AEye (LIDR) 11 Nov 222022 Q3 Earnings call transcript

Good afternoon, and welcome to the AEye's, Inc.

Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Clyde Montevirgen, Vice President of IR and Strategic Finance. ahead. go Please

welcome call. and Chief AEye’s quarter Financial third Officer; Thank me everyone today earnings Officer. Chief our With Bob our are XXXX and you, Brown, to Blair Executive LaCorte,

press Luis from celebrate third our ground can financial we at to milestone release breaking hear also adaptive company of XXXX. will Dussan, Co-Founder A platform. Technology significant of and launch investors.aeye.ai. official on the announced lidar found results quarter our AEye’s copy with XSight for Officer Chief our our be today, We Earlier website

we remind statements, discussion Before begin, Securities the that I by results defined future to would laws forward-looking participants or include events, connection performance. with like future may United in today’s as operating financial

based our or our predict. assumptions inherent conditions. on and other risks, and expectations circumstances business, difficult impossible in forward-looking changes industry that are statements subject regarding These current are uncertainties to Forward-looking are to the statements and

these those Our actual on these statements. results by undue forward-looking placing therefore any may We from of reliance differ contemplated you against caution forward-looking materially statements.

information quarterly of and result discussed by the law. XX-Q today the a required obligation find Securities more XXXX. no time undertake to except period Exchange intend information, and XXXX, whether as update or not of the factors in as from otherwise, time information All forward-looking be about reports do is as XX, future of we Form may can risks, any to with other statements, uncertainties and including developments September November XX, Commission, in report You on our our and filed end for new

presented and non-GAAP purposes accordance include These with A will measures. presented measures not measures to directly reconciliations of you the our financial a and considered GAAP. release. and available financial discussion today's measures as only, GAAP comparable be for to information of non-GAAP should for our our refer financial substitute supplemental addition, to in the directly measures are to is references GAAP measures reconciliation certain information should press non-GAAP the earnings comparable most In in release most

to Let me it now pass Luis. over

[Video Played]

congratulations the our partners this and Thank on entire to AEye Luis. milestone. you, And important achieving team

with our to Let frame three thoughts today presentation. begin me

market. as First, feedback gains. accelerated intelligent processes software help an cars, the increase assets, from or productivity demand information We safety demand defined see transcends the automate for and/ such terms This infrastructure, that drive smart also and providing be environments. player and lidar systems is high finally network-based data that few. impactful defense name unique and as an deterministic performance high-risk to market, sensor the will a fact automation It accepted in to

some feedback performance from become hardware will intelligence, its intelligent more reduce market and XSight Second, superior to AEye’s need with per a and customers. our platform and adoption has clear platform, Technology expand adaptable unit opportunities launched become to rocks. and to patterns, newly to partners costs.

an system customize to where way sensor-based features and data real created. to Software verticals, a is is information to excellent transform the is into value leveraging operating

one approach earlier, to in paradigm. is designed value took outlined Luis As add different and this we a that

believe greatly we generation driven that what systems. lidar is adaptive enhance you of show to will today. the this is with goal Our here is And next launch autonomous software

a investment thesis. our compelling need know we Finally, investors

is advancement would in to comes a from OEMs key in autonomous The be distance as be the but that will true now? two next investment that answer where If matter, approach Our trucking, autopilot you at a believe features for speed you great companies have quote. high game very the their old speed question particularly basis areas forward are in across low systems you changing of AEye’s highway lean is automation and and today. why customers. for and we the buy believe great such XSight automotive. presentation lidar not markets, and major and prices, a your platform all most intelligent enabler, in If technology, requested hub-to-hub only

only As software performance, adaptive see, AEye you market defined in system can the the today. industry the is are recognizing customers high and that delivering

have ensures technology platform. light at broken and pilot performance. actually Thailand. successful only commitment the reliability. plant product new in goal with on markets. update distribution launch not we only our capital for for to that In manufacturing the financial for unique two will have is capabilities progress partners velocity and our we manufacturing Our build last industrialization, and call, line high key manufacturing our was do Jose facility. Engel low-cost model. build capabilities, execution quick a our our to ground focused I XXXX industrialized but refresher San lidar the are Continental our stock This our launch believe and you automotive to announcing low-cost supplier and and to from Then of is line of will you test about partners high took a business on quarterly facility we a is to XXXX on finish XXXX. Sanmina's summary in Today's product the scale what our We our return and grade in plan. the I agenda our out will volume AEye Sanmina's Today, Bob future of

and the conclude questions. for Bob? call open will We up

challenging about we've everyone. our the of the like the price. for and afternoon, to on then performance, to briefly outlook financial To stock this Good in speak year. strategic Blair. discuss some our wanted begin, third gotten balance our of our Thanks, macro questions financial management environment, I I'd address quarter

most now US on the some since bearish we're sentiment in market the see XXXX. you the of investor experiencing slide, As

in could rise over believe shareholder interest We dramatic $XXX,XXX, company the with prior to basis third the up our sentiment third quarter. saw X% present sensor executing both from an sentiment, ramp rates seen capabilities, in generated increase goals for revenue development we're deploy stock market. as rather and tolling focus advantage to road a our quarter, to indicators, than impact foresight business market our related interesting controlling above units. which product in overall engineering is For continue industrial third from was this the which on on the those consensus samples we a more We've slightly around predominantly time We'll something which given cases, our effectively in production We the can is estimate to enables and and sensors that significant This price opportunity. industrial believe what on specific a particularly contrarian quarter the we the use stocks looming. product specific. our customers of the quarter recession takes coupled year-over-year well move of seeing software market from was growth application plan. improving in We in in the sequential on potential lidar and Revenue quality in by on and value our unique our adaptive management. reflected and licenses initial such intersection sales our as negative

quarter. the the Our that development but third year contract we the managing in our carefully throughout services specific grow revenue expenses and a spending to stock-based million variations third been was compensation down expect accrued economy the The contract quarter. volatility. quarter-over-quarter were the given and We've operating fourth GAAP general in in to quarter category administrative and payroll, $X.X lower quarter, in activity, of slowing due improvement market costs decrease the million $XX.X costs. ongoing reflects prior from

$X.XX estimates million, from was third were the increase used the Our $XX.X quarter working activities second loss Net and million the ramp. $X.XX This a second the was our prior non-GAAP very And the product second the quarter. cash cash environment. cash in the increased was expenses driven Net $X.X outlays in in of from improving prepaid $X.XX share non-GAAP production basis quarter. our improvement the non-GAAP of improvement the cash loss was loss EPS paid million strategy for quarter, the $XX.X insurance better the on quarter operating our quarter million on costs in than loss annual $X.XX the quarter, in focusing third quarter. of which $XX.X by an operating and from per GAAP or from usage clearly for a or quarter was third critical down $XX areas with share and basis, share we're on that was Net ramp. third associated EPS were this And $XX.X quarter. in in a continuing manage our to capital GAAP in support per carefully from We're $X.XX in $X.X third quarter. million by the of second a an million that quarter, million. consensus

$XXX.X with partnerships our equivalents $X.X $XX in capital exited million, on quarter provided Sanmina. and the quarter of net balance unique securities expenditures convertible with the We September, and of manufacturers marketable model the capital at a light cash, reflecting million like cash modest proceeds. second with us note sheet. Our in which million We business issued our Continental were and

issue XXXX the the note to investor to same to certain subject in same on conditions and another convertible have We amount right in the same the terms.

quarter now has balance can of million proceeds issuing $XXX in to agreement, we remaining XX.X but shares includes proceeds stock potential cash remaining, which that during our million a the under under up it's $XXX.X also agreement. this million gross from $X.X subject common Our million issue purchase of to limitation shares

equivalents cash cash, marketable up together from potential available our and have stock of million. $XXX liquidity with our proceeds total purchase consider securities, you when approximately we remaining agreement, So the common to

can Overall, tranche stock business position convertible improve climate a to the to we believe our solid under the and with challenging market we third a second Assuming fully issue board. in quarter note. that expected we of agreement in XXXX. our head utilize be what's base into with common growing financial economic the solid continue capacity us to execution our products across and provides as support that the the purchase We

unique emerging to to and We light that quickly. capital focused product keeps a us model. scalable allows and with commercial market nimble think business We as are conditions respond us customers a operation

turn now me near-term outlook. Let to our

manufacturing growth supply near execution to by as still quarter’s quarter term, fourth the to in see ramp establishing outlook challenges last we industrial up due were this product our our chain expect maintaining view ability revenue We employees. scale to a our quarter environment. meeting call strong market, we Sanmina during XXXX. further the goals commercial modest at the But the in macro on begins production We're for our The volumes of for to in articulated cautious third successful remain. in

We spending million. production revenue expect the ramp product, XSight approximately The of the quarter our for we growth fourth carefully although while with chain environment, In noted to while a be is on to we us been to for our we longer. challenges response uncertain as the going do managing our enabling track industrial supply earlier, XXXX. $X still are be expect in have global this

we other similar items loss expenses non-GAAP non-GAAP be for operating and million quarter. basis, fourth full million a unusually the $XXX net in expenses this year we third from of million to in we that to of at a million now provided second in $XX excluding levels the $XX the net to range quarter, certain to $XX guidance the $XX our We to improving we million stock-based beginning our compensation were and updated year, saw expect first and year. guided of the last net low However, in of expense quarters to also quarter the loss operating expect the non-GAAP be loss from the the on improving and

capital be to million approximately QX. in expenditures $X expect We our

now. markets very view. in me experienced to term, remains end ongoing the new a With we're and near we recession compelling backdrop we I'll our the customers chain XSight customers opportunities the our encouraging. industrial while manage launched of Meanwhile, approach across we disruptions on newly Continental’s production are to XSight the forward supply in excited B-sample through XX the our product automotive market is that an adoption feedback we looking we're OEM with challenges, with team to those available The and have and impacts HRLXXX see front conclude XXXX. end product industrial saying automotive to Blair. for as by our secular potential And the lidar call of us Let have in to managing the We're Continental’s getting to expect spending in back turn from accordingly. that,

Bob. you, Thank

explain transmitting lidar system of to and commercial The data, passively let XSight flip So process of Motorola no sensors approach me hardware architecture launch unique a StarTAC the phone, detection transmission of systems static minutes been few centric, our product like analog take is collection today this building companies how capabilities our groundbreaking are providing then and majority software raw intelligence. to customers data performance lidar allows for this that have to platform requesting. original and other but much

different As a took we approach. Luis explained, fundamentally

First, we components can on with the hardware two-way using located individually, sensor the sensor way works, a the communication different control software-based depending the on operating to system change environments.

the AEye that the allowing other our efficient trigger customers itself from platform so like can unique when not to our addition, peers, be information. silo systems more use cameras, critical lidar In our use maps, radar IM and and to collecting intelligent XSight does they can create sensors

vehicles, and for In new defined architecture that infrastructure, ability to and add our not we assets. defined to will aerospace and sensor we optical infrastructure, this patented to to or last compatible compartmentalize now well is channel. another natively we be processed require perception intelligent the and enabled updates, this data over unique sites, perfect practical Finally, had network, secondary call, importantly, communication cloud. be the our in enable scenarios for first, of smart and data era most local triggered software network, the software announce to a other its manage and industrial communication over air as as and announced modes industry where are enabling in Today, smart applications defense

demonstrate opens capabilities this our architecture As enormous up customers. later, network we will native extension for

potential you that processing from move see look on your While But to and an this processing logic only the seems design. to to more too parallel be analog network to digital to good smartphone approach serial have true, a at later.

With opportunity technology in and launch participated our automotive customer this automotive one groundbreaking progress our world's This the production quarter, AEye accelerating is of and video. launch and Together in our product with automotive of took providers, the Germany. three that IAA trucking. automotive the intent platform foresight earlier we one Continental, Commercial in Vehicle are world's trucking. to of events our and show in licensee, We show ‘official to this vehicles lead top recently dedicated the largest commercial saw you preview Luis

were platform sensor booth, as has radar, can their our of a integrated you As we perception see, including cornerstone and been camera Continental’s suite, software. featured and with

they of of driver the the lidar panel and We excited by of HRLXXX development. AEye distinguished is and world's setting in line samples testing This production to in need only heard and rate was intelligence. internal question current vehicles design validation prior means allows Our and range, to Continental’s we resolution, today? production call testing the to to which with have facility D units. are momentum In industry automotive new venue. the AEye Class prominently is featured Continental addition, This and was refresh operation see. assistance product of how AutoSens pre-production customers technology positive One this leaders are A at the Continental’s with true the customer show stock intent, produced by is products A your Engel systems also vehicle named Product at demo our truck AutoSens. through own high-volume for conduct also encouraged a design force. on front do be Then field leading their scaled were Year validation community standards were OEMs demand. strong meet for advanced the put existing testing. we tooling autonomous be to

AEye have which to we're commercial we how has customer was our multiple Continental’s when question been your joint evaluation production We engagements you latest final began heard and regard have on disclose fit years OEMs phase engaged QX are Another of intense been will and investors progressing RFQs, and our from performance. with in in feedback with RFQ to Continental in partners, get RFIs of and OEMs the two evaluations, distribution samples in processes. now for over and

We technical positive substantial OEMs. very have feedback had and from

on model imperative We more appreciate that that have manufacturing. numerous our highest horizon. industrialization, In today with are Continental. Continental in we we awards that automotive engaged believe performing RFQs on still the they and actively are business solution, production that than by for have multiple been told It fact, we reiterate risk XXXX been by that customer OEMs, six has their we schedule in and the stayed as reduces we leveraging lidar

high enables Continental. as superior such trucking and autopilot to sensors be performance highway and partnership we performance automated with as our OEMs hub speeds, uniquely Our at from features for hub desirable down pilots initial features functionality selected metrics to to transition higher high continue

While some been knowledge, any and Also the available from September, announced vehicles program, GTC any where on have we for automotive major developed at seen only lost and now that believe process. AEye RFQ passenger the sim conference, for their the testing production canceled, AEye has programs the XXXX, we engaged delayed. best of has do in drive no delays team achieved HRLXXXsensor platform. have in OEMs NVIDIA for the to We been in industry system, not potential NVIDIA continental awards the and milestone another development Continental is our by

endorsement capability Continental strong velocity key are technology. lidar. defined and integration leaders of the autonomous market Assistance to of seamlessly more to one NVIDIA and sensing OEMs to adaptive believe our intelligent This from in will Driver automotive to customers be software allows adoption Lidar We harness of accelerate Platforms integrate enable of and using able platform. for Another the platform. with this the our full the

One production, to and time specific refine impactful traction HRLXXX dramatically will and XSight where market development key compatibility the market testing hub accelerating performance OEMs platform their gaining which for platform to deployment. is is As again considerable save time further of the to autonomous trucking. for prepare requirements, during the is hub for OEMs we commercial match our to

an XXXX. shortage for drivers lidar’s measurable goals, been goods we have a with you platform. and impressive based to by increasing safety autonomous reductions, and carbon vehicle on trucking that AEye XX,XXX emission demand of on delivery, performance, accelerating system several our urgency selected by of the EPA new ROIs. has nominated been regulations US their many hub-to-hub for commercial deployment weather evaluation, and these know, The is capabilities, alone, growing immediate compounded there's autonomous a After here trucks of years of major in the for As timeline robustness. twice NHTSA and by truck ultra-long-range integrator

While already to a this knowledge, to global is they for leader and in our has disclose jointly with currently their platform starting publicly not Level trucks, roadmap SAE across we partnership several platform heavy-duty in North technology higher substantially autonomous partnerships in large XSight volumes brands today, announced. best long-haul trucking have scale addition decided AEye’s To fleet in ‘XX, ‘XX. in the X driving with to and of a network to plan our clear deploy America XXXX OEM

addition ultra-long-range characteristics as selected impact to obstacle ability, and in projects, override platforms a have adaptive can positive rear to we autonomous be lane ITS’s detection distances have, work markets. the determine intelligent and cases address its challenging the In commercial defense XSight XSight spot used facing system long-range monitoring enhance in AEye’s multiple showcasing and OEMs, small how at well The long facing changing. lidar pre applications. the most Otosan we engaged foresight vehicles. recently industrial aerospace to AEye and the facing platform to also continue address of they platform for including safe development, Angeles, in many Congress our trucking our individual Otosan, World platform transportation having use is participated Los as launch will for leverage include closely detection Ford in Ford and with high-performance These front development blind to

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patented sensor. proud business analytical network-based opens information allows to how, our transitioned the they of system will integrate smart We the manufacturing enable technology When revolutionary. time capability XXXX data capabilities cities where joint believe a communication. B-sample markets. we our believe our optical in scenarios. the capability goals. processing data continue decisions. In the this to process significantly with perception opportunities both automotive and execute battlefield expanding customize and for their Highlights made we add We architecture. to XSight users radar development and to We autonomous to new This the and the Continental customers, progress addition is cloud, with in camera or AEye make partners. include the capabilities our virtual have and conclusion, enormous addition defense patent pipeline this on In are portfolio. and combine we on of and development XX up increased when launched and extended production to platform two and real with you to our HRLXXX trucking of This we process portfolio for critical the We

defense also the product We and launched industrial and the aerospace in markets. XSight

our would I the match challenging exceeded environment time safer and make our to EBITDA our people stressful place. and world. world their persistence an for has acknowledge liquidity. like the and our to to and been consistently employees have extremely enhance our I thank manage spending want dedication around empathy, helping global goals partners us we Finally, many this for specifically and a And the

to enabler, encourage look at and we forward autonomous and do, We all believe XXXX. to And we our lidar lean as you us a systems next you forward key AEye. in in advancement a the business strong believe automation will that are major of you if scaling that be close XXXX of technology. with Finally, intelligent

will We questions. open now to

question is Desilva [Operator ROTH Suji from Instructions] Capital. The first with

Hi, here. Blair. progress Hi, Bob. Congratulations on the

can to is I'm foresight trying test working what of just or facing understand to of in are that and to version a hands now had watching implication, this its some test, end the launching customer customers implications already of kind the So the [inaudible]? and to of understand they already product their Blair, kind have have

out Sure, of you question. peers. seen our different little Because is what would it thanks have for bit many than a of the

do. recall, there we you we key lidar, we years like of could product believe cost order One could a this blocks was adoption piece are platform any horizontal and a two puzzle. a hardware, of As engaged for technology, use ago, it had drive across to the modular out that first that the drive actually be same when customized, you that things in you could that software sensing few decided that so control to of down critical you to build market, the hardware could

The we second that and would need multiple piece you manufacturers model. was like of business it that capital believe a

That product software network, in also being platform is industrial for system by a used software Sanmina that So platform, defense. released XSight strategy. actually that We a what to means major QX configurations. safety the is to tested automotive importantly, us one trucking. the One now and licensee first in construct drive different as leverage year, to you're aerospace you seeing of to and same when automotive one this able they customer for being And the of milestones of most software our data have slightly software ways is engagements. that And being the used data for customized But we can have platform. giving hardware be automotive the one saw in say platform, we synergy will actually use in platform, grade. build today, functionally that by different different them

got customer version software. a it and update of facing produced markets, least of at products we them versions was than and early the from of if industrial production early hardware see QX, our have we which their the production you would cycle. the software you much at Sanmina, software, it that are just of it can versions or and end was at today, They faster our our what the was aerospace the first So been means production product, the final first giving in

got in they field. the using will the them, they be So for just that product

could on as be a this So It just implementations but track defense. it could plane final did aerospace not be it or on toll could the using system be system. offensive a pilots, what in scale used on and incoming a can get It deployed, in putting helicopter have least they putting this production customers defensive at roads and IPS targeting or was point early as intersections, that mortars. to in But in gotten time, a product. at be would and

were you to our have different half able A-sample automotive would because as and a to or you a upgrade licensee the to If last have side, customer Continental and the the we're year trucking been to B would B software. the continue with a a dealing move point over you of for B-sample point to on levels

So what industry C, production this called testing, that as production, and a to development what and product allowing B-sample, we these mass we're go intend to pre this product also DV term was and in take the C-sample. they final is we through is the simultaneously And which call got we intent the them is means that use to programs. the

one like we the changes aerospace you can we'll get Ford, As going where with the development, still just they difficult announced make much we and another be have to feedback software intelligent that doing. saw, IPS customers. with platform, many, given actually individual many from to hardware input more just what are while can and our into we're final changes make, And

as the marketplaces, ready industrial we C-sample in commit and once we their production. the larger product in stages, the to final deployment. was, volumes, automotive And through and format. product ready trucking they ship market, ready final and in the you go In final moved into So both B-sample the saw is what these aerospace, for is tooling to

if six unique also helpful business to Okay, six talked is you I check? detail Continental, then It's understand, heard that quick RFQs, a customers, up. different given about with When just correctly to thanks Blair. just want there follow your and very that model,

Right.

at one since So we we since said things that early truth, we've went gone part culture on is and is did, listened a to our the to we've of which our went take and -- back back we've finding public, call look what and we said. every done of

that engagements focused base consistently go we already in also we that take the evaluation approves. process, they a that a to, will six Continental than lot customers of we're engaged of at primarily But So if six back and you approaching Continental and we through a with have installed do are sell new it, things. are minimum the who who but said RFQ RFI us look more

six what engagements, that's product, not all processes. general, that a to since you of what as loquacious separate half I our So may Continental hope talking I engaged from six you particular my And be them focused and people. would that and was doesn't too we're Italian since But between between customers. really and set say break half explanations. up I automotive I'm of channel partner in say say a can will we are them capability I least But we're in presentation and that high than we the the six got be is commitment I it's trucking, again, mean They're performance. from on hope say engaged at and would in as that they processes. what a minimum is That we more those at

Now need need the trucking able speed, highway, needs begin stop see it is there the to implement in road. and on of high of high be objects you amount most the you to on distance. to time to a you you absolute need because truck, performance, to it's want at trucking, the that with do And to able to it automatic, need be automation small because

have performance. standards, Bob's then looking difficult, And to been which I'll on as bring highway on is or to not to need take focused say we DMV systems, is very out believe hour. a cameras the going date, it, is So an you're and to it low-density lower going solve, performance you're miles ourselves distance autopilot, benchmark, difficult meet short automotive and had to To you're very at do or such have to features level, just highway that it high lidar over systems, radar going autopilot. would we XX go if it's In high to to redundant it's RFQ focused the capability the we system. a the be market, the have systems what German problem a the

capabilities. value It they the customers feature. believe There deployed, system. we focused Or that new systems redundant highest to safety lidar, that they Because that a need critical very, be isn't also to add that margin the a RFI on are systems. it performance So RFQ, because while the car. we ones the adding we're they're high like just need is night system the isn't believe just with are to a be at looking will people and for park able be contain a very continental talk have there'll and about first

question next Osha is Guggenheim. The Joseph with from

for questions Joe. actually front Hello, Kansas, going this apologize. my hop mute. then both I And I'm state I'm Hillary in to is on and back on up

a what year provide and various going could we're the the question, on margin throughout like. start on wondering as to color just rate to if next then of year. the industrial into head as markets spend like, on little like. handful question we we if next ramp you look that stuff any could you understanding, context exit First OpEx, that Thank to side, the But wondering what hear provide quarters, the end any looks second a year the might And closer just first looks for just ramp, you. half what

the thanks, Sure, the one. one. And let I'll handle second Hillary. I'll handle Bob first

the we again, I been is out. been into pretty I giving We as management, segments, things And instance, extremely IPS there's first the have public segments, intersection how would accurate very, say roll opinion, for to very important. cycle. will our roll our that been over you also start out hope year actually different as throughout I we've a company, transparent, but very think on

intersection. or the XX% fact, happen In around of at deaths pedestrian

So we is funded issue. those that issue. that isn't margin by they And a a safety are this believe This states.

from people's build value believe, customizations on to, our we're will be of people as alluded add, Bob software, And be pass they those model, that it -- that a they noted, Bob top system hit. other allows own or even better that thing have and incident can and one margins. for is have things the the to believe toll with we a two And us they're is, So the high-volume detection, of have they us can that certain to doing partnering throughs. aid at however, margins we could good some not like system our software speeds We They're roads, this, the high that's basis margins. we where as do where more for see second do API's you open like reselling some more margin take now implemented. is being

public believe we expertise. the standalone been As we think to sales there, tier margin, you'll lower a a integrated software functionally auto maybe XX XX will don't because a that's volume, fill when and recall, it's has went hardware there'll high be the OEMs, two its in that safe their that years. actually or differently AUTOSAR market ones for which I some with That's believe calls and role ago, and than what we but compliant do of lot the half software. software said said doing they've And ADAS they what is that very ago, year capability, people the

have opportunity an ourselves, concerns, a have volume, right? software markets to made, the for in to on is smaller vendor, made bigger So that add money or in it. believe We of safety top that there's like it's there volumes, be software being

So a bit we little see better margin profile.

on are right, systems, at the software reality these industry types you highly and margins it embedded any can the not of can implement our at with end great, take as look you look first a take year a industry. or you of I'll that Now, this, application hardware, regulated, software the

significant actually industrial will the ways, market, getting test some we deals up implementations get better done. lower that the there's because margins, with you're doing smaller while in it So believe ramp in slower to you're volume. And

see industrial lower at automotive, definitely a ramp better and margin we to have through. the over than move we year in while it next volumes also So

Okay, and on is Hillary, this the Bob let me answer OpEx. the second question,

As the not quarter was the back to items QX, in in in you favorable to OpEx We to noted, had we that be going QX. go some occur it the in fourth expect QX and are QX. do levels repeated

we're not the So reason in the assumption And to think going to thinking for with at give it we're XXXX but again I that's remarks. carefully. prepared to a way we're point, that as is OpEx about guidance going the we manage is continue working the for increase noted this

that QX So expecting not significant growth of year off level. in we're OpEx next

we say And do been terms that much achieving product our -- progress yes, been all at it So low major likelihood look that we careful with OpEx should product true. or very objectives. they we've trying that very without But We've, year, within all our the maintain going to think to obviously when development for that safe is or launching, for for while take changes as say have able and that, are close are spending, try XXXX. to a And slowing possible you as still to I development. Is you somewhere we've in down level adjusted in significantly, fair our this this it I to that market great I made business to the keep said. as think of we with year.

the So keep next on a I product well think continue year, to side to the our and and business continue goal. for on execute we'll expenses is tight the rein

from question A. Hans The Davidson. Chung with next is D.

you thank my Hi, for question. taking

the So end first, I with XSight production want to Sanmina. on follow up

the are how ramping and of what's next ramping mean, to to is over six build the a to So month for for schedule inventory you kind demand? going I XX AEye? much prepare in

Thanks Hans.

volume for to is Thailand volume, helping build and So that have actually talking be facility for you're where volume, the put also out testing low it, to to is Sanmina high-volume so high-volume could a that volume San you more. for XXXXs high grateful the line the low when industrial, in line, for be in facility be or in volume, low we're could us of plant intended And a world you we production a giving line, us its you volume line. break low in class a Jose, the place XXX,XXX that XXs

And us. jump the for is in require short than believe -- that an also at we to Sanmina run. three big more ramp over us produce two line. one, extremely could the we to Jose But we a will covers So that's next the the we that this, actually the kind way think line look of years, at is us the San produce

So that little context. a a gives you of bit

going on, guidance just we're not add give again, this on XXXX to on call. Yes, to

snap So what for ramp million a quarters And a fairly we still so the bit our back they're development as as do QX. ramp, set expect revenue we our is we'll QX to for to fourth volumes, expectation, we've modest continue of revenues, well. in

always specifics you we're growth year. point XXXX this that. you want run. at So get again, a into we question, business how get next and expecting for of to don't time. Yes. I And the the appreciate in because right And, But appreciate guiding said, as I on understand to Blair down nuts that bolts

we're we're actually question. from much the things internally rolling a our at the things do but how the you really And did market. in very the talk of we thank approach do that one volume year, about for So, culture hype is, to going XXXX? of want to out we all have not been to how we One and has last pragmatic through

it. Okay, got

curious So strategy next, for kind or mean, do of with what's your here? partners, you I the work to distribution mean what's strategy I market your your just go a XSight? kind market marketing go through directly

Right.

do different model by So with network building we're assume over making making remember, modular, start meeting. business much you just what belief much, I, our is integrating sensors I'll the is believe what is, long adoption time. software system And I different. that our But will drive is as I'll people doing tell with talked it tell beginning, down like about are yes, that it would And we as second We through our markets. you we from tell you other make with is do I'll is from maybe who intelligent you, went what to we and very every, and into integrating us different. the that this product And already today. it we'd the the

volume. just just the will at But we do is over beginning, that demand. they're with of value is are work IPO can get video, already In actually the we if with they're and people working integrators As were And largest the of is exclusively like time, integration sale. oftentimes automotive who already the the they're the peers. of system initial happy direct our with Or remember the integrating reseller for from partners companies, we now tremendous channel or way aerospace we to customer. the we've that majority have going of that very sales automotive in the largest different, into because the where is And is systems industrial companies it's drive configure more who to breed integrators integrator any us we very value that the go products you our could will Again, to okay. making a well. In we our a best right. to amount our are But Continental as train open system out model the working and for picked over our drive goal. in see out because and best point In that that money market, intelligent, the open licensees, market, the and also the take time. often of a way go are in and believe a that's directly. we're And you'll bringing that's the that network. models, going by we with the now customer business rolling one But intelligence since through of to largest our that industry every actually the using is other integrators, product there's data than it to by our that of every market, of product real and system are to agreements experts will model out, our we're view we hope flexibility, be that's indirect a, this who so ready a resell it themselves, cost rolling that reduction, and

with Roy The next Tower from Water John is question Research

you. Thank

But a or trucking not Any sales help So trucking. automotive know will way Blair, of successes your in naming on would way? in with technology you're kind names in that helpful. I be color in you

it's appreciate And I an question. excellent Sure. it.

and trucking, again, because like it of buy thing this think look in, through I you want to eyes like said, this the If -- return is want go they already to of truck it, trucking, isn't, they we are an on remember, because get truck the hey, about at ROI drivers investment. to sell they they to truck, have own this they to to want asset an the some I'd buying decision, I'd high-performance get the In that put customer. this

demand, on I So still the to high I means for Right? a make when is a the If can actually get them, need performance, while on look is hub this highway, technology the feature, to same driver sold hub capabilities. as at customer call this this use to trucking efficient. a autopilot, new automation more you you while highway one

else actually trucks, look deals. highway how much So faster we the is we penetration if differentiator of key we at much, can we high-end in systems run actually into with that than think stop the automotive, who's industry, over win automotive Because moving on as of trucking, which kind with have, a the to distances kind gives us them performance. automotive allow advantage can't of anyone and selling the we have that who massive lidar

huge discussion. But in first, they're question-and-answer LaCorte believe So is This for our to the any the concludes going that a of differentiates over some to capability that back -- Blair in ways, us going trucking we give And different like automotive. the same. this would kind turn exactly some to we it's in advantage is a to I ways, us remarks. conference closing sales session.

long to it's through those appreciate celebrating you I amazing. for thank want say have holiday we for are record had of everybody. weekend. a I call. -- just don't We people everyone our And a you and of hope who on tomorrow. I Well, came number great that you a

So thank you.

a Have great day. everybody. Thanks,

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

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