Mobileye Global (MBLY) 27 Jul 232023 Q2 Earnings call transcript

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

It is not my pleasure to introduce your host, Dan Galves, Chief Communications Officer. begin. may you Please,

business to periods quarter Please ending contains risks on today’s welcome it. currently call statements Such note earnings for discussion involve the based statements the July uncertainties. forward-looking as Mobileye’s and we XXXX see second and conference that, environment Hello, X, XXXX.

that press results actual to materially. the Please includes information cause refer accompanying to on could additional which release, the specific factors differ

GAAP call, we release. figures. will refer non-GAAP GAAP provided both is non-GAAP of earnings this to A and in reconciliation on to posted measures financial Additionally, our

us Prof. Moran CEO Joining on CFO. Shashua, the Mobileye’s Rojansky, are call and Amnon President; today and Acting Mobileye’s Shemesh

Thanks. now to will over call Amnon. And turn I the

thanks Hello, for joining everyone, and call. earnings our

better first were cautious solidify half growth production to on than much year, our On for higher of side, half. half but XX% the where second year-over-year we the to revenue expectation. in than we very first to the below the the schedule which volumes the in-line quarter led XXXX, seen normal grow the have Customers of expect was

with nearly better-than-expected than original points adjusted midpoint guidance margin XX%, in guidance, up is our was QX. higher At Profitability operating the margin versus of XXXX for January. operating three updated adjusted points XX.X%, of four back our

in engineering, plans The and spending results side the macro continual returns. to is on of cost and and good optimize our customers reimbursement, on factors, of news a heighten combination negotiation of refinement efficiency a order

more time. growth good This planned compared XXXX support despite XXXX. operating we moderating rates in future still levels XXXX, lower should leverage see to operating to growth of XX% in for we over expenses the Importantly, OpEx years and originally the base normal

OEM towards and advanced product established Turning to to count and OEMs advanced move like stages phase. we portfolio, more SuperVision what Chauffeur. design products for development nine consider win We large more now prospects we and for can the continue business our

are and products not to role we segments process often brands, different Chauffeur the cases, bundling SuperVision performance launch and about the most physical anyone. the like have OEM design the The customizing across system, what the in is of competing of the In the negotiating against system and convince and domain of various date. will testing OEM establishing legal

of the displaying, Beyond multiple edge our our distances, testing efficient, performance. in and road long what cutting portfolio history cost scalable, to efficient, types appeals product conditions, leading and and OEM and execution the ability prove engineering, across to that design all above capability our is are is physical

computer solutions to scalability, terms the efficient are sets technologies eyes forms and In the the remapping processing core boosted that hands baseline of way all on, eyes hands on, of IQ the of vehicle all and for off, price from points across vision platform wide off, range relevant off. and feature extremely by drive

REM which recent class design capability recurring group the ADAS and success to NED entire generate to Our across XXXX ADAS, is subscription across Group early in Volkswagen functionality new a cost the XXXXs. the platform, revenue. over added centering was to Since this other have good a provide enhanced an of opportunity and this example. the of all for relationship well a to leading work Beginning many leading mapping time. most led functions, low Mobileye provided the lane providing into to relatively OEM product, REM with exists The call among link we group Cascade to way used XXXX, cloud vehicles

with Next, Volkswagen SuperVision design we have the the Porsche common brands platforms shares Porsche. with premium of win other Group.

brands adopted by to SuperVision the other of we yet, economies expect scale. formalized While increase be premium not to

already bring SuperVision In to are excitement expressing record fact, executives product. on Audi and their to Bentley

our is of is also consumer customers OEM The SuperVision based our to the on culture SuperVision surround controller Chauffeur. computer the bridge solution of for IQ REM, to benefit level domain vision, it eyes and a baseline additional An that for. creates

The which result difference enabling significant obviously systems in perception meantime in failure, of. in increase eyes system of the is between radar, the and is which secondary made LiDARs key up the to additional

In on Volkswagen other conditions been there On which ID service integrated road news multiple has also words, mobility broad recent and delivery our a types. disengagement full front, driver systems, a by This as in set under have a forms Buzz the drive for U.S. both into and for commercial of baseline been solution. of Volkswagen’s self-driving mobilize vehicles our Europe. testing this

demonstrated recently months Volkswagen media only to and has technology is. how already testament a after analysts working The this together fact these is vehicles several with that us of evolved

and provide vehicle selling mobility-as-a-service point probability to price same to OEM. both and consumer points based all huge on across technology for efficient ability the core The high all solutions products is proven owned a

and in As software own to is and provide secure differentiate the also the system increased to their flexibility technology, of order ownership both deploy OEMs the our tools enable and true develop to of we systems. to

team For create tuneable experience. about can unique example, SuperVision a Porsche Porsche our parameters providing customer program, that with engineers is the software XXX to adjust

policy allows for we designed desired driving this system. As one as language one on to top an we tuning tuning, a code have formal driving which call our driving enabler behavior operating shaping policy describe of policy level high write that the

EyeQ that Then such to mobilize the functions monitoring on or potential parking we non on deploy the offer driving of the to within them bespoke software well cost additional automated the as as mobilize top EyeQ, saving Kit as EyeQ. have stack integration of

is Moran it on of to road. vehicles turning before the topic rollout Final the to software ZEEKR the continued over

being know, is over to over air full SuperVision updates. As to time capability the you delivered ZEEKR all the vehicles

other this. started as collection a than those behind of The America map done complexity North in but in China The and China is and built. key to it China regions, through data data that later is Mapping be means quickly Chinese in collection much coverage result is Europe. partners mapping must

months number of highway many recently beta full for a to All pilot to until the users. small have fairly functionality available assist now, navigate only system very point was a point but on sophisticated ZEEKR vehicles had

pleased number of good. very we all very significantly to on rollout We Pilot with users that are users full feedback Highway Navigate weeks. within expect has ZEEKR broadened been a and recently Initial the

much ZEEKR other system is ability heavy and changes in areas, many better NOT curves. lane difficult construction site highway like performing systems without performing in within than maneuvers traffic takeover terms complete margin and of situations to

that also have most the it performance efficient heightened the experienced. of the the competitors system Several focusing pilot Influencers navigate capable human-like strength and calling media the and car. assertive on versus highlighted of ever on

around other the eyes-on which system following is proof map, rapidly hands-free significant be in and outperforming. built is a feedback developed has other much ZEEKR’s customers out over been some is will in negative point the to it than regions market difficulty more that China Any months. The OEM

we non-engineers have of vehicles gotten more actual test OEMs that other obviously is proof powerful. benchmark This have points own supports from their driven from a in the performed feedback production much by tests environment, but

over I turn guidance the detail. to more over now financial go over it in Moran the go technical and results to to

thanks everyone. Thank for Amnon, and call the joining you,

numbers measurements. my I to of profitability of Before The indoor acquisition non-GAAP intangible is all refer which on in a please that Mobileye mainly Mobileye comments be in primary monetization related assets, non-GAAP XXXX. is begin, exclusion of aware to will

stock-based compensation. exclude also We

rate down revenue revenue QX both down not volume core offset QX was overall in with higher year-over-year inventory ASP about X% do growth also a decline. our X% fully the impacted destocking and the Starting in year-over-year. QX. customers modest of We more EyeQ sharply This did and QX, believe at

implies as that to units in Looking back ahead meaningfully volumes. guidance to were SuperVision we exactly was our shipments the This will half, industry expected. the production outperforming quarter. second be XX,XXX

QX. noted than QX build XX,XXX end goal. to debt low shipments call, were market volumes. inventory earnings reduce volumes we our weaker on market intent end higher April in The strong of fully in QX and shipments the recovery accomplished intentionally this As The from was significantly

Gross to The in being SuperVision mix point basis, EyeQ to stable. revenue. a approximate overall smaller revenue compared QX was as expectations. a was On margin sequential with margins were due simply one in-line increase QX of our

adjusted following Operating The expenses points of up the versus for majority in the four we and operating to of lower accounting than cost this strong led areas, QX. lower-than-expected margin about three the payroll were XX%, The FX quarter terms. depreciation U.S. of one, to rate X% Israeli side, are; the quarter. on the what the shekel dollar was forecast favorable savings in for number approximately had payroll led to expected, we

fall the new in move two, of XXXX. delayed May campus our will than new from facility begin later the campus until higher the The expected. we the expenses was Number year now from Jerusalem into

for also Number efforts our costs experienced three, around we mobility-as-a-service. lower

we based rollouts have exercise be of our We to X fleet ensure an vehicles are In possible. that constantly in as mobility-as-a-service, activities our the to efficient EyeQ plan case near-term. the as customers our of product reviewing the for Neovasc certify

the justified exists terms to platform. Neovasc however, Neovasc were weren’t fleet, the of The still possible new of simply testing the relative software. volume continued on validation cost in The that of and benefits the

including commercial scaling the go-to-market integration, Scheffler, built Volkswagen Mobileye the builders, and of vehicles. focused driving volume production vehicles of strategy terms Holland vehicle is from self In our drive from system, system on purpose into

business. important We the platform riders, expect defined of vehicle production which coincides and EyeQ compute platforms software also serial these our six each XXXX, to production base in volume scaling begin our with mobility-as-a-service imagining for

of inventory which of continue during we over supply chips, terms In crisis. flow, chain to have EyeQ largely the rebuild XXXX our course consumed strategic the cash and XXXX of been

years satisfy to by a ability partially positive. big Our inventory demand during our consuming buffer recent was

be roughly with case expenditure year of quarter a is were be will disruption the inventory view XXXX. similar CapEx the that our future. of important Rebuilding in the activity, that consistent any this prepared should in versus so we potential very Capital in

Turning of volume to EyeQ, today, guidance, On prior for have SuperVision. we the requests move last reaffirming both become core our EyeQ guidance. over the business months, around in-line customer tracking which have and are more with seen. schedules solid to couple and Revenue largely the is

half, XX% strongly XX% inventory up weaker versus in the trajectory in end QX support orders SuperVision, built a in with half. the steep reduced QX, which over both versus levels. QX than second the up for QX volumes expected and Customer and On volume of QX second volume solidified recovered market ramp the QX more

shipment expect QX We our prior be will full-year to than with higher QX. continue guidance, consistent

Gross stable. XXX margin vehicle ZEEKR new lines individual and the Europe. into are the Given for entry product launches

We expect level. growth QX margin to QX reduction which in revenue overall QX SuperVision versus will be drive QX, in some versus makes and higher

positive to operating updates the the guidance On adjusted related is side, expected operating to than income expenses. our lower

Year-over-year be of two reduction the to expected is already around XX% XX% OpEx our prior occurred following the the now growth. The coming of indication primarily Nearly to XX% rest of reduction growth half is QX. of versus in areas. from

QX are in payroll in mobility as some cost Number one, the in saving engineering facilities Number well. half lower like varying The half we to are degrees. of had now as second generating the of areas year of second two, to a reimbursements higher expected be than forecasted. service and year the the originally non-recurring

between tax in In for XX% expect an rate, terms the to we year. rate XX% effective and of tax continue the range

Before professional support the as an session, to and an thank like team company. thank would management. work finance mentor like also we for for and entire we I the since for me advisor to become our public Heller the to team being continued amazing start and finance a I Q&A tirelessly would to Anat have her

take we Thank now your you. questions. will And

are ready start Q&A So session. to we the

Instructions] [Operator We will session. now question-and-answer conduct a

the to Thank you. Thanks everybody. and is of yourself follow-up please. one time, It in just question and please Dan one interest limit

first Thank you. with Aaron from Fargo. question Wells And our Rakers comes

I do quick and have one one follow-up. question

started in nine had you estimated engaged I remarks a and the in So, have with that think now SuperVision. comment terms you of OEMs Chauffeur prepared

kind looking quarter I you think large the OEMs having last of XXXX six out in talked about timeframe. deployed

is things just that your design us how changed terms of have wins can curious, walk I’m in you how SuperVision? on through pipeline of change, So a

engagements the year the in of number noted our press OEMs. versus the in the that release of of SuperVision and expanded serious on We terms beginning Chauffeur have

concept Mobileye that Now, engagement where are I’m Mobileye or product we and in cost, aligned engineers in serious forward where OEM are right performance official physical fully terms path executing program the an technology, of funded production defining as with in phase. already a

rest of of vast to this XX% represents us. global Currently remains the the open volume. industry OEMs the very because is of about list majority very encouraging of This

complexities in these for not there technology, landscape. making competing process to are engagements do with So company but with or other decision another competitive have nothing OEM are we the that

internal the the pricing do roles Things within best go-to-market how align program, like assets. portfolio with plan, defining into launch consumer and the strategies, development to to what product the

So a well real gigantic level process and implications the a on new the two strategic as automotive term. than that complex care complexities plus make ADAS path what eyes is simple we off, hands With potentially and to making call eyes more decision program. off

our in including in technology. as the ZEEKR, favor competitive the envelope working Tesla So pushed pressure and increased China is hands-free on startups,

our an far in positive for is noted within rapidly to technology the cost of have OEMs away technology from align advanced half. in seriousness the as past have increase on very to be behind approach. appear one, two This some move leader. announcements high significant We then that second all seen and a years, We see over and design still us the wins OEMs likelihood us

four, think pollster about issues then I himself the of it has That XXX, out. kind is I front, dynamic and and sounds just you’ve we the curious like I’m guess XXX, very normalize guess And on got as inventory ZEEKR ZEEKR the that other very helpful interesting.

So, potential understand ZEEKR or and the updated I’m about on the as year? guess volumes far a the improve? I’m trying the you’ve what what if seen trying volumes are for to views Just, as how what we these gauge the embedding I upside into is, look of to Reiterating we do is forward, just setup half as ZEEKR to think back full-year the guide, as continue full-year? you

solid guidance quarter. did our think in we terms that is last I XXXX of very the corrected

updates, we are at Regarding going but not make basis. for on an provided volumes update And to XXXX, January. look, this we outlook early annual a ad hoc will we long-term SuperVision CES

where the order in about expansion and to with design talked track provide color Porsche is the some platform on pipeline But more The closed win proceeding that the of And customers, general. SuperVision everything that advanced. SuperVision we other was of The OEMs it as new SuperVision, to We versus in in is has of Volkswagen January. it planned. group is discussion brands. grown

XXXX, with the And changed. in that of systems, vehicle not has terms SuperVision models number of

We production beginning at sold one vehicles QX expect compared those outside by of of to China. of to in have Two vehicles five XXXX of this year. are the

is next QX that data that ZEEKR pace our January. its assume outlook XXXK would one that The thing That has the demand best point unit year XXX in XXXX for in was changed China. sustain available

vehicle XX,XXX annualized than was QX XXXX units year for of pace this QX in that The pace specific an lower about basis. the on

provided consistent So the update guidance that quarter, is we last with that our what gap assumed risk in but is a to January. XXXX forecast we

been expectations will I there our point a has while half about range Now already significant analysts, XXX,XXX adjustment volume XXXX. within in for for out projecting that of - covering

you much. Thank very

Please question McNally Our Evercore. with ahead. next from Chris go comes

Hey, may. team. Two road map I questions, if

in to is could we more, Or the think some mode. get XXXX? still of on themselves this launch SuperVision just rollout. larger, XXXX at been it is the would XXXX where would really the no whether on typical goal, that timing be are it too OEMs sequential whether starting of these first And that asking My more idea or significant? question point? not is they is sort clear. on When you update, And early target, an I go I maybe, Amnon, is The to have trying of launch around sort as programs you programs So but appreciate are more a determine about XXXX about XXXX. think visibility

will several more being diverse much We forecast XXXX XXXX in added. XXXX. in other more automakers will The with likely confident Porsche probably and than the business be

significant region on we few like reduce - volume fluctuation the reliance This would have in and vehicles China volumes. less Polestar. just brands lead to one other outside a with As as and now related well will and deeper like

overall design the high big on volumes point we terms over potential Now in the look early good trajectory our booking inflection in in wins and terms that the in probability wins line and the feel around But very in forecast of still launching of timeframe. of XXXX course business included we confident XXXX XXXX XXXX. SuperVision very of

OEM We automakers more more the SuperVision our as making to potential opportunities. also profit platform bullish within see get the models customers, to spread potential on

projection. could Now our mid-term this impact positively

they I think are January. Things in confident back on than XXXX. looked very we So look brighter

either is one. of regarding the And if a self could discussions to follow-up, the That driving offering licensing of their sort a aggressive some the a driving Okay. good OEMs great. I recent then full full to six down to tone mean, slow just self engage respect with customer of maybe compete it look, always free delicate could quick and want generally, more bad? with they the last move OEM maybe talk But Amnon, over about even specifically, or could or make take honestly very faster months. Tesla. talk conversations your you just some

is So can that topic. tone, that conversations on effect any are you relevant such you the if having it a had just know, Anything that directly. it add you any is on

past several that in Tesla about their licensing has SSD. think mentioned the the I times

concept. is competitive No. So what it a to Tesla with of market. would say respect noise is not It I new to the that, we really had new have FSD. have in And not accomplished lots

significant SuperVision. see for implement solutions the to development In advanced the that to positive move fact, faster like of pushes market us we the rapid

is one system. it the cost put Now working question argument as clarifies the OEMs, I think with specific of Tesla versus of performance that I there matter. would really

few mapping. REM, If and SuperVision category, XX you FSD definition it also the or the cameras, at radar radars. like SuperVision, look is is an high

what offer. In FSD can addition to

a very the superior rate good. that in FSD XXX,XXX analysis have measured the in of XXXX the SuperVision cost, It stronger the intervention vehicles cameras now REM software But a let’s of is terms $X,XXX radars. range. by REM in at And is testers. and is ability to China, very, enabled look price the is response ECU handle somewhere and or subsystem, including more to differentiation. complex we maneuvers. power the than on beta approximately SuperVision a is Today, comparative The of

then or is at if FSD will that price less matches owners. able SuperVision price, be to system car half OEMs Now, FSD to offer Tesla offered Tesla than the that

margins immediately on vehicle creating appears almost of Tesla and value strategy the FSD for the would on gross growth. the be to this solidly rely reduce Now, cannibalize the

would I bodes our OEM Now, mention also this with and well customers.

has road bar, Mobileye from million X the are important are XXX,XXX we already faster. we data. access And years, to will There XXXX, and and also surpass Now in two on the grow will FSDs there since respect of approximately there differences XXX,XXX. with much

Something that recognize. another is Tesla’s advantage very and often highlights an key as advantage, OEMs that that

their at noted of had petabytes, example, Margin we XXX day, for intending they So to to Investor video petabytes. Tesla and are cache a XX grow

database billion miles data to talks Tesla alone, that petabytes. video this program, mapping, all collected for is we nine mention miles Our collect definition XXX high XXXX the about of date. of in to data XXX driven type the the of we almost Not million

overall, other basis. of accomplishments this performance of accomplished, a is believe to when customization us. big both has at have that very Tesla actually is look momentum solution own more SuperVision very, to you We So much it what their our in have create customers, a I this And terms a very for of, positive Tesla’s solution think for cost optimal in category OEMs type and cars. positive and of wanting all

the appreciate I details.

Thanks Chris.

Joshua comes TD question Cowen. with next from Our Buchalter

about, thinking those haven’t was new the to there similar are in XX how Has new that SuperVision you the those about more, the are XXXX, vehicles to they particular XXX original are I launched your were or six been four ago? to you months guess, I vehicles on given, you are in appreciate are that I technology, for how really meaningfully with any production what nine expectations should thinking to handicapping expectations, gave other yet numbers. you compared the numbers. thinking in those that guess on, I be the about the curious how lowered color incremental

There ZEEKR and right models. X So ZEEKR into The performing for is to on another provided now, the Polestar vehicle baked and the us that that then other is launch. we feel we to about looks launching exactly be expectations good XXX forecast. to the track example, to

XXXX expectations we yes, feeling about the are well. good in and as So

are the get the the And half, made to able be we some revisions in relative XXX for launches into that Like additional expected. with as that should last the XXX, we comfortably we to product. back performing from ZEEKR the our quarter, minimal exactly guidance ZEEKR volumes

performance is and good for in versus feel originally expected identified about XXXX except back that we gap everything going looks where we the January. we So XXXX, kind solid for of in that how

a timing expect win then help And could on more is When this initial planned fully guardrails planned the the give Chauffer on is to like release us of vehicle. this you any the vehicles? project. Thank for was do congrats can you. into you EV the contribute I press types and vehicles, should for VW moving autonomous understand of commercial scope to read and revenues but hoping we this roadmap see and consumer this technology for, more you type

ID The the is in reason as in mentioned, vehicles, to PR Volkswagen technology that their also for they we because our shipped Austin, Germany. test the with Austin mentioned and only they own bus

already testing win mature this, And still but design an more there of than this ongoing, this win year. is already for the official hopefully in are phase vehicles actual formalities hopefully It into the VW. XX all design will at

you. Thank

Mark next with Sachs. from Our comes question Goldman Delaney

drive. So you AV can Mobileye provide more with the details on latest opportunity on outlook your

view the a Could to in mentioned ready on it being platforms your XXXX timeframe. to XXXX? that not I you on in purpose-built ramp and led you think remarks putting making on share purpose-built vehicles sense have bit on in less vehicles emphasis that confidence new what prepared more and change upfitting you more the

little Sorry, you a up broke Mark, bit.

Just repeat the question.

broke question? up a little repeat you the can sorry, Mark, bit. You

Dan. course, of Yes. Yes,

I sense on I with hear Sorry believe was about added details better little me less And the putting vehicles? making you in and bit on can AV purpose Hopefully AV now. your up you hoping drive. built more for emphasis vehicles correctly, Mobileye a if updated you now that. ramp plan to XXXX some mentioned, upfitting I on timeframe. and are new heard

changed a for already vehicles on bit the more you timeframe? in in what your and having confidence assuming strategy purpose-built led So that and XXXX have to is what’s those new color

Yes, that. I will take

are builders. mentioned So we is their with platform Volkswagen the we We made mentioned hold back the now we buzz. auto own the third that Scheffler, the who (ph) at working CES, company And the we releases with which press ID [Bentler] also their on. mentioned a by they mentioned company Commercial Vehicles on

working We XX. maker think while Mobileye’s the are the also announced with personal called I we that ago a PX car another with

and So of applications. the performing facing our and rather partnerships. focus or We do through entire with builders operating is way on own having our vehicle with customer vehicles, partnering chain owning of big the vehicles, that collaborating homologating own platform than a then

a that and press buses So ID that is Volkswagen in by on in our on-track, the back ago announced of we equipped new the weeks actual is what focus saw you then with at few including the testing CS, everything technology.

well Okay. That supporting offering I Thank as believe as Thanks. in And with your on sensors progress the be developing making of could little you. drive? they I a and Radar helpful share more an LiDAR update answers, the bit Mobileye could Chauffeur your is in was you you own hoping are also both as opportunity helpful.

imaging for on-track So are we end XXXX radars, SOP. the of

partner served for The second around generation Tier first is we timeframe, is X XXXX. the XXXX, second flight, time on-track And a be FMCW. it LiDARs on market. on-track work for generation We to where end with feel generation with the would of together gauging LiDAR autonomous offering are vehicles XXXX with that LiDARs, and FMCW already of radar the the to been and interacting

Mark. you Thank

take next Priscilla. question the will please, We

Our go next with question Patil Wolfe Research. Please comes from Shreyas ahead.

from Hey, or we into thinking the now see thanks that margin is more of back the about we in first my the how more that these for seeing potentially think just year? or revenue XXXX, to ZEEKR as advanced some so half upside see would could about unlocking are something taking you potential of features? that some they this much of Maybe be that question. even And could

feature potential the that in by based I NOP months REM traction, first the we see will revenue. six on think we a for certain customers, will to be going the because powered free will start to and is then we seeing XXXX all is for ZEEKR offered see revenue

And so XXXX. kick should in that

talking about XXX we vehicle per potential of XXXX. dollars So are in

then sure Understood. this not I’m And is Okay. if relevant.

feel free base this. I’m a the does perspective? off situation So for implications business to political dismiss, from if current you Israel any But have in on

Mobileye most a now think professionals. It not you the of the creating distress. look personal kind is are creating distress, It of experiencing I this is and of Mobileye, kind also of But all are at employees employees, Mobileye when distress. all

We haven’t in seen any effect on efficiency and productivity the past months. few

Mobileye. Israel. in Israel for source the are revenue manufacturing not of anything not We is

is material any on that the political upheaval impact Israel. see don’t going in we for So

increase? a SuperVision or And how or ADAS? it from of And reimbursements half? business about the base also second the just the that just engineering what’s you that modeling from think drive in do is mentioned Is it quick one, benefit you maybe just the the driving

Yes.

is So coming from ADAS. basically it base

for But reimbursement. we are on an, benefits in so get of of beginning for reimbursement. So our mainly reimbursement XXXX. we and most have programs, things That sometimes might for year, have expect our it these relates this ADAS programs, additional we NRE these at year we to is the cannot the

drive there well. now I that as Mobileye expecting one to smaller we And are that think Yes. item related was

Genuity. George with comes Our go Canaccord from next ahead. question Gianarikas Please

OEMs. take back of are a a the wondering characterized having the kind discussions times if about not help with us step you of script you I’m couple So many the view in in and your XX, not seeing, you understand landscape, the more competition efforts over of to in you. just marketplace, and the Tesla, FSD, XX, internal how some market the OEM of evolving see point next the other to solutions you Thank competitive of but the some relative XX-months? and

the are competitive and Think from of majority up. of category landscape comes to comes development the The from, SuperVision upwards about, of the OEM. the of what lined the talking in-house, competition going competition the we

or kind a process have like we went through product of awakening in of do even some the form trying this a or a And to in-house so solution eyes product. here building that type SuperVision an of for seen an of past, of OEMs of

They times gap of they four we big come a terms keep performance it very may than more vehicles. to of see the wise, their between tend our in And piece models the a satisfy it’ll, somewhere don’t and to very, medium business in six to And conclusion slim be that solution. segment high-end advantage. expensive of terms also very

And to talk the this OEMs us to brings about SuperVision. back

number We engagements now of the serious them And SuperVision. that only about table large the SuperVision have in about were OEM around development. and bullish the are the products we very on talking past with beyond talking in-house with a

the NVIDIA and So that competitive It not of landscape. Qualcomm. OEMs. development is in-house of of the are They the majority likes offering tools is for the

the are the a as of I competitors awakening see that certain So attempt. OEMs and wave from before, themselves said we

is aligned make these where XX% XX%, said, but that not, is efforts, reflecting. no still we us there. have and is, industry coming really we that I with competition, serious the just are telling to was follow-up point. one any mostly so comment the of from And OEMs we The to was engagements that don’t it there approach specifically that want is of this, volume these like global with have OEMs was what Amnon competition rest were in essentially have internal comment our about that behind these don’t there said What George, the represent in

awakening. of that anything causing a can to you there REM that point is Is that? one Is as more our bring you element table follow-up, other mapping And than important pieces? just that there particular the the Is you the it this Thanks. assess? about what talked is to component

I you China, example. to will for point the of in competitive kind landscape

They radars. LiDARs, than You on products. Lee have they many of we have facing at have them sensors have the you look And you have the X them road. have have front front a SuperVision, some bank, products multiple of Neo, facing their Auto, all more

with every of can superior we times on doing XX other test, to where we technology sometimes OEMs. putting somewhere more people They benchmarking started the very, aspect. test. more in to XX performance And gets start this products. when we And terms OEMs compute road exposed compute, in are vehicles we have have almost very the our can than much between expensive Once

Now SuperVision, The also they and start visible times more, Even if cost cost as competitive. public performance. then the all is testing. is four the but same they performance it becoming not have about can difference the versus is it

production. that this is think I really in visible So are becoming now things

These referred exactly is are It moving in actual no of is to of as because longer and areas a where that think projected cost. to Tesla of thousands well. demo existing kind this the fact that of Chinese U.S. the are automakers able other is is like the That is OEMs think is it systems in production, across cost. It And being miles is being it really REM and right. from actual awakening. Europe. system we all cost Amnon it production, I this driving now fast then over maps that because an of the pressure the some

question with Citi. Our next comes Itay from Michaeli

year, the this behavior driving roughly then make do as And it automakers. question, when nine or policy back large engagements in the model? about expect mostly as Just sourcing decisions? you the thus next secondly, the to just this going reception, automakers the their Is far year? partially year EyeQ Can with well these talk maybe you to first Kit or the

We take believe decisions the months. a number sourcing will that of

year, kind that of we year, this this are the beginning of is year, timeframe seeing. next somewhere quarter first next So

shaping for In are working and more built, and more move we adding really EyeQ have we system. that as where, of language we forward, hands the capabilities allowing our behavior on together terms onto Kit to OEM have

this We are platform. as a gradually creating

driving to policy they that of of of Now, driving that is It in shaping allows lot write the the all the files details kind policy. wish our a have, something aspects top on it to language actual really running powerful. very codes of and describe behavior is OEM XML great

get it. can’t you So

powerful on shape have It test, like it needs. code when top to that very system. amazed writing an is it So you are your you now how is. a And policy own simply driving of good you operating you can

operating and it. write system on innovate top to the don’t in we to So need of order write code

move has allow this hands adding on platform. And forward, we as serious of are very more - more and have our this that reception. we OEMs So is good innovations to top a very,

is That very helpful.

As second the REM a of quick the touch upon maps. follow-up, I was hoping you could generation

eyes-on terms when and to out. you the journey that of think you that expect developing to launching roll to what are I eyes-off maybe from in does maybe or

It is generation. maps second is or development. first that there generation REM The a is a continuous not

Europe Our China, And is REM deployed. more the to in where and also and is vehicles adding in first automation maps. maps more are the now focus production and the priority because now But the this U.S. we are being China expansion REM with activating

in necessary Chinese data. to because the is China entity view the foreign with This even comply in order cannot regulations,

So those efficient in it with much much, regulations. to and better makes more us order comply

our is priority. first this So

XXXX, as then And additional a of make program the come REM outside we to towards programs and XXXX, will for and the China Porsche the will in there deployment. shifting productized priority move out maps to U.S. that XXXX, Polestar the later the to Also, coming Europe start forward

helpful. is very you. That Thank

Ananda from comes Baruah Loop with Markets. question Capital go next Please ahead. Our

of the into you Thanks, Two quick how anticipate mentioned any there You to kind OpEx heading Hey. way should the dynamics? cost mix you savings. taking and context guys. between about, that various talked the Is interplay Appreciate the some about question. provide XXXX ones. we

Thanks. on. into I that. XXXX? things follow-up coming How we dynamic, cost have quick a as play some after then mentioned those And together, head margin, also the You gross OpEx

Okay.

acting So saving I pass of Moran, will CFO. that all the and cost our to

Yes.

the for we as levels. so and historical past in XXXX higher office the what will our yes, than So be that, said XXXX growth,

So in our to levels terms will of between historical XX%. percentage road that returning of the and XX% of XXXX operating we expenses. And be believe

was almost XXXX XX% growth. So

XXXX XX% for XXXX And still Despite be close will believe XXXX that was around to XX%. we news OpEx, our the on expectation good regional growth than XX%.

be So decreasing. the fact the that, the op base we are growth is would

going still for to increase We are the expectation XXXX. not

Can follow-up and quick you believe, me. the which inventory talked X the then you had Thanks. in that of is, just might more actually normalize? And a normalize. that clarify Tier to this had clarification impact timeframe you I OEM demand, it over about timeframe had destocking has that mentioned, expect you a And some it be will that for is

inventory Are you talking are IQ? SuperVision you about, about or talking

I IQ. No, think

Yes, the IQ.

So, the pretty see first was have quarter second we is robust the quarters quarter yes. And second the the the more also the first big. half fluctuation Actually, much and seen half. we between that than

we of result inventory, our year it at higher of with from levels resulting So this of the into is, coming of think increase a beginning the price increasing, beginning XXXX. is the customers as the maybe

stabilizing see in we schedule IQ. Now, of terms

So year, we or QX had QX the requests for if beginning of the for from to of QX shift to QX. volumes

We are no longer seeing that.

is it So stabilized. pretty

the volume that have in the why that bumpy we think And first year. volumes. think supply We production and same increase inventory two entered chain of not in role of the we is been we is terms the situation last the played crisis see more years issue course the as of year. very half But a and this it

volumes terms I see to any that of being that think will piled We inventory, up in in said, Amnon Inventory has terms it and bit two have of and a are customers from right. types there as that, is don’t request our of right. add IQs quarter-to-quarter. I push stabilized,

we we if own that Then on of door just months will completed EyeQ our crisis the is our to going make IQ end it we inventory ahead be Kit to there to year. kind till is of affected completed And another I has prepared. six to sure have more the in that been have that And normally be inventory. cost, we or had that because than knocks of order buy inventory that completed build and build our chips think we

end the Yes. Till year. the of

Levy Barclay. ahead. go question next Please Our comes with from Ben

First, to you. the as Maybe a SuperVision? it couple cadence the should as Thank clarification volume relates the it far on you that commentary just improvements. be of next far what as of just volume could to clarify received as you again, relates over some of sequential quarters

volumes to in just Yes, said the remarks. QX to than up being were we more QX being more what versus and above then Thanks, XX% We Dan. QX. levels, prepared XX% referring levels clarify than EyeQ

We of really that a and should increases bigger selling SuperVision part of comment the price was becoming part see the not also about because of average some mix, the volume.

of to kind expectations, and half point have orders very support volume that solid our in wanted been the much year. they of So volume second volumes from higher customers to really the just

specifically to And on the conversation just then wanted on follow-up Chauffeur.

a bit separate timing sort and customers is an a retrofitting, sense. So is stream very your the aligned that getting or can dedicated on engagement into it conversation maybe you part more but Chauffeur, is Chauffeur spend, evolution AMAS maybe this right SuperVision SuperVision is is is Chauffeur there you is know some this the of like less of the etc. I know, that the sounds in that focus how What more commentary? playing pushed seeing that so and give a are platforms, more interest now? partnership, of maybe was significant you is of on us out your OpEx with it as something mentioned, the spend it

the It is aligned very with SuperVision.

There as it incremental to of as addition kind radar think of SuperVision is I option. an mostly it some are based. SuperVision. an camera

For also there the example, in there program, front ZEEKR In radars. the radar. is a XXX facing Porsche the surround is

a Porsche And it eyes and EyeQ compute. two redundancy off of Instead that more you create a we is program, EyeQ three some when bit the in in you create to go more are to X. X Chauffeur, well order have ladder adding the as and

is it really, really it incremental. So is

and is the creates than much that we is better human OEMs. are effort times it multifold that The statistics validation, of the you that need working validation the so are heavy prove on with on something crash not to together an is lifting you development, statistics, because this

each program. We are of the ECUs thousands farms creating in of loop hardware for

data for of many, of two run example, For the [ph], to hours thousands night. SXXX in per a for the in loop DRXX, for one the thousands each for many the hardware of farm CHXXX, ECUs order has of

part or is OpEx our budget, this anticipate surprise. growth. a did that And come not of would our as something part is and we ongoing It of not

that two traction, I number a of with in In of OEMs, at serious close the terms will OEM least loop. them we believe to this engagement able are of be

Great. Thank you.

Please with from question Morgan comes Adam next Our ahead. Stanley. go Jonas

Hi. effort are your strategy mobilized of Thanks a GPU of there an and such way the AXXX vertically disadvantages or any versus using competitors integrated the is regarding towards to Curious are? silicon thoughts what custom way advantages for NVIDIA on some what as training. system GPUs move custom everybody. Amnon, in is your SuperVision custom a versus

integrated. system vertically is Our

an have but we families. GPUs, accelerator own our of chip, have EyeQ instead We

make different five chip accelerators, of have very families the and our that would We efficient.

the two is at If in the system. competing tenth something paper you terms SuperVision the tops advantage competing solution, on of On that tops look total the and XX, the of you chips now for EyeQ on compared one of to performance don’t any paper, see XXX.

we So solutions. have efficient highly

about of when vehicle. consumption, important efficient a highly a it. And ECU, is the you call cost, to advantage of Power you are is power have whether very need to - the solution need size you talking

- which general has type that like of, purpose chip really is customized efficiency. we computer not in order great So our both a driving of to you to it workloads advantages need the and is AXXX, know, the approach, vision power

follow-up. I I Thanks. a will will hold leave it there. Thanks.

everyone you call. earnings for much. so Thank joining And the thanks

Thank talk you you. next quarter. to will We

This conference call. concludes today’s

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