View, Inc.

Greetings and welcome to VIEW, Inc.' 's second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Samuel Meehan, Head of Investor Relations at VIEW. Thank you, Samuel. You may begin.

Good afternoon, everyone, and welcome to VIEW's second quarter 2023 earnings call. I'm Samuel Meehan, head of investor relations at VIEW. I'm here with Dr. Raul Mopuri, our CEO, and Amy Reeves, our CFO. Before we begin, I'd like to remind you that after market closed today, VIEW issued a press release announcing its second quarter 2023 financial results. and supplemental materials. You may access the press release and the supplemental materials in the investor relations section of view.com. As 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 performance to differ materially from those forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from our expectations. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after our call. For a more detailed description of certain factors that could cause actual results to differ, please refer to our SEC filings, including our most recent annual report on Form 10-K and subsequent filings. including quarterly reports on Form 10-Q. I would also like to remind you that during the call, we will discuss certain non-GAAP measures related to views performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in the press release. Unless otherwise stated, our comments during the call refer to non-GAAP results of operations. Now, I'll turn the call over to our CEO, Dr. Rao Mulpuri. Rao, over to you.

Thank you, Samuel, and thank you all for joining us this afternoon. A quick recap of the key announcements we made today. First, we had an excellent second quarter and the results demonstrate our focused execution towards profitability. Second, we reaffirmed our full year revenue guidance of 36% year over year growth at the midpoint. Third, we're forecasting to reach gross margin positive in the third quarter of 2023. This will be the first time the company achieves a positive gross margin which represents a critical inflection point for our business. Finally, we executed a term sheet for $150 million financing with a lead investor. The $150 million of additional capital is expected to enable the company to get to free positive cash flow with our current strategy. Let's spend a minute and talk about our mission. For the last 15 years, we've been hard at work at Vue to build a full stack product that transforms societal infrastructure for the better. While many of us recognize the long-term impacts of climate change, society is now waking up to the harsh realities of the acute short-term effects that are impacting everyone right now. Just in the last few months, we witnessed wildfires, warming oceans, floods, and extreme heat events that impacted large populations. Many of these large communities are unprepared for this new reality. The world needs urgent solutions to address these issues while also providing better quality of life for future generations. It is this mission that gets me and everyone at VIEW fired up to fight the fight every single day in order to bring our technology to scale and make the world a better place. Now let's discuss the second quarter in more detail. We recorded revenue growth of 72% year over year. As I've mentioned in the last call, we completed our pivot from majority of our business in office to majority multifamily residential sector. a sector that has been more resilient in the current cycle compared to commercial real estate. In addition, the tax credit has provided tailwinds for our expansion in this vertical. We are in the early stages of executing several multifamily projects with key platform accounts, and that gives us the line of sight these projects will help drive our top-line growth throughout the remainder of the year. With that visibility into Q3 and Q4, we have the confidence to reaffirm our revenue guidance for the full year. On our earnings call, we detailed the actions we took to reduce our fixed cost structure. The second quarter is an important proof point that these efforts are paying off. Our gross margin improved significantly from minus 140% in Q2 of 2022 to minus 48% in Q2 of 2023. Total operating expenses improved 48% year over year and reflects a more efficient go-to-market strategy, lower G&A spend, and lower R&D spend following the release of our mainstream Gen 4 product and our multifamily offering. I've been quite vocal on our past earnings calls about how our business model has significant leverage with scale. We built our company from the start to be ready to scale, and that required a sizable manufacturing footprint and customer support operations across the country. As the business scales, there's an inflection point when those upfront investments create tailwinds, make it easier to scale efficiently, and the business recognizes the benefits of this leverage. This dynamic is common to vertically integrated hardware technology companies. VIEW is now hitting that inflection point. In the second quarter, our revenues grew by $12 million year over year, and our gross loss improved by $9 million. Going forward, we expect to continue to benefit from this leverage as we grow our revenues. Now, looking ahead to the third quarter, I'm excited to announce that we expect to be gross margin positive. This is a significant milestone for the company and a testament to the relentless focus by the VUE team on achieving the path to profitability. The key elements for VUE achieving gross margin positive are, first, our enhanced go-to-market strategy. We've been targeting high-quality revenue opportunities where our products add the most value. We're also focused on serving and growing our strategic platform accounts. These are leaders in the industry that are driving transformation in real estate and believe that modern buildings should be more sustainable, experiential, healthier, and more tech-enabled. We're also seeing an uplift in interest from the recently enacted investment tax credit, which benefits both the customers' affordability as well as our margins. Today, ITC is enabling us to deliver view smart windows at cost parity to conventional windows and still capture a healthy margin. The second critical driver of gross margin comes from lower fixed costs, which enable a lower revenue break-even point. This includes a more efficient operation at the factory and reductions in overhead. The factory team has worked tirelessly to perfect our manufacturing process over the past 10 years, and today our factory is delivering well on large projects across the country. It is important to note that we expect to get to profitability with the footprint we have in place today. Finally, on the products, we're seeing the benefit of improved execution and lower costs due to improvements we completed over the last year. We recently completed an upgrade of VueNet, our next generation controls and network infrastructure. This work significantly reduced unit costs while improving product industrialization. We're starting to see the initial financial impact as we roll out the improved architecture on new projects. We also continue to recognize cost benefits in our vertically integrated smart building platform, and we're working closely with our customers to optimize design, cost, production, and delivery of their buildings. This is a continuous learning cycle and we believe there is still room for additional value capture. To close out my prepared remarks, we've made significant progress scaling the business towards profitability. The second quarter results are proof points that the plan is working, and we expect to achieve gross margin positive in the third quarter. We have significantly reduced the structural fixed costs of the business and plan on holding our fixed costs at these current levels until we achieve profitability. With that, I'll hand it over to Amy to cover the financials. Amy, over to you.