Good morning. I would like to welcome you to our Q1 2024 earnings conference call. Joining us today are Omer Keilaf, Chief Executive Officer; and Eldar Cegla, Chief Financial Officer. Following the 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 a 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 12, 2024. Omer, please.

Thank you, Maya, and good morning, everyone. Thank you for joining us. First quarter was a strong start for the fiscal year for Innoviz. We achieved revenues above our guidance range for the second consecutive quarter, once again, expanded our relationships with key partners and customers, made significant progress on our strategic realignment and continue to build on our RFI and RFQ platform. We had another busy quarter full of activity with our teams traveling globally throughout Japan, China, Korea, Europe and the U.S. to meet with existing and potential new customers. Meanwhile, we've been super focused on supporting RFQs across multiple programs. The team also made significant progress in continuing to develop and test our technology in line with our commitment to provide best-in-class technology to our customers. Beginning with our top line performance. We delivered revenues of $7.1 million, up from $1 million in Q1 2023 and above the guidance range of $5 million to $6 million we provided last quarter. Driven by a combination of NREs, samples and product shipments, these results demonstrate the potential power of this three-pronged approach to growing future revenue streams. I'll now pivot to a few customer and partner updates. As we showed last quarter, the BMW i7 has launched in Germany, and we expect BMW to share user experience feedback in the coming weeks. While other LiDAR companies have reached SOP allowing Level 2, we believe that as of today, we are the only pure-play LiDAR company to reach SOP with Level 3 with vehicles already on the road using our LiDARs and perception software. During the quarter, we continued supporting software development specific to the deployment of InnovizOne on BMW 5 Series vehicles in China. We continue to see China as a catalyst to accelerate the use of LiDARs in…

Thank you, Omer, and good morning, everyone. Starting with cash we ended Q1 2024 with approximately $128 million in cash and cash equivalents, bank deposits, marketable securities, and short-term restricted cash on the balance sheet. As Omer mentioned, our continued solid revenue performance plus the efficiencies achieved from our operational realignment led to a decreased level of cash burn compared to Q1 2023. With cash used in operations and capital expenditure coming in at $23 million compared to $29 million in Q1 '23. And with InnovizOne now in serious production, all quoting and bidding activities in our RFI and RFQ pipeline are focused on InnovizTwo platform. As we remain in this critical market capture windows, you have heard us talk about in the past, we are maintaining the appropriate level of flexibility to demonstrate we can meet customer evolving needs. The realignment has made Innoviz a more efficient company, and we are laser-focused on the InnovizTwo platform. Moving to the income statement. Revenues in Q1 2024 were $7.1 million, which is approximately 18% higher than our guidance range. This is a significant increase compared to Q1 2023 revenue of $1 million, demonstrating the positive financial trajectory we are delivering. Our operating expenses for Q1 2024 were $31.7 million, a decrease of 5% from $33.3 million in Q1 2023. This quarter's operating expenses included $5.9 million of share-based compensation compared to $5.2 million in Q1 2023. Research and development expenses for Q1 2024 were $23.8 million, a decrease from $26.1 million in Q1 2023. The quarter's R&D expenses included $3.8 million attributable to share-based compensation compared to $3.5 million in Q1 2023. As you can see, we have maintained decreased levels of operating and R&D expenses. We expect to keep our expenses at these levels in the coming months. To summarize, we are pleased by the continued strength of our financial performance and moving forward, we will remain disciplined and run an efficient organization with the goal of optimizing our competitive positioning while maintaining a healthy cash position. And with that, I hand it back to Omer before we open up the call for Q&A.

Thank you, Eldar. Before I conclude, I'm pleased to share that Innoviz was selected by the EcoMotion Community to host the EcoMotion Assembly at Innoviz's headquarters on the 4th of June. The EcoMotion Assembly is an auto technology conference hosted in Israel that brings together many OEMs, auto and technology companies from across the global mobility ecosystem to learn, share knowledge and developments and look ahead towards shaping the future of mobility. We are honored to host this prestigious conference this year and look forward to continuing to support strengthening the international mobility ecosystem. We encourage you to visit the EcoMotion website for additional information and hope that you will join us. To wrap up my remarks. As you've heard, Q1 was another busy and productive quarter for Innoviz with many engagements with existing and potential customers in different regions. We are already in the middle of the second quarter, and we are continuing to advance opportunities across different programs, and we look forward to sharing more positive updates going forward. We believe that we are well positioned with our customers and partners to win additional programs and cement our place as a leading LiDAR supplier during the market capture phase. As the market comes to appreciate this positioning and understands the growing importance of LiDAR across various applications with tailwinds coming from new regulatory requirements. We believe that the perception of the LiDAR sector by the capital markets will increasingly reflect the sector's opportunity. And with that, operator, then turn it on to the Q&A.

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

Yes. I'm hoping for more details on how Innoviz is progressing with its RFQ opportunities? The company reiterated its goal of winning two to three more programs this year. Could you please speak to what may need to happen for this to be realized and your confidence in getting there? Moreover, I'd like to better understand if the types of programs Innoviz expects to win this year has shifted given the commentary on potential L4 wins as I thought many of the key RFQ opportunities were for L2 and L3 ADAS applications. [Is it] another way, have your opportunities for consumer ADAS award change at all? Or is it more about an expansion of what you could win in L4?

Thank you, Martin. Thanks for joining us. No, actually, I want to start with the last question. We are highlighting the Level 4 opportunities because those actually made very significant progress in the last quarter. And in a way, we're expecting them to convert. And we wanted to highlight, not to surprise when things might happen. Let us -- most of -- as we said, most of our RFQ and RFI pipeline are focused on Level 3, and that's where we see most of the activity. In terms of the two to three opportunities that we're expected to get this year, so I just talked about another opportunity within the VW program with the Mobileye Level 3. It's quite a big program that we're very happy to step into, which will provide us additional volumes. And obviously, we're very happy about that. And we said there are actually additional opportunities with VW. It's really exciting to see how VW as a group can offer so many opportunities for us for growth. But other than that, we talked about the two other Level 3 programs that we were expected to converge by end of last year, and we are still working with those customers very closely. What needs to happen in order to conclude this process, it's basically still in many discussions that are related to design and manufacturing, and we are supporting the customers in order to allow them to converge the process as early as they can.

That's helpful. My other question was to better understand your expectations for cash use this year. And what would happen to cash flow over the next 6 to 12 months if the company has success converting on some of those NRE bookings opportunities you're guiding for?

So we have completed our realignment program. We expect to see some benefits from this cost reduction. And as I mentioned, we are expecting to see the cash on the expenditure to be similar to what we saw until now and maybe even better if we are available to show that in the next few months. So, all in all, I would expect that this year, we will be very disciplined, and we will be able to keep our budget as we planned. And as I said before, obviously, we have enough on our hands in order to capture the market or use the opportunity and execute on the strategic plans we have and hopefully able to secure additional wins.

But by the way, maybe I can add something that you might find interesting. While some of those decisions are taking longer. Some of the NREs that we're able to collect are coming from programs that we are asked to continue working on them in order not to allow any delay in our work to support those programs.

Our next question today comes from the line of Andres Sheppard of Cantor.

Hey Omer, hey Eldar good afternoon. Great to see you both again and congratulations on the quarter, and thanks for taking our questions. I wanted to maybe just confirm the time line for some of your OEM agreements. Obviously, both BMW being maybe the more near term. But just can you just remind us what is the time line for the ramp-up in revenues in Volkswagen, the Asian OEM and then the Robotaxis? Just wanted to -- not sure if those have changed or just wanted to maybe confirm those real quick.

So we didn't give a definite time line for each one separately. We gave only for those that were communicated by the customer online. Obviously, BMW launch was communicated, and we're expecting to get more insight from the, I would say, the feedback from the ground. We're obviously excited to see our product already out in the wild and being the only pure-play LiDAR company that already managed to get to deployment on SOP of a Level 3 program. I think it's a very significant milestone for us as a company, as a leading company in this category. In terms of VW, as we talked about the 2026 time line for the ID. Buzz, which had a similar time line for the Level 3 program. We didn't disclose additional time lines for the rest.

I appreciate that. Maybe a question for Eldar. How should we think about gross margins, OpEx and CapEx for this year? As it pertains to gross margins, what does the path to positive gross margins look like? I understand, obviously, it's a combination of volume, but just curious if you have maybe some color that you can share. And then on OpEx, should we expect that number to be lower now or maybe even significantly lower than last year given the realignment? And then just lastly, is the -- just the CapEx, it looks like this quarter was a little bit lower than Q1 last year. Just curious how we should think about that for this year as well.

So obviously, I'm expecting the realignment impacting our OpEx expenditure. So, this is definitely part of what we would project for this year. In terms of margins, a significant part of our revenues comes from NRE and NRE at Innoviz are positively affecting our gross margins. So, we are expecting to have additional NREs and additional positive contribution to our gross margins as we gain more and more NREs. And I'm not sure what we--

CapEx the last one.

CapEx will be stable. We are not expecting a huge CapEx for this year or increase from last year as we are relatively CapEx light. We are using contract manufacturers. So this should be stable.

Our strategy related to working with contract manufacturing has been very strong for us. It allowed us to be very flexible with different customers who want us to be able to serve them from different locations without making a huge investment on each one separately. Working with contract manufacturers with -- as partners with the right expertise and the existing facilities that are already automotive grade, allowing us to save CapEx, as Eldar mentioned, but also get faster to the market.

And just to clarify, so you said you expect CapEx this year to be lower than last year or flat is that --

No, it's similar.

Our next question today comes from the line of Kevin Cassidy of Rosenblatt Securities. Please go ahead.

Congratulations on the results. Just for the new ruling from the National Highway Transportation Safety Administration, automatic emergency braking, would the cars that you're in today, so the BMW and VW, would those qualify?

Definitely. Obviously, with the use of LiDAR enables this functionality in different weather conditions and lighting conditions. So definitely, it should supply -- fulfill the needs.

So do you see this type of ruling moving into other countries?

I believe that's a trend that I'll expect to see growing also new rolling on new features. I think that the benefit of using life-saving technologies is a proof of the capabilities. And I'm sure that the desire to improve and reduce the challenges related to unnecessary accidents is something that will continue to improve. I believe that basically, that's why we're here. Eventually there's no need for car accidents that can be avoided and technologies are already available. And I'm sure that those rulings would only continue.

And can you break out the revenue for the $7.1 million for March from NRE to production? And same with you for your outlook for June?

So a significant part is NRE. We didn't break it down, significant priority is NRE. But it consists of three elements: A, the InnovizOne components that we provide Magna for BMW samples that we are selling in ever-growing numbers and NREs, which are the most significant part of our revenues, and this is our expectation going forward. Three elements with at least this year, NRE leading the most part of the revenues.

[Operator Instructions] Our next question today comes from the line of Kevin Garrigan of WestPark Capital.

Let me echo my congrats on the progress. On the successful winter test, did you guys get a lot more interest from OEMs after you completed the test?

I think that the results that we're able to show to customers is getting, I would say [applauded]. We are very much aware of the challenges that might happen when you go into those extreme conditions. I think that we're a very sensitive complex system like LiDAR going through winter testing in these conditions is a very challenging task and being able to show the results in such a positive way, definitely get a lot of interest. I'm aware of many challenges that others have gone through, not even being able to start those tests on time. I think that us being able to go -- I mean one of the challenges of winter testing is that you actually need to meet winter. You can't do that in the summer. And if you miss winter testing, your program might be delayed by a year. And being able to meet the time line and successfully not need to wait another year to do that again, is super important. And I think that, as I mentioned on the earlier, one of the key issues with LiDARs when you go into such conditions is blockages. I emphasized that because I don't think that people are aware on that challenge. Whenever there is a blockage that can come from snow, dirt sometimes even drop of water. Some LiDARs might be blocked even if it's partially in their field of view, and that completely invalids the availability of the system. And it means that the driver needs to take control back for anything that might happen. If the system is highly sensitive to those situations, it means the availability of Level 3 is at very low probability whereas statistically it means that the driver needs to engage too many times, and it's a very poor user experience. Our ability to work in those conditions even when our window is covered by almost 25% to 50% and still provide very well -- very good visibility without any holes in the field of you. It's quite remarkable, and these are things that we're very happy to show to our customers and give them the understanding that using our LiDAR will give them very high availability of the system in those conditions. I think it's something that definitely will help us going forward this year.

On a separate question, can you guys kind of give us a sense of the breakdown between EVs and ICE platforms that are within the 10 to 15 RFIs and RFQs? Are most of those programs kind of geared more towards electric vehicles?

I don't think there is any major bucket in those programs. Of course, the system is very agnostic to which type of driving, if it's combustion or engine or EV. So you don't really care which car is used. And specifically with the programs that we already have with our customers, some of them are combustion, some of them are EVs. And definitely, I don't think there is a very clear majority between one or another.

That does conclude our question-and-answer session for today. Please proceed.

Thank you very much, everyone. We look forward to the next quarter to share with you our update. Thank you very much.