Hesai(HSAI)2024-11-26 15:21Financial Data and Key Metrics - Q3 2024 net revenue reached RMB 539.4 million (USD 76.9 million), surpassing the high end of revenue guidance [6][30] - LiDAR shipments exceeded 134,000 units in Q3, marking a second consecutive quarter of nearly 50% sequential growth [6][30] - Blended gross margin remained robust at 47.7%, supported by effective cost management and NRE revenues from L4 LiDAR [31] - GAAP net loss narrowed for four consecutive quarters, reflecting operational efficiency and financial discipline [7][32] - Q4 2024 projected revenue is nearly USD 100 million with an estimated net profit of USD 20 million, achieving full-year profitability on a non-GAAP basis [7][33][34] Business Line Data and Key Metrics - LiDAR adoption accelerated, with over 134,000 units shipped in Q3, driven by strong demand in the ADAS sector [6][30] - The company secured new platform wins with Leapmotor and a premium EV brand, with production expected to commence in 2025 [14] - The ATX LiDAR is nearing SOP phase, with significant interest from multiple customers planning to adopt it as a standard feature in their 2025 line-ups [15] - The OT128 LiDAR, designed for scalable applications like robotaxis and industrial robotics, has secured contracts with over 90 global and domestic clients [23][24] Market Data and Key Metrics - LiDAR adoption in China is growing, with 2/3 of highway NOA models and 100% of city NOA models equipped with LiDAR [9] - Level 2 and Level 2+ ADAS adoption in China is projected to reach 40% penetration in 2024 and 50% by 2025 [9] - The company expanded its global reach, securing design wins with 5 prominent global OEMs, including joint ventures in China and collaborations with SAIC Volkswagen [16][17][19] - Two new development projects were secured with top 3 OEMs in Japan, covering Level 2+ passenger vehicles and Level 4 robotaxi applications [20] Company Strategy and Industry Competition - The company aims to capitalize on the growing recognition of LiDAR technology in autonomous driving, with a focus on both ADAS and autonomous mobility markets [22] - The OT128 LiDAR, with its 360-degree perception and all-weather capabilities, positions the company as a leader in scalable applications like robotaxis and industrial robotics [23][24] - The company is leveraging its strong position in the ADAS sector to explore opportunities in the broader autonomous mobility market, where performance is prioritized over price sensitivity [22] Management Commentary on Operating Environment and Future Outlook - Management highlighted the critical role of LiDAR in vehicle safety systems, especially in low visibility conditions, as demonstrated by recent NHTSA investigations [11][12] - The company is confident in its momentum, projecting full-year profitability on a non-GAAP basis for 2024, a first for an automotive LiDAR company [7][34] - The introduction of Level 3 autonomous driving solutions in 2026 is expected to drive further demand for LiDAR technology, with multiple LiDAR units likely to be employed for enhanced safety [10] Other Important Information - The company introduced its new CFO, Andrew Fan, who brings over 18 years of expertise in accounting and corporate finance [26] - The OT128 LiDAR played a key role in the success of the Champion Autonomous Race car at Formula Student Germany 2024, showcasing its advanced capabilities [25] Q&A Session Summary Question: Updates on the contention with the U.S. DoD and its impact on 2025 projects - The company was removed from the 1260H list in October but was relisted on a different basis, with ongoing legal challenges to correct the DoD's erroneous claims [38][39][40][41][42][43] Question: Expectations for GAAP profitability in 2025 - The company is on track for GAAP profitability in Q4 2024 and is targeting full-year profitability in 2025, driven by strong revenue growth and cost control [44][45][46][47][48][49] Question: 2025 volume, revenue, and margin guidance - The company expects significant design wins for new car models in 2025, with millions of units projected to be shipped, supported by three different AT modules [52][53] - Normalized LiDAR gross margin, excluding NRE impact, is expected to remain around 40% [54] Question: LiDAR production for robotics and ASP differences - Robotics LiDARs have higher ASPs compared to ADAS due to lower volumes and different technical requirements, with the company leveraging its ADAS capabilities to maintain high profitability in robotics [59][60][61][62][63][64] Question: ATX shipment proportion and long-term outlook - The company expects ATX shipments to grow rapidly in 2025, with a focus on maintaining healthy blended gross margins through effective cost management [65][66] Question: Cooperation with Huawei in the intelligent driving market - The company views Huawei as a strong competitor within its ecosystem but remains focused on maximizing market share outside of Huawei's supply chain [68][69][70][71] Question: OT128 adoption and partnership with Cruise - OT128 has secured deals with over 90 clients, with production and deliveries already underway, while the partnership with Cruise remains strong, with NRE revenues recorded in Q3 [73][74][75][76][77][78] Question: Normalized OpEx and Q1 2025 margin guidance - OpEx growth is expected to be less than 5% on a GAAP basis and 10-15% on a non-GAAP basis in 2024, with active expense management planned for 2025 [81][82] Question: ATX design wins and potential switching from AT128 - The ATX is a cost-effective alternative to the AT128, with many customers expected to switch to ATX for better cost structures, while premium models will adopt higher-performance LiDARs like the AT512 [84][85][86][87][88][89]