Aeva Technologies, Inc. (NYSE:AEVA) Q1 2023 Earnings Call Transcript

Aeva Technologies, Inc. (NYSE:AEVA) Q1 2023 Earnings Call Transcript May 10, 2023

Aeva Technologies, Inc. reports earnings inline with expectations. Reported EPS is $-0.16 EPS, expectations were $-0.16.

Operator: Good day, Ladies and gentlemen, and welcome. My name is Judith and I’ll be your conference facilitator. I’d like to welcome everyone to Aeva Technologies’ First Quarter of 2023 Earnings Conference Call. During the opening remarks, all participants will be in a listen-only mode. Following the opening remarks, we will conduct a question-and-answer session. As a reminder, today’s conference call is being recorded and simultaneously webcast. I’d now like to turn the call over to Andrew Fung, Director of Investor Relations. Andrew, please go ahead.

Andrew Fung: Thank you, and welcome, everyone to Aeva’s first quarter 2023 earnings conference call. Joining on the call today are Soroush Salehian, Aeva’s Co-Founder and CEO, and Saurabh Sinha, Aeva’s CFO. Ahead of this call, we issued our first quarter 2023 press release and presentation, which we will refer to today and can be found on our Investor Relations website at investors.aeva.com. Please note that on this call, we will be making forward-looking statements, based on current expectations assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today, and should not be relied upon as representative of our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

For a further discussion of the material risk and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10-Q and Form 10-K. In addition, during today’s call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Aeva’s performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link. And with that, let me turn the call over to Soroush.

Soroush Dardashti: Thank you, Andrew, and good afternoon everyone. In Q1, the Aeva team was focused on advancing the commercial momentum for Aeva’s unique 4D LiDAR-on-Chip technology and I’m happy to share that we made significant progress in a number of notable areas. I would like to highlight our key accomplishments this quarter, which are summarized on Slide 4. First, progress with the Top-10 OEM is going well. We have recently received feedback that Aeva 4D LiDAR is enabling a key safety use case that was previously unattainable by the OEM. I am excited to share that we are also in discussion to deepen our relationship to include joint perception software development. leveraging Aeva’s unique combination of high resolution, long-range and instant velocity.

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Second, we are seeing encouraging progress with other opportunities in automotive. This includes a joint development engagement with a passenger vehicle OEM, looking to switch from 3D Time of Flight LiDAR as well as advancing to a growing number of RFQs. And third, reception for our perception platform for precision distance measurement has been quite positive. We are engaged with multiple leaders in industrial sensing to use Aeva’s perception platform and hope to share more later this year. I would now like to provide more color on recent business developments. Starting on Slide 6. As mentioned earlier, we are off to a strong start with the Top-10 OEM on providing a perception solution that meets their high standards of performance, safety and scalability.

The first vehicles integrating Aeva 4D LiDAR have been built and we have already achieved important development milestones including feedback from the OEM that we successfully enabled a key safety use case for highway driving that was previously unachievable with 3D ToF LiDAR for this customer. This was possible because of Aeva’s unique FMCW technology that simultaneously offers high resolution, long-range, and instant velocity capability. Together with our perception software, Aeva’s 4D LiDAR reliably detected and classified critical object on the road far away. This is a particularly important capability in use cases such as highway automation, where faster speeds require greater reaction time and higher sensing fidelity. I’m excited to share that we are also in discussion with the OEM around the use of Aeva’s perception software and looking at ways to help to accelerate the autonomous stack developments.

This gives us further confidence around our perception software capabilities and highlights the importance of leveraging direct velocity measurements in an automated driving system. Let’s move now to Slide 7. As we have shared, we have been making significant progress on our engagements and wanted to provide more color on our ongoing opportunities. Our focus remains on programs for large-scale deployment and we are seeing strong interest from leading automotive and industrial companies looking to bring next-generation perception to market. This includes progressing from the RFI to RFQ stage with some of the top global passenger vehicle and commercial vehicle OEMs. And in industrial automation, we are currently in multiple discussions to deploy our perception platform for precision distance measurement applications.

Many of our opportunities are with companies who have experience with LiDAR or even selected 3D time-of-flight LiDAR for initial pilot deployments in the past and are now increasingly interested in Aeva for the next generation due to the advantages of our FMCW approach. While we may not win every opportunity, each program offers meaningful revenue potential. As an example, the passenger vehicle program opportunities we are working on target volumes will over a hundred thousand units per year at steady state production. These programs have target starter production between 2025 and 2027, and we expect award decisions approximately over the next six to 12 months. Turning now to Slide 8, following the successful bring-up of our new final assembly manufacturing mine, we are working with Fabrinet to similarly expand our LiDAR-on-chip module manufacturing.

This expansion will add capacity to support the growing interest in both automotive and our perception platform for industrial automation with the ability to ramp further for mass production. As part of this, we will automate hundred percent of the LiDAR-on-chip module assembly steps. This will enable higher throughput that will further bring down costs on the path toward production. We expect to complete bring-up of the new line by year-end. With that, let me turn the call over to Saurabh, who will discuss the financials in more detail.

Saurabh Sinha: Thank you, Soroush, and good afternoon everyone. Let’s turn to Slide 10, to discuss our Q1 2023 financial results. Revenue for the first quarter was $1.1 million, driven by Aeries II deliveries to existing partners as well as to new customers for our unique 4D LiDAR capabilities. Non-GAAP operating loss was $31.3 million, as we continue to strategically invest in product and other research and development initiatives consistent with our work plan. Gross cash use, which we define as operating cash flow less capital expenditure was $37.3 million, reflecting operating expenses and timing of working capital. As such, we ended Q1 with $288.4 million in cash, cash equivalence, and marketable securities. The weighted average shares outstanding was $219.6 million in Q1.

To sum it up, Aeva is in a solid financial position to support our commercial momentum. We are making good progress on the key objectives we laid out for 2023 and we will continue to take a disciplined and strategic approach to execute on our plan. I will now turn the call back to Soroush for closing remarks.

Soroush Dardashti: In summary, I am excited by the progress and feedback from both existing and prospective customers on Aeva 40 LiDAR. Our differentiated FMCW technology is increasingly resonating with leaders in the markets we are pursuing and our priority remains on converting more of our commercial traction to program wins. I want to especially acknowledge the dedication of the Aeva team that is making all of this possible, as well as the ongoing support of all of our stakeholders. Aeva is laser-focused on delivering on our objectives and is well-positioned with our unique technology and our balance sheet to continue to execute on our mission to bring 40 LiDAR to markets. With that, we will now open the line-up for questions.

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Q&A Session

Operator: Thank you, sir. [Operator Instructions]. Our first question comes from Colin Rusch of Oppenheimer.

Operator: The next question comes from Joseph Moore of Morgan Stanley.

Operator: The next question comes from Pierre Ferragu of New Street Research.

Operator: Thank you. The next question comes from Suji Desilva of Roth MKM.

Operator: The next question comes from Tristan Gerra of Baird.

Operator: The next question comes from Richard Shannon of Craig Hallum.

Operator: Thank you. The final question comes from Kevin Garrigan of WestPark Capital.

Operator: Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and this also concludes today’s conference. Thank you for attending. And you may now disconnect your lines.