Good day and welcome to Velodyne Lidar Third Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Andrew Chan, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss Velodyne Lidar's third quarter 2021 financial results. Drew Hamer, the Company's Chief Financial Officer will run through the calls prepared remarks. We have Ted Tewksbury, the incoming Chief Executive Officer, Drew and Jim Barnhart, the Chief Operating Officer will be available for Q&A. Before we begin, I would like to remind you that shortly after the market close today, Velodyne issued a press release announcing its third quarter 2021 financial results. Velodyne also published an investor presentation. You may access the press release and the presentation in the Investor Relations section of velodynelidar.com. Today's discussion includes forward-looking statements. Please refer to our press release and our SEC filings including our most recent 10-K and 10-Q for a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. I would also like to remind you that during the call, we will discuss some non-GAAP measures related to Velodyne's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the press releases. To ensure that we address as many analyst questions as possible during the call, we request that you please limit to one initial question and one follow-up question. Now, I'd like to turn the call over to Drew.

Thank you, Andrew, and welcome to Velodyne. Ladies and gentlemen, as most of you saw on November 10, we will have a new CEO Ted Tewksbury leading our company. Ted is a seasoned technology executive who brings to Velodyne a proven track record and more than three decades of experience leading innovative businesses. A true visionary, I am looking forward to working with him to expand our lead in the global LIDAR industry, execute on our strategic growth plan and drive long-term value for all shareholders. I also would like to welcome our new Board member, Virginia Boulet. She is a renowned corporate governance expert whose expertise and deep experience will further strengthen our board of directors. Since our last earnings call in August, we've done a number of things. We signed one additional multi-year agreement for total 35 on track for a goal of 38 by year end. We've grown our pipeline to 220 projects, with an increasing concentration in the industrial and robotics market, which make up 1/3 of the pipeline project and has grown nearly 50% when compared to last year at this time. We believe the industrial and robotics market is one of the LIDAR markets closest to commercialization. And we expect our activity with customers in this market will only accelerate. We shipped more than 4400 sensors in the third quarter, continuing our market leadership. Our customers today are giving us purchase orders for larger volumes as they move into the first wave of mass commercialization. We are the global LIDAR leader, shipping more sensors in the third quarter than the aggregate of all our peers combined that have reported shipping sensors year-to-date. We expect to ship more than 15,000 sensors in 2021, up at least 28% over 2020 significantly more than our peers. The…

[Operator instructions] First question from Colin Rusch of Oppenheimer. Please go ahead.

Hi, good afternoon. This is Kristen on for Colin, thank you so much for taking the question. I wanted to follow-up on some of those final remarks that you made about just sort of the variability in rollout schedules, really wanted to ask about your customers have been operating in this sort of hand to hand combat environment for the last year now. How are you seeing the pace of innovation and design cycle times right now with your customers? And if you could provide just some context around the end markets and how that differs among those end markets? That would be helpful. Thank you.

Fair enough. I think I'm going to start with the final question first, I guess then, because each of the different markets - I'm sorry, this is Drew. Each of the different markets certainly has its own pace. And what we're seeing in the industrial markets, and the kind of the last mile delivery markets, as well as some of the mapping and other industrial sectors, the pace of design is increasing, we see that in our pipeline, the number of projects that have entered our multi-year agreement, pipeline has increased substantially in that space, very nicely, in fact, and the time to market for a lot of their solutions tends to be about a year, maybe two years at the most. When we start talking about the automotive manufacturing solutions, those solutions tend to be further out, they could be four or five years away from the design win to the design completion in the startup production. So they tend to take a much longer and require a much larger investment by Velodyne Lidar and so it really, the shift we're seeing right now is there's a more rapid movement in the industrial space to commercialization and revenues for Velodyne lidar, and for the automotive space, we're feeling like that still feels a real rapid movement, there's is still going to be four or five years out.

That's really helpful. And then wondering if you can touch on any changes in the competitive environment? We're certainly seeing some indications of industry consolidation. But also as you're focusing on this customer engagement, and quality, are you seeing any customers come back after working with other platforms?

Yes, it's our it's our belief that now that we're getting into more of a higher volume production, our focus is on the higher quality on a consistent basis in what we deliver to the sensors that are going out to customers, they want the sensors to be same kind of performance every time when they open up the box, and they take it out. Being the one company that's doing that on a regular basis, has created opportunities where customers have come back and let us know that the reason they want to go Velodyne is because those sensors are consistent when they receive them. We've also during this quarter, with the assistance of Jim Barnhart, spent a lot of effort in really closing our relationships with the existing customers who are buying some of those sensors, and making sure that we're meeting that requirement, which has allowed us to or put us in a position or we had to move some of this revenue after Q3 as we've ensured that the quality of the products was and the performance was consistent from senor to sensor, as they opened each box. And the impact of that is definitely something that customers have given us a lot of feedback is much appreciated. It's something that they're accounting on and they are looking forward to. And then our continued evolution along those lines, is something that they expect. And the fact that we're the leader in that space should lead to additional deals coming not only going forward, but also in the current quarter should say, but out into 2022 and beyond.

Thanks for that. And if I could fit one more in. I do just want to ask as we're looking at that first wave of mass commercialization. How are you feeling about component availability and your confidence in ramping production? Thank you.

Jim, you want to take that one.

Sure, yes this is Jim here. Excellent question Kristian. As we are seeing increased lead times, of course, we're working with our suppliers giving them advanced forecasts on a rolling 12-months availability right now. We are having some nature surprises here and there, but nothing that has gated our production yet. And we're working daily with customers, - excuse me with suppliers to make sure we're getting the components in. And the constraint is there is everyone seeing but we are overcoming that on a regular basis. And as we see the pre shortages, since we're looking out at least a quarter in advance for our production needs with our contract manufacturers, as well as the director reach out to our suppliers. We're addressing the shortages as we see them. And so far, we've been able to mitigate all of them. And we're continuing to do that, like I say on a regular basis. It is rather tactical at this point. But we say working with customers to make sure we have the clear demand from them and sending those signals to our supply chain, we've been able to keep that supply continuity and just being able to continue to doing that.

Great. Thank you so much. I'll turn it over.

Next question, Michael Filatov of Berenberg. Please go ahead.

Thanks for take my question, guys. I guess it's going to be a pretty straightforward one. Do you anticipate revenue increasing next year?

Yes.

Okay, great.

So based on the contracts that we have, in place, some of the POS that we've already received from customers, we are expecting in the conversations we've had with a number of customers we do, as we go through this next two, three months, we talked to all the 300 plus people that we sell sensors to, and we get some feedback from them and what they expect there needs to be and what they're expecting. What we have changed here in in the forecast that we've provided for the rest of this year. So we've taken out the NRE portion. So in the past, we've had customers tell us about they'll have a contract, and it'll have a piece of NRE, we're finding that those tend to take a little bit longer to close, and then they're going to be lumpy. So what we're really looking at right now, if you look at our kind of revenues from last year, and you take out the kind of the one-time items, though we have the one-time restocking fee in Q3, and we had some other licensed revenues that came in from somebody who is now licensed customer of ours. We're expecting you're going to see some nice growth in our product revenues this year. And what we anticipate as we go forward in '22 and beyond is that these product revenues will continue to maintain a growth. And then to the extent that the NRE types of relationships do come in, we're going to leave those to be kind of an upside and stay focused on product quality and delivery of sensors to customers. And then we'll take those things as they opportunistically present themselves.

Got it. Thank you for the thorough answer. Just following up on that, I mean, you guys have lowered the non-GAAP gross margin guidance again, and I'm kind of curious do you have sort of a target revenue level in mind. So when you expect to reach maybe breakeven on the operating income line or EBITDA level, is a return target revenue threshold you're expecting or a timeframe, you're expecting to reach breakeven.

So, it's the avoidance of not getting 2022 guidance. It's our belief that with some of the work that we're doing, it does have something to do with it, the mix of products, we're continuing the work of getting our production done offshore, which will also contribute to that. But it will be the increase in the product volume. So we should expect that - as we come out next year, we should be getting to that breakeven and maybe even better as we go out into '23 '24. But again, that's subject to our review of that everything that we're going to be providing for the 2022 plan, now we have Ted on Board, we're giving everything a thorough review.

Got it. Alright, I'll leave it there. Thank you.

Thank you. The next question, Mark Delaney of Goldman Sachs. Please go ahead.

Yes, good afternoon, and thanks for taking the questions. I'm pleased to Ted's on as well. And so I was hoping to start with a question for Tad, and maybe talk about your experience with Velodyne so far, what led you to take the job and any your initial views you may be able to share with us?

Sure, sure. So first of all, let me thank Drew for the generous introduction and just say how excited I am to be a member of the Velodyne team. It truly is an honor to have been unanimously selected for this position by the Velodyne Board. And I'm really looking forward to rolling up my sleeves and working with the team to do a deep dive across the company in all the business areas. I was attracted to Velodyne for a very simple reason, which is, as you all know, the company is the undisputed lidar technology pioneer and market leader. The company has the broadest product portfolio and shipped more sensory units than all the other competitors in the industry combined. And very importantly, Velodyne is really the only company that's demonstrated the ability to manufacture at scale. And so I looked at that and just saw an enormous opportunity to build on that strong foundation. For those of you who are familiar with my background, you'll know that I have a proven track record of building and scaling innovative technology businesses, and driving revenue, growth, profitability and shareholder value, which in my view, is exactly what Velodyne needs today. So this was a perfect fit. And as I said before, I look forward to working with the Velodyne team to unlock the company's potential and make that a reality.

Thank you, if I could ask the second question. I'm hoping to better understand the consistency issue with the product that was mentioned in the prepared remarks. Even if you could talk about it from a few different dimensions. Maybe firstly, how did you identify the issue? Do you have a good handle now and what's causing it? Have you come up with a fix and a timeline to fully remediate the consistency issue with the other product? Thanks.

Sure, yes, good question. This is Jim. We found out in the quarter that customers in some cases are actually using sensors in applications beyond the original intent. For example, ultra-pucks originally were released with the anticipation of being for more automotive use. And customers are starting to use them for mapping and surveying type applications where they're concerned for tighter accuracy in some cases, in other cases the different sensors like we're seeing on the puck, the VLP16, as we call it, we're seeing both high temperature requests, as well as even like back to the ultra-flex for freezing temperature request. So we're taking all that feedback in and we actually did pause shipment, while we made sure on the individual sensors, now the product families, I should say, made sure we understood really well what the customers were looking for. We in some cases, modified firmware to enable us to go to the freezing temperature type operations. Other cases, we changed the components to enable to some of the higher temperature operations. And just bottom line is, as Drew mentioned, we have received very positive feedback from customers on that they appreciated the fact that we kept them informed of what we were doing, we did delay some shipments to them, but made sure that what we were shipping was going to be conforming to their actual use case requirements. And, again the feedback has been quite positive from the customers on that. And I will say it's actually been positive amongst the employees as well. They appreciate the fact that we're making sure that what we're shipping out to customers are is really more conscious of what their use case needs are and conforming to their needs. And Drew mentioned in his prepared remarks that we've been refining both the engineering practices for how we actually release the product, as well as the production process for producing them. So it's really coming all together the holistic approach to quality, we really double down on the key in Q3 the third quarter, and we're continuing that going forward. So far that momentum is quite positive there. Go ahead Nick.

All right. Thank you. Next question will come from Aileen Smith, Bank of America. Please go ahead.

Good afternoon, everyone. Thanks for taking the questions. First one on the number of projects and the theoretical units that you have in the pipeline. I just wanted to square this away with a presentation last quarter, I think you had 213 projects that you were citing for 9 million possible units, versus this quarter, you're pointing to 220 projects with 7.5 million units. I think we can understand that some of the more incremental projects you're winning are coming from non-automotive end markets. And those are more spot by then the multi-year high volume programs. But how do you explain the change in the 1.5 million sensors that are so called missing from quarter-to-quarter? And are the contract terms really changing that much as you are in RFI or RFQ or other stages?

So this is our - first of all, I just want to be careful, there's nothing missing. We are gathering this information from the customers, it comes from them specifically. And we provide to you our pipeline. So this isn't necessarily - this is a pipeline of the business that we're currently tracking the opportunities that are presented. And when I share with you a pipeline, you're seeing the dynamics of any normal business where it goes in and out based upon customer needs. So the change that we saw this quarter is a result of direct conversations with a number of our customers about where they're saying that they're seeing changes in the priority for their business. A big chunk of this change actually came from the pre RFI category, where a customer has indicated that a big business that they're planning on entering into too, as they've continued to evaluate their business and restructure their business model and focuses for the future, they've decided to spend less in one of those segments. And there'll be hope - so they anticipate net volume of purchases would be declining. There are other areas where as with a number of customers who are moving forward with their projects, but as they've gotten into the projects, and they better understand their capabilities of launching, they've reduced the amount of sensors that they might be buying on the front end, even though they're still expecting to achieve the total volumes year two, three, four out, which have also impacted those numbers. As again, we're talking to them on a regular basis and as these customers are launching, they're very close contact with us about what their needs are, so that we can set up the production lines and meet their needs. So that is also affected what we're seeing in the pipeline. So this is a living, breathing pipeline. This is normal business. It's a lot of disclosure. But we think it's right so that people understand the opportunity and the potential for lidar in the future. That's why we continued to provide it.

Okay, great, understood, that's helpful. And then I wanted to ask a question around the average selling price. And specifically, in comparison to the first quarter. And probably I think these numbers are right, but when I'm looking at the mix of units sold that are solid state and some of your lower price sensors, your absolute units from the first quarter to the third quarter, were about comparable, but the percentage of the total was much lower, and yet your weighted average selling price was also much lower in 3Q versus 1Q. So that will lead us to conclude that you're dropping price, potentially substantially across some of your older and more legacy products. Is that a fair interpretation? Or are we missing something?

Well, first of all, in the first quarter we had look over almost 2,700 units that we shipped. In this quarter, we shipped over 4,400. So the volumes are up substantially. It's affected a bit because we are seeing an increase in the number of solid state sensors that we're shipping. And those are shipped at a lower price. So when you're doing a weighted average ASP, of course, that's going to have an impact. And then as it relates to the traditional role, the rotational sensors, there are some contracts we have with customers at a certain volume, we do normal volume, unit volume commitments with those people are bought started volume price commitments with those customers. And so there are some that may be sold at lower prices versus some they're sold to others. It's really not an isolated thing. But as we go forward, we're expecting that will - on a linear basis, we try not to take it one quarter at a time or sequential quarters. We do expect that we're going to see ASP coming down linear basis. But we'll also see movement inside the number of units that are shipped. And as we get further out in the mix between solid state and rotational and the higher price and low price sensors starts to come into play. We'll see this dynamic continuing as we go forward, that volumes will go up. As volumes increase, they'll offset some of the decreases that are coming from the ASPs and that'll give us the appropriate contributions we need to the business.

Okay, but as a clarification, I was referencing the solid state units from 1Q versus 3Q, which I think were both around 600 units, that 600 units in the first quarter out of a base of 2,700 versus out of a base of 4,400 in the third quarter on a mixed basis. That's actually accretive for you guys in the third quarter. So I'm more so trying to square away that average selling price would imply that across your other products, some of those rotational products that you were taking down price on those units.

There have been some price reductions on those units, because customers have increased the volumes that they're purchasing. So unit volume versus price agreement, there will be some of those happening, but I think it'll be - it'll, like I said, it's not going to be something we could look at on a sequential basis, we should see things like this happening more on a linear basis. But we could also see those rotational sensors go up in price as well on an ASP basis in future quarters.

Okay, great. That's helpful. Thanks for taking the questions.

Thank you for joining the call.

Thank you. The next question comes from Sam Peterman, Craig-Hallum Capital Group. Please go ahead.

Hi Drew. Thanks for taking my questions. My first one is going to be on that same slide in your investor deck that shows your pipeline, not on the $7.5 million versus 9 million units. But if you look at kind of the - just as a percent of the whole graph, where ADAS is at, it looks pretty similar to prior quarters where it's trending up pretty strongly in later years. And it doesn't look like there's a huge change to kind of what you're expecting from ADAS and yet your ADAS projects in that pipeline are down quarter-over-quarter and year-over-year, quite a bit year-over-year. So I'm just curious how you reconcile that? And if you can give us any color into what is going into your thinking on ADAS there and what you're seeing from customers?

Yes. So on the ADAS customers, we are seeing those projects aren't moving as quickly as we've indicated. They could take three to four, five years. And customer priorities are shifting on a pretty regular basis, and it's an area where we're very carefully evaluating the ADAS space, while we're getting tremendous activity from the industrial space. So we are seeing that some of those projects are - they're shifting. The OEM's priorities are changing and their commitment to incorporating Lidar into their solutions. We'll have varying priorities as we go forward.

Okay. And then one more on ADAS is you talked last quarter about your 2026 agreement with an OEM, I believe, in Asia for - around your solid-state product. I'm curious if you could provide any update on that and how that's looking and then. I'm not sure this is clarified for then - in an RFI or a key stage? Or just any color around that would be great.

Yes. That's actually - we're focusing on the RFI, RFQ stage with that. It's a very close partner, one of the OEMs in Asia. And we work with them. We've set up an operation close to them, and we work with them on a regular basis and have daily calls with them on that project and getting to that point where we can have those sensors move to the signed and awarded category.

Okay. Then quick last one for me on Velabit. Pipeline went up here for a substantial bit. I'm curious if you could give any color on the markets that you're seeing some activity and where those additional eight wins or eight projects into your pipeline are coming from?

Yes. So we are seeing enormous demand for us to get the Velabits to market. It's a product that we really don't have planned for production, commercial availability until about 2023. And the amount of interest from customers has made it a top priority for us to keep that moving along. We are seeing across the board demand for that solution. A lot of activity in the OEM shops. There's a lot of activity in all of our industrial customers. And it's interesting, there's even as we break down the industrial customers between the last mile deliveries, the kind of the robotics and even in newer spaces like delivery using drones and things like that, it's a really tremendous response from the market for us to get that product out and to them. So it's really widely spread that we're seeing it across all the markets, the interest in buying that, and we're very aggressively moving to get that to beat their standards.

Okay, thanks.

Next question will be from Tristan Gerra of Baird. Please go ahead.

Hi, this is Tyler [ph] on for Tristan. Maybe first off, can you talk about what efforts you're putting into the software platform that maybe extends beyond just object recognition and into car actualization?

Yes. So we have actually got - we've already built out a kind of a platform of products that can be incorporated into those systems. We are working very closely to identify additional features and functionality that the customers would want and require so that we can incorporate that into our development plans as we go out to 2022 and beyond. And then we'll work closely with them on any feedback they have as we continue to develop that and work towards some kind of a commercial agreement.

Okay. Great. And then for my follow-up, do you expect a rebound in 360-degree Lidar shipments? And if so, what would the timing of that inflection be? And then maybe what applications would you see that inflection point in?

A rebound in rotational sensor. So we actually haven't seen a decline in the demand of the rotational sensors. We are actually in a number of - we're very steadily selling our Puck sensors. Our Alpha Puck sensors actually had a nice uptick this quarter, contributing to the unit volumes, as Aileen kindly pointed out earlier. We are also engaged with a number of customers around the next-generation Lidar sensors, which will use our MLA and our ASIC chips. So we have a number of customers that want to use some of our sensors that will be kind of moving towards that automotive-grade capability, and they're working very closely with us and defining how that should work they're running tests on those sensors today on their vehicles. And so I really don't think it's as much a rebound as we do expect it to continue to be a strong product for Velodyne Lidar, a market-leading product as well as our Velodyne products. And - sorry, our solid-state products. And we do have agreements with customers to incorporate it into solutions. So I think you'll see it in the automotive vehicle solutions, the AV, sorry, autonomous vehicle solutions. And we're also seeing an interesting dynamic where with the robotics, some people want to use rotational because it gives them more data and gives them a full surround view from one sensor where others just want to use a solid-state sensor, whether it's a Velarray, or a Velabit. And then we're also seeing that in the IIS solutions where people use them in an intersection, it gives them, again, it gives them more data so that they can see the whole intersection with one sensor. So we're really - and then we also have in mapping. A lot of people use our rotational sensors, our puck lights, and they'll put them on drones, and they'll use them to do topographical mapping. We also have a customer who's using it for backpacks. So they put them on backpacks and they use them walk around people's neighborhoods and do the mapping in the neighborhoods as well. So really seeing rotational sensors are still very much a product that people want as well as giving them that option to be able to go with a solid-state sensor.

All right. Great, thanks for the color.

Next question comes from Raj Gill of Needham & Company. Please go ahead.

Good afternoon everyone. This is Denis on for Raj. So for my first question, I just want to ask them, can you talk about your current kind of mix of the in-house versus outsourced production? And how much of the guidance reduction that we're seeing here from the previous one was due to supplier component challenges that you're having versus this issue of improving consistency?

Yes. So we don't usually speak specifically to the particular components of in-house versus out of house. But what we have shared previously is that a number of our sensors are being produced by our contract manufacturers. So our Pucks, a number of other products, our Ultra Pucks, even our VLS-128s are now being produced by contract manufacturers. However, as we started looking at our solid-state products, we haven't been able to move as many of those offshore because of the delays we've talked about in previous quarters. Although a number of the components are being produced offshore, and then they come back to the United States for final assembly. And then the newer products as they're being assembled and stood up, those will continue to be done here in the San Jose facility. So the spilt is generally done across the line. I'm sorry, I think there was a second question there and I missed it. Would you like to repeat it, please?

Sure. So essentially, and then we had the guidance reduction here versus last quarter, moving to 61.5% from 85% or so how much of this was due to component shortages that are affecting the entire semiconductor industry versus just the ones that are - versus this issue of you guys trying to improve consistency for volume production?

It's actually - none of it has to do with supplier shortages or anything of that nature. It's mostly around the improving production consistency for our customers. But it's also just an expectation that we're finding NRE very difficult to forecast. So we have customers who are talking to us about long-term contracts. And we had some of that in the pipeline because it felt like they should move forward in Q3 or certainly in Q4, and we're believing that they're taking longer than expected. So that part, we've decided to take out of the forecast, and we're leaving it as an upside unless we have the signed agreement in hand as we go into the guidance.

Great. And then so with regards to the issues of moving production offshore, so in the current quarter, would you say that the situation is getting worse? Is it the same or is it improving? Can you provide some more color on some of these issues and what's going on as we speak essentially?

I'll let Jim speak to that.

Yes. It's interesting - this is Jim. I don't see any issue with moving production offshore. I mean, we're continuing with the state of the strategy as we do our development in-house to the initial prototyping up to pilot in our main center facility. And then once we have the technical transfer documentation done, what the manufacturing process instructions are, etcetera, we hand that package off to the contract manufacturers for production. And actually, that's progressing well.

[Operator Instructions] Next question comes from Michael Filatov of Berenberg.

Sorry, just another one for me. I was looking - just to confirm, the non-GAAP gross margin guidance for the full year. That negative 8% to positive 10%, is that correct?

No, it's negative 8% to negative 10%.

Okay. Got you. Thanks for clarifying that. Just looking at sort of the full-year revenue guidance again, if you look back at the original spec it was $150 something million for 2021 and now it's in the 60s, and margins are obviously down quite a bit. I mean what would you characterize as the main driver of that quite significant change in the revenue and margin expectations for this year? And what is the primary driver of that?

Yes. For us, the primary driver, now that we're at the end of the year versus when we came into the year or actually, when this - these numbers were provided during the merger, honestly, so these weren't even guidance for the company for the year. The main thing that we're seeing that's a difference from what we saw back in the beginning of 2020 versus to where we were today is, of course, throughout the year, there was the impact of COVID slowing programs down and creating that dynamic for the first two, three quarters here of not being - customers just sort of slowing everything down, pushing it out, we locked into some. We've definitely been impacted by that. And then some of that is resulting in some of the projects that we were expecting to get this year, pushing out to next year. So people are as they come back, they're starting to pick those projects back up again, and we look forward to those coming back into vogue in 2022. And then lastly, I think the key thing for us now, of course, in this forecast is a lot of those pipeline numbers there were consistently that NRE piece, and by taking that out, it's gotten us to where we are with the current forecast that we're sharing with everybody.

So based on what you said, it seems like things have just kind of gotten shifted back. Does that imply that in the next year or two, we could see that $150 million plus revenue become realized?

It - we have seen things shift back. And what we want to be really careful of, especially given the benefit of having Ted come on and evaluating all the different components of the business, as we talked about earlier, is that that would be the case. So I can't verify or deny that right now, but we are certainly going through every single project in our pipeline, having deep conversations with those customers to gain better understanding of where they're at with their projects and what their intentions are going forward, so that when we speak to you again, we're giving you a cleaned up deck, if you will, of what we're looking at.

All right. Thanks very much.

That concludes the question-and-answer session. I'll now turn the call back to management for closing remarks.

Okay. Well, everybody, I just want to thank you very much for joining our call today. I want to thank, we're very excited to have Ted joining the company. It's honor to be working with him and looking forward to working with you going forward. Again, I also just want to reiterate, we are very excited about what we're seeing in our unit volumes increasing. The activity that we're seeing with our industrial customers is really exciting for Velodyne Lidar because we expect it, at least in the near term, that will be the key generator of revenues. As we go forward, it will allow us to build out our products, our ability to produce its scale and consistency, and the level of quality that customers expect. And then as we get out into the future, as other projects get closer to start of production, we're looking forward to being able to satisfy customers' needs in ways that other Lidar companies can't because we'll be that proven technology that has evolved to having all of the various components of their boxes they need to check in order to be able to use a Lidar sensor in one of their solutions. So thank you very much for your time today. We look forward to talking with you more as we go forward. And hope you all have a good evening. Bye-bye.

That concludes today's conference. Thank you for attending. You may now disconnect.