indie Semiconductor, Inc.

Good afternoon and welcome to Indy Semiconductors' fourth quarter and year-end 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the phone presentation. As a reminder, this conference call is being recorded. I'll now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Thank you, Operator. Good afternoon and welcome to Indy Semiconductors. fourth quarter and year-end 2022 earnings call. Joining me today are Don McClymont, Indy's co-founder and CEO, and Tom Schiller, Indy's CFO and EVP of strategy. Donald will provide opening remarks and discuss business highlights, followed by Tom's review of Indy's Q4 and first quarter outlook. Please note that 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 about views 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 discussion of the strategic backlog formulation methodology, please refer to our safe harbor statement on our Q3 earnings press release. For material risks and other important factors that can affect our financial results, please review our risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2021, as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on certain non-GAAP financial measures. For a complete reconciliation to GAAP, please see our Q4 earnings press release, which was issued in advance of this call and can be found on our website at www.indisemi.com. I'll now turn the call over to Donald.

Thanks, Ashish, and welcome, everybody. Indy delivered another quarter of record revenue and gross margin performance in Q4, once again ahead of expectations and capping off a second consecutive year in which we more than doubled our top line. Our sustained outperformance reflects the strength of our highly innovative Autotech products, backed by an extensive global patent portfolio developed by Indy's team of over 600 dedicated employees around the world. Specifically, during the fourth quarter, we significantly outpaced our addressable markets and grew revenue 74% year-over-year and 10% sequentially to just over $33 million. We expanded gross margin to 52% and gained further design wind momentum spanning ADAS, user experience, and electrification applications. Of note, during the period, we ramped our user experience portfolio across leading North American automotive OEMs, exceeded 200 million unit cumulative shipments, closed a convertible debt offering of 160 million in support of our acquisition plans, launched a board-authorized 50 million share and warrant repurchase program, and more recently, we captured a motor control design for e-vehicle battery cooling systems, entered a key partnership with Seeing Machines targeting driver and vehicle occupant monitoring, demonstrated innovative power delivery, wireless charging, lighting, and ADAS solutions at CES, including our Surya Coherent LiDAR SoC, and announced our intent to acquire Geo Semiconductor. On a full year 2022 basis, we delivered $111 million in revenue and improved gross margin to nearly 50%, while substantially increasing our strategic backlog to 4.3 billion as of November 2022, up from 2.6 billion in 2021, and 2 billion at the time of our launch in 2020, setting the stage for sustained outsized growth through the balance of this decade as design wins translate into program ramps and ultimately revenue and free cash flow generation. Within ADAS, we are approaching a new era of sensor fusion, merging multiple disparate technologies to gather and process information, employing radars, lidars, ultrasound, and computer vision. We believe that following our sensor agnostic approach, INDI is the best position to auto-tech semiconductor and software pure play to capitalize on this strategic megatrend. First of all, radar represents a fundamental ADAS building block technology. Today, radar is widely deployed for automatic emergency braking, adaptive cruise control, lane change assist, and blind spot detection applications. In the near future, it will also enable the high-volume cross-traffic detection application, making it an extremely critical sensor. Recall, we significantly scaled our radar initiative through internal investments and the acquisitions of Analog Devices Radar Division and Onsemi's radar team. The successful integration of these assets was critical to accelerating our product development, leading to our largest design win to date for the top four automotive radar system supplier. Secondly, given LiDAR's impressive resolution, range, and depth perception capabilities, we can deliver this rapidly emerging sensor technology to enhance safety systems within mass market vehicles far sooner than the anticipated rollout of fully autonomous driving use cases. To date, addressing the complex and compute-intensive demands of coherent LiDAR systems has been achieved by using very high-end field-programmable gate arrays. FPGAs are ideal for prototyping, and offer high levels of flexibility and versatility, especially beneficial for nascent applications. But FPGAs are also expensive, power-hungry, they require complex PCBs and additional discrete components that add significant cost, size, they generate thermal problems, and excessive power consumption. This makes any migration to mass market LiDAR impractical, where automakers are seeking a sub-$500 price point with less than 30 watts of power dissipation for long-range LiDAR. Enter Indy's Surya LiDAR SoC, the world's first merchant market coherent LiDAR solution, allowing our customers to implement a highly integrated, high-performance, software-defined data acquisition and signal processing system. Surya integrates all the necessary multi-channel high-speed analog to digital converters, hardware and software digital signal processing, together with the system control interfaces needed for an efficient and cost-effective LiDAR system. When coupled with our differentiated Teraxion lasers, Surya can absolutely catalyze the LiDAR market. Third, ultrasound is increasingly deployed to provide practical, low spatial resolution and short-range sensing use cases up to a few meters, such as park assist systems. A key benefit of ultrasonic sensors is that they are particularly effective due to their resilience in most weather conditions and are relatively low cost. We are still in the early innings of our own ultrasound product ramp, supporting Hyundai's Smart Park feature set, amongst others. And last, and far from least, computer vision. Image processing systems provide the main sensing function in both ADAS and autonomous applications, requiring up to 20 cameras in next-generation vehicles. Many different functions are enabled by computer vision, ranging from simple backup cameras, e-mirrors, and surround view systems, to object and lane detection, night vision, and driver and occupant monitoring. Collectively, these functions can realize use cases such as lane change assist, highway pilot, traffic jam pilot, occupant safety, automated parking, and other levels of driver automation. In fact, given the increasing attach rate of cameras around the vehicle, IHS is forecasting 265 million camera ECUs will be needed to support the global automotive market in 2023, growing to 430 million units by 2028, and thus creating an $8.5 billion total addressable semiconductor market. To accelerate our market entry and capitalize on this opportunity, last week we announced our intent to acquire Jio Semiconductor. It's rare that an acquisition target is a perfect fit, but this is indeed the case with Jio. Underpinned by 100 global patents, Jio's industry-leading camera-based sensing and viewing capabilities are shipping today to some of the world's largest automotive OEMs, including Honda, Hyundai, Kia, Nissan, and Toyota. With design wins across more than 20 Tier 1s, GEO has programs with every major image sensor supplier in the world and is engaged in multiple key vehicle programs. GEO's products comprise three generations of application-specific camera video processors, including those focused on viewing, where video is projected on a display and viewed by the driver, and sensing, where video is processed using advanced computer vision and machine learning algorithms to assist the driver. The unique ability to support both of these key categories will allow Indy to deliver short-term solutions for today's use cases while providing a technology platform to provide fully autonomous features for the vehicles of tomorrow. GEO is complementary in terms of products, customers, and global sales channels, while at the same time highly synergistic operationally with massive cross-selling opportunities. Upcoming regulations and OEM's need for differentiation will require a significant increase in camera resolution and the number of image processors per car. These requirements will demand both sensing and viewing features. GEO's camera processing technology will allow the tailored processing of image for display and machine vision applications, resulting in a high fidelity image delivery to the display and a contrast enhanced image going to the machine vision system for object detection, low latency, and superior time to collision performance. at ultra-low power. INDI's differentiated sensing technologies combined with GEO's camera processing know-how and IP will uniquely position us to accelerate the adaptation of camera-based sensing technology across the vehicle spectrum. More importantly, GEO is enabling INDI to complete our sensor mosaic spanning radar, LIDAR, ultrasound, and computer vision with scale across each, now underpinned by a total of 370 patents and applications Our next step will be to fuse all sensing methods into integrated platforms to provide our customers with the most optimized and highest performing systems bar none. Switching gears, during the fourth quarter, we also continue to ramp our user experience portfolio across leading global automakers, as OEMs prioritize a best-in-class cabin experience more than ever. This focus towards creating a unique cockpit environment where communication, entertainment, and information sharing has become paramount, and indeed is a much greater customer differentiation than traditional torque, horsepower, and zero to 60 metrics. Providing the ultimate user experience throughout the entire cabin is the new standard. In particular, seamless mobile device integration within the automotive environment is increasingly a way OEMs are differentiating their cars, which means implementing systems such as Apple CarPlay and Android Auto that enable drivers to safely make calls, send and receive messages, and enjoy their favorite music without taking their eyes off the road. This key feature is set as everything for teen drivers and even more important for their nervous parents. Similarly, vehicle lighting is gaining in importance as it is a strong generator of brand recognition. Illuminating a car's interior and exterior creates an emotional ambience that drives a unique connection. Car manufacturers understand the significance of this dynamic and are striving to perfect the integration of lighting conditions for a more harmonious driving experience. Finally, in the EV area, we're seeing the start of a long-term secular tailwind as OEMs, led by consumer demand, shift towards electrification. According to Cox Automotive, EV sales were up 66% versus the prior year in the US, and the EV share of the total market nearly doubled to around 6%. While penetration of EVs has increased considerably, there still lies an enormous blue-sky opportunity ahead. And India remains especially well-positioned here, given our strong relationships with an increasing number of leading OEMs around the world who are seeking more highly integrated and power-efficient semiconductors to continually shorten charging times and extend vehicle range. I will now turn the call over to Tom for a discussion of our Q4 results and Q1 outlook.