Cyngn (CYN) 9 Aug 232023 Q2 Earnings call transcript

Greetings, and welcome to the Cyngn Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference to your host, Ben Mimmack, Head of Investor Relations. you. Thank

begin. may You

is call. and of us to conclusion one announcing this today. second made at the XXth, for operator, of on Investors call company’s available broadcast the Cyngn’s on after will for hour of the website XXXX, June ended joining The A quarter approximately at thank you, the the everyone section replay you investors.cyngn.com. the results available this Thank website press be release also

Before I and everyone accompanying meaning certain started, Reform Harbor we this information that of Litigation within Securities Safe statements Act contains remind get provision XXXX. to like would Private of herein conference the any call the forward-looking the of discussed

as These include, forward-looking and/or ability development regarding to changing anticipate, environment sustainable will outlook revenues, and other future, among of to expectations long-term strategy, the value, statements the and and plan, focus. its can expect, be company’s such sales statements operational growth terms believe, regarding things, products, continued respond deliver commercial identified to ability by

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

investing is investment Commission, in included an with Cyngn its the in before risks encourage we which Exchange associated you Securities with Information and about to the decision. making filings review

or by events, a changes any otherwise, update conditions, as forward-looking information, to any future obligation of The not market required result law. as except assume company does statements in new

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

over call will turn that, with to the Lior. And I

Thanks Ben. Good afternoon everyone.

plan quarter, new business, second customers all deployments. progress of and the to sign-up made we significant in areas a commercial the During on particularly but

In the to few opportunity for of weeks. detail about a a our I the Cyngn want announcements brief over moment, first, I'll talk and those overview we're delivering we've in new the story, made give more to past But major on. significant

an solution uses addressing that's autonomous vehicle We're autonomous company focused industrial on for vehicles.

vehicle agnostic labor to autonomous shortages, harness the industrial safety, reduce enables to and labor. enterprises overcome Our software increase costs associated driving with

the EAS, or artificial around Suite, to enables navigate to it. intelligence Autonomy Enterprise Our world use vehicles

Cyngn have in excited And done on manufacturing, increasing in as the vanguard of effort. way in other use one we been of safety, productivity, the all of cusp gets sectors industrial the to and logistics aspects proliferation to companies, of see AI the of work the efficiency development into transforming and the The pioneering AI AI improve of is life. is

Industrial of firms and remain destined to a which bottleneck workers. pool today the available changes to continue experience demographic sentiment are impact significant worker shortages, of labor

for positions business, surveyed of applications were to two-point few in National they July fact, increase Jobs from of for In XX% or Report a business June. Federation trying fill, owners reported Independent no the

Companies to latest compete efficiency improving workplace are safety of automation on who peers also are deploying the environment while technologies. with focused the improving the

for the $XXX today. conservatively estimate on Given these operation over the billion is industrial we needs in that in and industrial self-driving the today, based market world number of vehicles vehicles addressable

in stock are chaser agnostic, our penetrate deployment initial A perfectly Cyngn's the started commercial solutions this we flexible, vehicle market. quarter. first already have to process with designed

major adapt drive global technology more second our During to continued OEM. contract we the meet industry on localization milestones a to NRE heavy paid and quarter, make progress proprietary to

industry Technology not improvement. significant the and successfully potential multiphase would for project, the we an mining drive in with which allow had of X used Phase operational we April, Autonomy completed to increase vehicles In announced implemented Autonomous this in uptime that Mining currently

announced that Motrec, MT-XXX of Autonomy we with recently, Tractor. More Cyngn's we into a vehicles partnered also Technology manufacturer Motrec's to electric integrate industrial

is offering soon And environments. MT-XXX of and a X,XXX pounds through Cyngn's Technology, various hauling of addition the of capable capacity. towing be robust The goods, safely vehicle we'll autonomously industrial with

solution Motrec type our Tractors multiple FedEx, industrial popular the own customers Autonomy vehicle customers and sizable an Walmart. notable Tesla DriveMod fleets to operate offer another to We're excited globe, such and who more vehicle to around for even as GM, very System compelling types. of potential extend

agreement Heavy end an enabled now Turning one of Manufacturer the chaser with facilities. XXX to stock use product. At we Fortune many to in DriveMod chaser of July, Equipment our announced a their stock DriveMod our

chasers facilities the in future deployment, deployment This significantly the DriveMod solution. our customer out second chaser commercial the potential stock stock and of to hundreds the our flexibility globe, initial grow the has as prove chaser and across of uses we capability in stock

stock for you additional a testament to for to Cyngn. updating Autonomous demand the and on approach market need further offered innovative vehicle flexible through of autonomy the remainder look industrial of is year. to This forward chaser deployment by confirmation I the

XXX when Our that the from DriveMod and significant yesterday Project occurred Autonomous our news we enabled from have a Autonomous biggest announced secured development Arauco. shared pre-order we Forklifts Forklifts recent just of

we of global furniture need capabilities. will Development the from resulted sponsor wood to adapt Forklifts billion and the $X development to Forklifts year. last leader supplier, self-driving the a a construction work industries Arauco's in BYD Project announced the enable Autonomous and order successful is Arauco

short the why will that the available product capabilities the XXXX. in for securing that Arauco already We'll highlights now show orders firm the and be and Autonomous Forklifts a of we're placed DriveMod why video order demonstrates

[Video Presentation]

other we proprietary automating successfully leveraging heavy a have challenges already with by pallet autonomy the computer unmet previously which industrial of providers. vision pockets, addressed AI By Cyngn's and algorithms, loads was non-standard task,

customers the potential efficiency, In expected are mind forklifts of and that these enhance of improving wherever to majority they benefit utilized, addition are front safety to autonomous customers. a is for

few brands products, transformative to requests for industries pallets the all year. progress for automotive in products anticipate the have on commercial able of major Cyngn. for growing The past defense has current last and and been to I second Since seen also have commercialization you, made we being we in interest over updated months all our and in success including half future commercial and we the our further announce the significant

our leaders will So of stemming XX of next Sean the Engineering from of new year, on years focus success commercializing the quarter. requirements this we and on of meet commercialization. Felix our second two during has brought Singh, technologies. Stetson, of Engineering; over We experience VP VP the each Services, new emerging

will and and of commercialization EAS customer our in our development the hardware development, second software they be impact Between a success overseeing and Since for have continued significant quarter, functions. and them, Sean and Felix on appointment development responsible progress customer both the their of offering. support

eye way and long-term Cyngn a balance and benefits a cash conservative We to use of company close with the financial We intend situation funding stakeholders. to our the seek success to ensure of that continue keep on macro in its growth opportunities a shareholders.

with process, We with As that Virtu. part ATM during utilize S-X second of ATM not filed an quarter. SEC, which includes did the the the we an

it current like. looks giving what I our it moment, be flow month at to a forecast million per think approximately can At broad cash the breakeven. require any profitability while at circulation. generation approximately pathway cash a burn $X,XXX asked often would $X are current we the of And illuminating month, EAS out lay cash and XXX licenses flow We're not to to stroke

vehicles the supporting of licenses, customers and is and Obviously, cost we're addition, but we for worldwide, customers path does in identifiable many of today, the Cyngn. of calculation industrial this to these achievable fact for working think with or, hundreds in potential profitability operate

chaser in availability XXX Arauco the Tugger, Given DriveMod of and forecast has considering Motrec firm profitability traction confident only order fraction XXXX, represents reasonable new the stock only solution, seeing the DriveMod in the we're with time increased recent in of of in fleet a achieving chaser frame are weeks. a of which the stock

I like to shareholders, We thing to through want of and more any one over the to results. views our to I mention may Don answer have. you before go we value the hand questions financial There's would

time. verified during at a We welcome are questions next we with investors@cyngn.com able few to that post But reach to have to set in You will we days. where be Any look this at page call, can't cover engaging any will up management. we to shareholders the sequirecommunity.com, for forward out all. also answer you

it to And I'll Don. with over that, turn

Thanks, Lior.

first $X.X million to Turning quarter months public consecutive respectively. as for XXXX, The represents booked our in our second financial and third of $XXX,XXX revenue, QX quarter the we revenue revenue-generating company. results and a six

and Arauco new the of global the signed to XXXX the and vehicles the engineering was the to contracts we with that bring for all revenue quarter OEM we first industrial of heavy months six to recorded second market. non-recurring two related Substantially equipment autonomous a

in Total as zero costs second quarter of in compared in to the quarter of revenue $X.X to part and was XXXX, $XXX,XXX to second the due increase expenses in compared the million quarter of $X cost second million totaling the were in quarter the XXXX. corresponding

XX also were our added XXXX. R&D increase the increase for technology. a development expenses remainder in We related to support months will an as result expenses in personnel to that the $X.X past increase million higher and Costs over research expenses of development continue of and to anticipate the of

advertising an expenses, the increase a in were legal higher and to expenses and in G&A in professional as and company. personnel-related quarter costs, increase Second also other of marketing growth support higher G&A fees additional year-over-year result

$X.XX share. per to the was $X.XX Our of loss net XXXX. second $X.X loss quarter quarter net diluted and diluted basic a This million and million share compares for of or $X.X second basic per or

and the year $XX.X Working ended capital of was the million. stockholders' the the with approximately of at equity first with end $XX.X half investments, million. short-term of $XX.X cash totaling million, unrestricted quarter Cyngn

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

it That concludes final now turn I'd Lior remarks. and his financial like to Lior? back commentary our to for

be the developments following for some year. The have a an last with delivered and call, and to to with order project, to for Motrec, forklift our have Since new said a equipment partnership be order with a rocket exciting announced on announced On you have this we last, we manufacturing partnership last delivered. announced an that forklift a type spoke on seen we we Cyngn. we our for commercialization autonomous focused summer, of delivered autonomous in our months with few forklift product vehicle launched very our industry household were name heavy autonomous next chasers BYD

have we work the this like look to their effort for to you and far the keep the to meet thank updating everyone created of We company so our at on is I at Cyngn to and commitment delivering our the future intend on is that opportunities hard market allowing to It I would forward us successes. everyone year.

I Now, for call would like open analyst questions. the up to

session. a you. Thank At your answer first we'll Theodore from time Litchfield Hills conducting is question this with Research. Our question proceed [Operator Instructions] O'Neill Please be with question. and

general Thank you a first needed the number one to of operate I if you, know, run business of and have a autonomous to, require quarter. the question sort general could compare good versus of that of And of factory? a sensors safely. inside the cost just sort and the EV sensors about number you was on and cost in you wondering, is I congratulations the challenges of

think by you is lot question. associated high speeds driving driven everything work largely and I problem The Hey. we automotive the that in the space, at out for when EV, Landen with needs things. Theodore, the Ben which of here, and in a we is this because compare by the space thanks and cost dealing dealt the with chose the that few to the they be design a to limit domains with does world, this

products some horizon anywhere finished be is off some it Very our seeing city we're which able now. customers, for city. drop to an where need different up us from earlier you anywhere and lets One have situation to in to in a pick having

on horizon shorter lower -- speeds, so goes we're product operating we when of in out means that you object the of operating not a at need general around don't and an for that us since can miles out that speaks byproduct So And public see anything road, the we're example, XX, XX see readiness per that the at there. we're meters is trained surprise we since personnel, do open to that to, XXX hour. that traveling front and can the having

high if there we're with is We in. a the let's traffic being hour, the have, per there's scenarios, long-haul to of that, can't miles that into it, needs because do enter able We call traveling failsafe that example. luxury truck for slammed, be a to not which facility usually the know we break situation manufacturing XX where you maneuvers, can we do know

to was and been have you And the line of that vehicles computing way cost what customers savings views at a our only mundane travel way required, which operate all that include vehicle old ultimately sensor the intensive get of around offers to smaller look work. It compared means safely. a is that EAS less people we the to the warehouse. in so have of need cover still comes because the you world if space when as work include sensors you bottom licenses, the on the of and means the cost doing analyzing When to on-vehicle XD subscription was the with it, you're sitting the labor substantial to kit, doing to back human on and done our to not

Okay. or annually Arauco, $X which press million XXXX. the $X math out to by targeting About August the my and X million cash the works you monthly could announcement June XX% start say release, burn, of in represent with it

one, questions for of period, the the once my sort over a units does are, right? And So plan. this time more? say, about or second Is at longer out XXX or is year out the go math is two go a this all one build

to first. what up work so look ramped we vehicles We joint interest ramp-up as delivering question XXX. I'll We, customer shared the our for as like in with preorder to second that those a and haven't will backwards, guidance and start as in value. well -- signing getting don't the the those then mutual have

the that only to we'll there. do. -- we the as that OEM with supply process our a can, room be presents there's order everything be very as So with chain fleet it we of in as quickly get portion to working reach And ramp that we to take a place as and that a closely sense as lot will first with partners, saturate can exciting need of much their with to makes a beyond which grow that, quite opportunity automation to as fleet, to time of we expect captures

yes, from. derives page. and is roughly then, in And terms calculation, XX% right of where on you're numbers that the your That number the

that So it's based roughly publicly been we around the current have that's burn shared. rate

see the opportunity, beyond it the order but And operating we're and at the so chunk to our a opportunity of is we where initial as excited grow that, far to as into have meaningful even expenses. be

Okay.

if it cash the be XXX% up, it burn. of ramps So could

-- that of some is were blended as expect and we opportunity say, customer order from as already surpass vehicles the that, just that true I well where of mind that a of prices, the statements potential in with license of momentum. a order would out current numbers without see small of burn provide, from providers initial kinds Yes, numbers who rate that with precedents alone that XX% very that that have chunk that be which those order we positive you to surpassed there substantial as in far quite future already on from even a We're far would let's automation other reach volumes. and Arauco’s the Lior's you can Arauco the taking initial we're total going as the not are provided when average which represents of with $X,XXX a, XXX a consider portion are on providing yes,

Thank you very much,

is proceed from Dionisio your Please Rommel with question next with Our Capital. Aegis question.

afternoon. good Thanks. Yes.

some more us such marketing if is a just this new wonder, a of Thanks. near press signing contract rapid really impressive give amount flurry. I a of Is the could in slightly. success leap? little terms really on how us give front seeing a lot mean, You and I success personnel wonder driving releases of a on you on could just you of Lior, Congratulations flurry color it brought in are seeing And little kind guys had that. you’re what a here you of have if technological time. I term. color huge that's

to hearing you good again. from Rommel,

you in a the engineering brought team. started the years success. So what leadership, We key solutions, development some support experience both selling robotic is very alluded experienced on functions, automation building one in very customer and we including grew We important sales with team to, of solutions. industrial

that the it and that is operation. But that, has on team market the The added made to interest cost So based just prospective a Automation lot that announcements, structure also other is seeing on more momentum with the of Industrial to been the the new their see the in people I company. into of is flexibility, recognition customers. it or impact of more last a coming and a lot brings inbound our lot compete And you're so quarter have that new getting as of the these opportunity ability companies. we're from

a the just I Thanks. you've industry follow-up. you in about And just in updated prior if specifically. know wonder I some quick could give there. us mining And talked Great. of calls, thoughts your the opportunity

course. of Yes,

Stockchaser, facilities. the the vehicles of So remains like very year's And That industrial the see company. still logistics, readily complexes. for the remains usually the handling are focus of main predominantly large there, focus These and you next manufacturing or warehouses are material upcoming forklift. available main company Tugger to

more up sales contribute the and industry and team onwards. Arauco to But the This and in or Other heavy clearly, additional is is is that focuses license-based focused on company the where commercial mining are generating revenue. scaled XXXX like lining where applications, preorders on the rebased is ones these this revenues, for the are recurring the phase, in closest to these one deployment. including that R&D

Great.

much. very Thanks Okay.

today's conference. This concludes

lines we this your disconnect you may time, your participation. for at You thank and