indie Semiconductor, Inc.

Good afternoon and welcome to Indy Semiconductor's 3rd Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Thank you, Operator. Good afternoon and welcome to Indy Semiconductor's third quarter 2024 earnings call. Joining me today are Donald McClymont, Indy's co-founder and CEO, Raja Bal, Indy's CFO, and Mark Tindall, head of corporate development and investor relations. Donald will provide opening remarks and discuss business highlights, followed by Raja's review of Indy's Q3 results and Q4 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 material risks and other important factors that could affect our financial results, please review our risk factors and our annual report on Form 10-K for the fiscal year ended December 31, 2023, as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on consolidated non-GAAP financial measures, such as non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, and non-GAAP net loss per share. For complete reconciliation to GAAP and the definition of the non-GAAP reconciling items, please see our Q3 earnings press release, which was issued in advance of this call and can be found on our website at www.indisemi.com. And I'll turn the call over to Donald.

Thanks, Ashish. and welcome everybody. Let me first briefly cover our financial performance within the context of the overall automotive market environment before focusing on Indy's business achievements. During the third quarter of 2024, Indy achieved total revenue of $54 million, coming in above the midpoint of our guidance. Given the persisting unfavorable global macroeconomic environment and the well-reported short-term challenges impacting the automotive industry, These results are a testament to Indy's resilience. As we look forward, the growth reflected in our fourth quarter outlook and strategic backlog update highlights our ability to take share and outperform. Last quarter, we highlighted some of the factors negatively impacting the automotive industry, including the high cost of credit influencing consumer purchasing decisions and the ongoing elevated levels of vehicle and semiconductor inventory. We also noted that these challenges were widely anticipated to persist through the second half of 2024. Fast forward 90 days, this is indeed what the industry has experienced. But to paraphrase Mark Twain, the reports of the automotive industry's demise were greatly exaggerated. While we still see some uncertainty for the automotive market, the long-term market drivers of in-cabin experience, safety, and electrification remain strong. with safety and electrification being further accelerated by stringent new global regulations and increasingly demanding vehicle assessment programs from NHTSA and Euro NCAP. INDI remains incredibly well positioned to deliver growth across these three megatrends, leveraging our innovative and growing product portfolio to secure design wins which will translate into significant volume shipments in global production vehicles. Additionally, the Chinese automotive industry, EVs in particular, are showing relative strength And to that end, demand for Indy's ICs in China remained strong through the quarter. Let's turn to our business progress in the third quarter across our focus sectors. The news for the quarter across our target markets was unequivocally positive. We continue to gain commercial customer traction with our class-leading products. For ADAS, starting with Vision, our recently launched Indy 880 Vision Processor family is driving new design wins by hitting the customer sweet spot of performance, power, and cost requirements. In exhaustive customer testing, our solution is demonstrably exceeding the performance requirements of the upcoming and very rigorous US and European safety regulation for vulnerable road users that I discussed last quarter. Additionally, the numerous European and Asia-based OEM design and activities across occupant and driver monitoring applications that we also highlighted last time for Indy 880 and its predecessor products continue apace. And in China, the popular Avatar eVehicle is now on the road with our Vision Processor, supplying eMirror solutions. We're also delighted that the Indy 880 Processor family was recognized with the Award of Sensor Innovation of the Year by the Autotech Breakthrough Awards last month. Autotech Breakthrough is a leading independent organization that recognizes the top companies, technologies, and products in the automotive and transportation technology markets. Winning this prestigious award in a strong field of peers is an incredible validation of the class leading image signal processing innovation embodied in Indy's latest generation vision products. Our key 77 gigahertz radar program continues to progress well. Our lead customer is advancing through their internal productization stages and we remain steadfastly on track to support our customer to bring our highly competitive radar ECUs to production with multiple OEMs within the 2025 timeline as previously communicated. For LiDAR, our photonics team has secured a customer-funded program for a complete LiDAR optical engine plus a separate design win for a high-performance optical module. Both programs will leverage our world-class in-house optical component and system integration abilities. Moving to in-cabin user experience, I describe in detail last quarter our various lighting, power delivery, and wireless charging products and latest program wins. And all these are progressing well and on schedule for volume deployments commencing now and ramping in 2025. Our commercial momentum is strong, with numerous design wins across Western OEMs, including Porsche, General Motors, Volkswagen, and multiple Ford models. And in China, we are pleased to report Xiaomi, Avatar, BYD, LeeAuto, and many more OEMs are using Indy's ambient lighting ICs. This quarter, I want to highlight an unsung hero and more recent addition to our user experience portfolio, smart connectivity. The transportation and effective reproduction of high bandwidth data across the vehicle is essential for the growing multitude of in-cabin applications supporting audio-video entertainment and ADAS sensor data visualization. Indy's smart connectivity lineup of high-performance interface converters and retimers now has multiple active design engagements with global OEMs, including a large North American vehicle manufacturer. Finally, let me briefly touch upon our electrification portfolio. We have not elaborated on our capabilities in this segment, as our solutions today are primarily custom ASICs commissioned by specific customers. However, it's worth highlighting that Indy's unique engineering capabilities of analog, power management, digital, and system design are highly valued by Tier 1 system integrators who are dissatisfied with off-the-shelf solutions for their electrification applications, compelling them to commission Indy to deliver what they truly need. Although the past several quarters have been challenging, the long-term automotive outlook continues to remain strong. While analysts forecast modest growth in the new vehicle production for 2025, Indy's growth is not dependent on this. Indy continues to remain incredibly well positioned to deliver growth above market and many of our peer groups' projections, leveraging our uniquely differentiated and expanding product portfolio. The best indicator of our design win momentum and success in the field is the size of our strategic backlog, which we update annually in November. As a reminder, for a full definition of our strategic backlog, please see our Q3 earnings press release. We have recently completed this review process, and I'm pleased to share that our strategic backlog has increased to $7.1 billion, up over 12% from $6.3 billion last year and $4.3 billion in 2022. Based on our strategic backlog today, we would expect to achieve annual revenue of greater than $700 million in 2028. ADAS wins comprise over 72% of our updated strategic backlog, with in-cabin user experience and electrification accounting for the balance. The notable additions to our strategic backlog this year include some of the major DMS OMS wins for our Indy 880 Vision Processor family that we shared previously, plus a combination of our next generation wireless charging and smart connectivity solutions. Lastly, I would like to congratulate Raja on his appointment as our full-time Chief Financial Officer. As you know, Raja has served as Chief Accounting Officer from the time of our launch, and more recently as our acting CFO since June when Tom took medical leave. I want to personally thank Raja for his dedication and support over the last months. This promotion is extremely well deserved. Tom, who has been recuperating, will return soon in an advisory capacity to assist with strategic projects. Given Raja's tenure with INDI and Tom's continued engagement with us, we expect a seamless transition. I will now turn the call over to Raja for a discussion of our Q3 results and our Q4 outlook.