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

Moran Shemesh Rojansky: Yes. So yes, as for the office growth, so what we said in the past that, 2022 and 2023 will be higher than our historical levels. So in terms of percentage road of operating expenses. And we believe that the 2024 will be returning to our historical levels of between 15% and 20%. So 2022 was almost 35% growth. And our regional expectation for 2023 was around 30%. Despite the good news on 2023 OpEx, we still believe that 2024 will be close to 20% growth than 30%. So the op growth would be the fact that, we are the base is decreasing. We are still not going to increase the expectation for 2024.

Ananda Baruah: And then the quick follow-up is, you had actually mentioned, I believe, this might be more of a clarification that Tier 1 OEM inventory destocking has had some impact in demand, and you had talked about a timeframe over which it will normalize. Can you just clarify the timeframe that you expect that to normalize? And that is it for me. Thanks.

Dan Galves: Are you talking about, you are talking about SuperVision inventory or IQ?

Amnon Shashua: No, I think IQ.

Ananda Baruah: Yes, the IQ.

Moran Shemesh Rojansky: So, yes. Actually, we have seen that the second quarter and also the first quarter the fluctuation between the quarters was pretty big. And we see the second half is much more robust than the first half. So this is, we think it is as a result of our customers coming into the beginning of the year with higher levels of inventory, maybe resulting from increasing, the price increase at the beginning of 2023. Now, we see schedule stabilizing in terms of IQ. So if for the beginning of the year, we had requests for shift of volumes from Q2 to Q3 or Q3 to Q4. We are no longer seeing that. So it is pretty stabilized. We think that the last two years have been very bumpy in terms of the supply chain crisis and production volumes. But of course it is not the same situation as we entered this year. And that is why we see the volume increase and inventory issue we think played a role more in the first half of the year.

Amnon Shashua: I think I will add a bit in terms of there are two types of inventory, right. Inventory that our customers have piled up in terms of IQs and that is being and that, as Amnon said, it has stabilized, right. We don’t see any request to push volumes from quarter-to-quarter. Then there is our own inventory that we build six months ahead of IQ chips just to make sure that if another crisis knocks on our door we will be prepared. And that inventory has been completed and that affected kind of cost, because we had to buy more EyeQ Kit than we normally have in order to build our inventory. And that I think we have completed or it is going to be completed till the end of the year.

Moran Shemesh Rojansky: Yes. Till the end of the year.

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

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

Amnon Shashua: Thanks, Dan. Yes, just to clarify what we said in the prepared remarks. We were referring to EyeQ volumes being up more than 10% versus Q2 levels, and then Q4 levels being more than 25% above Q3. We should also see some average selling price increases because of SuperVision becoming a bigger part of the mix, and that was really not part of the comment about the volume. So they just really wanted to kind of support that volume expectations, volume orders from our customers have been very solid and point to much higher volumes in the second half of the year.