Aeva Technologies, Inc.

Welcome to the AVA Third Quarter 2022 Earnings Call. At this time, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to your host, Andrew Fung, Investor Relations. Mr. Fung, you may begin.

Thank you, and welcome, everyone, to AVA's Third Quarter 2022 Earnings Conference Call. Joining on the call today are Soroush Salahian, AVA's co-founder and CEO, and Saurabh Sinha, Ava's CFO. Ahead of this call, we issued our third quarter press release and presentation, which we will refer to today and can be found on our investor relations website at investors.ava.com. Please note that on this call, we will be making forward-looking statements based on current expectations and 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 further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our Form 10-Q for the quarter ended June 30, 2022. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of AVIS 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 Suresh.

Thank you, Andrew, and good afternoon, everyone. Over the past quarter, a major focus for us has been ramping deployment of Ares II, the world's first commercially available FMCW LiDAR, offering high performance and reliability. This is resulting in rapidly growing commercial momentum as more customers experience firsthand how the unique capabilities and scalability of AVA's 4D LiDAR can enable next-generation automation across automotive, industrial, and beyond. I would like to highlight some of our key accomplishments in Q3, starting with slide five. First, we made meaningful progress in bringing up our manufacturing and shipped Ares II to more than 25 customers across automotive, industrial, and other applications. Interest for AVA's unique FMCW LiDAR continues to rise to the upside, and we are working diligently to further scale manufacturing. Second, we have significantly grown the number of engagements we are involved in, and they are across an extended list of applications, reflecting the unique flexibility of our technology that is attracting more inbound interest. Importantly, Ares II's combination of high performance and product maturity has enabled us to progress to advanced or RFQ stage on multiple automotive and industrial programs. And with our integration on leading development platforms, such as NVIDIA SIM and Intempura, More OEMs now have the ability to validate and implement ABUS differentiated capabilities. Third, we are on track with our industrial collaborations and continue to target launch in 2024. With Nikon, we signed a joint development agreement in the past quarter for our first high precision industrial product. This important milestone solidifies the plan through production. Elsewhere, we are off to a strong start with our SIG-AG collaboration. and continue to pursue additional opportunities with industrial automation. Fourth, we've continued to strategically build a leading team to bring Ava 40 Lidar to mass production. In particular, we are pleased to welcome three new leaders to Ava's board of directors who offer invaluable expertise in product commercialization, strategy, and public company experience. In addition, we continued our expansion globally into Germany, India, and Thailand with sales, development, and manufacturing teams to support our growing commercial momentum. And fifth, we further cemented our leadership in FMCW technology. With more than 130 granted patents, we expanded our industry-leading portfolio of FMCW technology IP, built on years of development and on-road deployment that has resulted in our proprietary 40-liter on-chip solution. Turning now to slide seven, I would like to provide more color on key business developments over the past quarter. Since announcing ARIES II earlier this year, we have seen a sharp rise in interest in AVA's FMCW technology. The unique combination of high performance, product maturity, and scalability of our solution is a first for the industry and drawing inbounds from a broad range of customers looking to implement our 4D LiDAR for passenger vehicles, commercial trucks, mobility, and industrial automation. A key priority this past quarter was bringing up manufacturing in order to support qualification with our partners and meet the growing demand from new customers. Commercializing a new product is not trivial, and the AOL team made good progress in the first full quarter of Ares II deployment, enabling us to increase the production output by 300% and ship to more than 25 customers globally in the third quarter. While we don't intend to provide an update every quarter, we plan to build on this as we continue to bring up manufacturing. Because our proprietary silicon photonics platform integrates all key optical elements of LiDAR sensing onto the chip module, it allows us to significantly simplify and further automate the manufacturing process. We also continue to work closely with our supply chain, including securing materials needed to support the planned growth and volume. As recently announced, We continue our expansion globally, and we have established a local team in Thailand that will enable us to work alongside our partner, Fabrinet, in manufacturing a LiDAR chip module. As such, we are on track to continue increasing our volumes quarter over quarter in Q4, and look forward to meeting more of the growing demand for our products. Now onto slide eight. ARIES II is growing our number of commercial engagements, and importantly, moving them forward toward production. Since announcing a receipt back in February, AVA has progressed to advanced or RFQ stages on multiple automotive and industrial programs. In automotive, we continue to see a growing appreciation among OEMs for FMCW's fundamental perception advantages that are enabled with direct velocity measurements and how they can address many of the challenges affecting time of flight or 3D LiDAR solutions. This is the case for passenger vehicles for ADAS, all the way to autonomous driving for commercial trucks and mobility applications, as OEMs look to achieve more reliable performance, especially in corner cases across all levels of automation, as well as the ability to increase automation over time. As such, OEMs have been eager to evaluate ABUS 40 VITARP and our advancement to more RFQs is a testament to the OEM recognition of ABUS' unique ability to offer high performance in a scalable solution designed for automotive reliability. We expect decisions for some of the programs to be made in the coming months. While we do not anticipate winning every opportunity, we believe we are well positioned to convert additional programs towards production. Let's turn to slide nine. We are excited to be the first FMCW LiDAR integrated with NVIDIA Drive SIM and Intempura RT-MAPS, two leading autonomy software development tools that we believe will enable OEMs to accelerate development and adoption of FMCW LiDAR. Our customers utilize these platforms to simulate scenarios and validate performance of AVUS 40 LiDAR alongside other modalities as part of their multi-sensor autonomous stack. And because some OEMs require compatibility with platforms such as Intempura for development, our integration broadens AVUS reach, introducing additional OEMs to AVUS unique performance and capabilities that they can now directly implement into their vehicle stack. Switching gears to our industrial progress on slide 10, I'm happy to share that we have entered the next phase towards commercialization with Nikon. In Q3, we signed a joint development agreement with Nikon, a critical next step that defines the development and validation milestones for our first high-precision industrial product through to the start of production in 2024. Within this, we are also on track to complete, by the year end, the development of our LiDAR-on-chip perception platform for industrial automation. Reflecting the performance flexibility of AVA technology, we are leveraging our same LiDAR-on-chip for automated driving, but with different software to achieve micron-level precision. To our knowledge, this level of precision is uniquely made possible by AVA FMCW technology and enables us and Nikon to jointly bring to market a high precision product that is more accurate, yet smaller and lower cost than Mega-Z solutions. Beyond the first product with Nikon, we continue to see opportunity to expand into additional applications to our high performance and small chip based form factor. Moving to slide 11, Ava's proprietary FMCW technology is the driving force behind our commercial traction and we continue to extend our technology leadership with our granted patents now surpassing 130 globally and with over additional 135 patents pending. And this further solidifies our moat in the sensing industry. Our industry-leading portfolio of FMCW IP reflects breakthrough innovation in numerous areas, including silicon photonics, algorithms, system design, and 4D perception. Our IP is how we are able to solve the challenges facing traditional FMCW approaches, such as their ability to simultaneously deliver millions of points per second on a per beam basis at 500 meters of range. Together with direct velocity measurements, this differentiated capability enables classification of objects and road hazards at long ranges with greater confidence, providing critical response time needed for the safe operation of automated vehicles. It is also how we are able to introduce new levels of perception leveraging fourth dimension of velocity, such as our proprietary 4D perception and localization software. This capability provides real time six degrees of freedom vehicle motion estimation to enable accurate centimeter level vehicle positioning and navigation without additional sensors by costly high performance IMUs or less robust methods like visual SLAM. Even in future deficient environments, such as tunnels. This provides OEMs the ability to meet ASOS D redundancy requirements for positioning solutions. Our technology is built on multiple generations of development and years of on-road deployment. We believe this gives us a material lead over others who have attempted to develop FMCW technology or are at earlier stages of FMCW deployment and look forward to expanding our moat as we continue to innovate. Let's now turn to slide 13, which summarizes the strong progress we have made on our key objectives for 2022. With one quarter remaining this year, we have completed the majority of the goals we laid out for 2022 and are focused on accomplishing the remaining. I would like to share a bit more on each one. First, on ARES II deployment and qualification with customers. We have made meaningful progress bringing up manufacturing, enabling us to deliver ARES II to more customers and work on qualification, with existing strategic partners. Looking ahead, we continue to scale up manufacturing and meet more of the growing demand for AVA 40 LIDAR. Second, on converting two additional programs towards production. One of the two programs was met with SICK-AG collaboration, and we are encouraged by the progress we're making on our advanced engagement towards an additional program towards production. Third, on accelerating the release of our first non-automotive application. Our signed joint development agreement with Nikon is an important next step that moves us forward towards the 2024 SOP. And as previously announced, the SIG-AG collaboration further solidified our expansion into industrial automation with the SOP also targeting 2024. And fourth, on preparing the supply chain and processes for commercial deployments. We continue to work closely with our supply chain partners to continue increasing our production and scale up manufacturing. In addition, efforts also continue on track towards certification in automotive spice ahead of production. With that, let me turn the call over to Saurabh, who will discuss the financials.