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spk03: Good day and welcome to the Velodyne LIDAR 3Q-FY 2020 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Lana Adair from the Blue Shirt Group. Please go ahead, ma'am.
spk02: Good afternoon and thank you for joining us on today's conference call to discuss Velodyne LIDAR being third quarter of 2020 financial results. What that's on today's call are Dr. Anand Gopalan, Belladine's Chief Executive Officer, and Drew Hamer, Belladine's Chief Financial Officer. Before we begin, I'd like to remind you that shortly after the market closed today, Belladine issued a press release announcing its third quarter of 2020 financial results. Belladine also published an investor presentation. You may access the press release and the presentation in the investor relations section of VelodyneLIDAR.com. Today's discussion includes forward-looking statements. Please refer to our form 8K, dated October 5, 2020, filed with the Securities and Exchange Commission for a discussion of factors that could cause the company's actual results to differ materially from these 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 to one initial question and one follow-up question. Now, I'd like to turn the call over to Dr. Anand Gopalan, CEO of Velodyne.
spk01: Thank you, Lana, and thank you to everyone for joining us this afternoon. I'm Anand Gopalan, CEO of Velodyne LiDAR. Following a successful business combination with Grass Industrial Corp that closed on September 29th, Belladise is now a publicly traded company. And I'm tremendously excited about this opportunity to present our quarterly results for the first time. On behalf of management, we extend a strong appreciation to our dedicated internal team, our customers, and our new public shareholders. You brought us to where we are today. We are also grateful for the pioneering work of our founder, David Hall, who launched the LiDAR industry. David's vision and expertise have fueled Veridine's commercial success, as evidenced by our shipment of 47,500 sensors to date for a cumulative revenue of over $650 million. Following the completion of our business combination with Graf Industrial Corp., we have a public currency, a healthy balance sheet, and an exciting opportunity to extend our market leadership for both automotive and non-automotive applications while further accelerating product development and opportunistically evaluating potential acquisitions. Our strong performance in Q3 met or exceeded our targets. Revenue in the third quarter grew 137% year-over-year to $32.1 million. We added six new agreements across all three of our broad markets in the third quarter, bringing our total multi-year agreements to 24. At the end of our quarter, we were tracking 175 projects in our pipeline, which represents a 34% increase over the 131 projects at the end of 2019, and further illustrates the demand for LIDAR and Velodyne's ability to match LiDAR solutions to very different applications and price points. Our balance sheet was meaningfully strengthened post-business combination, and we believe we have more than enough cash today to fund us until we turn cash flow positive. Because some of you are just getting to know Velodyne during this call, I will spend a few minutes upfront to share with you why Velodyne is the LiDAR leader in the global autonomous revolution. Next, I will share recent developments before turning over the call to Drew Hamer, who will walk us through the third quarter 2020 financial results. Globally, we are on the brink of a LiDAR-powered autonomous revolution. The applications for LiDAR are endless and continue to grow well beyond auto. LiDAR enables broad secular trends for moving goods, moving people, smart cities, and security. Melodyne is the only LiDAR company today with both the breadth of product portfolio and the manufacturing capability to deliver lower-priced LiDAR with multiple specifications at scale for real-world applications. These include consumer vehicles for ADAS systems, industrial robotics, delivery systems, smart cities, shuttles, and many more. As many of you know, LiDAR is short for Light Detection and Ranging. LiDAR-based perception systems are advancing the development of safe, automated systems with multi-dimensional object detection, depth, distance, and classification with a very high level of precision. Velodyne is the first mover in LiDAR with a broad patent portfolio, a global customer base, and a valuable history of working across industries to help define applications and solutions that enhance the safety of autonomous vehicles and systems, and are priced so that those vehicles and systems come to market quicker. We have the largest market share of all LiDAR companies today. In the automotive sector, our products improve roadway safety with perception data for reliable object avoidance and safe path planning in various atmospheric conditions. LiDAR has a dramatically lower margin of error relative to radar or traditional cameras. We sell to the majority of OEMs and Tier 1 suppliers, and we work closely with nearly every major autonomous vehicle development program in the world. Velodyne is partnered with leading companies like Ford, Baidu, Nikon, and Hyundai Mobitz. Velodyne supplies over 300-plus customers, including major OEMs and leading tech companies, without a singular customer focus or concentration. We have inherently reduced the risk in our model by serving multiple customers in multiple industries, and we don't also have a geographical concentration. We also target 25-plus market segments beyond automotive. Many high-margin non-automotive industries are incorporating LiDAR or considering LiDAR seriously for adoption. We project that in the future, more than half of our revenue will be from outside of the auto space. E-commerce is one example. The demand for contactless last mile delivery solutions accelerated during COVID-19. Last year, the projected bill for last mile delivery was two years out, but now we see contracts more quickly than anticipated. On the regulatory front, Robotic delivery systems are approved already in 11 states, including Florida and Texas, and several cities, such as Palo Alto and San Francisco. In one last-mile application, our customer's analysis shows that transitioning from human to LiDAR-equipped robotic delivery yields a 96% cost savings by reducing an expense of $1.60 per package down to $0.06 per package. In addition to e-commerce, our LiDAR technology is also at the forefront of improving urban security and functionality. The city of Reno, Nevada, recently integrated our LiDAR sensors into the city infrastructure. The groundbreaking project between the University of Nevada and Nevada Governor's Office of Economic Development analyzes precise traffic and pedestrian data at intersections via smart traffic lights. We are engaged with many other state DOTs and even internationally for similar programs. The Velodyne LiDAR sensors collect anonymous traffic data in any weather conditions, be it daytime or nighttime. Our LiDAR technology's revolutionary application represents a seismic shift in the transportation industry, ushering in a new level of safety. Our business approach fosters entrenched customer relationships with high switching costs. Our stickiness factor increases as we move closer to launch. Once we have a design win with the customer, they initiate the integration of our technology into their components. These customers then build, validate, and test Validant technology in their systems that are then not easily transferable due to the underlying software. In effect, our relationship security grows as our customers move further into the program. Cost is no longer a barrier to the adoption of LiDAR. As we are seeing, approachable pricing expands the demand for the application of LiDAR technology to many industries. We have a direct, near-term line of sight for further lowering the ASP of our base sensors. New use cases are evolving. and we believe our TAM will only grow. In my prior role at Velodyne, I was our company's chief technology officer. Our team has built a broad product portfolio in rotational and solid-state LiDAR to avoid reliance on just one product or technology. As said earlier, Velodyne has an unmatched breadth of products architected for a wide range of applications. We manufacture surround view, directional solid state and blind spot lidar. To give you an example of one of our popular sensors, the Alpha Prime VLS128 offers surround rotational view with 300 meters of high resolution vision. Our lower pricing and miniaturization increase installation options for many applications. Today I can hold a velabit in the palm of my hand. I would note that we have designed our product portfolio with interchangeable components across the product lines, which gives customers' engineering teams economies of scale. We have fully automated wafer-scale LIDAR manufacturing processes in place today and operating with our contract manufacturers. We can produce at scale and we are the furthest along the path to mass production. With systems already in place and built, our capex spending over the next several years will be tens of millions and not hundreds of millions of dollars. We have developed complex algorithms and software systems 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 therefore a natural adjacency for us. And we are on the cusp of winning new software contracts which are incremental to our pipeline. We are accumulating data sets and building off of these data sets and applying our AI across our product install base. Now I'd like to highlight recent business developments. First, we have 24 signed and awarded multi-year contract agreements with six added in the third quarter of 2020. Our total number of pipeline projects is 175. We continue to experience a high conversion from the RFI and RFQ stages to contracts. Based on our long history of selling our LiDAR solutions, we understand the need to plan for an in-depth engineering-led sales cycle and the barrier that this represents to entry for a less established manufacturer to secure quality contracts at volume. Velodyne transforms lives and communities by advancing safer mobility for all. We issued a recent white paper comparing LIDAR-centric ADAS to the current camera and radar-based technology in nighttime conditions. Proprietary testing indicated the superiority of our LIDAR-based solution where the camera and radar systems failed. Finally, in late October, we hosted our third annual World Safety Summit. Our policy work brings people together. Smart vision technology ultimately translates to a vast reduction of fatality among operators, drivers, and pedestrians. In closing, Velodyne is far from a one technology or one customer type company. We manufacture a broad portfolio of exceptional LIDAR products and technologies, and the diversity of customers and industries are key strengths of Velodyne. Now I will turn our call over to my colleague, Drew, to walk you through our third quarter financials. Thank you.
spk07: Thank you, Anand, and thank you again to everyone for joining us today. I'm Drew Hemer, the CFO for Velodyne Lidar. I'm pleased for this opportunity to share Velodyne Lidar's financial results for the first time as a public company. I'll begin with an overview of the company's third quarter results before moving on to guidance for the fourth quarter and reconfirming fiscal year 2020. Third quarter 2020 is a milestone for Velodyne. We started trading on September 30th on the NASDAQ under the ticker symbol VLDR for the common stock and VRW for the warrants. This was a long process for the company's management team, employees, and investors, and we are excited and proud to be the first publicly traded LIDAR company with an exciting future opportunity set. Business continues to benefit from broad interest in LIDAR as a solution in both automotive markets and non-automotive markets. Importantly, the company continues to see healthy levels of customer engagement as evidenced by an increase in long-term contracts. Third quarter revenue of $32.1 million represents a 137% increase versus the comparable quarter last year. Sensors are the company's focused revenue stream. This quarter, we sold a record number of Alpha Prime units predominantly to the automotive sector. Another important area for the company is multi-year agreements with customers that are putting their supply chain in place for solutions that include LIDAR. The company finished the third quarter with 24 multi-year agreements. Baidu, an automotive customer, was the largest of these contracts. RoboSense, a last mile delivery customer, accelerated its program in response to COVID-19. True to our diversified end market model, our third quarter contracts represent customers offering solutions in each of our targeted end user segments. As highlighted in the press release, GAAP and non-GAAP gross profit in the quarter benefited from a one-time restocking fee, as well as the start of production at our contract manufacturers. The company expects next quarter's GAAP and non-GAAP gross margin to reflect a more normalized production model, and I'll touch on that during guidance. R&D was lower for the quarter due to the reclassification of some expenses to cost of goods sold in connection with non-recurring engineering services offered to our customers. Third quarter G&A includes legal expenses related to the recent successful intellectual property protection actions as well as the write-off of IPO-related expenses. Non-GAAP operating income does not include the sale of our Morgan Hill buildings. That building was sold for a net gain of approximately $7.5 million, and the sale proceeds decreased third quarter operating expenses by the same amount under GAAP accounting rules. At the end of the third quarter, Velodyne LIDAR was well capitalized with $298 million of cash and short-term investments on the balance sheet. This includes the proceeds from the equity financing that occurred in conjunction with the business combination, as well as global licensing agreements with HESI and RoboSense for 360 degree surround view LiDAR sensors. I would note that the capital expenditures were half a million dollars in the third quarter. Lastly, just to level set everyone, the company ended the quarter with 140.5 million weighted average shares outstanding. This accounts for the conversion of all of Belladon LiDAR's common and preferred shares, plus the shares registered for the investment that had closed at the time of the business combination. And finally, I'd like to turn now to guidance, which remains the same as we publicly disclosed in early September. As Anand mentioned, we are seeing increased interest and acceleration of last mile delivery plans as a result of the pandemic, while other industries are cautious about capital spending. With these dynamics in mind, for the fourth quarter and full year 2020, revenue is estimated to be approximately $101 million, based on our pipeline of production contracts and the reduction of ASPs offset by volume. We expect higher sensor volumes in Q4. We expect the full-year GAAP gross margin, including around $7.5 million of stock-based compensation expense, to be around 22.6% to 25.6%, and the non-GAAP gross margin to be approximately 30% to 33%. In Q4, GAAP R&D will include approximately $35 million of stock-based compensation, resulting in total expenses of $48 million to $50 million. This is lower than Q3 due to lower prototyping costs and the previously discussed reclassification cost of revenue. Net of the stock-based compensation expense, this is lower than Q3 due to lower prototyping costs and the previously discussed reclassification cost of revenue. On a non-GAAP basis, we expect R&D spend of between $13 million and $15 million as we continue to invest in new products. Sales and marketing expense on a GAAP basis is expected to include approximately $55 million stock-based compensation expense, resulting in a total expense of $59 million. On a non-GAAP basis, sales and marketing expenses are projected to remain around $4 million for the fourth quarter. GAAP G&A operating expenses are expected to include approximately $44 million of stock-based compensation expense, which will result in total expenses of approximately $49 million in Q4. On a non-GAAP basis, Q4 G&A expenses reflect a decrease in legal expenses related to our IP protection, but the reduction of those costs are partially offset by D&O insurance and other public company costs. The total non-GAAP G&A expenses are estimated to be approximately $5 million. For the full year, GAAP operating loss is expected to include approximately $142 million of stock-based compensation expense, which will result in a total operating loss of $208 million to $205 million. This assumes the stock-based compensation expense is calculated using the closing common share price for VLDR on October 30, 2020. The actual charge for each employee equity incentive will vary based upon the day the incentive vests. Non-GAAP operating loss is expected to be in the range of $67 million to $64 million for the full year of 2020. Fourth quarter non-GAAP adjustments of approximately $142.1 million includes $142 million in stock-based compensation expense. As noted, Stock-based compensation expense will be significant in the fourth quarter related to anticipated share investing. For modeling purposes, basic weighted average shares will be approximately $175.4 million for the fourth quarter and $148.5 million for the full year. In closing, our long-term optimism is even stronger following the company's public listing. Recent high-profile wins our significant pipeline of contract opportunities, and our commitment to new product development positions us well for the future. Thank you for your interest and for joining us for Velodyne's first earnings call. The third quarter investor presentation is available on our investor relations website today. We look forward to sharing results in the quarters ahead, and Anna and I are ready to address your questions. Operator, we are now open for questions.
spk03: Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. Please state your name before posing your question. Again, press star one to ask a question. We will now take our first question from Mr. Tristan Ghira from Baird. Thank you.
spk00: Looking at when we can expect an infection point in revenue from what's a lot of R&D project today into some initial volume ramp, is it fair to assume that this would be for last mile delivery vehicles since your commentary on the call that those projects were moving a little bit ahead of expectations, and what type of ASP should we expect in these initial volume ramps?
spk01: Okay, thanks. This is Almond here. Thank you for the question. Yeah, I think we definitely see, because of all of the economic conditions as well as the social conditions around the pandemic, we are seeing last mile delivery and delivery systems in general as accelerating faster than some of the other traditional automotive applications from level two to level five. So you're correct that those will inflect first, and we expect those to come to fruition sooner than some of these other applications. I don't think we publicly disclose specific ASPs associated with those sorts of specific customers or specific applications, but generally speaking, as I said before, we see in high volume, we see ASPs in the sub-thousand dollar range, for robotic application either. Anything to add, Joe?
spk07: Yeah, and I think, you know, it's very important to bear in mind when we're thinking about this is that the company has, you know, spent years developing a broad portfolio of products to be able to enter different markets at different price points and still provided a, you know, the kind of successful margin that the company should have if it's going to be a big, giant company. And what we're seeing is that, so you could see our, when I talk about our weighted average ASPs in the future because these solutions may be using VelaRays or as we get even out a little further, they could start using VelaBits in the coming years. That will result in the blended weighted average ASP be coming down, but overall this is purpose-built based upon the products that are being used that have been developing for the last four to five years.
spk00: Okay, great. And then as a follow-up question, How much visibility do you have into the initial L2-based design wins and what type of market share do you think you can get in that segment? And in terms of timeframe, is 2023 when we should really see this volume right into L2 application?
spk01: yeah so i think l2 applications are really we are having those conversations today with a lot of the oems and this is really on the backs of our ability to create something like develop bit which we announced at ces earlier this year which is the 100 asp lidar and mass volume that really unlocks l2 because now you'll be able to fix the low price points that are needed for l2 adoption So we've been having many deep conversations with multiple OEMs around the use of this technology in conjunction with our software for providing L2 functions like the AED. From a volume RAM perspective, yes, we expect these to come to fruition more likely in the 2023-2024 timeframe as a result of this conversation.
spk08: Great. Thank you. Thank you. Thank you.
spk07: Operator, next question, please.
spk03: We will now take our next question from Mr. Colin Rush from Oppenheimer. Thank you, and please go ahead.
spk08: Thanks so much, guys. Can you give us a sense of the total dollar volume of those six awards that you're noting in the specific application that are in those awards?
spk07: Yeah, so we can't give you a specific volume on the individual awards, of course, because there are NDAs and other things in place. But we do give you a sense that one of them was sizable. That was mentioned in our prepared remarks. The Baidu was a pretty substantial deal. And then it's a blend. It's various sizes from very large to slightly smaller deals that contributed to the business that we're really proud to have.
spk01: I would just add from an application perspective, we do span all of the different application classes that we have talked about all the way from systems that are moving people to systems that are moving goods and even smart city and security applications. So those awards span all of those categories.
spk08: Great. Yeah, I think that's it. a certain amount of confusion around the development portfolio or development portfolio, the ability to deal with, you know, faster moving vehicles, you know, 200 to 300 units rows. Could you speak to the capacity of the portfolio to actually serve that market and how it is, you know, for your customers to have that as they work through some of the earlier levels or lower levels of ADAS and thinking about, you know, future proofing the platforms?
spk01: Yeah, I mean, Velodyne, that's a great question. Velodyne has multiple products in its portfolio that actually serve their purpose. So on the 360 degrees surround view LiDAR, we have the Alpha Prime class of products, which in fact have been in production for multiple years at this point, and they're specifically designed to hit the performance needs for highway type of fast driving applications with the long range and high resolution required. Further, our Validate product family also has multiple SKUs in it, going from a low-end performing Validate to a highest-end performing Validate. And these highest-end performing Validates are also designed for providing the high resolution and long range. that are needed for a highway ADAS type of application. So I would say we have multiple products that fit those applications. And furthermore, we have these products that are in production today and are shipping to multiple customers.
spk08: Fantastic. And the last one from me, just in terms of the supply chain preparedness to scale with you? Are there areas of concern in type supply or where you're having trouble getting second, third sources that we should be aware of or that you're working on actively right now to scale into some of the revenues that you're talking about?
spk01: Yeah, you know, this is really what sets Velodyne, one of the things that sets Velodyne apart from all the other players is this is work that we have been doing for five plus years already. So we have, over the period of time, developed architectures that are scalable and developed supply chains that have multiple sources for all the key components. So today we are at a point where we have diversity, not just from a geographical perspective, but also from a supplier perspective for all of our key components. And that's what gives us confidence in being able to scale into these high-volume contracts that we are talking about today.
spk05: Great, thanks so much, guys. Thank you. Thank you.
spk04: We will now take our next question from Mr. John Murphy from Bank of America.
spk03: Please go ahead.
spk07: Good afternoon, guys. Can you hear me? Yes, we can. Thank you for joining us. Thanks for having me. Just a first question as we look at... disclosure around revenue by unit, so the number of sensors for the third quarter of 20. I'm just wondering if you can give us an idea of mix and price in the third quarter of 20 versus third quarter of 19. And then also, as we look at what you have in slide 11 in your third quarter deck, which is incredibly helpful in understanding end markets over time, I'm just curious if you can give us sort of some flavor of how The product mix will shift over time as these different end markets grow, maybe a year, two, three after. I'm sorry. On the first question, John, I think you were asking about ASPs this year versus last year. Is that right? Q3 2020 versus Q3 2019? Yes. If you could give us some idea of the sensor number year-over-year, the ASP year-over-year, and how MIX shifted between products on a year-over-year basis in the quarter. Yeah. So, you know, really we're very focused on – and let's talk a little bit about the MIX. So the MIX this year has benefited from the continued sale, the VLS-128s and some of our other products. We brought the VelaRace into the market this year as well. So, They've got this balancing effect where VLS128s have a higher ASP, whereas the Velarays are going to have a lower ASP as an entry point into the market. So there's a little bit of that going on kind of year over year. And then the volumes tended to look like it might be about the same, but the reality is that the products that are in the mix are substantially different by having the higher end VLS128s as well as the new Velarays coming into the mix. We're very, very proud, and I think we're very comfortable with the mix and the direction that it's going to be taking here as we go into the current quarter as well. And if we think about going forward, as we're seeing this great pipeline of projects ramping up from 134 to 175, it's very encouraging. I'm just curious, as you think about that mix going forward, could you see this sort of barbell continue, or how should we think about the product mix as these end markets develop over time?
spk01: Yeah, so maybe I can add some color. So I think as we move forward, we definitely continue to see this robust mix of products, both in the surround view rotational products, as well as the solid state products like the Valerate and VeloBit. Having said that, we definitely see for some of the large volume driving applications, the Valerate and VeloBit as we move into the out years will become a bigger portion of our unit shift. So the sound wave products will continue to be incredibly strong in some segments like level 4, level 5, as well as robotics, and will continue to also be a portion of the revenue.
spk07: Okay, and if I could just ask a follow-up on what do you think that means for margins over time? I mean, in some ways, some people might look at this and say, hey, that might be you know, a net negative for margins, but the reality, it doesn't seem like that's going to be the case for you. So maybe you could just talk about, you know, what this means for margins and how you deal with, you know, the shift over time. Yeah, so this is really important, as, you know, the work that Anand and David have done over the last couple of years in designing the products and setting up the supply chain. So that was the starting point, was to get these products to a price point that would allow for consumer purchases and yet provide the proper margins for the company. So the mix of all the different products as we move to scale should allow us to get the margins that we've been talking about during the merger activities that we had with the SPAC entity. And, of course, a lot of that is driven by the items that Anand mentioned just a few minutes ago, which is supply chain, design of the products, but it's also taking the products offshore and moving into more cost-efficient markets where we're able to reduce labor costs. It's also going to benefit from the development of our MLA and ASIC chips. These are proprietary chips that take a lot of the labor out of the manufacturing process as well as improve the yields on the units produced. And then finally, it makes it algorithmic so that we can calculate and manufacture these products at high volumes using proprietary machines that we've developed as well. So the combination of the supply chain, the design of the product, the supply chain that's being selected to do that, doing it with the MLA-ASICS chips, moving it offshore, using proprietary machines, has really made it so that we feel pretty confident that we should be able to hit the margins that we've been talking about previously.
spk01: Can I say something? Sorry, I should add, this is a plan we have been marching towards for four-plus years already. And so really we had a clear line of sight from the market and from our customer relationships into what these products needed to be from an AFC perspective to be able to pick this inflection point and scale. And we have been working towards developing those products so that they can have the right margin profile for the business. And today we are able to take advantage of that.
spk07: That's very helpful. Thank you very much, guys.
spk03: Once again, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. We will now take our next question from Michael Philotoff from Barenburg Capital Markets. Thank you.
spk07: Hi guys, thanks for taking my question. First one, I know there's a difference between the 905 nanometer and 1550 nanometer, which I think is sort of the mix that's being used in the market today. And I know you guys use the 905 nanometer. And I know there's some sort of benefits from a supply chain perspective in using 905 nanometer. So I was wondering if you could just give a little more color around that and maybe how that benefits you from a cost perspective and supply chain perspective.
spk01: Yeah, sure. You know, I think people make this out to be some sort of religious battle, but really the reality of it is we look at Wavelength as a tool in a toolbox. So the question is what's the right way, what is the right choice to make for these sets of applications we're talking about that hits the performance point, but also is able to hit the scalability and price point for these applications. From that perspective, the current portfolio uses 905 nanometer. And really, the key advantage is that it's able to pick the performance of these applications, but do that where you have significantly lower cost for the key components that are used in the building of the LiDAR, such as lasers and detectors, where we have the ability to use fully solid state devices and ability to have multiple sources who are building these devices in very large volume. And that allows us to really go to spending few dollars, literally a handful of dollars for lasers and detectors in our highest end product. And that's a huge contrast with what you would see if you were trying to build a 1550 system today.
spk07: Understood. And then one quick follow up, you know, could you give us maybe some color around the volumes needed to hit those sort of low and very competitive ASPs you've referenced for sort of the Bella family, um, If you could just give me a call around that, that would be great.
spk01: Thank you. Yeah, sure. So I think we have clear line of sight into being able to fit those ASPs today, and we are fitting those ASPs today. But when you look at something like $100 VeloBit, we expect to be able to fit those ASPs in what would be considered traditional first wave automotive volumes, which would be in the hundreds of thousands of units.
spk05: Great. Thank you very much. Thank you. Thank you.
spk03: Once again, if you would like to ask a question, please signal by pressing Start 1 on your telephone keypad. We will now take our next question from Mr. Joseph Spath from RBC Capital.
spk06: Thanks. Good afternoon, everyone. I was wondering if you could provide any update on the Vela software product, specifically the OEM customer's willingness to look to that type of solution as they sort of, you know, work on their next generation ADAS projects.
spk01: yeah so i think from a technology development perspective i would say that we as as we have discussed earlier we have now all the tools in the toolbox for develop software we are working uh we continue to work with multiple customers and designing that into their systems we are seeing a lot of strong interest of both uh in the oem space but also in in industrial spaces for the usage of the software And I would say that we are on the cusp of winning our first contract, which is all upside to the pipeline that we have talked about around the software products themselves.
spk06: Okay. Thanks for that. And then do you ship some of your product for these more developmental projects outside of of automotive to maybe some of the other initiatives you talked about like for autonomous delivery or whatnot. I believe a lot of those companies are probably sourcing a whole bunch of different competitive LIDAR to sort of better understand the competitive side as this is sort of a little bit maybe newer for them versus I think some of the auto customers that have been looking at LIDAR for a while. Is that right and is there any sort of feedback you can share as to sort of how they view Validon competitively?
spk01: So while I can't speak to specific customer feedback broadly, these customers, you'd be surprised at how sophisticated these customers are. And they have been looking at, obviously, as you said, multiple LIDAR solutions before selecting Belladine as a partner of choice. And that's because we have the ability to pick the LIDAR that meets the performance. We are the trusted market leader in the space. We have been doing this for decades. over a decade at this point. And we have the ability to deliver at mass volume. We ship more products in a week than many of the other players or all of the other players ship in a whole year. And that level of scale is critical for some of these hyperscalers who are looking to really deploy these systems very quickly in large volumes. And the way to meet those demands in the context of LIDAR. Actually, Velodyne, we believe, is the only player who is able to do that.
spk05: Thank you. Thank you.
spk03: It appears there are no further questions over the phone at this time. I would now like to turn the conference back over to management. Thank you.
spk01: Thank you, operator, and thank you to everyone listening. Thanks to everyone on the Velodyne team for helping to put together our first earnings call as a public company. At Velodyne, we are tremendously excited about our technology and its ability to create safer vehicles, safer roadways, and safer communities. The possibilities are virtually endless for LIDAR and its ability to positively impact our lives. Velodyne has already had a pretty remarkable journey getting to this point, but there is so much more to look forward to. Drew and I look forward to many more conversations and sharing our forward progress in the quarters to come. Thank you very much for your time.
spk05: Thank you.
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