Aeva Technologies, Inc.

Good day. My name is MJ, and I will be your conference facilitator. I would like to welcome everyone to AVA Technologies' third quarter 2023 earnings conference call. During the opening remarks, all participants will be in 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 Spung, Director of Investor Relations. Andrew, please go ahead.

Thank you, and welcome everyone to Ava's third quarter 2023 earnings conference call. Joining on the call today are Suresh Salahian, Ava's co-founder and CEO, and Saurabh Sinha, Ava's CFO. Ahead of this call, we issued our third quarter 2023 press release and presentations. which we will refer to today and can be found on our investor relations website at investors.eva.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 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 Soroush.

Thank you, Andrew, and good afternoon, everyone. It's been an incredibly exciting time at AVA. As the adoption of FMCW LIDAR continues to build, AVA is leading this trend. delivering production wins in both automotive and industrial. And with growing interest for AVA's unique 40-liter on-chip technology and continued advancement on a number of large opportunities, we have strategically positioned AVA to be in the strongest position for success and to secure additional wins. I would like to highlight key accomplishments that are summarized on slide four. First, I'm thrilled to share that AVA was selected by May Mobility to be the exclusive production supplier of long-range LiDAR for their autonomous vehicles. This is a multi-year production agreement where AVA's 40 LiDAR will replace conventional time-of-flight long-range LiDAR and was selected to help main mobility further scale by enabling a broader operational design domain. Second, AVA was also awarded a multi-year production program with Nikon for their high-precision industrial inspection products. We have been working with Nikon for some time now, and we're excited to leverage our LiDAR on-chip technology with micron-level precision to advance to the production phase and open new opportunities in the established and growing industrial automation market. Third, we continue to make strong progress with the top 10 OEM and are now in the final phase with this OEM. This quarter, we received the OEM's highest available rating for manufacturing readiness. This paved the way to be a potential direct supplier to the OEM and is a clear indication of AVA's ability to support major global automotive programs. We expect the OEM to make the production program award decision over the next quarter. And fourth, we further strengthened AVA's position for success. We are pleased to welcome Dr. Stefan Sommer, former CEO of ZF Group and board member at the Volkswagen Group, responsible for procurement, to ABUS Board to help further advance our automotive OEM opportunity. And last, as we move to the production phase, on the heels of our two multi-year production wins in automotive and industrial, and our continued momentum with top global OEMs, including a top 10 OEM, we're making a strategic decision to further bolster our already strong balance sheet with the raise of new capital of $145 million through an approximately $20 million private placement and $125 million preferred share facility with existing long-term stockholders. This strengthens ABLE's position to win additional OEM programs and support them beyond their startup production in a way that minimizes near-term dilution. I would now like to provide more color on our recent business development, which begins on slide six. Let's start with our production win in auto with May Mobility, a leader in the development and deployment of AV technology. The company has strategic partnerships with some of the largest automotive and transportation companies in the world, including with Toyota, where they currently provide paid autonomous rides on the Toyota Sienna autonomous vehicle platform. Through long-term contracts with transit agencies, municipalities, and other businesses, May Mobility operates transit services across a growing number of markets in the U.S., including Michigan, Texas, Minnesota, Arizona, and upcoming in California. To date, May Mobility has provided more than 350,000 rides using its proprietary multi-policy decision-making autonomous vehicle technology. with additional deployments planned to begin in 2024. To further scale, Maine Mobility has been looking for next-generation sensors that can enable expansion of their operational design domain. They selected AVA-40 LiDAR because they believe in the unique capabilities of FMCW technology and want to leverage AVA to scale their operations. Compared to time-of-flight LiDAR, ABA's combination of long-range and direct velocity measurements for every pixel detect and classify small hazardous objects faster and more accurately to provide the necessary reaction time across a broader range of conditions. And together with ABA's ultra-resolution, which utilizes our proprietary velocity data to differentiate stationary from dynamic points, we offer near-camera-level resolution, bringing more reliable perception that provides the confidence to expand. We believe other inherent benefits of FMCW also bring value to main mobility's AV stack. To provide some real-world examples, retroreflector blooming and road signs and interference from other sources of light, such as the sun, can challenge time-of-flight LIDAR performance. FMCW is inherently immune to retroreflector blooming in ambient light, enabling ABUS LIDAR to detect critical objects with no degradation in these scenarios and would clearly define object segmentation. These are just some of the differentiated capabilities we hope to bring to our partner, Main Mobility. As part of our production program win, AVA-40 LiDAR will be the exclusive long-range LiDAR on Main Mobility's autonomous vehicles globally and replaces the conventional time-of-flight long-range LiDAR. The agreement includes five-year volume commitments through 2028, with deliveries already starting this quarter and production ramping into 2025. Moving now to slide seven. We achieved an important milestone in industrial automation with the award of our first production program with Nikon to use AVUS LiDAR on chip technology to power the next generation high precision industrial inspection products. This suite of products is used for industrial metrology and quality control during high volume manufacturing. And Nikon's current generation is already deployed to customers across the automotive, aerospace, and renewable energy industries, including some of the largest OEMs, such as BMW, Stellantis, and other automakers. Being the same silicon photonics chip architecture used for our automotive applications, but with different algorithms to achieve micron level precision, AVOS technology will enable Nikon to offer a faster and smaller solution than is currently available, bringing added value to Nikon's current customers as well as opening new opportunities for additional applications. The production award comes after two years of close collaboration with Nikon to develop and validate our LiDAR on-chip technology meets Nikon's stringent performance requirements. Ava's startup production is on track to the target we set two years ago and is planned for late 2024. This production agreement includes minimum volume commitments from Nikon over the multi-year program. Beyond this, we continue to be engaged on additional opportunities in the industrial space. As we have previously discussed, the industrial automation market is an established and growing multi-billion dollar opportunity, and high precision measurement is a growing field within industrial automation where we are seeing strong interest for AVA's unique capabilities. Because of this pull from the market, we developed a perception platform for high-precision measurement that utilizes software to adapt performance for different requirements across multiple non-automotive applications. Nikon will be the first to use this perception platform, and we look forward to bringing additional applications to the market. Let's turn to slide A to discuss the latest in our collaboration with the top 10 OEMs. This quarter, we continue to make strong progress with the OEM, most notably the approval of AVA's manufacturing processes and ability for AVA to be a potential direct supplier to the OEM. I am incredibly proud to say that AVA received the OEM's highest rating category for manufacturing readiness, which the OEM indicated is only given to a small percentage of their supplier base. The rating is based on a comprehensive audit of AVA's manufacturing team and processes and an on-site assessment of AVA Manufacturing Partners' automated production facility. This is a clear validation of AVA's maturity and ability to operate as a direct tier 1 supplier for large global automotive programs. Over the quarter, this OEM continues to expand their vehicle fleet with AVA 40 LIDAR, to support their milestones and the overall AV stack. We remain highly encouraged by our progress and ability to help the OEM achieve their stringent requirements and use cases. This has resulted in AVA being further down selected to the final phase with this OEM. We expect the OEM to award the production program in the next quarter and hope to have more to share soon. Moving now to slide nine. We are excited to have Dr. Stefan Sommer joined ABA's Board of Directors. Stefan brings an extraordinary breadth of experience as an automotive industry veteran with a history leadership career in automotive. Stefan's past leadership roles include some of the largest global automotive call makers, including member of the board of Volkswagen Group and head of components and procurement at the VW Group, as well as leading some of the most renowned automotive tier one suppliers, including as the CEO of ZF Group where he led and executed a strategy that helped GrowZF to become one of the world's largest Tier 1 suppliers. With Ava's commercial momentum in automotive, Dr. Sommer's experience will be invaluable as we work together to bring automotive programs to SOP and work toward winning additional opportunities. Given his deep knowledge of the automotive industry, Dr. Sommer's interest to join Ava's board points to the significant potential of Ava's differentiated technology. We look forward to working together to accelerate adoption of Ava's 4EVIR. And with that, let me turn the call over to Saurav to discuss the financials.