Mobileye Global Inc. (NASDAQ:MBLY) Q2 2023 Earnings Call Transcript

Operator: Our next question comes from Itay Michaeli with Citi.

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

Amnon Shashua: We believe that the sourcing decisions will take a number of months. So somewhere this year, beginning of next year, first quarter next year, this is kind of the timeframe that we are seeing. In terms of working together EyeQ Kit and the behavior shaping language that we have built, where, as we move forward, we are adding more and more capabilities for allowing OEM to really have hands on onto our system. We are gradually creating this as a platform. Now, the behavior shaping language is really something very powerful. It allows the OEM to write actual codes kind of XML files that describe in great details a lot of aspects of the driving policy that they wish to have, and it is all running on top of our driving policy.

So you can’t get it. So you have a very powerful driving policy that when you test, you are simply amazed how good it is. And now you can shape it to your own needs. It is like writing code on top of an operating system. So we don’t need to write the operating system in order to innovate and write code on top of it. So this is – as we move forward, we are adding more and more innovations that allow OEMs to have serious hands on top of our platform. And this has a very, very good reception.

Itay Michaeli: That is very helpful. As a quick follow-up, I was hoping you could touch upon the second generation of the REM maps. I think you are developing or maybe launching in terms of what that does to the journey from eyes-on to eyes-off and maybe when you expect that to roll out.

Amnon Shashua: The REM maps is a continuous development. It is not that there is a first generation or second generation. Our focus now with expansion in China, and also activating the REM maps in Europe and U.S. But China is the first priority because this is where the production vehicles are now being deployed. And we are adding more and more automation to the REM maps. This is necessary in China because in order to comply with the Chinese regulations, foreign entity cannot even view the data. So it makes us more efficient and much, much better in order to comply with those regulations. So this is our first priority. And then as we move forward to the Porsche program and additional programs that will come to the 2025, 2026, Also, a Polestar coming out outside of China later in 2024, the priority will start shifting towards Europe and the U.S. to make the REM maps there productized for deployment.

Itay Michaeli: That is very helpful. Thank you.

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

Ananda Baruah: Hey. Thanks, guys. Appreciate you taking the question. Two quick ones. Is there any way to provide context about how we should anticipate the interplay between the mix that you talked about, kind of heading into 2024 and the various OpEx dynamics? You mentioned some cost savings. You also mentioned some cost coming on. How those things play together, the gross margin, OpEx dynamic, as we head into 2024? And then I have a quick follow-up after that. Thanks.

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