AEye, Inc.

Good afternoon. My name is Vaishnavi, and I will be your conference operator today. At this time, I would like to welcome everyone to AI's fourth quarter and full year 2021 earnings conference call and webcast. All participant lines have been placed in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Joining us on the call today will be Blair LaCourte, Chief Executive Officer and Bob Brown, Chief Financial Officer. Opening remarks by AI management will be followed by a question and answer session. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I'll now turn the call over to AI.

Thanks, and welcome everyone to AI's fourth quarter and full year 2021 earnings call. With me today are Blair LeCourt, our Chief Executive Officer, and Bob Brown, our Chief Financial Officer. Earlier today, we announced our financial results for the fourth quarter and full year 2021. A copy of our press release can be found on our website at investors.aey.ai. Before we start, I would like to remind participants that during this call, management may make forward-looking statements including, without limitation, statements regarding our future performance, growth strategy and financial outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the industry and other conditions. These forward-looking statements are subject to inherent risks, uncertainties and changes in circumstances that are difficult or impossible to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against placing undue reliance on any of these forward-looking statements. You can find more information about the risks, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission, including in our annual report on Form 10-K for the year ended December 31, 2021. all information discussed today is as of march twenty eighth twenty twenty two and we do not intend and undertake no obligation to update any forward-looking statements whether as a result of new information future developments or otherwise except as may be required by law In addition, today's discussion will include references to certain non-GAAP financial measures. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release, and you should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measure in our earnings release. With that, I'll pass it over to Blair.

Thank you for joining us today for AI's quarterly investor update. For those of you I have not met before, my name is Blair LaCourte and I am the CEO of AI. Joining me here today is my CFO, Bob Brown. This is our second public earnings call and our first full year report. We are very excited to share our progress here today. First, we're going to provide some perspective on how the LIDAR market has developed and where we believe we are in the cycle of commercialization. I will then touch on our progress in 2021, our key investment themes, and highlight AI's business model and product differentiation. Bob will then take us through our Q4 and full year 2021 financials. He will share a more in-depth review of 2021 accomplishments, as well as our financial projections for 2022. I will finish by highlighting two key culture initiatives and this year's strategic objectives. We will then transition to questions. As some of you may know, LiDAR is not a new technology. It was invented in the 1960s for specialized applications because of its deterministic capabilities in measuring the exact distance to an object with higher resolution, especially where other existing interpretive sensors like radars and cameras may be at a disadvantage. For the next 40 years, LiDAR was used to collect and transfer information in complex spatial environments. In the early 2000s, governments around the world began to look for ways to transition this technology into broader commercial markets. For example, the DARPA Grand Challenge was extremely successful in spawning over 85 LiDAR companies to implement sensors into automotive and the wider industrial marketplace. Fast forward to 2021, and as with most foundational technology transitions, not only have the markets expanded, but the original 85 plus privately financed companies led to eight IPOs in 2021, which raised a significant amount of public capital. We believe AI is now one of two companies with the capabilities to scale from simple to ultra-high performance applications. We also believe we are the only company with an adaptive, software-based sensor platform that can be customized across markets. Most importantly, AI's software-defined platform is well positioned to benefit from the trends and high demand for smart assets and software-definable vehicles. 2021 was a very productive year at AI. The dedication and high level execution of our team allowed us to deliver on plan with strong performance on many fronts. AI's focus was on productization, as well as building and enhancing the company's infrastructure and human capital to enable scalability. We finalized the next generation of our products, which are designed for manufacturability. We also began the transition to volume production with the announcement of collaborations in both industrial and automotive manufacturing. We secured world-class partners to help us bring this technology to market, and we engaged in key pilots in all of our strategic segments. We intend to take this momentum and continue to execute on our path to scale and profitability. Let's now walk through our investment themes. First and foremost, we are an automation company. Our technology acquires and processes high quality spatial information to allow assets or vehicles to make better decisions when a human is not engaged. In short, we enable automation on demand across many markets. Second, we have a unique business model that leverages the existing global value chains to increase innovation and drive the velocity of adoption. In the industrial markets, we sell software configured solutions, both direct to customers and in partnership with systems integrators. In the high volume automotive ADAS markets, we license our intelligence software platform to global tier one automotive suppliers for scalability. Third, we have built our products and business model on top of a disruptive software platform that resides on the sensor. This platform allows our LiDAR sensors to adapt to their environment or use cases and to deliver the right information at the right time to enable autonomous features and functions. By enabling smart assets and software-definable cars to be more intelligent in how they collect and integrate information, AI is enabling new business models for our customers. Fourth, AI utilizes capital light manufacturing and the existing global automotive supply chain for cost optimization and scalability. We believe we're the only company that has multiple global manufacturers investing in building out high volume production facilities. Finally, you can bet on a plan, but what you're ultimately betting on is a team with integrity and discipline that has a long track record of success. Now, we're going to shift gears, excuse the pun, and take a quick dive into our first three investment themes. First, high-quality information, where I will give you a preview of our new Foresight M product. Second, our unique business model, where we will hear from one of our partners and one of our customers on how they evaluated the LiDAR marketplace and why they chose AI over our peers. And third, an overview of our disruptive software platform, where we will share several videos of some remarkable new capabilities that have never been shown before. Then I will transition to Bob Brown, our CFO, to review the financials. So now let's expand on our first theme by explaining what we mean by delivering the highest quality spatial information by sharing with you for the first time the remarkable performance from our latest Foresight M platform. As many of you know, LiDAR is a deterministic sensor that provides resolution at range to accurately see and navigate around small obstacles at speed. even in poor conditions. We believe while many sensors can assist the driver, only high performance LiDAR in conjunction with other sensors can replace the driver and power autonomy on demand or full autonomy. As you can see, AI's 1550 nanometer LiDAR gets a significant amount more resolution than 4D radar. and it also detects pedestrians even when a high-end HD camera may not have the appropriate lighting conditions. Later in this presentation, we will also show these Foresight M capabilities at industry-leading range of over 500 meters. When architecting our solution, we took some cues from human biomimicry. We believe the quality of information is always heightened by the integration of multiple senses. So while we do believe LiDAR offers a unique value, our platform was designed, when appropriate, to also seamlessly integrate with onboard radars and cameras. Later in the presentation, you will also hear how Continental not only intends to sell our LiDAR technology as a standalone product, but also has recently integrated it into a system with their radar, cameras, and ADCUs. To demonstrate the value of our system's design and flexibility, we took a quick fly-through of our office and one of our employees. Sorry, Joel. To illustrate the power of our architecture and how the integration of multiple data sources together creates higher quality information for autonomous decision-making. While this may look like a video, it is actually a 3D LiDAR image that has RGB data fused at the point of acquisition. This is to further illustrate our point that is all about information and a network of sensors that increases the quality of that information. In this example, the LiDAR provides absolute deterministic resolution at range through its point cloud. but also uses the platform to integrate color information, which can be extremely helpful when navigating through environments that were designed for humans who use embedded color cues. For example, is it a white line or a yellow line? Let's transition to how our business model and how our partners are leveraging this platform to drive the adoption of LiDAR. We looked at autonomy across multiple markets and realized that if information is needed to be integrated to make decisions, we should evaluate how to work with the leaders who integrate information in each market. You can see here some of our announced partners, including Intetra, Komatsu, Hitachi, Mitsubishi, 2Simple, and Continental. Our partners are able to leverage AI's intelligence sensing platform to deliver specific applications to their customers. Why is this important? Because it shows the power of software that we can customize our sensing platform to meet the unique needs of our customers. Our partners have the ability to use their domain expertise to build impactful solutions faster. As an example, in industrial, Hanbin Lee, CEO of Seoul Robotics, will talk to us from Korea about how his company is leveraging our Foresight M product. He will explain how our software definability and high performance capabilities truly differentiate AI. Hanbin?