Don McClymont: Well, I mean, let me interject on first and take the last part of that question first. I mean really what’s going to drive us to 60% is the deployment of the ADAS products, which are coming later into our revenue profile as opposed to the products that took us over the line from private to public. So at that point, the mix of these products is going to make the biggest difference. And they are significantly higher ASP, which is typically proportional to the amount of gross margin that we can demand, because the value of the product is simply high.
Tom Schiller : The only other thing I would add is the gross margin progression has actually been pretty impressive. I mentioned the $6.7 million of revenue we did in 2020. That was at a 35% gross margin. And as you know, we’ve steadily expanded from there, up now into the — close to 53% range. So as Donald’s mentioning, as the mix continues to improve from here and it increasingly moves to ADAS, which inherently is higher gross margin, that gets us to the 60% target.
Operator: Our next question comes from Anthony Stoss of Craig-Hallum.
Anthony Stoss: Kind of a follow-up to Ross’ question. Tom, where do you expect to exit 2024 in terms of gross margins? Then I had a couple of follow ups for Donald.
Tom Schiller : Sure. We haven’t really guided that specifically. But just given the momentum we’re seeing and the mix moving more towards the ADAS side, 55% is a reasonable expectation.
Anthony Stoss: Donald, thank you for breaking out in your prepared remarks the ADAS 4.6 out of the 6.3. And I know you guys did a pretty good job of laying out $1 billion-plus win beginning late 2024. Of that 4.6, can you paint a picture how many of those customers will be live say by the end of 2025 or however you want to break it out?
Don McClymont: Yes, almost all of them will be at least beginning to ramp by that stage. We have a few wins, which are ’26 and beyond, but most of that backlog will begin to ramp in 2025.
Anthony Stoss: Let me squeeze one more in. Just the North American ADAS win, what’s the expected value of that one, the newest one?
Don McClymont: We’re not breaking it out specifically, but it’s a pretty meaningful design win. It’s with an existing customer where we have some significant volume in a similar space. I mean, you can assume as we’re calling out really as our headline win that it’s pretty significant part of the backlog increase.
Operator: Our next question comes from Craig Ellis of B. Riley Securities.
Craig Ellis: Yes. Thanks for taking the question and congratulations on the two company milestones, the $6.3 billion backlog and the adjusted EBITDA, profitability. So, yes, you’re welcome. I wanted to follow-up on the latter, given that there’s been some good attention on backlog. On profitability, is that something that you think the company can sustain as we go through 2024? Would there be anything we need to look out for with respect to a resurgence in asset costs or anything else?
Don McClymont: I mean, for 2024, we’re committed to a full year of profitability given the momentum that we see. I mean there’ll be some fluctuations up and down in OpEx and so forth. But really we’re — given the sort of — if you work with numbers basically, that’s the bottom line for us. We’re committed to a full year of profitability.
Tom Schiller: Yes. And to add to that, it’s really a function of — as we’ve talked about in the past, OpEx from here will go up nominally in absolute dollars, but will continue to come down dramatically on a percent of sales basis. That drives the operating leverage and the enhanced profitability.
