expected to drive future growth [11][13] Company Strategy and Development Direction - The company is strategically positioned to leverage its differentiated technologies in both automotive and adjacent markets, focusing on ADAS and quantum opportunities [14][22] - The recent acquisition of Emotion 3D aims to enhance software licensing revenue, marking a shift in the company's revenue model [20][26] Management's Comments on Operating Environment and Future Outlook - Management noted that despite ongoing macroeconomic uncertainties, underlying demand remains strong, and key projects are on track [6][7] - The company expects revenue growth in 2025 to range from $52 million to $56 million, with a non-GAAP gross margin of 49% to 50% [18] - Management expressed confidence in achieving targeted operational savings and maintaining a strong focus on cash optimization [19] Other Important Information - The company exited the quarter with total cash of $202.9 million, down from $246.9 million in the previous quarter, partly due to cash used for repurchasing convertible notes [17] - The company is exploring the possibility of an IPO for its joint venture in China, which could yield higher returns [17] Q&A Session Summary Question: Is the eMotion acquisition the first instance of software licensing revenue for Indy? - Management confirmed that this is the first major move into generating a meaningful licensing stream from software running on their processors, changing the revenue model significantly [25][26] Question: Any updates on RADAR and Vision Design wins? - Management indicated that RADAR components are primarily shipped outside the U.S., and the ASP per car is expected to be in the $25 to $30 range, suggesting a significant ramp-up potential [30][31] Question: How does the Motion 3D acquisition fit into the existing product offerings? - Management stated that the software will run on their chips and will be sold alongside hardware, with a vibrant market for software licensing expected to generate significant revenue [41][42] Question: What is the expected market size for photonics and quantum opportunities? - Management projected the total quantum photonics market to grow between $3 billion and $5 billion by 2030, with the company positioned to capture a significant share [58][61]