Good afternoon and welcome to indie Semiconductor 's First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Thank you, Operator. Good afternoon and welcome to indie Semiconductor 's first quarter 2023 earnings call. Joining me today are Don McClymont, indie's Co-Founder and CEO; and Raja Bal, indie's Chief Accounting Officer. Tom Schiller, indie's CFO and EVP of Strategy is out of the office with the passing of his mother just days ago. Donald will provide opening remarks and discuss business highlights followed by Raja's review of indie's Q1 results and second quarter outlook. Please note that 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 discussion of the strategic backlog formulation methodology, please refer to our Safe Harbor statement on our Q3 2022 earnings press release. For material risks and other important factors that could affect our financial results, please review our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on certain non-GAAP financial measures. For a complete reconciliation to GAAP, please see our Q1 earnings press release, which was issued in advance of this call and can be found on our website at www.indisemi.com. I'll now turn the call over to Donald.

Thank you, Ashish, and welcome everybody. I'm pleased to report that indie delivered yet another above plan record performance in the first quarter, reflecting robust demand for our highly innovative Autotech solutions and our unwavering commitment to achieving operational excellence. Once again, we substantially outpaced our industry peers, driven by indie's diverse and differentiated product set underpinned by over 400 global patents and applications. We're off to a strong start in 2023. Specifically, during the quarter, we grew revenue 84% year-over-year and 22% sequentially to $40.5 million and achieved a gross margin of just over 52%. Our deep R&D investments and targeted acquisitions are beginning to yield results, allowing indie to sharply outpace our peer group and insulate us from isolated geographic customer and market weakness. As we'll review, we're gaining design win momentum across ADAS, user experience and electrification applications, setting the stage for sustained, outsized growth for years to come as these wins translate into program ramps and ultimately revenue and free cash flow generation. First, within the ADAS product area, we're enabling automotive OEMs and Tier 1 suppliers to meet the growing demand for advanced safety systems in next generation vehicles. Importantly, we continue to follow a technology agnostic approach supporting multiple sensor modalities such as Radar, LiDAR, Computer Vision and Ultrasonic Solutions from which we will ultimately fuse the data created to provide a comprehensive and accurate perception of the vehicle's surroundings. We believe that our sensor fusion product roadmap augmented and accelerated by our acquisition strategy, has truly differentiated indie from the pack, including competitors who tend to cling to one modality, often with an extremely narrow customer base. Quite simply, we believe that no single sensing modality will dominate the application landscape, particularly given the diversity of ADAS use cases ranging from backup safety…

Thanks, Donald. indie delivered a strong first quarter once again exceeding our top line guidance and expectations. In fact, this represents our eighth consecutive quarter of beating or at least meeting our revenue and gross margin targets post-indie's IPO. Specifically, revenue for the period was up 84% year-over-year and up 22% sequentially to $40.5 million, including a stub portion of revenue from our acquisition of GEO Semiconductor in March. On a non-GAAP basis, gross profit was 21.1 million, translating into 52.2% gross margin up 484 basis points year-over-year and slightly ahead of our 52% guidance. Total operating expenses for the quarter were $37.9 million, including $29.3 million in R&D and $8.6 million in SG&A reflecting our continued investment in accelerated product development and expansion of our sales and marketing reach. In turn, our Q1 operating loss was $16.8 million. Below the line, net interest income was $0.5 million. As a result, our net loss was $16.3 million and we posted a $0.10 loss per share on a base of 155.1 million shares in line with guidance. Turning to the balance sheet. We had significant one-time cash disbursements during the quarter, including $90 million related to the acquisition of GEO Semiconductor, $8.4 million related to the acquisition of Silicon Radar and a $10 million repayment of the analog devices promissory note related to the acquisition of Symeo. We also invested $16.7 million in working capital, primarily to secure inventory in support of our back half growth plans. $3.2 million in capital expenditures for expanded internal testing capabilities and $3.9 million in other financing activities. Also, during the quarter, we raised $34.2 million from the ATM and issued 3.3 million shares. These sources and uses of cash combined with our non-GAAP operating loss of $16.8 million, resulted in $207.4 million of cash on hand exiting the quarter. Looking forward based on our order visibility and the depth of indie's new product pipeline, we plan to demonstrably outperform the Autotech market over the forecast horizon. For the second quarter, we plan to scale to a $205 million to $210 million annualized revenue run rate, assuming the midpoint of this range at $51.9 million, we expect non-GAAP gross margin again in the 52% range, particularly as we work through lower margin pre-synergized GEO inventory. We are also planning $33 million in R&D and $9 million in SG&A, which includes the full quarterly impacts of both our recent acquisitions versus just one month in Q1. As a result, we plan to narrow our operating loss to approximately $15 million. Below the line, we anticipate $200,000 of net interest expense and no taxes. Assuming 164.3 million shares outstanding, we expect a $0.09 loss per share. Finally, and to reiterate, we believe the combination of indie's accelerating growth trajectory, gross margin expansion, post-acquisition synergies and planned operating expense leverage will enable us to reach profitability in the back half of this year. With that, I'll turn the call back to Donald for his closing comments.

Thanks, Raja. In summary, Q1 was another solid quarter operationally, but we also remain in the early innings of what's possible at indie given the strength of our customer engagements, supplier partnerships, product portfolio, roadmaps and our world class design team. In the short-term, our performance and outlook represent yet more proof points that we're effectively executing to our plan. In fact, we are now on pace to more than double our top line again this year, our third year in a row of doing so. Since we're in the middle of the NBA Playoff season, that's indie's version of a triple double, representing another step towards realizing our vision of capitalizing on the 42 billion automotive semiconductor market opportunity and in the process creating an Autotech powerhouse. That concludes our prepared remarks. Operator, let's open the call for questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from Suji DeSilva with Roth Capital. Please proceed with your question.

Congrats on the progress here. First question, indie's exposure, I just want to think about a framework, think about this, I guess, I think about traditional versus new auto car companies. And I'm wondering, you know, is the exposure roughly half-half or is there any kind of one that's stronger than the other? And, you know, I guess China EV the question's been there around the demand you said remains strong. So just curious your thoughts on the relative demand across traditional versus new auto companies?

Thanks, Suji. I mean, from our subjective viewpoint, all of our products have extremely strong demand, as you can see from the results. So as far as we're concerned, the market remains particularly strong. We are very diversified across our products, geographies, customers and technologies, including the difference between E-Vehicle and internal combustion engine. So we're not really beholden to any one of those factors. We're very diversified across all of those factors. There has been, of course, some noise in the market, I would say, with regard to weakness in China, E-vehicles, where we do have representation, of course, as part of the broader portfolio. But from our perspective, they're scheduled to do 8 million E-Vehicles in China this year. And that's a pretty strong performance. It's a huge percentage of the world's market for E-Vehicle. And they've come from a very low base to basically a leadership position in a very short time. So our view on that generally is we only see strength in that particular market at this point also.

Okay, great. And in the prepared remarks, you guys mentioned the Apple CarPlay and China. Can you just elaborate on the content opportunity there and what's happening in that market if it's diversifying from Apple CarPlay and how the opportunity scales out for you?

Well, I mean, from our perspective, our hardware supports any software skin or user interface that's used on top of it. So whether it be Apple CarPlay, Android Auto or some proprietary system which belongs to an OEM and it makes really no difference to us as regards to what they do. So as far as our perspective goes, as long as there's continued growth and integration of the user's mobile device into the vehicle user experience, then there's potential for growth for us in those product areas. So it's still one of the strong parts of our business and it continues to grow.

Okay. I can sneak in one last quick question. For the in-cabin opportunity. What do you think of the two or three biggest revenue opportunities? It seems like there's a lot of different content there across safety and infotainment and all that. Maybe you could point out two or three that are really high growth opportunities in the next one to two years?

I mean, it's spread across our whole product portfolio, as we mentioned in the remarks. The ones that we called out in the remarks are really the ones that are the most immediate. But generally speaking, I mean, the cabin is becoming a place where people spend more time and there are many more creature comforts which are desired and can be offered by the car manufacturer to increase brand recognition and to increase their share. So it's generally still a very, very strong growth area. I mean much has talked about autonomous driving and E-Vehicle and so on and so forth, but it's still going to be a great driver of semiconductor content as the future unfolds.

Okay. Thanks, Donald.

Thank you. Our next question comes from Anthony Stoss with Craig-Hallum. Please proceed with your question.

Thanks. Hi, guys. Donald, I wanted to focus in on your GM ADAS win. I know you're not at liberty to probably divulge too much, but I'm just curious, did I hear you correctly that something may start next year or any sense on when the revenues would start for you and then have a couple of follow-ups?

Yeah. I mean, in that time frame, it's a very positive announcement for us and we are indeed very pleased about it. GM has been a sales through customer of ours for many years, but this represents kind of a new product area for us that's launching.

Is there any share or any number of models that you think you'll get that you'd care to share?

We're not at the point where we're at liberty to disclose exact numbers and volumes and car models, but it's going to be significant for us, to say the least.

Got it. And then following up on one of your earlier questions on China and your lighting that you disclosed, what percentage of revenue is China right now for you and where you see that in the next couple of years?

Sure. I'll take that, Donald. So China has been roughly historically roughly half of our revenues and that's pretty consistent with the current quarter and where we expect to be going forward. But to clarify that China for us is kind of misleading in terms of the filings because many of or much of the volume that's credited is being manufactured over there is generated through European and US design wins.

Yeah, that makes more sense. And then last question related to GEO. I'm curious if you're now having conversations post the close on other automakers that were maybe a little shy in using GEO because they're a private company and they're small and one, can you expect kind of new customer design wins now under the flag of indie?

Yeah, I mean, we announced a couple of wins in there that went across the line. Perhaps I would say because of the girth of the combined companies now already I mean which we're really just on the one yard line. We gave it a final push over. But yeah, I mean, we've been super happy with the way that the sales teams have integrated. We're working great together even after a very short timeframe and the amount of traction that we're seeing for their products through our sales channel and vice versa indeed for our products through their sales channels is enormous. So I do expect that over the course of the next while, we will make some announcements in that space.

Thanks, Donald. I'll appreciate it.

Thank you. Our next question comes from Ross Seymore with Deutsche Bank. Please proceed with your question.

Hey, guys. Thanks for letting me ask a couple of questions. I guess the first one, Donald, outside of China to a certain extent, because you've already answered that one, but a lot of investor concern just about supply demand dynamics in the automotive space. Any sort of changes in that from your perspective? Obviously, your numbers don't seem to show any big change one way or the other, but just wanted to get your thoughts.

I mean the situation has greatly alleviated itself from the situation of, let's say, the last 18 months or so. Much of the supply chain is back to normal. There are some isolated pockets that you can see which demand enhanced management to make sure that there's no slip twixt cup and lip. But other than that, it's becoming more alleviated. That being said, what we see is that there I mean the car volume per year is still below where it was at its peak in 2018. Still, many cars didn't get manufactured during the course of that period. And we still see some pent up demand to get the cars volume back to really where it was before. But generally speaking, we would see that the demand situation has improved, but still some work to do.

Got it. Thanks for that. And a couple of GEO questions quickly. Was the ADAS design win at General Motors in partnership with Sharp Japan? I noticed the word Japan in there. Was that something to do with the GEO side of things or was that from kind of core indie?

Yeah, we're actually not detailing that at the moment, but we'll announce on that as time progresses as we can talk a little bit more about the application.

Got you. Then the last question would just be now that you've had GEO in the fold for a bit of time. I think you said a couple of million dollars was the stub in the prior quarter when you guided and you expect a full quarter and then 40 million for the year roughly if I remember correctly, any changes to those numbers or are those all still applicable?

No, we're still tracking to plan.

Great. Thank you.

Thanks, Ross.

Thank you. Our next question comes from Cody Acree with Benchmark. Please proceed with your question.

Yeah, thanks for taking my questions, guys, and please pass my sympathies along to Tom on passing his mother.

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Yeah. Thank you very much. Don, can you just talk about your revenue mix by application? Can you give us some kind of color on how that breaks down for this quarter and or this past quarter and in your guidance? And then I have another follow up.

Well, I mean, we don't really segment our revenue by application or geography or anything at all really for that matter. Really, we're tracking to the plan that we put in place. I would say that by and large, everything, even in the sub segments and the product areas that we pursue is -- are individually tracking to plan as well. So we're pretty happy with the outlook that we have for the next few quarters and into the next few years.

And I guess then if you look at your revenue in another way, what is, can you talk about the sensitivity of your revenue to new wins versus what might be just volume sensitivity to the market? I guess what I'm saying is how much of your business is initial ramping of new products and new sockets and how much is dependent on the markets volume of vehicles?

Well, the primary factor that affects our revenue profile is our own share gain. As you've seen from the results that we've posted over the last eight quarters, we've massively outgrown the market. And that's the primary factor that's going to influence us before anything else. Of course, that was generated by new business starts and new product deployments over the course of that period and will continue to do so. In terms of I wouldn't really characterize them as new wins any longer because these are wins that we made. I mean largely in terms of the revenue profile that we've produced to date, the wins were made largely when we were a private company. And the wins that we talk about when we do our earnings and make press releases and so forth, when we announce new products and customer relationships are largely things that are going to build revenue sometime further out in the future, which is great because it gives us great visibility of where we've come from, where we are right now and where we're going for the long-term, really through the end of this decade. So again, we don't really sub-segment out by category or by nature of design win, but the just the nature of our business because of the long design cycles and we have a great deal of security and visibility into where the revenue is coming from on a quarterly and yearly and almost decade basis.

And then lastly, Don, if I may, can you just talk about your gross margin trends beyond the June quarter? Just mix versus internal efficiencies, supply efficiencies?

I mean, it will be driven by a multitude of factors mix as higher technology products deploy operating efficiencies as we increase in scale, maybe in the short term operating efficiencies as we fully integrate the acquisitions that we recently made. And you know we remain on track to hit our 60% gross margin model, which we've talked about at length over the course of the last quarters.

Okay. Thank you, guys.

Thank you. Our next question comes from Craig Ellis with B. Riley Securities. Please proceed with your question.

Yeah. Thanks for taking the question. Donald, I'll start with one that's more qualitative, but it relates to a point you made about the way you're scaling up the business both organically and inorganically with the business where it is today. It's significantly increased scale over the last few years. How is that changing the way customers come to indie to try and engage both types of customers, size of customers and maybe across different types of products that they may be interested in.

I mean, that's an interesting question. Our progress has been largely consistent and steady. And so with every, let's say, small milestone that we made, our credibility improves with our customers and they are willing to give us access to larger programs. I would say that there are days where you feel that there's somehow been a threshold crossed when, you know, some very large customer approaches us and calls out to us and says, hey, you know, we like what you're doing. We're really impressed. We are looking for a vendor in this space. Looks like your technology is very differentiated and that sort of pull from the market is something that is very gratifying to see as we've grown over the course of the last quarters and years and we've begun to get that sort of, let's say, quality of reliability in the market that we can deliver, we can deliver on time to the right quality. And automotive is quite a conservative market in that sense. So, track record matters. I mean, I would say generally speaking it's, I mean, it's been again, I'll repeat it, it's been a very gratifying experience to see our progress happening really linearly over the course of the last 14 years even.

That's helpful. And then I'll ask a specific product question. So there's been a lot of inquiry around GEO, so I'll stay away from that one. But on Radar, which is one of the bigger opportunities the company has. Can you just talk about how product development is going and customer engagement is going here and your confidence for that to flip to revenues and the benefit that you get with the recent acquisition in that area too?

Yeah. I mean, it remains fully on track. I mean, we don't talk about specific milestones in public, but yeah we're very happy with the way it's executing. The resonance from the market, who's beginning to get an appreciation that it's coming is becoming very strong because we do truly have a disruptive technology in that space that's going to make a difference. The addition of Silicon Radar also helps us in in-cabin arena because of their 120GHz technology. It's really the next step on the roadmap beyond what we have in development now. And they have a leadership position in that they're really the only 120GHz functioning front-end available in the world today. So that's really going to take us to next level beyond what we're developing right now.

Got it. And then the last one and I'll ask it to you, but it may be one for Raja. Just on the amount raised in the quarter, 34 million, I think it was conveyed that was via ATM. Is there plans to raise similar this quarter either by type or by amount? Thank you.

Yeah, sure. We did raise the 34 million via the ATM during Q1 and there are no plans currently to raise additional share place additional shares particularly at these share prices.

Got it. Thanks, guys.

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Thanks, everybody, for attending and listening to our call. Hope to see you guys at the investor conferences in the coming weeks and see you next quarter.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.