Good morning. I would like to welcome you to our Q1 2025 Earnings Conference Call. Joining us today are Omer Keilaf, Chief Executive Officer, and Eldar Cegla, Chief Financial Officer. 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, 2025. Omer, please go ahead.

Thank you, Ada, and good morning to all of you joining us on this call. Today, we will discuss our recent financial performance, tell you about some exciting new developments in our business and outline how these position us to achieve our long-term goals. In the first quarter, Innoviz reported record revenues and gross margin. Q1 revenues were $17.4 million, up approximately 3x sequentially and up approximately 2.5x year-over-year. Gross margin was approximately 40%, both revenue and gross margin were the highest in our company's history, demonstrating our progress in meeting our full year targets and achieving our long-term strategic and financial goals. As we discussed last quarter, in recent months, we've taken several significant steps to strengthen our financial position. In December, we entered into an approximately $80 million NRE payment plan with our key customers. These NREs formed a significant portion of our revenues in the quarter. Just last week, we announced an extension of our NRE payment plan to approximately $95 million with the bulk of cash payments expected in '25 and 2026, a testament to our customers' continued commitment to our technology. Our performance showcases the strength of our financial model. The recently expanded NRE payments plan, the registered direct offering, and our prudent cash management are expected to enable us to cross SOPs and ramp volumes in '26 and 2027. We recently announced our strategic partnership with Fabrinet to launch the mass production of our InnovizTwo platform ahead of our upcoming customer ramps. By working with Fabrinet, we will be able to efficiently scale production to volume with a partner that has automotive grade manufacturing capabilities around the world. Our existing Level 3 and Level 4 programs are on track. We are delighted by the accelerating plans for robotaxi deployments. Yesterday, we announced that we…

Thank you, Omer, and good morning, everyone. As we noted last quarter, in the past several months, we have strengthened the financial foundation of our company and have made meaningful strides on our paths to breakeven and profitability. The result we reported for the first quarter demonstrate the impact of the NRE payment plan on our revenues and our balance sheet reflects the proceeds of the registered direct offering of our security that we closed in the first quarter. We ended Q1 with approximately $85.4 million in cash, cash equivalents, short-term deposit and marketable securities on the balance sheet. For Q2, we expect strong cash inflows reflecting robust trade receivables with cash expected in the single digits. We look forward to continued balance sheet strength further aided by the effects of our operational realignment in Q1. Gross margins in the quarter was approximately 40%, a dramatic improvement over 8.9% in the previous quarter. Going forward, we expect margins will continue to be rather lumpy. This is due to the product ramp timelines and NRE flow based on our customers' milestones. For the full year, we continue to expect gross margins to be positive. Looking into the remainder of 2025 and beyond, we remain confident in our ability to manage our expenses effectively and keep our burn rate down on the annualized basis. Now turning to the income statement. Our Q1 revenues of $17.4 million set a record for the company, driven by the contribution of NREs as well as sales of LiDARs. Our operating expenses for Q1 were approximately $21 million, a decrease of 34% from $31.7 million in Q1 2024. This quarter's operating expenses included $3 million of share-based compensation compared to $5.9 million in Q1 2024. Research and development expenses for Q1 were $14.8 million, a decrease from $23.8 million in Q1 2024. Largely related to the allocation of direct costs to COGS under the NRE payment plan. The quarter's R&D expenses included $1.9 million of share-based compensation compared to $3.8 million in Q1 of 2024. To conclude, Q1 represent a record quarter of robust performance for both revenues and profitability perspective. We are encouraged by the ongoing strengths of our expense management and ability to consistently meet or exceed our revenue guidance. Looking into Q2, we are focusing on our future ramping InnovizTwo and securing additional design win as we reduce cash burn and maintain a strong balance sheet. And with that, I'll turn the call back to Omer for a few closing remarks.

Thank you, Eldar. Before I wrap up the call and open for Q&A, I wanted to recap some of the recent developments. We reported a record financial quarter with revenues of $17.4 million and gross margin of 40%. We announced our partnership with Fabrinet, which should help us efficiently bring the InnovizTwo product platform to mass production. We extended our NRE payment plan with key customers from approximately $80 million to approximately $95 million with the majority of cash payments expected in 2025 and 2026. We are pleased by the accelerating adoption of robotaxis powered by Innoviz Technologies around the world. We are accelerating delivery of our devices into the test leads as deployments ramp at a faster pace than we previously anticipated. Our collaboration with NVIDIA on the Hyperion platform is expanding and multiple OEMs are evaluating it for integration. Our technology is gaining traction in automotive applications, offering customers significant value with our auto grade devices and we are engaging with several integrators around specific projects. We continue to make excellent progress on the technological front and are enabling KPIs related to image quality, uniformity, accuracy, reliability, always on availability, and resilience. That enable mission-critical performance in Level 3 and Level 4 applications. Having delivered on the goals we set for ourselves since our founding, we look forward to the next stage in our company's growth as we focus on becoming the world's premier large scale provider of best-in-class LiDAR solutions for autonomous driving and beyond. With that, operator, let's open it up for Q&A.

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

Yes. Thank you very much for taking the questions, and congratulations on the good 1Q results. First question is on robotaxis. In addition to the VW announcement that uses Innoviz LiDAR, Uber has announced robotaxi plans with May Mobility, Pony.ai, WeRide and Momenta for programs in the U.S., Europe and the Middle East. When you think about the broader set of AVs that could be deployed globally, excluding China, what kind of share and market position do you think Innoviz will have?

So right now, we are working with the -- I believe the strongest platform players in this area. You can see the way that Mobileye able to gain more partners other than Volkswagen through partners like Holon and Verne. I think that the relationship -- the new deal between Uber and Volkswagen is expecting to allow Volkswagen to scale faster. Haven't -- since the Trump administration basically removing the barriers in terms of the amount of autonomous taxes which are allowed on the road, it was, I think, increased from 2,000 a year to around 100,000 a year. In a way it kind of started a race. Meaning that, up until a few months ago, many robotaxi companies were held from scaling because of that limitation. Now that this limitation has been removed, you will start to see a race in which companies will try to take cities. There will be a point in time where companies, cities that will be overpopulated with taxes, services, will not allow to new players to enter. I think the first mover advantage, is super important. The fact that the first over taxes that are going to be on the road are going to be equipped with Innoviz riders will give us a tremendous advantage, and we expect to be a meaningful player in that area.

Thanks, Omer. My other question was on the financials. The gross margin in particular was very strong, much higher than we had been estimating. Hoping to better understand what type of gross margin and EBIT margin you think NRE programs will typically have on average maybe over the course of 1 to 2 years. And specifically, when you do see NRE revenue and with what you saw in the first quarter, was there anything unusual in 1Q in terms of when you saw costs compared to the timing of the revenue? Thanks.

Yes. So Q4 gross margins as said, was 8.9% and indeed, this quarter, it's 40%. I think the NRE is always positively influencing the gross margin. So I don't think that over time, you will see such a high gross margins. But definitely, very positive and you can maybe not expect these levels, you can definitely expect positive and relatively high once NRE is kicking in, like we did this quarter.

And, Eldar, just to make sure I understand, what was unusual about the margin associated with the NRE revenue this quarter? I mean, I understand the timing will be lumpy of when you see NREs, but why the margin unevenness?

Because of the relative percentage of NRE versus units. So most of the revenues, the vast majority that was NREs, and that's why it pushed our gross margins up.

Okay. Thank you.

Thank you. Our next call comes from the line of Jash Patwa of J.P. Morgan. Please go ahead.

Hi, good morning and thanks for taking my questions. Congratulations on all the progress during the quarter. I'd like to start a question -- I'd like to start with a question on tariffs. I appreciate that you mentioned that tariffs are unlikely to have a material impact in the near-term. But maybe if you could just clarify which category test and series LiDAR shipments fall under. Are they included within the HSN category subject to the auto specific 25% tariffs? Or are they affected by the reciprocal tariffs? Additionally, if you could just provide some insights into any preemptive actions the company has taken to mitigate the impact of these tariffs, that would be super helpful. Thanks, and I have a follow-up.

So as far as we are concerned or too far as our knowledge and our analysis, we do not fall under this 25% tariff. We are an automotive component, which does not suffer from these kinds of -- is not impacted by such tariffs. We are monitoring it. We believe that the impact will be minimal, hopefully, up to none. We still think these tariffs are in the making or it's not clear or the dust needs to settle in order to understand where it falls. But, again, we think the impact is minimal to none. But maybe just to add, Fabrinet has different facilities around the world, including in the U.S. By the way, they also have in Israel. And therefore it gives us a very flexible, an easy way to deal with any future issues in this manner.

Understood. That's very helpful. Just as a follow-up, could you provide some more insights into your partnership with NVIDIA on the Hyperion platform? What factors have positioned Innoviz as a leader in this collaboration? And are there any development milestones or technological challenges that still need to be addressed? Relatedly, curious if you are the reference LiDAR sensor for this platform as well? Thank you.

Yes, happy to explain. I'm asked about this topic many times, and I would be happy to actually provide more color. So basically there are two platforms that people are familiar with when it relates to NVIDIA. The more known platform which people kind of hear about it more in a lot is the NVIDIA drive. NVIDIA has two business models. One is when they are providing an open source platform where they sell chips to different companies. And basically any company who wants to develop their own software stack can use the NVIDIA drive open source. There are many LiDARs that are part of the drive and you probably saw many announcement about LiDAR companies partnering with NVIDIA on the drive platform. It's very different than the Hyperion. The Hyperion platform is a full stack solution that NVIDIA is offering themselves to customers. So whenever a customer wants to buy the full stack solution from NVIDIA, it is NVIDIA decision on which sensors are included in this platform. And in the cases where NVIDIA is offering Hyperion to customers, outside of China, they are offering it based on Innoviz, InnovizTwo. And therefore, we are in basically daily discussions with NVIDIA and customers on the integration of the InnovizTwo into the platform and into these cars. So, basically, you can see this as a very important milestone for us in terms of our ability to scale through partners. We have the same engagement with Mobileye. As you are aware, we're are part also of the Mobileye Drive. Same name, but different platform were Mobileye is winning deals with the Mobileye Drive, and there's one platform that one customer that is -- that they are alluring to in the future. Every time where such a customer is speaking, NVIDIA Mobileye Drive, we are part of it, and we expect that once -- one of these customers will do the nomination of the platform, we will be able to benefit from it. There is one specific customer which we are engaged for a very long time now, and there are several that are reviewing this and we are expecting to start these discussions as soon as well.

Understood. Thanks, Omer and Eldar. Good luck.

Thank you.

Thank you.

[Operator Instructions] Our next question today comes from the line of Ryan Casey of WestPark Capital. Please go ahead.

Hello, gentlemen. Great quarter. Great quarter.

Thank you.

Your press release notes record revenues that I know NREs are a big part of that. Would you care to comment about even if they're sample unit shipments, was it also a record quarter for product shipments using a broad definition of product shipments?

I don't know if it was record, but it was a very nice number. We are expecting the -- to ramp up Fabrinet and have units out of Fabrinet. Fabrinet is basically increasing our capacity in order of magnitude. So this will be very impactful as we go forward down this year and definitely next year.

Terrific. And when do you think, say, the first product unit shipment would come out of a Fabrinet facility, would that be before the end of 2025?

It's going to be in a month.

In a month? Okay. Excellent. We've touched on a lot of the bigger questions. In terms of your non auto efforts, I think we've discussed before that industry participants, people looking for solutions may be coming to Innoviz, has that been the case with these new opportunities where people have come to you and ask for the solution? Or are you starting to actively pursue opportunities on your own directly as well in terms of reaching out to those industries.

So, basically, the -- our go-to-market is through integrators and distributors that are approaching customers themselves. There is a long list of applications which each one requires specific, I would say, insights and user experience and basically, we are providing these companies. We support their needs in terms of integrating into the LiDAR, but they can benefit from the advantages of higher performance of the sensor to provide more value to their customers. As such, we barely need to do or we don't need to do any specific tailoring to any specific application. The LiDAR is highly, flexible in terms of its ability to provide different configurations. And, therefore, it doesn't require us any meaningful effort. In many cases, with these kind of integrators, we are displacing existing solutions that are short in performance. And by using our sensor, we are able to provide a better value to their customers. So even in terms of educating them or training them to understand how to work with LiDAR, it's barely needed.

Okay. Terrific. That can be a sizable opportunity. And when you say displacing existing technologies, I'm assuming you're talking about cameras and radar and things like that, not necessarily other LiDAR solutions today.

Actually, there are -- we found, I would say, different industries that are already well educated above the benefits of using LiDARs, and some of them are already using LiDARs.

Okay.

But with the product that we can offer them, they can achieve more KPIs and better products -- and basically better capabilities.

All right. Terrific. Thank you for clarifying and expanding on those points. It was a really terrific quarter and a great start to the year. Congratulations.

Thank you very much.

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

Hey, Omer. Hey, Eldar. Thanks for taking my questions and congrats on the progress. Hey, going off of Mark's earlier question, looking at your pipeline, are you seeing a growing number of robotaxi RFQs? Or programs kind of in the early stages? Or is a lot of your pipeline still geared toward L3 programs?

It's -- okay. I would describe it this way. You have the traditional OEMs generally focusing on Level 3. And then you have, I would say, more of the technology companies who are trying to develop platforms, that could fit into different types of vehicles. It could be robotaxis. It could be shuttles. It could be trucks, and it could be also off road vehicles. So I would say it's kind of, 50-50. There are many that are, as you know, some of the programs that we are working on are expected to launch already next year. And we do feel that the kind of the race has started in the sense that once those cities will be populated with robotaxis, that will create more tension and stress on some of the other players due to the congestion that might happen once they will start to scale. And therefore, we do see more and more Level 4 players kind of looking for a solution that are automotive grade geopolitically kind of free and providing them, I would say, there are some advantages related to our sensor. I think we talked about that in previous quarters about our ability to work in very challenging environments such as rain, contamination, and some of the fleets that you might see today are using sensors that are allowing them work in clear sky situation and they understand that once they'll need to operate them in scaling, more challenging environments, they need to find a solution that is much more robust. These are the new KPIs. Like, we're in a new stage where just talking about range and resolution is not enough. Customers are much more aware of industrialization, on quality about resiliency, It sounds like buzzwords, but this is kind of like real life thing. Eventually the product needs to be super reliable and they become much more aware of these topics than they were before. And I think this is kind of where we shine and see opportunities to display some of the sensors that were used so far for R&D purposes.

Yes, that makes a ton of sense. Okay, great. And then on the growing traction smart applications, can you just talk more about how big you expect the market for smart applications to become? And do you see Innoviz kind of spending more on developing software capabilities in this space?

So there are different layers of software when you talk about nonautomotive applications. As you know, in the automotive sector, we are developing the perception software which is needed for object detection classification. We actually have a product running on the road today? VW is running their Level 3 vehicles not only with our LiDAR, they're actually driving autonomously using our perception software. You can imagine the level of effort and scrutiny that we had to pour in to get to automotive grade capabilities of such a software. And that gives us a big advantage when it comes to different -- other different applications that once high reliability and our uniqueness comes in our ability to provide perception over our sensor. I would say we try to be separated from the layers that are related to the specific KPIs that might be interesting for a very specific application as bridge collision or logistics kind of maneuvering. So this is -- these are where we are trying to cut barriers between us and the integrator, and we try to do something that is as scalable as possible. So I do believe that our software will continue to evolve and providing more tools that we can offer our partners to use in their applications. So I believe that our software is still going to be a very strong, I would say, offering to our partnering -- to our partners who eventually are doing the integration of their software to their customer environment.

Perfect. Thanks, guys, and congrats on the results.

Thank you very much.

Thank you. You have no further questions. Please proceed.

Okay. And with that, thanks again to everyone for joining us today. We look forward to updating you next quarter on the continued progress we are making here at Innoviz. We will be participating in several investor events over the next month and look forward to speaking with many of you there. Thank you very much.