Berkshire Grey, Inc.

Good day, and thank you for standing by. Welcome to the Berkshire Gray's third quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's prepared remarks, there will be a question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw a question, please press star, then 2. I would now like to turn the conference call over to David Kaluzdian, an investor relations representative for Berkshire Gray. Please go ahead, sir.

Thank you, Joe. And thanks to everyone for joining Berkshire Gray's third quarter 2022 earnings conference call. Earlier today, we issued a news release announcing our financial results. The release is available on our investor relations website at ir.berkshiregray.com. Leading today's discussion will be Berkshire Gray's founder and chief executive officer, Tom Wagner, and our chief financial officer, Mark Fidler. Following management's prepared remarks, we will open the call to your 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 uncertainties and risk factors. Information concerning these uncertainties and risk factors is contained in our filings with the SEC, and we refer you to those forward-looking statements disclaimer that accompanied our press release this morning regarding our financial results. 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 updating 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 news release issued today, which will be furnished to the SEC and is available now on our IR website. These non-GAAP measures are in addition to and not a 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 measures derived in accordance with GAAP. With that, I'll turn the call over to CEO Tom Wagner. Thank you, David.

Good morning, everyone. Welcome to our third quarter 2022 earnings call. Today, Mark and I will update you on our quarterly performance, operational execution, and long-term strategic alignment with customers, and the continued favorable macro environment driving the long-term demand for automation. We'll also provide some real-world feedback about how well our systems are performing at customer locations. First, let's talk about the quarter. We delivered revenue of approximately $24 million, growth of almost $5 million year over year. Through early November, we secured over $50 million in new orders, of which approximately 26 million were secured since our last earnings call. We're pleased with the orders we've secured to date. As expected, most of our orders this year represent follow-on orders from our existing customers. These orders demonstrate the success of our solutions in operation and quantifiable ROI for our customers. We have a very active sales pipeline of specific opportunities, and we expect more orders to be signed by the end of the year. On the execution front, we're rapidly scaling deployments of our solutions and installing them more efficiently than ever before at customer sites in the United States and Canada. The third quarter is historically a very busy time for us, since many customers need to have systems installed prior to their peak season, which occurs mainly between Thanksgiving and Christmas. During the third quarter, we installed 57 of our systems at 16 different sites. making it our busiest quarter ever. At this point through Q3, we have installed hundreds of our systems and have them running in production at our customers' facilities. Our systems are picking, sorting, packing, and organizing goods to fill e-commerce orders, resupply retail stores, and handle packages at large volumes daily. We hit contracted production rates and demonstrate high performance. For instance, we've achieved 100% accuracy and increased throughput by up to three times while substantially reducing labor costs. Real-world quantifiable performance and ROI is why these same customers, many of whom are Fortune 100 companies, are ordering more solutions. The value we're delivering to customers is just part of how our technology is differentiated. Recall, our technology tackles the hardest, most labor-intensive problem in the warehouse distribution industry, the processing of individual items, also known as eaches, or smaller groups of items, such as vendor packs. This handling is the cornerstone of precise, modern fulfillment, where the emphasis is on improving operational efficiencies while supporting all of the changes in consumer expectations tied to that mobile phone in your pockets. There are very few advanced automation options that can process these items and almost none that deliver full solutions like Berkshire Gray. Our solutions, which incorporate large bodies of proprietary AI software and patented hardware with over 170 patents issued and more than 325 current filings, deliver. We are disrupting the automation market with proven innovative technology that addresses a critical and core need. Now I'd like to talk about our perspective on the current macro environment. We've all observed that the current economic climate is challenging, marked by increased inflation, rising wages, continued supply chain issues, and the like. Certain of our large customers have been impacted by some of these issues, which generally result in increased operating costs. For some, labor constraints have also contributed to lower than expected revenues. At the same time, our customers continue to be under tremendous pressure to meet consumer expectations and maintain their competitive advantage. This leads to a continued need for automation because it actually helps to manage and mitigate some of these issues, and we are seeing this. To illustrate, let's talk about FedEx for a minute. Earlier this year, we announced an expansion of our strategic relationship with FedEx, which we continue to be very excited about. This expansion includes a strategic new application of our technologies for a critical operation, a corporate-wide master purchase agreement construct, and we issued a warrant to purchase our common stock that fully vests when FedEx purchases $200 million in products and services by the end of 2025. Now, FedEx has publicly discussed the challenges posed by the global macroeconomic environment, However, just last week, and we appreciate our partnership with them, they placed an $11 million order for more of our systems to be deployed in 2023. When it comes to the challenging macros, our technology precisely addresses the challenges by improving operational efficiency, reducing reliance on manual labor, and helping to future-proof operations due to the modular and flexible nature of our solutions. We continue to see tailwinds driven by our customers' needs to become more efficient in their operations, and above all, maintain their competitive edge in meeting the high expectations of their customers. We remain very bullish on our overall growth opportunity. Our commercial teams are very busy working on over 150 unique opportunities with existing and prospective customers to offer real solutions to real problems, and we are making excellent progress on that front. In fact, we were recently verbally notified that two projects in Europe are expected to be awarded to us. More importantly, these would mark the first project in EMEA for Berkshire Gray. With a pipeline worth over $6 billion of potential projects, we have strong conviction in our long-term growth prospects. In summary, we're delighted with our Q3 performance in recent orders. The macro environment continues to support the robust long-term opportunity for our type of automation, and we are executing well operationally. Our technology continues to prove its value, and we look forward to executing on our business plan. Now let me turn it over to Mark to give some details on the quarter and our outlook for the year.