Good morning, this is Rob Moffatt Vice President of Corporate Development and Investor Relations at InnoVizz, and I want to. Welcome you to our earnings conference call. Joining us today are Omer Keilaf, Chief Executive Officer and Elder Segla, 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.InnoVizz.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 InnoVizz. 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 important risk factors that could cause actual results to differ materially from any forward-looking statements, please see the risk factors section of our Form 20-F filed with the SEC on March 9, 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.. We have a lot to talk about today. Q4 was a record quarter for us There has been some important customer progress since the years and since the quarter has ended The first thing I want to highlight is the amazing revenue performance full year revenues of nearly $21 million. Were up 246% year-over-year and even with raising guidance mid-year. We came in above the high end of the guidance range In addition to that. We delivered Q4 2023 revenues of nearly $15 million an increase of nearly 850% year-over-year and also above the high end of our quarterly guidance range The strong revenue performance came from a combination of production revenues Robust sample shipments and NREs and it validates our three-pronged approach to growing future revenue streams. We also saw positive customer developments in the quarter with BMW and Volkswagen Unveiled a new shared program with Mobilite as the platform partner and unveiled a strategic realignment to maintain our cost discipline and extend our cash runway as. We position the business for rapid transformational growth. The combination of strong revenues and disciplined cost management led to an impressive cash performance with our quarterly cash burn at just $14.5 million, a record low since InnoVizz became a Public Company, which allowed us to finish the year with approximately $150 million, in cash and equivalents, leaving us with a strong runway that we expect to last through the market share capture window. I'll go through each one of these topics now. Let's start with the news we shared today on BMW In this morning's earnings press release We disclosed that we are working on a second vehicle the geography for the InnoVizz 1 deployment, when we first announced…

Thank you Omer, and good morning everyone. Starting with cash, we ended Q4 2023 with approximately $150 million in cash bank deposit, marketable securities, and short term restricted cash on the balance sheet. The combination of strong revenues coupled with disciplined cost management led to the lowest quarterly cash burn in our history. Since becoming a public company, cash used in operations and capital expenditures came in at roughly $14.5 million, which compares to prior trends in the $27 million to $29 million range. Needless to say, we were excited with this outcome and it demonstrates the impact that growing revenues coupled with cost management can have on the trajectory of cash line. Looking to the income statement, revenues in Q4 2023 came in at $14.9 million compared to Q3 2023 revenues of $3.5 million delivering a 328% quarter-over-quarter increase. On a year-over-year basis, it compared to Q4 2022 revenues of $1.6 million delivering a growth of nearly 850% year-over-year. This led to a full year 2023 revenue of $20.9 million, well ahead of the high end of our guidance re -- guidance range coming in at a very strong 245% year-over-year growth in revenues. On the cost side, operating expenses for Q4 2023 were $29.5 million, a decrease of 12% from $33.5 million in Q4 2022 and on a full year basis, 2023 operating expenses of $121 million came in roughly $4 million lower than the full year of 2022 for a 3% decline. This quarter's operating expenses included $5.5 million of share-based compensation compared to $5.3 million in Q4 2024 in Q2 in Q4 2022, sorry. Research and development expenses for Q4 2023 were $22.1 million, a decrease from $26.2 million in Q4 2022. The quarters R&D expenses included $3.6 million attributable to share-based compensation compared to $3.4 million in Q4 2022. In conclusion, the financial performance in the fourth quarter and the full year of 2023 was stellar. We exceeded our revenue targets all while controlling our cost and executing on critical milestones like the BMW-SOP, and it led to a fourth quarter cash burn that was our lowest in history since becoming a public company. Going forward, the strategic realignment shows a continued focus on a disciplined management of cost, which when coupled with continued revenue growth as a potential to extend our cash runway through the remainder of the market share capture window. And with that, I will turn the call back to Omer.

Thank you, Eldar. Looking back at 2023, I'm proud to say that we have delivered on many accomplishments. Our most meaningful progress was on the existing customer side with BMW, we successfully managed to transition into full series production on the I seven with the InnoViz 1 making us the only other pure play company with a level three passenger car on the road. And for the InnoViz 2, we initiated the B sample work we announced in August, which we expect to be a foundation for an expansion of additional development work packages. On the Volkswagen side, we disclosed a second program with the ID buzz and we made meaningful progress on securing one to two additional programs that we think we can get over the finish line in 2024. As a reminder, the ID buzz is incremental to the Volkswagen Award that we announced in 2022 and the additional one to two programs that we hope to convert soon could be meaningfully incremental to our existing Volkswagen volumes. Growing our contracted production volumes is our number one goal. We are indifferent where the volumes come from, whether it's from an existing customer or a new customer, each brings its own benefits, additional volumes, and NRE service revenues with an existing customer can require less incremental work and relationship management, along with other synergies resulting in a stronger margin profile over time and volumes with new customers can offer entry points for new growth in additional vehicles and platforms down the road. In addition to locking up incremental market share volume from either source helps absorb our fixed cost and bring us closer to being breakeven and ultimately free cash flow positive 2023 was very productive in terms of growing our relationships with new customers. And while we made…

Thank you. [Operator instructions] Our first, our first question comes from the line of Mark Delaney, from Goldman Sachs. Mark, please go ahead.

Yes. Thanks so much for taking the questions. To start, I was hoping you could comment on how the Forward Looking order book has evolved, which at one point I think was estimated to be north of $6 billion, and to what extent the order book and future Revenue Pipeline is being impacted by slower projected customer sales of EVs using your LiDAR. Thank you.

Sure. We didn't update the order book having that, the main change in the order book comes from the addition of the ID buzz. As we said in the past, we would not make updates to the other book based on a senior customer in order to not reflect the, the program size in respect to our customer confidentiality. So we will make updates once we bring more programs and then we can communicate them.

I guess though, if you, if you could talk more around how you would see revenue progressing over the next two to three years, you know, g GI given some of the changes in you projected EV sales from, from you know, some of the models that may be using your LiDAR, you have you, have you seen any shifts in, in, in customer plans around or around volumes that you can share even if on a qualitative basis?

Sure. I mean, I would say that we were not getting any feedback from customers concerning their slowdown of EV or not ev the, the LIDAR platform is not correlated specifically to EVs that can operate on combustion engines just as well. So, so far we didn't get any communication around ev slow down related to the volumes that they expect.

Understood. One, one last one from me. If I could please, I realize you're not guiding 2024 revenue, but I am hoping to better understand how you're thinking of the shape of the year. Would you anticipate first quarter revenue to be the low point of the year, given what you know about customer schedules and NR EOP opportunities, or is there any other qualitative Colorado shape of the year that you may be able to share? Thanks.

So, so yeah. So specifically as we said on the, on the, on the earnings call previously we are expecting that the second half will be more meaningful, but we, we don't give any specific for each quarter since it is very lumpy because the, the, the structure of the revenues that we are expecting.

Okay. Thank you. Our next question comes from the line of Andres Shepherd from Cantor Andres, please go ahead.

Yes good afternoon everyone. Congratulations on the quarter and thanks for taking our questions. Maybe to follow up on that last question specifically regarding the $20 to $70 million in new NRE bookings that you're targeting for 2024, I'm wondering if you have a sense as to when the majority of this will be recognized. Is this a Q4 Q3 story, or is this something that maybe will be expected gradually throughout the year? And if, if you have a sense of whether some of it or most of it will be likely be recognized as revenue versus a contract expense? Thank you.

Yeah, so the NREN-R-E booking will be recognized over the lifetime of a program up to SOP, that, which means basically whatever we book this year, it will probably be recognized over a few, a couple of years, maybe two to four years until the SOP and as we mentioned before, it's difficult to say how you recognize it and what point of time and it, if it will be recognized as revenue or rather contrary to the expense side.

I mean, when we talk with customers, we try to draft the agreement in a way that we can recognize it as as revenues. Maybe you can give examples on ways on kind of…

Yeah, I don't, I don't want to go into the, the accounting side, but if it's usually you look at the, a specific contract, if it's specific to a cu a customer or it's more generic, and then based on that you are able to recognize it accordingly.

Got it. Okay. That, that's helpful. And maybe as a follow up I'm wondering if you could maybe give us some direction on your path to break even gross margins. You know, I know, I know you're not guiding gross margins, but, you know, do you anticipate this could potentially be a 2024 timeframe, or, or are we looking more into perhaps next year in, in onwards? Thank you.

So I think, I think you need to look at the trend that we have shown over the past year in 2023. So QQ one was roughly almost 400 negative margins, and then Q4 was negative 15% margins. So I, I think you see a nice trend here. We are hoping that the trend will, will continue. I, I don't want to say when we expect to be positive, but i, I, we, we are expecting or we are hoping that this trend will continue and at least we will be flat due this year.

Got it. Okay. And maybe one last one if I could just in regards to your liquidity. So you have now roughly 150 million. Just curious as to how you're thinking about future capital racing opportunities. What is the run rate with the current liquidity on hand? Thank you.

So I think that in terms of liquidity, we, we were able to end the year with $150 million. We, we started the year with $186 million. And so we were able to put some additional cash on our balance sheet on the last quarter. We were able, as we said to start collecting NRE, which we said will balance off significantly our expense. So as we win more programs, we will be able to continue to balance off our expense side. And our goal is a, to be to be viable all through the window of opportunity that we are seeing in front of us the capture and each program that we win extends our runway with additional NREs

What, what I can add maybe to this. So we're seeing in front of us several big opportunities that we are working on for quite a long time, and that can unlock opportunities for us for, I would say for the next two years. We've been spending a lot of effort and time in trying to bring those opportunities and unlock them, and I believe that Innova's position very strongly to make that a reality. And I feel that if we will continue to be successful as we were in the last two years I believe that our technology is currently leading the pack in many ways. I believe that our experience, our customer base is giving us many advantages. I think some of the dynamics in the geopolitics, et cetera, gives us a big step up right now. So I feel that there are several opportunities in front of us that could be very meaningful. I I'm positive that we'll be able to reach to them.

Thank you. Our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Kevin, please go ahead, you can unmute.

Sure. Yes, thank you for letting me ask the question and congratulations on the progress. Just on the RFI and RFQ process, you know, you mentioned there are delays. Can you go into more details on what the delays are? Is it, is it the additional competition or OEMs just more cautious or you know, technical obstacles may maybe if just give some details on that.

So it depends on the, on the OEM there are several discussions with one customer related to their desire to I would say continue discussions on some interface cybersecurity. I mean, that's, that's specifically what we're doing having that they wanted to check if we can support different kind of interface. It sounds very technical, but eventually this, this requires a, a strong integration between us and, and the compute platform they're using. And they, it requires, I would say a good alignment before they can feel comfortable with, you know, the nomination based on this architecture. So there is several technical discussions on this, and you need to understand that one, once you kick off a project, you, the customer needs to feel very confident that nothing changes. If for any reason they learn they need to change something in the product on either side, whether it's the LiDAR on all the compute platform, it's, it's I would say it's a very expensive decision to make and therefore they're, they are cautious on kind of freezing the design and kicking off. That's one. Another OEM I think it's mostly related to their internal kind of change of teams. They added a new team coming from another activity they, they, they stopped working on, and that team had to be integrated into the team, which kind of slowed down things towards the end of the year. But I, I, I can say that the progress in the last few weeks was very on, on steroids, I would say. So I think that we're catching up there. I mean, they're catching up.

Okay. Okay, great. Maybe you touched on something there about the platforms, and I wanted to ask about that. You, you had mentioned you're on the Qualcomm and a mobile I platform, and that, that's great news, but is the decision still I, I guess they're not packaged together. It's still the OEM can decide one platform with Qualcomm and then even choose a competitor's LiDAR?

Yeah, definitely. I mean, eventually it's the OEM decision on which LiDAR to use, but I would say the following, right? Eventually when they make those decisions, there are many different metrics they they look at before making that decision. And, and one of them is risk related to doing something that someone else didn't do. And second is cost. I mean, obviously when, if someone would ask you know, Qualcomm or, or [indiscernible] to start developing their platform based on another LiDAR, that would be a very expensive effort. And I'm sure they would not just carry the cost themselves, they would just throw that back into the, to the, to the OM. And I think that from cost perspective, I, I don't think there's a lot of motivation for anyone to do that, but it's, it's never the decision of the platform player, but it's, they, they have ways to, I would say give the motivation to the OEM, not to add too much effort when it's not needed.

Thank you. Our next question comes from the line of Kevin Garrigan from West Park Capital. Kevin, please go ahead. I think you unmuted the wrong, Kevin?

Yeah. Hey, Omar and Elder, thanks for taking my question. And let me echo my congrats on the progress. Can you talk a little bit more about, your contract manufacturing strategy? You know, just remind us how many manufacturing partners you have, you know, what have you learned working with them and any thoughts on, on eventually building kind of your own manufacturing facility? Or do you feel contract manufacturers are kind of the best strategy?

So, you know, it's, it's always depends on the, the return on investment that you're making compared to the market volume. I mean, eventually right now we are trying to be elastic in, in terms of supporting different OEMs in different locations. We don't want to be committed to one geography. One once we, while we are trying to scale our ability to work with contract manufacturers, is I, I think it's one of our strengths today because we have access to different facilities that we don't need to make investment in, in, in ramping them up. Another part, which I think is maybe, you know, I think it's important when you go through an audit with an OEM and this, you know, primarily for the top 10 OEMs that set quality standards are the highest. When you are audited for a program, they cannot audit you. They cannot nominate you based on the facility, does not exist. When you're certified as a tier one to an OEM, it's and nominated for serious production, the teams need to be in the, in the facility and audited and make sure that the activity and the operation is meeting the standards. You cannot be nominated based on a future to be a facility that one day will meet their requirements. We did not have any alternative other than work with project manufacturers because, for example, when we were audited by Audi at the time, they wanted to be in the facility that eventually will serve them, and they want to make sure, and we, we provided them five options of different contact manufacturers. They had preference to one specific because of their previous engagement, audited it, and successfully managed to, to go through. Now that specific contract manufacturer has different facilities in different areas around the world, and that gives us that flexibility. I believe that once the program volumes would reach the several millions a year production, it would start to make sense for InnoViz to make those investments. But I think at this point of time it, it makes more sense and I think it's part, part of our advantages.

Yes. Got it. Got it. Okay. Yeah, that, that makes sense. And I, I appreciate the color on that. My second question, just with BMW getting ready for deliveries, can you just talk about how unit projections, you know, change from when you originally win the contract when you're about a quarter out or so, from kind of starter production? I mean, I'm assuming you kind of get more color on the units, but do you kind of go from yearly projections to the OEM giving you weekly or quarterly estimates, or do they kind of stick with kind of the yearly projections?

So, I mean, eventually we, you know, BMW is launching for the first time, they'll, they'll level three program as expected that will be a soft launch kind of filling the water. There are plans to launch additional vehicles. As I mentioned. One of them is also in China. But I cannot say right now the volumes. I mean, I, I believe that with over the course of the following quarters, we'll see the, the ramp and, and, and probably we'll get a better understanding of how fast it'll get to the maximum capacity.

Thank you. There are no further questions, so thank you all for your participation, and this concludes your call..