AEye, Inc. Q2 FY2024 earnings call

• Significant momentum with new product launch Apollo, receiving overwhelmingly positive OEM and partner feedback. • Actively engaged with multiple OEMs, and NHTSA ruling positively impacting discussions; Apollo meets NHTSA requirements with compact size. • Progress with Tier 1 partner LITEON, completed technology transfer and cost reduction initiative; LITEON's global footprint helps with OEM engagement. • Collaboration with NVIDIA on future integration with Hyperion platform; successful Apollo launch in China with multiple OEM engagements. • Raised capital, extending cash runway into H2 2025; managed expense targets, with cash burn reduced for fifth consecutive quarter. • Capital-light model allows focus on technology advancement, partnerships, and company value; software-defined strategy enabled rapid Apollo development from concept to samples in 6 months.

No distinct product segments were discussed in terms of absolute revenue and revenue contribution percentage. For the second quarter, net cash burn was reduced, with GAAP operating expenses at $8.1 million (down 23% from prior quarter) and non-GAAP operating expenses at $6.4 million (down sequentially). GAAP net loss was $8 million vs $10.2 million in Q1 2024, and non-GAAP net loss was $6.2 million vs $7.2 million in Q1 2024. Net cash used for operating activities decreased to $6.4 million from $7.9 million in Q1.

• On track to outperform full-year cash burn guidance of $25 million due to payroll and other savings. • Target 75% reduction in quarterly cash burn compared to Q1 2023. • Extended cash runway into second half of 2025 and secured access to additional liquidity via new equity line of credit facility.

• Forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult or impossible to predict; actual results may differ materially from forward-looking statements. Risks, uncertainties, and other factors are detailed in reports filed with the Securities and Exchange Commission.

Q: So to start, you noted your partnerships with ATI and LighTekton have led to OEM introductions. Any timelines you can give on potential series production agreement announcements? And then I think last quarter you had noted some use cases where autonomous trucking and railway systems. Any new use cases to point out?

A: Thanks, Kevin. Welcome back. Thanks for joining us again. So not a lot of big delta from what we discussed last quarter. Even with these new discussions coming in and the amount of interest that we're seeing on the long-range higher performance product coming from our China connection. In terms of SOPs, we're still looking at maybe as early as 2027 in those conversations. I think as you know that the lead time in some of these OEM programs, it could be around two years, maybe a little bit longer. So I would say the timeline of the engagements with the newer ones coming in, is still very similar to what we've been seeing, what we talked about last quarter. The good news is the amount of interest is picking up, so we have more of those conversations ongoing.

Q: Kevin Garrigan : Got it. Got it. Okay. Yeah. That makes sense. And then some of the RFIs and RFQs that you're seeing, I know demand and production, I know S&P Global had cut their estimates recently. Are you seeing any more pushes to the right for some of these RFIs and RFQs?

A: I think it's, steady as she goes is probably, the operative word on this, Kevin. I think if anything, we've got this NHTSA requirement that came out there earlier this year. This is driving some increased interest in, hey. What happens when the car is traveling at a high rate of speed? And it's not just autonomy anymore. It's automatic emergency braking in the U.S., example. So, fairly consistent timelines and increased interest in high-speed applications, which we covered in earning script is it plays quite well for the technology platform that you we use, which is 1550 nanometer lidar allows us to see very far down the road. So increased number of conversations, but the timelines appear to be holding.

Q: Kevin Garrigan : Yeah. Got it. Okay. Perfect. And then just last one if I can. I know you guys are using partners such as LITEON and ATI and LighTekton, and I think that's very smart. But any kind of hesitation from some Chinese customers that may be worried about any U.S.-China tension going on?

A: Look, I think, the important part of this relationship is to be able to have a local base supply chain and be able to move very quickly. The market in China is incredibly demanding. Speed and velocity of innovation and being able to adapt to the customer's needs that are also changing fairly quickly is first and foremost. So our partnership with ATI and LighTekton has been received quite well, as we rolled it out in the lidar show last month. And they seem to be fairly well respected in the ecosystem. So no word flags there. There's local support on the ground, which we have through LighTekton, local manufacturing-based supply chain, which we have through ATI. This is checking the major boxes for those potential OEMs.