Good day. My name is Stacy, and I will be your conference facilitator. I would like to welcome everyone to Aeva Technologies Second Quarter 2022 Earnings Conference Call. During the opening remarks, all participants will be in a listen-only-mode. Following the opening remarks, we will conduct a question and-answer-session. As a reminder, today's conference call is being recorded and simultaneously webcast. I would now turn the call over to Andrew Fung, Director of Investor Relations. Andrew, please go ahead.

Thank you, and welcome, everyone, to Aeva's second quarter 2022 earnings conference call. Joining me on the call today are Soroush Salehian, Aeva's Co-Founder and CEO; and Saurabh Sinha, Aeva's CFO. Ahead of this call, we issued our second quarter press release and presentation which we will refer to today and can be found on our Investor Relations website at investors.aeva.com. Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our Form 10-Q for the quarter ended March 31, 2022. In addition, during today's call, we will discuss non-GAAP financial measures which we believe are useful as supplemental measures of Aeva's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link. With that, let me turn the call over to Soroush.

Thank you, Andrew, and good afternoon, everyone. Q2 was a pivotal quarter at Aeva, as we achieved a major milestone on the path towards the production of our next-generation 4D LiDAR Technology. I'm excited to highlight that and a few of our other accomplishments, starting with slide five. First, we began delivering Aeries II two units to our strategic customers on time and according to the objectives we set out at the beginning of this year. This is a significant milestone, not only for Aeva but also for the industry, as this is the first time an FMCW 4D LiDAR with the combination of high performance and automotive reliability is commercially available. Second, with the commercial launch of Aeries II, we are seeing stronger traction in the market. We believe Aeries II offers a combination of performance and level of maturity that OEMs have been looking for, enabling us to advance to the next phase of development with our strategic customers and progress forward on a number of other engagements across automotive and industrial automation. Third, we are excited to announce a multiyear strategic collaboration with SICK AG, a leader in sensing solutions for industrial automation to deploy 4D LiDAR for a broad range of industrial sensing applications. SICK selected Aeva’s 4D LiDAR due to the unique performance capabilities enabled by our FMCW technology that address specific challenges limiting 3D LiDAR and cameras today. This collaboration is a first indication of the market demand for Aeries II and further solidified our expansion into industrial automation with a start of production targeted in 2024. And fourth, we continue to apply a strategic and deliberate approach to how we invest our capital and resources, which has enabled us to reach crucial milestone towards production and expand our commercial momentum, while maintaining strong…

Thank you, Soroush, and good afternoon, everyone. I would like to review our second quarter financial results, which are on slide 16. Revenue of $1.5 million in the second quarter was driven by the progress on our customers' development milestones and product sales. Non-GAAP operating loss was $29.3 million in the second quarter which reflects the combination of continued R&D expenses for product development and Aeva’s ongoing discipline in capital investment. Second quarter gross cash use, which we define as operating cash flow, less capital expenditures was $34 million. As a result, we continue to maintain a strong cash, cash equivalent and marketable securities position, which totaled $378.9 million at the end of the second quarter. And lastly, weighted average shares outstanding in the second quarter was $216.9 million. So to summarize, in the first half of the year, we executed well on our plan for 2022 in terms of both product and commercial objectives. In the second half of the year, we aim to continue to execute on our plan and believe we have the financial resources to continue to invest to bring 4D LiDAR to market. And with that, I will hand the call back to Soroush for closing remarks.

Thank you, Saurabh. I am incredibly proud of our accomplishments in Q2 and want to especially thank and congratulate Aeva team on achieving the significant milestone of delivering the first Aeries II units to our strategic partners. This is a major step forward towards bringing our unique FMCW, LiDAR chip technology and production. I would also like to thank all of our stakeholders and customers for their ongoing support. Looking ahead, we continue to see growing commercial momentum for our technology. Our collaboration with SICK AG is another example of the diverse and significant opportunities ahead. As we work towards scaling up Aeries II and our Perception solutions, we look forward to working with our partners and responding to the growing demand to enable next-generation of Perception in automotive and beyond. Thanks, everyone, for your time today. We will now open up the line for questions.

Thank you. [Operator Instructions] First question comes from Antoine Chkaiban with New Street Research.

Hi, guys. Thanks for taking our question. Congratulations on the muster contract with SICK. And you’ve announced a number of deals outside of the automotive segment to ensure leaseback. And - are the non-photo businesses tracking in line or ahead of your initial expectations -and in particular, any update on how you see photo versus non-photo opportunities ramp in your revenues? Any color on timing and relative size of each opportunity would be very helpful. Thank you.

Yes. Thanks for the question. So first of all, yes, we're absolutely excited by the win we have with SICK that we announced earlier. So obviously, we're seeing a growing demand across the board for in auto, but also in non-automotive. As your question about non-automotive, as a matter of fact, it is accelerating. It is really driven by a lot of inbound interest. As we said, with the collaboration also with Nikon, where we were able to pull that forward by one year at the beginning of this year for 2024 and now with SICK, we're further establishing and solidifying that. So which we are also targeting the same 2024 start of production. So overall, we're highly encouraged with ability to really use Aeries II and leverage the additional growing demand with our customers to also qualify Aeries II and be able to lock additional program opportunity. Right now, of course, with Aeries II on chip development and deployment, we continue to see a growing momentum in the markets, and we're looking forward to lot’s of those opportunities in the next number of months.

Great. Thank you. And maybe as a quick follow-up, can you provide a bit more color on why it chose FMCW technology over time of flight, any details on the core use cases, I'm talking about the SICK here?

Yeah. Absolutely. So obviously, from the SICK standpoint, maybe I'll give you a little bit of on SOCL. SOCL actually is a multiyear strategic agreement that we have. As I mentioned, we're trying to start of production in 2024. This offers a meaningful revenue opportunity for Aeva. So SICK is a leader, one of the foremost dealers in logistics, and at automation with major global accounts across versus the customers, industries. They had over 11,000 employees and a large sales force, which we really plan to leverage to efficiently scale our 4D LiDAR to a broad range of customers. And in general, to give you a rough also idea of the size of the scale, we're talking about opportunities here that SICK like already providing as a supplier in 2D and 3D LiDAR sensors. And this is for the logistic of factory automation businesses. And that segment already is for $1.6 billion opportunity. So with they have been working with us for the past 2 years, and they have looked at other 4D LiDAR technologies and end up deciding to go with us because of the fact that FMCW provides unique advantages, including voltage measurements, instant velocity and ability to actually not have things like go single blooming effect on retroreflector which is critical and especially outdoor applications we're initially focused on it. And with [indiscernible] Aeries II with the work with them. And really from there, we're looking to bring this out to a number of applications pretty much ending at outdoor. So – but just specifically SIXCK has really is a believer in the advantages of FMCW, similarly we have seen in automotive, but now also we are seeing that further solidify into the industrial applications.

Great. Thanks much for the color. That’s super helpful.

Next question are Arvind Ramnani with Piper Sandler.

Hi. Thanks for taking my question. I just wanted to ask, I mean, you certainly have - from the big kind of approach a unique approach to 4D LiDAR. And you're starting to see kind of progress with different clients. And as you talked about earlier on the call, kind of recognization you're able to sort of move forward or should pull forward some of your deals. Can you talk a little bit more about like - should we see sort of further progression? Is there a broader recognization in the industry where people are recognizing your difference - differentiated approach? And should we continue to see like some additional pull forward and will have an impact on your overall revenue?

Sure. Yes. Thanks for the question. So first of all, as we mentioned before, there is a growing consensus that FMCW will play a key role in enabling Nextel [ph] automation really due to the superior performance versus 3D LiDAR, but also because of the fact that we've been able to now integrate the LiDAR on chip in the Aeries II. So with that, we've been able also to demonstrate ability to reduce costs dramatically since the samples, as I mentioned on the call, over 55%, right? So with that, we really expect to work with the OEMs, work in auto, as well as on auto to continue to enable them to progress on the phase of development and qualification. We already started shipping the first Aeries II units and the feedback there has been quite positive. So with SICK outspend, this is one of our recent wins, is an example of the solidification expansion that we see for the growing consensus around FMCW, but also as we continue to scale manufacturing and bring Aeries II to customers, we expect that to continue to drive and capitalize on the new inbound interest for both auto and non-abdication [ph] So we expect to drive additional programs to production over the number of months.

Perfect. Perfect. And then just a quick follow-up on that. Certainly, you started on this journey a couple of years back, and some of your competitors, are they kind of looking at what you've done in [indiscernible] to kind of follow your production and your approach. Will they be able to sort of catch up? Or do you think the sort of too far along, where it may be a little bit more challenging for some of the competitors to sort of catch update to your approach?

Yes. No, that's a good question. So generally, obviously, with FMCW, as you know, it is a technology that we see growing consensus. At the same time, it is a technology that is not easy or trivial to achieve. And that's evident by the fact that Aeva is really the only public company that's actually able to provide digital technology and visible [ph] innovation and performance to our knowledge, right? So we have been able to make significant progress in the past number of years and also be able to actually get to a level of maturity with a B sample stage that I'm not aware of anybody else having yet. So that by itself is the fruit of labor is multiple years of development. So there are certain things that you have to really do that you cannot just bypass in terms of developing the core components and more to validating them with the customers in the real-world scenarios on the road or industry setting. And all of that is time that it takes. And second is actually around technology and IP. FMCW, the conventional way of doing it is very different from what Aeva has done. And we have been able to address some of the key challenges that anybody who tries to go initially developed those technologies would face. And so with that, we have created one of the largest portfolio of patents is relevant to FMCW, and we continue to add on additional IP on a regular ongoing basis. So that being said, obviously, there are folks now that are going towards FMCW, including some of the largest players that started with vision-based sensors, move to the 3D LiDAR and now have publicly talked about going to important, but we also see that as a validation for this technology. So for us, we will continue our focus on making sure that we make the best perception technology on the planet with our FMCW approach, and that's going to be our focus. So -- and we hope that others follow soon.

Really helpful. Thank you very much.

Next question, Richard Shannon with Craig-Hallum.

Well, great, guys. Thanks for getting me in the queue here. Appreciate it. Maybe a follow-up on the question of your SICK partnership. I didn't hear any comments about whether this was an exclusive arrangement or whether they're able to work with other LiDAR players and then kind of an ancillary question. The technology you're developing with Nikon seems potentially relevant to that kind of partnership? And is that something in future products beyond areas to that you might be able to use in that relationship?

Yes. Thanks for the question, Richard. So first of all, I'm not going to go into details of the commercial that we have first would say. But we really believe this is a strong collaboration that enable us to expand further industrial automation. In terms of the application, of course, again, SICK has been looking at many of the players in the space that have had 2-plus years and decided to converge on 40 to expand the portfolio from 2D to 3D out to 40 and decided to be unable to do that, so that’s important. I think in terms of the differences between the collaboration, we already have in Nikon, obviously, Nikon is different in the sense that it's an industry metrology for precision measurement. So there, we're really focused on is to leverage our ability to achieve a micron level precision for application, which includes manufacturing inspection, quality inspection on the assembly line, starting with actual automotive manufacturing area other whereas the SICK is about the scanning applications, as well as outdoor and longer-range sensing. But importantly, all of the applications we including Nikons and automotive application and all use the same foundation of LiDAR chip module with different optimizations for algorithms and software to enable us achieve this very different performance levels and perception capabilities, which has been critical and crucial for our ability to be able to address these very different set of requirements. And now with SICK we have the ability in a reliable, qualified and really real partner to be able to scale our technology as a channel to honor to a number of applications. And we don't have to go and make partnerships with many, many other smaller companies to do that. So that's gives you an answer the question.

That's very helpful,. My follow-up question here is, I know you've used this language I think since it's come public more than a year ago about moving programs toward production. -- you said you wanted to do that by the end of the year. I'm wondering if you could give kind of a thought process of what this really means? Are we going to see a press release with some important milestone potentially even with the named customer or not be able to do that by at that point in time. I don't know what exactly toward production means. Maybe you can provide more clarification, that would be great, please.

Sure. Yes, absolutely. So obviously, with -- in terms of target gross production first of all, I want to clarify -- this represents one of our two programs that we have targeted for this year towards production. As I said, this is a meaningful opportunity that we're working toward with targeted production starting in 2024, so that really focus on that. And in general, obviously, as I mentioned, an earlier question, we're continuing to make good progress with customers, both existing as new engagements and working towards them to really now all of Aeries for the man phase at the moment. We have already provided to a number of customers, and we're going to continue to do that. And even if this continue to operate their atoms to use that. And we -- our goal is, of course, to continue Aeries II to unlock additional program wins in the next number of months. So that's really where we're focused. But again, from the types of [indiscernible] that we talked about.

Thanks.

This concludes today's teleconference. You may disconnect your lines and thank you for your participation.