Cepton, Inc.

Good day and welcome to Septum's first quarter 2023 earnings call and business update. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct the question and answer session. If at any time during this call, you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, May 9, 2023. I would now like to turn the conference over to Hal Hsu, Chief Financial Officer. Hal, please go ahead.

Thank you and welcome to Cepton's first quarter 2023 earnings call and business update. With me today are Jun Pei, co-founder and chief executive officer, and Mitch Ortini, senior vice president of business development. During the call, we may refer to our unaudited gap and non-gap measures in our earnings release. The non-GAAP financial measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. Reconciliations for non-GAAP measures are included in our earnings release. I would like to remind everyone that comments made in this conference call may include forward-looking statements regarding the company's expected operational and financial performance for future periods. These statements are based on the company's current expectation and are subject to the safe harbor statements relating to forward-looking statements contained in our earnings release and the slides that accompany this call. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks, uncertainties, or other factors, including those discussed in the earnings release or during today's call. and those described in our filings with the U.S. SEC. We are not undertaking any commitments to update these statements as a result of future events, except as required by law. As a quick reminder, this call is being recorded, and you can find the earnings release and slides that accompany this call, as well as a webcast replay for this call at investors.septon.com. Now I'd like to turn the call over to Jim.

Thank you, all, and good afternoon, everyone. Thank you for joining SEPTOM's first quarter 2023 earnings call. We will provide a business update and review our first quarter financial results with you. I will start with an update on our series production execution. On the product side, we continue to ship pre-production units to COETO throughout the quarter. While the exact date of vehicle production launch is for the OEM to decide, our LiDAR remains on track to receive final validation from our OEM customer for production in saleable vehicles. Our products are being evaluated across multiple vehicle models under our existing production award. As a result of our continued performance with our OEM customer and the versatility of our flagship Vista X90 LiDAR product for vehicle integration, we expect to receive additional vehicle models in the next couple of months to expand the coverage of our existing series production award. We're encouraged by the commitment to our technology from our OEM customer. This is reflective of our efforts and dedication to enabling LIDARs as a critical component of automotive safety. In addition to hardware, Our embedded software allows us to meet the stringent automotive OEM requirement, such as cybersecurity, over-the-air updates, and functional safety. It also allows us to deliver additional custom features we delivered for our OEM customers. These capabilities were developed by our in-house software teams, and it's a tremendous value add for our OEM customers. Software is subject to the same standard as hardware, and our OEM customer has some of the highest standards in the industry when it comes to the reliability and safe operation of their vehicles. We believe having the ability to deliver a combined hardware and software solution to our OEM customer under a series production environment positions us beyond a simple LiDAR hardware provider. It actually positions us as a total LiDAR solution provider and as a leader in driving market adoption to enable LiDAR for everyday vehicles. As our products near the final stages towards the production validation, we're also working on increasing production capacity at our contract manufacturers and Tier 1 partner facilities. We have mentioned in previous quarters that we work closely with our Tier 1 partner, Coetel, to enable the future scale of production of our LiDAR products. Our continued efforts in scaling production include securing raw materials at scale and implementing production processes in both hardware and software to ensure we can deliver consistent quality at volume. For example, in this past quarter, we were able to increase the throughput by five times for one of the critical manufacturing steps, and we feel confident in meeting production milestones as we move towards SOP. Following the announcement of our Vista X120 Plus product earlier this year at CES, we unveiled the Vista X90 Plus this quarter. X90 Plus carries over the same slim form factor improvements to our current X90, the product that is launching with our lead OEM program. These improvements enhance our advantages in vehicle integration placed behind the windshield and unlocks the placement in other areas of the vehicle, such as the headlamp and fascia. Our X90 product is a direct result of working closely with our lead OEM customer to drive LiDAR adoption across the majority of the OEM customer's fleet. Shepton is the first and only known LiDAR company to launch a high-performance LiDAR in passenger vehicles behind the windshield. It is not a trivial task. and it creates a huge competitive mode for the distance future. Our new X90 Plus will also feature our recently announced point cloud processor ASIC, the Komodo. Developed in-house, this new ASIC is designed to improve our point cloud quality, reduce power consumption, and at the same time, replace FPGA and other merchant silicon devices to drive cost savings. In the years ahead, where production volume is high and on-time delivery is key, we are reducing reliance on the semiconductor supply chain with our own ASIC solutions. In addition, we expect to continue extending the technology leadership with our proprietary ASIC chipset. The accomplishments we have made to start off the year highlight our continued commitment and dedication to be a LiDAR market leader. As our products mature, we continue to make improvements in embedded software and innovate at the chip level to solidify our technology leadership. Transitioning from product development phase to the production phase stresses the importance of maintaining Septon standard quality at the volume demanded by our OEM customers. There are distinct challenges in maintaining the same level of precision and reliability in every LiDAR unit when the volume scales to tens and hundreds of thousands. Our investment towards production readiness will prove to be the key areas of differentiation in both lead time and cost. With that, I'll turn it over to Mish for an update on our customer programs.