AEye, Inc.

Good afternoon, and thank you for joining AI's second quarter 2024 earnings call. With me today are Matt Fish, Chief Executive Officer, and Connor Tierney, Chief Financial Officer. Earlier today, AI announced its financial results for the second quarter 2024. A copy of this press release can be found on the company's 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 current expectations and assumptions regarding AI's 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. 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 reports filed from time to time with the Securities and Exchange Commission, including in the most recent periodic report. All information discussed today is as of August 5, 2024. An AI does not intend to update any forward-looking statements regardless 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 the press release and you should refer to these reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures in the press release. With that, let me pass the call over to Matt.

Thanks, Betsy, and thank you all for joining us today on our second quarter 2024 earnings call. During the second quarter, we saw significant momentum with our new product launch, OEM and partner engagements, and bolstering of the company's cash runway. Our progress in meeting our internal and external KPIs was outstanding in the quarter. Since Q1, OEM and partner feedback on our newest product, Apollo, has been overwhelmingly positive and continues to drive a significant increase in interest from the market. we have not only met but exceeded our performance and maturity targets for Apollo. We view the uptick in activity as another sign of the demand for better value and greater performance from LiDAR technologies in general, but specifically in 1550 nanometer technology as OEMs and partners seek an ultra-long-range, high-speed LiDAR solution in a small form factor. Let me go into more detail. Regarding OEM discussions, we are actively engaged with multiple OEMs and initiated early engagements with several more in Q2. These discussions are primarily driven by the interest in Apollo. We believe the recent NHTSA ruling is also positively impacting our OEM discussions. As you recall, NHTSA has mandated automatic emergency braking, or AEB, as a requirement in all passenger cars, SUVs, and light trucks by 2029. The new regulatory standard sets a high bar. We are seeing OEMs that make performance at over 200 meters a crucial requirement to even be eligible to quote. We believe this favorably positions AI and makes a strong case for our 1550 nanometer LiDAR technology. We have demonstrated examples of AI's LiDAR sensor performing at a distance of one kilometer, which we believe is the longest distance in the industry. We expect 1550 technology will be critical to delivering the required safety performance to meet the NHTSA requirements. including their toughest standard of a forward collision warning at 90 miles per hour. Importantly, Apollo achieves this without requiring OEMs to sacrifice design due to its industry-leading compact size. With respect to our Tier 1 partner, LightOn, we are seeing tangible results from their ability to leverage their supply chain coupled with their expertise in optics. We have successfully completed the technology transfer to them and are now jointly executing a significant product cost reduction initiative that we believe will bring incredibly competitive pricing to the market. Liton's global footprint also provides a distinct advantage in engaging with OEMs that are facing geographical supply chain restrictions while navigating geopolitical uncertainties. Similarly, we continue to make excellent progress with NVIDIA and believe we are on track for future integration with their Hyperion platform. We are pleased with the significant interest we see in China, with multiple OEM engagements following our Apollo launch in Suzhou in June. Our collaboration with ATI and LightTekton at the recent LiDAR conference in Suzhou was a great success. ATI also provided fantastic support for the Apollo launch and facilitated valuable OEM matchmaking opportunities. Overall, the market has responded favorably to our progress and new partnerships this quarter, which allowed us to raise capital at relatively favorable terms and extended our cash runway into the second half of 2025. Our team has done an excellent job of managing our expense targets and we remain on track with the burn rates we committed to. While the U.S. and EU markets continue to progress at a measured pace, the Chinese market is leading globally in LIDAR adoption to the extent that we consider China to be a leading indicator of the future of LIDAR technology. These trends underscore the global shift towards advanced vehicle safety systems and the growing importance of LIDAR technology in achieving these goals. Lastly, our capital light model allows us to concentrate on key fundamentals, advancing our technology, attracting strategic partners, and driving company value with modest capital requirements compared to our peers. Success in the automotive industry hinges on a stable and reliable supply chain. Our approach with Apollo exemplifies this as it leverages a high degree of reuse within the existing supply chain. Additionally, our software-defined strategy has enabled rapid advancements in the product's capabilities, including going from concept to working samples of Apollo in only six months. This demonstrates AI's unique flexibility in adapting to rapidly evolving market needs. Having secured additional financing through the new circle stock purchase agreement, which coupled with our cash reduction initiatives and capital light model significantly extends our runway. We are entering a new stage in AI's growth. We have our sights set on executing our go-to-market strategy for Apollo and actively pursuing product design wins. We expect our relationships with our partners to continue to drive OEM interest in AI, and we are excited to be connected to top players in the China market and the global supply chain. Overall, our product development successes, financial performance, and market trends indicate a positive trajectory, and we are excited about the future of AI. At this point, I would like to turn the call over to Conor, who will cover our financial performance. Conor?

We are thrilled by the early progress that we are seeing in the Chinese market, where we estimate the market opportunity for ultra-long-range LiDAR to be $2.5 billion over the next three years. Our partnership with ATI is off to a strong start, and we are starting to make inroads with OEMs thanks to their support. We also continue to evaluate potential strategic investment opportunities. Driving down BOM costs is imperative to capitalizing market adoption and engaging in quoting activity with OEMs. We are making strong progress with Liton on this front, which is generating increased interest from OEMs. As an established Tier 1 that has brought other automotive components to the global market and with a track record of industrializing products, LightOn is seen as net positive by OEMs. AI's capital light business model, which reduces risk and will drive operating leverage as we scale in the future, sets us apart from the competition. Our burn rate is now up to 10 times lower than our peers. We think this is very crucial in the current environment where fundamentals matter. Capital is scarce and investors are focused on sustainable business models that can withstand market headwinds. We are pleased with the momentum that we have been able to achieve in bringing Apollo to market, all while continuing to drive down costs. During the second quarter, we raised $5.2 million in new capital net of financing costs. This has further extended our cash runway into the second half of 2025. We also recently closed a new equity line of credit facility that gives us access to up to $50 million in additional liquidity. When factoring this equity line of credit facility with our ongoing cost savings initiatives, including any additional funds raised from capital market activity, we believe AI has the financial resources to potentially create a four-year cash runway while also bringing Apollo to market and pursuing potential program design wins. Now turning to our second quarter financial results. I am happy to announce that we have reduced our net cash burn for the fifth consecutive quarter. Excluding new financing, our cash burn for the second quarter was $6.2 million, down from $7.6 million in the first quarter and better than our guidance of $6.7 million. Second quarter gap operating expenses were $8.1 million, down 23% from the prior quarter, due primarily to reductions in personnel costs and professional fees, partially offset by higher R&D expenses related to Apollo. Non-gap operating expenses were $6.4 million, down sequentially from $7.5 million in the first quarter of 2024, due primarily to the timing, higher audit-related fees and one-time legal fees in the first quarter. We reported a second quarter gap net loss of $8 million or $1.16 per share versus a gap net loss of $10.2 million or $1.61 per share in the first quarter of 2024. The decrease in gap net loss was mainly due to the timing of higher audit-related fees and one-time legal fees in the first quarter. On a non-GAAP basis, our net loss was $6.2 million or $0.91 per share in the second quarter compared to a non-GAAP net loss of $7.2 million or $1.13 per share in the first quarter of 2024. Net cash used for operating activities decreased to $6.4 million in the second quarter from $7.9 million in the first quarter. We closed the second quarter with $28 million of cash, cash equivalents, and marketable securities. Turning to 2024 guidance, we are incredibly proud of the progress that we have made in our continued cash burn reduction efforts. We are on track to outperform our burn guidance of $25 million for the full year, thanks to payroll and other savings. Expense management remains one of our top priorities. We're still targeting a 75% reduction in quarterly cash burn compared to the first quarter of 2023. We are optimistic about AI's future. Our partnership model is unlocking market opportunities for us and positioning the company for scalable success. We have strengthened our balance sheet, extended our cash runway, and secured access to even more liquidity. With that, I'll pass it back to Matt to wrap things up.