Arbe Robotics Ltd. Q2 FY2024 earnings call

• Secured two key customers for imaging radar production. One top 10 global OEM selected Arbe's chipset for next-gen imaging radar with serial production to begin immediately. • Teamed up with European truck manufacturer for imaging radar in next-gen sensor suit. • Progressed in OEM RFQ processes with Tier 1s (Magna, HiRain, Weifu, Sensrad) aiming for four design wins in 2024. • Successfully began trading on Tel Aviv Stock Exchange, raised $30 million via convertible bond.

Total revenue in the second quarter of 2024 was $0.4 million, an increase from $0.3 million in Q2 2023. Backlog as of June 30 was $0.8 million, expected to be recognized as revenue in 2024. Negative gross margin for Q2 2024 was 9.5% compared to 1% in Q2 2023, primarily due to headcount increase. Operating expenses in Q2 2024 were $11.6 million, down from $12.6 million in Q2 2023, driven by decreased R&D expenses and favorable exchange rate. Operating loss in Q2 2024 was $11.6 million, net loss $11.8 million. Adjusted EBITDA loss was $7.5 million in Q2 2024. As of June 30, 2024, Arbe had $8.8 million in cash and cash equivalents and $17.7 million in short-term bank deposits. In June, a convertible bond offering raised approximately $30 million, proceeds held in escrow.

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

Q: Walk us through milestones for top-10 OEM serial production and expected decision timeline?

A: The OEM has already decided to go to production. The process involves the OEM's Tier 1 adapting Arbe's reference design for their needs. The exact timing of full production depends on the development timeline, with estimations from Tier 1s suggesting revenues from this win could start by end of 2025 early 2026.

Q: Details on four design-ins goal, types of applications, timelines, and expected revenue?

A: Already achieved one out of four. In final phases with major RFQs, applications mainly safety-related (e.g., emergency braking). Expect to start gaining revenues from Tier Model 28 by shipping chips to Magna in second half of 2026.

Q: Key factors in selection of Arbe's radar and update on competitive landscape?

A: Main advantage is multi-channel radar technology being the mask for safety applications. 32 by 32 channels radar is minimum. No major shift in competitive landscape seen as automotive chip production remains complex. Arbe's ability to offer competitive pricing vs. competitors like Mobilize is a key factor.

Q: Trucking opportunity addressable market size, pricing, and headcount increase areas?

A: Trucking is lower volume, higher price per radar, but not a major part of business. Headcount increased in cost of sale (customer support) and areas related to finalizing production stages and supporting customer support.

Q: Pipeline beyond four design-ins geographically into 2025?

A: Short-term wins in Q3/Q4 with European headquarters OEMs. Next year, China, Japan, and Europe are major target regions.