Innoviz Technologies Ltd.

Good morning. I would like to welcome you to our Q4 and full year 2024 earnings conference call. Joining us today are Omer Kilaf, Chief Executive Officer, and Eldar Tsegla, Chief Financial Officer. I would like to remind everyone that this call is being recorded and will be available on the investor relations section of our website at ir.inoviz.tech. Before we begin, I would like to remind you that our discussion today will include forward-looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of Innovis. 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 important risk factors that could cause actual results to differ materially from any forward-looking statements, please see the risk factor section of our Form 20-F filed with the SEC on March 12th, 2024. Omer, please go ahead.

Thank you, Leda. And good morning, everyone. Thank you all for joining us on this call. Today, I would like to tell you about some of our recent financial developments and business accomplishments. and lay out how these leave Innovees in a transformed financial and operational position for 2025 and beyond. In 2024, Innovees recorded another strong year of financial performance. Fully revenues were $24.3 million versus $20.1 million in 2023 and exceeded the midpoint of our guidance range. During the year, we decreased our cash dues in operations and capital expenditures to $81.4 million from $99.6 million in 2023. In the past two months, we've taken significant steps to strengthen our financial position. We entered into approximately $80 million of NRE payments plan with our key customers. We ended 2024 with $68 million in cash and cash equivalent. Additionally, in February of this year, we completed a registered direct offering of our securities that generated gross proceeds of approximately $40 million. We also announced an optimization of our operations that should deliver approximately $12 million in savings on an annualized basis. Altogether, we expect our newly strengthened liquidity position to now be a competitive advantage for Innoviz. On the customer side, our recently unveiled partnership with Mobileye has resulted in programs with several new OEMs. And our integration with the NVIDIA Hyperion 8 platform means that we have the potential to serve customers across all three major AV platforms. We continue to work with a number of different programs and are expanding our production capacity by an order of magnitude in 2025 to meet customers' future demands. Heading into 2025, we believe that Innoviz is in an excellent position to execute on our pipeline with additional programs and accelerate growth with our market-leading LiDAR technology. We also feel that the time is ripe to begin exploring opportunities outside automotive industry as well. We believe that our financial position and our prudent cash management will enable us to cross expected SOPs and expected ramp volumes in 26 and 27. Let me begin by telling you more about the multi-year $80 million NRA payment plan that we announced in December. Under this plan, we expect to receive payments totaling approximately $80 million between 2025 and 2027 with the bulk in 2025 and 2026 and over $40 million already in 2025. We see the potential for this payment plan to be upsized as we are working to expand our scope of business with these and other new customers. Going into 2024, we had said that we expected 20 to $70 million of NRE bookings. During the year, we've also announced several new programs where we stated, started work with commercial discussions pending. These NREs and payment amounts are from customers we've been in discussion for quite some time and where we converted on the programs. We see this as a testament to the confidence our customers have in us and the scale of the programs. The payments are expected to fund the development work on our LiDAR and come before the production ramp. This does not mean we are increasing our spending on these programs. The NREs are going to cover expenditures based on ongoing, previously planned efforts, allowing us to further reduce our cash burden. It is important to note that the NRE payments are incremental to the revenues we expect to generate in 2025 from sales of our LiDAR base on existing engagements and orders from potential new projects. Two weeks ago, we announced a registered direct offering of $40 million, the cost of our securities. These investments from two significant multi-billion dollar institutions enhances our financial position and will support the company's business growth moving forward. We believe it enhances our resilience, provides additional operational runway, and will be a competitive advantage to Innoviz. It will help us reach key NRE milestones, cost expected SOPs and ramp volumes in 26 and 27. The investment should also buffer potential lumpiness related to the timing of NRE payments and has the potential to reinforce the markets and our customers' confidence in our market position. In addition to the NRE payment span and our offering, we recently announced an optimization of our operations that is expected to result in saving of approximately $12 million on an annual analyzed basis. In all, we believe the NREs, strategic investment, and operational optimization will enable InnoVis trajectory to meeting our SOPs and ramp up the InnoVis 2 to mass production volume. To that end, we've reached the C-sample phase and froze the design of the LiDAR. We thus remain confident in our ability to achieve our long-term goals, position innovates to reach profitability, and deliver significant value as we look to the end of the decade and beyond. Moving on to one of our major achievements. Last quarter, we disclosed that we've entered into several new OEM programs following our engagement with a major level four platform partner. In December, we were very happy to announce that that partner is Mobileye and the platform is Mobileye Drive AV Level 4. Earlier last year, Mobileye announced that they discontinued internal work on lighters and are pivoting to a third party time of flight lighter provider. We are very pleased that Mobileye chose Innovis lighters as a key feature of the platform. And we are very excited to be working with an industry leader as the world embraces autonomous driving. InnoVis 2.0 LiDAR, with its unique capabilities, including ambient IR, is a proposition that customers appreciate. And our engagement with Mobileye on this platform is a testament to that. Mobileye Drive is a comprehensive driverless system that enables fully autonomous robot taxis, ride-pooling vehicles, public transport, and goods delivery. Testing is already underway in Europe and North America. By leveraging InnoVis expertise in LiDAR technology, vehicles built with the Mobileye Drive platform will deliver safe and smooth driving performance in their domains. Each vehicle is planned to have nine InnoVis 2 LiDARs, and we expect the volumes from these programs to be very significant. We believe this will drive substantial revenue growth prospects for the company as road testing is planned to commence in 2025 with SOPs in 2026. Let me now go into the details of some of these programs. First, the VW-ADMT ID.Bus. The technological capabilities that we've demonstrated in this platform were key to the expansion of our relationship with Mobileye. We've been engaged with VW on this program for some time. After initially displacing the original long range dialer, Last year, we've also displaced the short range provider for the program with the InnoVis2 short range, which covers the short and medium range and is based on our existing InnoVis2 architecture. This vehicle was both in our booth and Mobilize booth during CES and drew a lot of attention. It has three roof-mounted InnoVis2 long range ladders in the front of the vehicle and six InnoVis2 short range ladders around the vehicle to provide a full 360 view of what's happening. This is critical because in level four vehicles, there's no driver. And so the car needs to be able to operate fully independently in all directions and understand its surroundings. The ID.Bus is planned for operation in Europe, North America and the Middle East. Test vehicles are already in operation in Austin, Texas, Hannover and Hamburg in Germany. SOP is expected in mid-2026. The next engagement I'll tell you about is the Holland PeopleMover. It's made by a division of Pentler Corporation of Germany, and it's intended for public transportation. The configuration here is very similar to the ID.Bus with a suite of nine Innobis II short and long range ladders in addition to radars and cameras. We expect SOP in 2026, and this vehicle is slated to roll out globally across North America, Europe, the Middle East, and Asia. The next vehicle we will look at is a public transportation shuttle by Schaeffler, which is a traditional German T01, and the first test vehicles are expected to come out this year. The last example of the L4 drive platform that I'll show you today is this two-seater luxury robot taxi from Verne. It's quite different from the vehicles that I just showed you, and it's a testament to the versatility of the L4 Mobilite Drive AV platform and the InnoVis offerings. It's a fully autonomous electric vehicle designed for safety and comfort from a new European OEM. The ADA system sensor suite is quite similar to what's in the ID.Bus and the other vehicles with nine Indoviz 2 lighters. The validation phase is scheduled for this year with SOP at the end of 26 in Zagreb and then expanding to Germany, the UK and Saudi Arabia in 27. We're excited to be involved with Mobileye on the ongoing adoption and proliferation of the Drive platform. At nine riders per vehicle, the Drive platform is expected to grow to hundreds of thousands of flyers per year, a significant revenue opportunity for Innopis. In addition to the VW ID.Bus Level 4 program that we've talked about earlier, we are continuing to work with VW L4 programs on the Chauffeur platform. I'm happy to share that the development process is moving forward nicely across these programs. We continue to move through various development gates successfully and are on track to meet the planned later start of production timelines. Another recent development that I'd like to bring to your attention is in regards to our relationship with NVIDIA. We are working closely with NVIDIA team and are engaging with OEMs who are exploring NVIDIA Iperion 8.1 platform which now incorporates the InnoVis 2. At CES, we also demonstrated that our perception software has been optimized to run on the NVIDIA Drive AGX O-ring platform. With Mobileye, Qualcomm, and NVIDIA, InnoVis is fully agnostic to the major AV platform, and we can meet the needs of our OEM customers regardless of their platform of choice. This is a critical value proposition and something we're very proud of. Shifting now to our pipeline, we're encouraged by the continued progression of the opportunities ahead of us and are confident in our product positioning. We're in talks with multiple OEMs on RFIs and RFQs across Europe, North America, and Asia. on level three and level four platforms. These programs encompasses a variety of vehicles, including passenger cars, trucks, shuttles, and robot taxis. We've been able to display the advantages of our technology, and we've successfully completed a variety of technological, technical, and commercial assessments, and are now in various stages of sourcing process with a number of major corporations. We have a lot to look forward to. and the entire team is working how to convert these opportunities into additional design wins. Having just returned from Europe, in the next few weeks, I'll be traveling to Detroit and the Silicon Valley to meet with many of these potential customers. In addition to the automotive opportunities that I've outlined earlier, I'd like to touch on some of the smart applications that we envision down the line. More and more, we're seeing our unique technology as being highly transferable to areas outside the automotive domain. We see a variety of applications in development, such as security, smart infrastructure, airports, and ground truth data collection. We continue to be laser focused on the automotive opportunities directly in front of us and on pursuing our strategy of targeting the market with the largest number of available units. However, We are also aware of longer-term markets that we can create for ourselves with our robust and mature LiDAR products and our position as a geopolitically neutral LiDAR supplier into markets where safety and security are critical. As we expand our capacity, we think the time is right for exploring these opportunities. We look forward to sharing more with you about this in the future. Before I hand over the call to Eldar, I'll provide you with some color on our financial performance in 2024 and our revenue guidance for 2025. In 2024, we exceeded the midpoint of our revenue guide of $23.5 million to $25 million, and our NRE bookings were in line with our expectations for the year. In 2024, we also met operational targets of adding two to three new programs. We believe that the NRA payments that we expect in 2025 combined with sales of flighters will drive a more than twofold increase in our revenues year over year for 2025 at 50 to $60 million with positive gross margin. The expected increase in revenue will further drive down our cash flow. On the operational front in 2025, we are targeting one to three new programs, and expect $20 to $50 million in additional NRE bookings, incremental to what we've already announced. And with that, I'll turn the call over to Uldar to review our 2024 financials.

Thank you, Omer, and good morning, everyone. Since our last earning call, we have strengthened the financial foundation of the company, and have made meaningful strides on our path to break-even and profitability. On February 12, we closed a registered direct offering of our securities, with a gross proceeds of approximately $40 million. This funding enhances our resiliency and extends our operational runway. It will help us reach key NRE milestones and prepare for SOP and volume production in 26 and 27. The NRE payments plan Omer discussed earlier demonstrates our customers' commitment to innovate and trust in our technology. Further, the realignment we announced this February improves our cost structure in support of our ongoing efforts to streamline the company. We ended 2024 with approximately $68 million in cash and cash equivalents, bank deposit, marketable security, and short-term restricted cash on the balance sheet, not including the $40 million gross funding I just mentioned. We are continuing to drive sequentially decreased cash burn, resulting from our continued prudent management of our company focused on a single Innoviz2 LiDAR platform, and our strong revenue performance. We are very proud of our trend of consistent improvement in cash burn that we delivered over the course of the year. While there may be continued lumpiness on a sequential basis, on full year basis, we expect to see considerably lower year-over-year burn. Looking into 2025 and beyond, we remained confident in our ability to manage our expenses effectively and keep our burn down on an annualized basis. Gross margins continued to improve quarter over quarter and in Q4, we generated gross profit for the first time. Going forward, we expect margins will continue to be somewhat lumpy as we ramp unit to volume production and as NRE revenues continue to fluctuate from quarter to quarter based on our customer's milestone. For the full year, we do expect gross margins to be positive. Now turning to the income statement, our full year 2024 revenues of $24.3 million was above the midpoint of our guidance range of $23.5 to $25 million versus $20.9 million in 2023. This represents another year in which we delivered on the top line, extending our record of revenue execution. Our operating expenses for 2024 were approximately $101 million, a decrease of 70% from $121 million in 2023. This year's operating expenses included $17 million of share-based compensation compared to $20.7 million in 2023. Research and development expenses for 2024 were $73.8 million, a decrease from $92.7 million in 2023. The year's R&D expenses included $11.2 million of share-based compensation compared to $13.7 million in 2023. 2024 R&D expenses reflected a reallocation of R&D expenses to cost of goods sold as part of the NRE revenue recognition process. To conclude, 2024 represented a transformative year of robust performance from both revenue and cash perspective. We are encouraged by the ongoing strength of our expense management and the ability to consistently meet or exceed our revenue guidance. Looking into Q1, we expect a strong start for the year as we further ramp the InnoVis 2 and work to secure additional design wins. And with that, I'll turn back the call to Omar for closing remarks.