indie Semiconductor (INDI) Q1 2025 Earnings Call May 12, 2025 05:00 PM ET Speaker0 Good afternoon, and welcome to ND Semiconductors First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead, sir. Speaker1 Thank you, operator. Good afternoon, welcome to ...

Revenue Performance - Total revenue for the three months ended March 31, 2025, was $54.1 million, a 3% increase from $52.4 million in the same period of 2024, driven by a $1.8 million increase in product revenue [128]. - Product revenue accounted for 93% of total revenue in both Q1 2025 and Q1 2024, with product revenue increasing to $50.4 million in Q1 2025 from $48.6 million in Q1 2024, a 4% increase [128]. - Approximately 63% of product revenues for the three months ended March 31, 2025, were recognized from shipments to customer locations in Asia [122]. Operating Expenses - Operating expenses decreased by 9% to $93.0 million in Q1 2025 from $102.0 million in Q1 2024, primarily due to a 15% reduction in research and development expenses [129]. - Research and development expenses for Q1 2025 were $42.1 million, down from $49.6 million in Q1 2024, reflecting a $7.5 million decrease [130]. - The company expects research and development expenses to stabilize over time following the recent decreases [130]. Cash Flow and Financial Position - As of March 31, 2025, the company had cash and cash equivalents of $246.9 million [146]. - For the three months ended March 31, 2025, net cash used in operating activities was $29.0 million, a 210% increase from $9.3 million in the same period of 2024 [147][149]. - The company reported a net cash used in investing activities of $2.4 million for the three months ended March 31, 2025, down from $5.5 million in 2024 [150]. - Net cash used in financing activities for the three months ended March 31, 2025 was $4.7 million, compared to a net cash provided of $6.9 million in the same period of 2024 [151][152]. - As of March 31, 2025, the company’s investment portfolio, including cash and cash equivalents, totals approximately $246.9 million [161]. Debt and Obligations - The company issued $218.5 million in aggregate principal amount of 2029 Notes, with approximately $23.4 million used for capped call transactions [144]. - Future material cash obligations total $462.5 million, including $390.5 million in debt obligations [154]. Interest Income and Expenses - Interest income increased by 73% to $2.3 million in Q1 2025 from $1.3 million in Q1 2024, attributed to higher cash balances [133]. - Interest expense rose by 114% to $4.5 million in Q1 2025 from $2.1 million in Q1 2024, primarily due to the addition of the 2029 Notes [134]. Foreign Currency and Risks - The company experienced a foreign currency translation exchange loss of $0.7 million for the three months ended March 31, 2025, compared to a loss of $0.2 million in 2024 [159]. - The company plans to enter into additional foreign currency forward contracts to mitigate currency fluctuation risks [160]. Other Financial Activities - The net gain from changes in fair value of contingent considerations and acquisition-related holdbacks was $4.8 million in Q1 2025, down from $15.4 million in Q1 2024, a decrease of 69% [135]. - Wuxi employees exercised options contributing a total capital of CNY 88.0 million (approximately $12.3 million) for a potential IPO in China [141]. - As of March 31, 2025, the company had raised gross proceeds of $90.2 million through the ATM Agreement, with approximately $59.8 million available for future issuances [140].

Exhibit 99.1 indie Semiconductor Reports First Quarter 2025 Results ALISO VIEJO, Calif. – May 12, 2025 – indie Semiconductor, Inc. (Nasdaq: INDI), an automotive solutions innovator, today announced first quarter results for the period ended March 31, 2025. Q1 revenue was up 3.3 percent year-over-year to $54.1 million with Non-GAAP gross margin of 49.5 percent. On a GAAP basis, first quarter 2025 operating loss was $38.9 million compared to $49.6 million a year ago. Non-GAAP operating loss for the first quar ...

indie Semiconductor, Inc. (NASDAQ: INDI ) is a U.S. semiconductor company that mainly produces for the automotive sector but also specializes in software solutions. During the current geopolitical problems, INDI has performed terribly. Nevertheless, the current release of tensionsMy main area of interest is algorithmic trading and trading strategies. However, I am also very interested in macroeconomic topics, especially since I lived and studied in Shanghai for half a year. That is why I plan to write about ...

Many investors believe a handful of semiconductor stocks are set to short-circuit. Three U.S. chip stocks have 25% or more of their floated shares sold short, indicating a very high level of bearish sentiment among a certain group of investors.  Despite heavy short interest in indie Semiconductor NASDAQ: INDI, Rigetti Computing NASDAQ: RGTI, and Impinj NASDAQ: PI, a deeper analysis reveals long-term growth potential that short sellers may be overlooking. Get Rigetti Computing alerts:High Short Interest Igno ...

Industry Dynamics - The semiconductor industry is highly cyclical, which may limit the company's ability to maintain or improve net sales and profitability[83]. - Average selling prices of semiconductor products have historically decreased, which could adversely impact revenue and profitability[88]. - The semiconductor industry is characterized by price erosion, particularly for older technology products, which could negatively impact the company's margins and revenue[105]. - The company faces significant competition in the semiconductor industry, requiring timely introduction of new technologies and products[84]. Market Dependence - The company relies heavily on the automotive market, and a downturn in this sector could significantly harm financial results[94]. - The demand for the company's products is closely tied to the demand for customers' end products, which can fluctuate significantly[90]. - The automotive industry's consolidation and potential bankruptcies among suppliers could reduce aggregate demand for the company's products[95]. - Approximately 82% of the company's revenues in fiscal 2024 were derived from products shipped outside of the U.S., with 45% specifically from Greater China[98]. Regulatory and Geopolitical Risks - Geopolitical uncertainties and macroeconomic conditions could adversely affect customer demand and disrupt the supply chain[83]. - The U.S. government announced a 10% tariff on imports from China and a 25% tariff on imports from Mexico and Canada, which could adversely affect the company's revenue and operations[97]. - The company is subject to various regulatory compliance risks, which could lead to investigations, sanctions, or enforcement actions that may adversely affect operations[131]. - The semiconductor industry is subject to stringent regulations regarding conflict minerals, which may increase compliance costs and impact the company's ability to meet customer requirements[147]. Financial Performance and Challenges - The company has historically incurred net losses since inception and may continue to do so, with profitability dependent on increased revenue growth from product demand[122]. - Total revenue for the year ended December 31, 2024, was $216,682,000, a decrease of 2.2% compared to $223,169,000 in 2023[354]. - Net loss attributable to indie Semiconductor, Inc. for 2024 was $132,603,000, compared to a net loss of $117,625,000 in 2023, representing an increase in loss of 12.7%[354]. - The accumulated deficit increased to $494.0 million in 2024 from $361.4 million in 2023, highlighting ongoing operational challenges[352]. Operational Risks - The company depends on third parties for manufacturing, which may lead to mismatches between supply and demand, affecting financial results[92]. - The company may experience challenges in winning competitive bid selection processes, impacting revenue generation[89]. - The company relies on third-party subcontractors for manufacturing, assembly, and testing, which exposes it to risks related to capacity and quality control[100]. - The company experienced problems achieving acceptable yields at third-party wafer fabrication partners, leading to delays and lower margins[102]. Growth and Strategic Initiatives - The company has a strategic backlog representing expected revenue from product orders within the next ten years, but there is no guarantee that these revenues will be realized[108]. - The company may pursue mergers and acquisitions to enhance market coverage and technological capabilities, but such activities involve risks and uncertainties[109]. - The company is focusing on expanding its market presence through strategic acquisitions and partnerships in the semiconductor sector[362]. Compliance and Legal Risks - The company faces potential product liability claims due to defects in its products, which could result in significant costs and reputational harm[134]. - The company faces risks related to compliance with anti-corruption laws, which could result in substantial fines and adversely affect its business operations[144]. - Compliance with environmental and occupational health and safety laws may require the company to incur substantial costs, potentially harming business expansion efforts[145]. Financial Structure and Capital Management - As of December 31, 2024, the total consolidated indebtedness of the company was $381.3 million[186]. - The company has 4.50% convertible notes with a principal balance of $160.0 million outstanding as of December 31, 2024[187]. - The company may experience challenges in accessing capital due to disruptions in credit markets, which could impede operations and growth strategies[125]. - Payments under the Tax Receivable Agreement may materially affect the company's financial condition and cash flow availability[205]. Currency and Foreign Operations - Fluctuations in foreign exchange rates could negatively impact reported revenues and operating results, although historically the effect has not been material[128]. - A significant portion of the company's consolidated revenue is generated from product sales in China, exposing it to economic and regulatory risks in that market[149]. - Changes in China's economic and political conditions could materially impact the company's financial results and operations[155]. Shareholder and Equity Considerations - The company may incur additional costs if disputes arise in jurisdictions outside Delaware, affecting business and financial condition[223]. - Sales of substantial amounts of Class A common stock by stockholders could increase volatility and downward pressure on share price[212][213]. - The weighted average common shares outstanding increased to 175,029,650 in 2024 from 145,188,867 in 2023, reflecting a growth of 20.5%[354]. Cash Flow and Liquidity - Cash flows from operating activities showed a net cash used of $58,601 in 2024, an improvement from $104,385 in 2023, but still a significant outflow compared to $76,746 in 2022[366]. - Cash, cash equivalents, and restricted cash at the end of the period increased to $284,548 in 2024, up from $151,678 in 2023, indicating improved liquidity[367]. - The company reported a fair value of common stock issued for business combinations amounting to $128,181 in 2023, reflecting strategic growth through acquisitions[367].

Core Viewpoint - indie Semiconductor, Inc. (INDI) is experiencing significant selling pressure, having declined 28.6% over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory and analysts expect better earnings than previously predicted [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2] - INDI's current RSI reading is 27.3, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5] Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts that earnings estimates for INDI have increased by 19.9% over the last 30 days, indicating a potential for price appreciation [6] - INDI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the likelihood of a turnaround [7]

Group 1 - The article discusses the potential for investing in undervalued stocks that are mispriced by the market as of the end of February [1] - It suggests that investors may consider joining a platform called Out Fox The Street for insights on these investment opportunities [1] Group 2 - There is a mention of a potential long position in a company referred to as INDI, indicating a possible interest in purchasing stock or options within the next 72 hours [2] - The article emphasizes that the information provided is for informational purposes only and does not constitute a solicitation to buy or sell securities [3] - It highlights that past performance is not indicative of future results, and no specific investment recommendations are made [4]

Financial Performance - In Q4 2024, indie Semiconductor achieved total revenue of $58 million, marking a 7.5% sequential growth and consistent with the midpoint of guidance [7][20] - Non-GAAP gross profit was $29.2 million, resulting in a gross margin of 50.4%, flat sequentially [21] - The company reported a non-GAAP operating loss of $14.2 million, an improvement of 16% sequentially [21] - The net loss for the quarter was $15.4 million, with a loss per share of $0.07 based on 205.7 million shares outstanding [22] Business Lines and Key Metrics - Vision products targeting multiple ADAS applications gained traction, with notable design wins including the iND880 Vision Processor selected by a large Korean OEM for a new e-vehicle platform [11][12] - The flagship 77 GHz Radar program is on track for production launch with initial shipments expected in late 2025 [13] - The company announced a major win for its vehicle intrusion detection system with a major German OEM, set to ramp up production in the second half of 2025 [15] Market Data and Key Metrics - The ultrasonic and radar-based automotive sensing market is projected to grow from $4 billion in 2024 to $6 billion by 2029 [14] - The average semiconductor content per vehicle is expected to exceed $1,000 in 2025, with premium and e-vehicles potentially seeing two to three times that value [18] Company Strategy and Industry Competition - indie Semiconductor is focused on leveraging its differentiated product technology portfolio to capitalize on long-term megatrends in ADAS, in-cabin user experience, and electrification [10] - The company is actively exploring M&A opportunities to enhance its technology and IP portfolio [19] Management Commentary on Operating Environment and Future Outlook - Management acknowledged ongoing market uncertainties due to tariffs and inventory issues, but expressed confidence in the long-term growth potential driven by new product launches [8][24] - For Q1 2025, the company expects revenue in the range of $52.5 million to $57.5 million, reflecting a 5% sequential decline but a 5% year-over-year increase [24] Other Important Information - The company exited Q4 2024 with total cash of $284.5 million, significantly up from $107.2 million in the prior quarter, enhancing its ability to pursue acquisitions [23] Q&A Session Summary Question: Impact of new products on growth in H2 2025 - Management highlighted that Vision products and Radar are expected to significantly contribute to revenue growth in the second half of 2025 [32] Question: OpEx management program and future reductions - Management indicated that further OpEx reductions are expected, with a target of $1 million to $2 million in run rate reductions as they approach late 2025 [42] Question: Geopolitical impacts and tariffs - Management noted that current tariff-related turbulence is viewed as a short-term issue, with no direct impact on product pricing but causing uncertainty in OEM planning [44][46] Question: Inventory levels and macroeconomic conditions - Management reported improved inventory levels but acknowledged a choppy macro environment, with tariffs contributing to ongoing uncertainty [51][52] Question: Geographic performance and inventory trends - Management observed relative strength in the China market, while also noting challenges faced by European manufacturers due to competition from Chinese firms [59][61] Question: Radar launch timeline and revenue expectations - Management confirmed that the Radar program remains on track for late 2025 production, with positive momentum in design wins [68] Question: Gross margin expectations for late 2025 - Management expressed optimism about achieving incremental improvements in gross margins throughout 2025, although the target of 55% remains uncertain [72]

Core Insights - Indie Semiconductor reported a quarterly loss of $0.07 per share, aligning with the Zacks Consensus Estimate, compared to a loss of $0.01 per share a year ago [1] - The company generated revenues of $58.01 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.13%, but down from $70.13 million year-over-year [2] - The stock has not performed well this year, remaining flat compared to the S&P 500's gain of 4.5% [3] Financial Performance - The company has not exceeded consensus EPS estimates in the last four quarters [1] - Current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $61.99 million, and -$0.08 on revenues of $303.06 million for the current fiscal year [7] Market Outlook - The earnings outlook and management's commentary on the earnings call will be crucial for the stock's immediate price movement [3][4] - The Zacks Rank for Indie Semiconductor is currently 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Electronics - Semiconductors industry is currently ranked in the bottom 47% of over 250 Zacks industries, which may impact stock performance [8] - Another company in the same industry, Ambarella, is expected to report a quarterly loss of $0.01 per share, reflecting a year-over-year change of +95.8% [9]