Berkshire Grey, Inc.

Thank you for standing by and welcome to the Berkshire Gray first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to our speaker today, Ms. Sarah Buddha, Vice President, Investor Relations. Thank you. Please go ahead.

Thank you. Good morning, everybody, and thank you for joining Berkshire Gray's first quarter 2022 earnings conference call. Earlier today, we issued a press release announcing our financial results. The release is available on our Investor Relations website at ir.berkshiregray.com. Leading today's discussion is Berkshire Gray's founder and Chief Executive Officer, Tom Wagner. Steve Johnson, our President, and Mark Fidler, our Chief Financial Officer, are also here with us today. Following management's prepared remarks, we will open up the call to questions. Before we get started, we would like to inform you that certain statements made during this conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Future operating performance and financial results of the business may differ materially from those expressed or implied in any forward-looking statements provided on this conference call, due to various risks and uncertainties and risk factors. Information concerning these uncertainties and risk factors is contained in our filings with the SEC. Forward-looking statements included in this call are based on information currently available to us and represent the company's current view as of the date these statements are made. We do not commit to update these statements. As a reminder, we will be referring to some non-GAAP financial measures during today's call. A detailed reconciliation of GAAP and non-GAAP measures can be found in our earnings press release today, which will be furnished to the SEC and is available now on our IR website. These non-GAAP financial measures are an addition and not substitute for or superior to measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to any performance measure derived in accordance with GAAP. With that, I'll now turn the call over to Tom Wagner, CEO.

Thank you, Sarah, and good morning, everyone. Welcome to our first quarter 2022 earnings call. It's been six weeks since our last call. Today, I'm going to focus on a few topics that underscore our growth opportunity, our unique position in the robotic automation market, and how we continue to build on the successes we realized in 2021. Along those lines, in the first quarter, we secured a new logo with an industry-leading retailer, launched new products which address critical market needs and broaden our unique product portfolio, and rapidly built a $100 million pipeline for a new product that we launched only a few months ago. Mark and I will spend some time discussing these items in more detail. Today, we also have Steve Johnson, our president, joining the call to talk more about our go-to-market activities and customer traction. As we get started, let me remind you of our mission here at Berkshire Gray, We make industry-leading AI-enabled robotic systems that fill e-commerce and retail orders and handle e-commerce packages as they make their way to your door. Our mission is to help customers succeed with intelligent robotic automation that gets the right goods to the right places in the right quantities at the right times. We automate difficult and labor-intensive tasks within fulfillment operations, including picking, sorting, packing, moving, and organizing. These are core functions that are found in almost every logistics operation and lead to a $280 billion addressable market for our products. Our technology is proven in production and driving tangible ROI for Fortune 100 customers. We secured repeat orders from every one of our anchor customers and are growing our new business pipeline as well. We have the right strategy, the right technology, and the right team in place today to capitalize on the tremendous market opportunity before us. Now let me talk about the quarter, our pipeline, and our technology advancements. In the first quarter, we delivered revenue of approximately $5.5 million, ahead of analyst expectations. Total orders to date are $203 million, and we have a backlog of $103 million as of the end of Q1. As Mark will discuss, we are reducing product costs to drive future gross margin improvements, and we continue to invest in our technology to position us for long-term growth. Most importantly, we remain confident in our plan of becoming a billion-dollar company and achieving our target long-term operating model of approximately 50% gross margin and 25% adjusted EBITDA margin. Moving on to customers, our pipeline is robust. we remain actively engaged at multiple levels with all of our anchor customers. Our technology is proven and in deployment, and we believe we are an important part of their long-term automation strategy. Regarding new customers, in the past few months, we secured an initial order with a major retail brand and a follow-on order from a new customer we landed in late 2021. This means order and follow-on order in rapid succession and is yet another positive indicator. Our current pipeline includes hundreds of identified opportunities and unique prospective customers. Steve will provide some more color on that shortly. Now I'd like to talk about some of our recent product news, which broadens our product portfolio and expands our growth opportunities. Last week we announced the next generation of our mobile solution, BG Flexx. Our mobile solution consists of autonomous mobile robots that sort, sequence, and move items for e-commerce, orders, and store replenishment. And we have large installations in operation today. With BG Flex, we combine a high-density buffer with our mobile robots, robotic picking stations, operator picking stations, and our orchestration software, which manages the flow of goods and work through the system. These new features lead to increased density and decreased footprint, expanding the applicability of our solution beyond large distribution centers to back-of-store and standalone micro-fulfillment centers. This is important as our customers increasingly rely on automation to address the unprecedented consumer demand for near real-time order fulfillment, such as buy online, pick up in store, and curbside delivery. Our new BG Flex mobile solution is yet another example of our ability to build on our standard product modules to deliver the automation our customers need to compete in today's on-demand economy. Along similar lines, we also recently announced our robotic pick and pack with identification, or RPPI solution. This system is built on our existing core picking technology, and adds new features for touchless e-commerce auto bagging. This allows retailers to increase fulfillment throughput while using sustainable approaches. For instance, having the robots pack into recyclable mailers. Current processes require human labor to place items into e-commerce shipping bags, which is labor intensive, slow, and can be prone to error. Our PPI provides both automation and support for sustainability programs, which is important to our customers and important to us. At Berkshire Gray, our technology is our competitive advantage. For customers, our technology is their competitive advantage as they compete in a rapidly transforming digital economy. This is why some of the world's largest retailers, e-commerce providers, and logistics companies choose Berkshire Gray. and why every one of our anchor customers has expanded their deployments with us with new orders. Repeat orders are a strong affirmation of our technology. Other affirmations include our strategic partnerships, like our partnership with Swisslog, and other experts, like Frost and Sullivan, who recently named us the 2022 Enabling Technology Leader for Intelligent Robotic Automation. In summary, we are well positioned for continued growth. Our technology and our team are industry-leading, evidenced by repeat orders from customers. We have a strong pipeline that Steve Johnson will discuss further in a moment. There are material long-term macro tailwinds, like changes in consumer shopping behaviors, for example, app-based ordering, as well as escalating labor costs and labor scarcity that are driving our customers to automate their operations. We have unique and differentiated products that are proven and in operation with Fortune 100 customers. We have even more conviction now about the growth opportunity we have in front of us today as we build a profitable billion-dollar company. Now let me turn it over to Steve to talk about our commercial momentum and our pipeline for growth.