Aeva Technologies, Inc.

Good day. My name is Jen, and I will be your conference facilitator. I would like to welcome everyone to AVA Technologies' second quarter 2023 earnings conference call. During the opening remarks, all participants will be in a listen-only mode. Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference call is being recorded and simultaneously webcast. I would now like to turn the call over to Andrew Fung, Director of Investor Relations. Andrew, please go ahead.

Thank you, and welcome everyone to AVA's second quarter 2023 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 second quarter 2023 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 most recent Form 10-Q and Form 10-K. In addition, during today's call, we will discuss non-GAAP financial measures. which we believe are useful as supplemental measures of AVA's 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. AVA and Q2 continue to make good progress on the path towards commercializing our unique 40-liter on-chip technology. I am excited by developments with existing collaborations, as well as new opportunities, and would like to highlight our key accomplishments, which are summarized on slide four. First, our collaboration with a top 10 OEM is going very well. We are deepening our engagement and integrating further into their AV stack. In Q2, we signed a strategic collaboration agreement where AVA would provide our perception stack as well as join the work with the OEM on neural network-based machine learning models in order to optimize the OEM's AV stack and achieve important use cases that previously challenged 3D time-of-flight LiDAR. In addition, the OEM has decided to expand its on-road deployment with AVA 40 LiDAR on the back of the milestones we have delivered. Second, I'm happy to share that AVA secured our first win in rail with Railergy, a leading supplier of railway automation solutions, including to Europe's largest freight carrier. AVA's 40 LiDAR was selected due to our unique velocity data that delivers superior perception capabilities compared to the conventional 3D LiDAR supplier we will replace. And third, we reached critical milestones with our industrial automation partners that keep us on track for 2024 SOP, including the validation of the LiDAR on-chip module for the first industrial product by Nikon and progressing on track with our development milestones with 6AG. I would now like to provide more color on our recent business developments, which begin on slide six. This past quarter, we significantly deepened our collaboration with the top 10 OEM on a number of fronts. The first is around perception software. We signed a strategic collaboration agreement to provide AVA's perception stack built around our unique velocity data to help the OEM safely operate under important use cases. We will also join the work on neural network-based machine learning models, incorporating data from AVUS for the LiDAR to optimize the performance of the overall AV stack. As mentioned last quarter, AVA's FMCW technology successfully enabled a key safety use case for highway driving that this OEM was unable to achieve previously with 3D time-of-flight LiDAR. Through our ongoing work, we have been able to demonstrate additional ways how FMCW's advantages over time-of-flight, such as direct velocity measurement and long range without the need to push high optical power, enables new levels of perception that can help the OEM more reliably achieve their high standards for performance and safety. To provide an example, by leveraging velocity for every pixel, AVA's ultra resolution differentiates stationary from dynamic points and brings camera-level resolution that can be up to 20 times that of a conventional resolution. As a result, our LiDAR can detect small hazardous objects like a tire fragment at upwards of 50% greater range. And because we can instantly measure the velocity for every pixel, AVA can more quickly and confidently classify objects as compared to 3D time-of-flight LiDARs that require multiple frames and points to infer velocity. Perception capability like this is critical to safety operating applications such as highway automation. We're thrilled that the OEM has decided to further leverage AVA to accelerate development of perception software to enable its highway speed autonomy use cases. The second is that as we continue to achieve perception and development milestones, the OEM has decided to expand on-road deployment with our LiDAR further into 2024. This includes plans for additional vehicles equipped with AVA 40 LIDAR that will be used to validate our perception software and overall AB stack in order to bring it to market. Overall, we are very encouraged by our progress with the OEM. Our focus will continue to be on supporting this OEM to achieve the requirements and positioning AVA to be selected for the production vehicle program. Moving now to slide 7, where I would like to share more about our first win in rail. AVA 40 LiDAR has been selected by Railergy to enable their autonomous train solutions. Notably, we believe AVA replaces a conventional 3D time of flight LiDAR supplier because our velocity data, ultra resolution, and other benefits of FMCW enabled Railergy to accurately and reliably identify obstacles on and around the rails, critical use case requirements that could not be achieved with 3D LiDAR. The first application with Railergy is for the largest freight operator in Europe to automate shunting activity, which is when trains are separated, moved, and linked together with new cars. Railergy's solution is intending to incorporate multiple AVA LiDARs per locomotive to safely enable these actions autonomously. We are excited to work with Railergy and see opportunities to broaden deployment to Railergy's other customers, which include other major rail operators. And as the rail industry and regulators look to bring safer and more efficient transport, we are beginning to explore opportunities for different types of applications with leaders throughout the rail ecosystem, including locomotive OEM, technology innovators, and operators. From our engagements, it is clear that AVA's combination of long range, instant velocity, and immunity to interference can offer unique advantages for rail automation applications. And we look forward to pursuing these opportunities to bring scale deployment of FortiLiDAR in rail. Let's now turn to slide eight. I am happy to share that we are on track to begin startup production for our industrial automation programs in 2024, and I would like to provide some color on our recent progress with Nikon. This past quarter, we completed development and validation of our LiDAR on-chip module for the first product with Nikon. As previously mentioned, this first product is an industrial metrology solution that enables automated inspection during high volume manufacturing. It requires micron level precision, where we will leverage our same core 4D LiDAR chip used for automotive applications, but with different algorithms to achieve ultra high precision. Due to our unique LiDAR on chip module, we are able to offer these capabilities at a lower cost and a much smaller size compared to the current solutions utilized today. With all performance specifications confirmed, this paves the way for us to progress to the next stage where we will work on the production qualification of our first industrial product together with Nikon ahead of SOP in late 2024. Switching gears now to the opportunities we're pursuing, let's turn to slide nine. Railergy represents a new win this year, and we're making progress on further expanding our number of program wins. In automotive, we continue to advance on large series production programs with a number of leading vehicle OEMs. Feedback has been consistent and encouraging, as more OEMs, including especially ones who have previously selected time of flight for initial pilot deployments, are appreciating that AVA's differentiated FMCW technology can help safely enable their next-generation, broader-scale deployments. In industrial automation, we have multiple ongoing engagements with large industrial sensing companies to leverage our perception platform for industrial measurement applications. Our focus as a company remains on programs for large-scale deployment with SOPs in the mid-decade, where each of these opportunities offer significant revenue potential for AVA. and we continue to expect additional award decisions over the next six to 12 months. With that, I'll turn it over to Saurabh.