Cepton (CPTN) 9 Aug 222022 Q2 Earnings call transcript

Good day and welcome to the Second Quarter 2022 Cepton Inc. Business Update and Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Hull Xu, Chief Financial Officer. Hull, please go ahead.

everyone, update. second welcome, call XXXX and business and you, to quarter Cepton's earnings Thank today Jun Business me Hourtienne, With is Senior and and Vice Mitch CEO; President of Development. Pei, our Co-Founder

current based would accompany statements I materially to in refer included conference expressed to to During with the and statements forward-looking and uncertainties a non-GAAP the in in company's future financial may the as periods. should in Actual in earnings the GAAP. are that to and filings or measures earnings described statements or periods our harbor future the relating slides those our a our made measures SEC. prepared GAAP The financial including are be financials remind expected of These measures company's Reconciliation for U.S. during for call. measures and expectations release to comments release. those everyone on number statements safe in release non-GAAP discussed non-GAAP to for call are that earnings accordance may those release. regarding operational our like in not call, this statements and earnings unaudited substitute performance with due include contained forward-looking may results we this other factors, considered financial risks, forward-looking or performance from today's subject or our of call by the these implied the superior differ the

events, except by those a any update of statements future not law. undertaking are We required as commitment to as result

earnings and this as webcast and this that reminder, you slides investors.cepton.com. quick this of being call a call as can find at replay recorded, the release As well call the accompany is

over Now to like call the I Jun. to turn would

call. and Hull, everyone. second afternoon, Cepton's you, quarter joining you good Thank for earnings Thank

business results financial a with review second will We update you. provide and quarter XXXX

off share will production Development infrastructure underway with update exciting Hourtienne, execution. OEM updates is the an projects SVP also start who Joining of with Mitch us our automotive I'll on on today smart Business and our customers. series

Koito U.S. We continue to the manufacturing test ramp assembly, in calibration, plants shipments delivery multiple-vehicle multiple across D-samples states and to for final to

D-samples final second a company's of multiple visited validation the Cepton readiness. Seen with production In available in our Koito As Manufacturing Japan our of line the in intent. we stage represents truly significant for production in production hardware in quarter, it Koito's lidars reminder, at commercialization facility how automated milestone in the are was the support making consumer journey Cepton us everyday vehicles. light goal our action achieving as and close to represents to teams

lidar lidar announced to production we're series collaboration OEMs. undertake and range will extend long and program. a efforts jointly our range current products both and we expanding As Koito near This targeting companies has beyond will both in commercially we commercialization technological OEMs and is manufacturing the activities go-to-market part with of accelerate automotive on and initially automotive, the and and that further technology market. transforming viable our innovations bolster to are scalable into time This partnership production partnership an we safety extended Cepton's lidar anticipate Cepton's products. to well way that demonstrates cover Japanese key will partner recently Koito expanded capabilities integral of the been

expanded advanced we see select lost back automotive applications. sub full to as key priority of our the Fabrinet in to production-ready for environment supplier are by of also the September top production. be scale production More OEM Securing activity Vista-X and the for the lidar end towards selection recently Cepton recent partnership will our also Fabrinet as lidar be broadly to the of support OEM a initial our series modules ready our tight capabilities This markets, flagship for and our announced Detroit XX program. year. our end customers. reflects partnership existing as solutions production rapid active on growth team's being automotive, in remains our supply facility America. engagement at office our will We serve the supplier and manufacturing capacity progress hub in Fabrinet of well turnkey we office and as accommodate targeting in Company's our non-automotive North Thailand with XXXX, automotive excited

field involved presence automotive component deploying expanding our OEM in as relationship engineers safety. in Our our actively lidars for with a customers Detroit standard deepens and are

OEMs. couple of Our automotive to progress with balance and see taking we lidar a is, lidar can't provide demand names, recently started drive followers for One ask vehicle vehicles lidar's market unique of awarded performance, many our strong. when continued reliability the of was specific continues we models on extremely top to will salable orders those question XX cost and our have While consumer vehicles?

of result OEMs for favorable factor Our small separating early and Cepton's continues be place ability for form creates point models lidar The unique consumption the products. presence these power low from our windshield our a of outlook behind differentiation growing to reception and positive Cepton as to competitors. lidar a a its Cepton with

On the our the ISO-XXXXX technology certification side first SOP basic. achieved we on

important further our to an Our end cost of reductions. out drive and capabilities enhancement ASIC we ASICs performance in-house of development the as seven remain our piece tape roadmap towards year the as technology

team software software future forward Our the more continues news exciting development progress sharing development on to make and kit quarters. in look to open-source we our

has beyond and expanded you can development. design Cepton see, lidar its As capabilities

ensure X with Our are lidar while on continuous partners our designed solutions based Tier readiness. refined and working to scale production inputs OEM

consumer of everyday be commercialize lidar in first to We expect one cars. technology our the to

turn Mitch. will over I it Now to

automotive order on is we production On from deliveries our firm our next Koito series our milestone received to production our production year. Thank for OEM you, path a programs first Jun. commercial This major program.

completed the Japan, Koito's Manufacturing initial and to production trips line OEM production of implemented facility. software in the site OEM several teams this audit on for engineering series During preparation our Manufacturing Koito's

production-ready and of being year. to committed end this we on by track said, the Jun As remain

Additionally, feedback. we automotive received OEMs our with and other technology very we in reviewed roadmap top Japan positive

to the on performance to focus three the well past technical our progress behind projects. real ongoing ability San RFI Jose a down our are integration windshield, additional differentiation OEMs a feedback and Our we Cepton very years reduce key positioned factors Consensus OEM reviews top vehicle lidar headquarters was hosted at at the and here we tailor heads been clearly efforts product, executing XX size, Recently, has application-specific for needs programs. automotive few for to Cepton. for to

domestically out and monitoring than still our the see applications Despite remains push examples name abroad side, in being at The beyond market our as domestic mature favored railway lines of in target projects projects some to their Obstacle strong. the proof-of-concept begun lidar a and phase working deployment on; airports. as and smart automotive are customers of we've much result for conditions. we're smart Midwest. as the products a infrastructure are demand well more economic few On China, tolling applications long-term to the into time confident recent implemented products continue for in infrastructure security this, deployment. smart To fragmented detection and both stations their is the we're

will turn I to it Next, Hull. back over

consists revenue in the million sequentially quarter development primarily and results. revenue development incremental with of was quarter million second outstanding The up Total increase year-over-year the revenue and $X.X as million revenue projects. was $X.X you, by we on quarter $X.X XXX% revenue. Thank Mitch. for and for our product Starting driven achieved XX% milestones

lower shortages supply for driven chain smart gross by Our and a ASPs. overall effects the quarter, profit the resulting of was in automotive and revenue between slightly primarily mix shift negative infrastructure

Excluding net adjustments million shares million million slightly $X.X or basic $X.XX $XXX.X outstanding negative a loss gain net of gross $X.X EBITDA was remeasurement liability, a $XX.X $XX.X quarter of and chain on our million or remeasurement $XX.X our diluted. average include positive. Adjusted $X.X per Non-GAAP the $X.XX million. warrant was million of profit $XXX.X share non-GAAP on a would was have million share million effects, stock-based shares diluted for per basic the and on earn-out Weighted diluted, supply compensation first basic liabilities. income been shares GAAP was gain and basis. and

million, As and and in lone million facility consists to Capital. cash liquidity XXX approximately and XXXX Trinity income of the liquidity purchase a commitment available million on June equity available $XXX $XX remaining XX, Park approximately million we $XX of investments, up short-term of had from total to

winning Turning by being additional smart execution to decline to year OEM track full to of year substantial full of focus instead guidance to to In and as on guidance, our pushed on automotive, order and smart and we the driven Most continue demands. $X automotive execution meet in series production desire and are overrun revising cost projects focus million for our program revenue we on is remain infrastructure $X between infrastructure we programs. out incurring million. XXXX

our be operating year On the operating expenses and million cost side, we to expect full between to million. $XX $XX continue

Our the initial for expect unit the orders to this continue focus we of remainder on year's Based of total executing contribution samples ongoing volume programs automotive, year's automotive ship programs more than production received, from remains we front to us. In double support in and the our other year. on production volume. we next

up call Now for the I'd questions. open like to

[Operator with come ahead. Joseph go Instructions] Please And Spak question Markets. will Capital RBC our first from

margin was sort you previously couple the the in positive what year. so current first there back, you given I of A for rest here Thanks gross think much. the an the that some of -- here, the of about, be expectation talked questions just you shifts outlook could of mentioned Hull thought

hugely are we year the the positive mid-single For expecting in positive range. not margin gross but although still digit

the and you couple if I then it. mix One that us some weighed because mentioned mentioned out And with you Okay. between sort here. things of units on could auto of a you was wondering infrastructure help and ASPs,

to each than on those So may And help of I of sort markets. units people it'd ground then went be having many you there to say a sort terms 'XX base Xx between more end helpful total auto of have think helpful. would two how to be in context But some some 'XX. be of

on Yes, the ASP. first is question

on of slightly term infra. two-third question So automotive expect of least year, this the can the color we we to total infra volume the order near based some think in lower next for more unit production year so automotive, ASP it providing was second we're for the as year's automotive do automotive next but obviously on for volume than smart you And ASPs at our of than on, about next volume. from generally smart guidance full-year maybe know, year, have being double not

-- you you shipped you can in tell many us quarter? this Can how just total Right. units,

We're Total the shipped quarter. units about in XXX.

I and it customers if with of one last encouraging. you one Maybe could, sounds talks a couple Okay. mentioned

on commercial the of sort obviously with of for confidence could, you Cruise big If sort Ultra a such win. a Cruise progress sort talks of Ultra was wave program. and vehicles sole-sourced first Any second a being way a of and GM

into have their I'll we Japan is as specifics take strategies the in of other much the just discussions can't additional Yes, engaged definitely, OEM as positive have much can there, get still were and just trend we're environment say direction. additional intact. the OEMs this the and very customer. for Yes, -- but here all all very Mitch America extension one. that XX still our working I lidar, Joe, global macroeconomic it's we expected with to positive in The with OEMs applications top a lead despite Hourtienne, traditionally are GM duration, models, are are North progressing

has and been GM. top good progress the with So with OEMs really XX specifically the

will Galinko Maxim with next Group. Please Our go come ahead. Matthew from question

differences good that of flavor delays out have into of any is kind continue you're to what smart gives we taking go infra. And in there for business types my comes you'll seeing projects Maybe you could I if afternoon between or based. thanks that and getting pushed confidence pretty any back. are the that Hi, regions the questions. or delays where that broad guess it to Is

Matt. Thanks, I'll again, This is too. take that one Mitch Hourtienne,

here a in the applications, airports did few U.S. specific mention domestic I So

what end you're dealing government a projects like we being the time solution entity bit phase taking additional the finding a in a that is same. electronic a afterward but infrastructure while is the in on in spent mass tolling say end POC demand in Similarly, stations airports, these of bit positive still online and - more longer. do we're starting favored take than anytime our expected. the here longer, the But POC states can that remains large longer deployment or demand there we from is So, but are a application there and as deployment the the another out U.S. actual more coming taking with Midwest. different to is bit states We're

I pretty I have or thanks. think said at XXXX that any get any I move might know is you there out it but, there as ability pushed bid visibility could and are you when there, that to mean the it's Jun, do is factor opaque all years? event multiple something

a it's of think a push. predict difficult the don't multiple I to It's phases the deployment. bit year

the multiple using going tooling lidar good It's states, stations, themselves. to Again of across our per application, applications. going rollout. phases So many across all know that how you're strategies in way what and using different visibility down the they're we that have airports, have the you're site. for these We they just predicting airports the multiple

the more quarters on of it's versus So years. order

go Craig-Hallum. with Our will next ahead. question Shannon from Richard come Please

the sorry that for in year, apologize, I understood anyway. blocks comments a If I've smart down missed the a infrastructure here, considering first lot question most spotty the here, or guess thanks Hi reception coming regarding it, million also from had was automotive guidance correctly, my I on out for I the here. in some cell to but I range had it's guys, of from impact of I X.X questions. taking of

significant the question. Yes, Thanks from smart seeing infra. for not most Richard. the impact of is the any you're Yes, We're automotive. on right, decline

get know here. that. to then line transcript apologize. went over -- Okay. just Unfortunately, so But the ask fix their I'll I read I or I $X.X this, didn't side, catch another probably I question don't how a

I worries. there automotive, is our said, no impact significant infra. primarily from just No from

catch I could able your I to earlier I comment didn't what part that have. the kind expect in doubling, you, a is do would was all next here I you Hull. second automotive unit question well questions am guess, early I than about be more here Okay. the I comments one Thanks, characterize My what volumes if means think there, stage Wondering ramp you year an on assuming on basis. of regarding double. of mean of to

you if So next some any I you limit context sort like you that or of there way wonder could could tripling year or could any us characterize give please. any is see upside that

sure. Sure,

as we in than visibility primarily little is have bit received the know, you is comment a Smart that, in on maybe couple initial around little of will we longer. that order infra. So based a definitely there will bit Koito production automotive, from that that upside have to do quarters, smart longer infra automotive and a we have

terms you're give the Okay, do of you probably able Hull, just I for sense revenue in fair half. then Please. the the math, expect we of on second in numbers And enough. real not if OpEx there. should quick cash can of burn second just your here. and us Maybe year, a here what the to what expecting

over roughly contribution lot the zero right, gross year the profit gross growth there's year OpEx a to the for remains million is of total anywhere year not -- for million so our $XX profit for profitability. Sure, to and $XX between essentially

half So with we've a done year.

So essentially it's OpEx. the half half of second

go Instructions] Northland. [Operator Richard question next will Gus Our with ahead. from come Please

thanks Yes, taking my for question.

call Just might early you are OEMs. to many sort I that in give address. mentioned many you was how D-samples could potentially if you of programs and that shipping just how multiple wondering the

vehicle Yes. factories across OEM we multiple Yes, just clarify, to said all states.

the it's same So OEM. all

are on you of was moving mentioned serve Is what's vehicle production provide any of and Okay, some just then got infrastructure mostly And Fabrinet some markets. then and there. wondering it. you applications? could color on also going some your as I will that types if to over you

of key part Koito. that a infrastructure OEM program supplying potentially win. outside production -- as working submodule also OEM on to remains just the will our automotive automotive stream so other initial so of that the X for Yes with including work applications smart applications series to other Tier addition Koito customers the Fabrinet OEM in Fabrinet we're supply but and

add unit full as to Fabrinet applications will And other supplying be I'll just doing a those a turnkey back module. opposed

a of automotive the unique but those type assuming like golf something. And something Okay. cart program, be applications. autonomous an wouldn't or mainstream I'm other more

safe assumption today, a yes. for That's

I to the over conference concludes This session. back any Jun question-and-answer would closing our Pei to remarks. turn for like

for certainly guys to everyone as from and spending lidars updates today, excited a and giving and very it Cepton be us to part have time of line D-samples ramping Thank vehicles forward with production Thanks, and readiness is we're we're you going more heard the in you much. coming having quarters. at Okay. to getting looking closer big you to up into everyday Koito, closer

now presentation. has concluded. today's attending you The Thank conference for

You may now disconnect.