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spk00: Good morning and welcome to Innovee's third quarter 2021 earnings conference call. Joining us today are Omar K. Laaf, Innovee's Chief Executive Officer, and Eldar Segla, Innovee's Chief Financial Officer. Following the formal remarks, we will open the call for your questions. I would like to remind everyone that this call is being recorded and will be available Before we begin, we would like to remind you that our discussions today will include forward-looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of Innoviz. Actual results could differ materially from those anticipated in the forward-looking statements. Forward-looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them. For a discussion of some of the important risk factors that could cause actual results to differ materially from any forward-looking statements, please see the Risk Factors section of our Form 20F filed with the SEC on April 21, 2021. I will now turn the call over to Omer. Please go ahead.
spk02: Hey, good morning everyone. Good to see you. Let's start the show. Hi, everyone, and good morning. I'm Omer Kelaf, CEO and co-founder of Innovis Technologies, and with me, Eldar Segla, our CFO. Very happy to be in New York and meeting with investors and talking with analysts and being able to bring our car, the Grizzly, which we call, with our Innovis One LiDAR to show and demonstrate the great performance. Happy to be here today. Before I move on to our quarterly updates, today we have a very special guest with us. I'm very happy and honored to have Mr. Richard Rau, who is the VP of Automated Driving of BMW. He's joining us now today from Germany, Munich, He's here to talk about the program, the process. We are very fortunate for BMW being selected Innovis Technologies through Magna, our T1 partner. And I'm very excited to see you here, Richard. We've been working together for the last three or maybe four years right now. Thank you very much for accepting my invite to be here today.
spk01: Thank you, Omar. Thank you for inviting me. I'm glad to support you in this important call for Innovis. I would like to give you all in a few minutes a little bit a little perspective on our joint project we have with innovates and magna before I dive into this, however, I need to give a little disclaimer. Because we do have very strict policies at BMW that restrict me in terms of what I can say about ongoing projects within BMW so please. I understand that I will not talk about specific launch dates or specific features or functionalities, nor will I be commenting on the programs of other OEMs or on other laser scanner programs. With having this set, maybe I give you a little background on where we stand at BMW with autonomous driving. Many things which I'm going to say are public knowledge, but maybe in this summary not fully present to you. First of all, we have announced this quite a few times that we do work on a full level three customer system. So true autonomous driving that will launch as soon as the necessary regulations are in place. And as soon as it meets all the high safety standards at BMWs for the safety of our customers. We have also, I think, talked quite a bit in public about on conference and the like that for us, a LiDAR or a laser scanner is an absolute necessary component in the overall sensor setup for a true level three system. And that we are pretty firm about, have been for the last few years, and that has not changed. You cannot build from a BMW perspective a true level three system without LiDAR systems or without at least one LiDAR in the system. For this end, we have nominated Magna and Inovits already some time back to develop for us for our autonomous stack. a LIDAR for really an end user customer application so that it meets all autonomous requirements and all the performance requirements we have for the system. That one was announced, I think, within the internet early 2018. And this project is ongoing. And if I move on now a little bit to technological aspects of this project, designing a lidar as an integral part of an autonomous system is a very challenging task because you have to take many, many design decisions and optimizations. This whole process cannot really be reduced to single parameters as the question, what is the right wavelength of the laser I use? What is the right type of mirror and the like? There are many, many things you have to take into consideration. For this end, we do have quite a sizable team at BMW that is doing nothing else than working on a daily basis with a highly competent team at Innovitz and in Magna to exactly designing the system, to finding the best trade-offs, the best design decision that we have an overall system that do meet or that doesn't meet all the level three requirements we do have. Especially on the technical side, things like... You know, is it 1550 nanometer laser or 905 nanometer laser the better option, the decisions you need to take and in specifically the specific IP InnoVits brings to the table clearly tilts from my perspective, the overall optimization towards the 905 with the specifics that InnoVits can provide. Overall, I can say that this project that we have is right on track with respect to all important parameters, with respect to the design of the system, with respect to validation, and also with respect to the industrialization, which is also an overall very challenging task because LIDARs are highly complex systems. And overall, the project is on track that BMW will be able to deliver with my introduction statements I have just made. And it is a real pleasure to work with the team at Innovitz because they are great in terms of their competence. They're extremely skilled. They have IP that makes a significant difference for us. And that overall, we are there on a very good track. So I hope this helps to give you a little bit of perspective on our work together with Innovitz. And with this, I would pass it back to Oma.
spk02: Thank you very much, Richard. I really appreciate it. And I'm very, very excited to hear you talk about our team. It's been such a long journey so far. And as you know, we are super committed to continue to work with you and help you be very successful in your journey to be the first level three car maker in the market. It's a real honor. And I know it's very uncommon that BMW would participate in such a forum. And I believe it's really thanks to a very special relationship that we've managed to generate in the last few years and hopefully will continue. Thank you very much. See, I think it should be enough for today, but let's continue. Let me move to our presentation, talking about what Inouye has been up to in the last quarter. So before I'll talk about the exact activities, are you seeing my slide? Okay, good. Okay, so of course for the LiDAR market, there are different applications of automation, whether it's logistics and agriculture and smart cities and trucks. There are many ways you can leverage on a good LiDAR. Innoviz has always been very focused on one category, which we thought is going to be the most important and most relevant for us, which is the passenger vehicles. When you talk about the passenger vehicle, it's important to understand that this, okay, sorry. Okay, sorry. Okay, so in order to understand this market, it's also important to understand that it's also setting the highest bar. It is the most cost sensitive because it's for a privately owned vehicle. It requires the highest performance because it's for highway driving, for very fast cars. It has the highest standards on reliability. That's for a passenger vehicle that needs to last for 15 years. It requires perception software that comes along with the sensor. It requires a very strong industrialization process for a product that needs to be built in millions, as Richard just said. It has very high sensitivity to size and power consumption. And of course, eventually when it comes to very high volume, you need to work with tier ones that allow you to access the market. I think that if you combine all of those unique requirements and maybe the most harsh one, this is where Innoviz stands out with our solution, which is the most cost-effective and highest performance. Of course, the opportunity in this market comes because it is the largest growing market until 2030. It is the shortest validation process in order to reach the market. In opposed to level four, level five, level three is much more simplified. Customer value is already proven. OEM financial motivation is already proven as well. The car makers would be able to charge for chauffeur driving from drivers and generate recurrent revenues monthly. Of course, when working automotive, you generate also very good relation for very long term, having a very strong customer loyalty for many, many years. And since this market is about to converge and we see many, many opportunities now on a decision making for programs that are going to be launched for the following years. And of course, those programs will last for many, many years beyond that. This is our opportunity to take a very significant market share. Now, at Innoviz, we have a certain methodology on how we develop things. Over the last five, six years, every year, we stop and look at what we're doing and trying to find what's the next 10x improvement. What is the game changer that we can bring into our offering that can allow us to be much more attractive? What we identified right now is that if our focus is the level three, level two, level three passenger vehicles platform, we believe that Innobis II new product is already meeting the highest performance targets. And we see it as the most cost-effective solution in meeting our targets. Right now, Having our all automotive experience makes us to understand that with our ability and our financial stability, raising money through the SPAC gave us 12 months ago an understanding that strategically point of view, we want to go and start to address this market as a direct tier one supplier. That would be a very meaningful ability for us to access the market and get many benefits from it. A standard tier two, tier one is when a technology company provides a certain technology, a reference design, a prototype, and eventually sells the components. The tier one takes full ownership of the process, work directly with the car maker, integrating the product, designing the tools, designing the manufacturing, producing the samples, and basically doing everything in the program while the tier two only sells its technology. In our case, since we've been able to work very closely with both Magna and BMW, we were able to absorb a lot of knowledge. In this program, we are also responsible for the manufacturing of the samples. We were responsible for the design for manufacturing. We were responsible for the design of the manufacturing tools. All of these assets that we were able to collect through the further years showed us that there are still gaps between us and being in a classic tier one, but those are gaps that we can mitigate now that since we were able to raise substantial money, it allows us to strategically go in that direction and offer our solution directly to car makers. So some of those capabilities are now done in house such as integration, of the software, the operating system, the auto cell, the production validation. And of course, when it comes to high volume manufacturing, we will be able still to leverage on our existing relationship with our existing T1s as they have those capabilities of automotive grade, high volume manufacturing. And it's really a win-win situation for everyone. The benefits for us is, of course, having higher revenues in terms of us not just selling the components right now, we're selling the complete solution, which gives us substantially higher, potentially, revenues. And it allows us to be much more flexible in control of the process when we're submitting to RFQs. Now we're working directly with the customer in negotiations, understanding their needs, needs and requirements and allowing us to be more competitive when it's needed. Of course, when it comes to offering a product with a less margin stack, because we are the tier one, it allows us to give a much more pricing fit. And of course, when it comes to amortizing all of our efforts, which could be very tremendous for one single program, we innovate since we are developing the technology, we are bringing a new product to the market, we can amortize those efforts across multiple programs in that manner, allowing us to provide a much better offering to every other customer. From a project management, being part of a level two, level three program means a very highly complex technology project. We, Innove, is a very technical company. Working in a simpler project management manner will allow for simpler processes to move faster. We believe that's another value that Innove is, in our methodology, to be flexible with our customer. Helping them to get to the market is going to be the benefit of our customers. And last but not least, it's really a win-win situation for everyone because our car makers, customers can get a very strong, a very good pricing offer commercial terms. Our T1 partners can leverage on volume production that we can bring to the table, allowing them to exercise their manufacturing sites that are already automotive certified and allow us eventually to generate additional revenues and gain more business. In the car space, when you build a car, you have thousands of suppliers. The car makers cannot work directly with each and other supplier in the market. And therefore, they selectively choose who are the main tier ones that eventually would source those technologies through them. And every tier one that today exists has gone through a very long process with the car maker in order for them to be recognized as a tier one. We've gone, I told you a few in the last quarter, I told you about the different audits that we were passing. The context of those audits is related to the fact that we've been audited to become a tier one in front of one of the biggest car makers in the market today. Those sessions that length for over several months, over a year, basically, allowed us today to say that with many disciplines which are related to logistics and cybersecurity and software development and quality assurance, we've gone through a lot of effort. And eventually, I'm very happy to tell you today that we were able to formally being recognized as a direct supplier to one of the biggest car makers in the market and now eligible to be nominated as the direct supplier of the LIDAR. That nomination is part of an RFQ that is going on, and we believe that we have very good chances to be nominated eventually, yet to become. That process gives us also higher confidence in now approaching other car makers, being able to show them that we are already fully certified as a tier one working directly in front of car makers, now giving us a back wind to work with other car makers and we are working through the same process with additional OEMs as we speak. This slide talks about market fit. What we are showing here is a reflection of all of the RFIs and RFQ that we received the last two years. As you can see, the spread of the different requirements are spread between two accesses. One is the field of view, the other is the range and resolution. And as you can see, there is another element here, which is related to the cost. Of course, the premium vehicles are usually targeting very high, very fast driving of autonomous driving, which pushes the performance requirements higher. InnoVis One, which was our first product to the market, was designed around requirements we got from the premium vehicles, us knowing that those car companies are more likely to be in the market faster than others because they are much more technical. And since then, we are also brought in InnoVis One Plus because the requirements in the market continuously increase. As you can see, those products have very high performance and yet are not able to support low-cost brands because of the price barriers. For that, we designed Innoviz2 that is going to be a great fit for the entire market. It has 30 times improvement over Innoviz1, and it's going to be significantly cheaper that will allow us to meet all of the demands that we see from the different brands. I have very high confidence with this product to be a real game-changer. I want to talk about the NVIDIA announcement we made yesterday. So NVIDIA is a company we announced yesterday about working and being part of their platform. Innobis is a formal NVIDIA drive ecosystem partner. NVIDIA is a very common platform used by probably most of our customers that are on a path to develop an autonomous vehicle. As such, NVIDIA recognized that our sensor is asked by several of our customers to be integrated as fast as possible. And working with NVIDIA and incorporating our LiDAR into their platform is eventually going to help our customers to move faster, solve problems, not to deal with problems that were already dealt ahead of time. NVIDIA decision to include Innobis on its platform is a vote of confidence initially coming from their customers who wish to integrate Innobis LIDARs. We are appreciative of NVIDIA making our LIDAR accessible to the market and believe it will help our customers accelerate their autonomous vehicle development. I want to talk about confidence. So when interviews went public six months ago and started to prepare towards it, we had to provide some guidance on how we see our potential going forward. When doing our business model and trying to reflect what's the potential revenues over deals, there were several key elements that we took into account. The first one is related to the pipeline. I'm happy to tell you that since then, that time, many other customers have propagated into the pipeline. Additional car makers that were not in the discussion a couple of years ago are now providing RFIs and RFQs. This gives us a lot of confidence since we see that LIDARs are now going also not only to the premium vehicles, and we see more and more car makers with an interest to include LIDARs in very high volumes. In terms of progress through the final interviews, let's continue to work with different programs and propagate it in different stages. I can say that today on three programs, we are at the final stage. Possibly we know that in some of them, we are the leading candidate and we believe that we have chances, good chances to win this program very meaningfully for us. ASP, as I said earlier, now competing on programs as a direct supplier will allow us to increase our overall potential revenues and increase our time. For market fit, I want to say that when we started our discussion with the market a year and a half ago, we talked about InnoVis 1, we talked about InnoVis 2, and there was another product we called InnoVis SLR. Now, SLR was the development of InnoVis 1 in terms of the improvement of performance. What we managed to do in the last year and a half, and actually that was announced a few months ago, we were able to bring the 30 times improvement into Innoviz2, which was initially only targeted the cost reduction of Innoviz1. So Innoviz2 is now including both the cost reduction of 70% of Innoviz1 and the performance improvement of 30 times. Having such a product in our hands gives us higher confidence in our ability to acquire very meaningful business in the future. The tier one role is giving us ability to control our process, our ability to be much more flexible and competitive, and in that manner, allowing us to have high confidence that we will be able to achieve a bigger portion of the market. With all of these elements, which we are continuously developing, I believe that what Innobis is now able to say is that we have very high confidence in our ability to meet our vision and our targets. Several announcements that we've made in the last quarter, such as integrating with Webasto, which is a tier one, using LIDARs for roof mounting, NVIDIA, as we were talking, EV Motors, who is an importer for electric vehicle to Israel, Juifix, which is a smart city, an infrastructure development using our LIDARs in the Chinese region, And Modify.ai and 3D Target, which is an AV integrator in Italy. Very thankful for all our partners. It's a real honor to grow our ecosystem, which we're using our LIDARs. Small update on our funnel. So we have additional customers getting into advanced technology evaluation. Additional customer moved into the process of commercial and requirements negotiation, which led to an increase of the potential order book of $200 million. And we will continue to give you update as many of those programs that we're working on will materialize. Now I want to talk about technology development. So as you know, we're expecting to have InnoVis 2 coming along. The team has been working very difficult, very hard in the last two, three weeks towards a certain milestone with the customer to show them the InnoVis 2 B sample. I have here the Innobis B sample in my hand. And this is a product that today the team is working to tailor and basically bring to the performance that is needed. I suppose that you are able to see the excitement of the team. And I can tell you that I've spent also several evenings with the team. And today, I can tell you that just last night, I got a picture from the lab. People at 2 o'clock in the morning, they stay until 4 o'clock in the morning. The level of passion that exists in the team on eventually providing our LIDAR to the market, bringing Innoviz2 to our customer, meeting our commitments, has always been of very high importance to us. Innoviz2 is making its first steps, showing here the first light coming from the product. There is still much work to do. But I'm very thankful for my team and for those that are listening to me now. I'm looking forward to see it in my own eyes. It's very exciting. Thank you very much. I will move along to Eldar to talk about the financials.
spk03: Thank you very much, Omer. And thank you, everybody, for joining us today. So revenues for Q3 2021 were $2.1 million, an increase of 106% compared to Q2 2021, and an increase of 13% compared to Q3 2020. InnovizOne-related revenues in Q3 2021 were $1.6 million, or 79% of the total quarterly revenues, an increase of 36% compared to $1.2 million or 66% of the total quarterly revenues in Q3 2020. The company continued to see strong interest for its products and expects the positive momentum to continue. Operating expenses for Q3 2021 were $30 million, an increase from $16.8 million in Q3 2020. Q3 2021 operating expenses included $18.2 million of stock-based compensation. The increase in operating expenses compared to Q3 2020 was primarily due to increase of $7.4 million of stock based compensation and people related expenses, additionally, the company. continue to invest in R and D with R and D expenses totaling $20.6 million of which $3.7 million was attributable to stock based compensation compared to $14.7 million of R and D expenses incurred in Q3 2020 of which $0.6 million was attributable to stock based compensation. As of September 30th, 2021, the company had $139.6 million in cash and $185 million in short-term deposit compared to $58 million in cash as of September 30th, 2020. The increase in cash was related to closing of the company's business combination transaction earlier this year. Thank you very much for joining, and I'm returning the call to Omer. Thank you.
spk02: Thank you, Eldao. So again, thank you all for joining us today. Let's use this opportunity to get some questions from the people on the line. Thank you.
spk04: Thank you. In order to ask a question, please raise your hand using your mobile or desktop application and wait for your name to be announced. Once again, please raise your hand using your mobile or desktop application and wait for your name to be announced. Our first question today comes from the line of Michael Filatov. Michael, you will be prompted to unmute. Please go ahead.
spk07: Hi, guys. Can you hear me?
spk04: Loud and clear.
spk07: Okay, great. So thanks for taking the question and thanks for the presentation. So the first one I want to ask here is around sort of an article that came out with an interview with the director of development at BMW. And he had mentioned that, you know, BMW would put out a level three sort of platform on the seven series, you know, maybe next year. So I know you can't comment on your customer's timeline, right? I totally understand that. But I want to kind of ask the question, when will we be able to buy a car with an interviz lighter on it, whether it's a BMW or something else?
spk02: So as you said, the BMW article, which gave indication of having a level three following next year, I mean, I wouldn't be able to provide any other indication than what BMW is offering, but as Mr. Richard Rao said, level three of BMW would always consist of a LiDAR. Other than that, I would say that the dots could be connected somewhere else.
spk07: Okay, fair enough. I had to ask. So next question would be, you know, I think you made it very clear what you feel the advantages are of being a direct tier one supplier to OEMs. But it seems like that strategy has maybe changed since earlier in the year when you were going through the SPAC merger process. when you talked a lot about the necessity of working through a tier one supplier in order to supply high volume series production. So maybe you could just explain what's driving that shift in sort of your strategy. And then also, you know, there's gotta be some balance sheet requirements in order to supply directly a high volume program. So maybe you could talk about some of the exposure to warranty recall risk and how you plan on, I guess, dealing with that.
spk02: Sure. So the opportunity of becoming a direct supplier, tier one, came along through different discussions with car makers. We always let the car makers decide what's the best way to engage with us. So because we have several tier ones and eventually we let the car maker to have their preference on how they want to engage. talking with them about the potential advantages of us becoming a direct tier one highlighted the opportunity in terms of being able to be much more flexible and providing a much cost effective solution. And in working with a tier one has a lot of overlap in terms of duplication of teams that are working basically co-side. and making the overall project a bit more complex and a bit more expensive. And some car makers are willing to go through that, are preferring that combination, but some car makers understand that for a very high volume production of when it comes to hundreds of thousands and millions and the price point is very, very sensitive, they became more attentive or interested to understand what might be the situation with Innobis becoming a direct supplier. It was our strategy, you know, that when we started that, you know, Innobis without the relevant, I would say, experience in automotive and knowing how to interface with T1s, with the car maker, it was, you know, it was basically a mandatory thing to do. Following four or five years of work in this space, I can tell you that I've been in discussions that the car makers were giving us audits on so many areas that I personally never knew before. And I was quite amazed about how knowledgeable my team became in automotive. I would say that InnoVis is probably one of the most experienced automotive player today in Israel. And eventually, the feedbacks that we were getting from those auditors were quite impressive in there. I would say they are not used to companies, to have such capacity and expertise in automotive, and eventually felt very comfortable with giving us the opportunity to compete directly. I believe that it will give us additional capabilities in the future. The overall financial stability that we have due to our ability to raise substantial money in the last process, in the SPAC process, gave them sufficient confidence that we will be able to fulfill their needs and meet their targets.
spk07: Excellent thanks and just one more quick one in these three programs that are in sort of the final stages that you referenced, are you competing with the end of his one or the end of his two on those programs.
spk02: Those are for Innovis 2. We are competing with Innovis 2. Those are very high volume programs and the sensitivity for the pricing is tremendously higher. And also the requirements that we see are growing over time. And there is a really good fit between those two products. Innovis 2, it's not only that it's much better from performance point of view and pricing, the industrialization of it has been simplified significantly. Without going to the very fine details, I would say, you know, in Innobis 1, we're using four lasers and four detectors. In Innobis 2, we're only using one laser and one detector, which allows us a much simpler, you know, assembly process, shorter, and basically allowing us to have a much more robust design that allows us to reach volume very fast.
spk07: Got it. Thank you very much.
spk04: Thank you, Michael Filato from Berenberg. Our next question today comes from the line of Mark Delaney from Goldman Sachs. Mark, please go ahead.
spk08: Yes, good morning, and thanks very much for taking the questions. I thought first maybe I could ask a follow-up on this approach as a Tier 1. Can you comment on how broad-based you think that approach will be going forward? Do you think a lot of your customers are going to want to use Innoviz as the Tier 1, or is it still more of a select situation? Will you be the Tier 1? And then when you think about the financial implications of that, you commented on the potential to have more profit dollars available to InnoViz with that model. Could you also talk about the margin percentages of doing that? Tier 1 margins tend to be lower, so I'm curious if there's some trade-offs, even if it's higher EBIT or EBITDA, we need to be thinking about a little bit of a different margin percentage profile. Thanks.
spk02: Sure, and maybe before I'll answer your question, I forgot to answer Michael's questions on warranty and liability. Obviously, when we are discussing this matter with carmakers, that's part of the negotiation. So we're negotiating the level of warranty and liability, the capping that we could have in order to be meeting their needs. and we bring it to a position that it makes sense. And we've done a good job so far, and so far we were able to accomplish and basically meet all of the requirements in a good way that meets both sides' needs. And then to your question about how we're going to continue to approach the market. So since we have the relationship with the tier ones, we do let our customers to have their preference. And for some car makers, we are still addressing as a tier two. I can say there are many programs in Asia, in Japan, in China, that we are still acting as a tier two and planning to continue to do so. In Europe and in the US, I believe that our tier one position would take a more significant portion, but still, if our customers would prefer a different setting, that is something that we'll be happy to support. And regards to the margins, I can't let Eldar to answer. I have a C4 here. Yes.
spk03: So thank you. I hope you can hear me. So thank you, Mark, for your question. So yes, the top line, as you mentioned, is higher as we are selling the whole system. It has some impact on our gross margins. Obviously, we are switching from selling a component-based model to selling a whole system. So all in all, we are taking some lower margins, but still we will see much more benefit from this model as it increases significantly our top line.
spk08: That's really helpful. Thank you both. And a second question for me, if I could. You mentioned in your press release being in final consideration with a large OEM for a level two, level three program. Could you go into more depth on that if you're able to in terms of how many other LIDAR companies may be being considered at this stage? And also, if you do, in fact, win that opportunity, is there any color you can provide in terms of the timing and magnitude of that business opportunity? Thank you.
spk02: Yeah, so as far as we know, and we were told by the sourcing team that currently we are only competing with an additional supplier, which is another tier one. We are, from the point of being able to announce the deal, that's part of the negotiation as well. We at first probably would be able, if we win it, we'll be able to announce that we have gathered another nomination in the market for level two, level three. It's a very big opportunity, very substantial. It's one of the biggest car makers in the market. And following a certain milestone, we will be able to also disclose the name of the customer. And that was already agreed by the two sides that once we will meet a certain milestone, which is basically not a very long term, it's a delivery related to the B sample delivery, we will also be able to announce who is the customer. Anything that I forgot to address here?
spk08: Yeah, just any color you're able to provide, if you can, in terms of when revenue may start for that program, if you do win it, and any size on the opportunity from a revenue perspective.
spk02: So the timeframe is about 24 ramp up, but the volumes are quite significant again. And there is an NRE portion to it, but the growth stage is 24 and then 25 and onwards.
spk08: Thank you.
spk04: Welcome. Thank you, Mark Delaney from Goldman Sachs. Our next question comes from the line of Adria Shepherd from Cantor Fitzgerald. Please go ahead.
spk02: Hey, everyone. Can you hear me OK? Yes, a bit.
spk04: A bit on the lower end. If you're able to amplify, that would be great. Is that any better? Much better, Andreas. Thank you. Please go ahead.
spk06: Great. Thanks, guys. And congrats on the quarter. Most of my questions have kind of been answered, but maybe just to do a quick follow up on NMS2. You mentioned that the first engineering samples, they are expected to be delivered later this year. What is kind of next and what is the timeline look like going forward?
spk02: So I have here one of the first samples of InnoVis2. It's already, we have all of the components inside integrated. One of the unique elements that we've done also with InnoVis2, some of the vertical integration, you might say, that we are doing all of the design for manufacturing, but also the manufacturing in our offices. So we have our own clean room with our active alignment process. So we are building units as we speak, InnoVis2 samples, and the team is working on the integration of basically the software now. And we expect to be able to show the InnoVis2 to customers in the coming weeks, maybe less, and show it to the public at a later time. This is very, we mentioned actually pulling slightly the process. We are also working on some several variants of the design to meet different installation positions because there are different customers looking to either mount it on the roof or in the grill or in the windshield, et cetera. So those require some tweaks in the design. And then that's part of the work that we do with customers in regards to this. So there is going to be a first B sample available and shown and basically shared with customers by end of this year. And there is another step towards the middle of the year, which is going to be a version that is already designed for automotive. And then we will continue for the C sample and D sample. But in general, availability of the B sample is going to be end of this year.
spk06: Excellent. That's very helpful. Thanks for that. And maybe one quick follow up for me is, you know, you recently announced your partnership there with GFX and I was just wondering, you know, I know that you keep emphasizing that the kind of the main priority is targeting, you know, passenger vehicles and OEMs, but are there more kind of opportunities here, you know, low hanging fruit similar to this recent collaboration that you're entertaining and that you see kind of pursuing in addition to the OEMs?
spk02: Absolutely. I can share my vision on where the LiDAR market would go. I personally believe that 20 years from today, the LiDAR technology, the 3D sensing, would be very similar to where the cameras are today. If you think about applications done today by cameras, which are used in order to try to understand the environment and operate around it, with a camera, the data is very much, I would say, the environment is very meaningful when it comes to the ability to extract and understand the scene. Because for example, in the car space, the cameras are trained in a very specific location in the road with specific kinds of people and cars. And you see what happens when there is an ambulance or a very strange vehicle and suddenly the camera fails because The problem of camera is that it's very much related to how much you are training your data in order to mitigate with new changing environments. Now, when you think about infrastructure, logistics, smart cities, and you think about cranes that are used in very complex environments, Where for a camera, in order to use it, to have a seamless integration and extract value from it, you need to implement a lot of effort and training to kind of work in that very diverse area. LiDAR, because of its ability to see the world in 3D and basically stand out, like to be able to extract the objects and the people and the heights and understand the 3D dimension environment for a LiDAR to be integrated into so many applications would be much easier and seamless. And therefore, I believe that LiDARs would help to accelerate and scale many applications that today are very difficult to exercise because of the nature of the data of cameras today. So I have no doubt that LiDARs would grow very dramatically. It's basically another sensor, only that it's 3D. We're in a world that is 3D. And therefore, it adds a lot of value around surveillance, about smart cities, infrastructure. And I believe that would grow very fast. Great.
spk06: Thank you very much, guys.
spk04: Thank you, Andrea Shepard from Cantor Fitzgerald. Our next question today comes from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.
spk05: Mark Benthien, ECA- hi thanks for taking my question and congratulations on your progress, I just want to understand a little more about the significance of the nvidia drive platform. Mark Benthien, ECA- Is that opening up more tier ones for you a broader market acceptance or maybe even getting over some of those hurdles you said what it is to be a automotive supplier.
spk02: I can share that we are very impressed by the way that NVIDIA has managed to secure. I would say in the US, in Europe, I would say that almost all of our customers are using NVIDIA, which is very impressive. As such, in order for us to gain points in their sourcing decision, we are very keen to do integration into this platform as much as possible to allow them a more seamless integration. Eventually, a car maker or a shuttle developer, he will make its own decision on what is the right sensor set he wants to use, whether it's one lidar or four lidars or six. It's really his own understanding of what's the application that he needs to do. NVIDIA motivation is to try to predict which sensors are more likely to be used by their customers and as such to address those integration efforts ahead of time and basically give their customers a better product in terms of an open source stack that already includes the different sensors. Innovis LiDAR was indicated from several customers to NVIDIA on the desire to use our product. And as such, we started to work with NVIDIA in order to port our algorithms from our edge processing unit to the main centralized computer of NVIDIA. The automotive space is, I would say there are two camps. There is the distributed computing and you have the centralized computing. In a distributed computing platform, you have multiple sensors where each one is making its own processing power and providing on the... on the network and already processed data object detection, which obviously reduces a lot of costs related to no high need for high bandwidth data. And the main processing power doesn't need to be very strong because you don't need to process all of the different sensors. That has many advantages. There is another architecture which is centralized, which means that the main processor is very strong. It is connected directly to multiple sensors and can host the different processing power of each sensor on its own. Of course, it requires additional routing into the platform, but that's what our customers make their own decision. InnoVis wants to support all of those infrastructures. And since NVIDIA seems to become a very strong platform, we started to port all of our edge processing algorithms that so far was implemented on our automotive grade platform, what we call the InnoVis app, and was used by different customers for edge computing, is now ported to the NVIDIA platform. to help our customer get a faster and more easy integration of our lidars and our perception software. I hope I answered your question.
spk05: Yeah, that's a very complete answer. Maybe I'll just ask about that. As the one processor controlling all of the cameras, lidars, and radars, is it NVIDIA that has the fusion software, or are you providing some of that?
spk02: It's basically, we're not doing sensor fusion. It's done by either NVIDIA or the customer or the car maker. Okay, great. Thanks. that eventually from perspective of functional safety in the car, the different layers of the lidars and the cameras needs to be completely separated. Because if the perception software is working based on using both camera and lidar, It means that if the camera fails, your perception software fails as well. And that is not acceptable when it comes to functional safety. And therefore, our perception software needs to be completely disconnected from the camera. I see. Thank you.
spk04: Thank you, Kevin Cassidy from Rosenblatt Securities. You have no further questions. Please proceed.
spk02: Okay, so thank you very much. It's very exciting to be here in New York and we will be happy to see you again in the next world and give you more updates on our progress. Thank you for the support. Thank you for the questions. We are very excited about what we do. Again, I think that What we are able to bring to the market now with InnoVis 2, it gives us a huge, I would say, self-fulfillment in our ability to deliver a product that we believe is a game changer and eventually will allow us to accomplish our mission in labeling autonomous driving to everyone. Thank you very much. Again, thank you to my team at home. Goodbye. Bye-bye. All right.
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