indie Semiconductor(US:INDI)2023-11-10 00:20Financial Data and Key Metrics Changes - The company achieved record revenue of $60.5 million in Q3 2023, representing a 101% year-over-year increase and a 16% sequential increase [8][34] - Gross margin expanded to 52.7%, up 226 basis points year-over-year and 50 basis points sequentially [34] - The operating loss narrowed to $13 million from $15.8 million in the same period last year [35] - The strategic backlog increased to $6.3 billion, up from $4.3 billion last year [10][42] Business Line Data and Key Metrics Changes - The company reported significant growth in its Autotech Solutions, particularly in ADAS (Advanced Driver Assistance Systems), which contributed approximately $4.6 billion to the backlog [10][12] - The Computer Vision segment saw a key win with a North American OEM, contributing to the strategic backlog [16] - The User Experience segment is ramping up with integrated lighting and charging solutions, reflecting a shift towards immersive in-cabin experiences [22][30] Market Data and Key Metrics Changes - EV sales in the U.S. increased by 50% year-over-year, with penetration rates reaching nearly 8% of new vehicle sales [24][31] - The automotive ECU market incorporating vision-based processing is expected to grow from 232 million units in 2022 to nearly 400 million units by 2027 [19] Company Strategy and Development Direction - The company is focusing on a sensor fusion strategy that integrates Radar, Computer Vision, LiDAR, and Ultrasonic Solutions to enhance vehicle safety and performance [13][14] - The goal is to exceed $1 billion in annual revenue by 2028, driven by the growing demand for sophisticated safety semiconductors [11][42] - The company aims to achieve a 60% gross margin and a 30% operating margin in the long term [39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macroeconomic environment but emphasized resilience and strong demand for their products [51][76] - The company expects to reach non-GAAP EBITDA breakeven in the current quarter, marking a significant milestone [10][61] - There is confidence in sustaining profitability throughout 2024, despite potential fluctuations in operating expenses [61] Other Important Information - The company completed a warrant exchange tender offer, effectively retiring 27.4 million shares, which reduces potential future dilution [39] - The acquisition of Exalos, a Swiss photonics company, is expected to enhance the company's semiconductor capabilities [29] Q&A Session Summary Question: What is the coverage of the $6.3 billion backlog for revenue forecast? - Management indicated that the backlog is largely fully booked for the next 12 months, suggesting a revenue run rate of approximately $220 million for 2023 based on historical data [49] Question: Are there any updates on OEM programs that were previously pushed out? - Management reported no further push outs and noted that market demand remains resilient [73] Question: What are the key drivers for gross margin improvement? - The deployment of ADAS products, which have higher average selling prices, is expected to drive gross margin towards the target of 60% [53][54] Question: What is the expected gross margin exit for 2024? - Management suggested that a gross margin of around 55% is a reasonable expectation for 2024 [56] Question: Can you elaborate on the developments in radar technology? - Management highlighted ongoing development and deployment of radar for diverse functions beyond ADAS, indicating a bright future for this segment [65]