AEye, Inc.

Good afternoon, and thank you for joining AI's first quarter 2024 earnings call. With me today are Matt Fish, Chief Executive Officer, and Connor Tierney, Chief Financial Officer. Earlier today, we announced our financial results for the first quarter 2024. A copy of our press release can be found on our website at investors.ai.ai. Before we begin, I would like to remind participants that today's discussion may include forward-looking statements as defined in the securities laws and regulations of the United States with reference to future events, future operating results, or financial performance. 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 these 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 most recent periodic report. All information discussed today is as of May 14, 2024, 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 information purposes only and should not be considered as a substitute for financial information presented in accordance with GAAP. A reconciliation of the 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 measures in our earnings release. Now let me pass the call over to Matt.

Thanks, Leigh, and thank you all for joining us for the AI First Quarter 2024 conference call. We have made excellent progress across multiple fronts since our last update. On this quarter's call, I am pleased to announce that we achieved a key milestone with our Foresight Flex platform, announced our new Tier 1 partner, LightOn, formed a three-way partnership that gives us access to the China market, made remarkable progress in our cash reduction initiative, and overall created significant additional company value. Our engagement with LightOn is off to a strong start, and they have completed their technology and supply chain audits. They have reported that they are pleased with our foresight technology, its performance, and overall maturity. As we continue to work with them, our belief that they are the right partner for us is only reinforced. They have an innovative spirit, are obsessed with delivering the most cost-effective solutions, and bring cutting-edge manufacturing capabilities that they are already delivering to automotive ADAS. Thanks to their decades of experience in the delivery of optical devices, our partnership with LightOn puts us on an immediate path to deliver unparalleled performance for an ADAS product at our price point. As mentioned in our last update, we are already working jointly with LightOn on multiple OEM opportunities. Similarly, our collaboration with NVIDIA has yielded significant advances in high-speed, long-range detection performance, and we believe we are ultimately on track for future integration with the NVIDIA Hyperion platform. We are also thrilled to announce a key strategic partnership that will bring AI's LiDAR into the China automotive, trucking, and rail safety markets. Working with Accel Light Technologies, known as ATI, and Light Tecton Technology, AI's Foresight LiDAR solution will be available to address the ultra-long-range detection needs in these key transportation areas. ATI is a global company and manufacturer of fiber optic, passive and active pluggable modules used in fiber optic networks for various high-tech markets. LightTekton is a research, development, and manufacturing company that is developing LiDAR-based technologies for autonomy. ATI and LightTekton are ideal partners for this effort, and we are thrilled to collaborate with them to help solve transportation challenges with our Foresight technology. Both companies see the clear value in AI's LiDAR technology, and ATI already has an established footprint in China. It is worth noting that because of AI's software-defined architecture, we are able to work with ATI and LiteTekton to enter these markets by simply reconfiguring our existing solution without requiring changes to the hardware. This partnership also reflects our consistent belief that the most logical path to the mainstream market for LiDAR will be built on partnerships with seasoned manufacturing organizations, especially in the automotive space. Shifting to the product itself, our next generation product, Apollo, that we announced late last year, has now passed its first power on milestone and continues to exceed all our performance expectations. As you recall, Apollo is the inaugural member of our Foresight Flex family and gives OEMs a compact ultra long range LiDAR sensor that facilitates diverse mounting options, including unparalleled performance when mounted behind a windshield. Apollo demonstrates the power of 1550 nanometer LiDAR technology, and we expect to unveil the first samples of Apollo to automotive OEMs in the second quarter. Apollo came out a mere four months after we announced Foresight Flex, which demonstrates the power of our software-defined LiDAR architecture. By focusing our efforts on software development, improvements happen very quickly, especially when you're backed by an incredibly capable and talented engineering and operations team. This team has been outstanding and driving hard to get Apollo into the hands of OEMs. We believe we have the most compact design in the ultra-long-range performance category, which provides a compelling alternative to the bump-on-the-roof design. Our behind-the-windshield LIDAR is getting very positive OEM reactions from a vehicle design perspective. We believe that our 1550 nanometer-based technology is critical to delivering the required safety and performance that overcomes the additional challenge of penetrating the windshield. OEMs will need to include LIDAR in future vehicles and are looking for creative ways to seamlessly integrate the sensors into the vehicle design as opposed to designing around them. We are particularly encouraged by NHTSA's recent ruling mandating automatic emergency braking, AEB, as standard in all passenger cars, SUVs, and light trucks by September of 2029. We believe that NHTSA's ruling ultimately favors the adoption of LIDAR across the passenger vehicle market. We are confident that our LIDAR meets NHTSA's toughest standards, including the 90 miles per hour forward collision warning requirement. Lastly, our capital light model enables us to focus on the key fundamentals that advance our technology, attract partners, and drive company value. We see some of our competitors are coming around to this realization that a capital intensive manufacturing model isn't going to be viable for the foreseeable future. Winning in the automotive industry requires a stable and reliable supply chain. The approach we use with Apollo is a great example of this because of its high reuse of the existing supply chain. This coupled with our software-defined approach enabled rapid advancements in the capabilities of the product. We've been able to accomplish a lot in the first quarter, all while staying on track and even outperforming our burn rate targets, which Conor will discuss in greater detail. With that, I'm pleased to turn the call over to Conor.

Thanks, Matt. Welcome, everyone. I'm excited about our new strategic partnership with ATI, which will provide us with direct access to the Chinese automotive rail and trucking markets. What's even more important is that we believe China accounts for a significant portion of the estimated $3 billion global LiDAR market, as China is making large investments in bringing LiDAR technology into its transit systems and is moving much more aggressively than the Western market in LiDAR adoption. As Matt mentioned, we're making steady progress with LiDON and working jointly with them on multiple OEM opportunities. Further, a substantial reduction in estimated BOM costs will provide us with a pricing edge that will be a major competitive advantage once production scales. I'm also pleased to announce that we're actively pursuing multiple strategic investment opportunities. This speaks volumes about the progress AI has made on the execution side and shows that both investors and partners are bullish on the opportunities ahead of us. We are now proving that we can deliver on both our product development goals and execute commercially at a burn rate that's up to 10 times lower than our peers. Thanks to our Capital Light business model, we have more resilience to ride out the industry headwinds. Now turning to our first quarter financial results. First and most importantly, I am pleased to report that we reduced our net cash burn by an additional $1.8 million to $7.6 million from the prior quarter's cash burn of $9.4 million, despite paying out $2.4 million in one-time personnel-related costs during the first quarter of 2024. This is our fourth consecutive quarter of cash burn reductions. Given the focus on pivotal automotive milestones and the wind down of our industrial product line, we believe that comparisons of our first quarter 2024 and fourth quarter 2023 revenues are not helpful in evaluating our performance. First quarter gap operating expenses were $10.5 million, down 52% from the prior quarter, due primarily to cash restructuring charges related to the reduction in force and non-cash impairment charges incurred in the fourth quarter of 2023. Non-GAAP operating expenses were $7.5 million, up sequentially from $6.5 million in the fourth quarter of 2023, due primarily to the timing of audit-related fees and one-time legal fees. We reported a first quarter gap net loss of $10.2 million or $1.61 per share versus a gap net loss of $27.8 million or $4.44 per share in the fourth quarter of 2023. The decrease in gap net loss was mainly due to the impairment of long-lived assets, inventory write downs and associated reduction in force initiatives last quarter. On a non-GAAP basis, our net loss was $7.2 million or $1.13 per share in the first quarter, compared to a non-GAAP net loss of $6.9 million or $1.10 per share in the fourth quarter of 2023 due to the G&A costs discussed earlier. Net cash used for operating activities decreased to $7.9 million in the first quarter from $9.2 million in the fourth quarter of 2023. We closed the first quarter with $28.9 million of cash, cash equivalents and marketable securities and no debt. As an additional source of liquidity, we have access to our equity line of credit facility and our shelf registration statement, which allows us to raise up to $200 million through September of 2026. Turning our attention to 2024 guidance, we're pleased to report that our diligent efforts in implementing various cost reduction initiatives continues to yield significant results. In the first quarter, we surpassed our cash guidance and remain on course to achieve our target cash burn of $25 million for the full year 2024. By the end of the year, this will represent a remarkable 75% reduction in our cash burn rate compared to the first quarter of 2023. Testament to our commitment to prudent financial management is the recent achievement of negotiating an annual reduction of $500,000 for certain professional services fees. This exemplifies our dedication to optimizing expenses while maintaining the integrity of our financial processes. Our overarching objective is to continue identifying and pursuing cost reduction opportunities while ensuring that we sustain the core aspects of our business that drive company value. We are also bullish about the partnership revenue opportunities discussed earlier and expect to recognize revenues from these initiatives later this year. We see exciting times ahead for AI. Our new three-way partnership with ATI provides an opportunity to enter the China market with compelling LIDAR solutions. Our new LIDON partnership should enable us to slash BOM costs, putting us in prime position to attract additional OEM interest. Our ongoing commitment to financial stewardship, including further cuts to fixed operating costs extends our cash runway deep into 2025. We are also actively pursuing bringing new investors to the cap table. We believe we are strategically positioned to seize the immense opportunity with our OEM partners, making us bullish about the future of AI. With that, I'll pass it back to Matt to wrap things up.