Luminar Technologies, Inc. (NASDAQ:LAZR) Q3 2023 Earnings Call Transcript

Luminar Technologies, Inc. (NASDAQ:LAZR) Q3 2023 Earnings Call Transcript November 9, 2023

Aileen Smith: Welcome everyone to Luminar’s Third Quarter of 2023 Business Update Call. My name is Aileen Smith and I am Luminar’s Head of Investor Relations. With me today are Austin Russell, Founder and Chief Executive Officer; and Tom Fennimore, Chief Financial Officer. As a quick reminder, this call is being recorded and you can find the earnings release and shareholder letter that accompany this call at investors.luminartech.com. We ran into some hiccups with Business Wire and getting our press release out on time. But hopefully, most of you folks were able to have a chance to review our inaugural letter to shareholders and our press release that were issued via an 8-K as well as uploaded to our IR website. As we’ve communicated, we are piloting a new format for our call this earnings.

The shareholder letter was meant to replace our historical earnings deck and prepared remarks, so that we can dedicate more time to addressing questions from our investor community, including retail investor questions posted SAFE platform, institutional investor questions emailed to our investors inbox and live questions from our analyst community. We will be checking each of these platforms intermittently throughout the duration of our call to address any that come in real time. Before we begin the Q&A, let me remind everyone that during the call, we may refer to GAAP and non-GAAP financial measures. Today’s discussion also contains forward-looking statements based on the environment as we currently see it and as such, does include risks and uncertainties.

Please refer to our press release and business update shareholder letter for more information on the specific risk factors that could cause actual results to differ materially. We plan to alternate questions asked on our SAFE platform or by e-mail with questions asked from our live research analyst community. With that said, let’s jump right into Q&A and start with some of the tough questions from our safe platform.

A – Aileen Smith: Austin, the first question is for you. So recently, the successful run at rate test with Volvo was a major milestone accomplishment for Luminar. What else is left to do with Celestica and Volvo before the green light is given to start production? And when do we expect series production orders?

Austin Russell: Yes, so it’s been great collaborating with Volvo and leading up to this huge culmination and milestone that we have as it relates to run at rate. So this was sort of the key and fundamental milestone when it comes to testing the capacity and quality for product leading up to start a production. So that’s something that obviously we’re proud to have passed and an incredible effort and thank you to the team and as well as Volvo’s team in helping push that across the line with the Mexico factory with Celestica. So that’s — that’s been great. There’s obviously still work to do from a finalization of industrialization standpoint in conjunction with Volvo leading up to the start of production next year and getting everything queued up for what they have launched.

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Q&A Session

But that was really the big major push in terms of demonstrating the capacity. So that really starts and shows that you can scale well into the tens of thousands and then setting the stage up for hundreds of thousands thereafter. And I think we said that, the Mexico facility would support up to 250,000 centers or corresponding vehicles per year. So it’s been a great starting point with that. And then, we’ll have ultimately a similar test with TPK and Mercedes and everything down the line as that all plays out accordingly. So yes, we’re excited for the future. And it’s really all systems go with Volvo. It’s going to be a huge game changer as they launch and scale this EX90 next year.

Aileen Smith: Great. Our second question from the retail shareholders. Can you add some color to your relationships with Mobileye and NVIDIA? How does Luminar benefit from the relationship? What kind of future revenues do you expect from them as they launch various products with your LiDAR? In particular, Mobileye’s Chauffeur program and Polestar?

Austin Russell: Yes, yes, absolutely. So when it comes to NVIDIA and Mobileye, they’re incredible technology partners that we have that we’ve been collaborating with, well, I guess each now for years, so that they really selected us as their respective partner when it comes to LiDAR systems and associated technologies and even some components of software as well that we’ve been collaborating with them with OEMs. So that’s something that we really see as a clear integrated partnership and springboard as well to be able to address the respective OEM opportunities that are out there. We know Mobileye’s been an incredible leader when it comes to assisted driving systems and that’s continuing to extend into further advanced capabilities.

And NVIDIA has really been establishing themselves in the industry as well. And like I said, just incredible success that we’ve seen. So to be a part of that and be selected to be their partners with respect to these next-generation automotive technologies as automakers really strive to be able to adopt this is very, very meaningful to us. And like I said, we couldn’t ask for better partnerships in the industry to be able to help successfully realize that. So we’re all in. They’re all in. And we’re — I think, really now starting to see the fruits of the labor of the collaboration that we’ve had for years. So that’s, I think, probably yet another inflection point that we’re at where you can start seeing that transition from, development work that we’ve been doing with these guys, into the automotive industry and production vehicles.

And, you take a look at like the Mercedes program, for example, in the collaboration that we have with them on that, with NVIDIA, that’s something that’s obviously been public. And again, it goes to show what you can do when you combine the respective leading technology companies together to create an incredible solution.

Aileen Smith: All right. Our next question is going to be for Tom and that is, is Luminar in danger of bankruptcy?

Tom Fennimore: Aileen, the short answer is no. I understand why some shareholders would ask that question, given the recent stock price performance. But when you actually look at our most recent results for Q3, We cut our non-GAAP gross loss almost in half which puts us on trajectory to get it to positive by the end of the year as those launch-related costs continue to wind down as we successfully industrialize Iris. We cut our free cash spend by nearly $20 million during the quarter which puts us on track to kind of get it into that $35 million to $40 million dollar range for Q4. We had over $320 million of cash and liquidity as a quarter end we’re on track to have over $300 million of cash and liquidity at the end of the year.

So when you kind of look at where we our targets for ending the year we’re going to have over 2 years of runway we believe that that’s going to be enough to get us to profitability. We have the book to business in place that will drive strong revenue growth once we reach that high volume SOP next year. So that gives us a credible way to start growing our revenues and profits to help our reduce our cash spend even more. And so, once again, I understand the source of the question but that’s clearly not the case. We have the most cash and liquidity of any publicly traded LiDAR company and God forbid, if we find ourselves in a scenario where we need more, I have plan A, B, C, D, E, F and many more ways ready to go, you know, always have contingency plans built to put those in place way before you need them.

And, you know, we’re doing that if, you know, God forbid we end up need to do something on that end.

Aileen Smith: Great. All right, we are going to transition to some questions from our retail, or sorry, research analysts. Because we are trying to offer more time for Q&A, we would ask that our research analysts ask one question and we will allow for another 2, 3 follow-ups. Our first question is going to come from Joshua Buchalter at TD Cowen.

Joshua Buchalter: Hey guys, thanks for taking my question and thanks for letting me go after the bankruptcy question. It’s a nice way to warm-up the room. I want to follow-up on the Mobileye commented earlier, it’s been hard. We’ve observed that Luminar has been the lighter of choice on Mobileye’s chauffeur platform while they work on their internally developed product. There have been some recently announced design wins for chauffeur. I mean, can you guess, is it safe to assume that Luminar has a very decent shot on goal? Can you maybe expand on that relationship and what chauffeur wins mean for your business?

Austin Russell: And you want me to take that or you want to take it? Yes, no, I mean, I think it’s fair to say. It’s hard to comment, specifically further at this time as it relates to, the ongoing work and collaboration but I could say it’s been as successful as we could have hoped for and again everything that we set out when we originally announced partnership with uh Mobileye that we wanted to ultimately achieve we’ve been pushing that full speed ahead and that’s been absolutely fantastic since what in — it was nearly I think it was like 3 years ago when, yes, I think probably to the month, 3 years ago when we were out there with it. And at the same time, same with NVIDIA in terms of, what we can hope to achieve. So I think we wish all of the best possible success to these respective companies.

And I think it’s in any scenario, a key component of it, we don’t make the compute systems and modules, right? You know, so that’s something that I think will be an important part of that collaboration. Now, obviously, the internal effort, I think, was unique to Mobileye rather than NVIDIA, specifically but there obviously hasn’t been any change as it relates to realizing and using us when it comes to that from a platform standpoint. So, building LiDAR’s and creating new breakthrough technologies is really, really hard. And as we know, it takes a lot of time, effort, a decade and a lot of capital along the way to be able to make that happen, assuming you have the right technology path and roadmap in the first place. But that’s why we spent all these years building it from the chip level up to have these level capabilities, performance, economies of scale and at the same time doing what’s needed to be able to achieve these automaker requirements and getting out there.