Arbe Robotics Ltd. Q1 FY2024 earnings call

• Arbe congratulated a Tier 1 in China selected to supply radar systems with Arbe chipset to a global leader in autonomous driving, net production in 2025.
• Successful development of post-point cloud algorithms integrated into HiRain's imaging radar for serial production; HiRain to begin net production by end of 2024.
• Progress with OEMs on data collection for Level 2++ and Level 3 solutions, and radar specification improvement.
• ADAS radar requirements emphasize 32x32 channels, and Arbe has largest channel array; engaged with 11 car companies globally.
• Collaborations with NVIDIA (Arbe Perception Radar in Omniverse) and Horizon Robotics (integration of Weifu's 4D Imaging Radar with Arbe chipset).
• Dual listing on Tel Aviv Stock Exchange and advancing convertible bond issuance for working capital.

Total revenue in the first quarter of 2024 was $0.1 million, a decrease from $0.4 million in Q1 2023. Backlog as of March 31st was $1 million. Negative gross margin for Q1 '24 was 194% compared to 11% in Q1 2023. Operating expenses in Q1 2024 were $12.5 million vs $10.7 million in Q1 2023. Operating loss in Q1 2024 was $12.8 million vs $10.6 million in Q1 2023. Adjusted EBITDA loss was $8.5 million in Q1 2024 vs $8.4 million in Q1 2023. Net loss in Q1 2024 was $12.8 million vs $9.9 million in Q1 2023. As of March 31st, 2024, Arbe had $5.4 million in cash and cash equivalents and $30.3 million in short-term bank deposits with no debt.

• Goal of four design-wins with automakers remains unchanged.
• 2024 revenue expected in line with 2023, followed by growth in 2025.
• Adjusted EBITDA for 2024 projected to be in the range of $30 million loss to $36 million loss.

Q: About confidence in achieving four design-wins, timeline, geography.

A: Engaged with 11 car companies globally, RFQ conditions changed leaving few players, close to winning contracts with top 10 OEMs.

Q: Update on auto-grade qualification.

A: Close to finishing qualification by end of current quarter, GlobalFoundries leading the process.

Q: Progress with HiRain, Weifu, NVIDIA partnership, China market.

A: HiRain and Weifu have orders for 2025, NVIDIA Omniverse has only Arbe's imaging radar, integration with Horizon helps in China market penetration.

Q: Exposure to ICE/hybrid and pricing power.

A: OEMs reevaluated launch on EV/ICE/hybrid, imaging radar cheaper than LiDAR providing pricing advantage.

Q: Investments in production for back half of 2024.

A: CapEx for production already done, ready for revenues.