Luminar (LAZR) 8 Aug 222022 Q2 Earnings call transcript

Welcome, everyone to Luminar's Second Quarter Business Update Call. I'm Trey Campbell, Luminar's VP of Finance and Investor Relations. With me today are Austin Russell, Founder and Chief Executive Officer; and Tom Fennimore, Chief Financial Officer.

As a quick reminder, this call is being recorded, and you can find the earnings release and slides that accompany this call at investors.luminartech.com. In a moment, you'll hear brief remarks followed by Q&A. we're watch take our the Series video that, that minutes, Path of production can you next series. ahead going five to so to But installment of now. is the video that for URL screen The right on

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we and I'd that, and risk that With could factors introduce uncertainties. press release results more specific the statements differ as it, Austin and to to and as Today's me also during such, forward-looking everyone materially. CEO, that non-GAAP the risks on Please include our Luminar, may Q&A, call, for see cause GAAP refer discussion the remarks we Before on remind the business update Russell. information measures. refer contains presentation let like we to prepared to currently environment Founder based begin and does and actual

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into Like from latest the the of we've Trey Obviously, intensely a just the well stuff. last right from for of the new exciting and series of jumping some doing So welcome been helpful in since to But we're year-end. you, and Hopefully, focused here giving some leading in video launch go context by production I well, little live production. first update, the as path we've bit up from -- was thank what giving this off, said, to yes, our terms think execution, headquarters I on comments. our remained everyone. in,

So to to XXXX I'm key company-level that on say or each greater remain will in me to of Tom few a be proud which meet in minutes. four here we next outlining milestones, detail beat our track

is to continue conviction we business as successfully traction accelerate to be to ourselves our they to So build as able major with continuing prove further automakers, us. the expand and

major result as increasing both a our customer strong program including for as financial from increase guidance in XX% increased forward-looking this book rate well to are execution we XX% So demand, as our for to year, growth and commercial the the wins order of commercial metrics.

actually which in increase in already were than XX% was first well. growth rate that's a So strong pretty I we think the as actually place what expecting,

impacting as churn at strategy improving safety consumer front dollar whole the many has robotaxis replace trying some driving different for experience come the most the technology think the But driver the challenges, with market this industry a ride downturn than part of macroeconomic headwinds facing with a guys I know. just you and is critical it’s may performance driverless Our year around most. considering of vehicle existing the of vehicle a for cutting-edge market the purposes, centered different as multi-trillion Luminar primarily and companies surprise, autonomous to the broader altogether addressing the capabilities, time, many of market rather had of using and

lines as well market on and no and track are of showing overall and the accelerating a our result, So slowing business economics down.

a been over lot there's aim a under in on that to deliver one promises of will commitments. is where and be key over So we the delivery world

of dive little few number doing technology and one number a the two of deeper Number bit on on is a three this drivers a scale; is is execution, So, past leadership. and quarter. highlights

execution. first, So

by highway Sentinel, commercial up on and of Iris launch we're strong. our progress for execution proactive our execution developing Our The software on is key right Iris the also and successfully leading and parallel, solution of to production Iris, plan on autonomy series capabilities. programs focus central effort year-end. industrialization against programs and remain now of biggest and executing for In safety customer

release have our for next we quarter the a on of as bigger front version this beta approach sense. We update

teams program launches program On for next had with the program OEM milestones OEM. major and our In QX, successfully of course over we partners first production the months. series multiple support to the XX execution we the phase OEM to the completed associated prepare on front, of are intensely focused the for that

their are of automakers future including road by counting safety power Luminar ultimately encouraged capabilities. Our the on to next-generation to and continue our autonomous technology and map, progress be

is for continuing market to of China. a that has that's Another rapidly us lot develop potential

in significantly to So our investing presence we're and China expanding win.

and the in help Shanghai. our So in presence we've brands, the affiliated in even company automaker we there, mobility been which and with tech a And will Geely QX, working with beyond. ECARX, SAIC large associated closely also accelerate Group China with partnered

of execution that industrialization, So is successful and phase. scale critical the is next scale, product, product following industrial secondly

a come product to and lead So the capital prepping minds of takes significant brightest of and time, work. all complex for it some large-scale amount make together a manufacturing of

to with our expanding So the upon in build and customer we're the a contract manufacturing existing high of saw dedicated to you following some manufacturing facility demand, expand increased as facility the volume partners. expecting video, now

our series series partnership capacity the Orlando building XXX,XXX by have which production line, to we on. programs capacity, which with manufacturing we're been highly half expanded existing the line, highly advanced already automated end manufacturing We year the in with our to we the our For Calvary to in track have has Celestica the year working of The at now team bringing facility second line the a in scale. this in ready capacity initiative per the Mexico. starting in new units the initial Monterrey, adds volume up dedicated facility, scale capabilities of facility build production line. Robotics enable automated to support in place with to and includes pilot of for of XXXX, achieve customer the remain on high And online be to exponential here

mass Iris technology, you but and assembled is scale. when undertaking, at we team course, kind it means of successfully its right a only to but the of the a right to partner also it not of and Of the product, have perfect producing the happen. first make automotive It's

alone, the to right alongside we also continued CJ Third, wanted duct and and technology companies. was just leaders recruiting Nvidia's GM, the Moore, Tesla Ozcelik, as previously and other EVP Brider and A and we industry ended Director their Systems continue advance and attracting new strategy with examples to Apple guided thank execution broader team. and of our and to already who strong as business; in actually they've Autonomous our talent top we including Software, a industry of are QX drive indication up Director focus, jumped larger into and VP for talent, automotive couple of industry leaders welcome adding key at and So, at for of automotive industry team previously much Taner who among critical along the Autopilot

our financials. a milestones it So that sort and up vision of our consistent the -- that. long-term up is broader off of in Second it to all conclusion, business XXX-year lives deliver autonomy call, through that is future sum taking rolls it Tom is company saving the note, the the handing strong. really vision last tax. largely to all and safety mentioned Execution also to as macroeconomic It's by and I or before slowdown in on that, we're here edge headwinds I to market of cutting and in powering unaffected And the all and important with

will believe I market, true as set than I And broader market the before, and sheet win. customer our leadership most this is to up or the more is balance And on critically, cash think winner-take-all the we take accelerate a be now needed only have And market to able for and backside and continue scenario. ever. the this what Our accelerating. said that and adoption. the believe winner of strong, I've runway with is be the type And it to programs, technology, tough we the execute to market talent,

for with I'll of the the as on four our our off the to at the company-level we Now discuss that, it milestones beginning well quarterly financials to outlined key progress quarter. XXXX as Tom year hand

dour our Austin. I'm our by to key milestones. start towards going Thank XXXX progress reviewing you,

track first we to readiness goal this achieve is to year, on achieve goal. production this and Our serious are

for operate of come automated demand. in in line expected Austin to are facility currently new are line they facility preparing Monterrey, us which Mexico will a We online discussed we for have. new series are currently, preparing the half Mexico meet in existing dedicated launch facility, Celestica's second in dedicated production This increased to using earlier, next Celestica existing at the And production year.

our detection software In mobility, the higher live safety system proactive by the at avoidance camera Sentinel releasing Tarun compared we QX, today's track end year. capability of conducted front, version our collision, of we and ADAS goal the on and of beta on the Second, system. remain of confidence achieve the to drives to radar-based demonstrating

by are wins. five milestone forward-looking year growth is book this to goal seeing the feel we to very also this commercial this XX% demand order milestone least our year. exceeding XX% to raising strengthening are confident year total from customers. major at or about on based at grow wind finally, new raising this We major Our our And XX% and growth from this existing commercial and are XX% third least we

expectations turn up component results year-over-year was the to in coming me due our driving million, program QX. financial and as as quarter review momentum XX% of $X.X sales. continued increased Let Revenue revenue, sensor ahead and commercial for well to for

of our million gross on from we manufacturing expense COGS a expenses For with this R&D majority reported the $XX.X non-GAAP quarter, quarter associated and a overhead. and of million of development loss fixed A was revenue basis. $XX.X program COGS

our loss gross previously, this and COGS of economics. these not unit representative production and factors stated inflate are reported at As stage

decline Cash lumpiness up to due OEM spend $XX.X from spend the of was capital this to during repurchases, we was in Our with first years with multiple also expenses with million. cash cash of revenue M&A. year. We and quarter securities. sequentially cash share on cash $XX this net an made additional increased as working $XXX marketable industrialization at leaves million runway spend ended we QX from investments the and million current contracts million Luminar position quarter, in This rate, spent which of cash in production. approximately we received $X expect Year-to-date, ramps series quarter QX on liquidity the our

will We series the are tough be balance need our not financial investments our for momentum on environment, this better-than-expected we achieve strong very guidance and back deploy sheet. how continue this in both production year I the our are seeing plan given make to will year we now disciplined future. and commercial in reach update we full strategic to we growth the to but pulling in

raising $XX our a to $XX from revenue previously. full $XX guidance up million million are million, range We year of to

of to for well as the team guidance in year that loss to another revenue, that, in million as the to we guidance quarter. nature for last and net guidance the share million Consistent we conclude, to sequentially for mid $XXX than the We revenue both be our be as the we loss full moderately serious to our range. be from spend lumpy count than to We to increase Trey $XXX our broader low will to Luminar for business in EPS back great year's our year-end maintain QX program to for higher invest with operating I prepare maintain $XX and in QX of thank cash our the quarter, range. our be $X.XX year our million total year million, continue like $X Given Q&A. continue higher With cash our be would expect comments production. To QX non-GAAP to last range for spend. this expect

is, is the Q&A we the platform, few then questions and partnership is Thanks, talk to of a of platform. I'll is these in the with total. a question questions. hit several the the status? the about place really maybe Luminar start that had We to with Tom. them Tesla analyst Apple, if the but Austin, and move roadmap been Any the questions we'll still on We're in in going of so, safe Mercedes you what to kind partnership going received first kind commercial in momentum with business three, could Lucid Tom, safe with combination. to do

Yes.

So, I in jump we on that. can think right

has for And probably commercial only So publicly place, is multiple it progress as work have about that I have us. not increased announced of were a customer major I those accelerating specific careful is been what on mentioned, things in continuing with other largely other here. hence But we've still them, to our customer to with win programs prospective and can as factors. commenting broadly ones indicated case think say along that in it's guidance, Mercedes, be we the OEMs, or across I

we continuing from OEM the lot going the of into speed for the on execution full So these work a automakers are to execute what customer that's I that key programs. we've is announced, say successfully all would And ahead. programs

or progress feedback we It's announcements, as will one and that's it's own. announcement driving important good. So pretty anything for instance, that do I to here, reach opportunity jointly. It's on to -- it at the it's where kinds a it sufficient of credibility have effectively have as able confidence a announce randomly also really sanctioned more these anything and establish the stage able has part on we we these industrialization usually to production. to to sanctioned this, make usually as we in something of But good a been our of program that's see being do that series be usually reasonable that every OEM a don't important much when think much remember

think think we domain, I it's I So approach an more a that important take one. but conservative in

including already well have this Nissan again, couple as -- as well that and major we Mercedes, too, of for year as wins So a with matter.

that other increase programs. see from the to where we see along to with is dozen But So nearly and here, a where increasing hence guidance continuing we're this types XX% of the growth. XX% that's

Austin. for profitable? Tom, see expect probably shareholders when next the think you, it's Thanks, Great. really to is can I Luminar and question

Trey. Yes. Good question,

the that ago. years markets, and or back last that Just me seen environment equity over saw really lot new XX dotcom bubble zooming the for we've the dotcom the the particularly years, two reminds technologies bursting we a in so of

public them many During through going And burst, that period, you a credible weren't probably the that And One they the that to had common. public cash the they that would execute have revenue of those in near-term those the that from revenue place the lot And losers. of right and three, series things and winners three team companies opportunities. profitability. credible that companies. that readiness have them then we today, to we And year. when sheet they deliver up production Luminar that it on that that went companies reaching as reach the near-term of viable series public, on many the at bubble opportunities. is deliver revenue had hand balance Two, period hand had revenue have ultimately awards really the on end separated look and away. I went in companies ended production When at opportunities had survive the from

we to is of I lot years. that are this if expect we're importantly, which in them few lot hand, public in Luminar, most know well. over years. place, on of personal my the and will We the team allow and only the to have to survive. a but all that couple this that in have we have and then, three, talked not opinion, don't of to plus going reach cushion us profitability, resources a place, going And strive call. a on as earlier to cash know and have Unfortunately, going the last I gone companies, we But reach healthy to the about these of we at survive, we next we're

Tom. Thanks, Great.

is I is targeted I with think partnership for next the question Volvo? you. with Luminar think their Austin, currently Where

Yes.

that up successfully program successful to to Volvo and program. ramp launch with to to important So I we're -- executing it's and the track the associated a achieve the capacity and program partnership think remaining for on leading milestones note milestones,

on next-generation being capabilities, after Volvo working really announced in they the and as Luminar are highway in So safety discovering more stealth where the the to partnership We introducing and think and position had next-gen announced best which this while trend aggressive significant technology initially, plan XXXX. year which past be was just with bucking ago, with this time the started XCXX collaboration it then They having terms over a that I window commercial before industry the for them came and by surprise we jointly for came the XXXX, a would a pilot able the actually to a selling recap, the as out. were much out -- flagship believe wipe next-generation ahead me taking in a options standard And of of back really major making that I XCXX of in subsequently in -- vehicle, of and period a quite one. of XXXX, vehicle, we game the the of years. of mode kind vehicle

scale So progresses, then, that the that's further. -- as intent and of to course,

confident leadership. cool a they've see will and of that's progression to doing pretty been industry relationship the grow, to and that there we remain So -- continue job great

that's would been Luminar Presidential And safe tomorrow. maybe current and so, from we'll analyst passed from that? Luminar the how Will and to use the if bill question last questions. the signature to then Great. moving go And chip platform, the benefit

Yes.

as tomorrow, we've some mall you integrate. in for expected bill, to is to do the to particularly vertically of signed us. Trey, when be we opportunities which, regards we acquisitions So some interesting potential said, read the made recent see with

that be passed make And following something exploring. not signature accelerate we're see we but closely tomorrow and is application plans something then the to This as currently for to ultimately to the for something going to that rules, development us Luminar is upon that's the plan, sets bill so us. the our exploring President it the commerce allow that to identify are of execute is and as if them that department some hopefully could they need with that what opportunities we're sense

I And say thanks people to the Great. It's to all the this the with safe increase want We'll to to participated use in great with that, just all to quarter. turn. you. continue let XXX over as me platform platform who see shareholder engagement of this a interest. And

maybe XXX I was point, Trey? because there so saw there's we with actually time earnings we be questions even like there it's even point sense help through a cool could to have it I some around to answer that good too. wouldn't some call, more. like would it of dedicated all that questions even make At were the do session could go an but talking But a with to think asked I

everybody. Thanks,

Michaeli that, So analyst first to our going transition be from Itay the let's is And first at question -- to with Citi. let's question.

see to Thanks, Good Great. everybody. everybody.

Just two questions.

any a couple there if could just the share into new as dig customers going new even on customers, you extent we can from the plant. second, First, to coming the expand And to hoping is manufacturing book. unannounced could it of And wins more opposed I was that new assumption? outlook? things. what wins for be rate a bit guidance forward higher the within increasing are existing Hoping forward-looking order further take on To then you

And total comes requirements as just XXXX? once CapEx all that margin, for to gross for that capacity well plant online as First, implications had. that's just I XXXX,

to take new want Great. and order I'll then the take plan? book do you the

Yes.

Okay.

great. Sounds

reminder, rate, year. where So to so And Itay, to from it that's end we order growth XX% be expect when as look it this we at book of XX%. increasing the at a the we're

both coming year as well that the $X.X as also vehicle growth be that whatever the that kind of so other prepared for at ones, which earlier would But the new started of they we we're ones of So, expecting giving we're from there. it's could customers coming we've of say, kind new year. and That's both happen about from, that at talked programs. XX% volume new us this I and customers, billion, working as year, with as want to existing end us by well least

we so, in can coming is a The end this sources. new of that And plant, more talk have of those into is but already. from CapEx guidance detail, the lot by for this the both I'm sure about baked of growth that that year, we

stuff line to automation that as to A build that, is think for of into of putting clean baked like spend going room that out cost the well is I this plant, lot most the that, our year. go that into. as equipment

guidance going and so And so that's this it's a given maybe the baked think into XXXX, we've year. lot of into spills some I to but that of be

not trigger a I think say this want the is to it's this. And been totally talking out of to They’ve volume that are nowhere theory increased going Yes. from in surprise that huge customers fair and facility quite get with at this. and about it more this we're accelerate more that it pulling materialize the of some That's dedicated really the table. but to for we're seeing why time,

it's work not of not I a like factory there -- or capacity cable is can when team really, this an the linearly advanced And car from huge our work well. where automotive up require started So, That's but the those and partners manufacturing automated XXXX of we up say, stuff that line. like we with that dollars from as to back primarily now, happens worth this -- something fully bill it's capacity. in just with automated that years is capacity that process with of out, here, seeing unfortunately, work mostly started and really scaling the automation -- all factory really it [ph] get that it investing we investment. the scalable But really now not require on that -- manual in XXX of would around actually the is or billions they've that materialize, manufacturing done was all our

we to support lines install Mexico in or So can continue capacity beyond. additional additional to

prepare important side but game. to get I So both scale, that's said, very, be that out this to it additional is takes And it year's that it demand of an of also didn't investments. to part of one an a product, scale. come -- so in it's parallel, to didn't trigger And as industrialized challenging challenging a worth of the nowhere, totally for was those it stuff -- as work so say, able very but to the and increased to

Terrific. all Thank That’s you. very helpful.

Thanks, going to Itay. Josh come from is at Buchalter The question Cowen. next

thanks the on Hey question. my taking Congrats guys. results and for

first well. about I The manufacturing as ask wanted the to facility one,

and get pretty be of more the what points at to to diode? Freedom driven quarter think then you've you their sort like more target? next-generation integrating linear units that series Is you. the or total the it BOM we you have capacity. should we a end things data Should we online is ramp, cost Thank is $XXX million margins from of or that getting now, laser my obviously, XXXX, of the year. be Right during in units. think on video, of think the tough will for and million ambitious LiDAR comes catalyst sort mentioned as I cost given a end And for when for when what when production onto I X the of thinking your your Photonics follow-up, it it BOM enter

well production. as I significant talking COGS mean this -- of R&D-related is impossible they factory that amortized the of of part of this it's really is of all not units overhead there's expenses hand into that's has about, amount and there read to it right in into one series I attributed get Tom not today. now, twice. and when think kind was to It's it's a as kind effectively number still It as of be

said about BOM million-plus for at speak like X BOM probably then we're we've per the you So, year, fair the I beyond I when unit, remains think to IRIS. more to but Tom and once the volumes for roadmap, target that's And -- publicly say where it's can ultimately, ahead $XXX. long-term well, think seven-figure basically get market that $XXX

So, -- we're $XXX well. over then really volumes the still longer the as be $XXX and tracking high towards with ultimately to term, that

driver it ultimately that's And expensive. commodities really extremely to key and the other which getting part the of function required a So, lot continue starts the we are down, of the architecture. are as get lowering of But but And of single of there's volume. receiver huge that that components key to single that it. then basically done, And and with on. work laser cost a fact we're obviously design the focused don't based hasn’t still cost part really the a that's or have the of the array catalysts enable a to

So, if about. you're it's it's -- And give know but of up don't combination color we've been on tracking you to to not to leads what but I there it an factors a to one, multiple talking want more any it. easy

Yes.

bit little to color said just Austin more then So to answer and a Josh, question. your add what I'll

not this we're time. at guidance I to But any fair give this building going and for capacity. volume XXXX So, to installing think specific plan we're say it's that

the utilization year. we we dedicated that on half timeframe, we XXXX of were of the pretty healthy that facility online The second about the plant in talked rate. that has $XXX reached So, call, that target, BOM bringing kind a that when as

There's have, but team discussed. is that target. good that's make still get even talk ultimately as the as introducing critical in to you that that on in well very area to million-plus lot full that help $XXX that you production we that at target, for of core the us other some those for facing target acquisitions to process in with to point And to target. to the X I'm components there, technology first team referenced to the $XXX. we're said, we'll confident we to the so continues some the they that's work be in do, kind that of about in period that going things getting term get year, to that that have, going going that require some The recent challenged environment the those The units get $XXX BOM to to as us future. It's super-scale a But future. front particularly, longer that

key vertical these now, long-tail from that from these different off the years on the so that different things is standpoint. technology a make all cost from integration ultimately. the are up today, we a paying all are Exactly. components bolder Like that aspects And the gets the the like the end like aspects bets things few

So – said, think but was that I yeah, well

Very much a tough and detail all appreciated the backup. No. on executing congrats

Thanks, Josh.,

from All question of The Mark next Sachs. Delaney Goldman right. comes

Yeah. Thank taking Good questions. the you afternoon, for on.

are the on production seeing? having which impacts But ramp given supply about mean, it’s what ramp you you was hoping constraints view supply some the to of year. the that any the at when which you're impact you chain chain, better can extent understand at you ready any to there can and the to on rate think series reiterated I of be you're magnitude of the First, – in Luminar. end

about and that – get the hoping parts good some time. any our – the year, we of don't foresee sure there don't runs we be we reach now And job say or but year year out on that, those freight won't series up. are this I financial and material expedition year. monitor as a not there. need Mark, to now, as parts year for fees have need ramping they the that next production very next production. as there run we supply we pay not we our that this easy out talked We're any targets on series making we finding we that them. Right But wouldn't we it's We'll some question, Great Cheryl But of make basis, our to significant that of we for and year, premium we're base is before, challenges as reach this who either place. this only our Yeah. or in a supply supply-chain does daily Zulla, well financials, next supply sure to to are them for something as

fair some integrated now specialized hardest there, too, of those this we Yes. I most achieve for that, it's think at And have the I to stage. components say vertically to mean,

further of some But drivers key force it's one where with that now operation, yes, hence, increased well limited the the would that the of other and we a limited, was capacity the behind chain critical. manufacturing we that dedicated was that as more are up that build-out parts than so the have So ramp – facility scale lot can be even ultimately worsen freedom of supply –

bit what and elaborate more be allude area So but please, – not expecting terms you done may you you expenses in given of thinking things markets did investment, we capital the more you've we out to an we're little buybacks be has something current sheet your environment? of the else balance know I one be be to more strong a the perhaps sort more on with a if going being already company pointed bit is to kind the for you Is back environment I on of that trying with your spending, you're if you hold prudent should Tom, Thank me, could. some? could to spending don't anything thoughtful as or given cut little you. back in. of constrained be on should trying

Yeah.

major disciplined that approve I to XX% company, our So the try I think said, and start-up been as whenever the continuing to when largest Mark, the room. We've were shareholders in we I disciplined. any spend at maintain used here words be mentality,

mentality we So have as that approached have spend. of our we kind

companies continue the making far And that not I disciplined future. they our to we here complete here, in $XX existing we that cutbacks. know the that during other that's Board, significant million we've spent our make any want completed are authorization, to repurchase we're we spending investments share up did to authorization. But that going but we're that quarter. and The and it to so that's the also replenish have. look, it's do So something the maintain make, if

the our all say, But dislocation, But is absolutely. this unchanged but market I'd maybe one. be in It's I particularly -- is even now? effectively the a generally, a and use or Yes, be of -- given to on scenario strategy continue And everything are prudent being more balance you we plans the disciplined we disciplined there's where just this. just market. more even that just yes, all cap to craziness the that have just tempting said, buyback. just its a sneeze reality and that's think to thing do

to important So, we that enough and to to able with still need more be more than than have like it's getting discipline. and said, even like towards take to to said, I cash this, where runway I we get go enough ultimately, profitability but have

Mark. a lot, Thanks

at Jefferies. is Kelley question from Next David

and wins afternoon, Nissan I to the pipeline, Good you thanks taking year-to-date. for Mercedes questions. my helped starting the have you year. with essentially major believe your Maybe commercial the guys commercial or outlook two, for buy

in the on So process where conviction maybe step-up that here? driving we back if of the you can the the into increased are us what's into update year half maybe and

Yes, David.

to two have we end at announced were that we've another which And pipeline at look year. we're and by have, very going year, of of for can that Mercedes we're confident existing when least that the get Nissan. the So kind publicly three the already that we announce we we this

very the conversations perspective. and And so, the customers, from existing both our we're going with our new well having are

on as a I point distinction. well is this, important one And too, think and this key Yes.

though, when ultimately, just they every something reality talk is when effectively this. you you do out, really, with what will talk was us so anything saw the then, whatever -- being OEM And where on about the the at program, we equipping I Volvo the customers option much side. will as as knew even as start the just they that, with there's I like multibillion even just opportunity mean, there. still example, all, so end new already flagship on existing vehicle. existing no the with customers by the for -- What even And our that is single particularly But is for a think prove usually announced. people revenue interesting, time, on, is achieve that, just first by is vehicle and targets programs OEMs the more about we with want standardized do you That yourself an new dollar the can for customers. of customers, actually can with decade, EBITDA we There's

as the kind like, you on program something, on that's first OEM can you just programs. program OEM It to of in it's go but place, just a we're And because those or part. launch new from it is So than gateway, as with you higher times working and with very be challenging, well. to key something. focus as part sort the a the of an lower focused one going And even that that's as of continue the very, start then more And in a wins the where multiple But volume goes can one. not of that's on that -- prove get yourself, so lot that's that's a volume. how OEM, important depends the the if of actually with additional, of obviously, be to one they start valuable, interesting valuable much a there's effectively,

And for last of about just additional modeling hires the some out maybe you've weeks. should Thank hires you? it. in impact about potential few maybe impact the of areas go-forward build cost and how had the of think should Okay. we you. few then potential How a opportunity the Got on then think And touching we

Yes.

to So, that of some increase that has to we've been think able particularly workforce. David, we've been going the of attract see plans. issues. not be in well. slowing higher back the a this quantity and to only represented we've I hire hires to in bring really sure our once making as over a growing. We environment months, probably where I quantity, an this grow quality, XX focusing we're that's increased the the quality double companies the to look the but and lot areas resources the are we you opposed the not company high-quality going to but hiring I out last next business bit quantity, point. think you over increased not focus shift at new going because again of and significantly a as the think when size our we that going of We're But to the are to to probably their We're Luminar And the on there opportunity to have again, little in And but made. other only is lot of of XX and XX be as continue XX in months talent quality by place, more still of this go in investing the to view to going that size

will increase. So both

David. a Thanks lot,

guys. Thanks

production -- first And think too, that We've wins talk stuff the major once of nonlinearly series program even get following to -- division it's actually scale it place. product. starts to before, into we've beyond wins get takes certain program to a But the when invest $X.X and had an what's to need level I certain that in everything of it it's there with other billion these talked like go on that. required it reach of fair level, say even like in about it's very industrialized technology to a there, order very terms with you It the we you the can that, beyond takes. incremental -- to

the and the So that's we've leverage effect R&D where a where what see from this can put into we already huge massive business today. you of the company and scale and have

Thanks.

Deutsche Emmanuel from of next The Rosner right. Bank. All comes question

much. Thank very you

share ask if to couple of agreements hoping partnerships few a was already about I and a First, you've more details you could you announced. the

halfway of us? Mercedes, volume your ECARX the in platforms, What through also, the of you terms share First with you in partnership than anything then all, on And arrangement collaboration timing, share year. terms can anything could of the we're more with since China? with in

Sure.

I'll So the one ECARX take Emmanuel. first,

focus. technology gateway So family. the at ECARX particularly the really we of for those that a to more ECARX ECARX brands, of as don't And and technology -- broader supplier part the is is. that broader Geely Luminar who of them view family what know those Geely have China-centric the

China. we're more only international-focused are the business, Polestar, the we as and Volvo given view i.e., member it most Geely family a of technology, did in some you within our broader family relationships it [indiscernible], pre-existing technology family say, the with are broader vehicles. working with of that of way, of to already Geely brands. broader integrate certain As know, not ECARX Geely I And optimal the the to, deploy that our the the but of our in we work more brands look and to which partnering do with in with at ECARXs SAIC would broader to brands China have order take well we as When family, Geely opportunity with

public then our partnership with of it. part as purpose will the with invest We're of take element and strategic do add partnership ECARX of order stock. planning kind an we economic our to strategic $XX that's and that going or in $XX So million that to We to our million invested process.

take do think But between as cross ownership Tom? the productive So two cross of kind a companies it it be or want we of doing working there's going because so. to like strategic to partnership we're Do the the a from very shareholder to two shareholder Mercedes think together. a Benz, more us of you

Yeah.

think I certainly say that. I

Mercedes their year. progress, it's partnership I this the there's launch. with platform those too, other and key I you earlier can actually a mentioned next-generation that before mean, don't we I continuing and just but for announced about think have a anything vehicle a relationship than great is is we to that this that I little think As share bit as fundamental guys.

beyond on Mercedes this able into is really going at there they're may you incrementally come autonomy pilot with enable the their kind X better basic You And safety just looking traffic bit we where a there, highway on and next the more be type LiDAR capabilities economy-type platform the Level little can to-date, that's so to they that platform guys just achieve Valeo beyond current provide vehicle. vehicle. have with safety familiar generation the with to that capabilities of maybe jam that, proactive

with speed of like industry capacity and the part as the ahead, So standards pinnacle Mercedes. of that's very site the strict and we're moving have what a working ultimately and that. know intense in very anyone we're full enabling, They probably highest folks the

for So the level well. also great, all matter drive, really collaboration for sides the and to next and it's helping to take on that is Luminar take them the really next level as

little Thanks. That's bit also my for about great color. a competitive next question, great a And and actually, which is segue capability environment. the

other can of, know color think around, some I large little it a pretty if a to monopoly. that and assume you color on major different player. also -- I looking price? you fit? I the going, would OEM what like, where that I sort would in be it’s, fairly in for are LiDAR seen was any a they So quarter, wanted allocate why terms could European provide a not LiDAR us Like business And we've to bit is not it it have guess, of could not you another been capabilities, whether of good Luminar, give you're why But

Yeah.

scenarios for -- that initial you too traffic and the like from is that's this from this dissimilar type is out. what vehicle subscribing on taking program model, on enough, think are Mercedes actually funnily So there too, I have jam cape actually then not the if case, orders in there, focused pilot vehicle

be Pilot vehicle. case, Jam Luminar talk like trips in Really willing like even -- capabilities on on autonomy cases when model, we Volvo, jam that a for speed Polestar, a Daimler this I lower model XXX to highway improving Traffic is the are think ported. come a capability what those Actually, that, vehicle, are type proactive of, capabilities on about SAIC, just and you of capability. Mercedes, safety, play kind what's on that's where think Truck, into to the next-generation the is -- need pilot point to data that example. anything traffic like achieve even actually that the interesting or doing. that here to vehicle So level all you I it's a don't on able on is vehicle, people that They're of I'll But kind a be LiDAR that or on case type have a say we're those use like guys on

it to that or the makes integrated to for it, best. all what have effectively nearly that that look of I enabling we setups is interesting. that see scenario So we do kinds Obviously, roof-line we think are those yes, able be on of you'll all focusing capabilities. what continue makes to forward And

these use of programs Jam kind lower vehicle will applications integrations towards too, see bumper you for suited well more as when speed Traffic there work of this. that the Pilot type fact, In different for that's for cases type

from color next of a see there maybe that a of that market what too. It's it side So adds level we perspective from bit that kind deeper. of little from

that's So for the assigned there, to more great Traffic Jam step out Pilot value generally. LiDAR more

It’s very helpful. Thank you.

Srini The [ph] next Thanks, [indiscernible] Emmanuel. from at Company. Pajjuri question comes SMB

questions Hi, guys. my congratulations on taking and quarter for Thanks and outlook. solid a

of for cost what clarification that downs the this to margin your guess? a that years, sort Tom, units, also, Celestica should get XXX,XXX does gross Tom. And you I First, we facility of next in about? you on be volume the of couple talked thinking once accelerate about,

Yes.

a Srini, So good question.

having having importantly, comes that automation we, would when increased facility XXXX get kind and half more of going XXXX You to say I second as know, is line that of, that is and scale what into and the that production initial do at for we that also we Celestica's need have to plan. build then facility, not spend us only cost out existing side. help on to the orders now launch series production to Between online concurrently

and elevated get it's And some really up bring running to that there. so going we until costs

dedicated gross then and of the and kind With where that targets getting full that the of in that past, about into kind margin, that running, that the $XXX series facility get to to talked up $XXX that's cost production BOM of some year range. we've first we of we contribution once new is get that

give series of that gross You where contribution at or side. from margin we'd kind margin that or least can minus, combine plus be the that forward of you elements with going production, to that be some were $X,XXX at ASP initially

Great. versus Okay. -- interesting hardware, Thank that with a extent these talked especially design who just hear Mercedes to are of then supplier solution. It's out a to major win is the economy, is And a that highway you. your some [indiscernible] have specific supplying about But Austin, you you what my tip these to there new to and and on there have, potentially follow-up question wins system claims software, about supposedly broader design agreement, answer the previous Mercedes. Mercedes. to hardware also mentioned revenue-sharing for entire and they're we

just to role I'm what as compute here what rolling your is. So their versus

clarify can would very helpful. that, you If be that

Yes, absolutely.

providing example. as for with sake of – actually just stack for clarity is that NVIDIA That a NVIDIA -- in that part in. case of are then correct for So We the on type software with that have there, the the partnership working they too.

and of different and levels of top do series changing capabilities, too, different the takes the there's the and these into It go being while kinds things, capabilities, of in And terms on to resolution be vehicle. there's certain hardware fundamental of to highway for place want of LiDAR capability enabling and at very built kind the about you there economical enablement. the the all the production very the talk we performance But a we've long what so to performance that's when that can first of everything enable then that. software like of long-range for what level and wider So, that is enabled. system distinction with range, also part a of certain autonomy

important when terms in It's it. there been public highway part saying all when supply Hyperion integrated all actually NVIDIA time of, to a this their that I actually as part all, one in that or you look product the that design of you of have Mercedes is this for think about be of to autonomy of -- as the tightly case, who's But NVIDIA the OEMs part chips. distinction things, able -- that or that, OEMs do design win with And now at the It's ultimately talking substantial of doing with pretty out it's software of the all things. things to now that's and easy one the you the as the kinds when that see at So is the there. other in with not at not very we've Select partners credible there. these hardware getting for collaborating their that's think cool software have least people no I let part Mercedes, to they building is the who's problem And doing have use succeed. do software to majority RIVA path or reality platform closely those don't for a both of gave these and chain that or because strategy like of software is

do but going doesn't you where not, when into capability of LiDAR to you so its it anything So software the be it's having to your car, the design landscape enabling comes OEM ultimately is can down box that's majority that on can -- a own. it design the key it, to

to what have that's kind see you of core as so, part we of actually And capability. And have enabling the capabilities.

they Now software, so they part can the we a we develop, factor of terms that of to more similar kind though able well, world. to out be software develop see NVIDIA, chips -- get in of in

software the start say we proactive standardizing focused focus the across to see and would develop safety software out implementations, has more the LiDARs our more so of as get in the world. I You more on board. opportunity you that's safety set

now. So, And been that And from only we've on as on – that. down -- leadership heavily. making from number the Tesla CJ continue of with but to of some and coming that as doubling I we're do going on investments we're coming mentioned, board software Apple years part to for the yes,

I in more. Okay. Great. squeeze may one if And

topic design you least one incremental On of China, the at there. win about talked

the here. LiDAR strategy opportunity it's about one competitive talk with the I same So hand, market given very out in is there. you can the longer-term here a the multiple On domestic players market. significant the At think, domestic time, I pretty think volumes

compete to guess facility to the there? plan need you do market? I there? be domestic you compete And How you to in are have then able a differentiating So, how to do production

Yes.

we right? it's Japanese, especially American typically, be the be to of think you market the foreign brands, to China with when actually the when about little global going So And technology So that half market, and look they actually the from like types tend brands for is sell at those over ours. programs, in Chinese of European, a programs, cutting-edge China.

actually of local to successful segment. is want Chinese ends is growing of SAIC, Auto both ones half – in that is be half we Then a currently brands, relationships be of from one We in a little over the So, call it China, the Shanghai the Western not customers. a will the OEM market there of China largest market have. the there natural which our little or one in half of pool less the existing than

We have early segments. success the in of both ends

China companies, are put terms initial we're see seeing best to there are going was to local the the global directly be because competing The likely is there, to the on to against the in we that strategy in local the going Western less the of is on LiDAR SAIC think it the very securing market. to side, brands. go going going I more win going Tesla from that with on they're to and helpful the be focus to for going have. decisions. And out when those We're in brands going our more higher-end vehicle the competition want platform SAIC Chinese us program be we that's on out that to companies compete on to compete that local tech that

so And Tesla, their the upstart to not they Chinese but other to some wanted have differentiate best against on only technology OEMs. the vehicle of

sure future. demand there, is the as China sufficient In facility, OEMs want But going the both terms the in producing we're to -- from vehicles of local make are for at that OEMs. be that in the for local point is China to some Western that to LiDAR going well our as on China China there

China, open be probably it's I think in do in to when made and if going China. a facility we China for

investments before. question is LiDAR approach the theory you the approaches you you jam look is stand I do. was that. China. And from company able of at answer towards take cash we lot investments. investments a part that that that there But in. probably time And in going that able of reality us to Yes. in we was coming build technology series And lead it dozens the that revenue the top if can LiDAR have be standardize Again, I that you like towards those these I be a we portion support how have how more that apply market a There's industrialized that programs it's have tonight, capabilities. the of XXx interestingly technology even there, a as enough, to to type XXX-nanometer for also to be get -- in the capability, the think, cash, like too, what for we we the applied actually someone traffic system. a brand many order on the able addition we to back end I higher-level work. can about before, of which to behind of side And But across for up to well. make, can talked conditions, the capital following ultimately billion be ties are the volume also on I done discussion could We've there's two, of to is single of and worth actually production to there that the like product able lead. to all of on one, every a the is what real $X.X difficult, is you vehicles, that folks difficult performance think there's do invest enable an to -- effectively help can make think, their years' auto the to to think grade industrialized products similarly OEMs And huge the pilot be those however all future should in But had where built that the truly with also have like a state SAIC. exactly is mean, of as excluding take of to you get a -- back being because

around in great China, ties in pretty to place that a all and scenario together of us up even to be I think but of for end good just able all not creates So, a outside China.

guys. Thanks Yes.

for Thanks in the the so to Kevin, the call next today, to and much. and contributing call. let's go both We platform quarter. call and joining the safe listen. Thanks everybody on you to forward ahead us look out talking close on

update. will right. Have this All conclude joining a everyone, for great business Thanks, That today. day. us

Thank you

you. Thank