Ouster, Inc.

Good day and welcome to the Velodyne Fourth Quarter Fiscal Year 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kristen Chapman of LHA Investor Relations. Please go ahead, ma'am.

Good afternoon and thank you for joining us on today's conference call to discuss Velodyne LIDAR's fourth quarter and full year 2020 financial results. With us on the call are Dr. Anand Gopalan, Velodyne's Chief Executive Officer, and Drew Hamer, the company's Chief Financial Officer. Before we begin, I would like to remind you that shortly after the close of market today, Velodyne issued a press release announcing its fourth quarter and full year 2020 financial results. Velodyne also published an investor presentation. You may access this press release and presentation in the investor relations section of VelodyneLIDAR.com. Today's discussion includes forward-looking statements. Please refer to our press release for a discussion of factors that could cause the company's actual results to differ materially from those forward-looking statements. I would also like to remind you that during the call, we will discuss some non-GAAP measures related to Velodyne's performance You can find the reconciliation of those measures to the nearest comparable gap measures in the press release. To ensure that we address as many analyst questions as possible during the call, we request that you please limit yourselves to one initial question and one follow-up question. Then you may re-enter the queue. Now I'd like to turn the call over to Dr. Anand Gopalan, CEO of Velotime. Please go ahead, sir.

Thank you, Kirsten, and thank you to everyone for joining us this afternoon. I'm Anand Gopalan, CEO of Velodyne. Our fourth quarter and full year 2020 results demonstrate that we continue to expand our leadership position in the LiDAR market. Velodyne is the only LiDAR company today with both the breadth of product portfolio and the manufacturing capability to deliver low-priced LiDAR with multiple specifications at scale for many real-world applications. We shipped a record 4,237 sensor units in the fourth quarter, and 11,710 for the full year. This included 718 solid-state LiDAR units in Q4. We are manufacturing and shipping more LiDAR units than all our competitors have reported. In fact, we ship more products in a week than all the other players have reported shipping in a whole year. In addition, we have expanded our offerings and now provide full solutions of hardware plus software through our acquisition of mapper.ai. This is an exciting new part of the story. In terms of manufacturing, we have fully automated wafer-scale-like LiDAR manufacturing processes in place today and operating with our contract manufacturers. We can produce at scale, and we are far along the path to mass production. and continue to execute on our strategy of transferring manufacturing of mature products to contract manufacturing partners. Despite COVID-19, we have not slowed down. We continue to set production records and are making significant progress on our growth plans. This uniquely positions us to meet the rapidly growing volume requirements of our customers in the coming years. Thanks to its broad rotational and solid-state LiDAR portfolio, Valodyne's ability to address many segments is a key competitive strength, and we continue to de-risk our business model by being the leader in multiple markets with multiple customers in each. Valodyne supplies over 300-plus customers, including major OEMs and leading tech companies such as Caterpillar, Ford Autosan, GM, Honda, Hyundai Mobis, Toyota, Volkswagen, Zoox, Didi, EasyMile, GADIC, Google, and Leica Geosystems. We announced agreements in the fourth quarter of 2020 covering industries from autonomous vehicles and trucking to robotics and mapping. As of today, we now have 26 active multi-year agreements, up almost nine-fold from three in the first quarter of 2020. Over the past few months, we announced that we Signed a multi-year agreement with Motional, a Hyundai and Aptiv combination to be the exclusive provider of long-range surround-view LiDAR sensors for Motional's SAE Level 4 driverless vehicles. We executed an agreement with May Mobility for its entire fleet of self-driving shuttles. Signed an agreement with Local Motors to use our sensors to enable safe, reliable operation of OLLI, the company's 3D-printed electric and self-driving shuttles. We signed a five-year sales agreement with Thor Drive, who will be using our LiDAR sensors to power its cargo and baggage ground support tractors in a groundbreaking AV program at the Cincinnati Northern Kentucky International Airport. And we entered into a strategic partnership with Beijing Trunk Technologies or Trunk Tech, with whom we will collaborate in developing next-generation autonomous heavy trucks to accelerate the commercialization of driverless trucks in China's logistics market. In mapping, we signed a multi-year sales agreement with Emerson, a world leader in drone autonomy, LiDAR mapping, and data analytics, who will use our sensors for mapping hazardous and GPS-denied environments. Our pipeline, which is the most robust in the LiDAR industry, now stands at 194 projects, This is up from 183 reported for the fourth quarter of 2020 and 131 projects reported at the beginning of the year on January 1st, 2020. There is expanding adoption of LiDAR across a wide variety of industries, some of which are accelerating in a post-COVID world, such as last-mile delivery. Our pipeline of opportunities in industries such as robotics grew 220% from 873,000 units in February of 2020 to 1.9 million units today. I'd like to take a moment to comment on our pipeline, which is very fluid and will vary with customers' changing needs and expectations as it continues along its long-term growth trajectory. A recent example of this is an AV project that we had with an OEM customer. While we are on this customer's first and second generation autonomous vehicle platforms, the customer made a choice to use a different technology for their next generation platform. However, we continue to be actively engaged with them on multiple other opportunities, which, if successful, could more than offset any financial impact of this project. We have also seen an ADAS customer select an older technology for their first generation rollout while they continue to move forward with us on projects for next generation platforms. On the other hand, recently we had a major OEM customer re-engage with us and renew our long-term relationship through a follow-on multi-year agreement. Our product portfolio also includes the complex algorithms and software solutions to complement our sensor products. Software is only possible with a robust pre-existing hardware install base like Valodyne has today. A higher margin software subscription model is a natural adjacency for us. We have made significant progress on executing new software contracts and now have 18 opportunities in our pipeline with the software component, three times the number than in the third quarter of 2020. Velodyne is innovating on the cutting edge, and in 2020, we launched Industry First, our new Veleray solid-state sensor product line, and VeloBit LiDAR, our smallest sensor, which are designed to be manufactured at scale and at price points targeted at broad-based LiDAR adoption. Velodyne's VeloBit LiDAR sensor was named a winner in the Best of What's New Awards by Popular Science and won the 2020 Innovation Award by Silicon Valley Robotics. Last but certainly not the least, we have 28 VeloBit projects in our pipeline today. We are the most innovative LiDAR company, as evidenced by our track record, and you will see additional new LiDAR architectures and technologies introduced by us in the near future. Velodyne transforms lives and communities by advancing safer mobility for all. In the fourth quarter, we joined the Qualcomm Smart Cities Accelerator Program to promote using LiDAR technology in smart city solutions. By becoming part of the Qualcomm Smart Cities ecosystem, we are now working with private industry, governments, and solution providers to create smart city applications that improve public services and enhance safety and the quality of life. Earlier this year, we issued a white paper in conjunction with the University of Nevada Reno Center of Applied Research that outlined how roadside LIDAR is the key to building smart and safe transportation infrastructure. The past few months have seen a few more LIDAR companies look to go public on the backs of our success. The information in their public filings validates our substantial leadership position and also showcases the massive opportunity for Velodyne due to our dominance in each of their industries. In summary, it is an incredibly exciting time for LiDAR and for Velodyne as we work towards democratizing LiDAR for many applications. We believe we have hit an inflection point in the LiDAR industry, which is evidencing itself in our expanding pipeline and by shipping more units than ever before in the fourth quarter of 2020. In many applications, LiDAR status as a critical sensor is giving us the opportunity to add higher value to our customers by providing full solutions, not just hardware. Before I turn the call over to Drew, I wanted to take a moment to touch upon our recent board and leadership transition. As you saw, our board has named Brad Culkin as chairman to succeed David Hall. Brad co-founded Velodyne LiDAR's predecessor company, Velodyne Acoustics, and has been involved in Velodyne LiDAR throughout its history, including serving on Velodyne LiDAR's board since September 2016. We look forward to continuing to benefit from his invaluable guidance on technology and business strategy. I'm also excited to see Sally Frickman, take over the role of chief marketing officer. Her expertise in managing public relations and digital marketing will prove invaluable as we continue to execute on our strategic plans. And finally, it's my pleasure to welcome Hameed Zaringalam to our board of directors. In his role as corporate vice president at Nikon Corporation, Hameed is responsible for the external investments, strategic alliances, and the private equity strategy of Nikon Corporation, leveraging their core competencies to enable and scale growth in new markets. And he is responsible for Nikon's strategic partnership activities in semiconductor lithography in the United States. With his appointment, we are further deepening our relationship with our valued manufacturing partner, Nikon. I'd now like to turn over the call to Drew for a discussion of our financials.