AEYE(LIDR) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reduced its net cash burn by $3.4 million to$9.4 million from the prior quarter's cash burn of $12.8 million, marking the third consecutive quarter of cash burn reductions [25] - Fourth quarter revenues were$69,000 compared to $188,000 in the prior quarter, with gross margins decreasing due to lower revenue and increased noncash inventory write-downs of$2.2 million [26] - GAAP operating expenses for the fourth quarter were $21.8 million, up 69$27.8 million or $4.44 per share, compared to a GAAP net loss of$17 million or $2.78 per share in the previous quarter [28] - The company closed the fourth quarter with$36.5 million in cash, cash equivalents, and marketable securities, with no debt [31] Business Line Data and Key Metrics Changes - The company continues to focus on key automotive milestones under its automotive-first strategy, which has led to a reduction in revenue as it winds down its current industrial product line [26] - Non-GAAP operating expenses were $6.5 million, down from$8.5 million in the previous quarter, due to ongoing cost reduction initiatives [28] Market Data and Key Metrics Changes - The company has signed a letter of intent with a global Tier 1 automotive ADAS sensor supplier, indicating increased engagement from OEMs and a rise in RFI and RFQ activity [7][10] - The road safety crisis is worsening, with pedestrian fatalities in the U.S. increasing by nearly 80% from 2010 to 2021, highlighting the urgent need for LiDAR technology [17] Company Strategy and Development Direction - The company emphasizes a capital-light business model, which is expected to extend its cash runway well into 2025 and allows it to weather current industry headwinds [12][34] - The focus remains on market-leading product performance and go-to-market strategies via Tier 1 partners, leveraging existing supply chain infrastructure for efficient integration [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that broader market conditions have caused delays in LiDAR adoption within OEM vehicle programs but remains optimistic about ongoing discussions with OEMs [10] - The company expects cash burn for 2024 to be in the range of $20 million to$25 million, representing a 75% reduction compared to Q1 2023 [32] - Management is confident in the differentiation of its technology and the potential for significant opportunities with OEM partners [34] Other Important Information - The company underwent a reverse stock split in December 2023, and all financial information presented has been adjusted accordingly [24] - The company has access to an equity line of credit facility and a shelf registration statement, allowing it to raise up to $200 million over the next 2.5 years [31] Q&A Session Summary Question: Can you provide more details about the Tier 1 announcement and its implications? - The company is already working with the Tier 1 partner on inbound RFI and RFQs, indicating a strong collaboration moving forward [38] Question: How is the LOI structured in comparison to the previous partnership with Continental? - The company expects a similar revenue-sharing structure as with Continental, which fits into its capital-light model [55] Question: What are the expectations for the LiDAR market in 2024? - While the market has been challenging, there has been significant activity in Q1, leading to cautious optimism regarding series production agreements [56][58]