Cyngn (CYN) 15 Mar 232022 Q4 Earnings call transcript

Greetings, and welcome to the Cyngn Fourth Quarter and Full Year 2022 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded.

It is now my pleasure to introduce to you, Ben Mimmack, Head of Investor Relations. Thank you, Ben.

You may begin.

thank today. everyone and for the operator, us joining you, you on to call Thank release Cyngn's is press at year Investors The announcing of investors.cyngn.com. ended and fourth section December fiscal quarter XX, company's XXXX, the available the results at website for the after A website broadcast on this this of of also be conclusion replay available call. made will the the

will of discussed XXXX. components; ability to Before believe, and/or as focus. Autonomy the the Reform within call to and conference everyone other that include, we this strategy; Enterprise statements of among provision regarding get expectations started, revenues; harbor statements the terms Act or growth forward-looking long-term development accompanying operational safe sustainable I be expect, herein information the respond outlook would the environment; Litigation things, such certain and like EAS regarding by to with identified future, meaning changing Suite These and sales its to and remind Securities can ability value; the plan, deliver contains statements company's any anticipate, Private forward-looking continued and of

are actual Although prove to that from expectations be believes that statements these and to will can that in statements risks those reasonable results correct. be the to company There as differ today, could expectations projected. those reflected cause are uncertainties of assurance those the forward-looking the subject dramatically no

of is future filings any as The any included in Information conditions decision. information, before about the to the not an by law. review Cyngn encourage and associated a statements does or as assume in which changes making in risks company we Exchange to except result required forward-looking update you new the investing with events, market Securities otherwise, with obligation Commission, investment

XXXX. quarter with floor Lior Lior company's year fourth CEO, for recent questions. for financials today's to return make Alvarez, follow the highlights; will concluding will Officer, will a remarks and discuss the Chairman company's the and review operating opening a of Chief few On Financial Tal, fiscal Don call, then the before

over With I'll turn the call that, to Lior.

everyone. are know our good new very stage afternoon, all report here another you and listening I and as move pre-revenue going special We're Cyngn public out to and mission with quarterly we for to to the October since joining our at revenue are investors to Ben, XXXX. of us. company, Thanks, moment is we first our a you journey. us in Thank earnings like very a in many This call for celebrate company's Cyngn. delighted of I but outline in targeting landmark our would familiar take opportunity the of for

on solving challenges labor associated labor, error. focused accidents is Cyngn arising and of global from of the human cost high the shortages industry with the cost

fleets Suite, compete Autonomy variability vehicles self-driving DriveMod, their Enterprise the driving. in solution, to that reduce organizations achieve software safety, handles proprietary while they operate our to productivity workforce redeploy economy. Our Thus, of solution, industrial can the enables improve companies high-value need today's and to the tasks

Because their year, space, increasing is is fueled throughout to automate backbone further our improving of today the the enterprises, and a of our turnkey on industrial Unlike spaces, using all solution, our market non-public integrated which business every help of or many the lowering our their offer off industrial from new and fleets, We major of e-commerce. productivity, buy hardware we will solution vehicles with line. by huge are which growth fleets AV automation cost using aim retrofit partners, existing DriveMod to the companies, customers the industrial doing and growing option arrive industrial safety. vehicles focused of the customers Kit OEM the

a the significant and provide opportunity achievements presents it and products work. putting introducing made that play our the to strides of to video During own at in commercial short going significant EAS to and customers technological year market surpassed during a milestones of see we the and list impactful our We're expectations. the the our towards and both XXXX, hands events,

[Audio/Video Presentation]

that we've got video you I excited the done hope far. so what about

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foremost, developed DriveMod enabling developer first existing companies and and of self-driving order autonomously, fleets new vehicles we process a into integrated can that existing our We Kit in are, be to operate to to software. fleets legacy But enable software.

our patent-pending vehicles. us and existing Kit Our is deployment component for infrastructure important scalable an for go-to-market DriveMod in allows new or

to new data to and fast that harness the developing for expense improve Kit of our our receive undergo a upgrade support existing our sensing artificial our and the can a technologies. new retrofit vehicles, continuously vehicle We DriveMod vehicles features in to operation. companies would fleets innovations transition solutions from simplify package vehicle intelligence, that computing By otherwise and integrating complication for their autonomous fleet and the enhance economical into we have software develop and

of autonomous that Suite, In July, tools fleet. we launched our Autonomy Version X.X driving customer manages package of Enterprise the

cloud of when thousands forklifts EAS costs, in third X to include uses improvement expect In for vehicle global our reduction and computing to in contract a a material second features have in their and manufacturer Autonomy signed continued Cyngn's Enterprise an EAS type develop forklift a innovate multiphase building to further operations. quarter, in reach new electric XXXX. we that customers Suite multibillion-dollar our expanded XX% can XXX While we the we of delivers the Version

most fleet autonomous forklift our to autonomously, Forklifts and are enable handling capabilities globe, add to vehicles the across to this used operate EAS material and excited their the commonly we're portfolio. customer forklift

to We first autonomous the agreement fourth quarter. facility California. our Continental November, in in an announced Southern to deploy vehicles to commercial Moving contract U.S.

used another capabilities manufacturer month, sector. types multiphase contract last for engagement we the our just with DriveMod harness to vehicle the heavy of Finally, deploy in our to announced through XXXX machinery mining third development AV a technology Global Cyngn's machine in the of

a flexibility to our and mining. mining broaden EAS vast multi-traction pursuing companies cases these of and each to vehicles This across and opportunities our of the three industrial majority to from for in range on applications to logistics material on one in their operation. a to of solutions today, and testament adaptability industrial positions DriveMod the us solutions business And capabilities employees their to engagements Our heavy From manufacturing in cover industrial rely or and of to its vehicles full globe the handling, of continue of technology. customers. manufacturing the serve operate presence more the construction, logistics relies their or is

cost. at However, out significant tasks comes these reliance people carry on to a

U.S. $X that these to fill by is first most the people economy alone. in a estimated positions. trillion will manufacturing of shortage cost these the is It XXXX, The pressing labor industry shortage critical and of

year-over-year. costs environment, cost Bureau the as increasing. civilian compensation is the to According of employ Secondly, to and people result year higher workers a the the cost X% and in a This period. ever XXXX Statistics, in increased of operating vehicle Labor benefits on ending macroeconomic is increase top for the labor for wages a shortages, December X.X% of the of and by growth making

to their by potential there’s $XXX on to has while extremely billion an many workplace and high-risk for employee be nature, sites, cost have are businesses accident to in keep than for Every workplace companies. employers. environment. And accidents devastating effect for the everyone preventable XXXX. a the more costly seeks industrial Finally, With absolute working at incident minimum, the life estimated

perfect plus weather alongside reasons we defined, to are three a general In vehicle are being can decision-making growing allow for are efficient, adoption. so work solutions companies the autonomous attention more early safeguard vehicles, amount which Employees company steps safe. environment. and employees of to addition, them Industrial to are to we more to environment space element and AV in that of more getting them investors. to Things their slower and think for with trained reallocate easier solutions repeatable ESG, takes be on industrial Therefore, are and public. is the tasks whims start autonomous seeing focus keep interest employees that more environmental creates high-value solutions. to candidate are a from the allow These more employees from its the more of is so huge vehicles. variability, Environments the autonomous for automated social just of exposed

large-scale of well addition positioned fourth by Cyngn's is the industrial suited advantage In revolution, being for our technology adoption to customers. take to ideally

on focus technology an initial has overachieve adaptable in resulted autonomous public when a Our developing solution applied roads system of industrial requirement that the flexible, settings. to on

our existing built in as manufacturer DriveMod acquire. their all As Kit on earlier, new by our contract they to firms mentioned our technology I allows vehicles implement well fleet vehicles as

a company the single the ourselves very in vehicle we future. through we position and possibilities their excited control in enables the software for to system. Insight Cyngn today Therefore, sophisticated Our find are

OEM ourselves Chris robots Brain building over secured in automated of on customer partnerships and deployment initial square customers feet autonomously previously having coverage order engagements. from Head first stockchaser will thousands billion an During best XXXX. manufacturers Sales excellent XXXX, position we our our to with a In further he Chris appointed to where pedigree in do notable deploy recently landmark this, to December. Wright we XXXX, of Corp, to of advance has XXX commercial leading success our and initial at as worked

of enabled engagement. development forklift of our the year follow forklift aims to by targeting mass our customer we're our Kit into from our automation. positive has of and meet far, the extremely to our is for forklift market very Feedback potential expansion fleet on customer the DriveMod milestones been continue excited so release to project, Second electric

space work and an in sometime vehicles. development of during out in suitability early with stage continue industrial the heavy the where heavy we our ambition products is year. mining technology Finally, the the next this the environments to on industrial to engagement releasing the to prove at This we multi-stage requirements year of meet for aim commercial contract use of

call With that, to Don. over the turn I'll

Lior. we've several a But questions few past of over now through that summary it America. confirm with to like Cyngn I'd Thanks, relationship of the brief is our days, about first, financials. Bank I'll you take had because banking

that financials. way, I'll the out of with to Now turn the

the quarter phase of as revenue first XXXX. bring the as a a public quarter during of this first XXXX. new $X.X reported multiphase to mentioned $X.X contracts and operating same in million public increased from I'm vehicle to ended Lior one a million our related $XXX,XXX part contracts million. period as value administrative to December will remarks, market was expenses, total expenses of XX, related to types revenue, the due booked have requirements were of the and first compared costs that higher pleased the company. with to general very signed of company in was $X.X for expansion These the and development fourth The operating in to stemming $XXX,XXX Total partners in the increase company in As report contract of engineering of XXXX, amount we we NRE two completion nonrecurring his commercial

fourth quarter incurred of the expenses Research related engineers, as and development fourth of to managing larger compared XXXX also continued high-quality expenses hiring the expenses of the we a related to were other and in to additional quarter team. higher XXXX

million XXXX, development for were operating increase the to year related expenses engineering to $X.X full to was increase part XXXX. total a $X.X increase mentioned $XX.X research personnel above. million and the million in due For The in in expenses compared

R&D the we increase our team, expenses and year-over-year therefore, to continue expect these higher to expect to We of be during XXXX. size

expense in mentioned and and administrative included General On additional costs of earlier $XX.X of quarter compared expansion renewal an that share basic higher $X.X lease were $X.X or $X.XX costs well of or due stock-based net to per diluted a share noncash additional the fourth related expansion by full of compared a and basis, $X.XX increase and XXXX. basic the diluted in million diluted Fourth a a in to as company loss quarter in compared $X.X to was share per year $X.XX loss million XXXX expenses or net million or year and million $X.XX to net compensation our share million loss per was as facility. basic the compliance the the and per prior XXXX. to $X.X

to XXXX last Turning private unrestricted million, an with from to $XX.X completed ended million due placement year-end approximately We the of short-term balance the $XX.X cash we year. increase balance totaling and sheet. in of year cash offering investments April the

slightly year-end million Working of XXXX. at stockholders' at was million to $XX.X was at equity capital XXXX. $XX.X And end the XXXX from the compared million, $XX.X of end up year-end $XX.X million

detail on the the numbers was XX-K Additional filing press earnings SEC be in later today found that this anticipate issued and earlier with these can our week. that we release

turn it I'll for remarks. that, With to his Lior? back Lior final

not set was slowing here. on bring the industrial use our at transformational exceeded we We or us ourselves of for vehicles end space year mission down. of and XXXX a autonomous met and work XXXX all to made all progress Cyngn across amazing we're milestone to who the and the

to as many heavy industrial as forward updated all our to forklit autonomous look of you products. keeping possible bringing solution I During these tirelessly and year. in the also to locations XXXX, we'll while developing stockchasers our throughout our projects market introduce on work

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

[Operator And O'Neill Theodore Litchfield the question our Instructions] first Hills with line of Research. from

paths for DriveMod you commercialization the you to have have So guys -- multiple stack.

wondering paths? these mining is, You've XXXX tell a information a as it XXXX? are was which forklift, interesting promising come equipment can for is the or pricing looks explore retrofit you or one And follow-up you product. to stockchaser, got more any that the early OEM to us it discovering the And multiple as too and I

Hi, Theo. Lior. This is

material, really paths, customer on is these the look It's with vehicles it through out human inside management tools automate and or applications, it's allows the replace the it's manage vehicles they product So different or to what stockchaser to and the the fleet. warehouse software or over but the right? of vehicle. mine software our take construction that our software, OEMs. different different EAS, the to on partnership even like the different It's observe implementation logistics us might a whether and the that in These fleet support the in these allow the

that will readiness that If the year, logistics you this is and you commercialization. where advanced the focus Chris Wright, been And stockchasers, and milestones throughout on our its the releasing is see have the followed manufacturing for the we've new most in and that you vehicles ability our of one the these of efforts on off the really Head using customers integrated, focus Sales, line manufacturer. like is said, new our in line going to to most across with taking either to manufacture contract

industry that The heavy both and in you other two announced, and initiatives the mining development in research are phase. the

They're over to are the both paid commercialize which that today, them. evolve projects allow same stockchasers the us stage into time then will will

that at talked going other the two that next them have are available market things of sales with stockchasers and what 'XX these the development that's probably conditions, slightly the of one we And and So timeline but to forward. and created in accelerated moment initiatives would to year… are the become The pull earlier been mode in about some threads, we we do planning otherwise in 'XX different. is three are their the is

you And interesting sense. makes terms pricing in That anything of are on this? Okay. seeing

are Yes, announced Theodore. the we've Landen, have. And that way, commercial we we win this by first the has -- Ben

So win we Continental. commercial with first U.S. did announce that

lot established that building operate pricing of the essentially shared on certainly opportunity was the sits these our market that we IPO through and validator that cost the on labor to a a we of of had that based through So vehicles them. human great data that

sales from team validation getting further of available having commercially and expect are are initial that are and validation Chris that in customers Wright continue the ongoing the we form the that stockchaser deploying to seeking solution. we there and So conversion

comes the question next line with our Dionisio Capital. And of from Rommel Aegis

I the you just delved occurs said lot Obviously, into and a wanted had you that sector. something to earlier, follow mining in materials up little industry of handling on overseas. opportunity a

those specifically significant that or be And think So expand and about the opportunity do building sales be guys I could sector? feel wondered, mining that, to you in you to a you materials to address international do opportunities, an for handling able how the force just preparing internationally.

the today. really customers, company that the the OEMs thank to a and footprint company leveraged the of Hi, Being smaller, joining software have take of fact for they with software have can working us what Rommel, company. advantage we for support relations the the in installed and remain is us and a they system as allows vehicles their a have whatever in entire they where is to close you top have more to them on collaboration

insisting industrial and other regulatory working on is is from staying the that applications is cross-borders much means for our public focus of space the The the on us. accommodating a and component important consideration less our more as away of roads implications

OEMs, of really working private to relationships to these presence ability automotive, So on throughout globally we're road, the and combination that through spaces complicated with equivalent the to [VMDs] less their these a] the local global have two the [meet be expand robotaxi it or allows own our impacted the and through or remain has And than anything us through anything hurdles. and regulatory deployment. the truck in go

Okay. And on the front. just revenue

the on of congratulations your that? extent outlook -- revenues. to those a that. into business, just part all, as for going that see Infinitracker playing strategy sales And those that in To an of First what maybe your part incorporating initial update Wonderful into on XXXX?

we additional doing, the that Rommel. to the the see learn vehicles have Lior's the propositions value of as ranging various and to this that bring that that insight, EAS data fairly provide business expected we and EAS more of that throughout more, that offering earlier Yes, since to consistent that from been that work -- let themselves is umbrella their point from be they're captures automation. of data that see terms assets the This IPO automate really we Ben, in Sure. them them value touting revolution customers to would give drive types about all

see that are It's to standalone product. natural than an much So need own as into fit when alongside we tracked. be that to more a vehicles as working assets its Infinitracker cross-sell opportunity the

to expect with dovetails to and consistent remain, And to additional opportunity overlap the effort create customers is to say, we Infinitracker have EAS. that for value really so let's an additional peripheral its in

with the from Tuttle comes question Singular next our line of Darin And Research.

on Congrats guys. great quarter

think non-reoccurring forecasted of contract related pilot to million. I full to $X.X for revenues around I that would -- latest engineering have fleet Or partners a the vehicles include that you of of these contract vehicles? question non-engineering a just Is related have? that some

categorizing development a as we availability The is described state to be work. bringing Lior that precursor, engineering contracts, a under that offered is can a that are those general platform. they vehicles to contract release, EAS that reason NRE as as is the work that specifically is so on the It commercial-ready general

really come fruition, is we're new deployment is the help customers sales, which be opportunity. and justify I this do to we seeing customer So to what can find say to flywheel that customers or and between to sponsor lead work a R&D that would for the

ready would from commercial we with from work. transition reach release, along customers to is that vehicle have chaser. by the share we opportunity through landing saleable into validate one that that's cost what do point that we solution revenues certain so stock leading type of needed driven to development we of And that that Oftentimes, with NRE, generating the and as burden commercially customer, done be validation way, this when type of our engineering then the

steps be the largely EAS. while what what be to other play That readiness is process. vehicles on we out commercial revenues you're a seeing for we repeatable offered prepare to So first expect generates in

of you. then that working those I scope trying that is in mining that I vehicle Is indoor sector? the that contract, vehicles? of specific Okay. got will got a the location? multiuse Just in like for use the is that outdoor. determine you. to And mining specific for Or potential so terms case be of a for one, that or

But of amount is the of at in application primarily I allowed can I say am much that constrained information I applications. open as first so to somewhat as I'm about share this this can that type stage. That's outdoor, share targeting here. pit Sure. mining

Got it.

the last on of Okay. left question know on And relationship banking that quarter guidance this cash then guidance end the America, expectation on of quarter? cash guidance me. that Any or to first Bank for with cash I existing just XXXX. but balances. of just at here any end Any over

you to Nice Sure. Darin. have the call, Yes. on

So into for the we've we're million]. the -- the had quarter [$XX.X pretty specific that enough cash at guidance, that's quarterly without -- got And end we getting year. cash year of comfortable

quarterly do probably So see you amounts like. the the math and what look there can would

be quarter the dramatically Our first burn going from different rate for the not is fourth to quarter.

next question Brian line And Markets. Capital comes Chardan of from with the Dobson the

news contract And I the Congratulations year. that customers later Continental. on feedback what's been around, similar the suppose, speaking would as you this you're with you're U.S. expect that potential from spreading with? like announcements

positive have We definitely response. gotten

using be brand who swath a in of about the are first in have Of early you friends who USC to whole to be going adopters quick their who and our second technology like domain adopt. a those ranging a into to a late to and somebody customers risk like to way know or is your averse are from want to the and use and are the adoption more see excited slightly at all then they course, being curve that people mover

now way we're curve. We're early that adoption So our our making adopters. through finding

additional along demos you we're that year. impact enable knocked lines available over and easier our to more and opportunities the of exciting vehicles USC, stockchaser USC facilities. up absolutely certainly to with customers what customers, this hopefully work first the opportunities are be is the success And throughout and hopefully from come to at and from that come over setting have on all yes, potential getting, States to we're at positive see feedback site to stories United the the se for we for with commercially We've request sharing streamlined a domino focus have see seeing the that various per sales

Yes. color. Great.

been there's Cyngn? automation you do about So of this area use see a vehicle of about as guess I the you're discussion technology. years, industry in replace conveyor key supplement as or for thinking to the coming belt opportunity the

things or a stockchasers deliver the large conveyor facility manufacturing implemented of were a the and line -- a difficult on configurability. that One for logistics the can is is flexibility and

the Sometimes changes. workflow during day, the

Sometimes the way at peak times to you very bolted workflow in that's a it's conveyor when difficult need changes. and to change doing you have those large the facility the

of things brings in be that and ever-changing facility the think it's large additional so adapt is the settings needs we ability these one So and to do industrial that able be an investment. responsive really without autonomy to flexibility, to

conversations need they belts. areas down right maintenance. people, and miles to primary conveyor of to actually it's and/or of help And type run run who question. multiple of with very into have large is necessarily a situation, also add just little color that people customers repair very little conveyor an stockchaser additional conveyor vehicle the which which had a parts bringing -- your out for a there out customers is shuttling that. facilities to we to like who maintenance a -- break large I think process And belt bit a use And I streamline and not potential either/or of the bit case belt read the the in utilize

brought then autonomous our being that And you that operation. definitely attention that to -- cut downtime down of imagine, And it's time-critical being type becomes with very as and can a vehicles significantly. might doing

opportunities So we're seeing those supplementary stemming both from solutions. also some of

There And are today's time. no this teleconference. further questions at concludes this

great for may participation, Thank You time. your at your have a this lines you disconnect and day.