Hesai (HSAI) 14 Nov 232023 Q3 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for Hesai Group's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that today's conference call is being recorded.

I will now turn the call over to our first speaker today, Yuanting Shi, the company's Investor Relations Director. Please go ahead.

operator. you, Thank thank XXXX and joining Group's Hesai Hello, Conference you Call. Quarter Earnings Third everyone, for

Our is as well earnings at as website release via now available Newswire services. our on investor.hesaitech.com

David hear our call will an our of updates. overview will you Today, with CEO, Dr. start Li, from the recent who

Next, for our questions. results our Louis we before address CFO, will Mr. open Global Hsieh, financial the call

available prepared on view for participants IR Quarterly We to the This slide stack we Filings, today. also investor.hesaitech.com is of part at have our our website Financial in discussion invite deck the section. Results

I you most will will earnings comparable more and measures GAAP today, to continue, this we the note forward-looking safe thoroughly Before applies in the our earnings discuss non-GAAP explained we as also refer company make harbor our statement the are in to call which filings. measures which statements. the reconciled release release on and press reported Please to that SEC

turn call to pleased ahead. I'm over go CEO, that, to Dr. Li. please the With David, David our

and report thank to our today. joining call you, performance for our everyone, delighted Yuanting, quarter expectations. our We're surpassed third that you, financial Thank

quarterly another and total outperformed record doubled to rose our metrics net our year-over-year. high, Both projections. revenues delivery initial Our reach

and of The successfully up. wrapped phases thrilled to products. third transition is announce posed for a We're ADAS the also of product both and transition that maintained upgrade XX% challenges now margin the by in we robotaxi over gross quarter ADAS the fully despite

efforts This capabilities. and as chain our accomplishment well robust as engineering exceptional supply through possible manufacturing, optimization was made

debt. end anticipated year, lead made the gross not dip we're beginning of trajectory margin stable we direct in initially the result, at in As ship margin a a gross lower at the the -- long-term of into the but a only

delivery, revenue with includes that entire probably achievements X in have available careful margins. gross we performance using Upon share publicly our stellar across and spectrum. market peers U.S. say This scale information, listed our metrics comparison can excelled

the the Remarkably, we XXX this balance achieved the operating among sole to a feat, is positive XX million, sheet efficiency that commitment peers fact RMB X to XXXX. achieve we significance as quarter, for particular USD company maintained have demonstrating standout throughout for totaling first amid This consecutive months flow continuing the the our have us robust this places million unwavering third process. Of of operational growth. cash

our These achieving milestones underscore and testament to devoted work financial a sustainable our profitability. a steadfast team to are hard long-term growth dedication and

notable Let's delve into with again. the starting third update, quarter business

milestone In achieved strides third significant under long-range, models front. the ETXX for the quality, once our in-cabin the win in by we EV making on for luxury OEMs and a top quarter, the announcing of the first-of-it-kind next-generation domestic China, Group, FAW prestigious production brand one ultra-thin X with We're global defined by their series LiDAR proudly design safety.

in-cabin an placement, OEMs vertically unit ETXX by LiDAR aerodynamics in-cabin well terms rejection rate. the dirt, the XX% LiDAR car and Fueled itself from revolutionized integrated meters impressive protect ETXX our diminished with forerunner reactivity has emerged to right and design resistance at exteriors. in XXX of next-generation, modules, models high-performance as achieving sleeps gram allowing

the product production scheduled signifies new XXXX. this mass in materialize its first marketing Group commercialization of win of towards with and forward robust this of FAW half led progress design the success immerse in-cabin to This by the

and as as and design broadened including Great client partnerships, our starting automaker in flagship multiple Leapmotor AT of wins, portfolio in China, set Series motor, exclusive , well one recently EV secured in debut the largest with Huangzhou we Wall Furthermore, leading new feature and Neta markets. in are to EV automakers models XXXX. will XXXX in new two Chinese Their LiDAR our

our with design endorsement of wins, recent prior strong our of future our engagements timely noteworthy choice a delivery. switch products LiDAR is these product proven high-quality and the to is that performance or certain Their It model for of record of have existing industry superior among peers. several to our them LiDAR

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leadership. these a partnerships, China the vehicle Tier OEMs design to robust have With OEMs suppliers, XX assessment recent secured in XX we wins global models, over including X our X across and with market top

currently the X global eagerly are manufacturers' Europe. these safer creating intelligent to with announce development, North from automotive engaged delighted that OEMs more In fulfillment to forward We discussions of and in RFI/RFQ look we're to vision vehicles. leading America deeply contributing we of international X and

in of ventures these X be conclusion including RFPs for the joint were to none from projection, quarter, China. X expect global per in slated finalized customers' and third from OEMs in we X QX global OEM While

are It's not worth distribution. some intended them noting for to these that global vehicles market, the of exclusive Chinese are

attained financial and of OEMs, procedures of have extensive qualification these supplier aspects, supply of by stability complemented evaluation quality, certification, X we audit chain, essential site product, following include line, For global visits. production other that the status round multiple

future. about partnerships that may exciting the potential emerge, more sharing enthusiastic and and in news forward developments to are the we We look near

cutting-edge wins underscoring reinforced This car targeting research we with our European and integrating a beyond. for deep with additional and excellence our addition, in and earnings on us prominent marks XXXX OEM technology OEM SOP and of partnership this future strategically a deepened development positioning have acknowledged models including technical expansion in last our program dates design focused strategic for. potential mentioned collaboration development multisensor LiDAR package, our broadened into In call, the with

are progress quarterly us my OEM selection. our provide programs showcase make integral to strategy. decisions update, market regarding before previous our vendor They As in international of distinctive customers I to and this development for opportunity capabilities highlighted with engineering nature final they technological

superior our offering. precise engine and number OEM to of prefer wins, Given design higher accelerating and resolution that LIDAR's our performance global clear becoming competitors' quality is OEMs of domestic it that

updates manufacturing product enhancement. our Next, the and share I'd on to like

from long-range Rock wide Hesai FTXXX, of fully system our experience smoother the advantages serious The safer car SUV luxury a to new harnessing across Motor, production spot, but and the aware, high-precision features FOV, SOP dedicated to we potentially blind-spot and and towards first LiDAR XD the Series model ultra-wide with advancing full-sized post you're view, perception new blind providing flagship driving range September, scenarios. growth powerful celebrated FTXXX's installed resulting LiDAR. minimum model the of vehicle a of our a field As coupled AT milestone attain first the be model on to on world's In with products is phase. SOP a solid-state

from mature specifically represents power production is posted which impressive of products. portrait production highly a attention In officially higher to to resolution, achievement a a third set seamless at iteration and XX% LiDAR. of momentous full-scale improvement, our Series enhanced mass leverage including automated ATXXXA our to reduction XXX in achieving LiDAR. quarter, facility, an positions upgraded model, to for consumption, the SOP extension that AT center us economy the in in transition our Turning line to long-range tailored flagship reflectivity we the launched ATXXXP brand of Hangzhou strategically years of the ATXXXP our at the rate, this heart scale production our XX% the

invaluable our We're the ramp-up of experience. quarter with not in product of expected poised learning potential but the this stands at commitment to also volume the improved fourth The shipment market reap our upgrade at meeting only Hertz now to efficiency success and the year. Center reflects production of recent cost rewards demand, seamless unwavering

we of has us leveraging contemplate endeavor innovate insights in This are knowledge provided play we leadership capabilities, prepared with By the our in role the ever-evolving expanding drive production capabilities positioning to present will market us sustained it future. success. and strengthened in-house that Moreover, pivotal well dynamic for deliveries, crucial our LiDAR industry. as has and in a landscape manufacturing our

share Lastly, recently located completed the have and in-house what I'd construction to our R&D Maxwell Center, manufacturing of Jiading, Shanghai. like facility, in we

solid-state produce products. and actively is equipped next-generation to addition LiDAR, of this research our LiDAR our preparing new facility fully now development with FTXXX spearhead In to

performance production XX our and efficiency in number time quality to state-of-the-art this We're driving market. hundreds the of facility functional about with integration testing amplifies scale only of program not outlook, established to the also the the in flares processes The enthusiastic market enhancing to and seamless the expands facility R&D the We've potential future and solutions near overall future. to this capability and to introduce point groundbreaking our but our activities research initiatives offering.

triumph, product our us during steadily transition This deliveries quarter. revenue, with for third margins to we the put and and year. stronger-than-expected finish along a strong gross on quarterly effectively track summarize, To navigated

testament and resounding global the programs just Our it's foundation growth. strengthens leading not continuous a design feat, and and our and run development a our from of OEM is market leadership remarkable wins domestic enduring to

commitment remain dedicated to reliability the and enhancing quality, we will safety to continue performance, systems by as to worldwide. autonomous saving advancing and safety cause transportation our of lives steadfast Our endeavors guide

the over please performance Louis, go now ahead. more outlook. I'll and call on our Louis to to turn share details financial

and David, you, Thank hello, everyone.

figures to our quarter. earnings quarter third further the mindful the the release encourage go refer I call earnings through third Let's financial to operating for of be length listeners and details. our To today, of for

third this million, see to We of quarter year. last year-over-year, top the XXXX. the the USD record quarter high which in our second XX.X% from the guidance, high exceeded net pleased reaching another against are growth the million. that bounce-back lockdowns comparable XXX We COVID RMB Shanghai our achieved increasing revenues end benefited of of after XX

doubling LIDAR market. total, XX,XXX outperformed the well, in than Deliveries our solidifying more in units year-over-year position leading over global as to further

benefit we would a products transition the In that remind economies the beginning anticipated simultaneous I fully from before terms of year, you of multiple of could for gross product margin, to at scale. like we

Hence, a pattern. gross V-shaped significant product a phase, were expecting as designated are QX and margin we transition drop a QX forming and on

manufacturing the of earlier driven significantly However, our improvement continuous cost higher than mentioned. XX.X%, third for margin just guidance, our XXXX as our gross by in David reached structure, quarter

to products robust autonomous the Continued contributed margin for mobility quarter's uptake. demand high-margin also

has result, were initial transition projections. considered QX, QX and both which outperformed As our a previously product a as phase significantly

operating relentless scale million, LiDAR structure cost Our manufacturing USD to the of X.X XX.X global improve RMB industry, million. positive also our by optimize led strength flow, cash and financial in to third our unmatched quarter marked efforts

long-term strong growth. and performance sustainable profitability year-to-date positions continue our toward advance robust achieve us path to Our to

strong our we a turning financial expect Now outlook, to performance. where

Our robust seasonally bode our quarter strongest third for fourth results quarter. well

XXX to between XX.X%. RMB quarter million, representing XX.X net For the we of to of XXXX be RMB million. year-over-year XX.X% expect USD increase million, fourth revenues approximately XX.X and million, USD XXX a

to a more We with that product. are share shift ATXXXP optimized pleased the toward

Consequently, in the ADAS controlled now for by of chain. cost production stage are manufacturing and a predictability of we entered future, for We anticipate processes, ADAS. mature well-managed high characterized level structure a supply stabilized

by posed navigate it outstanding transition to challenges capability the overcome our management. chain having in the process engineering pride carefully. Thanks supply take development We in swiftly and and depth and

target We on are to deliver in our delighted XXXX. to for announce are track LiDARs total XXX,XXX of we on

fact, we momentum seeing In LiDAR adoption are XXXX. into equipment OEMs with LiDAR globally. growth by will We accelerate anticipate this systems of

expecting than customers units volume LiDAR our For SOP to customer to portfolio models. forecast, OEM Based are XXXX, year. this expanding include vehicle over anticipate our reason, the more SOP, on of approximately XX next end to ADAS XXX,XXX will by reach our we double we XX order

USD RMB gross and full As which we The XXXX. with of figures a over XX models the now, Therefore, the preliminary delivery total, ADAS us margin market for wins year positioning global X.X million, covering blended in estimates to units, XX,XXX our to on level subject design billion, ahead with throughout we of we and to significantly XXXX. XX% conditions all group monthly climb rate in reaffirm reflects a OEMs industry. have revenue and our achieving demand, company's approximately above XX% operating By market conditions in are XX secured and December, conjunction these well of we of annual outlook based anticipate is the of target change. LiDAR XXX expect competition of current customer vehicle

momentum secured in a for terms exceeded the In expectations the we've financial laying while own and generated. further we third the solid apart major market quarter us of in design quarter, our wins, development. bolstered setting was a growth summary, bridge and and performance by foundation

looking toward eagerly the to promising journey fourth are as we our exceptionally We forward profitability. continue quarter

take and to her I'd tactics Ouster's Q&A, like add personal a into to opinion side. my moment on behavior towards going Before

Filings claims competitors press can and Specifically, recent being I release claims available Finance's competitors' in at October investor.hesaitech.com LiDAR be A XX, the responses other address of Results or against in and by section. our Ouster on size XXXX, Hesai's smear presentation and technology want available false discussion directed the found the a company's origin-based us. point-by-point the of intended uses, national Quarterly to campaign in our on regarding possible and website made website full-size fabricated

to infringement a claims China-U.S. lobbying its geopolitical business products to and company's and attack, and line from Ouster find Relying primarily media banish seeking marketplace. agents basis IP national U.S. practices, and the discrete have contentious. on and I attempted tensions. deplorable exploiting focused heightened this origin, on technology of

intelligence aid attacks a and by innuendo the all by to all potentially false. that are is our spent claims working on dollars steals Chinese Chinese Ouster and Hesai Ouster's to gathering, on national attempt Chinese military unsubstantiated launch security and has on and spy lobbying fiber possibly using denied and with portray patently a desperate to Capitol American litigation U.S. IT of LiDARs military allegations the has are undermine and millions Hill Americans, in expenses Ouster's. as fees company

These underhanded Hesai perform company much of are its on merits are is than actions because range Ouster's products. preferred are LIDAR products. LiDARs customers the unable compete the resolution higher that better quality by tactics desperate Hesai. effectively Frankly, against of and a marketplace and they the in to

years the for LiDAR in months $XX mounting of on gross combination a losses, of million As alone. of the XXXX X shrinking several result, $XXX first Aster-Velodyne revenues, and seen has revenues margins declining just losses shipments million dwindling

to its Ouster Uo in autonomous to Ouster ago. XX% all several market of precipitous from market-leading XX% according global drop level is over years LiDAR XXXX and reflected This share high for price share, declining Intelligence in aside vehicle X% share compared

Ouster's Ouster-Velodyne and investigation, the Earlier the with of ITC settlement the this IP attested Ouster-Hesai clear. patent agreement entered During desperation which very litigation became is year, into case. divest to cross-licensing heart Hesai, the at

own claims separate wasn't patent XX including obligations agreements, allowing sue to Holdings and interest the not each patent legal bound provision, cross-licensing use vested it not and for LiDAR abide its IP their contractual Adapt probably Ouster have contained entity, to therein, LLC. did Vision It's provisions. the to Then by to site the other years

affiliate case. a through agreement Obviously, dispute have as in She of subterfuge, Designating mechanism. it. Velodyne ruled arbitration knew Ouster major their The a liability and right is a of legal judge none was major, resolution Ouster's would ITC via merger. the saw not Ouster

by new not legal So Hesai the its transferring a did escape simply obligation agreement entity. to

contractor commercial were do contracts only obligations In simple, that have would and cease keep just whatsoever. ones If off don't you the things the spin like a like. you value world, this bizarre to

on She case. in then Hesai's grant motion to went terminate to the ITC

behavior and As to National I innuendo, tactics and with be Xenophobic baseless opinion, and virgin-based principles tactics tolerated. my values allegations Ouster's an In find attacking of stereotypical desperate such repugnant not antithetical American, and should Hesai American

America. Operator, Simply put, campaign against today. I take This believe questions. Ouster's Hesai on for is remarks our smear we now downright ready to prepared are concludes

Stanley. Morgan Tim with Your saw first from comes [Operator Instructions] question

a I of couple So got questions.

the more that clean more autopilot The over makers past the are cat and because China, the key next on functions dedication noticed urban flagship first EV providing models in opportunity of as after. points one of growth quarter, is and year this year selling into the that and we EV one your and about

might just have next So start the at to point an from that pipeline, year? inflection on seen LiDAR company's wanted project know adoption you based I off that kicking

suffer we broadly prices to saw supply onto in market some the that mid-range adopted Would also meantime, capture Hesai not competitors constraints. Especially, models. the still on cutting wave higher mass our from model the get noticed function the upgrade. of more So but the today, aggressively to of we competitors' first and just consider

So first my question. that's

Louis. Tim. This is you, Thank

very Your point I well exactly that's what is And happening. think is taken.

EV take know, So Auto, BYD. the to our the as Li And companies and new seen Li of NOA. And we've the you rate 'XX. I aggressively largest pushing most that will urban on models like high-end customer, Auto, climb from continue Neo, is into Xiaopeng think across

they're leading that so in area. And

behind. are Hesai pleased ones in And other we're gains. The with coming share very market

in largest we the I the of out OEMs ones. have XX China, think XX

pleased will Does our price Tesla-style up ability why we're with in answer so market have and strategy, you've -- is And very something consider seen XXXX. for us question? the share We that the lower we that's your numbers And to gains. do it these pick significantly.

Yes. to that. on Yes. follow think, That's details question, great. And I my provided want and the second the But just Louis comment additional about just players. with global up dispute

the terminated I investigations, ITC patent brought So infringement think it by after officially up Ouster. was

OEM comfortable size feel us? help global think the maker and do increase car to actually and you co-work So going more make and revenues that's with global to us to confident

think dispute global Or adopt global makers, likely you group wait-and-see urge coming you carmakers might to That light or more there of the players could to be do attitude. mentioned. actually global the any just with as the

So place while basically, in to tend near they as to be aggressive cautious will more the the car makers term. to the or more become order

your could share So with you us? view

Tim, you, is Yes. this is This great David. question. Thank a

sued a think and evidences the end, us, of the see Velodyne lot right? we very we believe we but review of to then, in briefly Hesai people and competitor's it's us, Ouster say at sued of then If I had -- have with cross-licensing interest the So to of look Velodyne course, then on judges. to Ouster infringes that the a and important a then the best history, -- in acquisitions. sort it's the rulings we

the is more believe to at that and I important all of court that are But verifies ongoing And with the in the leadership but to also declines us. also all in verifies it shows in then shipment OEMs acquisitions. ourselves always there and the very go the feeling defend not the intellectual the international past, favor global And much in there's level strongest strong definitely is the of whenever there's further customers we confident litigation, we And concern. us, it it to and termination also this evidence So while that our ability have us. informed revenue only property.

X by to selections. the just selections were there David's The to comfortable X, years add that been OEMs ones got OEMs the so ago. to year more comment, you I Those think this global the think I on remember, made side. selecting has no -- ADAS past global will far feel in X, were any

So we're for top definitely but these have X time. determinations always hunt the or at in made that this global, -- they we're and X the in in not official

work. way that the not. That's our feedback, on LiDARs best performing But can based rest assured you be or are our the

and I time, it's just are So think working of OEMs. matter those global we a

we the for a we Yes, some this not, know on is make evidence wouldn't whether don't because of or vendor. performance of extremely based do way purely decision IP was it. people for quality the know that decision have course, helpful and a of But the that to we delayed out of getting of

Yes.

So understand of performance this the in go all quality to to LiDAR year ADAS products. the that So Tim, you. us, our made and a testament it's right? all decisions these Thank

Got it.

upside. because Just we the question, presentation quarter during on actually us now, just X us mentioned the ATX on Because if -- I AP saw that results to may. increasing shift I Louis think I the surprise noticed the margin that think surprised third to last I

where more we further mix would to do what's X you information the the So following So about your ATX fourth if quarter? bit the expect in see LiDAR And in margin little customers of the improvement Pro? to case, or major the fully more we could AP to that's a sales quarters? in upgrade share

question. a great that's Yes,

will QX, account AT older QX, Pro in basis. will old in It mix XXX be P AT shipments. about XX% XX% XXX, a XXX the QX. of flip of In XX%, for And ATP, version XX%. will full phases So daily was Pro or the was

to call out that to -- think want I ATXXXP I as Yes. Pro. opposed point it's we that

major means the and better with upgrade Pro in this the In a lower word range, means is point cloud think one. products original power case, sometimes sometimes I different the a density than accuracy, it better in better interior our industries consumption. better,

a That's it a upgrade. that call version, if decided So not we major is it's Pro. not anything, a, why really to Max Pro, it's because

[indiscernible]

Right.

don't confuse. want we So people to

we So just ATXXXP. call that for record, the will

this in So it ATP. will be quarter, XX%

Got Super it. clear.

upgrades Looking forward the more following in to exciting quarter.

Thank you.

Thank Tim. you,

Chung with Citi. Your next question comes from Jeff

Jeff This from is Citi.

new around in Louis first made guidance of year. XXX,XXX units LiDAR my So the shipment the is about question next that presentation

was So my previous is understanding a year. the next guidance XXX,XXX unit

just that question. year? company and was due the I upgraded guidance is is to why? the new thing if want this check. shipments So did first to yes, new in the And first And sales So the customers? This my next

December, can the of that XXX,XXX rate. XX,XXX year, achieve then Louis a single which a month, shipment unit said end by And in separately, also means unit we annualized the this

the invest So this shipment we a This QX. CapEx. flow XXX,XXX year, do to means very close units on that much which to generation into next is cash not in target very strong need result should

want just questions. check I are first So to Those my this.

Yes.

several think push things delivery numbers the pushing was going is on the adoption the City or volume was one answered of was hard Li on NOA, very I up that's Auto and on to Urban just significantly. guidance I adoption. upgraded

up units. You to also Li Auto XXXX for forecast take XXX,XXX saw their

rate up. also goes the adoption So us helps as that

it's When you LiDAR. X, have level you inevitable, almost close get to to have

said, why, OEMs, other features. the we as a ahead And to and advanced a game the adopt especially become are as going been of in while, for City we've NOA so these LiDAR ones who will way that's saying are must. software,

Wall. like also new includes It Great wins

So us. Great with Wall Motor has X models

upgraded seen that those SOP in doesn't for -- said, expect from year quarter. wasn't then wins customers, you new would models existing And last for -- mean, you've in schedule. as That accounted I wins. and debut the so we numbers plus our all QX. So then XXXX And is account last

or in, QX. X will come X that another have We in

that's basically, uptick. why the So

my nature. honestly, know is XXX,XXX, think I guys conservative. But is probably you that's --

had point the is on Second question. a you --

Sorry, Jeff.

CapEx. is other The question

CapEx. Yes,

Hertz or now, are hold we line. has We can have lines. It The factory X right? X factories -- X X

prebuilt the first in it's is high December for Year. because the an month New So Chinese unusually line

-- is our delivery to it's So highest typically, highest always going our be well, month.

why. And so that's

high So in in it front January not as will New Chinese of be Year. probably

I So down CapEx overseas build side, because do we're necessarily it's on typically will we also as -- plants fine not but have we to well. what CapEx will think go the plans

is So Asia Southeast plans North X customers. for our in to and also X the service for America global

we're But We're right? we we're cash million. strong $XXX a in -- position, $XXX when Today, million.

other about to coming is customers in current the And other we a want are I their very shipment is to very take the you could want optimistic are is volume make estimate thing last comment that them for to The -- if rate not it, bullish, thing so and the few be do year. our about of the underestimated. that. think And prepare vendor, a to quite as

So be prepared higher than which to a means need volume that, our for internally, that's we estimate. current

done. construction investment been always all infrastructure, the has the lot -- that's the a But good a of already the on side thing because

higher So it's X expect shift. than the much second means investment. very shift, unit for we Line if Hertz XXX,XXX capacity could But what necessary. additional today. forget We limited could X volume the go don't a add Jeff, And

think I as goes. capacity fine as So far we're

demand month. units some well of their from next and demand a the above Jeff, some also customers Okay. XX,XXX year months, the real for is

prepare to needed the why So that's we new line. for

my question... That's fantastic. And second

] Don't worry. It's a [ problem. high-class

the quarter observe the number we quarter up fourth ASP Could given us that, third you color, one, about blended Sure. And that's second actually And is about margin my guidance. went GP by Q-on-Q. XX% second some question -- give great. my

XX% wondering, the single challenge ramp in just the LiDAR And fourth was mix quarter? the does XQ? in to of could up robotaxi-related the in quarter? I'm So should And how what margin further we the XX% GP this

internal be for around And I'm mark. it gross honest, But forecast reason to double a, more QX, QX XX,XXX. in it'll quarter, XX% our that. call units it, it, be mobility ADAS are the was because is QX. were XX% forecasts To the mean our is better if challenge we The you're margins it was current I right. of -- the ADAS only XX%

the the slightly lower new robotaxi will -- quite margin ADAS facility is So manufacturing have the actually hurts, that typically upgrade because But of than the a and margin it business. good.

we at would gross forecasted margins you So in remember for -- we between fall beginning if the the year. and margins XX% year, ADAS X% of the back this -- somewhere calendar

transition in the be QX to will that. of squarely double hit APP, we digits. Because We'll

next So scale. is year, numbers will hit go up on we And track. everything those the as

can you $XX guidance. internal about million So count $XX for to our is

Yes, actually less was point. revenue X that robotaxi There's the originally forecast.

an this quarter. So is ADAS

that ADAS-heavy margin even So we actually that we a pretty in take up margins take is the fact can amazing quarter. an can

question Hou Sachs. next Your comes Tina from with Goldman

Congrats on the very strong quarter of results.

first my set price. of questions is Yes. really So

of a the just first wondering it I'm all, for product So versus Is ATP much is more or AT? expensive how price similar?

similar range It's major a at a similar upgrade. a because it's in a range -- in similar range it's because

the X so are a up related in LiDAR, super see market Obviously, great many OEMs and competition new price to second also know we that OEMs Chinese but is Okay. it. to taking loss-making. And prices. of are intense especially Got the lot

at like in a order wondering how just they potential are much looking LiDAR? adopt to cut So price like of

on side, our... price finding the ASG think a in reduction we the I request are XXXX of at

Yes.

end, passenger's the -- trade-off add the cannot your a it's as it's or line. doesn't think in meet the price. of the A But safety the I end, the Understood. will to if use customers work requested the price is decline offer So it's scale in really on the lot try But performance number cannot to we customer, product always decision very and the low a lower the a want competitions and by the ship quality. end, quality a of it, between with because in and do the them. a

to are But driving obviously, Understood. more the market. we prevalent another is LiDAR. like adopting guess, be prices autonomous And in higher-end in to longer or I vehicles term, mid- like brands that quite related to that then the ADAS now question, believe that, it's or going

mass holding like like you taking So point? And mass then timing do is brand market [ what like example, the this foresee brands of back at they're what ], them for LiDAR. kind up QIT

specific comment cost, the We see think the I able hardware do about won't But to what in also a only customer. that it's not be end, we it's on functions the they develop. is about

and playing advanced when if City more isn't higher example, functions, LIDAR, to is are value which able X roll with functions. with function added to For more than by value a the you're doing compared the just much of the advanced people NOA greater other such Level out

carmakers whole, advanced think don't So in for end, as generate functions it's about value can all to a customer. I we the specific the about brand, develop the it's more more

next cost to is question my or So margin. relating

for wondering when just rate we our kind So utilization of a ramp can our full product? for up see at stage? AT relatively What growth the factory

I doesn't we've our a -- -- our for that give XX% lose target. for makes year but competitive somewhere thank you blended with it question, next leverage break the XX% by will margins then think reasons us number, a out us is and in give don't That's it's OEMs. as between good why specific we we negotiations and you, be product because it

growing. over get margin but higher But you to next can you imagine the than revenue for ADAS because AM for becomes our XX% and margin is sure quite good know ADAS of us year, is to -- that slightly

So we now, can take that it's the good. to quite

from question next America. comes Your with Bank of Jessie Lo

start because for we the we probably question also quarter not significantly, first It and the quarter. our in quite came probably well. fourth be up into to heart mass be are as the would in center will in producing entering next would OpEx guidance on reduction third My mass because

guidance into for quarter So ratio XXXX? the what entering will fourth and the be OpEx

question. good a It's

And the I number of fees. G&A side. in was because high that's OpEx actually professional think for -- mostly the

on we for hiring the compliance as a had ramp-up the -- had for for from became we've for for all to public So fees the SOX a audit the company, -- suits legal internal G&A also with Ouster. from financial, and deal we

that from So mostly side.

margin long our XX%. a X%, about year think year term, last -- our was XX%. XX%, will non-GAAP around I net be basis, probably on non-GAAP this OpEx And margin

know. we're on Next to hoping the as year, get basis, non-GAAP you a profitability

on saying the have in you overseas of because question because be, build Mexico. of control. not has share is a professional the regarding good. can plant been is would out it. fees. works OpEx there thoughts news our potentially Got some Very And But we that actually of done my plan It we would next

see. I Oh,

to we made haven't decision build factory Mexico. the in a So

we in so customers the are regions the looking in meaning prefer Mexico. different options locally at U.S. there either American North And if we because build could the or

customer in So not but a deciding that's in America. there with Mexico, some us But in North plant about and we working news for actually to actively finding might are customer the false the true. build be

if the in is plant not, start put plan America. the a finish 'XX, So in North whole thing

Your next Suji Tang ] [ [ from with Securities. TI ] question comes

with Olivia from comes question Zhang Haitong. next Your

Hi, hear you me? can

hear can we Yes, ahead, you. Go Olivia.

Okay. me. question from Maybe quick just X

in gets future, by products overseas you years? the Hertz do the maybe, adopted global for or As X OEMs, revenue target next have relevant X

because our little of a It Currently, XX% close is bit bit times of the below. higher a be revenue our used It's to to overseas mobility. total. little

growing is than I in is and the currently. much it U.S. in Europe think Asia ADAS faster

would we continue Asia increase the to So to percentage. expect

will begin 'XX. add 'XX, in volume to overseas the OEMs significant think I

be So ideally in I overseas think term, trend would we Asia. long expect That XX% this China XX% But be will at our continue. target. would

As no there over I'll call remarks. to company closing turn for the questions back further the now, are

joining you today. us Thank once again for

you concludes any and you, IR our free contact forward have to we This and Thank If feel further next today's call, please team. again questions, look to speaking quarter. goodbye. you to

call. today's conference This concludes

line. your disconnect Thank you. now may You