Good morning. This is Rob Moffatt, Vice President of Corporate Development and Investor Relations at Innoviz. And I want to welcome you to our earnings conference call. Joining us today are Omer Keilaf, Chief Executive Officer; and Eldar Cegla, Chief Financial Officer. Following their opening remarks, we will open the call to your questions. I would like to remind everyone that this call is being recorded and will be available on the Investor Relations section of our website at ir.innoviz.tech. Before we begin, I would like to remind you that our discussion today will include forward-looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of Innoviz. Actual results could differ materially from those anticipated in the forward-looking statements. Forward-looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them. For discussion of some of the important risk factors that could cause actual results to differ materially from any forward-looking statements, please see the Risk Factors section of our 20-F filed with the SEC on March 09, 2023. I will now turn the call over to Omer. Please go ahead.

Thank you, Rob, and good morning, everyone, and thank you for joining us. I'm excited to provide an update on the progress we've been making at Innoviz. This has been another fast-moving quarter with new programs, new partnerships, new product opportunities, and our steady march to 2023 production with BMW and the Shuttle program. Let's start off with what I believe is the biggest development, our new light commercial vehicle program. Last quarter, we told you that we were in a late-state discussions with one of our major existing customers for a new program and today, we're announcing that we have delivered of that promise. This program is for a level four commercial -- light commercial vehicle and more specifically a commercial van that will include three to four LiDAR per vehicle and perhaps what is most exciting here is that the expected program is on a very accelerated timeline. Due to the speed at which this program is moving, we are beginning our activity based on an agreed framework while working on the final requirements and commercial terms. This program is moving quickly, targeting a mid-decade SOP, with test vehicles on the road already this year, which you'll be able to see. This means that this program can contribute nicely to the revenues in the back half of 2023 with sample shipments ramping and attractive levels of NRE expected to come on sooner than they typically do. The reason this program is moving so quickly is because we are displacing a development stage competitor. This is a new milestone for Innoviz as a company and I believe it is a very important indicator of the quality of our technology and the benefits of 905 nanometer solutions where we believe we are the leader. Another aspect of this deal that…

Thank you, Omer and good morning, everybody. Starting with cash. We ended Q1 2023 with approximately $156.5 million in cash, short term restricted cash and marketable security on the balance sheet. Our largely matured cost structure and our operating cash outlays remain mostly stable during the quarter, and we're in line with our 2023 budget. Moving to the income statement. Revenues in Q1 2023 came in at $1 million compared to Q1 2022 revenues of $1.8 million. Revenue were impacted by our pivot towards SOP with BMW and the Shuttle program, which will weigh on the first half of the year before revenues begin to grow in the back half of the year. The biggest factor involved here is the lower sales price as we transit -- as we transition from selling LiDAR sample unit to selling just the components to Magna, who is the tier one for the BMW program. As we think about revenue cadence for the year, we expect the second quarter to look largely similar to the first quarter. And for the same reasons, looking to the back half of the year, we expect revenues to step up modestly in this third quarter and then step up to a large extent in the fourth quarter with tailwinds from improving production volumes, growing InnovizTwo volumes, revenue based NREs and increased sample shipments to new programs. Moving forward down to the income statement. On the cost side, operating expenses for Q1 2023 were $33.3 million, an increase from $31.1 million in Q1 2022. Q1 2023 operating expenses included $5.2 million of fair base compensation compared to $4.7 million in Q1 2022. The increase in quarterly operating expenses compared to last year Q1 operating expenses was primarily due to the higher R&D expenses, mainly on InnovizTwo cost, a general increase in headcount, associated share-based compensation expenses, and facility costs. Research and development expenses for Q1 2023 were $26.1 million, an increase from $22.8 million in Q1 2022. The quarter included $3.5 million attributable to share-based compensation compared to $2.7 million in Q1 2022. In conclusion, 2023 is an important year of growth for Innoviz. We are launching our first series production vehicles, ramping our InnovizTwo volumes, expanding in the non-automotive market, and diligently going after all of the programs in our robust pipeline. We expect to finish the year on a very strong note with lots of momentum heading into 2024. And with that I will turn the call to back to Omer. Thank you.

Thanks Eldar. You've heard us talk a lot about existing customers today, including Volkswagen. So I wanted to take the opportunity to offer a reminder for my upcoming fireside chat with Gero Kempf, the AD/ADAS over at Audi. Usually it's Gero asking me all the questions, but this time I will get the turn the table around and ask him about Audi autonomy strategy and some of the lessons he learned along the way during his years of experience in the field. I'll probably also fit in one or two questions on what led Audi to choose Innoviz as its still one LiDAR supplier. Investors should be able to stream along at the website on this line. Before turning the call to Q&A, I wanted to offer a few final remarks. We covered a lot of ground today and shared a lot of positive news, so I just wanted to offer a quick record of everything that was said. We announced a new light commercial digital program that is on an advanced timeline and is expected to already begin contributing financially in 2023. As part of that process, we're displacing a development stage competitor and we believe we can do it again in the future. We also talked about being integrated into a second compute platform with this OEM customer and we said that working with this compute platform player can lead to additional opportunities for growth going forward, including with other OEMs. We also talked about our discussion with another top three compute platform player, which is NVIDIA exploring a deeper integration with Hyperion platform that could bring further programs into our pipeline in addition to the ones that are already working on Innoviz base. On the RFQ front, our pipeline is the biggest it has ever been. And…

Thank you. [Operator Instructions] Our first question today comes from the line of Mark Delaney of Goldman Sachs. Please go ahead.

Yes. Thank you very much for taking the questions. Omer, you spoke about integrating with a major compute platform for the new commercial vehicle program and also about being in discussions with NVIDIA for its Hyperion platform. Can you speak more on what work needs to be done in order to be successful with those integrations and then the timeframe that you expect to be integrated with Qualcomm, Mobileye and NVIDIA?

Yeah. Sure. So on the commercial -- light commercial vehicle, we already kicked off the activity, so we're already there. There are two deployments. So there are two flicks that are going to be equipped with our LiDARs this year, some of them in the next month or two, and another one later in the year. So the work has already started. So this is going to be several years of work that the eventual SOPs in the middle of the decade, but we already started to work. With NVIDIA, the discussion is around several programs that are still in the RFQ stage. And basically following the RFQ process, we hope that we will be able to win this contract.

Okay. That's helpful. Thank you. And then Innoviz is a goal of series production awards with two new customers this year, I believe. How many shots on goal do you have specifically with new customers this year? So we can get a sense of the win rate you're expecting, and maybe you can comment a bit more on your confidence on being successful with these awards in 2023 with the two new customers. Thank you.

Sure. So we talked about having more than five RFQs in parallel right now. Only -- and we said that there are additional one to two programs that are with existing customers. So you can get a sense, we said more than five, so you get a sense of how many programs this will -- are with new customers. And I believe that we are in a very good position. Generally, I think that what Innoviz is offering today is very, I would say, very attractive. Beyond the fact that the product is great pricing, et cetera. I think the fact that we are already awarded with several programs today is giving us a huge advantage. In talking with these customers, you can see that those are not the first customer who made a decision for the LiDAR sourcing. The fact that they can rely on us having already customers that are going to make sure that we'll be on time and working with very credible customers like Volkswagen is giving them a lot of confidence. So I believe that with the potential with the great product that we offer, the price point that we offer, the automotive experience that we have, guaranteed volume from customers is giving us a huge advantage. So I would say that I'm confident that we will be able to get to those -- these two new awards.

Thank you. I'll turn it over.

Thank you. Our next question comes from the line of Jared Maymon from Berenberg. Please go ahead.

Hey, good morning, guys. Thanks for taking the question. Obviously -- congratulations, by the way, eight of the top 10 global OEMs is very meaningful. That's pretty exciting. Obviously exciting for you, because even if one of those is one that could be dozens of millions or hundreds of millions of revenue in the out years. So pretty exciting stuff. And then also obviously shows the kind of motivation of OEMs to design in LiDAR. First question I had, I know there was a large silicon platform provider that recently announced an expansion of their supply and development agreement with Volkswagen for level two plus and level three vehicles. And that same platform provider has been kind of increasingly discussing the need for RADAR and LiDAR subsystems in recent years. It sounds like that award is for a vision-only system, but that same providers in talks with, it sounds like all of their customers for that system to eventually add LiDAR and RADAR subsystem. So just curious if you can tell us about your work with that platform provider, and then how meaningful it could be if they partner with Innoviz for that redundant system that they're creating.

Sure. So what I can say, as we said that during our talk earlier, the discussions with Volkswagen in regards to expansion on additional platforms is also with additional compute platforms, and basically any program that will go with LiDAR will be with Innoviz LiDAR. And that means that if the decision to kick off a program based on a Mobileye platform or that silicon, sorry, silicon company, that will be with Innoviz and we will work with them together.

Got it. Okay.

Of course - sorry, just to add, of course, it'll have a nice impact on additional opportunities that they are part of that would be the…

Right. Yeah. And obviously lot of opportunities that they're kind of a part of there. So that's great to hear. And then just on the light commercial vehicle award this morning, so curious if there's any kind of read across here for potential expansion into passenger light vehicles with that OEM. And it sounds like if that's the case both on this kind of commercial vehicle award and potentially on passenger light vehicle awards, you could be displacing kind of a key competitor. So I guess also just curious, anything you could share on that OEM strategy with LiDAR, for example, is this an OEM that's similar to Nissan where they're hoping to install LiDAR on all of their vehicles by 2030, or something like that?

Yeah. If you allow me -- maybe before I answer that, maybe just to kind of comment on why we're not mentioning the name of the customer. Generally speaking, when we're in discussion with the different OEMs, the topic of marketing following nomination is something that we decided not to have as part of the negotiation, which we learned, it's becoming, I would say, annoying to the customer. That specific customer told us from the beginning that they expect the marketing element would not be even raised during the process. They told us that some other companies talk with their marketing team more than they talk with them, and they asked us, not to push for that at this point. And we want to respect it. I mean, we are -- we want to act as a traditional -- as a Tier 1 in this manner, and they're expected -- they expect us to act in that manner. Since this is a program that you actually see on the road in a few months, then we didn't see a good reason to push for it, and for sure not to add friction in the process in order to make things move faster. But as we did last year when we announced on our VW Group, and eventually without naming them and following that we did, so we -- that will be possible in the following months. To your question about whether this OEM has experience with LiDARs and also with passenger vehicle, it's an expansion that we're -- this is an existing customer that is using our LiDARs already on other platforms that is using for passenger vehicle.

Got it. Okay. Loud and clear. And then, one more for me if I can. Just on the MRM software, obviously, that's pretty exciting. You guys have a big software team. Sounds like this is maybe one of the things that they've been working on. Just curious on an ASP basis, is this kind of single digits or low double digits, or could it be more meaningful? And then, just clarifying, is this kind of drive policy, or application level? Anything you'd tell us there.

Well, I think it's too early to kind of name the pricing we give to it. I mean, we're still quoting it, but I think it's a very interesting direction where the market is going. Understanding that they see the LiDAR as the more resilient sensor in order to provide the backup for a compute box that will eventually drive the vehicle for safety and needs to make a decision on which sensor, it wants to rely on. The fact that our sensor has the ability to see very clearly in the different weather conditions and light conditions and with the ability to see lane markings, et cetera, I think is a very interesting, I would say, development that we're seeing. We hope that will be successful and that will become a product that will be able also to offer to others. But in terms of pricing, I rather not mentioned right now.

Got it. Fair enough. Thank you guys.

Thank you. [Operator Instructions] Our next question comes from the line of Samik Chatterjee, JP Morgan. Please go ahead.

Hi. Hope you can hear me. Thank you for taking my question and congrats on the win you announced this morning. I guess a question on that, maybe if you can help us size the sort of impact that has on the order book. I know you're waiting to sort of frame up the parameters around it, but any sort of ballpark numbers of how it impacts your overall order book, the magnitude of the win you're expecting there. And you mentioned three to four LiDARs per vehicle is the opportunity. Are you really thinking about sort of all of them being a similar sort of spec in a ways two, or are there more sort of -- it's a more sort of diverse opportunity where you have InnovizTwo and Innoviz360 sort of all on the same vehicle, how you're thinking about that, and have a follow up. Thank you.

Yeah. Sure. So within we communicate the volume of the program, but it is only based on InnovizTwo, so there's three to four LiDARs per vehicle. And I wish at this point, not to disclose additional figures until things -- maybe will be also shared with the customer because also that's something that we want to be a bit more cautious with in respect to the customer. We said that we will update our older book by the end of the year. So we don't need to talk specifically on every program and its size. Having that it does reflect a lot of information that our customer not necessarily want us to disclose.

Okay. Okay. Sorry. And quick one for Eldar here. The difference between the NRE bookings and the cash collection guidance is -- maybe just explain the difference there and does it expand as your sort of -- does the gap between cash collection and NRE bookings expand as your NRE expands over time. Is there any sort of thing to keep in mind there?

Yeah. So the NRE is a very important factor in our business and it's meaningful to our cash flows. So when we talk about NRE booking, usually when we approach a program, we quote for few tens of millions of dollars of NRE typically, and this is for the first part, development part, the first 2, 3 years of the program as of the win, then we have the collection. The collection is done over the period of the development process. So the collection is being done. So if we book $30 million and it goes over three years, it may be collected $10 million every year just as an example. But it's very meaningful and incremental. Each program adds additional collection opportunities for each year. So it's a aggregating.

And maybe just to add, last year we announced our first win with Volkswagen, and we stated that we're acting as a tier one. I know there were lot of concerns whether Innoviz will have to increase its burn rate in order to act as a dark supplier. I think that the proof behind us now, over the last year, we did not increase our burn rate, for sure, not significantly in order to maintain our position as a dark supplier. And that's our plan also going forward. So the product that we're offering to the different customers is the same ones, the InnovizTwo, and ideally the NREs are going to offset the spending that we have. And we expect to have more wins this year, which will allow us to offset significantly -- I would say more significantly the spending that we have by those earnings. And some of those programs are quite meaningful. The NREs can between $40 million and $50 million each.

Thank you. Thanks for taking my questions.

Thank you. Our next call comes from the line of Andres Sheppard of Cantor. Please go ahead.

Hey, good morning or good afternoon guys. Congratulations on the quarter, and thanks for taking our question. I wanted to maybe follow up on the NREs. So just to better understand, do we have a sense of when the NREs might be recognized? And just to clarify, if they are recognized as revenue, then is it safe to assume that that would be -- that would result in additional revenues than the guidance that's provided? In other words, would that be upside to the revenue guidance? Thank you.

Yeah. Newer NREs booking, which fall into -- which are paid and we meet certain milestones already this year, and this potentially is expected, might be an upside if recognize as revenue. So this might be on top of the revenue target of between $12 million to $15 million. But again, this is something that we need to see further down this year. Definitely it has -- can be very meaningful.

Got it. Thank you, Eldar. And in regards to the revenue cadence that you provided, so looks like Q2 will be similar to Q1. And then with revenue stepping up in Q3 and Q4, I'm wondering, can you give us a little bit more color in terms of the second half of the year? Is it safe to assume a gradual increase in revenue in Q3 and then a meaningful kind of heavier loaded Q4? Or should we assume perhaps a more gradual between Q3 and Q4? Thank you.

No. It's exactly the first part. Yes, the Q3, we would expect a gradual growth, and then Q4 being more meaningful with the full impact of reaching the start of production of our different programs for this year, the Shuttle program and BMW. So the impact will be there. They more meaningful.

There is also a delivery towards the last quarter, which is related to the new program that we announced today, which we equip a large amount of vehicles and there is activity that includes an NRE in that regard in order to expedite the process. So that's part of it as well.

I see. Okay. Thank you. And maybe one more, if I could squeeze in. In regards to the liquidity, so with the a hundred -- and let's call it $157 million in liquidity, can you remind us, sorry, what is the kind of expected runway with that? I mean, presume that's sufficient through at least start of production in the second half of the year, but just remind us what the runway expected is with the current liquidity. Thank you.

So for this year, we are -- we have funding needed to execute our strategy definitely. And this definitely impacts also our next year. In terms of our expenses, as Omer mentioned before, we are not planning to increase expenses significantly. While we do expect on the back half of this year or the second half of this year to see more and more revenues and more importantly, more and more collection from the NREs, which will balance off some of our burn.

Wonderful. Okay. Thank you guys. Congratulations on the quarter again. I'll pass it on.

Thank you.

Thank you. Our next question comes from the line of Kevin Garrigan from WestPark Capital. Please go ahead.

Yeah. Hey, guys. Thanks for letting me ask a question and congrats on the announcement this morning. Just I guess kind of a quick clarification. So your pipeline is estimated to be over 20 million LiDAR units in total with NRE bookings in the $20 million to $40 million range. In your press release, you had said that you added a new RFQ to the pipeline. Does this addition kind of change the number of LiDAR units significantly or NRE bookings, or was this RFQ kind of already baked into the estimates?

Maybe just to make sure I understood your question, because the pipeline that we have or programs that we are in an RFI and RFQ stages with which we said that more than half of it is actually at the RFQ stage, which is quite amazing. The total, I would say NRE opportunity is $150 million to $250 million. I heard you say $20 million to $40 million. This -- the $20 million to $40 million is just our, I would say, target for the booking that we have this year. And as I said, programs that are beyond that figure for each. So -- and then your question was whether the new announcement today changes the figure in the pipeline? Is that the question?

So in your press release, you had said that you added an additional program to the pipeline by bypassing the RFI stage and moving directly to the RFQ stage. Was that already kind of booked into these numbers?

Yeah. Yeah. Because those were customers that were in an RFI stage, and moved into the RFQ stage. So they were booked -- they were in the booking on that figure earlier. But the RFQ stage is -- it's a very meaningful one because it's the last stage of the process. RFI can linger and could be also several times. And RFQ is a more focused, I would say, where you down select the different suppliers and you work with generally two to three suppliers in order to conclude the process. So the figures -- the numbers that -- of the different programs the same only that are the more mature stage in the funnel.

Okay. Got it. Thank you for that clarification. And then just as a follow up, so you're -- you guys are really starting to gain momentum with platforms in the late stages with many platforms. Do you feel comfortable with kind of your current manufacturing capacity, or is there kind of any plans to expand capacity at any point?

By the way, just to maybe add something. I mean, we did add -- there were -- in one or two new programs added to the older book. I don't know how it changes the overall number, but the funnel is continue to grow. To your second question, obviously, yes, of course. I mean, we have two production lines today that are building InnovizOne, one in Germany. But that's a small scale, I would say, production line. The other bigger one is in the states, and it's actually owned by Magna, in Michigan. That's the production line that is producing LiDARs for BMW today. InnovizTwo, today we're building it at Innoviz. We have our own NPI line, and we're designing the production line for automation that will eventually would provide a significantly higher capacity. The plan of work to reach a capacity of 200K per machine. And the idea is that we will be able to duplicate those machines in order to get -- to rather flexible volume. So for sure. We -- eventually, we need to support suppliers. It won't be at Innoviz facility. It will be based on [indiscernible] factors that we work with. Our production strategy is possibly different than others. I mean, by the time the market would grow for volume, we want to leverage on existing factories. We don't want to spend money on building factories, and we want to leverage on existing factories by contract manufacturers that can operate our production. So we are designing the production line. Contract manufacturers will operate it for us. I mean, at the time that we were audited by Audi more than a year ago. In order for them to nominate us, they had to qualify and feel comfortable with the production line that eventually will serve them.…

Okay. Yeah. That makes a ton of sense. Okay. Perfect. Thanks guys.

Thank you. We now have a follow up question from the line of Jared Maymon from Berenberg. Please go ahead.

Hey, thanks for taking the other question, guys. Sorry if there's a little bit of background noise here. Just a quick one on the model, with the BMW program starting production soon, but can you just get a bit more color on the kind of recent developments and expectations for that agreement? Can you just remind us if this is an SOP that coincides with the SOP of new BMW models, or does that scope include some mid-cycle refreshes and then anything you can update us on how many platforms or models that's across now?

Yeah. So as we said, and we said before, the first launch is with the i7 and the design fits also the five series and the IX. But we cannot disclose right now and when BMW decide to launch them at this point.

Got it. Thank you very much.

Thank you. That does conclude our call for today. Thank you very much for attending. Have a good day. You may now disconnect.