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Arbe Robotics .(ARBE) - 2024 Q1 - Earnings Call Transcript
ARBEArbe Robotics .(ARBE)2024-05-22 17:30
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Financial Data and Key Metrics - Total revenue in Q1 2024 was 0.1million,adecreasefrom0.1 million, a decrease from 0.4 million in Q1 2023 [11] - Negative gross margin for Q1 2024 was 194%, compared to a positive gross margin of 11% in Q1 2023 [11] - Total operating expenses in Q1 2024 were 12.5million,upfrom12.5 million, up from 10.7 million in Q1 2023, primarily due to an increase in noncash share-based compensation expenses of 1.9million[11]−OperatinglossinQ12024was1.9 million [11] - Operating loss in Q1 2024 was 12.8 million, compared to 10.6millioninQ12023[12]−AdjustedEBITDAlossinQ12024was10.6 million in Q1 2023 [12] - Adjusted EBITDA loss in Q1 2024 was 8.5 million, compared to 8.4millioninQ12023[12]−NetlossinQ12024increasedto8.4 million in Q1 2023 [12] - Net loss in Q1 2024 increased to 12.8 million, compared to 9.9millioninQ12023[13]−CashandcashequivalentsasofMarch31,2024,were9.9 million in Q1 2023 [13] - Cash and cash equivalents as of March 31, 2024, were 5.4 million, with 30.3millioninshort−termbankdepositsandnodebt[13]BusinessLineUpdates−ThecompanyachievedasignificantmilestoneinQ1withthesuccessfuldevelopmentofpost−pointcloudalgorithms,integratedintoHiRain′simagingradarforserialproduction[5]−ArbeanditsTier1partnersmadeprogresstowardserialproductiongoals,workingwithmajorOEMsonLevel2++andLevel3solutions[6]−HiRainannouncedplanstobeginnetproductionofimagingradarbytheendof2024[5]−Arbe′sradartechnologywasshowcasedatthe2024BeijingInternationalAutomotiveExhibition,integratedwithHorizonRobotics′JourneysixautomotiveAIprocessors[8]MarketandCompetitiveLandscape−Thecompanyisengagedwith11carcompaniesacrossEurope,Japan,andChina,withexpectationstosecureatleastfourdesignwinsin2024[17]−Arbe′sradartechnologymeetsthehigh−channelcountrequirementsofmajorOEMs,suchasMercedes,whichemphasizestheneedforatleast32x32channels[7]−TheNHTSA′smandateforautomaticemergencybraking(AEB)by2029andEuroNCAP′s2030roadmapforzeroroadfatalitiescreateopportunitiesforArbe′simagingradartechnology[9]−Thecompanyexpectsover1530.3 million in short-term bank deposits and no debt [13] Business Line Updates - The company achieved a significant milestone in Q1 with the successful development of post-point cloud algorithms, integrated into HiRain's imaging radar for serial production [5] - Arbe and its Tier 1 partners made progress toward serial production goals, working with major OEMs on Level 2++ and Level 3 solutions [6] - HiRain announced plans to begin net production of imaging radar by the end of 2024 [5] - Arbe's radar technology was showcased at the 2024 Beijing International Automotive Exhibition, integrated with Horizon Robotics' Journey six automotive AI processors [8] Market and Competitive Landscape - The company is engaged with 11 car companies across Europe, Japan, and China, with expectations to secure at least four design wins in 2024 [17] - Arbe's radar technology meets the high-channel count requirements of major OEMs, such as Mercedes, which emphasizes the need for at least 32x32 channels [7] - The NHTSA's mandate for automatic emergency braking (AEB) by 2029 and Euro NCAP's 2030 roadmap for zero road fatalities create opportunities for Arbe's imaging radar technology [9] - The company expects over 15% of new cars to feature high-end imaging radars by the end of the decade [9] Strategic Direction and Industry Trends - Arbe is in the final stages of dual listing on the Tel Aviv Stock Exchange and advancing through a convertible bond issuance to support production ramp-up in 2025 [10] - The company is focusing on cost-effectiveness and maintaining a strong balance sheet to fund revenue growth, with 2024 revenue expected to be in line with 2023, followed by growth in 2025 [14] - The shift in OEM strategies from EV-only to hybrid and ICE vehicles has caused delays but presents opportunities for Arbe's radar technology [30] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving four design wins in 2024, driven by higher radar specifications and regulatory changes [17] - The company is nearing full auto-grade qualification for its chipset, expected to be completed by the end of Q2 or early Q3 2024 [20] - Arbe's radar is positioned as a cost-effective solution compared to LiDAR, particularly in the context of price pressures in the EV market [31] Other Key Information - Arbe's radar is the exclusive high-end imaging radar in NVIDIA's Omniverse ecosystem [25] - The company has preliminary orders from HiRain and Weifu for 2025, totaling 40 million, with 75% of the volume targeting passenger vehicles [22][23] Q&A Session Summary Question: Confidence in achieving four design wins in 2024 [16] - Management highlighted higher radar specifications and regulatory changes as key drivers, with 11 car companies engaged across Europe, Japan, and China [17] Question: Progress on auto-grade qualification [19] - The company is on track to complete qualification by the end of Q2 or early Q3 2024, with no major hurdles expected [20] Question: Revenue ramp timelines with HiRain and Weifu [21] - Preliminary orders for 2025 total $40 million, with 75% targeting passenger vehicles [22][23] Question: Arbe's role in NVIDIA's Omniverse ecosystem [24] - Arbe's radar is the exclusive high-end imaging radar in the ecosystem [25] Question: Impact of EV market shifts on Arbe's business [29] - The shift to hybrid and ICE vehicles caused delays but presents opportunities for Arbe's radar technology [30] Question: Investments for production ramp-up [35] - The company has completed most production-related expenses, with CapEx investments already made [36]